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  • Writer's pictureLaurie Vanhoose

Major Medicaid Legislation – 88th Legislative Session May 31, 2023

Updated: Oct 25, 2023

Below is a summary of major legislation passed during the 88th Texas Regular Legislative Session that impacts Texas’ Medicaid and CHIP programs. Note this list includes bills that have been sent to the Governor, but he has until June 18, 2023, to sign or veto a bill.

HB 12. Post Partum Coverage: Extends pregnant women’s Medicaid coverage for a full twelve- months post-partum. Author: Rep Rose, et al. Senate Sponsor: Kolkhorst.

HB 44. Provider Discrimination: Prohibits a Medicaid/CHIP provider from refusing to provide health care services to a Medicaid recipient or CHIP enrollee based solely on the recipient's or enrollees' refusal or failure to obtain a vaccine or immunization for a particular infectious or communicable disease. The Health and Human Services Commission (HHSC) may not provide reimbursement to a provider who violates the prohibition and requires HHSC to withhold reimbursement from the Medicaid or CHIP provider until the provider is in compliance with the statute. The bill exempts providers specializing in oncology and organ transplant care services. Author: Rep. Swanson, et al. Senate Sponsor: Middleton.

HB 54. Personal Needs Allowance: Increases the Medicaid personal needs allowance from $60 to $75 dollars for individuals residing in a nursing facility or similar institution. Author: Rep. Senfronia Thompson, et al. Senate Sponsor: Zaffirini.

HB 916. 12 Months Contraception: Directs health plans, including Medicaid managed care organizations (MCOs) (does not include CHIP), to allow women with a birth control prescription to obtain up to a 12-month supply. Author: Rep. Ordaz, et al. Senate Sponsor: Paxton.

Community Health Workers (CHWs) Bills:

HB 113 directs the Health and Human Services Commission (HHSC) to allow MCOs to categorize CHW costs as quality improvement (QI) costs. Author: Rep. Ortega, et al. Senate Sponsor: Blanco.

HB 1575 directs HHSC to add CHWs and doulas as Medicaid provider types under the case management program for children and pregnant women and directs HHSC to standardize MCO non-medical drivers of health questions used during the initial risk screening for new managed care pregnant members. The bill requires CHWs to be certified by the Department of State Health Services and doulas must have a national certification. Author: Hull, et al. Senate Sponsor: Kolkhorst.

Medicaid Prescription Drug Coverage Bills

HB 1283. Preferred Drug List (PDL) Carve-In Delay: Texas has a single Medicaid PDL managed by HHSC. Per state statute, the state control of the formulary was scheduled to sunset on August 31, 2023, giving MCOs full control to manage the PDL. HB 1283 extends that sunset date to August 31, 2033. Author: Rep. Oliverson, et al. Senate Sponsor: Hughes.

HB 3286. PDL Improvements: Improves many of the current processes related to HHSC processes and administration of prescription drugs by giving health plans additional flexibilities to override the PDL when in the best interest of the client. Changes include:

  • Expedites access to new National Drug Codes (NDCs) by allowing provisional availability.

  • Directs HHSC to adopt rules to allow exceptions to the PDL if the required drug under the PDL:

  • is contraindicated,

  • will cause an adverse reaction or is expected to be ineffective based on the clinical characteristics of the client,

  • the member was previously discontinued use of the preferred drug,

  • the member is taking a nonpreferred version of an antidepressant or antipsychotic,

  • the member was prescribed the nonpreferred version upon being discharged from a facility,

  • is stable on the nonpreferred version

  • is at risk of complications if forced to switch, the preferred drug is not available.

  • Directs HHSC to ensure all therapeutic equivalents for a generic drug are on the PDL.

  • Directs HHSC to establish an expedited review process to consider MCOs and providers requests to add drugs to the PDL.

  • Directs HHSC to add temporary non-preferred status to new drugs that are available but have not yet been reviewed by HHSC's Drug Utilization Review (DUR) board.

  • Requires HHSC to add an additional MCO rep to the DUR and grant them voting rights.

Author: Rep. Klick. Senate Sponsor: Hancock.

HB 4990. The Texas Pharmaceutical Initiative: Establishes a new governmental entity in Texas that may provide PBM and prescription drug and supplies manufacturing services for the following state programs:

  • State employees, retirees and dependents.

  • Persons confined by the Texas Department of Criminal Justice or the Texas Juvenile Justice Department.

