Relating to the licensing of mental hospitals and mental health facilities and the definition of facility for the purposes of the employee misconduct registry.
CriticalImmediate action required
Medium Cost
Effective:2025-05-29
Enforcing Agencies
Health and Human Services Commission (HHSC)
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date:May 29, 2025 (Passed by supermajority, overriding the standard September 1 date).
Compliance Deadline:Immediate. You must integrate EMR checks into your hiring workflow today.
Agency Rulemaking: HHSC must update the EMR technology to accept Chapter 577 provider reports. Expect a "regulatory gray zone" where the statutory duty exists, but the online portal may not yet list your facility type.
Immediate Action Plan
1.Hiring Freeze/Pause: Halt all unlicensed offers pending verification that your HR team has access to and is checking the EMR database.
2.Update Checklists: Insert the EMR search step prior to the criminal background check phase in your Applicant Tracking System (ATS).
3.Risk Audit: While not explicitly retroactive, run a batch EMR check on your *current* roster of unlicensed staff to eliminate latent liability.
4.Notify Insurer: Contact your Employment Practices Liability Insurance (EPLI) carrier to ensure coverage includes defense costs for mandatory state reporting claims.
5.Manual Reporting: If the HHSC portal is not updated to accept Chapter 577 reports immediately, file misconduct reports via certified mail to establish a compliance record.
Operational Changes Required
Contracts
Staffing Agencies: Update Master Service Agreements (MSAs) immediately. Require agencies to perform EMR checks for all placements and indemnify your facility for penalties arising from the placement of a barred individual.
Employment Agreements: Revise termination clauses to explicitly state that substantiated findings of abuse, neglect, or exploitation will result in a mandatory report to the state EMR, effectively barring future employment in the sector.
Hiring/Training
Pre-Employment "Hard Stop": HR must verify the employability of every unlicensed applicant (techs, aides, orderlies) by searching the public EMR database *before* extending an offer.
Internal Investigations: Train compliance staff on the new mandatory reporting threshold. If an internal investigation substantiates abuse, you no longer have discretion; you must report it to HHSC.
Reporting & Record-Keeping
Audit Trail: Place a time-stamped screenshot or printout of the "No Record Found" EMR search result in the permanent personnel file of every new hire.
License Applications: On your next initial or renewal application, you must provide the specific name and physical address of the "person responsible for daily operations" (e.g., Administrator or CEO).
Fees & Costs
Administrative Burden: Absorb the operational cost of additional background screenings and the legal costs associated with defending potential defamation claims from employees reported to the registry.
Liability: Failure to check the EMR constitutes negligence per se, likely voiding standard liability defenses in patient injury lawsuits.
Strategic Ambiguities & Considerations
The "Appropriation" Trigger: Section 3 states HHSC is only required to implement this if the legislature appropriates specific funding. The Fiscal Note estimates a $3.7M cost. If funding is delayed, HHSC enforcement may lag. Counsel: Do not rely on this technicality. Perform the checks to mitigate civil liability regardless of agency readiness.
"Person Responsible for Daily Operations": The statute requires this designation but does not define the role. To avoid administrative rejection of license applications, designate your highest-ranking non-clinical officer (CEO/Administrator) rather than a shift supervisor or medical director.
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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
Current state law regulating freestanding psychiatric hospitals requires physicians, nurses, psychologists, and therapists who practice in these facilities to undergo criminal background checks as part of their professional licensure. However, there is no explicit requirement for unlicensed staff such as administrators, admissions personnel, and aides to undergo the same checks. The bill author has informed the committee that this gap contrasts with other health care facilities, such as nursing homes, assisted living centers, and home health agencies, that must conduct background checks and consult the employee misconduct registry, which tracks individuals who have committed abuse, neglect, or exploitation in health care settings, and thus may put those receiving mental health treatment at risk of encountering staff with undisclosed criminal histories or documented misconduct. C.S.H.B. 3560 seeks to close this regulatory loophole, bring freestanding psychiatric hospitals in line with other health care facilities, and enhance patient safety by subjecting mental hospitals and other mental health facilities to statutory provisions relating to the employee misconduct registry.
