HB18

HB18 puts rural-hospital financial assistance into law, changes Medicaid payment rules, and expands connections to pediatric specialists and mental-health care. It took effect June 20, 2025, when the governor signed it—not at the later ceremonial signing. It does not guarantee that every rural hospital will receive a grant or that every service is already available. Final law · Official history

Help for financially vulnerable hospitals

The Health and Human Services Commission (HHSC) must maintain a State Office of Rural Hospital Finance to help rural hospitals and health systems navigate state and federal financial programs. The rural-hospital strategic plan must assess financial needs and the likelihood that hospitals can maintain services, meet obligations and stay open over the next two years. The office’s report moves from November 1 to December 1 of each even-numbered year.

The law establishes four grant programs:

• Financial stabilization: for hospitals, hospital districts and hospital authorities at moderate or high financial risk. Before December 1, 2026, the office uses published HHSC financial data; afterward, the statutory needs assessment and vulnerability index govern. Allocation factors may include vulnerability, being the county’s only hospital provider and whether another hospital is within 35 miles.
• Emergency hardship: for loss of assets in a disaster, or an unforeseeable or unavoidable circumstance likely to force closure or prevent payroll within 180 days after applying.
• Innovation: for projects that improve access and quality, strengthen finances and are expected to continue without further state funding. Priority goes to services for pregnant or recently postpartum women, people under 20, older rural residents and uninsured people.
• Hospital support: to sustain operations and long-term financial viability; eligible recipients also include statewide nonprofit rural-hospital organizations.

Grants require contracts protecting their public purpose. They cannot pay costs another source is legally or contractually obliged to pay, or replace non-Medicaid federal funding. Medicaid compliance duties remain. When a hospital belongs to a larger system, the parent or system cannot control the grant money; a person present at the hospital or an administrative office within five miles at least two days each week must control it. The office should award grants within 180 days where practicable—not an unconditional payment deadline. The law exempts the solicitation of applicants from Chapter 783’s uniform grant-management rules, not every use of grant money from oversight. Implementation of these grant provisions requires a specific legislative appropriation. Sections 2–4

Training and Medicaid payments

Subject to funding, HHSC must contract with two to four public higher-education institutions for a rural hospital officers academy. It must offer at least 100 hours of coursework annually, admit new participants each year, charge participants nothing and offer travel-related reimbursement. Training covers regulations, financial programs and management. Participants must be responsible, or preparing to become responsible, for a rural hospital or health system’s finances. HHSC selects the admission criteria; a temporary interagency committee oversees curriculum. Contracts were due December 1, 2025 and committee appointments January 1, 2026. The committee ends when it adopts the curriculum or September 1, 2027, whichever comes first; its temporary statutory provisions expire September 1, 2028.

For Medicaid, HB18 removes the appropriations-limitation wording from the existing rural-hospital cost-based reimbursement provision and adds an annually calculated extra rate for hospitals with an obstetrics and gynecology department, subject to federal law. The two-year calculation cycle for the underlying cost-based rates already existed; HB18 did not invent it. Neither the law nor the fiscal note promises a specific additional payment to every hospital. Section 5 · Government Code 532.0155, historical text available

Pediatric and mental-health access

The pediatric tele-connectivity grant program now uses specified rural-hospital and rural-clinic definitions instead of the former “nonurban health care facility” category. It can connect recipients to pediatric specialists or institutions in the Texas Child Mental Health Care Consortium. Grants may support equipment, information technology, provider fees and other approved needs. HB18 removes the old eligibility requirements for specified pediatric staffing, a neonatal unit or emergency department, quality-assurance arrangements and education commitments; recipients still must keep records and report effectiveness. It also repeals the separate program work-group provision and permits combining reports.

For these provisions, a rural hospital is licensed under Chapter 241 and is either in a county of 68,750 people or fewer, or has a specified federal critical-access, rural-referral or sole-community designation. A designated hospital in a metropolitan area must have 100 beds or fewer. The Medicaid payment provision retains its separate rule-based rural-hospital definition. A qualifying rural clinic must meet the federal rural-health-clinic definition, be accredited or participate in Medicare (or both), and be in a county without a general or special hospital. These are not benefits for every clinic that describes itself as rural. Sections 6–11

The consortium must establish or expand consultation for practitioners treating pediatric and perinatal patients at qualifying hospitals and clinics. It must develop a pediatric telehealth plan for establishment by September 1, 2026; on or after that date, actual program establishment or expansion is subject to available appropriations. The plan may limit operating hours. Biennial reports must identify participating hospitals and clinics and program maintenance costs, and also go to the Legislative Budget Board.

Mental-health services through the new rural program for a child under 18 require written consent from a parent or guardian—or, if neither is known or available, the adult with whom the child primarily lives. The law makes that consent invalid if it authorizes a mental-health service affirming a child’s perception of gender inconsistent with biological sex. This is a restriction on the new program, not a new statewide rule for every mental-health service. Agencies may delay provisions requiring federal approval while seeking that approval. Sections 12–17