PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION
CHAPTER 354. MEDICAID HEALTH SERVICES
SUBCHAPTER A. PURCHASED HEALTH SERVICES
DIVISION 9. AMBULANCE SERVICES
1 TAC §354.1115
The Texas Health and Human Services Commission (HHSC)
proposes to amend §354.1115, Authorized Ambulance Services.
Background and Justification
Senate Bill 2424 of the 81st Legislature, Regular Session, 2009,
requires the Health and Human Services Commission (HHSC) by rule to
change the Medicaid authorization process for certain non-emergency
ambulance services. Authorizations that are for a one-day non-emergency
ambulance transport may be obtained on the same day or the next business
day following the transport. If an authorization is requested for
transport on multiple days, such as for a series of medical appointments,
the authorization must be obtained prior to any transport. HHSC must
have staff available to evaluate requests for authorization for a
minimum of 12 hours each day, excluding state holidays and weekends.
Authorization requests that are granted must be effective for a period
of not more than 180 days.
Section-by-Section Summary
HHSC proposes to make the following changes to §354.1115 to
reflect the required changes to the authorization process for non-emergency
ambulance services:
Revise paragraph (2)(A) to remove the reference that an authorization
must be obtained before non-emergency ambulance transport in all circumstances.
Revise paragraph (2)(A)(iii) by inserting text to require that
the authorization period be effective for a period of not more than
180 days.
Revise paragraph (2) by inserting new subparagraph (B) to allow
for an authorization for a one-day non-emergency ambulance transport
to be made on the same day or the next business day following the
transport.
Revise paragraph (2) by inserting new subparagraph (C) to require
that an authorization for transport on multiple days be obtained prior
to any transport.
Insert new paragraph (3) to require that staff be available to
evaluate authorization requests at least 12 hours each day excluding
state holidays and weekends.
Paragraphs and subparagraphs were renumbered and relettered as
necessary to accommodate the new language.
Fiscal Note
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services,
has determined that during the first five-year period the amended
rule is in effect there will be a cost savings to state government.
The current contract with the Medicaid claims administrator includes
an amendment for a 24 hours a day, 7 days a week telephone request
line at a cost of $215,000 annually. This contract amendment would
be canceled for a savings of $107,500 General Revenue ($215,000 All
Funds) each year, based on a 50 percent administrative federal match
rate. The proposed rule will not result in any fiscal implications
for local health and human services agencies. Local governments will
not incur additional costs.
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 amended requirements,
as they will not be required to alter their business practices as
a result 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 employment.
Public Benefit
Chris Traylor, Associate Commissioner for Medicaid and CHIP, has
determined that for each year of the first five years the proposed
amendment is in effect, the public will benefit from the adoption
of the rule. The anticipated public benefit of the proposed amendment
will be improved efficiency in operations by processing requests for
non-emergency ambulance services only during hours when most requests
are received.
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. Under §2007.003(b)
of the Government Code, HHSC has determined that Chapter 2007 of the
Government Code does not apply to this rule. The changes this rule
makes do not implicate a recognized interest in private real property.
Accordingly, HHSC is not required to complete a takings impact assessment
regarding this rule.
Public Comment
Written comments on the proposed amendments to the rule may be
submitted to Garry Walsh, Senior Policy Analyst, Medicaid/CHIP Division,
Texas Health and Human Services Commission, P.O. Box 13247, H390,
Austin, Texas 78711; by fax to (512) 249-3731; or by e-mail to garry.walsh@hhsc.state.tx.us
within 30 days of publication of this proposal in the
Texas Register.
Statutory Authority
The amendment is proposed under Texas Government Code §531.033,
which provides the Executive Commissioner of HHSC with broad rulemaking
authority; and Human Resources Code §32.021 and Texas Government
Code §531.021(a), which provide HHSC with the authority to administer
the federal medical assistance (Medicaid) program in Texas.
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.
§354.1115.Authorized Ambulance Services.
In addition to the requirements stated in this section, a provider
must comply with §354.1001 of this title (relating to Claim Information
Requirements), and §354.1113 of this title (relating to Additional
Claim Information Requirements).
(1) Emergency Ambulance Transportation. The Commission
or its designee will reimburse a Medicaid-enrolled provider for the
emergency transport of a Medicaid recipient with an emergency medical
condition in accordance with the following criteria:
(A) Transport must be to an appropriate facility. If
the transport is made to a facility other than an appropriate facility,
payment is limited to the amount that would be payable to an appropriate
facility; or
(B) Transport by air or boat ambulance is reimbursable
if the time and distance required to reach an appropriate facility
make the transport by ground ambulance impractical or would endanger
the life or safety of the recipient. If the recipient's medical condition
does not meet the emergency air or boat criteria, but does meet the
emergency ground transportation criteria, the payment to the provider
is limited to the amount that would be payable at the emergency ground
transportation rate.
(2) Non-emergency Ambulance Transportation. The Commission
or its designee may reimburse a Medicaid-enrolled ambulance provider
for non-emergency transport when the following requirements are met:
(A) A physician, nursing facility, health care provider,
or other responsible party, shall obtain authorization from the Commission
or its designee when [
(i) Except as provided by clause (iii) of this subparagraph,
a request for authorization must be evaluated by the Commission or
its designee based on the recipient's medical needs and may be granted
for a length of time appropriate to the recipient's medical condition.
(ii) Except as provided by clause (iii) of this subparagraph,
a response to a request for authorization must be made by the Commission
or its designee not later than 48 hours after receipt of the request.
(iii) A request for authorization must be granted immediately
by the Commission or its designee and must be effective for a period
of not more than 180 days from the date of issuance if the request
includes a written statement from a physician that:
(I) States that alternative means of transporting the
recipient are contraindicated; and
(II) Is dated not earlier than the 60th day before
the date on which the request for authorization is made.
(B) If the request is for authorization
of ambulance transportation for only one day in circumstances not
involving an emergency, a physician, nursing facility, health care
provider, or other responsible party shall obtain authorization from
the Commission or its designee no later than the next business day
following the day of transport.
(C) If the request is for authorization
of ambulance transportation for more than one day in circumstances
not involving an emergency, a physician, nursing facility, health
care provider, or other responsible party shall obtain a single authorization
before an ambulance is used to transport a recipient.
(D) [
(i) Payment under the Medicaid program is denied because
of lack of prior authorization; and
(ii) The person provides the nursing facility, healthcare
provider, or other responsible party with a copy of the bill for which
payment was denied.
(3) The Commission or its designee
authorized to act on behalf of the Commission must be available to
evaluate requests for authorization under this subsection not less
than 12 hours each day, excluding weekends and state holidays.
(4) [
(5) [
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 18, 2009.
TRD-200902478
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
1 TAC §354.1261, §354.1262
(Editor's note: The text of the following sections proposed
for repeal will not be published. The sections may be examined in
the offices of the Texas Health and Human Services Commission or in
the Texas Register office, Room 245, James Earl Rudder Building, 1019
Brazos Street, Austin, Texas.)
The Texas Health and Human Services Commission
(HHSC) proposes to repeal §354.1261, Benefits and Limitations
for Birthing Center Services, and §354.1262, Conditions for Participation
for Birthing Center Services.
Background and Justification
The proposed repeal of §354.1261, Benefits and Limitations
for Birthing Center Services, and §354.1262, Conditions for Participation
for Birthing Center Services, is a result of a federal mandate from
the Centers for Medicare and Medicaid Services (CMS) that instructed
Texas to discontinue Medicaid payments directly to birthing centers
for services provided by the facility. This proposed repeal of the
Medicaid health services rules and related reimbursement rules for
birthing center services will bring HHSC into compliance with the
federal mandate from CMS.
Section-by-Section Summary
The proposed repeal of §354.1261 and §354.1262 will discontinue
Medicaid enrollment for birthing centers.
Fiscal Note
Thomas Suehs, Deputy Executive Commissioner for HHSC, has determined
that during the first five-year period the repeals are in effect,
there will be no significant fiscal impact as a result of the repeals.
Birthing centers will no longer be able to enroll as Medicaid providers
and receive direct Medicaid payments for birthing center services.
Birthing centers will continue to be an eligible place of service.
Even though the payments to birthing centers will be discontinued,
the payments that were formerly paid to birthing centers will instead
be paid directly to the certified nurse midwives, who will then reimburse
the birthing centers for the use of the facilities as a result of
the repeal of these rules. Therefore, the elimination of payments
to birthing centers will be offset by the increase in rates to certified
nurse midwives. This change in payment methodology is mandated by CMS.
Small and Micro-business Impact Analysis
The proposed repeals will not result in any significant fiscal
implications for small businesses, local health and human service
agencies or local governments. Those that provide birthing center
services will no longer receive direct reimbursement from Medicaid
and will instead bill certified nurse midwives for reimbursement for
Medicaid-covered births. Billing the midwife for services could increase
administrative costs. A certified nurse midwife may incur an administrative
cost when complying with this rule because the midwife will have to
reimburse the birthing centers for its Medicaid services. This change
is required by federal regulation. There is no anticipated negative
impact on local employment.
Public Benefit
Chris Traylor, Associate Commissioner for Medicaid and CHIP, has
determined that for each of the first five years the repeals are in
effect, the expected public benefit of the repeal of these rules is
that HHSC will be in compliance with the CMS directive to discontinue
direct payments to birthing centers.
Regulatory Analysis
HHSC has determined that this proposal is not a "major environmental
rule" as defined by §2001.0225 of the Texas Government Code.
A "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
Written comments on the proposal may be submitted to Marianna Gomez,
Policy Analyst for Acute Care Policy Development, Medicaid and CHIP
Division, Texas Health and Human Services Commission, P.O. Box 85200,
MC-H310, Austin, Texas 78708-5200; by fax to (512) 491-1953; or by
e-mail to Marianna.Gomez@hhsc.state.tx.us within 30 days of publication
of this proposal in the Texas Register.
Statutory Authority
The repeals are proposed under Texas Government Code §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules
necessary to carry out the commission's duties; and Texas Human Resources
Code §32.021 and Texas Government Code §531.021(a), which
provide HHSC with the authority to administer the federal medical
assistance (Medicaid) program in Texas. The amendment affects Texas
Government Code, Chapter 531, and Texas Human Resources Code, Chapter
32. No other statutes, articles, or codes are affected by this proposal.
§354.1261.Benefits and Limitations.
§354.1262.Conditions for Participation.
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 18, 2009.
TRD-200902480
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
SUBCHAPTER D. REIMBURSEMENT METHODOLOGY FOR INTERMEDIATE CARE FACILITIES FOR PERSONS WITH MENTAL RETARDATION (ICF/MR)
1 TAC §355.457
The Texas Health and Human Services Commission (HHSC)
proposes to amend §355.457, Fiscal Accountability, under Title
1, Part 15, Chapter 355, Subchapter D.
Background and Justification
Section 355.457 establishes the fiscal accountability process for
the Intermediate Care Facilities for Persons with Mental Retardation
(ICF/MR) program. HHSC, under its authority and responsibility to
administer and implement rates, proposes to update this rule to formalize
certain limitations on hours allowed to be reported by ICF/MR providers
(owners and related parties). Rates for this program are based on
modeled rates, which incorporate cost information from ICF/MR provider
cost reports. A modeled rate is considered fully-funded when the model
is updated with current cost report information that has been adjusted
for inflation to the rate period.
Limitations on allowable hours for owners and related parties are
necessary to ensure that cost reports reflect only hours and associated
costs that are reasonable and necessary in the normal conduct of operations.
The test of reasonableness includes the expectation that the provider
seeks to minimize costs and that the amount expended does not exceed
what a prudent and cost-conscious provider would pay for a given item
or service. In determining the reasonableness of a given cost, the
restraints or requirements imposed by arm's-length bargaining and
the actions that a prudent person would take in similar circumstances
are considered. Since related-party transactions are not constrained
by the requirements imposed by arm's-length bargaining, additional
tools are necessary to ensure that reported related-party hours are
reasonable.
Currently, this rule specifies that allowable hours for owners
and related parties are limited to the lesser of the actual hours
worked or the hours for a comparable direct-care staff person assumed
in the fully-funded model. The proposed rule amendment codifies current
practice by adding language that results in a less stringent limitation
on the determination of allowable owner and related-party hours.
Section-by-Section Summary
HHSC proposes to make the following amendments to §355.457:
Revise subsection (b)(2)(C)(ii) to delete references to related-party hours.
Add new subsection (b)(2)(C)(iii) to describe the process by which
allowable reportable hours for direct-care workers are determined
resulting in a less stringent limitation on the determination of allowable
owner and related-party hours.
Add new subsection (b)(2)(C)(iv) to describe the process by which
allowable direct-care trainer supervisor and direct-care worker supervisor
hours are calculated.
Renumber current subsections (b)(2)(C)(iii) - (v) to (b)(2)(C)(v) - (vii).
Modify renumbered (b)(2)(C)(vii) to refer to clauses (ii) - (vi)
instead of clauses (ii) - (iv).
