HB 18

relating to the establishment and administration of certain
programs and services providing health care services to rural
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  This Act may be cited as the Rural Health
Stabilization and Innovation Act.
SECTION 2.  Section 526.0301, Government Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 526.0301.  STRATEGIC PLAN FOR RURAL HOSPITAL SERVICES;
REPORT.  (a)  The commission shall develop and implement a strategic
plan to ensure that the citizens in this state residing in rural
areas have access to hospital services.  The commission shall
consult with the State Office of Rural Hospital Finance established
under Section 526.0304 when developing and implementing the
(b)  The strategic plan must include:
(1)  a proposal for using at least one of the following
methods to ensure access to hospital services in the rural areas of
(A)  an enhanced cost reimbursement methodology
for the payment of rural hospitals participating in the Medicaid
managed care program in conjunction with a supplemental payment
program for rural hospitals to cover costs incurred in providing
(B)  a hospital rate enhancement program
applicable only to rural hospitals;
(C)  a reduction of punitive actions under
Medicaid that require reimbursement for Medicaid payments made to a
rural hospital provider, a reduction of the frequency of payment
reductions under Medicaid made to rural hospitals, and an
enhancement of payments made under merit-based programs or similar
(D)  a reduction of state regulatory-related
costs related to the commission's review of rural hospitals; or
(E)  in accordance with rules the Centers for
Medicare and Medicaid Services adopts, the establishment of a
minimum fee schedule that applies to payments made to rural
hospitals by Medicaid managed care organizations; [and]
(2)  target dates for achieving goals related to the
proposal described by Subdivision (1); and
(3)  a rural hospital financial needs assessment and
financial vulnerability index quantifying the likelihood that a
rural hospital, during the next two-year period, will be able to:
(A)  maintain the types of patient services the
hospital currently offers at the same level of service;
(B)  meet the hospital's current financial
(c)  Not later than December [November] 1 of each
even-numbered year, the State Office of Rural Hospital Finance
[commission] shall submit a report regarding the [commission's]
development and implementation of the strategic plan to:
(3)  the Legislative Budget Board.
SECTION 3.  Subchapter G, Chapter 526, Government Code, as
effective April 1, 2025, is amended by adding Sections 526.0304 and
Sec. 526.0304.  STATE OFFICE OF RURAL HOSPITAL FINANCE.  The
commission shall establish and maintain the State Office of Rural
Hospital Finance as a division within the commission to provide
technical assistance for rural hospitals and health care systems in
rural areas of this state that participate or are seeking to
participate in state or federal financial programs, including
Sec. 526.0305.  TEXAS RURAL HOSPITAL OFFICERS ACADEMY.  (a)
(1)  "Institution of higher education" has the meaning
assigned by Section 61.003, Education Code.
(2)  "Rural county" means a county with a population of
(3)  "Rural hospital" has the meaning assigned by
(b)  To the extent money is appropriated to the commission
for the purpose, the commission shall contract with at least two but
not more than four institutions of higher education to establish
and administer an academy to provide professional development and
continuing education programs for the officers of rural hospitals
and other health care providers located in rural counties.  The
academy must offer at least 100 hours of coursework each year that
consists of courses and technical training on matters that impact
the financial stability of rural hospitals and rural health care
(1)  relevant state and federal regulations;
(2)  relevant state and federal financial programs;
(3)  business administration, including revenue
(4)  organizational management; and
(5)  other topics applicable to the financial stability
of rural hospitals and rural health care systems.
(b-1)  An institution of higher education that establishes
an academy under Subsection (b) shall establish an interagency
advisory committee to oversee the development of the academy's
curriculum.  The advisory committee is composed of the following
members appointed by the president of the establishing institution
(1)  a representative of the commission;
(2)  a representative of one or more institutions of
(3)  a representative of the Department of State Health
(4)  a representative of the Texas Department of
(5)  a representative of the state auditor's office;
(6)  a representative of any other state agency the
president determines is appropriate.
