Part 15.
TEXAS HEALTH AND HUMAN SERVICES COMMISSION
Chapter 354.
MEDICAID HEALTH SERVICES
Subchapter A. PURCHASED HEALTH SERVICES
6.
HOSPITAL SERVICES
1 TAC §354.1077
The Texas Health and Human Services Commission (HHSC or Commission)
proposes to amend §354.1077, Provider Participation Requirements, to
require hospitals in eight urban service areas to comply with the reimbursement
provisions and rate reductions of 1 TAC §355.8064 in order to participate
in the Texas Medicaid Program.
Background and Justification
The 2006-07 General Appropriations Act (Article II, Special Provisions,
Section 49, 79th Legislature, Regular Session, 2005) directs HHSC to achieve
savings for services provided in eight urban service areas to aged, blind
and disabled Medicaid clients. The eight urban service areas are Bexar, Dallas,
Harris, El Paso, Lubbock, Nueces, Tarrant, and Travis.
Section 49 of the Act further directs HHSC to utilize cost-effective models
to better manage the care of these clients and, at the same time, affect the
identified savings. Finally, Section 49 directs HHSC, to the extent necessary,
to adjust provider payments to ensure that the savings target is met. The
Commission plans to meet these requirements, in part, by implementing a non-capitated
Integrated Care Management (ICM) model in the Dallas and Tarrant service areas,
and a partially capitated model with inpatient hospital services carved out
in other urban service areas. The goal of both models will be to promote proper
utilization and integration of acute care and long-term care services, while
achieving the savings directed by the Legislature.
Concurrently with this rule, HHSC also is proposing in this issue of the
Section-by-Section Summary
Section 354.1077(c) requires hospitals in the eight designated service
areas to agree in writing to comply with the reimbursement provisions and
rate reductions of 1 TAC §355.8064 in order to participate in the Texas
Medicaid Program.
Fiscal Note
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services,
has determined that during the first 5-year period the proposed rule is in
effect there will be no fiscal impact to state government. The proposed rule
will not result in any fiscal implications for local health and human services
agencies. The proposed rule will result in reductions in Medicaid revenues
to local governments.
Small and Micro-business Impact Analysis
Mr. Suehs has also determined that there will be no effect on small businesses
or micro businesses to comply with the proposal, as they will not be required
to alter their business practices as a result of enforcement of the rule.
There are no anticipated economic costs to persons who are required to comply
with the proposed rule. There is no anticipated negative impact on local economies.
Public Benefit
Ed White, Director of Rate Analysis, has determined that, for each year
of the first five years the amendment is in effect, the public benefit expected
as a result of enforcing the amendment is the cost-effective managed medical
care of the aged, blind, and disabled Medicaid population utilizing a health
maintenance organization (HMO) hospital carve-out model or Integrated Care
Management (ICM) model.
Regulatory Analysis
HHSC has determined that this proposal is not a "major environmental rule"
as defined by §2001.0225 of the Texas Government Code. "Major environmental
rule" is defined to mean a rule the specific intent of which is to protect
the environment or reduce risk to human health from environmental exposure
and that may adversely affect, in a material way, the economy, a sector of
the economy, productivity, competition, jobs, the environment or the public
health and safety of a state or a sector of the state. This proposal is not
specifically intended to protect the environment or reduce risks to human
health from environmental exposure.
Takings Impact Assessment
HHSC has determined that this proposal does not restrict or limit an owner's
right to his or her property that would otherwise exist in the absence of
government action and, therefore, does not constitute a taking under §2007.043
of the Government Code.
Public Comment
Questions about the content of this proposal may be directed to Scott Reasonover
(telephone: (512) 491-1438; Fax: (512) 491-1998) in HHSC Rate Analysis for
Hospital Acute Care Services. Written comments on the proposal may be submitted
to Mr. Reasonover via facsimile, E-mail to Scott.Reasonover@hhsc.state.tx.us,
or mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200, Austin, TX
78708-5200, within 30 days of publication of this proposal in the
Texas Register
.
Statutory Authority
The amendment is proposed under the Texas Government Code, §531.033,
which provides the Executive Commissioner of HHSC with broad rulemaking authority;
the Human Resources Code, §32.021, and the Texas Government Code, §531.021(a),
which provide HHSC with the authority to administer the federal medical assistance
(Medicaid) program in Texas; and the Texas Government Code, §531.021(b),
which provides HHSC with the authority to propose and adopt rules governing
the determination of Medicaid reimbursements.
