HB 985

relating to hospital-owned outpatient facilities, including
site-neutral reimbursement rates under Medicaid.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter A, Chapter 311, Health and Safety
Code, is amended by adding Section 311.006 to read as follows:
Sec. 311.006.  ACQUISITION OF OUTPATIENT HEALTH CARE
FACILITIES.  (a)  In this section:
(1)  "Commission" means the Health and Human Services
(2)  "Hospital" means a hospital licensed under Chapter
(b)  A hospital that acquires an outpatient health care
facility shall provide written notice of the acquisition to the
office of the attorney general and the commission.
SECTION 2.  Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.0286 to read as follows:
Sec. 32.0286.  SITE-NEUTRAL REIMBURSEMENT RATE FOR
OUTPATIENT SERVICES.  (a)  In this section, "hospital-owned
outpatient facility" means a department, unit, clinic, or other
facility or organization that a hospital provider either creates or
acquires for the purpose of furnishing outpatient services.  The
term includes a hospital outpatient department.
(b)  Notwithstanding any other law, the commission shall
ensure the Medicaid reimbursement rate for outpatient services
provided by a hospital-owned outpatient facility is the same as the
reimbursement rate for outpatient services an independent,
physician-owned practice provides if:
(1)  the outpatient services are not dependent on
technology associated with the facility; and
(2)  evidence-based rationale does not support a
different reimbursement rate for a specific outpatient service.
SECTION 3.  (a)  In this section:
(1)  "Commission" means the Health and Human Services
(2)  "Department" means the Texas Department of
(3)  "Medicaid" means the medical assistance program
established under Chapter 32, Human Resources Code.
(b)  The department, in consultation with the commission and
the office of the attorney general, shall conduct a study on the
feasibility and advisability of expanding the policy under Section
32.0286, Human Resources Code, as added by this Act, to commercial
health benefit plan issuers in this state by prohibiting the
issuers from providing provider-based billing rates for outpatient
services that are greater than the rates provided to independent,
physician-owned practices providing the same outpatient services.
(c)  Not later than September 1, 2026, the department shall
prepare and submit to the legislature and the standing committees
of the legislature with primary jurisdiction over insurance and
Medicaid a report containing the results of the study conducted
under Subsection (b) of this section and any recommendations for
legislative or other action.  The report must include an estimate of
any projected cost savings to health care consumers in this state
that would result from commercial health benefit plan issuers
implementing a site-neutral payment policy for outpatient
SECTION 4.  Not later than January 1, 2026, the executive
commissioner of the Health and Human Services Commission shall
adopt or amend rules as necessary to comply with Section 32.0286,
Human Resources Code, as added by this Act.
SECTION 5.  Section 311.006, Health and Safety Code, as
added by this Act, applies only to a hospital's acquisition of an
outpatient facility on or after the effective date of this Act.
SECTION 6.  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 7.  This Act takes effect September 1, 2025.