Part 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION
Chapter 355. REIMBURSEMENT RATES
Subchapter J. PURCHASED HEALTH SERVICES
Division 4. MEDICAID HOSPITAL SERVICES
The Health and Human Services Commission (HHSC) proposes an amendment to §355.8061, concerning payment for hospital services and §355.8069, concerning supplemental payments to certain rural public hospitals, in Title 1 of the Texas Administrative Code (TAC), Part 15, Chapter 355, Subchapter J, Division 4, Medicaid Hospital Services.
Background and Justification
The purpose of these proposed amendments is to make changes to the Non-State-Owned Rural Public Hospital supplemental payment program (also known as the upper payment limit, or UPL, program for rural public hospitals). Specifically, the amendments propose to include outpatient services in the supplemental payment calculation for non-state-owned rural public hospitals and change the Medicaid charge deficit criteria from 1% to 0.5% for inpatient services for the rural public hospital UPL program.
As a result of these proposed amendments, the State will obtain additional federal revenue for non-state-owned rural public hospitals that participate in the Medicaid program. The state matching funds required to draw down federal dollars will be provided by the non-state-owned public rural hospitals.
Section-by-Section Summary
The proposed amendment to §355.8061 adds outpatient services in the supplemental payment calculation for non-state-owned rural public hospitals. Outpatient services are being added to the supplemental payment calculation for rural public hospitals since they are part of the Texas Medicaid safety net hospitals. This proposed amendment will support these hospitals in their mission to serve Medicaid recipients.
The proposed amendment to §355.8069 changes the Medicaid charge deficit criteria from 1% to 0.5% for inpatient services. Currently, certain rural public hospitals whose Medicaid deficit (the difference between Medicaid fee-for-service billed charges and total Medicaid payments) is at least 1% of the total Medicaid deficit for all participating rural public hospitals provide the intergovernmental transfers (IGTs) for the rural public hospital UPL program. Changing the deficit criteria from 1% to 0.5% allows for an increase in the number of qualified providers who would provide intergovernmental transfers and, therefore, increases the amount of supplemental payments to eligible providers.
Fiscal Note
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services, 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 (SFY) 2008, HHSC estimates that the amendments to the rules will result in increased federal matching funds of $5,733,810. HHSC estimates that the State will receive an estimated increase in federal matching funds of $5,719,928 for SFY 2009 and $5,718,824, 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 rule amendment.
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
Carolyn Pratt, Director of Rate Analysis, has determined that for the first five years the rules are in effect, the public benefit expected as a result of enforcing the proposed rule amendments is that non-state-owned rural public hospitals in the State of Texas will 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
Written comments on the proposal may be submitted to Lupita Villarreal by mail at HHSC Rate Analysis-Hospital Services, Mail Code H-400, P.O. Box 85200, Austin, TX 78708-5200, by fax to (512) 491-1998, or by e-mail to lupita.villarreal@hhsc.state.tx.us, within 30 days of publication of the proposal 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.
The proposed amendments affect the Human Resources Code, Chapter 32, and the Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.
§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) - (3) (No change.)
(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) - (B) (No change.)
(C) Notwithstanding the provisions of subparagraphs (A) and (B) of this paragraph, all hospitals that are eligible to receive funding under §355.8069 of this title (relating to Supplemental Payments to Certain Rural Public Hospitals) shall also be eligible to receive funding under this paragraph. Supplemental payments are available under this section for outpatient hospital services provided by certain rural public hospitals on or after September 1, 2007.
(D) [(C)] 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.
(E) [(D)] 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
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.
(F) [(E)] 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.
(G) [(F)] 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)
of this title, 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) (No change.)
(b) - (d) (No change.)
§355.8069.Supplemental Payments to Certain Rural Public Hospitals.
Notwithstanding other provisions of this subchapter and subject to the availability of funds, supplemental payments are available under this section for inpatient hospital services provided by certain rural public hospitals.
(1) - (3) (No change.)
(4) Supplemental payments are made to two groups of rural public hospitals:
(A) Rural public hospitals that have a deficit between
fee-for-service Medicaid billed charges and fee-for-service Medicaid
payments (including supplemental payments) which is greater than
0.5 [one
] percent of the total deficit between fee-for-service
Medicaid billed charges and fee-for-service Medicaid payments (including
supplemental payments) for all rural public hospitals. Medicaid billed
charges and payments are based on a 12-consecutive-month period of
fee-for-service claims data selected by HHSC.
(B) (No change.)
(5) (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 April 3, 2008.
TRD-200801738
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: May 18, 2008
For further information, please call: (512) 424-6576