The proposed amendment affects the Human Resources Code, Chapter 32, and
the Texas Government Code, Chapter 531. No other statutes, articles, or codes
are affected by this proposal.
§354.1077.Provider Participation Requirements.
(a)
A hospital must comply with each of the following requirements
to qualify for participation as a hospital in the Texas Medical Assistance
(Medicaid) Program. A hospital must:
(1)
be licensed by the Texas Department of Health (department)
as a general or special hospital, unless exempt from licensure by the appropriate
licensing authority. This requirement does not apply to military hospitals
providing inpatient emergency hospital services;
(2)
be enrolled and participating in the Medicare Program
as a hospital;
(3)
sign a written provider agreement with the department
or its designee to participate in the Medicaid program. The provider agreement
requires the hospital to comply with the terms of the agreement and all requirements
of the Medicaid program, including regulations, rules, handbooks, standards,
and guidelines published by the department or its designee; and
(4)
comply with the utilization review plan approved by the
department or its designee.
(b)
Effective December 1, 1991, the hospital must maintain
policies and procedures regarding the following policies with respect to all
adult individuals receiving inpatient services provided by the hospital:
(1)
provide all adult individuals the following information
regarding advance directives at the time of the individual's admission as
an inpatient:
(A)
the individual's rights under Texas law, whether statutory
or as recognized by the courts of the state, to make decisions concerning
medical care, including the right to accept or refuse medical or surgical
treatment and the right to formulate advance directives (directive to physicians/living
will or durable power of attorney for health care); and
(B)
the hospital's policies respecting the implementation
of such rights;
(2)
document in the individual's medical record whether or
not the individual has executed an advance directive;
(3)
not condition the provision of care or otherwise discriminate
against an individual based on whether or not the individual has executed
an advance directive;
(4)
ensure compliance with the requirements of Texas law,
whether statutory or as recognized by the courts of Texas, respecting advance
directives at facilities of the provider or organization; and
(5)
provide for education for staff and the community on issues
concerning advance directives.
(c)
Notwithstanding subsections (a) and (b)
of this section, effective September 1, 2006, a hospital in the Bexar, Dallas,
El Paso, Harris, Lubbock, Nueces, Tarrant or Travis Service Areas will not
be permitted to participate in the Texas Medical Assistance (Medicaid) Program
unless the hospital agrees in writing to comply with the provisions of §355.8064
of this title (relating to Reimbursement Adjustment for Hospitals Providing
Inpatient Services to SSI and SSI-Related Clients).
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 12, 2006.
TRD-200603150
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: July 23, 2006
For further information, please call: (512) 424-6576
Subchapter J. PURCHASED HEALTH SERVICES
4.
MEDICAID HOSPITAL SERVICES
1 TAC §355.8063
The Health and Human Services Commission (HHSC) proposes
an amendment to §355.8063, concerning the reimbursement methodology for
freestanding psychiatric inpatient services, in Chapter 355, Reimbursement
Rates.
Background and Purpose
The purpose of the proposed amendment is to change the Medicaid reimbursement
methodology for freestanding psychiatric inpatient hospitals. The proposed
rule change will modify §355.8063(o) to add freestanding psychiatric
inpatient facilities to those facilities that are reimbursed under the Tax
Equity and Fiscal Responsibility Act (TEFRA) cost principles. These changes
are being proposed as a result of the expiration of the Lone STAR Select II
waiver program. The Lone STAR Select II waiver program offered participating
freestanding psychiatric facilities a negotiated per diem reimbursement in
lieu of cost-based reimbursement. With the expiration of the waiver, HHSC
is converting previously participating facilities from per diem reimbursement
to cost-based reimbursement, effective September 1, 2006. Converting the methodology
for these facilities will allow HHSC to reimburse the providers based on their
actual costs, which will more accurately reflect the providers' true costs.
This change is estimated to result in annual savings to the Medicaid program.
Fiscal Note
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services,
has determined that during the first 5-year period the amended rule is in
effect there will be savings of over $3 million in general revenue and over
$5 million in federal funds for each state fiscal year the rule is implemented.
The proposed rule will not result in any fiscal implications for local health
and human services agencies. Local governments will incur no additional costs.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on small businesses
or micro-businesses, or on businesses of any size, as a result of enforcing
or administering the amendment, since providers will be reimbursed for their
Medicaid inpatient psychiatric services based upon their actual costs of providing
those services.
