Cap Recap: THA Gets Frank About Troublesome Rate-Setting

Each week during the 2023 session of the Texas Legislature, The Scope’s Cap Recap will take a quick look at the previous week’s most hospital-relevant news under the Pink Dome in Austin.


In the midst of about a dozen THA testimonies and a couple of key bill advancements, one fight loomed large above the rest last week at the Capitol, as THA hit back hard against a bill that would institute government rate-setting and depress insurance coverage.

House Bill 633 by Rep. James Frank (R-Wichita Falls) was the subject of a THA member alert last week and also came under scrutiny in the House Select Committee on Health Care Reform, where THA attorney Heather De La Garza, J.D., testified against it. A committee substitute for the bill would require hospitals to accept the lowest contracted rate the hospital has with any health plan as full payment from self-pay patients and patients paying outside insurance.

De La Garza said passing the bill would “set Texas on a dangerous [course] of government rate-setting in the private health care market” and said hospitals need to be able to react to market forces. She said the bill may also disincentivize Texans from buying comprehensive insurance. HB 633, she said, would mandate Texas hospitals to potentially provide health care at a financial loss.

“Paying a provider less does not lower the cost to provide health care,” De La Garza added. “The cost to staff and equip a hospital remains the same, or at times even increases depending on external market forces.”

Rep. Frank, who sits on the committee, raised the issue of hospitals receiving large amounts of government funding for uncompensated care. De La Garza reminded the committee that in 2020, even after receiving governmental payments, Texas hospitals still had an uncompensated-care shortfall of $4.6 billion.

Postpartum Medicaid Coverage Bill Clears Committee

Two key bills with strong THA support passed out of committee this week, making them eligible for consideration on the floor of their parent chamber. House Bill 12 by Rep. Toni Rose (D-Dallas) to extend Medicaid coverage for new mothers to 12 months postpartum, earned approval from the Select Committee on Health Care Reform. Right now, new moms in Texas only have Medicaid coverage for two months postpartum, and data show maternal complications and deaths often occur beyond that two-month window.

Senate Bill 25 by Sen. Lois Kolkhorst (R-Brenham), which would boost state support for nursing-related postsecondary education, also cleared committee. Among its key steps, the bill would remove an annual $7,000 cap for loan repayment assistance for nurses who work as faculty in a nursing degree program and would revive a dormant nursing scholarship fund, a priority for Texas Lt. Gov. Dan Patrick. The Senate Health and Human Services Committee gave the bill its signoff.

Vaccines, Emergency Care and More

THA testifiers represented hospitals on a host of issues during the week, but in terms of quantity, one general topic required more attention than the rest: Vaccines, especially in relation to COVID-19. THA attorney Cesar Lopez, J.D., represented hospitals on several bills on that topic, including registering THA’s opposition to House Bill 44 by Rep. Valoree Swanson (R-Spring). Under HB 44, providers could not require patients to be vaccinated for any infectious disease. Lopez also registered THA’s concerns on several other measures – including:

  • House Bill 81 by Rep. Brian Harrison (R-Midlothian), which would require providers to obtain informed consent before providing a COVID-19 vaccine and prohibit them from compelling an employee to receive the vaccine; and
  • Senate Bill 1024 by Sen. Kolkhorst, which would prohibit not only vaccine mandates, but also mask mandates by any entity that receives state funding.

Measures that THA testified in support of included a bill that would establish a state process for the successful hospital-at-home program that became a useful byproduct of the pandemic, and one that would strengthen the “prudent layperson” standard for emergency care.

Anna Taranova of University Health San Antonio spoke for THA on the hospital-at-home measure – House Bill 1890 by Rep. Jacey Jetton (R-Richmond) – while Lopez represented THA on the prudent layperson bill, House Bill 1236 by Rep. Tom Oliverson, MD (R-Cypress). That bill would clarify that an insurer can’t base coverage for emergency care on the patient’s final diagnosis, but on whether a prudent layperson would believe the emergent event was, in fact, an emergency.