New Medicaid Managed Care Laws Lauded as Wins for Texas Patients
By Phil West

Medicaid captured the Texas Legislature’s attention during the 2025 session, with lawmakers passing a quartet of bills focused on improving managed care statewide, including nutrition and newborn support, physician enrollment, and credentialing.

“These are wins for patients,” said Cynthia Peacock, MD, chair of the Texas Medical Association’s Committee on Medicaid, CHIP, and the Uninsured. “The majority of these bills are patient-centered, which it should be, but helping with onboarding [and] making it easier to be a Medicaid physician of course is a win.”

To that end, a pair of bills geared toward smoothing administrative pathways for physicians passed and are now in effect:

• House Bill 3151, which enables expedited Medicaid credentialing and payment for federally qualified health centers; and
• Senate Bill 1266, which called for the Texas Health and Human Services Commission (HHSC) to ensure a support team assist physicians with Medicaid enrollment and other inquiries through its online Provider Enrollment and Management System (PEMS) portal.

“The implementation of SB 1266 will improve PEMS enrollment by notifying providers of revalidation requirements at least 30 days before the provider’s disenrollment by email and physical mail; ensuring information about how a provider may submit complaints and feedback about enrollment, credentialing, and related support is prominent and easily accessible to providers; and evaluating the performance of Texas Medicaid & Healthcare Partnership enrollment and credentialing support team annually and posting a report on HHSC’s website with the result of the evaluation,” said an HHSC spokesperson about the bill.

Another TMA Medicaid committee member, William Brendle Glomb, MD, currently chief medical officer at Waco Family Medicine, and a former chief medical director for Medicaid and CHIP Services at HHSC, credits the success of those bills and others to a “different, positive attitude” from the Texas Legislature.

Legislators “came in with a much more measured approach,” he said. “What did get passed seems to be much more helpful to the Medicaid patient than previous legislative sessions. I saw it as a positive.”

For instance, House Bill 26 allows Medicaid managed care organizations (MCOs), per their contracts with the state, to offer nutrition counseling and instruction services approved by the state’s Medicaid managed care advisory committee.

Though the law went into effect on Sept. 1, TMA staff notes HHSC still needs to develop policies and procedures in order to make it implementable, which are not expected until 2026.

“HB 26 is a step in the right direction to show that investing in prevention can reduce chronic disease in our patients and decrease the overall health care spend in state health programs,” said Valerie Smith, MD, also a member of the TMA’s Medicaid committee who worked with lawmakers in her role as president of the Texas Pediatric Society.

 “We look forward to future sessions where we would like to see other nonmedical drivers of health addressed to keep kids healthy and out of more expensive settings of care,” she added.

Legislators also looked out for young Texans with House Bill 3940. The bill requires HHSC to annually inform MCOs and health care professionals who regularly care for pregnant women and newborn children receiving Medicaid that a mother’s Medicaid identification number can be used for a newborn who has not yet received one.

That bill, which TMA supported, also includes provisions for the information regarding Medicaid eligibility to be included in the existing statutory requirement to distribute newborn resources to new parents and caregivers and document their distribution in the mother’s medical record.

In email correspondence, HHSC told Texas Medicine Today “provider obligations” take effect Jan. 1, 2026, per the legislation, and the agency is “in the process of developing the required notices, updating resource pamphlets and guides, and issuing the annual provider notices, in cooperation with the Department of State Health Services.”

The agency also said it is “developing the required written notice that informs parents or caregivers that the newborn child is automatically eligible for Medicaid and that the mother’s Medicaid identification (ID) number may be used on reimbursement claims for services provided to the newborn child until the child is enrolled in Medicaid and assigned a separate Medicaid ID.”

HHSC said it is also developing official annual written notices for MCOs and providers that will be posted on the Texas Medicaid & Healthcare Partnership website. Prior to Senate Bill 896 passing this session, employer-based health plans in Texas covered newborns automatically up to the 32nd day after the child’s birth; that’s now extended to the 61st day. This aligns more closely with Affordable Care Act (ACA) guidelines, which give parents 60 days to enroll a newborn in an ACA health plan. Texas’ law applies to health plans either issued or renewed starting Jan. 1, 2026.

Dr. Glomb was especially pleased with another piece of newborn-oriented legislation – House Bill 136, requiring HHSC to provide Medicaid payment for lactation consultation services provided by certified lactation consultants.

“This will do a lot in terms of expanding the service, particularly for the moms who may be on Medicaid, certainly for the babies who are on Medicaid,” he said. “This is a real boon, because they can have all of the benefits of breastfeeding.”

He adds the legislation paves the way for his clinic group to add at least another additional lactation consultant; they currently have one for a patient pool of close to 75,000.

Legislators also approved two new laws relating to rare conditions:

• Senate Bill 1044, which adds Duchenne muscular dystrophy to the panel of Texas’ required newborn screening tests, which health plans, including Medicaid and private insurance, are generally required to cover; and
• House Bill 426, which requires Medicaid and CHIP to cover the full cost of a cranial remolding orthosis for a child aged 3 to 18 months diagnosed with craniosynostosis, brachycephaly, or positional plagiocephaly.

Learn more about TMA’s statewide advocacy, and check out the latest Medicaid developments included in TMA’s Health Plan News roundup.

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