Renumber rule references throughout the rule as a result of the
renumbering.
Add headers to certain rule subsections, paragraphs and subparagraphs
throughout the rule for added clarity.
Fiscal Note
Gordon E. Taylor, Chief Financial Officer for the Department of
Aging and Disability Services, has determined that during the first
five-year period the amended 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.
There are no fiscal implications for local governments as a result
of enforcing or administering the section.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on
small businesses or micro-businesses as a result of enforcing or administering
the amendment. The implementation of the proposed rule amendment does
not require any changes in practice or any additional cost to the
contracted provider. This rule language reflects current practice
and results in a less stringent limitation on the determination of
allowable owner and related-party hours.
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 local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that for
each of the first five years the amendment is in effect, the expected
public benefit is that the rule language regarding the maximum allowable
hours for owners and related parties will be more specific in how
the limits are calculated.
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.
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.
Public Comment
Questions about the content of this proposal may be directed to
Pam McDonald in the HHSC Rate Analysis Department by telephone at
(512) 491-1373. Written comments on the proposal may be submitted
to Ms. McDonald by facsimile at (512) 491-1998, by e-mail to pam.mcdonald@hhsc.state.tx.us,
or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200,
Austin, Texas 78708-5200, within 30 days of publication of this proposal
in the Texas Register.
Statutory Authority
The amendment is proposed under Texas Government Code §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules
necessary to carry out the commission's duties; Texas Human Resources
Code §32.021 and Texas Government Code §531.021(a), which
provide HHSC with the authority to administer the federal medical
assistance (Medicaid) program in Texas; and Texas Government Code §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 amendment affects Texas Government Code Chapter 531 and Texas
Human Resources Code Chapter 32. No other statutes, articles, or codes
are affected by this proposal.
§355.457.Fiscal Accountability.
(a) General principles. The Texas Health and Human
Services Commission (HHSC) applies the general principles of cost
determination as specified in §355.101 of this title (relating
to Introduction). Fiscal accountability is a process used to gauge
the ongoing financial performance under the non-state operated facility
reimbursement rates.
(b) Annual reporting. Fiscal accountability will consist
of the annual reporting of direct service costs from all non-state
operated providers. The data will be collected on a cost report designed
by HHSC in accordance with §355.105(b) of this title (relating
to General Reporting and Documentation Requirements, Methods, and
Procedures).
(1) Direct-service costs. Direct service
costs include costs associated with personnel who provide direct hands-on
support for consumers and include personnel such as direct care workers,
first-level supervisors of direct care staff, Qualified Mental Retardation
Professional (QMRPs), as defined in 42 Code of Federal Regulations,
Part 483, Subpart I, §483.430, registered nurses, and licensed
vocational nurses. Direct service costs include: costs related to
wages, benefits, payroll taxes, and contracts for direct services.
Accrued leave (sick or annual) can only be considered a direct service
cost if the employee has a right to the cash value of that leave upon
termination.
(2) Provider responsibilities. The provider
is responsible for submission of the fiscal accountability cost report
to HHSC, and payment of amounts owed in accordance with subsection
(c) of this section, regardless of whether the provider contracts
with another entity for the management or operation of the ICF/MR.
(A) If the provider contracts with another entity for
the management or operation of the ICF/MR, the provider must report
the specific direct services costs of that entity as required in the
cost report instructions and not the amount for which the provider
is contracting for the entity's services.
(B) For staff whose duties include work other than
the provision of direct services for the provider, time spent providing
direct services and associated expenses may be reported as direct
service costs if properly documented in accordance with §355.105
of this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).
(C) Allowable compensation for owners and related parties
and definitions of owners and related parties are specified in §355.102(i)
and §355.103(b)(2) of this title (relating to General Principles
of Allowable and Unallowable Costs and Specifications for Allowable
and Unallowable Costs).
(i) Time sheet requirement. Owners and related-parties
who provide multiple types of direct service, both direct care and
indirect services and/or both direct hands-on support and first-level
supervision of direct care workers must maintain daily time sheets
that record the time spent on activities in each area. The provider
must maintain documentation relating to the compensation, bonuses,
and benefits of each owner or related party in accordance with §355.105(b)(2)(B)(xi)
of this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).
(ii) Calculation of allowable hourly wage rate
and benefits. Allowable [
(iii) Calculation of allowable hours
for direct staff except for direct-care trainer supervisors. Allowable
hours per unit of service for a direct service staff-type when the
reported hours for the staff-type includes related-party hours, are
determined as follows:
(I) Step 1. Determine the hours per
unit of service for a comparable direct-service staff-type assumed
in the fully-funded model as defined in clause (ii) of this subparagraph,
adjusted for the provider's average Level of Need (LON) during the
reporting period.
(II) Step 2. Determine the hours per
unit of service encompassed by the 90th percentile in the array of
hours per unit of service for comparable direct service staff-types
as reported by those contracted providers not reporting any related-party
hours for that staff-type, adjusted for the provider's average LON
during the reporting period.
(III) Step 3. Determine the greater of Step 1 and Step 2.
(IV) Step 4. Determine the actual hours
worked by the staff-type per unit of service.
(V) Step 5. Determine the lesser of
Step 4 and Step 3. This value is the allowable hours per unit of service
for the direct service staff-type.
(iv) Calculation of allowable hours
for direct-care trainer supervisors. Allowable direct-care trainer
supervisor hours when the reported direct-care trainer supervisor
hours include related-party hours, are determined as follows:
(I) Step 1. Determine the ratio of
direct-care trainer supervisor hours to direct-care trainer hours
assumed in the fully-funded model as defined in clause (ii) of this
subparagraph.
(II) Step 2. Determine the ratio of
direct-care trainer supervisor hours to direct-care trainer hours
encompassed by the 90th percentile in the array of ratios of direct-care
trainer supervisor hours to direct-care trainer hours for those contracted
providers not reporting any related-party direct-care trainer supervisor
hours.
(III) Step 3. Determine the greater of Step 1 and Step 2.
(IV) Step 4. Determine the actual ratio
of direct-care trainer supervisor hours to direct-care trainer hours.
(V) Step 5. Determine the lesser of
Step 4 and Step 3. This value is the allowable ratio of direct-care
trainer supervisor hours to allowable direct-care trainer hours reported.
To determine the actual allowable direct-care trainer supervisor hours,
multiply the allowable direct-care trainer hours by the allowable
ratio of direct-care trainer supervisor hours to allowable direct-care
trainer hours.
(v) [
(vi) [
(vii) [
(3) Placement of vendor hold for change of ownership
and contract termination. The Department of Aging and Disability
Services (DADS) will place a vendor hold on a prior owner at a change
of ownership which results in the execution of a new provider agreement
or a contract termination. The prior owner must submit a cost report
to HHSC for the current reporting period. Upon receipt of an acceptable
cost report and resolution of any outstanding balances, the vendor
hold will be released.
(4) Ownership change or contract termination and
failure to submit a cost report. Providers with an ownership
change from one legal entity to a different legal entity or a contract
termination that do not submit a cost report for the fiscal year of
the ownership change or contract termination within 60 days of the
change of ownership or contract termination are subject to recoupment
of funds related to fiscal accountability as described in subsection
(c)(1)(D) of this section. The recouped funds will not be restored
until the provider submits an acceptable cost report and has paid
the actual amount due as specified in subsection (c)(1)(A) - (C) of
this section. If an acceptable cost report is not received within
365 days of the change of ownership or contract termination date,
the recoupment will become permanent.
(5) Failure to submit a cost report. Providers
that do not submit a cost report completed in accordance with all
applicable rules and instructions within 60 days of the placement
of a vendor hold due to the failure to submit the cost report are
subject to an immediate recoupment of funds related to fiscal accountability
as described in subsection (c)(1)(D) of this section. The recouped
funds will not be restored until the provider submits an acceptable
cost report and has paid the actual amount due as specified in subsection
(c)(1)(A) - (C) of this section. If an acceptable cost report is not
received within 365 days of the due date, the recoupment will become
permanent.
(6) Other applicable rules. For cost reports
pertaining to providers' fiscal years ending in calendar year 2004
and subsequent years the following applies:
(A) Providers must follow the cost-reporting guidelines
as specified in §355.105 of this title (relating to General Reporting
and Documentation Requirements, Methods, and Procedures).
(B) Providers must follow the guidelines in determining
whether a cost is allowable or unallowable as specified in §355.102
and §355.103 of this title (relating to General Principles of
Allowable and Unallowable Costs, and Specifications for Allowable
and Unallowable Costs).
(C) Revenues must be reported on the cost report in
accordance with §355.104 of this title (relating to Revenues).
(7) Field Audit and Desk Review. Desk reviews or field
audits are performed on cost reports for all contracted providers.
The frequency and nature of the field audits are determined by HHSC
to ensure the fiscal integrity of the program. Desk reviews and field
audits will be conducted in accordance with §355.106 of this
title (relating to Basic Objectives and Criteria for Audit and Desk
Review of Cost Reports), and providers will be notified of the results
of a desk review or a field audit in accordance with §355.107
of this title (relating to Notification of Exclusions and Adjustments).
(8) Reviews of exclusions or adjustments. An ICF/MR
provider who disagrees with HHSC's exclusion or adjustment of items
in cost reports may request an informal review and, when appropriate,
an administrative hearing as specified in §355.110 of this title
(relating to Informal Reviews and Formal Appeals).
(c) Fiscal accountability. HHSC will require
providers to report all direct costs incurred in their annual fiscal
year. HHSC will compare the reported direct service costs to the direct
service cost component of the modeled rates.
(1) Fiscal accountability calculation. The
total direct service revenue of the modeled rates is the direct service
portion of the rate multiplied by the number of allowable units paid
for services provided during the reporting period.
(A) Providers whose direct service costs are 90% or
more of the direct service revenues will not be subject to repayment
under this section.
(B) Providers whose direct service costs are less than
85% of the direct service revenues will be required to pay to HHSC
or its designee the difference between the direct service costs and
95% of the direct service revenues.
(C) Providers whose direct service costs are less than
90% but greater than or equal to 85% of the direct service revenues
will be required to pay to HHSC or its designee 75% of the difference
between the direct service costs and 90% of the direct service revenues.
(D) Providers who do not submit an acceptable cost
report as described in subsection (b)(4) or (5) of this section will
be assumed to have direct service costs equal to 65% of the direct
services revenues and HHSC or its designee will recoup the difference
between 65% of the direct services revenues and 95% of the direct
service revenues, subject to the provisions of subsection (b)(4) or
(5) of this section.
(2) Notification of recoupment. Providers
will be notified, by certified mail, within 90 days of the determination
of their recoupment amount by HHSC of the amount to be repaid to HHSC
or its designee. If a subsequent review by HHSC or audit results in
adjustments to the Cost Report as described in subsection (b)(7) of
this section that changes the amount to be repaid to HHSC or its designee,
the provider will be notified in writing of the adjustments and the
adjusted amount to be repaid. HHSC or its designee will recoup any
amount owed from a provider's vendor payment(s) following the date
of the notification letter.
(3) Repayment. Repayment will be collected
from the following:
(A) the provider or legal entity submitting the report;
(B) any other legal entity responsible for the debts
or liabilities of the submitting entity; or
(C) the legal entity on behalf of which a report is submitted.
(4) Repayment when ownership change or contract termination occurs.
For providers undergoing an ownership change
or contract termination, HHSC or its designee will recoup any amount
owed from the provider's vendor payments that are being held. In cases
where funds identified for recoupment cannot be repaid from the held
vendor payments, the responsible entity from paragraph (3) of this
subsection will be jointly and severally liable for any additional
payment due to HHSC or its designee. Failure to repay the amount due
or submit an acceptable payment plan within 60 days of notification
will result in the recoupment of the owed funds from other Medicaid
contracts controlled by the responsible entity, placement of a vendor
hold on all Medicaid contracts controlled by the responsible entity
and will bar the responsible entity from receiving any new contracts
with HHSC or its designee until repayment is made in full. The responsible
entity for these contracts will be notified as described in paragraph
(2) of this subsection prior to the recoupment of owed funds, placement
of vendor hold and barring of new contracts.
(5) Aggregation.
(A) Definitions. The following words and terms have
the following meanings when used in this paragraph.
(i) Aggregation-- [
(ii) Commonly owned corporations--two or more corporations
where five or fewer identical persons who are individuals, estates,
or trusts own greater than 50 percent of the total voting power in
each corporation.
(iii) Entity--a parent company, sole member, individual,
limited partnership, or group of limited partnerships controlled by
the same general partner.
(iv) Control--greater than 50 % ownership by the entity.
(B) Component Codes Included in Aggregation. If an
entity controlling more than one ICF/MR component code or commonly
owned corporations requests aggregation, compliance with the spending
requirements will be evaluated in the aggregate for all ICF/MR component
codes that the entity or commonly owned corporations controlled at
the end of its fiscal year or at the effective date of the change
of ownership or termination of its last ICF/MR contract.
