Overall Vote Recommendation

Vote Yes; Amend

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

HB 3396 amends the Texas Family Code and Government Code to authorize non-governmental medical consenters, those who are permitted to make healthcare decisions on behalf of foster children, to assume financial responsibility for medical services provided by out-of-network providers. This includes behavioral health services. The bill clarifies that such consenters may even enroll the child in a separate health insurance plan if needed. The Department of Family and Protective Services (DFPS) is explicitly excluded from liability unless a court orders otherwise.

The bill provides that this financial assumption does not limit a foster child’s access to in-network Medicaid services or restrict parental or judicial rights. To ensure proper case tracking, medical consenters must notify the child’s caseworker within 10 business days of receiving out-of-network care. The child’s health passport must also reflect the care received. The bill also amends the Government Code to prohibit Medicaid managed care organizations from discouraging or obstructing access to care obtained under this authority.

This legislation effectively creates a mechanism that empowers caregivers to seek timely and possibly more specialized care outside the Medicaid network, while shielding the state from automatic financial responsibility. It contains a provision for implementation delays if federal waivers are needed.

The Committee Substitute for HB 3396 makes several key refinements to the originally filed version of the bill while preserving its central objective, allowing non-governmental medical consenters for foster children to assume financial responsibility for out-of-network medical care.

One notable difference is the clarification of terminology. In the original bill, the definition of “health care provider” includes anyone licensed to provide health care in Texas, but excludes no specific providers. In the substitute version, the definition explicitly excludes pharmacies, likely to prevent confusion regarding coverage for prescriptions or retail services, which are typically handled differently under Medicaid regulations.

Another important addition in the substitute version is in Section 266.0043(b). While the original bill allowed medical consenter to assume financial responsibility for out-of-network services, the substitute version expands this by allowing the consenter to “enroll the child in a health insurance plan” as a means of fulfilling that responsibility. This expands the practical options available to consenters and acknowledges the financial realities of accessing non-Medicaid providers.

The substitute bill also strengthens judicial and statutory clarity by including a new subsection (d)(3), which specifies that the bill does not "limit a court’s authority to order the department to assume financial responsibility", a provision absent from the original version. This helps ensure that courts retain discretion in exceptional circumstances, even while the general rule excludes DFPS from liability.

Finally, the substitute version includes additional clarifying language to reinforce that Medicaid managed care organizations (MCOs) are not liable for the costs of care when provided under the authority of a non-DFPS medical consenter. While this is conceptually present in both versions, the committee substitute sharpens the statutory language to avoid misinterpretation by explicitly referencing the related Family Code section.

In summary, the Committee Substitute improves precision, legal clarity, and caregiver flexibility while retaining the original bill’s focus on enhancing foster children’s access to timely and appropriate out-of-network medical care without increasing DFPS liability by default.

Author

James Frank

Co-Author

Joanne Shofner

Contact the Author

Rep. James Frank

Capitol Phone:

(512) 463-0534

Capitol Office:

CAP 1N.9

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), HB 3396 would have no significant fiscal implications for the State of Texas. The bill authorizes certain non-DFPS (Department of Family and Protective Services) medical consenters to assume financial responsibility for out-of-network medical care for foster children, including behavioral health services. Since the bill explicitly states that DFPS is not liable for these costs, unless a court orders otherwise, it effectively limits the state’s financial exposure by preventing automatic Medicaid or DFPS funding for such services.

Both DFPS and the Health and Human Services Commission (HHSC) have indicated that they would need to amend contracts, policies, and procedures to comply with the bill. However, these administrative changes are expected to be minor and can be absorbed within the agencies' existing budgets and staffing levels. No appropriation or new funding stream is required to implement the legislation.

In terms of local government impact, no significant fiscal burden is anticipated. The bill does not mandate local entities to bear any costs or create new service obligations. Overall, the legislation is fiscally neutral to both state and local governments while granting non-DFPS medical consenters greater flexibility in obtaining healthcare for foster children.

Vote Recommendation Notes

HB 3396 presents a carefully crafted policy aimed at improving healthcare access for children in foster care, particularly in areas where Medicaid managed care networks are limited or overwhelmed. The bill empowers non-DFPS medical consenters, such as foster parents or other authorized caregivers, to independently engage out-of-network medical or behavioral health providers and assume financial responsibility for that care. The bill includes a mechanism for these consenters to enroll the child in a private health plan if needed, enhancing flexibility in access to timely, appropriate care.