  • Programs administered by the HHS system (Medicaid, women's health programs, program for children with special health care needs, etc.)

The initiative is governed by a board consisting of 3 members appointed by the Governor. The bill grants the board the following authority:

  • develop and implement the initiative,

  • establish procedures and policies for administration,

  • establish compliance procedures,

  • hire and employ an executive director and necessary personnel,

  • execute contracts to conduct all activities.

The bill requires the board to develop and submit a business plan by October

1, 2024 regarding:

  • Establishing a statewide PBM,

  • Establishing a distribution network for drugs and supplies,

  • Providing advanced pharmaceutical preparation services,

  • Establishing conditions for agency participation,

  • Identifying cost savings and funding sources.

The bill also establishes the Texas Pharmaceutical Initiative Advisory Council to advise on implementation. Author: Rep. Bonnen, et al. Senate Sponsor: Kolkhorst.

HB 1357. Substance Use Disorder (SUD) Treatment: Continues Medicaid coverage of SUD treatment services. The statute previously sunset the benefit and this bill removes the sunset date and makes the benefit permanent. Author: Rep. Holland. Senate Sponsor: Huffman.

HB 2727. Home Telemonitoring: Expands the Medicaid home telemonitoring benefit to allow FQHCs and RHCs the ability to provide and bill for remote patient telemonitoring. Previously, statute limited the providers to home health agencies and hospitals. Current statute also limits the conditions for which telemonitoring can be ordered but HB 2727 expands to allow for additional conditions to be added based on clinical effectiveness, with a special focus on adding services for high-risk pregnant Medicaid clients. Author: Rep. Price, et al. Senate Sponsor: Perry.

HB 2802. Texting: Aligns state law with federal guidance to make it easier for MCOs to text Medicaid clients. Currently state law requires clients to opt-in to texting and email on the Medicaid application. The bill changes the process to an opt-out and allows an MCO to gain contact information via various options in addition to the enrollment application. Author: Rep. Rose, et al. Sponsor: Blanco.

HB 3265. Medically Dependent Children’s Program (MDCP) Report: Changes the frequency and requirements associated with the legislatively mandated MDCP report. Author: Rep. Manuel. Senate Sponsor: Alverado.

HB 3462. Ombudsman Programs: Statutorily consolidates the various HHSC ombudsman programs and aligns statute with changes made during HHSC Sunset review in the 84th Legislative Session. Author: Rep. Noble. Senate Sponsor: Sparks.

HB 3550. Prescribed Pediatric Extended Care Centers (PPECCs) provide private duty nursing (PDN) services for children with complex medical needs. There are very few PPECCs in Texas due to burdensome regulatory and administrative requirements. HB 3550 seeks to address some of those concerns and makes the following changes:

  • Directs HHSC to establish minimum transportation requirements and allow the center to:

  • Determine, in coordination with the client's parent or guardian the schedule of transportation services and the necessary type of provider who must be present during transport.

  • Permit a client's parent or guardian the option to decline transportation services.

  • Prohibits a plan of care or provider's order from documenting a client's need to access a center's transportation services or consider transportation services as nursing services included in the plan of care.

  • Allows a center to provide nursing services in a group setting, consistent with appropriate staffing ratios as determined by HHSC.

  • Allows a center to obtain all signatures for a client on one consent document.

Author: Rep. Rose, Jetton. Senate Sponsor: LaMantia.

HB 4169. Prevocational Services: Requires HHSC to seek federal approval to include prevocational services as part of the individualized skills and socialization services delivered under a Medicaid waiver program providing long-term services and supports. Author: Rep. Price, et al. Senate Sponsor: Sparks.

HB 4880. Non-Opioid Treatment: Requires HHSC to ensure Medicaid reimbursement for non-opioid treatments. The bill defines "non-opioid treatment" to mean a drug or biological product that is indicated to produce analgesia without acting on the body's opioid receptors. Author: Hefner. Senate Sponsor: Perry.

SB 745. Fraud, Waste and Abuse: Expands the scope of the Texas Medicaid Fraud Prevention Act and authorizes the Office of Attorney General to investigate and pursue civil enforcement actions to deter fraud and recover funds from providers committing unlawful acts associated with "health care programs," funded in whole or in part by Texas - includes Medicaid, CHIP and the Healthy Texas Women Program. Author: Senator Kolkhorst, et al. House Sponsor: Noble.