(C) Aggregation Request. To exercise the aggregation
option, the entity or commonly owned corporations must submit an aggregation
request, in a manner prescribed by HHSC, at the time each cost report
is submitted. In limited partnerships in which the same single general
partner controls all the limited partnerships, that single general
partner must make this request. Other such aggregation requests will
be reviewed on a case-by-case basis.
(D) Frequency of Aggregation Requests. The entity or
commonly owned corporations must submit a separate request for aggregation
for each reporting period.
(E) Ownership Changes and Contract Terminations. ICF/MR
contracts that change ownership or terminate effective after the end
of the applicable reporting period, but prior to the determination
of compliance with spending requirements as per paragraph (1) of this
subsection, are excluded from all aggregate spending calculations.
These contracts' compliance with spending requirements will be determined
on an individual basis and the costs and revenues will not be included
in the aggregate spending calculation.
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 18, 2009.
TRD-200902479
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
1 TAC §§355.502, 355.503, 355.505, 355.507, 355.513
The Texas Health and Human Services Commission (HHSC)
proposes new §355.502, Reimbursement Methodology for Professional
Services in Home and Community-Based Services Waivers, and new §355.513,
Reimbursement Methodology for the Deaf-Blind with Multiple Disabilities
Waiver Program, under Title 1 of the Texas Administrative Code (TAC),
Part 15, Chapter 355. HHSC proposes to amend §355.503, Reimbursement
Methodology for the Community-Based Alternatives Waiver Program and
the Integrated Care Management-Home and Community Support Services
and Assisted Living/Residential Care Programs; §355.505, Reimbursement
Methodology for the Community Living Assistance and Support Services
Waiver Program; and §355.507, Reimbursement Methodology for the
Medically Dependent Children Program, under 1 TAC, Part 15, Chapter 355.
Background and Justification
HHSC is concurrently repealing §355.9022, Reimbursement Methodology
for Community-Based Services Provided to People Who Are Deaf-Blind
with Multiple Disabilities (DBMD) and proposes to move certain parts
of that rule's language to new §355.513 to allow easier public
access to the rules as Subchapter E contains most of the community
program rules. New §355.513 also adds a reimbursement methodology
for rates for requisition fees in DBMD to provide payments for the
cost of acquiring adaptive aids and minor home modifications. Requisition
fees are currently not reimbursed in the DBMD program but are reimbursed
in other §1915(c) waiver programs. The proposed repeal of §355.9022
is contemporaneously proposed elsewhere in this issue of the Texas Register.
The definitions for professional services (nursing, physical, occupational
and speech therapy, behavioral supports, dietary services and audiology)
in the various Department of Aging and Disability Services (DADS) §1915(c)
waiver programs, including Community Based Alternatives (CBA), Community
Living Assistance and Support Services (CLASS), Consolidated Waiver
Program (CWP), Home and Community-Based Services (HCS) waiver, Texas
Home Living (TxHmL) waiver, Medically Dependent Children Program (MDCP),
and DBMD, are identical. However, the rates vary: CBA, CLASS, CWP,
MDCP and DBMD use one set of rates and HCS and TxHmL use another set.
The current difference in nursing rates between HCS and TxHmL and
the remaining DADS §1915(c) waiver programs was justified in
the past because the billing guidelines for CBA, CLASS, CWP, MDCP,
and DBMD differed from those for HCS and TxHmL. DADS is revising the
HCS and TxHmL nursing billing guidelines to match the CBA, CLASS,
CWP, MDCP and DBMD guidelines effective September 1, 2009. When data
become available for HCS and TxHmL under the new billing guidelines,
nursing rates will be calculated using data from all §1915(c)
waiver program cost reports.
The difference in rates for other (non-nursing) professional services
is due to the lack of robust cost data on these services in CBA, CLASS,
CWP, DBMD, and MDCP. The vast majority of units of service for these
services are provided in HCS and TxHmL. As a result of using the HCS
and TxHmL database to set rates for the non-nursing professional services
in CBA, CLASS, CWP, and DBMD, the rates for these services will increase
to match the rates for HCS and TxHmL.
New §355.502 and §355.513, and the proposed amendments
to §§355.503, 355.505, and 355.507 will give HHSC the authority
to combine allowable costs per unit of service for professional services
with allowable costs per unit of service for identical professional
services in all DADS §1915(c) waiver programs into a single database
for use in determining rates for these services. These proposals will
move HHSC closer to achieving its goal of standardizing professional
service rates in community-based programs.
The amendment to §355.505 adds a reimbursement methodology
for day activity and health services (DAHS.) DADS is implementing
DAHS as an option in CLASS effective September 1, 2009.
Section-by-Section Summary
HHSC proposes new §355.502 as follows:
Propose subsection (a) to apply the general principles of cost
determination to the reimbursement methodology for professional services.
Propose subsection (b) to define professional services.
Propose subsection (c) to provide the method for calculating rates
for professional services. Subsection (c)(1) gives the method for
calculating rates when a sufficient, reliable database exists for
the service in a program; subsection (c)(2) gives the method for calculating
rates when a sufficient, reliable database does not exist.
Propose subsection (d) to provide the method for calculating rates
for specialized nursing services provided by a registered nurse (RN)
or a licensed vocational nurse (LVN).
HHSC proposes amendments to §355.503 as follows:
Combine subsections (a) and (b) and renumber the remaining subsections
of §355.505.
Revise the name of the section to "Reimbursement Methodology for
the Community-Based Alternatives Waiver Program."
Renumber subsection (d)(1) as (c)(1) and change the reimbursement
methodology for professionals to utilize cost per unit of services.
This change reflects the new reimbursement methodology for calculating
rates for professional services described in §355.502, relating
to Reimbursement Methodology for Professional Services in Home and
Community-Based Services Waivers.
Renumber subsection (d)(1)(F) as (c)(1)(F) and remove language
requiring the costs for these services to be arrayed to calculate
a separate rate for CBA. Also, add a reference to new §355.502,
relating to Reimbursement Methodology for Professional Services in
Home and Community-Based Services Waivers.
Delete subsection (d)(6) to remove the language for the reimbursement
methodology for specialized nursing. This language is being moved
to §355.502, relating to Reimbursement Methodology for Professional
Services in Home and Community-Based Services Waivers.
Other minor, non-substantive changes are made for clarity.
HHSC proposes amendments to §355.505 as follows:
Combine subsections (a) and (b) and renumber the remaining subsections
of §355.505 accordingly.
Renumber subsection (d)(1) as (c)(1); delete the term "psychological
services" and replace it with "behavioral support" to reflect a change
in the name of the service. In addition, add day activity and health
services because this service is being added to the CLASS waiver effective
September 1, 2009. Finally, add auditory integration training/auditory
enhancement training and nutritional services to the list of services
for which reimbursement will be determined on a fee-for-service basis.
These services are professional services and are now included in the
reimbursement methodology described in new §355.502, relating
to Reimbursement Methodology for Professional Services in Home and
Community-Based Services Waivers.
Renumber subsection (d)(4)(A) as (c)(4)(A); delete the term "psychological
services" and replace it with "behavioral support." Also, add auditory
integration training/auditory enhancement training and nutritional
services.
Add subsection (c)(4)(A)(v) to require the allocation of administrative
and facility costs across services on a pro rata basis.
Renumber subsection (d)(4)(A)(vi) as (c)(4)(A)(vii); add language
for calculating adjusted allowable costs. Also, add a reference to
new §355.502, relating to Reimbursement Methodology for Professional
Services in Home and Community-Based Services Waivers.
Delete subsection (d)(4)(A)(vi)(I) - (III). The proposed amendment
moves the reimbursement methodology for professional services to subsection
(d)(4)(A)(vi), now (c)(4)(A)(vii); the reimbursement methodology for
specialized nursing has been moved to §355.502, relating to Reimbursement
Methodology for Professional Services in Home and Community-Based
Services Waivers.
Add subsection (c)(4)(D) to reference the reimbursement methodology
for day activity and health services at §355.6907, Relating to
Reimbursement Methodology for Day Activity and Health Services.
Renumber subsection (d)(5) as (c)(5); add continued family services.
Other minor, non-substantive changes were made for clarity.
HHSC proposes amendments to §355.507 as follows:
Revise subsection (b) to remove language for calculating nursing
rates prior to September 1, 2007, rates for independent nurses, and
rates for personal assistance services (PAS); add a reference to new §355.502
(relating to Reimbursement Methodology for Professional Services in
Home and Community-Based Services Waivers).
Add new subsection (c) to add language for calculating PAS rates
and renumber the remaining subsections accordingly.
Delete subsection (e) to remove the language relating to pro forma
reimbursement determination. Pro forma reimbursement methodology is
in §355.105(h), relating to General Reporting and Documentation
Requirements, Methods, and Procedures, which is applicable to all
programs.
HHSC proposes new §355.513 as follows:
The language from repealed §355.9022, Reimbursement Methodology
for Community-Based Services Provided to People Who Are Deaf-Blind
with Multiple Disabilities, is proposed in subsections (a) through
(h) with the following revisions:
The rules now state that services without sufficient, reliable
cost data will be developed by using rates from similar services from
other Medicaid programs.
Add new language that HHSC will collect cost reports if HHSC deems
it appropriate.
The rule revises the language for calculating adjusted allowable
costs and adds a reference to new §355.502, relating to Reimbursement
Methodology for Professional Services in Home and Community-Based
Services Waivers.
Delete the language regarding specialized nursing rates and add
reimbursement methodology for requisition fees.
Other minor, non-substantive changes are made for clarity.
Fiscal Note
Gordon E. Taylor, Chief Financial Officer for the Department of
Aging and Disability Services, has determined that, during the first
five-year period the amended rule is in effect, there will be a fiscal
impact to state government, as result of increasing the non-nursing
professional services in CBA, CLASS, CWP, and DBMD, and adding requisition
fees to DBMD and MDCP, of $116,810 for state fiscal year (FY) 2010;
$147,373 for FY 2011; $147,301 for FY 2012; $147,301 for FY 2013;
and $147,301 for FY 2014. There will be no fiscal impact from adding
DAHS services to the CLASS program as consumers in CLASS are already
receiving DAHS through the state plan program. The proposed rule will
not result in any fiscal implications for local health and human services
agencies. There are no fiscal implications for local governments as
a result of enforcing or administering the section.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on
small businesses or micro-businesses as a result of enforcing or administering
the amendment. The implementation of the proposed rule amendment does
not require any changes in practice or any additional cost to the
contracted provider.
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 local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that for
each of the first five years the amendment is in effect, the expected
public benefit is that the same rates will be paid for similar professional
services across §1915(c) waiver programs, requisition fees will
be made available in the DBMD and MDCP programs, and DAHS services
will be made available to CLASS consumers. The rule amendment will
also relocate the DBMD rules to a subchapter with similar rules and
will, thus, be more accessible to the public.
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.
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.
Public Comment
Questions about the content of this proposal may be directed to
Sarah Hambrick in the HHSC Rate Analysis Department by telephone at
(512) 491-1431. Written comments on the repeal may be submitted to
Ms. Hambrick by facsimile at (512) 491-1998, by e-mail to sarah.hambrick@hhsc.state.tx.us,
or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200,
Austin, Texas 78708-5200, within 30 days of publication of this proposal
in the Texas Register.
Statutory Authority
The amendments and new rules are proposed under the Texas Government
Code, §531.033, which provides the Executive Commissioner of
HHSC to with broad rulemaking authority; and the Human Resource Code §32.021
and Texas Government Code §531.021(a), which provide HHSC with
the authority to administer the federal medical assistance (Medicaid)
program in Texas.
The amendments and new rules 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.
§355.502.Reimbursement Methodology for Professional Services in Home and Community-Based Services Waivers.
(a) General requirements. The general principles of
cost determination as specified in §355.101 of this title (relating
to Introduction) applies to these rules.
(b) Professional Services. Professional services include
nursing services provided by a registered nurse (RN) or a licensed
vocational nurse (LVN) (including Adjunct Support and Respite in the
Medically Dependent Children Program), physical therapy, occupational
therapy, speech/language therapy, dietary services (including nutritional
services), audiology services (including auditory integration training/auditory
enhancement training), and behavioral support services.
(c) Professional Services Rates. The rates for professional
services are calculated in the following manner:
(1) If there is sufficient reliable cost report data
from which to determine reimbursements, rates are calculated in the
following manner.
(A) An allowable cost per unit of service for each
cost report is calculated in accordance with the specific methodology
for each Home and Community-Based Services (HCBS) waiver.
(B) The allowable cost per unit of service for each
cost report for all HCBS waivers is combined into an array.
(C) The array of allowable costs per unit of service
for all HCBS waivers is weighted by the number of units of service,
and the median cost per unit of service is calculated.
(2) If there is not sufficient, reliable cost report
data from which to determine reimbursements, reimbursements will be
developed by using pro forma costing. This approach involves using
historical costs of delivering similar services, where appropriate
data are available, and estimating the basic types and costs of products
and services necessary to deliver services meeting federal and state
requirements.