Critically, HB 3396 strengthens individual liberty and personal responsibility. It provides medical decision-makers in foster care with a pathway to act in the child’s best interest without expanding state obligation or reliance on public funds. The caregiver, not the government, bears financial responsibility for any out-of-network services voluntarily sought. The bill includes a safeguard making clear that the Department of Family and Protective Services (DFPS) is not financially liable unless ordered by a court, thus maintaining DFPS's current fiscal boundaries and avoiding unfunded mandates on the agency or state.

The bill also respects principles of limited government and fiscal restraint. The Legislative Budget Board has determined there is no significant fiscal implication to the state, and any costs related to policy or contract changes within the Health and Human Services Commission (HHSC) or DFPS can be absorbed using existing resources. Furthermore, the bill imposes no new taxes or spending programs, and no additional public employees or departments are created. The regulatory burden on businesses is negligible. Medicaid managed care organizations (MCOs) are prohibited from interfering with the caregiver's chosen care but are explicitly not held liable for those services, ensuring neutrality in operational impact.

In addition, HB 3396 respects and reinforces the free enterprise principle by allowing families to seek services from private, non-network providers, expanding care options beyond the limitations of state-contracted Medicaid networks. It modestly rebalances access to care in favor of the caregiver’s discretion, without disrupting the overall managed care structure or undermining the STAR Health system.

The bill could be strengthened through a clarifying amendment that more narrowly defines when courts may assign financial responsibility to DFPS. While the bill already states that DFPS is not liable “unless a court orders” otherwise, this language may open the door to broad or inconsistent judicial interpretation. A clarifying amendment could reinforce the state’s limited financial role by specifying under what conditions, such as emergency situations or statutory criteria, a court may assign that responsibility. However, adoption of such an amendment is not a prerequisite for support. The bill’s overall structure is sound and in alignment with core liberty principles.

In summary, HB 3396 improves care access for foster youth by empowering individuals, protects taxpayers, avoids regulatory overreach, and upholds limited government principles. For these reasons, Texas Policy Research recommends that lawmakers vote YES on HB 3396 while also supporting a clarifying amendment that would only strengthen its alignment with the Liberty Principles as described above.

Individual Liberty: The bill increases individual liberty by empowering non-DFPS medical consenters, such as foster parents or court-appointed caregivers, to independently choose out-of-network medical providers for foster children and voluntarily assume the financial responsibility for doing so. This grants those closest to the child greater freedom to act in the child’s best medical interest, especially in underserved areas where access to care is constrained within Medicaid-managed care networks. It avoids requiring families to wait on state authorization or rely exclusively on state-assigned providers, thus decentralizing healthcare decisions from the state to the individual.
Personal Responsibility: By allowing caregivers to assume financial responsibility for out-of-network care, the bill reinforces the principle that individuals, not the government, should be accountable for the choices they make. The bill makes clear that DFPS will not be liable for these costs (unless ordered by a court), ensuring that those who elect to pursue out-of-network care also accept the associated financial burden. This avoids moral hazard and promotes decision-making rooted in responsibility rather than dependence on the state.
Free Enterprise: The bill promotes free enterprise by allowing foster caregivers to access providers outside the Medicaid managed care system. In doing so, it gives private healthcare providers, particularly in behavioral health and specialty care, an opportunity to serve foster children who might otherwise be unreachable due to network restrictions. By reducing reliance on state-contracted providers and encouraging open-market options, the bill fosters a more competitive and less monopolized environment for healthcare services.
Private Property Rights: The bill does not create, infringe upon, or alter private property rights. It concerns access to healthcare services and the voluntary assumption of payment responsibilities, but it does not involve land use, eminent domain, or the regulation of privately held assets. However, by empowering caregivers to engage freely with private service providers, it is at least compatible with a respect for property and contract rights.
Limited Government: The bill maintains a limited-government framework by explicitly stating that the state (DFPS) is not responsible for out-of-network care costs unless a court orders otherwise. This protects the state from being drawn into additional obligations by default. However, the provision allowing a court to assign financial responsibility to DFPS introduces a modest risk of judicial overreach or inconsistent application. While this does not fundamentally violate limited government principles, a clarifying amendment would strengthen the bill further by placing clear statutory boundaries on such judicial authority.

Related Legislation

SB 855 (Same As)

View Bill Text and Status