Policy Priorities

State: Policy Priorities for 2025-26

Through several of the most difficult years they’ve faced in their history, Texas hospitals have continued operating around the clock, fulfilling the requirement to care for all Texans with emergency conditions regardless of the patient’s ability to pay.

They’ve done it through a time of financial and operational challenges, in an increasingly regulated environment, with ongoing threats to the viability of patient care. Today, Texas hospitals continue to be in need of resources to replenish their workforce pipeline, care for the state’s most vulnerable patients in Medicaid, increase access to coverage and care, and improve the breadth and capabilities of behavioral health care, among other needs.

1. STATE BUDGET

• Ensure state funding of hospitals in Medicaid is closer to the cost of care, based on a review of rates performed by the Texas Health and Human Services Commission.
• Ensure continuation of Medicaid reimbursement add-on payments for trauma, safety-net and labor and delivery, including the rural add-on for labor and delivery care.
• Maintain funding for the state’s trauma care network to ensure Texas hospitals’ participation in this critical and voluntary program.

2. FINANCIAL STABILITY

• Support stability and maintenance of supplemental Medicaid payments to help cover billions in unreimbursed costs, and ongoing preservation of the Medicaid 1115 Waiver.
• Support statewide reauthorization and use of local provider participation funds to finance Medicaid hospital programs, defray uncompensated care costs and support access-to-care projects established under the Medicaid 1115 Waiver.
• Oppose decreases in hospital reimbursements, including through the use of site-neutral payments and/or any proposals amounting to government rate-setting in the private health care market.
• Oppose any attempts to curb or ban hospital outpatient payments – also known as “facility fees” – which cover all costs of care aside from professional services fees.

3. WORKFORCE

• Support efforts to clear the bottleneck in the state’s nursing workforce training pipeline with robust funding for the clinical site nurse preceptor grant program established by Senate Bill 25 in the 2023 legislative session.
• Increased state funding for physician, nurse, behavioral health and allied health professional education, training, retention and loan repayment programs to address severe workforce shortages and help care for a growing population.
• Support strategies to bolster workplace safety, building on the gains made during the 2023 legislative session to prevent and address workplace violence.

4. HEALTH CARE ACCESS AND COVERAGE

• Support efforts to increase the number of Texans with comprehensive health insurance.
• Support continuation of Texas’ existing strongest-in-the-nation charity care law requiring hospitals to meet stringent community benefit standards.
• Support streamlining the enrollment process for children to avoid redundancy in data collection, reduce administrative burden for both state eligibility workers and families, and improve enrollment for eligible children.

5. BEHAVIORAL HEALTH ACCESS

• Support funding to address behavioral health needs.
• Support Medicaid coverage for adult behavioral health inpatient care beyond 15 days through a state waiver allowing removal of the federal prohibition on payments to “institutions for mental disease” for most adult inpatient care.
• Support adding intensive outpatient therapy and partial hospitalization as required Medicaid benefits to improve the continuum of care and reduce hospital readmissions.
• Increase state funding to ensure timely and appropriate access to inpatient and outpatient community-based services and supports for Texans with a behavioral health diagnosis.

6. REMOVE RED TAPE LIMITING ACCESS TO CARE

• Support payer policies that improve patient access to care and reduce red tape, including limits on prior authorizations and care location policies.
• Support measures that remove overly burdensome utilization review policies, ensure robust insurance networks and strengthen access to and payment of emergency room care.
• Support patient access to price transparency data and meaningful quality data for all health care providers.
• Increased payer accountability in contracting and payment policies, provider relations and network adequacy.

7. PUBLIC HEALTH & EQUITY

• Support expanded resources to allow the state and Texas hospitals to respond to current and future pandemics, natural and man-made disasters, and emergencies, a need reinforced by the emergence of Hurricane Beryl in July 2024.
• Support policies and legislation that address documented health disparities in access, morbidity and mortality, particularly among racial/ethnic minority groups and those of lower socioeconomic status.
• Support a strong public health system in Texas to build a strong workforce and decrease acute health care needs.

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Federal: Policy Priorities 2025-26

During an era when the need for both physical and behavioral health care is acute in Texas and across the nation, Texas hospitals continue to pursue their lifesaving mission in the face of numerous headwinds: belowcost reimbursement; inflationary pressures and higher drug costs; bottlenecks in the hospital workforce pipeline; sicker patients and ever-thickening insurer red tape that impedes care and raises costs. They battle through these challenges while continuing to be the only providers who offer 24/7 care every day of the year.

Texas hospitals remain vital to their communities not only as caregivers, but also as large employers. In turn, soundly crafted assistance from policymakers in Washington, D.C., is critical to helping hospitals serve those communities to their fullest capabilities.

THA priorities for the 119th Congress include:

1. STOP SITE-NEUTRAL PAYMENT POLICIES.

Site-neutral payments – which involve paying the same for care regardless of the setting – have been the focus of legislation that would apply them to drug administration services at off-campus hospital outpatient departments, as well as other broader efforts. Just as all patients are not the same, all sites of care are not the same – and should not be reimbursed as though they are. Texas hospitals oppose all payment cuts resulting from new site-neutral policies, which would particularly reduce access to care in rural and other underserved communities.