(b-2)  The advisory committee established under Subsection
(b-1) is abolished on the earlier of:
(1)  the date the advisory committee adopts a
(b-3)  This subsection and Subsections (b-1) and (b-2)
(c)  An institution of higher education that establishes an
academy under Subsection (b) shall:
(1)  appoint a panel that consists of at least five but
not more than 11 representatives from the entities from which
members of the advisory committee established by the institution
under Subsection (b-1) are appointed to establish a competitive
application process and selection criteria for academy
(2)  subject to Subsection (d), select academy
participants using the competitive application process developed
(d)  Participation in an academy is limited to individuals
who are responsible for, or who anticipate becoming responsible
for, the financial stability of a rural hospital or rural health
(e)  The panelists appointed under Subsection (c) shall
review applications for the academy and provide recommendations to
the establishing institution of higher education regarding
(f)  An institution of higher education that establishes an
(1)  shall accept new participants for the academy each
(2)  shall offer to reimburse academy participants for
travel and related expenses; and
(3)  may not claim or charge a participant for
admission to or participation in the academy or any associated
SECTION 4.  Chapter 526, Government Code, as effective April
1, 2025, is amended by adding Subchapter G-1 to read as follows:
SUBCHAPTER G-1.  GRANT PROGRAMS FOR RURAL HOSPITALS, HOSPITAL
DISTRICTS, AND HOSPITAL AUTHORITIES
Sec. 526.0321.  DEFINITIONS.  In this subchapter:
(1)  "Hospital district" means a hospital district
created under the authority of Sections 4 through 11, Article IX,
(2)  "Office" means the State Office of Rural Hospital
Finance established under Section 526.0304.
(3)  "Rural county" means a county with a population of
(4)  "Rural hospital" has the meaning assigned by
(5)  "Rural hospital authority" means a hospital
authority located in a rural county.
(6)  "Rural hospital district" means a hospital
district located in a rural county.
Sec. 526.0322.  FINANCIAL STABILIZATION GRANT PROGRAM.  (a)
To the extent money is appropriated to the commission for the
purpose, the commission may establish a financial stabilization
grant program to award grants to support and improve the financial
stability of rural hospitals, rural hospital districts, and rural
hospital authorities that are determined to be at a moderate or high
risk of financial instability.  If the commission establishes a
financial stabilization grant program under this section, the
office shall administer the grant program for the commission.
(b)  The determination of whether a grant applicant is at a
moderate or high risk of financial instability shall be made using
the hospital financial needs assessment and financial
vulnerability index developed as part of the strategic plan
required under Section 526.0301.
(b-1)  Notwithstanding Subsection (b), for a grant
application received before December 1, 2026, the office shall
determine whether the applicant is at a moderate or high risk of
financial instability by evaluating data published by the
commission regarding the financial stability of rural hospitals,
rural hospital districts, and rural hospital authorities.  This
subsection expires September 1, 2027.
(c)  The office shall develop an application process and
eligibility and selection criteria for grant applicants under this
(d)  The office may award a grant under this section only in
accordance with the terms of a contract between the office and the
grant recipient.  The contract must include provisions under which
the office is granted sufficient control to ensure that:
(1)  grant funds are spent in a manner that is
consistent with the public purpose of providing adequate access to
quality health care in all areas of this state; and
(2)  both this state and the grant recipient are
benefited by the award of the grant.
(e)  The office shall develop a formula to allocate the money
available to the commission for grants under this section to rural
hospitals, rural hospital districts, and rural health authorities
that are determined to be at a moderate or high risk of financial
instability.  The formula must consider:
(1)  the degree of financial vulnerability of the
applicant as determined using the hospital financial needs
assessment and financial vulnerability index developed under
(2)  whether the applicant is the sole provider of
hospital services in the county in which the applicant is located;
(3)  whether a hospital is located within 35 miles of
the applicant's facilities; and
(4)  any other factors the office determines are
relevant to assessing the financial stability of rural hospitals,
rural hospital districts, and rural health authorities.