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.
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.
ANALYSIS
C.S.H.B. 3560 amends the Health and Safety Code to include in the definition of "facility" for purposes of provisions relating to the employee misconduct registry a facility licensed by the Department of State Health Services under provisions governing private mental hospitals and other mental health facilities. The bill requires an application for a license for such a mental hospital or mental health facility to contain the name and address of the person responsible for the daily operations of the hospital or facility.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 3560 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 provided for the bill to take effect immediately, contingent on receiving the requisite constitutional vote, or on September 1, 2025, the substitute provides only for the bill to take effect September 1, 2025, with no possibility for immediate effect.
Honorable Gary VanDeaver, Chair, House Committee on Public Health
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB3560 by Pierson (Relating to criminal background check requirements for staff at certain licensed hospitals.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3560, As Introduced: a negative impact of ($3,757,542) through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($2,597,102)
2027
($1,160,440)
2028
($1,161,980)
2029
($1,163,261)
2030
($1,164,570)
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings/(Cost) from GR Match For Medicaid 758
Probable Savings/(Cost) from Federal Funds 555
Change in Number of State Employees from FY 2025
2026
($1,949,589)
($647,513)
($662,129)
7.0
2027
($1,160,440)
$0
$0
7.0
2028
($1,161,980)
$0
$0
7.0
2029
($1,163,261)
$0
$0
7.0
2030
($1,164,570)
$0
$0
7.0
Fiscal Analysis
The bill would add licensed private mental hospitals and other mental health facilities to the types of facilities that the Health and Human Services Commission (HHSC) is required to investigate employee reportable conduct on. The bill would amend the license applications of private mental hospitals and other mental health facilities license applications to include the name and address of the person responsible for the daily operations of the facility.
Methodology
According to HHSC, additional staff are needed to account for the new provider type, which could impact up to 63 currently licensed private mental hospitals and other mental health facilities. This analysis assumes HHSC would require an additional 7.0 full-time-equivalents (FTEs) to account for the new provider type, including: 6.0 Nurse III to investigate reportable conduct committed by facility employees and 1.0 Program Specialist VII to assist with related regulatory activities and policies required to account for the new provider type. Personnel-related costs, including salaries and travel, are estimated to total $1,226,352 in General Revenue in fiscal year 2026 and $1,160,440 in General Revenue in fiscal year 2027.
Technology
According to HHSC, updates would be required to the Employee Misconduct Registry (EMR) system, websites, and databases to account for the new provider type. The total technology cost is estimated to be $2,032,879 in All Funds ($1,370,750 in General Revenue and $662,129 in Federal Funds) in fiscal year 2026 to make one-time modifications to the EMR system and other related technology system changes.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
529 Health and Human Services Commission
LBB Staff:
JMc, NPe, ER, LBl, NV, SB
Related Legislation
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Effective immediately, Texas law expands the Employee Misconduct Registry (EMR) to include licensed mental hospitals and mental health facilities (Chapter 577). You are now statutorily prohibited from hiring unlicensed personnel listed in the EMR and must report any employee acts of abuse, neglect, or exploitation to the Health and Human Services Commission (HHSC). Implementation Timeline Effective Date: May 29, 2025 (Passed by supermajority, overriding the standard September 1 date).
Q
Who authored HB3560?
HB3560 was authored by Texas Representative Katrina Pierson during the Regular Session.
Q
When was HB3560 signed into law?
HB3560 was signed into law by Governor Greg Abbott on May 29, 2025.
Q
Which agencies enforce HB3560?
HB3560 is enforced by Health and Human Services Commission (HHSC).
Q
How urgent is compliance with HB3560?
The compliance urgency for HB3560 is rated as "critical". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB3560?
The cost impact of HB3560 is estimated as "medium". This may vary based on industry and implementation requirements.
Q
What topics does HB3560 address?
HB3560 addresses topics including hospitals, occupational regulation, occupational regulation--health occupations, criminal records and mental health & substance abuse.
Legislative data provided by LegiScanLast updated: November 25, 2025
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