S.B. No. 1753 amends Section 540.0272 of the Government Code to allow Medicaid managed care organizations to offer specific mental health, substance use services, or food and nutrition assistance services as alternatives to certain state Medicaid plan services. The bill requires that contracts with these organizations include provisions permitting them to provide medically appropriate, cost-effective, and evidence-based services from a list approved by the state Medicaid managed care advisory committee. Notably, the language specifies that recipients are not mandated to use these alternative services in place of the traditional services outlined in the state Medicaid plan.

Additionally, the bill mandates that the commission prepare and submit an annual report to the legislature detailing the usage of these alternative services and consider their actual costs when setting capitation rates for the managed care organizations. The changes will apply to contracts entered into or renewed on or after the effective date of the Act, which is set for September 1, 2025. If a state agency determines that federal authorization is needed for implementation, it may delay the provision's implementation until such authorization is granted.