Sec. 526.0323.  EMERGENCY HARDSHIP GRANT PROGRAM.  (a)  To
the extent money is appropriated to the commission for the purpose,
the commission may establish an emergency hardship grant program.
If the commission establishes an emergency hardship grant program
under this section, the office shall administer the grant program
(b)  The office may award emergency hardship grants to rural
hospitals, rural hospital districts, and rural hospital
authorities that have experienced:
(1)  a man-made or natural disaster resulting in a loss
(2)  an unforeseeable or unmitigable circumstance
(A)  the closure of the entity's facilities during
the 180-day period beginning on the date the entity submits an
application for a grant under this section; or
(B)  an inability to fund payroll expenditures for
the entity's staff during the 180-day period beginning on the date
the entity submits an application for a grant under this section.
(c)  The office shall develop an application process and
eligibility and selection criteria for grant applicants under this
(d)  The office may award a grant under this section only in
accordance with the terms of a contract between the office and the
grant recipient.  The contract must include provisions under which
the office is granted sufficient control to ensure that:
(1)  grant funds are spent in a manner that is
consistent with the public purpose of providing adequate access to
quality health care in all areas of this state; and
(2)  both this state and the grant recipient are
benefited by the award of the grant.
Sec. 526.0324.  INNOVATION GRANT PROGRAM.  (a)  To the extent
money is appropriated to the commission for the purpose, the
commission may establish an innovation grant program to provide
support to rural hospitals, rural hospital districts, and rural
hospital authorities that undertake initiatives that:
(1)  provide access to health care and improve the
quality of health care provided to residents of a rural county;
(2)  are likely to improve the financial stability of
(3)  are estimated to become sustainable and be
maintained without additional state funding after the award of a
(b)  If the commission establishes an innovation grant
program under this section, the office shall administer the grant
(c)  In awarding grants under this section, the office may
prioritize initiatives focused on improving health care facilities
(1)  women who are pregnant or recently gave birth;
(2)  individuals under the age of 20;
(3)  older adults residing in a rural county; or
(4)  individuals who are uninsured.
(d)  The office shall develop an application process and
eligibility and selection criteria for grant applicants under this
(e)  The office may award a grant under this section only in
accordance with the terms of a contract between the office and the
grant recipient.  The contract must include provisions under which
the office is granted sufficient control to ensure that:
(1)  grant funds are spent in a manner that is
consistent with the public purpose of providing adequate access to
quality health care in all areas of this state; and
(2)  both this state and the grant recipient are
benefited by the award of the grant.
(f)  A grant recipient may not use the proceeds of a grant
(1)  reimburse an expense or pay a cost that another
source, including Medicaid, is obligated to reimburse or pay by law
(2)  supplant, or be used as a substitute for, money
awarded to the recipient from a non-Medicaid federal funding
source, including a federal grant.
Sec. 526.0325.  RURAL HOSPITAL SUPPORT GRANT PROGRAM.  (a)
To the extent money is appropriated to the commission for the
purpose, the commission may establish a rural hospital support
grant program to award support grants to rural hospitals, rural
hospital districts, and rural hospital authorities to improve the
financial stability, continue the operations, and support the
long-term viability of the grant recipient.  If the commission
establishes a rural hospital support grant program under this
section, the office shall administer the grant program for the
(b)  The office shall develop an application process and
eligibility and selection criteria for grant applicants under this
(c)  The office may award a grant under this section only in
accordance with the terms of a contract between the office and the
grant recipient.  The contract must include provisions under which
the office is granted sufficient control to ensure that:
(1)  the grant funds are spent in a manner that is
consistent with the public purpose of providing adequate access to
quality health care in all areas of this state; and
(2)  both this state and the grant recipient are
benefited by the award of the grant.
