BILL ANALYSIS Senate Research Center C.S.S.B. 1640 By: Hagenbuch Health & Human Services 4/15/2025 Committee Report (Substituted) AUTHOR'S / SPONSOR'S STATEMENT OF INTENT In 2023, the Federal Bureau of Investigation (FBI) updated the standards for state agencies to access criminal background information. In the 88th session, the Texas Department of Public Safety led an effort on behalf of all impacted agencies to update Texas statutes to meet these standards, but the FBI recently indicated that the office of the inspector general's (OIG) language was overly board and needed further refinement. Current Law: Under current law, the Health and Human Services Commission (HHSC) and OIG are authorized to obtain criminal history information for individuals with a direct or indirect ownership or control interest of five percent or more in a Medicaid provider. However, the definition is tied to federal regulation, which may not adequately encompass all relevant individuals. S.B. 1640 updates and expands the criteria under which criminal history information may be obtained for persons affiliated with Medicaid providers or applicants. Specifically, it: Broadens the scope of individuals subject to background checks by including those with indirect financial interests, mortgage or promissory note interests, and members of corporate boards or partnerships. Clarifies the definition of "managing employee" to include general managers, administrators, or directors with operational or managerial control. (Original Author's/Sponsor's Statement of Intent) C.S.S.B. 1640 amends current law 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. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends the heading to Section 411.1143, Government Code, to read as follows: Sec. 411.1143. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION; AGENCIES ADMINISTERING OR OPERATING MEDICAL ASSISTANCE AND OTHER PUBLIC BENEFITS PROGRAMS. SECTION 2. Amends Section 411.1143, Government Code, by amending Subsections (a) and (a-1) and adding Subsection (e), as follows: (a) Provides that the Health and Human Services Commission (HHSC), an agency operating part of a public benefits program, including the medical assistance program under Chapter 32 (Medical Assistance Program), Human Resources Code, or the office of inspector general established under Subchapter C (Office of Inspector General: General Provisions), Chapter 544 (Fraud, Waste, Abuse, and Overcharges Relating to Health and Human Services), of the Government Code, is entitled to obtain criminal history record information as provided by Subsection (a-2) (relating to providing that HHSC and the office of inspect general are entitled to obtain criminal history record information maintained by certain entities) that relates to a provider under a public benefits program, rather than the medical assistance program, administered by the Public Safety Commission (commission) or a person applying to enroll as a provider under a public benefits program administered by the commission. Makes conforming and nonsubstantive changes. (a-1) Provides that criminal history record information HHSC or office of inspector general is authorized to obtain under Subsection (a) includes criminal history record information relating to: (1) a person that: (A) has a direct or indirect ownership interest, or a combination of direct and indirect ownership interests, that equals five percent or more in the provider or person applying to enroll as a provider; (B) owns an interest of five percent or more in a mortgage, deed of trust, promissory note, or other obligation secured by the provider or person applying to enroll as a provider if that interest equals at least five percent of the value of the property or other assets of the provider or person applying to enroll as a provider; (C) is an officer or director of the provider or person applying to enroll as a provider if that provider or applicant is organized as a corporation; or (D) is a partner in the provider or person applying to enroll as a provider if that provider or applicant is organized as a partnership, rather than a person with a direct or indirect ownership or control interest, as defined by 42 C.F.R. Section 455.101, in a provider of five percent or more; and (2) a managing employee of the provider or person applying to enroll as a provider, rather than a person whose information is required to be disclosed in accordance with 42 C.F.R. Part 1001. (e) Defines "managing employee," "ownership interest," and "provider." SECTION 3. Effective date: upon passage or September 1, 2025.
BILL ANALYSIS
Senate Research Center C.S.S.B. 1640
By: Hagenbuch
Health & Human Services
4/15/2025
Committee Report (Substituted)
Senate Research Center
C.S.S.B. 1640
By: Hagenbuch
Health & Human Services
4/15/2025
Committee Report (Substituted)
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
In 2023, the Federal Bureau of Investigation (FBI) updated the standards for state agencies to access criminal background information. In the 88th session, the Texas Department of Public Safety led an effort on behalf of all impacted agencies to update Texas statutes to meet these standards, but the FBI recently indicated that the office of the inspector general's (OIG) language was overly board and needed further refinement.
Current Law:
Under current law, the Health and Human Services Commission (HHSC) and OIG are authorized to obtain criminal history information for individuals with a direct or indirect ownership or control interest of five percent or more in a Medicaid provider. However, the definition is tied to federal regulation, which may not adequately encompass all relevant individuals.
S.B. 1640 updates and expands the criteria under which criminal history information may be obtained for persons affiliated with Medicaid providers or applicants. Specifically, it:
Broadens the scope of individuals subject to background checks by including those with indirect financial interests, mortgage or promissory note interests, and members of corporate boards or partnerships.
Clarifies the definition of "managing employee" to include general managers, administrators, or directors with operational or managerial control.
(Original Author's/Sponsor's Statement of Intent)
C.S.S.B. 1640 amends current law 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.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends the heading to Section 411.1143, Government Code, to read as follows:
Sec. 411.1143. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION; AGENCIES ADMINISTERING OR OPERATING MEDICAL ASSISTANCE AND OTHER PUBLIC BENEFITS PROGRAMS.
SECTION 2. Amends Section 411.1143, Government Code, by amending Subsections (a) and (a-1) and adding Subsection (e), as follows:
(a) Provides that the Health and Human Services Commission (HHSC), an agency operating part of a public benefits program, including the medical assistance program under Chapter 32 (Medical Assistance Program), Human Resources Code, or the office of inspector general established under Subchapter C (Office of Inspector General: General Provisions), Chapter 544 (Fraud, Waste, Abuse, and Overcharges Relating to Health and Human Services), of the Government Code, is entitled to obtain criminal history record information as provided by Subsection (a-2) (relating to providing that HHSC and the office of inspect general are entitled to obtain criminal history record information maintained by certain entities) that relates to a provider under a public benefits program, rather than the medical assistance program, administered by the Public Safety Commission (commission) or a person applying to enroll as a provider under a public benefits program administered by the commission. Makes conforming and nonsubstantive changes.
(a-1) Provides that criminal history record information HHSC or office of inspector general is authorized to obtain under Subsection (a) includes criminal history record information relating to:
(1) a person that:
(A) has a direct or indirect ownership interest, or a combination of direct and indirect ownership interests, that equals five percent or more in the provider or person applying to enroll as a provider;
(B) owns an interest of five percent or more in a mortgage, deed of trust, promissory note, or other obligation secured by the provider or person applying to enroll as a provider if that interest equals at least five percent of the value of the property or other assets of the provider or person applying to enroll as a provider;
(C) is an officer or director of the provider or person applying to enroll as a provider if that provider or applicant is organized as a corporation; or
(D) is a partner in the provider or person applying to enroll as a provider if that provider or applicant is organized as a partnership, rather than a person with a direct or indirect ownership or control interest, as defined by 42 C.F.R. Section 455.101, in a provider of five percent or more; and
(2) a managing employee of the provider or person applying to enroll as a provider, rather than a person whose information is required to be disclosed in accordance with 42 C.F.R. Part 1001.
(e) Defines "managing employee," "ownership interest," and "provider."
SECTION 3. Effective date: upon passage or September 1, 2025.