(d) Specialized nursing rates. Specialized nursing
rates will be determined for both RN and LVN services by multiplying
the RN and LVN rates determined in subsection (b) of this section
by 1.15. The specialized nursing rate is paid when a client requires,
as determined by a physician, daily skilled nursing to cleanse, dress,
and suction a tracheostomy or daily skilled nursing assistance with
ventilator or respirator care. The client must be unable to do self-care
and require the assistance of a nurse for the ventilator, respirator,
or tracheostomy care.
§355.503.Reimbursement Methodology for the Community-Based Alternatives Waiver Program [
(a) General requirements. The Texas Health and Human
Services Commission (HHSC) applies the general principles of cost
determination as specified in §355.101 of this title (relating
to Introduction).
[
(b) [
(c) [
(1) Unit of service reimbursement. Reimbursement for
personal assistance services
and in-home respite care services,
and cost per unit of service for nursing services provided by
a registered nurse (RN), nursing services provided by a licensed vocational
nurse (LVN), physical therapy, occupational therapy,
and speech pathology[
(A) Total allowable costs for each provider will be
determined by analyzing the allowable historical costs reported on
the cost report.
(B) Total allowable costs are reduced by the amount
of the pre-enrollment expense fee and requisition fee revenues accrued
for the reporting period.
(C) Each provider's total reported allowable costs,
excluding depreciation and mortgage interest, are projected from the
historical cost-reporting period to the prospective reimbursement
period as described in §355.108 of this title (relating to Determination
of Inflation Indices). The prospective reimbursement period is the
period of time that the reimbursement is expected to be in effect.
(D) Payroll taxes and employee benefits are allocated
to each salary line item on the cost report on a pro rata basis based
on the portion of that salary line item to the amount of total salary
expense for the appropriate group of staff. Employee benefits will
be charged to a specific salary line item if the benefits are reported
separately. The allocated payroll taxes are Federal Insurance Contributions
Act (FICA) or Social Security, Medicare Contributions, Workers' Compensation
Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the
Texas Unemployment Compensation Act (TUCA).
(E) Allowable administrative and facility costs are
allocated or spread to each waiver service cost component on a pro
rata basis based on the portion of each waiver service's units of
service to the amount of total waiver units of service.
(F) For nursing services provided by an RN, nursing
services provided by an LVN, physical therapy, occupational therapy,
speech pathology, and in-home respite care services, an allowable
cost per unit of service is calculated for each contracted provider
cost report for each service. The allowable cost [
(G) For personal assistance services, two
cost areas are created:
(i) The attendant cost area includes salaries, wages,
benefits, and mileage reimbursement calculated as specified in §355.112
of this title (relating to Attendant Compensation Rate Enhancement).
(ii) Another attendant cost area is created which includes
the other personal attendant services costs not included in subparagraph
(G)(i) of this paragraph as determined in subparagraphs (A) - (E)
of this paragraph. An allowable cost per unit of service is determined
for each contracted provider cost report for the other
attendant cost area. The allowable cost [
(iii) The attendant cost area and the other attendant
cost area are summed to determine the personal assistance services
cost per unit of service.
(2) Per day reimbursement.
(A) The reimbursement for Adult Foster Care (AFC) and
out-of-home respite care will be determined as a per day reimbursement
using a method based on modeled projected expenses which are developed
by using data from surveys; cost report data from other similar programs,
consultation with other service providers [
(B) The reimbursement for Assisted Living/Residential
Care (AL/RC) will be determined as a per day reimbursement in accordance
with §355.509(a) - (c)(2)(F)(iii) of this title (relating to
Reimbursement Methodology for Residential Care). The per day reimbursement
for attendant care will be determined, based upon client need for
attendant care into six levels of care. A total reimbursement amount
will be calculated and the proposed reimbursement is equal to the
total reimbursement less the client's room and board payments. The
room and board payment is paid to the provider by the client from
the client's Supplemental Security Income (SSI), less a personal needs
allowance. When the SSI is increased or decreased by the Federal Social
Security Administration, the reimbursement for AL/RC will be adjusted
in amounts equal to the increase or decrease in SSI received by clients.
(C) The reimbursement for out-of-home respite care
provided in a Nursing Facility will be based on the amount determined
for the Nursing Facility case mix class into which the CBA participant
is classified.
(D) The reimbursement for Personal Care III will be
composed of two rate components, one for the direct care cost center
and one for the non-direct care cost center.
(i) Direct care costs. The rate component for the direct
care cost center will be determined by modeling the cost of the minimum
required staffing for the Personal Care III setting, as specified
by the Department of Aging and Disability Services, and using staff
costs and other statistics from the most recently audited cost reports
from providers delivering similar care.
(ii) Non-direct care costs. The rate component for
the non-direct care cost center will be equal to the non-attendant
portion of the non-apartment assisted living rate per day for non-participants
in the Attendant Compensation Rate Enhancement. Providers receiving
the Personal Care III rate are not eligible to participate in the
Attendant Compensation Rate Enhancement and receive direct care add-on's
to the Personal Care III rates.
(3) Monthly reimbursement ceilings. The reimbursement
for Emergency Response Services will be determined as monthly reimbursement
ceiling, based on the ceiling amount determined in accordance with
1 TAC §355.510 (relating to Reimbursement Methodology for Emergency
Response Services (ERS)). The reimbursement for Home-Delivered Meals
will be determined on a per meal basis, based on the ceiling amount
determined in accordance with 1 TAC §355.511 (relating to Reimbursement
Methodology for Home-Delivered Meals).
(4) Requisition fees. Requisition fees are reimbursements
paid to the CBA home and community support services contracted providers
for their efforts in acquiring adaptive aids and minor home modifications
for CBA participants. Reimbursement for adaptive aids and minor home
modifications will vary based on the actual cost of the adaptive aid
and minor home modification. Reimbursements are determined using a
method based on modeled projected expenses which are developed by
using data from surveys; cost report data from similar programs; consultation
with other service providers and/or professionals experienced in delivering
contracted services; and/or other sources.
(5) Pre-enrollment expense fee. Reimbursement for pre-enrollment
assessment is determined using a method based on modeled projected
expenses that are developed by using data from surveys; cost report
data from other similar programs; consultation with other service
providers and/or professionals experienced in delivering contracted
services; and other sources.
(6) [
(d) [
(e) [
(1) Cost reporting guidelines. If HHSC requires a cost
report for any waiver service in this program, providers must follow
the cost-reporting guidelines as specified in §355.105 of this
title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).
(2) Excused from submission of cost reports. If required
by HHSC, all contracted providers must submit a cost report unless
the number of days between the date the first Texas Department of
Aging and Disability Services (DADS) client received services and
the provider's fiscal year end is 30 days or fewer. The provider may
be excused from submitting a cost report if circumstances beyond the
control of the provider make cost-report completion impossible, such
as the loss of records due to natural disasters or removal of records
from the provider's custody by any regulatory agency. An AL/RC provider
may also be excused from submitting a cost report if the total number
of days serving AL/RC or Residential Care residents is 366 or fewer
during its fiscal year. Requests to be excused from submitting a cost
report must be received by HHSC before the due date of the cost report.
(3) Number of cost reports to be submitted. Contracted
providers are required to submit one cost report per legal entity
if all contracts under the legal entity participate in the attendant
compensation rate enhancement in accordance with §355.112 of
this title (relating to Attendant Compensation Rate Enhancement).
Contracted providers who operate both contracts that are participating
in the attendant compensation rate enhancement program and contracts
that are not participating in the attendant compensation rate enhancement
program must file two separate cost reports per legal entity, one
report for the contracts that are participating in the attendant compensation
rate enhancement program and one cost report for the contracts that
are not participating in the attendant compensation rate enhancement.
(4) Reporting and verification of allowable cost.
(A) Providers are responsible for reporting only allowable
costs on the cost report, except where cost report instructions indicate
that other costs are to be reported in specific lines or sections.
Only allowable cost information is used to determine recommended reimbursements.
HHSC excludes from reimbursement determination any unallowable expenses
included in the cost report and makes the appropriate adjustments
to expenses and other information reported by providers; the purpose
is to ensure that the database reflects costs and other information
which are necessary for the provision of services, and are consistent
with federal and state regulations.
(B) Individual cost reports may not be included in
the database used for reimbursement determination if:
(i) there is reasonable doubt as to the accuracy or
allowability of a significant part of the information reported; or
(ii) an auditor determines that reported costs are not verifiable.
(C) When material pertinent to proposed reimbursements
is made available to the public, the material will include the number
of cost reports eliminated from reimbursement determination for the
reason stated in subparagraph (B)(i) of this paragraph.
(5) Allowable and unallowable costs. Providers must
follow the guidelines in determining whether a cost is allowable or
unallowable as specified in §355.102 and §355.103 of this
title (relating to General Principles of Allowable and Unallowable
Costs, and Specifications for Allowable and Unallowable Costs), in
addition to the following.
(A) Client room and board expenses are not allowable,
except for those related to respite care.
(B) The actual cost of adaptive aids and home modifications
are not allowable for cost reporting purposes. Allowable labor costs
associated with acquiring adaptive aids and home modifications should
be reported in the cost report. Any item purchased for participants
in this program and reimbursed through a voucher payment system is
unallowable for cost reporting purposes. Refer to §355.103(17)(K)
of this title [
(f) [
(g) [
§355.505.Reimbursement Methodology for the Community Living Assistance and Support Services Waiver Program.
(a) General requirements. The Texas Health and Human
Services Commission (HHSC) applies the general principles of cost
determination as specified in §355.101 of this title (relating
to Introduction).
[
(b) [
(1) Providers must follow the cost reporting guidelines
as specified in §355.105 of this title (relating to General Reporting
and Documentation Requirements, Methods, and Procedures).
(2) Number of cost reports to be submitted. Contracted
providers are required to submit one cost report per legal entity
if all contracts under the legal entity participate in the attendant
compensation rate enhancement in accordance with §355.112 of
this title (relating to Attendant Compensation Rate Enhancement).
Contracted providers who operate both contracts that are participating
in the attendant compensation rate enhancement program and contracts
that are not participating in the attendant compensation rate enhancement
program must file two separate cost reports per legal entity, one
cost report for the contracts that are participating in the attendant
compensation rate enhancement program and one cost report for the
contracts that are not participating in the attendant compensation
rate enhancement. All legal entities must submit a cost report unless
the number of days between the date the legal entity's first Texas
Department of Aging and Disability Services (DADS) client received
services and the legal entity's fiscal year end is 30 days or fewer.
(3) A provider may be excused from submitting a cost
report if circumstances beyond the control of the provider make cost
report completion impossible, such as the loss of records due to natural
disasters or removal of records from the provider's custody by any
governmental entity. Requests to be excused from submitting a cost
report must be received by HHSC Rate Analysis before the due date
of the cost report.
(c) [
(1) Unit of service reimbursement or reimbursement
ceiling by unit of service. Reimbursement or reimbursement ceilings
for related-conditions waiver services, habilitation, nursing services
provided by a registered nurse (RN) [
(2) Monthly reimbursement. The reimbursement for [
(3) Reporting and verification of allowable cost.
(A) Providers are responsible for reporting only allowable
costs on the cost report, except where cost report instructions indicate
that other costs are to be reported in specific lines or sections.
Only allowable cost information is used to determine recommended reimbursements.
HHSC excludes from reimbursement determination any unallowable expenses
included in the cost report and makes the appropriate adjustments
to expenses and other information reported by providers; the purpose
is to ensure that the database reflects costs and other information
that are necessary for the provision of services and are consistent
with federal and state regulations.
(B) Individual cost reports may not be included in
the database used for reimbursement determination if:
(i) there is reasonable doubt as to the accuracy or
allowability of a significant part of the information reported; or
(ii) an auditor determines that reported costs are not verifiable.
(C) When material pertinent to proposed reimbursements
is made available to the public, the material will include the number
of cost reports eliminated from reimbursement determination for the
reason stated in subparagraph (B)(i) of this paragraph.
(4) Reimbursement determination. Recommended unit of
service reimbursements are determined in the following manner.
(A) Unit of service reimbursement for habilitation, and
cost per unit of service for nursing services provided by an
RN, nursing services provided by an LVN, physical therapy, occupational
therapy, speech pathology, behavioral support services,
auditory integration training/auditory enhancement training, and nutritional
services [
(i) The total allowable cost for each contracted
provider cost report [
(ii) The total allowable cost is [
(iii) Each provider's total allowable
cost [
(iv) Payroll taxes and employee benefits are allocated
to each salary line item on the cost report on a pro rata basis based
on the portion of that salary line item to the amount of total salary
expense for the appropriate group of staff. Employee benefits will
be charged to a specific salary line item if the benefits are reported
separately. The allocated payroll taxes are Federal Insurance Contributions
Act (FICA) or social security, Medicare contributions, Workers' compensation
Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the
Texas Unemployment Compensation Act (TUCA).
(v) Allowable administrative and facility
costs are allocated or spread to each waiver service cost component
on a pro rata basis based on the portion of each waiver service's
units of service to the amount of total waiver units of service.
