1 TAC §355.8061, §355.8063
The Health and Human Services Commission (HHSC) proposes
to amend §355.8061, concerning Payment for Hospital Services and §355.8063,
concerning Reimbursement Methodology for Inpatient Hospital Services to Chapter
355 of Title 1 of the Texas Administrative Code. Section 355.8061 establishes
the methodology HHSC will use to distribute supplemental (UPL) payments for
outpatient services to private hospitals. Section 355.8063 establishes the
methodology HHSC will use to distribute supplemental (UPL) payments for inpatient
services to private hospitals.
Background and Purpose
HHSC submitted two State Plan Amendment (SPAs) during calendar year 2005
to the Centers for Medicare and Medicaid Services (CMS) to implement a supplemental
payment program to private hospitals. These two SPAs, TX-05-001 and TX-05-011,
have been approved by CMS. The proposed rule amendment amends Title 1 of the
Texas Administrative Code, Chapter 355, §355.8063, Reimbursement Methodology
for Inpatient Hospital Services, and §355.8061, Payment for Hospital
Services. The rule amendment will implement Medicaid Upper Payment Limit (UPL)
supplemental payments to privately-owned and operated hospitals in Hidalgo,
Webb, Maverick, Montgomery, Travis, and Bexar counties effective June 11,
2005 and Medicaid UPL payments to privately-owned and operated hospitals in
all other Texas counties effective November 12, 2005. The privately-owned
and operated hospitals must be affiliated with a hospital district or other
state or local governmental entity to be eligible for supplemental payments.
The hospital district or state or local governmental entity will, thru intergovernmental
transfers or in the case of a state entity, general revenue transfers, provide
the non-federal share of the supplemental payments.
Fiscal Note
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services,
has determined that during the first five-year period the proposed rules are
in effect, there will be no fiscal impact to state government. Mr. Suehs has
determined that the proposed rules are not expected to increase state expenditures,
but will increase the amount of federal matching funds to the state. During
state fiscal year 2007, HHSC estimates that the proposed rules will result
in increased federal matching funds of $678,958,339; this figure includes
retroactive payments for state fiscal years 2005 - 2006. HHSC estimates that
the rules will result in increased federal matching funds of $347,365,919,
per fiscal year, in subsequent years.
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 proposed rules.
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 the amendments. The amendments will not affect
a local economy.
Public Benefit
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services,
determined that for the 2006-2007 biennium, the public benefit expected as
a result of enforcing the proposed rules is that private hospitals in the
State of Texas will receive additional revenue to assist them recover more
of their cost of treating Medicaid patients.
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 Kevin Niemeyer
(512) 491-1366 in HHSC Rate Analysis-Hospital Services. Written comments on
the proposal may be submitted to Mr. Niemeyer by facsimile (512) 491-1998;
by e-mail to kevin.niemeyer@hhsc.state.tx.us; or by mail to HHSC Rate Analysis-Hospital
Services, Mail Code H-400, P.O. Box 85200, Austin, TX 78708-5200, within 30
days of publication in the
Texas Register.
Statutory Authority
The amendments are 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, to administer Medicaid funds, and to adopt rules
necessary for the proper and efficient operation of the Medicaid program;
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.
No other statutes, articles or codes are affected by the proposed rules.
§355.8061.Payment for Hospital Services.
(a)
The Health and Human Services Commission (commission) or
its designated agent shall reimburse hospitals approved for participation
in the Texas Medical Assistance Program for covered Title XIX hospital services
provided to eligible Medicaid recipients. The Texas Title XIX State Plan for
Medical Assistance provides for reimbursement of covered hospital services
to be determined as specified in paragraphs (1) - (4) of this subsection.
(1)
The amount payable for inpatient hospital services shall
be determined as specified in §355.8063 of this title (relating to Reimbursement
Methodology for Inpatient Hospital Services).
(2)
The amount payable for outpatient hospital services shall
be determined under similar methods and procedures used in the Social Security
Act, Title XVIII, as amended, effective October 1, 1982 through July 31, 2000,
by Public Law 97-248, except as may be otherwise specified by the Health and
Human Services Commission. For the period of September 1, 1999 through and
including September 30, 2001, payments to all providers were at 80.3% of allowed
costs. For the period beginning October 1, 2001, Medicaid reimbursement for
outpatient hospital services for high-volume providers, as defined by the
commission, shall be at 84.48% of allowable cost. For the remaining providers,
reimbursement for outpatient hospital services shall be at 80.3% of allowable
cost. For the purpose of establishing the proposed discount factor, a high-volume
provider is defined as one, which is paid at least $200,000 during calendar
year 2000. Any subsequent changes to the discount will require HHSC to hold
a public hearing on proposed reimbursements before the HHSC approves any changes.
