90 Days to the 90th Legislature: Healthcare Policy Impacts

In January, Texas lawmakers will return to the Capitol for the 90th Legislative Session. But the work of shaping the next session didn’t stop when the Legislature adjourned in May 2025.

Throughout the interim, House and Senate Committees have studied issues identified through the interim charges, which lay the groundwork for possible bills that will be filed. At the same time, state agencies, healthcare providers and patients have been navigating the effects of legislation passed in previous sessions, along with changes in federal policy and regulation.

Together, these developments have created an eventful interim and set the stage for a legislative session that could have lasting effects on healthcare in Texas. Being prepared starts with being informed.

Summary of Interim Charges

Interim charges are a policy tool for leadership of the Texas House and Senate to study and research throughout the interim – the period in which the Texas legislature is not in session. The purpose of the interim charges is to prime the legislature in the months leading up to the legislative session, providing evidence and recommendations for potential legislation.

While each committee can discuss and meet about anything under their purview, the Speaker of the Texas House and the Lieutenant Governor also publish a list of charges they expect their committees to study. Each committee then holds hearings throughout the interim to hear testimony from stakeholders on each of the topics the committees decide to examine, regardless of whether it was sourced from the charges. There were several interim charges that were published this year affecting healthcare.

2026 Senate Interim Charges

Two key charges out of the Senate are likely to have significant impact on hospitals and healthcare during the session:

Preventing Fraud, Waste & Abuse: The Senate Finance Committee was tasked with reviewing agencies’ abilities to mitigate fraud, waste and abuse in government programs and contracted services.

Policies that result from the hearings could have an impact on hospital practices and the government payments on which they depend. Texas hospitals don’t condone fraud, waste or abuse (and in fact, expend considerable resources to prevent such actions). However, hospitals could suffer if measures to clamp down on fraud create excessive friction and burden for good actors, who represent the overwhelming majority of providers in the system. These practices could have unintended consequences on care delivery and reimbursement from government payers, and ultimately patient access.

Rising Healthcare and Insurance Costs: The Senate Health and Human Services Committee was tasked with studying increasing healthcare costs by examining pharmacy benefit managers and hospital outpatient payments – also known as facility fees – then discussing whether they have contributed to the rising cost of healthcare.

Some hospitals charge facility fees in outpatient settings to receive reimbursement for goods and services provided in their outpatient facilities. Much of the discussion on facility fees is based largely on misinformation about what facility fees are and the essential things they pay for, such as staffing, equipment, supplies, or building and operational maintenance.

2026 House Interim Charges

In the House, THA is monitoring:

AI in Healthcare: The House Public Health committee was tasked with studying the use of Artificial Intelligence in healthcare to aid in the quality of care that patients receive, as well as the risks in using AI in healthcare.

Hospitals utilize AI to make patient care more efficient in a variety of ways, such as using ambient AI to help transcribe patient notes. This allows providers to devote more time to patient care and less time on paperwork. THA Associate General Counsel Nicole Lusardi testified to the House Public Health committee that the use of AI in healthcare also helps to assist physicians with accurately diagnosing patients that might otherwise have gone undetected without the help of AI.

Select Committee on Health Care Affordability: House Speaker Dustin Burrows established a special Select Committee on Health Care Affordability in March, chaired by House Rep. James Frank. The committee was instructed to study the core causes of the rising cost of healthcare, including by focusing on market consolidation and competition, price transparency and understanding the cost drivers for hospital systems, insurers, pharmacy benefit managers and other healthcare stakeholders.

THA President and CEO John Hawkins testified before this committee in May 2026. Hawkins provided clarity to hospitals’ perspective on workforce, pharmaceutical and supply expenses, and how hospitals navigate their duty to provide care within an inadequate reimbursement environment. He also spoke to the unique financial situation in Texas that necessitates facility fees, when consolidation benefits local communities, Texas hospitals’ exemplary charity care efforts and hospital industry support for price transparency.

Interim Charges Takeaway

After committees conclude their interim hearings, each committee publishes an interim report. These reports will include a background of the topics discussed, summaries of witness testimony and recommended actions for the next legislative session. Some of the recommendations may be filed as priority legislation during the 90th Legislature. The interim reports for 2026 are expected in late November or December.