Sec. 526.0326.  GENERAL GRANT PROVISIONS.  (a)  Chapter 783
does not apply to the solicitation of applicants for a grant under
(b)  To the extent practicable, the office shall award a
grant under this subchapter not later than the 180th day after the
date the office receives the recipient's grant application.
(c)  A Medicaid provider's receipt of a grant under this
subchapter does not affect any legal or contractual duty of the
provider to comply with any applicable Medicaid requirements.
SECTION 5.  Section 532.0155, Government Code, as effective
April 1, 2025, is amended by adding Subsection (g) to read as
(g)  To the extent allowed by federal law and subject to
available appropriations, the executive commissioner, in addition
to the cost-based reimbursement rate calculated by the executive
commissioner under Subsection (b), shall develop and calculate an
add-on reimbursement rate for rural hospitals that have a
department of obstetrics and gynecology.  The executive
commissioner shall calculate the rate required by this subsection
SECTION 6.  Section 548.0351, Government Code, as effective
April 1, 2025, is amended by adding Subdivision (6-a) to read as
(6-a)  "Rural hospital" means a health care facility
licensed under Chapter 241, Health and Safety Code, that:
(A)  is located in a county with a population of
(B)  has been designated by the Centers for
Medicare and Medicaid Services as a critical access hospital, rural
referral center, or sole community hospital and:
(i)  is not located in a metropolitan
(ii)  if the hospital has 100 or fewer beds,
is located in a metropolitan statistical area.
SECTION 7.  Section 548.0352, Government Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 548.0352.  ESTABLISHMENT OF PEDIATRIC
TELE-CONNECTIVITY RESOURCE PROGRAM FOR RURAL TEXAS.  The commission
with any necessary assistance of pediatric tele-specialty
providers shall establish a pediatric tele-connectivity resource
program for rural Texas to award grants to rural hospitals
[nonurban health care facilities] to connect the hospitals [the
facilities] with pediatric specialists and pediatric
subspecialists who provide telemedicine medical services or with an
institution of higher education that is a member of the Texas Child
Mental Health Care Consortium established under Chapter 113, Health
SECTION 8.  Section 548.0353, Government Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 548.0353.  USE OF PROGRAM GRANT.  A rural hospital
[nonurban health care facility] awarded a grant under this
subchapter may use grant money to:
(1)  purchase equipment necessary for implementing a
(2)  modernize the hospital's [facility's] information
technology infrastructure and secure information technology
support to ensure an uninterrupted two-way video signal that is
compliant with the Health Insurance Portability and Accountability
Act of 1996 (Pub. L. No. 104-191);
(3)  pay a service fee to a pediatric tele-specialty
provider under an annual contract with the provider; or
(4)  pay for other activities, services, supplies,
facilities, resources, and equipment the commission determines
necessary for the hospital [facility] to use a telemedicine medical
SECTION 9.  Section 548.0354, Government Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 548.0354.  SELECTION OF PROGRAM GRANT RECIPIENTS.  (a)
The commission [with any necessary assistance of pediatric
tele-specialty providers] may select [an] eligible rural hospitals
[nonurban health care facility] to receive a grant under this
(b)  To be eligible for a grant, a rural hospital [nonurban
health care facility] must maintain [have:
[(1)  a quality assurance program that measures the
compliance of the facility's health care providers with the
[(2)  on staff at least one full-time equivalent
physician who has training and experience in pediatrics and one
individual who is responsible for ongoing nursery and neonatal
[(3)  a designated neonatal intensive care unit or an
[(4)  a commitment to obtaining neonatal or pediatric
education from a tertiary facility to expand the facility's depth
and breadth of telemedicine medical service capabilities; and
[(5)  the capability of maintaining] records and
produce [producing] reports that measure the effectiveness of a
[the] grant received by the hospital under this subchapter
(c)  To the extent practicable, the commission shall award a
program grant to a grant recipient not later than the 180th day
after the date the commission receives the recipient's program
grant application under this section.
(d)  Chapter 783 does not apply to the solicitation of
applicants for a program grant award under this subchapter.
