Relating to access to criminal history record information that relates to providers and provider applicants under Medicaid and other public benefits programs administered by the Health and Human Services Commission.

Contracts

You must amend three specific contract categories to include "Bad Actor" and indemnification clauses:

• 1. Employment Agreements: For all management-level staff, employment must be contingent on clearing HHSC/OIG checks.
• 2. Loan/Security Agreements: Private lenders holding >5% security interest must warrant they have no disqualifying criminal history and agree to submit PII for screening.
• 3. Operating Agreements: Partners and officers must consent to screening; the entity requires the power to buy out or strip voting rights from disqualified individuals to preserve the provider number.

Hiring/Training

• Expanded Roster: HR must expand background checks beyond clinical staff. You must now screen any "Managing Employee" (General Managers, Administrators, Business Managers) regardless of their ownership status.
• Consent Collection: Implement a process to collect PII and consent forms from non-employee stakeholders (e.g., private lenders or silent partners) for submission to HHSC.

Reporting & Record-Keeping

• Org Chart Updates: Update internal organizational charts to explicitly identify:
• 5% Direct/Indirect Owners.
• 5% Security Interest Holders (Lenders).
• Officers, Directors, and Partners.
• Managing Employees (defined by operational control).
• Audit Trail: Maintain proof of screening for all individuals in these categories to present during OIG audits.

Fees & Costs

• Administrative Costs: Budget for increased legal fees to amend corporate/loan documents and increased administrative time for processing expanded background checks.
• State Fees: No new state fees are imposed by the statute itself.