Major Policies & Impactful Events

The Enhanced Premium Tax Credits (EPTC) was a COVID-era program that provided additional financial assistance and eligibility to purchase insurance from the Affordable Care Act’s (ACA) Health Insurance Marketplace. EPTCs were more than successful in just increasing the number of insured individuals: they were key to allowing people to purchase an appropriate level of coverage, rather than settle for minimal benefits. Of the four million Texans enrolled in an ACA plan, 95% of them utilized EPTCs.

These credits expired on Dec. 31, 2025, and as a result, many Texans who were previously enrolled in the ACA’s Marketplace plans did not enroll in coverage due to the increased cost of that coverage.

Because of the loss of additional support provided through the EPTCs, hospitals are seeing increased numbers of uninsured individuals seeking medical care in their emergency rooms, and as such, are providing more uncompensated care for patients that would have otherwise been covered under the ACA.

The Rural Hospital Transformation Program was created by an approximate $1.4 billion allocation from H.R. 1, colloquially known as The One Big Beautiful Act. The program timeline will run from 2026 to 2030 with $281 million awarded to approved Texas facilities each year.

One initiative out of the program focuses on rural hospital districts that participate in community-based prevention, wellness and nutrition-based programs, and services that improve diabetes, cardiovascular diseases, respiratory diseases and obesity. Another initiative awards approved rural health provided funding for developing career paths for high school students, providing scholarships for students, offering incentives for professionals to work in rural areas, and creating a new residency training program. As an additional example, initiative six awards funds to rural health providers for updated equipment to improve patient care.

The Centers for Medicare & Medicaid Services withheld approval of billions in Medicaid supplemental payments, creating a $27 million-a-day impact for Texas hospitals. THA advocated strongly over several platforms for the release of the funds, informing the public of the stakes and defending hospitals’ financing structures against federal agencies. The dispute was resolved September 17, when Texas Governor Greg Abbott announced that nearly $12 billion in Medicaid funding had been secured for hospitals and other healthcare providers. The resolution approved funding of three key Medicaid state directed payment programs – CHIRP, TIPPS, RAPPS – and releases $1.4 billion in withheld 2026 CHIRP Quality Incentive Payments.

The 340B Rebate Pilot Program was announced this summer by the Health Resources Services Administration (HRSA) – the agency that oversees the federal 340B program. The purpose of the pilot is to test a rebate payment program on 21 drugs included on the CMS Medicare Drug Price Negotiation Selected Drug List. This is a change from the current upfront discount model where covered entities receive their discount at the point of purchase.

The pilot program is scheduled to go into effect on Jan. 1, 2027. The change from the upfront discount model to a rebate model would require covered entities to pay full price for drugs in the pilot program and puts manufacturers in the place of approving program compliance before a rebate is issued. In contrast to the upfront discount model, a rebate program would make it difficult for hospitals and other covered entities to manage cash flow, ensure financial stability and direct savings to their communities.

However, on Oct. 9, the American Hospital Association, Maine Hospital Association and four safety-net hospital filed a lawsuit against HRSA, Secretary Kennedy, HRSA Administrator Thomas Engels, the Department of Health and Human Services and the United States asking the court to permanently enjoin the federal government from being able to implement the new Rebate Model pilot program. The same plaintiffs also filed a separate motion for expedited review to request a temporary restraining order (TRO) of the federal government from implementing and beginning the rebate program on Jan. 1 while the case is litigated in federal court. [As of the date of this publication, a hearing on the TRO has not yet been set.]

Top Issues to Watch in the 90th

The upcoming legislative session will kick off on Jan. 12, and there’ll be no shortage of hot topics that’ll impact Texas patients and hospitals.

Aligning with national trends, observers of the legislative cycle should note that healthcare affordability, edits to Texas’ landmark medical liability law, the renewal of hospital local provider tax arrangements and scrutiny of hospital charity care policies are all expected to be a part of the discussion. Other news-making topics, such as the reduction of property taxes, data centers and transmission lines, will also be under the microscope.

The first day that a member of the legislature may file a bill for consideration in the 90th session is Nov. 9 – on that day, we will get a peek at the actual legislative proposals to the issues and problems discussed during the interim.

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