Rural Hospital Advisory Committee

Rebecca McCain, MHA (RHAC Chair)
Electra Hospital District
Electra

 Rural Hospital Services Strategic Plan. CSHB 18 would require the statewide Rural Hospital Services Strategic Plan to include a rural hospital financial needs assessment and financial vulnerability index quantifying the likelihood that a rural hospital will be able to maintain its current level of services, meet its financial obligations, and remain operational during the next two-year period.

The bill would transfer reporting responsibility from the Health and Human Services Commission (HHSC) to the State Office of Rural Hospital Finance created by the bill. This office also would be responsible for the submission of the plan to the Legislature, the governor, and the Legislative Budget Board. The bill would change the reporting deadline from November 1 to December 1 of each even-numbered year.

State Office of Rural Hospital Finance. The bill would require HHSC to establish and maintain the State Office of Rural Hospital Finance within HHSC to provide technical assistance for rural hospitals and health care systems in rural areas that participated or sought to participate in state or federal financial programs, including Medicaid.

Definitions. CSHB 18 would establish definitions of “rural hospital” and “rural health care clinic” and repeal the definition of “non-urban healthcare facility.” The bill would make conforming changes to replace the term “non-urban healthcare facility.” The bill would define a rural county as a county with a population of 68,750 or less.

Creation of the Texas Rural Hospital Officers Academy. CSHB 18 would, if funds were appropriated by the Legislature for that purpose, establish the Texas Rural Hospital Officers Academy. HHSC would be required by December 1, 2025, to contract with at least two but no more than four higher education institutions to administer the academy. The academy would be required to provide at least 100 hours of annual coursework and technical training on matters that impact the financial stability of rural hospitals and rural healthcare systems, including relevant state and federal regulations and financial programs, business administration and revenue maximization, organizational management, and other applicable topics.

HHSC would be required by January 1, 2026, to create an interagency advisory committee to oversee the academy’s curriculum development. The committee would be composed of representatives from relevant state agencies, institutions of higher education, and rural hospitals appointed by the HHSC executive commissioner. The committee would be abolished on the earlier of the date a curriculum was adopted or September 1, 2027. The provisions related to the establishment and duties of the committee would expire on September 1, 2028.

HHSC would be required to establish selection criteria for applicants to an academy and include the criteria in each contract with participating institutions. Participation in an academy would be limited to individuals responsible for, or expected to be responsible for, rural hospital or health care system financial stability. Institutions contracted to administer an academy would be required to accept new participants each year, would be required to offer reimbursement for travel expenses, and could not charge for admission or participation.

Grant programs for rural hospitals. CSHB 18 would require HHSC to establish several grant programs for rural hospitals or rural hospital districts, authorities, or organizations. The bill would require the State Office of Rural Hospital Finance to administer the grant programs established under the bill, including setting application and eligibility criteria, executing contracts with grant recipients, and ensuring appropriate use of funds. HHSC would only be required to implement grant programs under the bill if the Legislature appropriated money specifically for that purpose.

To the extent practicable, grants would have to be awarded within 180 days of application receipt. Funding could not be used to supplant non-Medicaid federal funding or cover costs obligated to be reimbursed or paid by another funding source, including Medicaid. The solicitation of applicants for a grant under the bill would not be subject to certain general Government Code provisions on uniform grant and contract management.

Financial Stabilization Grant Program. The Financial Stabilization Grant Program would be established to support rural hospitals, hospital districts, and hospital authorities at moderate or high risk of financial instability. This risk would be required to be made using the hospital financial needs assessment and vulnerability index developed under the strategic plan.

The office would also be required to develop a formula to allocate funds under the program, which could consider:

• the degree of financial vulnerability of the applicant;
• whether the applicant was the sole hospital provider in the county;
• whether the applicant was within 35 miles of a hospital; and
• other factors determined to be relevant by the office.

For applications submitted before December 1, 2026, the office would have to determine grant eligibility by reviewing financial data published by HHSC. This provision would expire on September 1, 2027.

Emergency Hardship Grant Program. The Emergency Hardship Grant Program would be established to assist rural hospitals, hospital districts, and hospital authorities that had experienced:

• a man-made or natural disaster that resulted in a loss of assets; or
• an unforeseeable or unmitigable circumstance that was likely to cause facility closure or an inability to fund payroll within 180 days of applying for a grant.

Innovation Grant Program. The Innovation Grant Program would be established to support rural hospitals, hospital districts, and hospital authorities that undertake initiatives:

• to provide health care access and improve the quality of rural health care;
• that are likely to improve the recipient’s financial stability; and
• that are estimated to become sustainable without future state funding.

In awarding these grants, the office would be required to prioritize funding for initiatives improving health care facilities or services for women who were pregnant or recently gave birth, individuals under age 20, older adults in rural counties, or uninsured individuals.

Rural Hospital Support Grant Program. The rural hospital support grant program would be established to support rural hospitals, hospital districts, hospital authorities, and hospital organizations in improving financial stability, continuing operations, and supporting the long-term viability of the grant recipient.

Rural hospital reimbursement methodologies. CSHB 18 would remove language specifying that the biennial cost-based Medicaid reimbursement methodology for rural hospitals adopted by the executive commissioner of HHSC is subject to limitations on appropriations. To the extent allowed by federal law, the bill also would require the HHSC executive commissioner to develop and calculate an annual add-on reimbursement rate for rural hospitals with obstetrics and gynecology departments. 

Pediatric Tele-Connectivity Resource Program for Rural Texas. The bill would revise certain provisions on the Pediatric Tele-Connectivity Resource Program for Rural Texas, including establishing that the program applied to rural hospitals and health clinics rather than nonurban health care facilities. The bill would authorize the program to award grants to rural hospitals and clinics to connect them with an institution of higher education that was a member of the Texas Child Mental Health Care Consortium.

The bill would remove various eligibility criteria for program grant recipients. To the extent practicable, HHSC would be required to award a grant under the program within 180 days of receiving a program application. HHSC also could combine the required biennial report on the program with the report for the Strategic Plan on Rural Hospital Services.

The bill would repeal provisions authorizing the creation of a work group to assist with the program.

Rural Pediatric Mental Health Care Access Program. Using the existing network of child psychiatry access centers, CSHB 18 would establish or expand provider consultation programs to assist health care practitioners providing services at rural hospitals or health clinics to identify and assess the behavioral health needs of and to identify necessary mental health care services to improve access to mental health care services for pediatric and perinatal patients seeking services at the hospital or clinic.

In collaboration with a rural hospital organization, the Texas Child Mental Health Care Consortium would be required to develop and implement a plan by September 1, 2026, to expand telemedicine or telehealth programs for these purposes. The bill would allow for the plan to include limitations on when telemedicine services are available and require that the level of access to mental health care services for pediatric patients be the same or substantially similar to that of services provided to students attending a school in a school district for which the consortium has made services available.

Mental health care services for minors under the program could only be provided with the written consent of the child’s parent, guardian, or the adult with whom the child primarily resides. The consortium would be required to develop a model consent form to be posted on its website.

The bill would require the consortium’s biennial report to also be submitted to the Legislative Budget Board. The report would have to include information about the rural hospitals and health clinics to which the program provided mental health access services and the cost to maintain the program.

Other provisions. If a state agency determined that a waiver or authorization from a federal agency was necessary to implement the bill, the agency would be required to request the waiver and could delay implementation until the waiver or authorization was granted.

The bill would take immediate effect if finally passed by a two-thirds record vote of the membership of each house. Otherwise, it would take effect September 1, 2025.