Cost to Persons and Effect on Local Economies
HHSC does not anticipate that there will be any economic cost to persons
who are required to comply with this amendment. The amendment will not affect
a local economy.
Public Benefit
Ed White, Director of Rate Analysis, has determined that, for each year
of the first five years the amendment is in effect, the public benefit expected
as a result of enforcing the amendment is that freestanding psychiatric facilities
will be reimbursed based upon their actual costs of providing psychiatric
inpatient services. In addition, the change in the reimbursement methodology
will result in savings to the Medicaid program.
Regulatory Analysis
HHSC has determined that this proposal is not a "major environmental rule"
as defined by §2001.0225 of the Texas Government Code. "Major environmental
rule" is defined to mean a rule the specific intent of which is to protect
the environment or reduce risk to human health from environmental exposure
and that may adversely affect, in a material way, the economy, a sector of
the economy, productivity, competition, jobs, the environment or the public
health and safety of a state or a sector of the state. This proposal is not
specifically intended to protect the environment or reduce risks to human
health from environmental exposure.
Takings Impact Assessment
HHSC has determined that this proposal does not restrict or limit an owner's
right to his or her property that would otherwise exist in the absence of
government action and, therefore, does not constitute a taking under Texas
Government Code, §2007.043.
Public Comment
Questions about the content of this proposal may be directed to Alisa Jacquet
(telephone: (512) 491-1432; FAX: (512) 491-1998) in HHSC Rate Analysis for
Hospital Acute Care Services. Written comments on the proposal may be submitted
to Ms. Jacquet via facsimile, E-mail to alisa.jacquet@hhsc.state.tx.us, or
mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200, Austin, TX 78708-5200,
within 30 days of publication in the
Texas Register
.
Statutory Authority
The amendment is proposed under the Texas Government Code, §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules necessary
to carry out the Commission's duties, and §531.021(b), which establishes
HHSC as the agency responsible for adopting reasonable rules governing the
determination of fees, charges, and rates for medical assistance payments
under the Human Resources Code, Chapter 32.
The proposed amendment affects Texas Government Code, §§531.033
and 531.021(b) and Chapter 32 of the Human Resources Code. No other statutes,
articles, or codes are affected by this proposal.
§355.8063.Reimbursement Methodology for Inpatient Hospital Services.
(a) - (n)
(No change.)
(o)
Reimbursement to in-state children's hospitals
and
freestanding psychiatric facilities
. The HHSC or its designee reimburses
in-state children's hospitals
and freestanding psychiatric facilities
under similar methods and procedures used in the Social Security Act,
Title XVIII, as amended, effective October 1, 1982, by Public Law 97-248,
Tax Equity and Fiscal Responsibility Act (TEFRA) except for the cost of direct
graduate medical education (DGME). For cost reporting periods beginning on
or after September 1, 2003, children's hospitals with allowable DGME costs
as determined under TEFRA principles will receive a pro rata share of their
annual TEFRA DGME cost based on appropriations or allocations from appropriations
made specifically for this purpose. The amount and frequency of interim payments
will also be subject to the availability of appropriations made specifically
for this purpose. Interim payments are subject to settlement at both tentative
and final audit of a hospital's cost report. The HHSC or its designee establishes
target rates and stipulates payments per discharge, incentives, and percentage
of payments. The HHSC or its designee uses each hospital's 1987 final audited
cost reporting period (fiscal year ending during calendar year 1987) as its
target base period. The target base period for hospitals recognized by Medicare
as children's hospitals after the implementation of this subsection is the
hospital's first full 12-month cost reporting period occurring after its recognition
by Medicare. The HHSC or its designee annually increases each hospital's target
amount for the target base period by the cost-of-living index described in
subsection (n) of this section. The HHSC or its designee selects a new target
base period at least every three years. The HHSC or its designee bases interim
payments to each hospital upon the interim rate derived from the hospital's
most recent tentative or final Medicaid cost report settlement. If a Title
XIX participating hospital is subsequently recognized by Medicare as a children's
hospital after the implementation of this subsection, the hospital must submit
written notification to the HHSC or its designee and include adequate documentation
and claims data. Upon receipt of the written notification from the hospital,
the HHSC or its designee reserves the right to take 90 days to convert the
hospital's reimbursement to the reimbursement methodology described in this
subsection.
(p) - (v)
(No change.)
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on June 12, 2006.
TRD-200603151
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: July 23, 2006
For further information, please call: (512) 424-6576
Chapter 355.
REIMBURSEMENT RATES