(vi) [
(vii) [
(viii) [
(I) The attendant cost area includes salaries, wages,
benefits, and mileage reimbursement calculated as specified in §355.112
of this title (relating to Attendant Compensation Rate Enhancement).
(II) Another attendant cost area is created which includes
the other habilitation services costs not included in subclause (I)
of this clause as determined in clauses (i) - (v) of this subparagraph
to create an other attendant cost area. An allowable cost per unit
of service is calculated for the other habilitation cost area. The
allowable costs per unit of service for each contracted provider
cost report are arrayed and weighted by the number of units of service,
and the median cost per unit of service is calculated. The median
cost per unit of service is multiplied by 1.044.
(III) The attendant cost area and the other attendant
cost area are summed to determine the habilitation attendant cost
per unit of service.
(B) Unit of service reimbursement and reimbursement
ceilings for respite care services are determined in the following manner:
(i) For in-home respite care services, a unit of service
reimbursement is determined using a method based on modeled projected
expenses which are developed using data from surveys, cost report
data from other similar programs or services, professionals' experience
in delivering similar type services, and other relevant sources.
(ii) For out-of-home respite care services, a unit
of service reimbursement ceiling is determined using a method based
on modeled projected expenses which are developed using data from
surveys, cost report data from other similar programs or services,
professionals' experience in delivering similar type services, and
other relevant sources.
(C) The monthly reimbursement for case management services
is determined in the following manner:
(i) Total allowable costs for each provider will be
determined by analyzing the allowable historical costs reported on
the cost report and other pertinent cost survey information.
(ii) Total allowable costs are reduced by the amount
of administrative expense fee revenues reported.
(iii) Each provider's total allowable costs, excluding
depreciation and mortgage interest, are projected from the historical
cost reporting period to the prospective reimbursement period as described
in §355.108 of this title (relating to Determination of Inflation Indices).
(iv) Payroll taxes and employee benefits are allocated
to each salary line item on the cost report on a pro rata basis based
on the portion of that salary line item to the amount of total salary
expense for the appropriate group of staff. Employee benefits will
be charged to a specific salary line item if the benefits are reported
separately. The allocated payroll taxes are Federal Insurance Contributions
Act (FICA) or social security, Medicare contributions, Workers' compensation
Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the
Texas Unemployment Compensation Act (TUCA).
(v) Each provider's projected total allowable costs
are divided by the number of monthly units of service to determine
the projected cost per client month of service.
(vi) Each provider's projected cost per client month
of service is arrayed from low to high and weighted by the number
of units of service and the median cost per client month of service
is calculated.
(vii) The median projected cost per client month of
service is multiplied by 1.044.
(D) The unit of service reimbursement
for day activity and health services is determined in accordance with §355.6907
of this title (relating to Reimbursement Methodology for Day Activity
and Health Services).
(E) [
(5) The reimbursement for support family services and
continued family services will be determined as a per day rate
using a method based on modeled costs which are developed by using
data from surveys, cost report data from other similar programs, payment
rates from other similar programs, consultation with other service
providers and/or professionals experienced in delivering contracted
services, or other sources as determined appropriate by HHSC. The
per day rate will have two parts, one part for the child placing agency
and one part for the support family.
(d) [
(1) One-time administrative expense fee. Reimbursement
for the pre-enrollment assessment and care planning process required
to determine eligibility for the waiver program will be provided as
a one-time administrative expense fee.
(2) Administrative expense fee determination process.
The recommended administrative expense fee is determined using a method
based on modeled projected expenses which are developed using data
from surveys, cost report data from other similar programs or services,
professionals' experience in delivering similar services, and other
relevant sources.
(e) [
(f) [
(1) Providers must follow the guidelines in determining
whether a cost is allowable or unallowable as specified in §355.102
and §355.103 of this title (relating to General Principles of
Allowable and Unallowable Costs, and Specifications for Allowable
and Unallowable Costs) as well as the following provisions.
(2) Participant room and board expenses are not allowable,
except for those related to respite care.
(3) The cost of adaptive aids and home modifications
is not allowable. Allowable labor costs associated with acquiring
adaptive aids and home modifications should be reported in the cost
report. Any item purchased for participants in this program and reimbursed
[
(g) [
(h) [
(i) [
(j) [
§355.507.Reimbursement Methodology for the Medically Dependent Children Program.
(a) The Texas Health and Human Services Commission
(HHSC) determines payment rates for qualified contracted providers
for the provision of services in the Medically Dependent Children
Program (MDCP). HHSC applies the general principles of cost determination
as specified in §355.101 of this title (relating to Introduction).
(b) The rates for nursing services
provided by a registered nurse (RN) or licensed vocational nurse (LVN)
will be determined in accordance with §355.502 of this title
(relating to Reimbursement Methodology for Professional Services in
Home and Community-Based Services Waivers).
(c) The rates for personal assistance
services (PAS) (with delegation of the service by an RN and without
delegation of the service by an RN), will be based upon the Community-Based
Alternatives (CBA) approved rates for PAS in accordance with §355.503
of this title (relating to Reimbursement Methodology for the Community-Based
Alternatives Waiver Program) and §355.112(l) of this title (relating
to Attendant Compensation Rate Enhancement).
(d) [
(e) [
(f) The following sections of this title will apply
to cost reports or surveys required to obtain the necessary information
to determine new payment rates: §355.102 of this title (relating
to General Principles of Allowable and Unallowable Costs), §355.103
of this title (relating to Specifications for Allowable and Unallowable
Costs), §355.104 of this title (relating to Revenues), §355.105
of this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures), §355.106 of this title (relating to
Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), §355.107
of this title (relating to Notification of Exclusions and Adjustments), §355.108
of this title (relating to Determination of Inflation Indices), §355.109
of this title (relating to Adjusting Reimbursement When New Legislation,
Regulations, or Economic Factors Affect Costs), §355.110 of this
title (relating to Informal Reviews and Formal Appeals), and §355.111
of this title (relating to Administrative Contract Violations).
§355.513.Reimbursement Methodology for the Deaf-Blind with Multiple Disabilities Waiver Program.
(a) General information. The Texas Health and Human
Services Commission (HHSC) applies the general principles of cost
determination as specified in §355.101 of this title (relating
to Introduction). HHSC will reimburse qualified Texas Medicaid contracted
providers for waiver services provided to individuals who are deaf-blind
with multiple disabilities.
(b) Other sources of cost information. If HHSC has
determined that there is not sufficient reliable cost report data
from which to set reimbursements and reimbursement ceilings for waiver
services, reimbursements and reimbursement ceilings will be developed
by using rates for similar services from other Medicaid programs;
data from surveys; cost report data from other similar programs; consultation
with other service providers or professionals experienced in delivering
contracted services; and other sources.
(c) Waiver rate determination methodology. If HHSC
deems it appropriate to require contracted providers to submit a cost
report, recommended reimbursements for waiver services will be determined
on a fee-for-service basis in the following manner for each of the
services provided:
(1) Total allowable costs for each provider will be
determined by analyzing the allowable historical costs reported on
the cost report.
(2) Each provider's total reported allowable costs,
excluding depreciation and mortgage interest, are projected from the
historical cost-reporting period to the prospective reimbursement
period as described in §355.108 of this title (relating to Determination
of Inflation Indices). The prospective reimbursement period is the
period of time that the reimbursement is expected to be in effect.
(3) Payroll taxes and employee benefits are allocated
to each salary line item on the cost report on a pro rata basis based
on the portion of that salary line item to the amount of total salary
expense for the appropriate group of staff. Employee benefits will
be charged to a specific salary line item if the benefits are reported
separately. The allocated payroll taxes are Federal Insurance Contributions
Act (FICA) or Social Security, Medicare Contributions, Workers' Compensation
Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the
Texas Unemployment Compensation Act (TUCA).
(4) Allowable administrative and overall facility/operations
costs are allocated or spread to each waiver service cost component
on a pro rata basis based on the portion of each waiver service's
service units reported to the amount of total waiver service units
reported. Service-specific facility and operations costs for out-of-home
assisted living, out-of-home respite, and habilitation day services
will be directly charged to the specific waiver service.
(5) For professional services, including physical therapy,
occupational therapy, speech/hearing/language, case management, nursing
services provided by a registered nurse (RN), nursing services provided
by a licensed vocational nurse (LVN), dietary services, auditory services
and behavioral support services, an allowable cost per unit of service
is calculated for each contracted provider cost report in accordance
with paragraphs (1) - (4) of this subsection. The allowable costs
per unit of service for each contracted provider cost report is multiplied
by 1.044. This adjusted allowable costs per unit of service may be
combined into an array with the allowable cost per unit of service
of similar services provided by other programs in determining rates
for these services in accordance with §355.502 of this title
(relating to Reimbursement Methodology for Professional Services in
Home and Community-Based Services Waivers).
(6) Requisition fees. Requisition fees are reimbursements
paid to the Deaf-Blind Multiple Disabilities (DBMD) contracted providers
for their efforts in acquiring adaptive aids and minor home modifications
for DBMD participants. Reimbursement for adaptive aids and minor home
modifications will vary based on the actual cost of the adaptive aid
and minor home modification. Reimbursements are determined using a
method based on modeled projected expenses, which are developed by
using data from surveys; cost report data from similar programs; consultation
with other service providers or professionals experienced in delivering
contracted services; or other sources.
(7) For habilitation day, residential habilitation
(less than 24-hour and 24-hour residential habilitation), assisted
living (24-hour supervision and less than 24-hour supervision), and
intervener services, two cost areas are created:
(A) The attendant cost area, which includes salaries,
wages, benefits, and mileage reimbursement calculated as specified
in §355.112 of this title (relating to Attendant Compensation
Rate Enhancement).
(B) An "other direct care" cost area, which includes
costs for services not included in subparagraph (A) of this paragraph
as determined in paragraphs (1) - (4) of this subsection. An allowable
cost per unit of service is determined for each contracted provider
cost report for the other direct care cost area. The allowable costs
per unit of service for each contracted provider cost report are arrayed.
The units of service for each contracted provider cost report in the
array are summed until the median unit of service is reached. The
corresponding expense to the median unit of service is determined
and is multiplied by 1.044.
(C) The attendant cost area and the other direct care
cost area are summed to determine the cost per unit of service.
(D) The room and board payments for waiver clients
receiving assisted living services are covered in the reimbursement
for these services and will be paid to providers from the client's
Supplemental Security Income, less a personal needs allowance.
(8) The lifetime ceiling per client for minor home
modifications is determined from sources other than cost reports for
this program. The annual ceiling per client for adaptive aids is determined
from sources other than cost reports for this program.
(9) Pre-enrollment assessment services are based on
the hourly case management reimbursement.
(10) HHSC may adjust reimbursement if new legislation,
regulations, or economic factors affect costs, according to §355.109
of this title (relating to Adjusting Reimbursement When New Legislation,
Regulations, or Economic Factors Affect Costs).
(d) Authority to determine reimbursement. The authority
to determine reimbursement is specified in §355.101 of this title.
(e) Reporting of cost.
(1) Cost-reporting guidelines. If HHSC requires a cost
report for any waiver service in this program, providers must follow
the cost-reporting guidelines as specified in §355.105 of this
title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).
(2) Excused from submission of cost reports. If required
by HHSC, all contracted providers must submit a cost report unless
the number of days between the date the first Department of Aging
and Disabilities Services (DADS) client received services and the
provider's fiscal year end is 30 days or fewer. The provider may be
excused from submitting a cost report if circumstances beyond the
control of the provider make cost-report completion impossible, such
as the loss of records due to natural disasters or removal of records
from the provider's custody by any regulatory agency. A DBMD Waiver
contracted provider may also be excused from submitting a cost report
if the total number of DBMD clients served during the reporting period
is three or less. Requests to be excused from submitting a cost report
must be received by HHSC's Rate Analysis Department before the due
date of the cost report.
(3) Reporting and verification of allowable cost.
(A) Providers are responsible for reporting only allowable
costs on the cost report, except where cost-report instructions indicate
that other costs are to be reported in specific lines or sections.
Only allowable cost information is used to determine recommended reimbursements.
HHSC excludes from reimbursement determination any unallowable expenses
included in the cost report and makes the appropriate adjustments
to expenses and other information reported by providers, in order
to ensure the database reflects costs and other information necessary
for the provision of services and is consistent with federal and state
regulations.
(B) Individual cost reports may not be included in
the database used for reimbursement determination if:
(i) there is reasonable doubt as to the accuracy or
allowability of a significant part of the information reported; or
(ii) an auditor determines that reported costs are not verifiable.
(C) Material pertinent to proposed reimbursements and
made available to the public shall include the number of cost reports
eliminated from reimbursement determination for the reason stated
in subparagraph (B) of this paragraph.
(4) Allowable and unallowable costs. Providers must
follow the guidelines specified in §355.102 and §355.103
of this title (relating to General Principles of Allowable and Unallowable
Costs and Specifications for Allowable and Unallowable Costs), in
determining whether a cost is allowable or unallowable. In addition,
providers must adhere to the following principles:
(A) Client room and board expenses are not allowable,
except for those related to respite care.