The purpose of the hearing is to give interested parties an opportunity to
comment on the proposed reimbursements. Notice of the hearing will be provided
to the public. The notice of the public hearing will identify the name, address,
and telephone number to contact for the materials pertinent to the proposed
reimbursements. At least ten working days before the public hearing takes
place, material pertinent to the proposed change will be made available to
the public. This material will be furnished to anyone who requests it. After
the public hearing, if negative comments are received, a summary of the comments
made during the public hearing will be presented to the HHSC. Reimbursement
for outpatient hospital surgery is limited to the lesser of the amount reimbursed
to ambulatory surgical centers (ASCs) for similar services, the hospital's
actual charge, the hospital's customary charge, or the allowable cost determined
by the commission or its designee.
(3)
Variances shall be accounted for in the Texas State Plan
for Medical Assistance or as otherwise specified by the commission.
(4)
Notwithstanding other provisions of this chapter and subject
to the availability of funds, supplemental payments will be made each state
fiscal year in accordance with this paragraph to eligible hospitals that serve
high volumes of Medicaid and uninsured patients.
(A)
Supplemental payments are available under this paragraph
for outpatient hospital services provided by a
non-state owned or operated,
publicly-owned hospital or hospital affiliated with a hospital district
in Bexar, Dallas, Ector, El Paso, Harris, Lubbock, Nueces, Tarrant, and Travis
counties on or after July 6, 2001.
Supplemental payments will be made
for outpatient services on or after June 11, 2005, for Midland, Potter, and
Randall Counties.
(B)
Notwithstanding the provisions
of subparagraph (A) of this paragraph, all hospitals that are eligible to
receive funding under §355.8063(t)(4) of this title shall also be eligible
to receive funding under this paragraph. Supplemental payments will be made
for outpatient services on or after June 11, 2005, for hospitals in Hidalgo,
Maverick, Montgomery, Travis, Bexar, and Webb counties. Supplemental payments
will be made for outpatient services on or after November 12, 2005, for eligible
hospitals in all other counties in the State of Texas.
(C)
[
(B)
] State funding for supplemental
payments authorized under this paragraph will be limited to and obtained through
intergovernmental transfers of local or hospital district funds.
State
funding for supplemental payments authorized under subparagraph (B) of this
paragraph will be limited to and obtained through intergovernmental transfers
of local governmental entity or hospital district funds or transfer of State
General Revenue.
The supplemental payments described in this subsection
will be made in accordance with the applicable regulations regarding the Medicaid
upper payment limit provisions codified at 42 C.F.R. §447.321.
(D)
[
(C)
] The
non-state owned or
operated,
publicly-owned hospital or hospital affiliated with a hospital
district in a county listed in subparagraph (A) of this paragraph that incurs
the greatest amount of cost for providing services to Medicaid and uninsured
patients[
,
] will be eligible to receive supplemental [
high
volume
] payments.
Any hospital eligible under subparagraph (B)
of this paragraph will be eligible to receive supplemental payments.
The
supplemental payments authorized under this subsection are subject to the
following limits:
(i)
In each state fiscal year the amount of inpatient supplemental
payments and outpatient supplement payments may not exceed the hospital's
"hospital specific limit," as determined under §355.8065(f)(2)(E) of
this chapter (relating to Reimbursement to Disproportionate Share Hospitals
(DSH)
)
for DSH hospitals
; and
(ii)
The amount of outpatient supplemental payments and fee-for-service
Medicaid outpatient payments the hospital receives in a state fiscal year
may not exceed Medicaid billed charges for outpatient services provided by
the hospital to fee-for-service Medicaid recipients in accordance with 42
C.F.R. §447.325.
(E)
[
(D)
] An eligible hospital will receive
quarterly supplemental payments. The quarterly payments will be limited to
one-fourth of the difference between the hospital's Medicaid fee-for-service
outpatient Medicaid payments received and 100% of Medicaid allowable outpatient
hospital cost. Medicaid payments and cost will be based on a twelve consecutive-month
period of fee-for-service claims data selected by HHSC.
(F)
[
(E)
] For purposes of calculating
the "hospital specific limit" under this paragraph, the "cost of services
to uninsured patients" and "Medicaid shortfall," as defined by Texas Administrative
Code §355.8065(b)(5) and (16), will be adjusted as follows:
(i)
the amount of Medicaid payments (including inpatient and
outpatient supplemental payments) that exceed Medicaid cost will be subtracted
from the "Medicaid Shortfall."
