Texas’ 89th Regular Legislative Session concluded on June 3, 2025, with the Texas Primary Care Consortium (TPCC) championing the passage of several important bills and funding initiatives that strengthen primary care. These advances range from new payment flexibility and funding to streamline Medicaid enrollment to rural health support and workforce development. Key victories include:

• House Bill (HB) 2254: Allows primary care physicians and groups to sign voluntary value-based contracts with Preferred Provider Organizations, helping spur primary care payment towards value.
• HB 26: Allows Medicaid managed care organizations to provide evidence-based mental health and substance use services or medical nutrition counseling and education services “in lieu of” services, which are services provided as alternatives to traditional Medicaid benefits, with the goal of improving health outcomes. Additionally, allows HHSC to establish a pilot with a Medicaid Managed Care Organization to evaluate use of medically necessary tailored meals for high-risk pregnant women.
• HB 3151: Medicaid Managed Care Organizations to provide expedited credentialing for federally qualified health clinics (in addition to the existing statutory requirement for physicians), to minimize administrative costs and promote timelier payments.
• HB 136: Authorizes Medicaid payment for lactation providers and nutritional counseling to help address non-medical drivers of health.
• HB 18: Establishes new funding to support rural hospital sustainability and innovation grants, fundamental to protecting rural health infrastructure and access.
• New funding initiatives within the state budget to:
  
  • Streamline the Medicaid and Supplemental Nutrition Assistance Program (SNAP) eligibility system and update the Provider Enrollment Management System (PEMS), helping connect patients to health care coverage and nutrition support.
  • Provide $5 million to support existing and establish new family medicine-obstetrics post-graduate training programs, with the goal of increasing the availability of maternal health care in rural and other underserved communities.
  • $9 million to fully implement the Texas All-Payor Claims Database, data from which can be used to help state policymakers better evaluate the utilization and cost-effectiveness of primary care.
  • Continued funding for rural physicians, nurses, and mental health professional loan repayment to help preserve access to care.

At the same time, federal actions, including the passage of the One Big Beautiful Bill Act (OBBBA) (HR 1) pose new challenges for primary care. The bill will reduce health care spending by more than $1 trillion over the next decade while also destabilizing health care coverage for millions of people enrolled in Medicaid, the Children’s Health Insurance Program, the Affordable Care Act (ACA) Marketplace, and Medicare. According to the Congressional Budget Office, the bill, when taken together with Congress’s decision not to extend ACA enhanced premium tax credits (as of now, but Congress can still vote to extend them before the end of the year) as well as other federal regulatory initiatives, will increase the number of uninsured individuals nationally by at least 14.2 million by 2034, including some 1.4 million Texans.

OBBBA does contain several bright spots, including a temporary Medicare physician payment increase, a provision clarifying direct primary care is not the practice of insurance, and an allocation of $50 billion to establish a Rural Transformation Grant Program over the next five years. Moreover, in August, the US Department of Health and Human Services and the Centers for Medicare and Medicaid Services announced formation of a Health Care Advisory Committee whose mission, according to CMS Secretary Mehmet Oz, MD, will be to “help us cut waste, reduce paperwork, expand preventive care, and modernize CMS programs with real-time data and accountability, all while keeping patients at the center.”

Nevertheless, implementation of OBBBA will make the primary care practice environment much more challenging.

Moreover, the health care coverage losses stemming from the bill will be compounded by other tests facing primary care, including cessation of federal data collection and reporting on a variety of issues, erosion of support for scientifically based clinical standards, including vaccines and mental health treatment, and anticipated restrictions on immigrant health care-related federal funding for federally qualified health centers.

In passing HR 1, Congressional leaders stated that a key goal was to reduce health care waste as well as costs, public policy goals Texas Health Institute and the Texas Primary Care Consortium support. There is little dispute that ever-rising health care costs, including among those with health insurance, are straining the budgets of families, state and local governments, and employers. It is imperative that policymakers and stakeholders work collaboratively to identify meaningful, data-driven solutions to promote more affordable health care services and coverage, and to ensure appropriate utilization of care. Primary care is key to those efforts. In the coming months, THI and TPCC will elaborate more on such opportunities.

In the meantime, primary care has always demonstrated its agility, whether that be in the exam room, providing a routine checkup one minute, diagnosing a complex condition the next, or navigating a highly dynamic health policy environment. This nimbleness will be critical to primary care’s endurance as it faces federal setbacks while building upon state progress.

TPCC’s next webinar will explore these dynamics and begin charting ways to harness primary care’s creativity and adaptability in the face of change. Be part of the conversation as we navigate these critical challenges together. Register today to join us for Primary Care at a Crossroads: Navigating Recent Policy, Budget, and Regulatory Changes.

Helen Kent Davis
Senior Associate - Health Policy, Texas Health Institute
Founder and Principal, HKD and Associates