Regular Session
Texas Health and Human Services Commission (HHSC)
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This bill's path through the Texas Legislature
BILL ANALYSIS |
| C.S.H.B. 2402 |
| By: Rose |
| Human Services |
| Committee Report (Substituted) |
| BACKGROUND AND PURPOSE Under current law, Texas Medicaid sets drug reimbursement rates based on the usual and customary price which, according to the Texas Administrative Code, is the price the provider most frequently charges the general public for the same drug. However, the bill author has informed the committee that there is ambiguity regarding the reporting of usual and customary pricing, as there are certain membership-based pharmacy discount programs that provide medications at a reduced price as an exclusive benefit to enrolled members. Further, if Medicaid includes these membership prices in usual and customary calculations, reimbursement rates could be artificially lowered, discouraging pharmacy participation and limiting cost-saving options for consumers. C.S.H.B. 2402 seeks to prevent the distortion of Medicaid reimbursement rates by excluding monthly fee-based membership discount programs from usual and customary calculations.
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| CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
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| RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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| ANALYSIS C.S.H.B. 2402 amends the Human Resources Code to establish that the fee, charge, or rate for the payment of Medicaid benefits, other than for a professional service, excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program. If before implementing any provision of the bill a state agency determines that a waiver or authorization from a federal agency is necessary for implementation of that provision, the agency affected by the provision must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.
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| EFFECTIVE DATE September 1, 2025.
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| COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 2402 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. Whereas the introduced required the Health and Human Services Commission to exclude any fee, charge, or rate offered as part of a fee-based membership discount program in determining the usual and customary fee, charge, or rate that prevails in the community for Medicaid payment purposes, the substitute establishes instead that the fee, charge, or rate for those purposes excludes any fee, charge, or rate offered as part of a monthly fee-based membership discount program. |
| H.B. No. 2402 | ||
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| relating to the determination of fees, charges, and rates for | ||
| certain benefits under Medicaid. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 32.028(c), Human Resources Code, is | ||
| amended to read as follows: | ||
| (c) The fee, charge, or rate for other medical assistance: | ||
| (1) is the usual and customary fee, charge, or rate | ||
| that prevails in the community unless the payment is limited by | ||
| state or federal law; and | ||
| (2) excludes any fee, charge, or rate offered as part | ||
| of a monthly fee-based membership discount program. | ||
| SECTION 2. If before implementing any provision of this Act | ||
| a state agency determines that a waiver or authorization from a | ||
| federal agency is necessary for implementation of that provision, | ||
| the agency affected by the provision shall request the waiver or | ||
| authorization and may delay implementing that provision until the | ||
| waiver or authorization is granted. | ||
| SECTION 3. This Act takes effect September 1, 2025. | ||
| TO: | Honorable Lacey Hull, Chair, House Committee on Human Services |
| FROM: | Jerry McGinty, Director, Legislative Budget Board |
| IN RE: | HB2402 by Rose (Relating to the determination of fees, charges, and rates for certain benefits under Medicaid.), As Introduced |
| Source Agencies: | 529 Health and Human Services Commission |
| LBB Staff: | JMc, NPe, ER, ESch, NV |
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Common questions about HB2402
HB2402 mandates a critical change in how "Usual and Customary" (U&C) rates are calculated for Medicaid reimbursement, specifically protecting providers who offer subscription-based discount programs. The law requires that prices offered through fee-based membership programs (e. g.
HB2402 was authored by Texas Representative Toni Rose during the Regular Session.
HB2402 was signed into law by Governor Greg Abbott on June 20, 2025.
HB2402 is enforced by Texas Health and Human Services Commission (HHSC).
The compliance urgency for HB2402 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
The cost impact of HB2402 is estimated as "low". This may vary based on industry and implementation requirements.
HB2402 addresses topics including human services, human services--medical assistance, medicaid and health & human services commission.
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