HB 4615

relating to the regulation of certain nursing facilities, including
licensing requirements and Medicaid participation requirements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 540.0752(b), Government Code, as
effective April 1, 2025, is amended to read as follows:
(b)  Subject to Section 540.0701 and notwithstanding any
other law, the commission shall provide Medicaid benefits through
the STAR+PLUS Medicaid managed care program to recipients who
reside in nursing facilities.  In implementing this subsection, the
(1)  a nursing facility is paid not later than the 10th
day after the date the facility submits a clean claim;
(1-a)  a nursing facility complies with the direct care
expense ratio adopted under Section 32.0286, Human Resources Code;
(2)  services are used appropriately, consistent with
criteria the commission establishes;
(3)  the incidence of potentially preventable events
and unnecessary institutionalizations is reduced;
(4)  a Medicaid managed care organization providing
(A)  provides discharge planning, transitional
care, and other education programs to physicians and hospitals
regarding all available long-term care settings;
(B)  assists in collecting applied income from
(C)  provides payment incentives to nursing
(i)  reward reductions in preventable acute
(ii)  encourage transformative efforts in
the delivery of nursing facility services, including efforts to
promote a resident-centered care culture through facility design
(5)  a portal is established that complies with state
and federal regulations, including standard coding requirements,
through which nursing facility providers participating in the
program may submit claims to any participating Medicaid managed
(6)  rules and procedures relating to certifying and
decertifying nursing facility beds under Medicaid are not affected;
(7)  a Medicaid managed care organization providing
services under the program, to the greatest extent possible, offers
nursing facility providers access to:
(A)  acute care professionals; and
(B)  telemedicine, when feasible and in
accordance with state law, including rules adopted by the Texas
(8)  the commission approves the staff rate enhancement
methodology for the staff rate enhancement paid to a nursing
facility that qualifies for the enhancement under the program.
SECTION 2.  Subchapter F, Chapter 540, Government Code, as
effective April 1, 2025, is amended by adding Section 540.0283 to
Sec. 540.0283.  NURSING FACILITY PROVIDER AGREEMENTS:
COMPLIANCE WITH DIRECT CARE EXPENSE RATIO.  (a)  A contract to which
this subchapter applies must require that each provider agreement
between the contracting Medicaid managed care organization and a
nursing facility include a requirement that the facility comply
with the direct care expense ratio adopted under Section 32.0286,
(b)  This section does not apply to a state-owned facility.
SECTION 3.  Section 242.032, Health and Safety Code, is
amended by adding Subsection (b-1) to read as follows:
(1)  include the name of each person with a direct or
indirect ownership interest of five percent or more in:
(A)  the nursing facility, including a subsidiary
or parent company of the facility; and
(B)  the real property on which the nursing
facility is located, including any owner, common owner, tenant, or
(2)  describe the exact ownership interest of each of
those persons in relation to the facility or property.
SECTION 4.  Subchapter B, Chapter 242, Health and Safety
Code, is amended by adding Section 242.0333 to read as follows:
Sec. 242.0333.  NOTIFICATION OF CHANGE TO OWNERSHIP INTEREST
APPLICATION INFORMATION.  A license holder shall notify the
commission, in the form and manner the commission requires, of any
change to the ownership interest application information provided
SECTION 5.  Section 32.028, Human Resources Code, is amended
by amending Subsection (i) and adding Subsection (i-1) to read as
(i)  The executive commissioner shall ensure that rules
governing the incentives program described by Subsection (g)(1):
(1)  provide that participation in the program by a
(2)  do not impose on a nursing facility not
participating in the program a minimum spending requirement for
direct care staff wages and benefits;
(3)  do not set a base rate for a nursing facility
participating in the program that is more than the base rate for a
nursing facility not participating in the program; [and]
(4)  establish a funding process to provide incentives
for increasing direct care staff and direct care wages and benefits
in accordance with appropriations provided; and
(5)  to the extent permitted by federal law, require
the commission to recoup all or part of an incentive payment if the
nursing facility fails to satisfy a program requirement.
(i-1)  The commission shall prohibit a provider who is the
subject of the recoupment of an incentive payment under Subsection
(i)(5) from participating in the incentives program described by
Subsection (g)(1) for a period of not less than two consecutive
years following the date on which the recoupment occurs.  The
commission shall publish and maintain on the commission's Internet
website a list of each provider prohibited from participating in
the incentives program under this subsection.
SECTION 6.  Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.0286 to read as follows:
Sec. 32.0286.  ANNUAL DIRECT CARE EXPENSE RATIO FOR
REIMBURSEMENT OF CERTAIN NURSING FACILITY PROVIDERS.  (a)  In this
section, "direct care expense":
(A)  non-revenue generating support services,
such as laundry, housekeeping, dietary services, and nursing
(B)  ancillary services, such as laboratory tests
and services, physical therapy services, occupational therapy
services, speech-language pathology services, or audiological
(C)  program services, such as an adult day-care
(2)  does not include an expense for:
(A)  administrative costs other than nursing
(D)  taxes, other than sales and payroll taxes;
(F)  rental or lease payments; or
(b)  Notwithstanding any other law, the executive
commissioner by rule shall establish an annual direct care expense
ratio, including a process for determining the ratio, applicable to
the reimbursement of nursing facility providers for providing
services to recipients under the medical assistance program.  In
establishing the ratio, the executive commissioner shall require
that at least 80 percent of the portion of the medical assistance
reimbursement amount paid to a nursing facility that is
attributable to patient care expenses is spent on reasonable and
necessary direct care expenses.
(c)  The executive commissioner shall adopt rules necessary
to ensure each nursing facility provider that participates in the
medical assistance program complies with the direct care expense
ratio adopted under this section.
(d)  To the extent permitted by federal law, the commission
may recoup all or part of the reimbursement amounts paid to a
nursing facility that are subject to the direct care expense ratio
under this section if the facility fails to spend the reimbursement
amounts in accordance with the direct care expense ratio.
(e)  The commission may not require a nursing facility to
comply with the direct care expense ratio as a condition of
(f)  This section does not apply to a state-owned facility.
SECTION 7.  (a)  The Health and Human Services Commission
shall, in a contract between the commission and a managed care
organization under Chapter 540, Government Code, as effective April
1, 2025, that is entered into or renewed on or after the effective
date of this Act, require the managed care organization to comply
with Section 540.0283, Government Code, as added by this Act.
(b)  The Health and Human Services Commission shall seek to
amend contracts entered into with managed care organizations under
Chapter 540, Government Code, as effective April 1, 2025, before
the effective date of this Act to require those managed care
organizations to comply with Section 540.0283, Government Code, as
added by this Act.  To the extent of a conflict between that section
and a provision of a contract with a managed care organization
entered into before the effective date of this Act, the contract
SECTION 8.  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 9.  This Act takes effect September 1, 2025.