(ii)
The amount of the "Medicaid shortfall," as adjusted in
accordance with clause (i) of this subparagraph, will be subtracted from the
"cost of services to uninsured patients" to ensure that, during any state
fiscal year, a hospital does not receive more in total Medicaid payments (inpatient
and outpatient payments, graduate medical education payments, supplemental
payments and disproportionate share hospital payments) than its cost of serving
Medicaid patients and patients without health insurance.
(5)
Notwithstanding other provisions of this attachment, supplemental
payments will be made each state fiscal year in accordance with this subsection
to state government-owned or operated hospitals for outpatient services provided
to Medicaid patients.
(A)
Supplemental payments are available under this subsection
for outpatient hospital services provided by state government-owned or operated
hospitals on or after December 13, 2003. To qualify for a supplemental payment,
the hospital must be owned or operated by the state of Texas.
(B)
The aggregate supplemental payment amount will be the annual
difference between the aggregate upper payment limit and the outpatient fee-for-service
Medicaid payments made to the state government-owned or operated hospitals
under this attachment. The aggregate upper payment limit will be calculated,
based on Medicare payment principles and in accordance with the federal upper
limit regulations at 42 CFR §447.321, using the most recent cost report
data available.
(C)
The amount of the supplemental payment made to each state
government-owned or operated hospital will be determined by:
(i)
dividing each hospital's fee-for-service Medicaid payments
by the sum of the Medicaid fee-for-service payments of all state government-owned
of operated hospitals; and
(ii)
multiplying the percentage calculated in clause (i) of
this subparagraph by the aggregate supplemental payment calculated in subparagraph
(B) of this paragraph.
(D)
Supplemental payments determined under this subsection
will be calculated annually and paid quarterly.
(E)
Supplemental payments made under this subsection when combined
with other outpatient payments made under this attachment shall not exceed
the maximum amounts allowable under applicable federal regulations at 42 CFR §447.325.
(b)
Title XIX providers may not carry forward those unreimbursed
costs attributed to either the lower costs or charge limitations authorized
by 42 Code of Federal Regulations §405.455 et seq., effective for all
accounting periods beginning on or after January 1, 1982.
(c)
The direct and indirect costs of caring for charity patients
shall have no relationship to eligible recipients of the Texas Medical Assistance
program and are not allowable costs under the Texas Title XIX Medical Assistance
program. Obligations by hospitals to provide free care, under the Hill-Burton
Act or any other arrangement as a condition to secure federal grants or loans,
are not recognized as a cost under the Texas Medical Assistance program.
(d)
The contents of subsection (a) - (c) of this section do
not describe the amount, duration, or scope of services provided to eligible
recipients under the Texas Medical Assistance Program.
§355.8063.Reimbursement Methodology for Inpatient Hospital Services.
(a) - (s)
(No change.)
(t)
Non-State Owned [
Urban
] Hospital Supplemental
Inpatient Payments. Notwithstanding other provisions of this chapter, supplemental
payments will be made each state fiscal year in accordance with this subsection
to eligible hospitals that serve high volumes of Medicaid and uninsured patients.
(1)
Supplemental payments are available under this subsection
for inpatient hospital services provided by a publicly-owned hospital or hospital
affiliated with a hospital district in Bexar, Dallas, Ector, El Paso, Harris,
Lubbock, Nueces, Midland, Potter, Randall, Tarrant, and Travis
counties
. Supplemental payments will be made for inpatient services on or after
July 6, 2001
,
for Bexar, Dallas, Ector, El Paso, Harris, Lubbock,
Nueces, Tarrant, and Travis counties. Supplemental payments will be made for
inpatient services on or after February 7, 2004, for Midland County. Supplemental
payments will be made for inpatient services on or after May 29, 2004 for
Potter and Randall counties.
(2)
State funding for supplemental payments authorized under
this paragraph will be limited to and obtained through intergovernmental transfers
of local or hospital district funds. The supplemental payments described in
this paragraph will be made in accordance with the applicable regulations
regarding the Medicaid upper limit provisions codified at 42 C.F.R. §447.272.