(B) The actual cost of adaptive aids is not allowable
for cost-reporting purposes.
(f) Reporting revenue. Revenues must be reported on
the cost report in accordance with §355.104 of this title (relating
to Revenues).
(g) Reviews and field audits of cost reports. Desk
reviews or field audits are performed on cost reports for all contracted
providers. The frequency and nature of field audits are determined
by HHSC staff to ensure the fiscal integrity of the program. Desk
reviews and field audits will be conducted in accordance with §355.106
of this title (relating to Basic Objectives and Criteria for Audit
and Desk Review of Cost Reports), and providers will be notified of
the results of a desk review or a field audit in accordance with §355.107
of this title (relating to Notification of Exclusions and Adjustments).
Providers may request an informal review and, if necessary, an administrative
hearing to dispute an action taken under §355.110 of this title
(relating to Informal Reviews and Formal Appeals).
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 22, 2009.
TRD-200902559
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
1 TAC §355.722
The Texas Health and Human Services Commission (HHSC)
proposes to amend §355.722, Reporting Costs by Home and Community-based
Services (HCS) Providers, under Title 1, Part 15, Chapter 355, Subchapter F.
Background and Justification
Section 355.722 establishes the fiscal accountability process for
the Home and Community-based Services (HCS) waiver program. HHSC,
under its authority and responsibility to administer and implement
rates, proposes to update this rule to formalize certain limitations
on hours allowed to be reported by HCS providers for owners and related
parties performing direct service activities. Rates for this program
are based on modeled rates, which incorporate cost information from
HCS provider cost reports. A modeled rate is considered fully funded
when the model is updated with current cost report information that
has been adjusted for inflation to the rate period.
Limitations on allowable hours for owners and related parties are
necessary to ensure that cost reports reflect only hours and associated
costs that are reasonable and necessary in the normal conduct of operations.
The test of reasonableness includes the expectation that the provider
seeks to minimize costs and that the amount expended does not exceed
what a prudent and cost-conscious provider would pay for a given item
or service. In determining the reasonableness of a given cost, the
restraints or requirements imposed by arm's-length bargaining and
the actions that a prudent person would take in similar circumstances
are considered. Since related-party transactions are not constrained
by the requirements imposed by arm's-length bargaining, additional
tools are necessary to ensure that reported related-party hours are
reasonable.
Currently, this rule specifies that allowable hours for owners
and related parties are limited to the lesser of the actual hours
worked or the hours for a comparable direct-care staff person assumed
in the fully-funded model. The proposed rule amendment codifies current
practice, which differs from the current rule, by adding language
that results in a less stringent limitation on the determination of
allowable hours for owners and related parties performing direct-service
activities.
Section-by-Section Summary
HHSC proposes to make the following amendments to §355.722:
Revise subsection (h)(2) to delete references to related-party hours.
Add new subsection (h)(3) to describe the process by which allowable
hours for related-party direct-care workers are determined.
Add new subsection (h)(4) to describe the process by which allowable
related-party direct-care trainer supervisor and direct-care worker
supervisor hours are calculated.
Add new subsection (h)(5), which indicates that for staff-types
for which representative non-related-party hours and units of service
data are not available, allowable related-party hours are determined
using a pro forma approach, and renumber subsequent paragraphs.
Renumber current subsections (h)(3) - (5) as subsections (h)(6) - (8).
Modify renumbered (h)(8) to refer to paragraphs (2) - (7) instead
of paragraphs (2) - (4).
Renumber rule references throughout the rule as a result of the
renumbering.
Add headers to certain rule subsections and paragraphs throughout
the rule for added clarity.
Fiscal Note
Gordon E. Taylor, Chief Financial Officer for the Department of
Aging and Disability Services, has determined that during the first
five-year period the amended 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.
There are no fiscal implications for local governments as a result
of enforcing or administering the section.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on
small businesses or micro-businesses as a result of enforcing or administering
the amendment. The implementation of the proposed rule amendment does
not require any changes in practice or any additional cost to the
contracted provider. This rule language reflects current practice
and results in a less stringent limitation on the determination of
allowable owner and related-party hours.
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 local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that for
each of the first five years the amendment is in effect, the expected
public benefit is that the rule language regarding the maximum allowable
hours for owners and related parties will be more specific in how
the limits are calculated.
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.
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.
Public Comment
Questions about the content of this proposal may be directed to
Pam McDonald in the HHSC Rate Analysis Department by telephone at
(512) 491-1373. Written comments on the proposal may be submitted
to Ms. McDonald by facsimile at (512) 491-1998, by e-mail to pam.mcdonald@hhsc.state.tx.us,
or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200,
Austin, Texas 78708-5200, within 30 days of publication of this proposal
in the Texas Register.
Statutory Authority
The amendment is proposed under Texas Government Code §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules
necessary to carry out the commission's duties; Texas Human Resources
Code §32.021 and Texas Government Code §531.021(a), which
provide HHSC with the authority to administer the federal medical
assistance (Medicaid) program in Texas; and Texas Government Code §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 amendment affects Texas Government Code Chapter 531and Texas
Human Resources Code Chapter 32. No other statutes, articles, or codes
are affected by this proposal.
§355.722.Reporting Costs by Home and Community-based Services (HCS) Providers.
(a) Submittal of cost reports. On an annual
basis, all providers must submit cost reports as directed by HHSC
or its designee and in accordance with this subchapter. The Texas
Health and Human Services Commission (HHSC) applies the general principles
of cost determination as specified in §355.101 of this title
(relating to Introduction).
(1) Direct service costs. Direct service
costs are defined to include costs associated with personnel who provide
direct hands-on support for consumers and include personnel such as
direct care workers, first-level supervisors of direct care workers,
registered nurses, licensed vocational nurses, and other personnel
who provide activities of daily living training and clinical program
services. Direct service costs include: costs related to wages, benefits,
payroll taxes, and contracts for direct services. Accrued leave (sick
or vacation) can only be considered a direct service cost if the employee
has a right to a cash value of that leave upon termination.
(2) Staff who provide both direct and other than
direct services. For staff whose duties include work other than
the provision of direct services for the provider, time spent providing
direct services and associated expenses may be reported as direct
service costs if properly documented in accordance with §355.105
of this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).
(3) Providers must report the following costs:
(A) Staff wages related to the delivery of direct services
including residential assistance, day habilitation services, and the
direct supervision of the delivery of these services.
(B) These costs may be either the provider's actual
expense or contracted expenditures.
(b) Reviews of exclusions or adjustments. A provider
who disagrees with HHSC's exclusion or adjustment of items in cost
reports may request an informal review and, when appropriate, an administrative
hearing as specified in §355.110 of this title (relating to Informal
Reviews and Formal Appeals).
(c) Field audit and desk review. Desk reviews or field
audits are performed on cost reports for all contracted providers.
The frequency and nature of the field audits are determined by HHSC
to ensure the fiscal integrity of the program. Desk reviews and field
audits will be conducted in accordance with §355.106 of this
title (relating to Basic Objectives and Criteria for Audit and Desk
Review of Cost Reports).
(d) Notification of exclusions and adjustments. HHSC
will notify a provider of the results of a desk review or field audit
in accordance with §355.107 of this title (relating to Notification
of Exclusions and Adjustments).
(e) Cost reporting guidelines. Providers
must follow the cost-reporting guidelines as specified in §355.105
of this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).
(f) Allowable and unallowable costs. Providers
must follow the guidelines in determining whether a cost is allowable
or unallowable as specified in §355.102 and §355.103 of
this title (relating to General Principles of Allowable and Unallowable
Costs, and Specifications for Allowable and Unallowable Costs).
(g) Revenues. Revenues must be reported
on the cost report in accordance with §355.104 of this title
(relating to Revenues).
(h) Related parties. Allowable compensation
for owners and related parties and definitions of owners and related
parties are specified in §355.102(i) and §355.103(b)(2)
of this title (relating to General Principles of Allowable and Unallowable
Costs and Specifications for Allowable and Unallowable Costs).
(1) Time sheet requirement. Owners and related
parties who provide multiple types of direct service, both direct
care and indirect services and/or both direct hands-on support and
first-level supervision of direct care workers must maintain daily
time sheets that record the time spent on activities in each area.
The provider must maintain documentation relating to the compensation,
bonuses, and benefits of each owner or related party in accordance
with §355.105(b)(2)(B)(xi) of this title (relating to General
Reporting and Documentation Requirements, Methods, and Procedures).
(2) Calculation of allowable hourly wage rate
and benefits. Allowable [
(3) Calculation of allowable hours
for direct staff except for direct-care trainer supervisors and direct-care
worker supervisors. Allowable hours per unit of service for a direct
service staff-type when the reported hours for the staff-type include
related-party hours, are determined as follows:
(A) Step 1. Determine the hours per
unit of service for a comparable direct service staff-type assumed
in the fully-funded model as defined in paragraph (2) of this subsection,
adjusted for the provider's average Level of Need (LON) during the
reporting period.
(B) Step 2. Determine the hours per
unit of service encompassed by the 90th percentile in the array of
hours per unit of service for comparable direct service staff-types
as reported by those contracted providers not reporting any related-party
hours for that staff-type, adjusted for the provider's average LON
during the reporting period.
(C) Step 3. Determine the greater of
Step 1 and Step 2.
(D) Step 4. Determine the actual hours
worked by the staff-type per unit of service.
(E) Step 5. Determine the lesser of
Step 4 and Step 3. This value is the allowable hours per unit of service
for the direct service staff-type in question.
(4) Calculation of allowable hours
for direct-care trainer supervisors or direct-care worker supervisors.
Allowable direct-care trainer supervisor or direct-care worker supervisor
hours when the reported direct-care trainer supervisor or direct-care
worker supervisor hours include related-party hours, are determined
separately as follows:
(A) Step 1. Determine the ratio of
direct-care trainer supervisor or direct-care worker supervisor hours
to direct-care trainer or direct-care worker hours assumed in the
fully-funded model as defined in paragraph (2) of this subsection.
(B) Step 2. Determine the ratio of
direct-care trainer or direct-care worker supervisor hours to direct-care
trainer or direct-care worker hours encompassed by the 90th percentile
in the array of ratios of direct-care trainer or direct-care worker
supervisor hours to direct-care trainer or direct-care worker hours
for those contracted providers not reporting any related-party direct-care
trainer or direct-care worker supervisor hours.
(C) Step 3. Determine the greater of
Step 1 and Step 2.
(D) Step 4. Determine the actual ratio
of direct-care trainer or direct-care worker supervisor hours to direct-care
trainer or direct-care worker hours.
(E) Step 5. Determine the lesser of
Step 4 and Step 3. This value is the allowable ratio of direct-care
trainer or direct-care worker supervisor hours to allowable direct-care
trainer or direct-care worker hours reported. To determine the actual
allowable direct-care trainer supervisor or direct-care worker supervisor
hours, multiply the allowable direct-care trainer or direct-care worker
hours by the allowable ratio of direct-care trainer supervisor or
direct-care worker supervisor hours to allowable direct-care trainer
or direct-care worker hours.
(5) Calculation of allowable hours
for other staff types. For staff types where representative hours
and units of service data are not available, allowable related-party
hours are determined using a pro forma approach in which factors such
as hours assumed in the fully-funded model, median non-related party
hours reported, and non-related party hours or staff ratios for similar
staff types are considered.
(6) [
(7) [
(8) [
(i) Adjusting reported cost. Each provider's
total reported allowable costs, excluding depreciation and mortgage
interest, are projected from the historical cost-reporting period
to the prospective reimbursement period as described in §355.108
of this title (relating to Determination of Inflation Indices). HHSC
may adjust reimbursement if new legislation, regulations, or economic
factors affect costs, according to §355.109 of this title (relating
to Adjusting Reimbursement When New Legislation, Regulations, or Economic
Factors Affect Costs).
(j) Fiscal Accountability.
(1) General principles. Fiscal accountability is a
process used to gauge the ongoing financial performance under the
reimbursement rates.
(2) Annual reporting. Fiscal accountability will consist
of the annual reporting of the direct service costs including wages,
and benefits, from all providers. The data will be collected on a
cost report designed by HHSC in accordance with §355.105(b) of
this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).
(A) The Department of Aging and Disability Services
(DADS) will place a vendor hold on payments to a provider whose provider
agreement is being assigned or terminated. The provider will submit
a cost report for the current reporting period to HHSC. Upon receipt
of an acceptable cost report and repayment of any amounts due in accordance
with this section, the vendor hold will be released.
(B) Providers that do not submit a cost report completed
in accordance with all applicable rules and instructions within 60
days of the placement of a vendor hold due to the failure to submit
the cost report are subject to an immediate recoupment of funds related
to fiscal accountability as described in paragraph (4)(E) of this
subsection. The recouped funds will not be restored until the provider
submits an acceptable cost report and has paid the actual amount due
as specified in paragraphs (5) - (7) of this subsection. If an acceptable
cost report is not received within 365 days of the due date, the recoupment
will become permanent.
