Texas bill proposing Medicaid regulations to ensure direct care for long-term care residents scheduled for hearing


Boram Kim


A bill that would require nursing facilities through the STAR + PLUS Medicaid managed care program to meet the state’s direct care payment ratio is advancing through the legislature. After passing the Senate, Senate Bill 1629 is scheduled for a hearing in the House Human Services Committee on May 9th. 


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The bill would require nursing facilities to ensure at least 80% of the medical assistance reimbursement amount that it receives is spent on direct care expenses.

Andrea Earl, associate state director of advocacy and outreach at AARP Texas, told State of Reform that a key piece of the legislation is ensuring facilities provide quality direct care.

“What that means is, there’s an establishment of this specific percentage of state dollars and federal dollars that has to go to the direct care of residents while they are in nursing facilities,” Earl said. “Direct care for us here in Texas means the staff, physical therapy—it doesn’t mean funds going to lease or renting the facility itself. So trying to define and make sure that more dollars are going to direct care patients rather than lining the pockets of the industry itself is a big aim for this [legislation].”

A recent assessment by US News ranked Texas 43rd nationally for nursing home quality. Reports of fraud and abuse at for-profit nursing homes have been numerous. Texas ranks 3rd among states with the lowest CMS ratings for nursing homes and has the highest number of facilities with one-and-two-star ratings in the country.

“So overall, Texas has not done a great job in raising the quality of these facilities,” Earl said. “We continue to see no improvements even though after COVID we’ve received a number of different funding streams to assist this group—nursing homes and skilled nursing facilities. And even this legislature, there is more funding that’s going to this industry. So while we’ve been putting forth dollars, we haven’t seen an increase in quality of care here in Texas.”

Texas continues to experience a statewide staffing shortage across the healthcare system, particularly in skilled nursing and rural areas. The preliminary Senate and House budgets outlined funding increases of $46.8 million and $7 million to the Nursing Shortage Reduction Program and the Nursing Faculty Loan Repayment Program, respectively. Both programs aim to promote the number of licensed nursing professionals in the state. 

Earl said while improving staffing at facilities would contribute to improving the quality of care, creating transparency in the ownership structure would help residents and consumers make better decisions about choosing a facility and figuring out who the good actors are and how their dollars are being spent. 

SB 1629 aims to create more transparency and accountability within nursing home facilities, specifically around their forms of payment and ownership structure. In February, CMS released proposed rules around disclosure of ownership and staffing to ensure compliance with federal standards around nurse staffing ratios and care quality. Earl says SB 1629 along with upcoming federal guidance and rules on transparency will be critical for the state’s long-term care industry. 

“We are really excited about the ownership piece—the 5% and above ownership piece is really going to be key for consumers,” Earl said. “It is a very hard structure to understand as far as [getting] into these private equity firms and all of that.

So the federal government’s doing a pretty good job at communicating and explaining what’s going on and showing that these ownership structures really do impact the quality of care and that there is data directly linking to the private industry in these firms having poor quality of care in facilities …”