2. PROTECT TEXAS’ SAFETY-NET HOSPITALS FROM DEVASTATING FUNDING CUTS.

Medicare and Medicaid are critical payers for Texas hospitals, but these programs pay below the cost of care. Texas hospitals oppose any reduction to vital Medicaid and Medicare payments so that patients can access the care they need, when they need it. THA is advocating for a full repeal of three years’ worth of planned cuts in the Medicaid Disproportionate Share Hospital (DSH) program, which – absent congressional action – will kick in on April 1, 2025. These cuts must be repealed – or at minimum delayed – for Texas’ safety-net providers to stay viable.

3. PRESERVE STATE FUNDING OPTIONS FOR MEDICAID.

Texas hospitals oppose efforts to limit states’ ability to draw down critical federal Medicaid payments, which providers nationwide use under the current 1115 waiver to ensure access to essential care for Medicaid enrollees and the uninsured. States need the flexibility to utilize lawful methods to finance the non-federal share of Medicaid payments, which are required to draw down federal matching funds. Shifting rules and new financing conditions will undermine the safety net and stability of the Texas Medicaid program. Without lawfully approved supplemental payments, access to care will suffer for all Texans.

4. SUPPORT RURAL HOSPITALS BY CONTINUING CRITICAL PAYMENT PROGRAMS.

Two vital lifelines for rural hospitals – the Medicare-Dependent Hospital (MDH) and Low-Volume Adjustment (LVA) programs – are set to expire after March 31, 2025. MDH is a payment source for facilities with a particularly high Medicare patient population, while LVA provides payments to facilities that don’t reach a certain threshold of discharge numbers, among other requirements. For the stability of the vulnerable rural facilities they benefit, these programs must be made permanent or extended.

5. PRESERVE PREMIUM TAX CREDITS THAT ARE HELPING TEXANS OBTAIN HEALTH INSURANCE.

Premium tax credits passed in 2021 have helped bolster enrollment in federal Marketplace plans, with nearly 3.3 million Texans signing up during the 2024 plan year. But these credits will expire at the end of 2025 without congressional action to renew them. Given the state’s nation-leading number of uninsured, Texas hospitals support maintaining these credits and will continue striving to increase the number of Texans with comprehensive health care coverage.

6. STREAMLINE AND REDUCE THE BURDEN OF INSURERS’ PRIOR AUTHORIZATION REQUIREMENTS.

Health insurers’ prior authorization requirements continue to be bureaucratic and costly for hospitals and a care impediment for patients, posing a particular challenge in the Medicare Advantage (MA) program. Texas hospitals support the Improving Seniors’ Timely Access to Care Act and other legislation that would streamline prior authorization in MA plans, reducing this burden that hits all types of hospitals, but especially rural ones.

7. ALIGN POLICIES FOR, AND REIMBURSEMENT FROM, MEDICARE ADVANTAGE PLANS WITH THOSE OF TRADITIONAL MEDICARE.

Medicare Advantage (MA) plans reimburse hospitals at a slower pace and often at a lower rate. These plans offer benefits and cost-sharing arrangements that differ from traditional Medicare. Rural hospitals, especially critical access hospitals (CAHs), are disadvantaged in an MA system. Congress should support policies to ensure adequate MA reimbursement, especially for CAHs, by allowing hospitals to consider MA patient days as traditional Medicare days on the Medicare cost report. Consistency across MA plans and traditional Medicare will protect patients’ access to medically necessary care and reduce financial instability and administrative burdens for small, rural and vulnerable Texas hospitals.

8. PROTECT ACCESS TO THE 340B DRUG PRICING PROGRAM.

The 340B program allows eligible providers to stretch their resources to better serve the needs of their patients and communities. Savings through the program fund health services tailored to meet community needs and free or discounted drugs to patients. Texas hospitals oppose efforts to diminish the value and scope of the 340B program, including new mandates on eligible providers that will result in reduced access to care.

9. SUPPORT PERMANENCE FOR TELEHEALTH FLEXIBILITIES AND THE HOSPITAL-AT-HOME PROGRAM.

Telehealth flexibilities that Medicare authorities granted as a result of the COVID-19 pandemic have netted lasting benefits for remote care. The federal Acute Hospital Care at Home program was likewise a beneficial pandemic-era initiative, allowing hospitals to control surge capacity by treating eligible patients at home. Authorization for telehealth flexibilities and the hospital-at-home program run through March 31, 2025. THA is asking for them to be extended or made permanent.

10. PROTECT HEALTH CARE WORKERS FROM VIOLENT ENCOUNTERS ON THE JOB.

Texas hospitals have reported a significant increase of violence in their facilities despite robust prevention efforts. Physical and verbal abuse contribute to burnout and workforce shortages, which increase the cost of care. Texas hospitals support the Safety from Violence for Healthcare Employees (SAVE) Act, bipartisan legislation that would provide federal protections for health care workers like those that already apply to aircraft and airport workers.