JD Key Consulting Logo
Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB963

Regular Session

Relating to allowing Medicaid managed care organizations to engage in marketing about the availability of certain private health benefit plan coverage.

Government Affairs & Regulatory Compliance Analysis

SB963: Government Affairs Overview

SB963 removes the regulatory firewall preventing Medicaid Managed Care Organizations (MCOs) from cross-selling private Qualified Health Plans (QHPs) and Medicare Advantage plans to Medicaid recipients. This creates a significant revenue retention opportunity for MCOs with commercial affiliates, but strictly mandates that all marketing communications must explicitly disclose cost-sharing obligations (deductibles and copays) and prohibits financial incentives for enrollment.

Sen. Bryan Hughes·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01
Business Impact

Who SB963 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). Consider how these changes may affect your operations.

🏥

Healthcare

Affected business types:

  • Hospitals
  • Healthcare systems
  • Medical practices
  • Health insurance providers
View all healthcare legislation

Key Operational Considerations

  • 1Uniform Managed Care Contract (UMCC): Expect a unilateral amendment from HHSC incorporating these new marketing permissions and restrictions.
  • 2Field Marketing: Field teams must be retrained on the prohibition of incentives. "Value-added services" must be distinct from enrollment incentives to avoid violating the new ban on material gain.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

Need Government Relations Support?

JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.

Need Help Navigating This Legislation?

JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.

SB963
Moderate
Relating to allowing Medicaid managed care organizations to engage in marketing about the availability of certain private health benefit plan coverage...
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
HHSC
Primary Author: Sen. Bryan Hughes
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025 (All marketing materials and scripts must be compliant by this date; there is no statutory grace period).
  • Agency Rulemaking: The Texas Health and Human Services Commission (HHSC) must update the *Uniform Managed Care Manual* (UMCM).
  • *Regulatory Gray Zone:* Implementation is contingent on HHSC determining if a federal waiver is required. If HHSC seeks a waiver from CMS, the effective date will be delayed until federal approval is granted.

Immediate Action Plan

  • 1. Draft Disclosure Language: Legal must immediately draft standard "Cost-Sharing Disclosure" text for both print and verbal communications.
  • 2. Audit Vendor Contracts: Review all third-party marketing agreements to ensure they prohibit offering financial incentives for commercial plan enrollment.
  • 3. Monitor Waiver Status: Task Government Relations with monitoring HHSC's determination regarding the federal waiver requirement; do not launch media buys until the waiver status is resolved.
  • 4. Update CRM Logic: IT must add a mandatory checkbox or voice-log requirement to call center software to verify the disclosure was read to the consumer.

Operational Changes Required

Contracts

  • Uniform Managed Care Contract (UMCC): Expect a unilateral amendment from HHSC incorporating these new marketing permissions and restrictions.
  • Vendor Master Services Agreements (MSAs): You must amend agreements with third-party marketing agencies and call centers. Insert strict indemnification clauses regarding the ban on "material or financial gain" incentives. If a vendor offers a prohibited gift card, your MCO will be liable for the sanction.

Hiring/Training

  • Call Center Scripting: Scripts must be rewritten to include a mandatory "Cost-Sharing Disclosure." Agents cannot simply highlight coverage; they are legally required to inform the recipient about deductibles and copayments associated with the private plan.
  • Field Marketing: Field teams must be retrained on the prohibition of incentives. "Value-added services" must be distinct from enrollment incentives to avoid violating the new ban on material gain.

Reporting & Record-Keeping

  • CRM Updates: Your Customer Relationship Management systems must be configured to log that the mandatory cost-sharing disclosure was delivered. In the event of an audit or a Deceptive Trade Practices claim, you must be able to produce a timestamped record verifying the consumer was warned about costs.
  • Material Approval: All new cross-selling brochures and digital assets must be submitted to HHSC for approval prior to use.

Fees & Costs

  • No New State Fees: There are no new licensure fees.
  • Operational Costs: Budget for legal review of marketing materials and IT costs to update CRM workflows for disclosure verification.

Strategic Ambiguities & Considerations

HHSC rulemaking will define the operational boundaries of this law. Watch the *Texas Register* for the following:

  • 1. Specificity of Disclosure: The law requires disclosing "deductibles and copayments." It is unclear if a general warning ("Plans have deductibles") suffices, or if agents must quote specific dollar amounts for specific plans. The latter would significantly complicate call handling times.
  • 2. Definition of "Material Gain": The law bans financial incentives. HHSC must define the *de minimis* threshold. Until then, assume that even nominal items (gift cards, branded merchandise of value) tied to QHP enrollment are prohibited.
  • 3. Waiver Determination: HHSC has the discretion to pause implementation to seek a federal waiver. This creates uncertainty regarding the actual "Go-Live" date.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a Consultation

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.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Jan 29, 2025
Passed Senate
Apr 10, 2025
Passed House
Apr 29, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsHuman ServicesHuman Services--generalHuman Services--medical AssistanceManaged CareMedicaidHealth & Human Services CommissionAdvertising
03

Senate Authors

Sen. Bryan HughesRepublican · Primary Author
Coauthors (1)

House Sponsor

Rep. Christian ManuelDemocrat · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Sen. Bryan Hughes

View all bills by Sen. Bryan Hughes

Related by Topic

View more Human Services legislation
Quick Reference

Frequently Asked Questions

Common questions about SB963

Q

What does Texas SB963 do?

SB963 removes the regulatory firewall preventing Medicaid Managed Care Organizations (MCOs) from cross-selling private Qualified Health Plans (QHPs) and Medicare Advantage plans to Medicaid recipients. This creates a significant revenue retention opportunity for MCOs with commercial affiliates, but strictly mandates that all marketing communications must explicitly disclose cost-sharing obligations (deductibles and copays) and prohibits financial incentives for enrollment.

Q

Who authored SB963?

SB963 was authored by Texas Senator Bryan Hughes during the Regular Session.

Q

When was SB963 signed into law?

SB963 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB963?

SB963 is enforced by Texas Health and Human Services Commission (HHSC).

Q

How significant are the changes in SB963?

The regulatory priority for SB963 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB963?

The cost impact of SB963 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB963 address?

SB963 addresses topics including human services, human services--general, human services--medical assistance, managed care and medicaid.

Q

What are the key dates for SB963?

Key dates for SB963: Effective date is 2025-09-01. Rulemaking: Update Medicaid marketing guidelines to explicitly permit MCOs to inform recipients about Qualified Health Plans (QHPs) and Medicare Advantage, while mandating the disclosure of cost-sharing obligations (deductibles/copays) for QHPs. (2025-09-01). Consult with legal counsel regarding applicability.

Q

What are the penalties under SB963?

SB963 establishes the following penalties: administrative penalty of Contractual sanctions or administrative penalties (governed by existing MCO contract compliance frameworks) for Offering material or financial gain as an actual or implied incentive for an individual to enroll in a Qualified Health Plan.. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by SB963?

SB963 primarily affects healthcare providers and medical facilities. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026