(3)
In each county listed in paragraph (1) of this subsection,
the publicly-owned hospital or hospital affiliated with a hospital district
that incurs the greatest amount of cost for providing services to Medicaid
and uninsured patients, will be eligible to receive supplemental high volume
payments. The supplemental payments authorized under this paragraph are subject
to the following limits:
(A)
In each state fiscal year the amount of any inpatient supplemental
payments and outpatient supplemental payments may not exceed the hospital's
"hospital specific limit," as determined under §355.8065(f)(2)(E) of
this chapter (relating to Reimbursement to Disproportionate Share Hospitals
(DSH))
for DSH hospitals
; and
(B)
The amount of inpatient supplemental payments and fee-for-service
Medicaid inpatient payments the hospital receives in a state fiscal year may
not exceed Medicaid inpatient billed charges for inpatient services provided
by the hospital to fee-for-service Medicaid recipients in accordance with
42 CFR §447.271.
(4)
Notwithstanding the provisions
of paragraphs (1) - (3) of this subsection, a privately-operated hospital
that executes an indigent care affiliation agreement (as defined in this subsection)
with a hospital district or state or local governmental entity is eligible
to receive supplemental payments under this paragraph. The purpose of the
affiliation is that private hospitals will use the supplemental funds to provide
additional indigent health care.
(A)
Supplemental payments will be made for inpatient
services on or after June 11, 2005, for eligible hospitals in Hidalgo, Maverick,
Montgomery, Travis, Bexar, and Webb counties. Supplemental payments will be
made for inpatient services on or after November 12, 2005, for eligible hospitals
in all other counties in the State of Texas.
(B)
A hospital that is eligible to receive supplemental
payments under this paragraph must provide a copy of the fully executed indigent
care affiliation agreement to HHSC prior to payment of any supplemental funds
under this paragraph.
(C)
An eligible hospital must certify, on a form
prescribed by HHSC and prior to payment of any supplemental funds under this
paragraph, the following:
(i)
No part of any supplemental payment paid to
the hospital under this paragraph will be returned or reimbursed to the hospital
district or state or local governmental entity;
(ii)
No part of any supplemental payment paid to
the hospital under this paragraph will be used to pay a contingent fee, consulting
fee, or legal fee associated with the hospital's receipt of the supplemental
funds; and
(iii)
The person signing the certification on behalf
of the hospital is legally authorized to bind the hospital and to certify
the matters described in the certification.
(D)
A hospital district or state or local governmental
entity must certify, on a form prescribed by HHSC and prior to payment of
any supplemental funds under this paragraph, the following:
(i)
The hospital district or state or local governmental
entity has not received and has no agreement to receive, any portion of the
funds paid to an eligible hospital that has executed an affiliation agreement
with the hospital district or state or local governmental entity;
(ii)
The hospital district or state or local governmental
entity has not entered into a contingent fee arrangement related to the hospital
district's or state or local governmental entity's participation in the supplemental
payment program authorized under this paragraph;
(iii)
The hospital district or state or local governmental
entity is authorized to participate in the supplemental payment program authorized
under this paragraph pursuant to a vote of the hospital district's or state
or local governmental entity's governing body in a public meeting preceded
by public notice published in accordance with the hospital district's or state
or local governmental entity's usual and customary practices or the Texas
Open Meetings Act, as applicable;
(iv)
All affiliation agreement, consulting agreements,
or legal services agreements executed by the hospital district or state or
local governmental entity related to the hospital district's or state or local
governmental entity's participation in the supplemental payment program authorized
under this paragraph are available for public inspection upon request.
(E)
Beginning August 31, 2008, each participating
hospital and hospital district or state or local governmental entity must
submit a fully executed indigent care affiliation agreement as well as certification
forms on or before August 31st of each fiscal year to be eligible to receive
supplemental payments under this paragraph during the following fiscal year.
(F)
If the federal Centers for Medicare and Medicaid
Services (CMS), the United States Department of Health and Human Services,
or other responsible legal authority recoups federal financial participation
related to an eligible hospital's receipt and/or use of supplemental payments
authorized under this paragraph, HHSC may recoup an amount equivalent to the
amount of supplemental payments recouped by CMS. Supplemental payments under
this paragraph may be subject to any adjustments for payments made in error,
including, without limitation, adjustments under §371.1703 of this title
(relating to recovery of overpayments), 42 C.F.R. part 455, and chapter 403,
Texas Government Code. HHSC will send a notice of recoupment to the hospital
and will recoup from any current or future Medicaid payments as follows:
(i)
HHSC will recoup from the hospital against which
the disallowance was directed;
(ii)
If, within 30 days of the hospital's receipt
of HHSC's written notice of recoupment, the hospital has not paid the full
amount of the recoupment or entered into an agreement, in writing, with HHSC,
HHSC will recover the amount of the CMS recoupment from the hospital district
or state or local governmental entity;
(iii)
If HHSC recoups the outstanding amount from
the hospital district or state or local governmental entity, the hospital
district or state or local governmental entity may recover the same amount
from its affiliated hospitals via mechanisms agreed to in writing by the affiliating
entity and the affiliated hospitals.