SECTION 10.  Section 548.0357, Government Code, as effective
April 1, 2025, is amended to read as follows:
Sec. 548.0357.  BIENNIAL REPORT.  Not later than December 1
of each even-numbered year, the commission shall submit a report to
the governor and members of the legislature regarding the
activities of the program and grant recipients under the program,
including the results and outcomes of grants awarded under this
subchapter.  The commission may combine the report required by this
section with the report submitted by the State Office of Rural
Hospital Finance under Section 526.0301.
SECTION 11.  Section 113.0001, Health and Safety Code, is
amended by adding Subdivision (4) to read as follows:
(4)  "Rural hospital" has the meaning assigned by
Section 548.0351, Government Code.
SECTION 12.  Chapter 113, Health and Safety Code, is amended
by adding Subchapter D-1 to read as follows:
SUBCHAPTER D-1.  RURAL PEDIATRIC MENTAL HEALTH CARE ACCESS PROGRAM
Sec. 113.0181.  MENTAL HEALTH CARE ACCESS PROGRAM FOR RURAL
HOSPITALS.  Using the network of comprehensive child psychiatry
access centers established under Section 113.0151, the consortium
shall establish or expand telemedicine or telehealth programs for
identifying and assessing behavioral health needs and providing
access to mental health care services for pediatric patients
seeking services at a rural hospital.
Sec. 113.0182.  CONSENT REQUIRED FOR SERVICES TO MINOR.  (a)
A person may provide mental health care services to a child younger
than 18 years of age through a program established under this
subchapter only if the person obtains the written consent of the
parent or legal guardian of the child.
(b)  The consortium shall develop and post on the
consortium's  Internet website a model form for a parent or legal
guardian to provide consent under this section.
Sec. 113.0183.  REIMBURSEMENT FOR SERVICES.  (a)  Except as
otherwise provided by this section, a child psychiatry access
center established under Section 113.0151(a) may not submit an
insurance claim or charge a rural hospital, or a health care
practitioner providing services at a rural hospital, a fee for
providing consultation services or training opportunities under
(b)  A child psychiatry access center established under
Section 113.0151(a) may submit a claim for reimbursement to the
commission or a contractor operating a medical assistance program
on behalf of the commission if:
(1)  the provider of the services is enrolled and
credentialed as a Medicaid provider; and
(2)  the individual receiving services by telehealth or
telemedicine is eligible and enrolled in the Medicaid program.
(c)  Reimbursements issued under Subsection (b) shall be
paid at the reimbursement rate established by the commission or in
accordance with the contractual agreement between the provider and
the contractor operating the medical assistance program on behalf
SECTION 13.  Section 113.0251, Health and Safety Code, is
Sec. 113.0251.  BIENNIAL REPORT.  Not later than December 1
of each even-numbered year, the consortium shall prepare and submit
to the governor, the lieutenant governor, the speaker of the house
of representatives, and the standing committee of each house of the
legislature with primary jurisdiction over behavioral health
issues and post on its Internet website a written report that
(1)  the activities and objectives of the consortium;
(2)  the health-related institutions of higher
education listed in Section 113.0052(1) that receive funding by the
(3)  the rural hospitals to which the program
established under Section 113.0181 provided mental health access
(4)  the cost to maintain the mental health care access
program established under Subchapter D-1; and
(5) [(3)]  any legislative recommendations based on
the activities and objectives described by Subdivision (1).
SECTION 14.  The following provisions of the Government Code
SECTION 15.  If before implementing any provision of this
Act a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 16.  (a)  Not later than December 1, 2025, the Health
and Human Services Commission shall contract with institutions of
higher education to establish an academy under Section 526.0305,
Government Code, as added by this Act.
(b)  Not later than January 1, 2026, the president of an
institution of higher education establishing an academy under
Section 526.0305, Government Code, as added by this Act, shall
appoint the members of the interagency advisory committee as
SECTION 17.  This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2025.