(C) Providers with an ownership change from one legal
entity to a different legal entity or a contract termination that
do not submit a cost report for the fiscal year of the ownership change
or contract termination within 60 days of the change of ownership
or contract termination are subject to recoupment of funds related
to fiscal accountability as described in paragraph (4)(E) of this
subsection. The recouped funds will not be restored until the provider
submits an acceptable cost report and has paid the actual amount due
as specified in paragraphs (5) - (7) of this subsection. If an acceptable
cost report is not received within 365 days of the change of ownership
or contract termination date, the recoupment will become permanent.
(3) Comparison of direct-service costs to total
direct-service revenue. HHSC will require providers to report
all direct costs incurred on an annual fiscal year basis. HHSC will
compare the reported direct service costs to the total direct service
revenue.
(4) Calculation of direct-service revenues and
fiscal accountability repayment. Direct Service Revenues are
calculated by multiplying the number of units eligible for payment
that have been paid for services delivered during the reporting period
times the appropriate direct service portion of the rate for the service
billed.
(A) Providers whose direct service costs are 90% or
more of the direct service revenues will not be subject to repayment
under this section.
(B) Providers whose direct service costs are less than
90% but greater than or equal to 85% of the direct service revenues
will be required to pay to DADS 50% of the difference between the
direct service costs and 90% of the direct service revenues.
(C) Providers whose direct service costs are less than
85% but greater than or equal to 80% of the direct service revenues
will be required to pay to DADS 100% of the difference between the
direct service costs and 85% of the direct service revenues plus 50%
of the difference between 85% and 90% of the direct service revenues.
(D) Providers whose direct service costs are less than
80% of the direct service revenues will be required to pay to DADS
the difference between the direct service costs and 95% of the direct
service revenues.
(E) Providers who do not submit a cost report as described
in paragraph (2)(B) or (C) of this subsection will be assumed to have
direct service costs equal to 65% of the direct services revenues
and will be required to pay to DADS the difference between 65% of
the direct services revenues and 95% of the direct service revenues,
subject to the provisions of paragraph (2)(B) or (C) of this subsection.
(5) Notification of recoupment. Providers [
(6) Repayment. Repayment will be made by
the following:
(A) the provider or legal entity submitting the report;
(B) any other legal entity responsible for the debts
or liabilities of the submitting entity; or
(C) the legal entity on behalf of which a report is submitted.
(7) Providers required to repay revenues to DADS will
be jointly and severally liable for any repayment. DADS will apply
a vendor hold on Medicaid payments to a provider for not making the
payment to DADS within 60 days of receiving notice.
(8) Aggregation.
(A) Definitions. The following words and terms have
the following meanings when used in this paragraph.
(i) Aggregation-- [
(ii) Commonly owned corporations--two or more corporations
where five or fewer identical persons who are individuals, estates,
or trusts own greater than 50 percent of the total voting power in
each corporation.
(iii) Entity--a parent company, sole member, individual,
limited partnership, or group of limited partnerships controlled by
the same general partner.
(iv) Control--greater than 50% ownership by the entity.
(B) Component Codes Included in Aggregation. If an
entity controlling more than one HCS component code or commonly owned
corporations requests aggregation, compliance with the spending requirements
will be evaluated in the aggregate for all HCS component codes that
the entity or commonly owned corporations controlled at the end of
its fiscal year or at the effective date of the change of ownership
or termination of its last HCS contract.
(C) Aggregation Request. To exercise the aggregation
option, the entity or commonly owned corporations must submit an aggregation
request, in a manner prescribed by HHSC, at the time each cost report
is submitted. In limited partnerships in which the same single general
partner controls all the limited partnerships, that single general
partner must make this request. Other such aggregation requests will
be reviewed on a case-by-case basis.
(D) Frequency of Aggregation Requests. The entity or
commonly owned corporations must submit a separate request for aggregation
for each reporting period.
(E) Ownership Changes and Contract Terminations. HCS
contracts that change ownership or terminate effective after the end
of the applicable reporting period, but prior to the determination
of compliance with spending requirements as per paragraph (4) of this
subsection, are excluded from all aggregate spending calculations.
These contracts' compliance with spending requirements will be determined
on an individual basis and the costs and revenues will not be included
in the aggregate spending calculation.
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 18, 2009.
TRD-200902481
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
1 TAC §355.725, §355.791
The Texas Health and Human Services Commission (HHSC)
proposes new §355.725, Reimbursement Methodology for Professional
Services and Requisition Fees for Home and Community-based Services
(HCS) and amendments to §355.791, Reporting Costs and Reimbursement
Methodology for the Texas Home Living (TxHmL) Program, under Title
1, Part 15, Chapter 355, Subchapter F.
Background and Justification
New §355.725 establishes the reimbursement methodology for
professional services and requisition fees for the Home and Community-based
Services (HCS) program.
The definitions for professional services (nursing, physical, occupational
and speech therapy, behavioral supports, dietary services and audiology)
in the various Department of Aging and Disability Services (DADS) §1915(c)
waiver programs including Community Based Alternatives (CBA), Community
Living Assistance and Support Services (CLASS), HCS, TxHmL, Medically
Dependent Children Program (MDCP), and Deaf-Blind Multiple Disabilities
(DBMD) are identical but the rates vary with CBA, CLASS, MDCP and
DBMD using one set of rates and with HCS and TxHmL using different
rates.
New §355.725 will give HHSC the authority to combine allowable
costs per unit of service for HCS professional services with allowable
costs per unit of service for identical professional services from
other DADS §1915(c) waiver programs into a single database for
use in determining reimbursement rates for these services in accordance
with proposed new §355.502, Reimbursement Methodology for Professional
Services in Home and Community-Based Services Waivers. Proposed amendments
to §355.791 will give HHSC similar authority for the TxHmL waiver
program.
The current difference in nursing rates between HCS and TxHmL and
the remaining DADS §1915(c) waiver programs was justified in
the past due to different DADS billing guidelines for CBA, CLASS,
MDCP and DBMD than those for HCS and TxHmL. DADS is revising the HCS
and TxHmL nursing billing guidelines to match the CBA, CLASS, MDCP
and DBMD guidelines effective September 1, 2009. The change in HCS
and TxHmL nursing billing guidelines will enable providers in these
programs to bill for significantly more units of service than allowed
under the current guidelines. Because of this change in billing guidelines
that allows for more units of service to be billed, the nursing rates
for these programs will be adjusted effective September 1, 2009 to
reflect the new billing guidelines that will go into effect on September
1, 2009. Proposed new §355.725 and proposed amendments to §355.791
will allow for these needed adjustments to take place. Because HCS
and TxHmL providers will be able to bill more nursing units of service
without changing the actual amount of nursing services provided, the
nursing rates in these two programs must be adjusted in order for
this change in billing guidelines to be fiscally neutral. Data on
nursing costs associated with the new billing guidelines for HCS and
TxHmL will not be available until the 2012-13 biennium; in the interim,
new §355.725 and amendments to §355.791 will allow HHSC
to use the nursing rates currently in place for CBA, CLASS, MDCP and
DBMD for HCS and TxHmL. When data becomes available for HCS and TxHmL
under the new billing guidelines, nursing rates will be calculated
using data from all §1915(c) waiver program cost reports.
The difference in rates for other (non-nursing) professional services
is due to the lack of robust cost data on these services in CBA, CLASS,
DBMD and MDCP. The vast majority of units of service for these services
are provided in HCS and TxHmL. New §355.725 and amendments to §355.791
will allow HHSC to combine data on other professional services costs
from HCS and TxHmL with data from the other DADS §1915(c) waivers
to develop uniform rates for these services.
New §355.725 will provide a reimbursement methodology for
payment rates for requisition fees in HCS to provide payments for
the cost of acquiring adaptive aids and minor home modifications for
consumers. Requisition fees are currently not reimbursed in the HCS
program but are currently reimbursed in other §1915(c) waiver
programs.
These proposals will move HHSC closer to achieving its goal of
standardizing professional service rates in community based programs.
HHSC, under its authority and responsibility to administer and
implement rates, is also proposing changes to §355.791 that outline
how the TxHmL rates will be determined effective September 1, 2009
and thereafter. The proposed amendment will adjust payment rates for
TxHmL to comply with the 2010-11 General Appropriations Act (Article
II, Health and Human Services, 81st Legislature, Regular Session,
2009) which appropriated general revenue funds for provider rate increases
for this program to set TxHmL rates equal to HCS rates for similar
services.
Finally, HHSC is proposing to revise §355.791 to replace outdated
references to the legacy Department of Mental Health and Mental Retardation
(MHMR) with references to DADS and to indicate that failure to maintain
accurate records will result in HHSC notifying DADS to place the TxHmL
program provider on vendor hold. The current rule language requires
both the TxHmL program provider and all waiver contracts to be placed
on vendor hold.
Section-by-Section Summary
HHSC proposes new §355.725 as follows:
Add new subsection (a) to state that, effective September 1, 2009
and thereafter, the payment rates for professional services, including
physical therapy, occupational therapy, speech/hearing/language, nursing
services provided by an registered nurse (RN), nursing services provided
by an licensed vocational nurse (LVN), auditory services, dietary
services, and behavioral support services will be equal to the rates
for these services as determined in accordance with §355.502,
Reimbursement Methodology for Professional Services in Home and Community-based
Services Waivers.
Add new subsection (b) to state that, effective September 1, 2009
and thereafter, the payment rates for requisition fees for acquiring
adaptive aids and minor home modifications will vary based on the
actual cost of the adaptive aide and minor home modification. Reimbursements
are determined using a method based on modeled projected expenses
which are developed by using data from surveys; cost report data from
similar programs; consultation with other service providers and/or
professionals experienced in delivering contracted services; and/or
other sources.
HHSC proposes to amend §355.791 as follows:
Modify subsection (c) to replace an outdated reference to the legacy
MHMR with a reference to DADS and to indicate that failure to maintain
accurate records will result in HHSC notifying DADS to place the TxHmL
program provider on vendor hold.
Modify paragraph (l)(3) to replace an outdated reference to the
legacy MHMR with a reference to DADS.
Add a new subsection (s) to state that, effective September 1,
2009 and thereafter, the payment rate for day habilitation services
will be equal to the HCS approved rate for day habilitation services
for Level of Need 5; the payment rate for community supports will
be equal to the HCS approved rate for supported home living, the payment
rate for respite will be equal to the HCS approved rate for respite;
and the payment rates for supported employment and employment assistance
will be equal to the HCS approved rate for supported employment.
Add a new subsection (t) to state that, effective September 1,
2009 and thereafter, the payment rates for professional services,
including physical therapy, occupational therapy, speech/hearing/language,
nursing services provided by an RN, nursing services provided by an
LVN, auditory services, dietary services, and behavioral support services
and payment rates for requisition fees will be equal to the HCS approved
rates for these services as determined in accordance with new §355.725,
Reimbursement Methodology for Professional Services and Requisition
Fees for Home and Community-based Services.
Fiscal Note
Gordon E. Taylor, Chief Financial Officer for the Department of
Aging and Disability Services, has determined that during the first
five-year period the amended rule is in effect there will be a fiscal
impact to state government as result of increasing TxHmL rates to
match HCS rates for similar services of $1,657,985 for state fiscal
year (FY) 2010, $1,674,544 for FY 2011, $1,662,437 for SFY 2012, $1,662,437
for FY 2013, and $1,662,437 for FY 2014. There will be no fiscal impact
from adjusting HCS nursing rates because any decrease in the unit
rate will be offset by an increase in the number of units billed.
It is anticipated that there will be no fiscal impact from adjusting
HCS and TxHmL other professional services rates since the combined
database contemplated in the amendments will be dominated by HCS and
TxHmL units of service. The fiscal impact to state government of codifying
a reimbursement methodology for payment rates for requisition fees
in HCS will be $71,951 for state fiscal year (FY) 2010, $84,192 for
FY 2011, $84,151 for SFY 2012, $84,151 for FY 2013, and $84,151 for
FY 2014. There will be no fiscal impact from codifying a reimbursement
methodology for payment rates for requisition fees in TxHmL since
requisition fees are already paid in that program. The proposed rule
will not result in any fiscal implications for local health and human
services agencies. There are no fiscal implications for local governments
as a result of enforcing or administering the section.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on
small businesses or micro-businesses as a result of enforcing or administering
the amendment. The implementation of the proposed rule amendment does
not require any changes in practice or any additional cost to the
contracted provider.
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 local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that for
each of the first five years the amendment is in effect, the expected
public benefit is that the same rates will be paid for similar professional
services across §1915(c) waiver programs and that requisition
fees will be made available in the HCS program. The rule amendment
will also specify how TxHmL rates will be equal to similar rates in
the HCS program beginning September 1, 2009 and will correctly describe
vendor hold requirements for noncompliance with record keeping requirements.