(G)
Funding of supplemental payments under this
paragraph shall be disbursed as follows:
(i)
Supplemental payments available under this paragraph
shall be payable to a hospital affiliated with a hospital district or state
or local governmental entity in proportion to the amount transferred by the
hospital district or state or local governmental entity affiliated with the
private hospital, subject to legislative appropriation. Such supplemental
payments will be based on calculations made by HHSC and will be made quarterly,
beginning June 1, 2007.
(ii)
If a hospital district or state or local governmental
entity does not transfer to HHSC sufficient funding for the time period specified
to generate the full amount allowable under this paragraph, each hospital
affiliated with that hospital district or state or local governmental entity
will receive a portion of the supplemental payment under paragraph (5) of
this subsection based on that hospital's percentage of the full entitlement
for all hospitals affiliated with that hospital district or state or local
governmental entity.
(iii)
HHSC will issue one supplemental payment for
a hospital for inpatient services the hospital provided on or before August
31, 2006, if the hospital meets the criteria of subparagraphs (A) - (C) of
this paragraph no later than May 31, 2007, and if a sufficient amount of funds
(as determined by HHSC) are transferred to HHSC to support the one-time supplemental
payment no later than December 1, 2007. A hospital district or state or local
governmental entity must notify HHSC in a manner prescribed by HHSC of the
date it intends to transfer funds related to the supplement payment authorized
under this subparagraph. The supplemental payment will be processed for each
participating hospital based on the amount of funds transferred to HHSC up
to the calculated maximum payment for the applicable retroactive time period.
A hospital that satisfies the criteria of subparagraphs (A) - (C) of this
paragraph after May 31, 2007, will not be eligible for the supplemental payment
authorized under this subparagraph but will be eligible to receive regular
supplemental payments under paragraph (5) of this subsection. If the full
amount of the calculated intergovernmental transfer (IGT) transfer is not
made by the transfer deadlines specified by HHSC, the supplemental payment
for that time period will be calculated based on the amount of the funds transferred.
Regular quarterly supplemental payments for state fiscal year 2007 for which
IGT funds are received will be made, beginning in June 2007, to each participating
hospital for which a copy of the fully executed indigent care affiliation
agreement, as well as any required certification forms, have been timely received.
(H)
State funding for supplemental payments authorized
under this paragraph will be limited to and obtained through intergovernmental
transfers of local governmental entity or hospital district funds or transfer
of State General Revenue. The supplemental payments described in this subsection
will be made in accordance with the applicable regulations regarding the Medicaid
upper limit provisions codified at 42 C.F.R. §447.272.
(5)
[
(4)
] An eligible hospital
under this subsection
will receive quarterly supplemental payments.
The quarterly payments will be limited to one-fourth of the lesser of:
(A)
The difference between the hospital's Medicaid inpatient
billed charges and Medicaid payments the hospital receives for services provided
to fee-for-service Medicaid recipients. Medicaid billed charges and payments
will be based on a twelve consecutive-month period of fee-for-service claims
data selected by HHSC; or
(B)
The difference between the hospital's "hospital specific
limit," as determined under §355.8065(f)(2)(E) of this chapter
relating to Reimbursement to Disproportionate Share Hospitals (DSH)) for DSH
hospitals
and the hospital's DSH payments as determined by the most
recently finalized DSH reporting period.
(6)
[
(5)
] For purposes of calculating
the "hospital specific limit" in paragraph
(5)
[
(4)
](B)
of this subsection, the "cost of services to uninsured patients, " as defined
by §355.8065(b)(5) of this chapter and "Medicaid shortfall," as defined
by §355.8065(b)(16) of this chapter, will be adjusted as follows:
(A)
The amount of Medicaid payments (including inpatient and
outpatient supplemental payments) that exceed Medicaid cost will be subtracted
from the "Medicaid shortfall."
(B)
The amount of the "Medicaid shortfall," as adjusted in
accordance with subparagraph (A) of this paragraph, will be subtracted from
the "cost of services to uninsured patients" to ensure that, during any state
fiscal year, a hospital does not receive more in total Medicaid payments (inpatient
and outpatient rate payments, graduate medical education payments, supplemental
payments and disproportionate share hospital payments) than its cost of serving
Medicaid patients and patients with no health insurance.
(u) - (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 January 9, 2007.
TRD-200700040
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: February 18, 2007
For further information, please call: (512) 424-6900