SB 1342. Third Party Liability (TPL): Aligns Texas Medicaid TPL statute in compliance with federal regulations that are effective January 1, 2024, and further ensures Medicaid is the payor of last resort. The bill requires:

  • Third parties (other than Medicare) to accept the state's "authorization" that the item or service is covered under the state plan.

  • Adds a 60-day timeliness requirement in which the third party must respond to a state's inquiry about a claim.

  • Adds that a third party must agree not to deny a state's claim for failure to obtain prior authorization for the item or service.

Author: Senator Perry. House Sponsor: Smithee.

Budget Summary:

House Bill 1: General Appropriations Act and SB 30: Supplemental Appropriations Act.

The 2024 -2025 biennial budget is $321.3 billion and represents a 5.95% increase from the 2022-2023 budget. The budget only spends about half of the estimated $32.7 billion surplus. The Texas Comptroller Glenn Hegar has to certify that the budget is balanced, and then Governor Abbott has until June 18th to strike any spending lines from the budget.

Article II Health and Human Services:

  • Represents a 10% increase in general revenue.

  • Includes an increase of $11.6 billion in all funds for behavioral health services across all HHS agencies and includes Medicaid and other programs.

  • Includes $80.8 billion in all funds for Medicaid:

  • Fully funds Medicaid caseload growth - for 2024 caseload estimate is 4,397,058 and 3,939,383 in 2025.

  • $2 billion to increase the base wage for community attendant services to $10.60 an hour.

  • $206.8 million to increase provider rates for pediatric services (6% increase), women's health related surgeries (6% increase), private duty nursing (2% increase) and ground ambulances (25% increase for mileage reimbursement rate).

  • $811.7million in all funds for increases to Nursing Facilities with the direction that at least 90% of the rate increase goes to direct care staff wages and benefits.

  • Directs HHSC to implement the new Patient Driven Payment Model for Nursing Facility Services (PDPM) and includes:

  • $15,022,400 for FY 2024 and 2025 for HHSC to make modifications to the MMIS for implementation.

  • $99,920,196 in all funds for fiscal year 2025 for reimbursement rate increases for nursing facility (NF) services reimbursed using the new model.

  • The rider also lays out intent It is the intent of the Legislature that reimbursement rates for NF services should incentivize client care and quality of services over resource utilization and that NFs participating in the Medicaid program should utilize reimbursement rate increases to improve staff-to-client ratios, staff training and education, and wages for direct care staff.

  • $178.2 million for rural hospitals and rural labor and delivery add on payment, and a new rural hospital grant program.

  • Outlines intent that when Medicaid provider rates are increased as a result of a legislative appropriation, MCOs must reimburse the full amount of the appropriated funds to providers, to the extent allowed by federal laws and regulations.

  • $92 million in all funds in 2024 and $21million in all funds in 2025 to provide temporary staff to support increased workloads of eligibility staff due to the unwinding of the PHE and continuous coverage.

  • Allocates $2,614,000 each year to fund patient navigators at women’s health program providers to facilitate and expedite enrollment into the Healthy Texas Women’s Program.

  • Includes a cost containment rider but increases it to $450 million (was $300 million) and requires the agency to find savings in the Medicaid program including through the following initiatives:

  • Increasing fraud, waste and abuse prevention and detection.

  • Maximizing federal flexibility under Medicaid.

  • Achieving programmatic and administrative efficiencies.

  • Savings from emergency telemedicine services for individuals with intellectual and development disabilities.

  • Transitions Medicaid only services into managed care for dually eligibles.

  • Adds an additional 1,831 new home and community-based services waiver slots.

  • Requires HHSC to maintain an Executive Steering Committee related to the MMIS contracts and projects.

  • Directs HHSC to annually collect information from each MCO on the percentage of clients enrolled in consumer directed services and establish incremental benchmarks for improvement.

  • Continues the Medicaid therapy services reporting.

  • Requires HHSC to annually evaluate data submitted by MCOs to determine whether the data continues to be useful or if additional data is needed to oversee contracts or evaluate effectiveness.

  • Requires HHSC to quarterly report on supplemental, directed and other payments.

  • Includes funds to improve 2-1-1 analytics and functionality.

  • Provides $2,000,000 in all funds in 2025 for ongoing costs associated with the Medicaid and CHIP Provider Enrollment and Credentialing Portal.

For questions or additional information please contact Laurie Vanhoose at or 512-217-8459.


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