Public Hearing
HHSC will hold a public hearing on July 7, 2009, at 9:30 a.m. (Central
Time) to receive public comment on the proposal. The hearing will
be held in the Lone Star Conference Room of the Health and Human Services
Commission, Braker Center, Building H, 11209 Metric Boulevard, Austin,
Texas. Entry is through Security at the main entrance of the building,
which faces Metric Boulevard. Persons requiring Americans with Disabilities
Act (ADA) accommodation or auxiliary aids or services should contact
Meisha Scott by calling (512) 491-1453, at least 72 hours prior to
the hearing so appropriate arrangements can be made.
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.
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.
Public Comment
Questions about the content of this proposal may be directed to
Pam McDonald in the HHSC Rate Analysis Department by telephone at
(512) 491-1373. Written comments on the proposal may be submitted
to Ms. McDonald by facsimile at (512) 491-1998, by e-mail to pam.mcdonald@hhsc.state.tx.us,
or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200,
Austin, Texas 78708-5200, within 30 days of publication of this proposal
in the Texas Register.
Statutory Authority
The amendment and new rule are proposed under Texas Government
Code §531.033, which authorizes the Executive Commissioner of
HHSC to adopt rules necessary to carry out the commission's duties;
Texas Human Resources Code §32.021 and Texas Government Code §531.021(a),
which provide HHSC with the authority to administer the federal medical
assistance (Medicaid) program in Texas; and Texas Government Code §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 amendment and new rule affect Texas Government Code Chapter
531 and Texas Human Resources Code Chapter 32. No other statutes,
articles, or codes are affected by this proposal.
§355.725.Reimbursement Methodology for Professional Services and Requisition Fees for Home and Community-based Services (HCS).
(a) For professional services, including physical therapy,
occupational therapy, speech/hearing/language, nursing services provided
by a registered nurse, nursing services provided by an licensed vocational
nurse, auditory services, dietary services, and behavioral support
services, an allowable cost per unit of service is calculated for
each contracted provider in accordance with §355.723 of this
title (relating to Reimbursement Methodology for Home and Community-Based
Services (HCS)). This adjusted allowable cost per unit of service
may be combined into an array with the allowable cost per unit of
service of similar services provided by other programs in determining
rates for these services in accordance with §355.502 of this
title (relating to Reimbursement Methodology for Professional Services
in Home and Community-Based Services Waivers).
(b) Requisition fees. Requisition fees are reimbursements
paid to the HCS contracted providers for their efforts in acquiring
adaptive aids and minor home modifications for HCS participants. Requisition
fee reimbursement for adaptive aids and minor home modifications will
vary based on the actual cost of the adaptive aid and minor home modification.
Reimbursements are determined using a method based on modeled projected
expenses which are developed by using data from surveys; cost report
data from similar programs; consultation with other service providers
and/or professionals experienced in delivering contracted services;
and/or other sources.
§355.791.Reporting Costs and Reimbursement Methodology for the Texas Home Living (TxHmL) Program.
(a) Submission of cost reports. On an annual basis,
Texas Home Living (TxHmL) Program providers must submit cost reports
as directed by the Health and Human Services Commission (HHSC) or
its designee in accordance with §355.105 of this title (relating
to General Reporting and Documentation Requirements, Methods, and
Procedures).
(1) "Direct service costs" are defined in §355.102(f)(3)
of this title (relating to General Principles of Allowable and Unallowable
Costs). For purposes of this section, direct service costs include:
(A) costs associated with personnel who provide direct
hands-on support for consumers and include personnel such as:
(i) direct care workers;
(ii) first-level supervisors of direct care workers;
(iii) registered nurses;
(iv) licensed vocational nurses; and
(v) other personnel who provide activities of daily
living training and clinical program services; and
(B) costs related to:
(i) wage rates;
(ii) benefits;
(iii) payroll taxes;
(iv) contracts for direct services; and
(v) direct service supervision information; and
(C) leave (sick or vacation) in accordance with §355.103(b)(1)(A)(iii)(III)(-c-)
of this title (relating to Specifications for Allowable and Unallowable
Costs) including accrued leave if the TxHmL Program provider has implemented
a written policy that entitles an employee to the cash value of accrued
leave upon termination.
(2) For staff whose duties include work other than
the provision of direct services, the proportion of work that is spent
on direct services may be included in the direct service costs.
(A) The proportion of their salary and benefits that
is compensation for direct services work can be included in the direct
service cost report only to the extent that the salary and benefits
for this direct service work must be the lesser of the actual wages
and benefits or the wages and benefits for a comparable direct care
worker assumed in the model.
(B) The TxHmL Program provider must have a procedure
in place that specifies how direct service work time is allocated.
(3) TxHmL Program providers must report the following
information in the Full Cost Report:
(A) direct service costs related to the delivery of
direct services including, but not limited to community support services,
supported employment, and the direct supervision of the delivery of
these services; and
(B) indirect costs including but not limited to facility
operating and administrative costs.
(4) These direct service costs and indirect costs may
be either the TxHmL Program provider's actual expense or contracted
expenditures.
(b) Record keeping requirements.
(1) A TxHmL Program provider must:
(A) retain records according to HHSC's requirements;
(B) ensure that records are accurate and sufficiently
detailed to provide the legal, financial, and statistical information
requested by HHSC; and
(C) maintain all work papers and any other records
that support the information submitted on the Full Cost Reports relating
to all allocations, cost centers, cost or statistical line items,
surveys, and schedules.
(2) HHSC may require supporting documentation other
than that contained in the cost report to substantiate reported information.
(3) A TxHmL Program provider must maintain documentation
relating to compensation, bonuses, and benefits of each owner or related
party in accordance with §355.105(b)(2)(B)(xi) of this title
[
(4) A TxHmL Program provider must maintain clearly
defined bonus policies in its written agreements with employees or
in its overall employment policy in accordance with §355.103(b)(1)(A)(i)
of this title [
(5) A TxHmL Program provider must maintain clearly
defined benefit policies in its written agreements with employees
or in its overall employment policy in accordance with §355.103(b)(1)(A)(iii)
of this title [
(6) A TxHmL Program provider must maintain documentation
for each employee that clearly identifies each compensation component,
including regular pay, overtime pay, incentive pay, mileage reimbursements,
bonuses, sick leave, vacation, other paid leave, deferred compensation,
retirement contributions, TxHmL Program provider-paid instructional
courses, health insurance, disability insurance, life insurance, and
any other form of compensation.
(A) Types of documentation would include insurance
policies, TxHmL Program provider benefit policies, records showing
paid leave accrued and taken, documentation to support hours (regular
and overtime) worked and wages paid, and mileage logs or other documentation
to support mileage reimbursements and travel allowances.
(B) For accrued benefits, the documentation must clearly
identify the period of the accrual. For example, if an employee accrues
two weeks of vacation during 20X1 and receives the corresponding vacation
pay during 20X3, that employee's compensation documentation for 20X3
should clearly indicate that the vacation pay received had been accrued
during 20X1.
(c) Noncompliance with record keeping requirements.
Failure to maintain accurate records is a violation of the TxHmL Program
provider contract, and will result in HHSC notifying DADS [
(d) Cost reporting. A TxHmL Program provider must complete
Full Cost Reports in accordance with HHSC's rules, regulations, and
instructions.
(1) Providers must follow the cost-reporting guidelines
as specified in §355.105 of this title [
(2) Providers must follow the guidelines in determining
whether a cost is allowable or unallowable as specified in §355.102
and §355.103 of this title (relating to General Principles of
Allowable and Unallowable Costs, and Specifications for Allowable
and Unallowable Costs), in addition to the following.
(3) Revenues must be reported on the cost report in
accordance with §355.104 of this title (relating to Revenues).
(4) Allowable compensation for owners and related parties
and definitions of owners and related parties are specified in §355.102(i)
and §355.103(b)(2) of this title [
(e) Cost certification. A TxHmL Program provider must
certify the accuracy of cost reports submitted to HHSC. A TxHmL Program
provider may be liable for civil and/or criminal penalties if the
cost report is not completed according to HHSC requirements.
(f) Due date. A TxHmL Program provider must submit
Full Cost Reports in accordance with §355.105(c) of this title
[
(g) Extension of due date. HHSC may grant extensions
of due dates for good cause in accordance with §355.105(c)(2)
of this title.
(h) Cost data. HHSC may at times require additional
financial and statistical information to assess the fiscal integrity
of the TxHmL Program in accordance with §355.105(c)(3)
of this title.
(i) Failure to submit requested data. Failure to submit
acceptable cost data by the due date constitutes a violation of the
TxHmL Program provider contract and may result in vendor hold.
(j) Review of cost data. HHSC reviews each TxHmL Program
provider's cost data to determine whether the financial and statistical
information submitted conforms to all applicable rules and instructions.
Forms that are not completed according to HHSC's instructions or rules
may be returned to the TxHmL Program provider for proper completion.
(k) Desk reviews or field audits are performed on cost
reports for all contracted providers. The frequency and nature of
the field audits are determined by HHSC to ensure the fiscal integrity
of the program. Desk reviews and field audits will be conducted in
accordance with §355.106 of this title (relating to Basic Objectives
and Criteria for Audit and Desk Review of Cost Reports), and providers
will be notified of the results of a desk review or a field audit
in accordance with §355.107 of this title (relating to Notification
of Exclusions and Adjustments).
(l) Access to records. Each TxHmL Program provider
must allow access by HHSC or its authorized representatives to any
and all records necessary to verify cost data submitted to HHSC.
(1) This requirement includes records pertaining to
related-party transactions and other business activities engaged in
by the TxHmL Program provider that are directly or indirectly related
to the provision of contracted services.
(2) Failure to allow inspection of pertinent records
within 10 working days following written notice from HHSC constitutes
a violation of the TxHmL Program provider contract.
(3) If the administrative office or other entity pertaining
to a multi-contract operation refuses access to records, then the
penalties are extended to all of the TxHmL Program provider's entities
having Medicaid contracts with DADS [
(4) Additional rules regarding access to records that
are out-of-state may be found in §355.105 of this title [
(m) Reviews of exclusions or adjustments. An TxHmL
Program provider who disagrees with HHSC's exclusion or adjustment
of items in cost reports may request an informal review and, when
appropriate, an administrative hearing as specified in §355.110
of this title (relating to Informal Reviews and Formal Appeals).
(n) Notification of exclusions and adjustments. HHSC
will notify a TxHmL Program provider of exclusions and any adjustments,
including caps applied, to reported costs in accordance with §355.107
of this title [
(o) General requirements. HHSC determines reimbursement
rates according to §355.101 of this title (relating to Introduction).
(p) Payment rate determination. For the initial reimbursement
period, beginning the effective date of the Center for Medicare and
Medicaid Services (CMS) approval of the waiver, payment rates are
those rates determined for other Medicaid programs with similar services.
When payment rates are not available from other Medicaid programs
with similar services, payment rates are determined on a pro forma
approach in accordance with §355.101(c)(2)(B) and §355.105(h)
of this title [
(q) Payment rates for TxHmL services in effect for
the initial reimbursement period will remain in effect until HHSC
obtains sufficient reliable cost data to determine new payment rates.
(r) Each TxHmL Program provider's total reported allowable
costs, excluding depreciation and mortgage interest, are projected
from the historical cost-reporting period to the prospective reimbursement
period as described in §355.108 of this title (relating to Determination
of Inflation Indices). HHSC may adjust reimbursement if new legislation,
regulations, or economic factors affect costs, according to §355.109
of this title (relating to Adjusting Reimbursement When New Legislation,
Regulations, or Economic Factors Affect Costs).
(s) Effective September 1, 2009 and
thereafter, the payment rate for day habilitation services will be
equal to the Home and Community-based Services (HCS) waiver program
approved rate for day habilitation services for Level of Need 5; the
payment rate for community supports will be equal to the HCS waiver
program approved rate for supported home living; the payment rate
for respite will be equal to the HCS waiver program approved rate
for respite; and the payment rates for supported employment and employment
assistance will be equal to the HCS waiver program approved rate for
supported employment. The referenced HCS waiver program approved rates
are calculated in accordance with §355.723 of this title (relating
to Reimbursement Methodology for Home and Community-based Services
(HCS)).
(t) Effective September 1, 2009 and
thereafter, the payment rates for professional services, including
physical therapy, occupational therapy, speech/hearing/language, nursing
services provided by an RN, nursing services provided by an LVN, auditory
services, dietary services, behavioral support services, and requisition
fees will be equal to the HCS waiver program approved rates for these
services as calculated in accordance with §355.725 of this title
(relating to Reimbursement Methodology for Professional Services and
Requisition Fees for Home and Community-based Services (HCS)).
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 22, 2009.
TRD-200902560
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
1 TAC §355.7103
The Texas Health and Human Services Commission (HHSC)
proposes to amend §355.7103, Rate-Setting Methodology for 24-Hour
Residential Child-Care Reimbursements, under Title 1, Part 15, Chapter
355, Subchapter H.
Background and Justification
This rule establishes the reimbursement methodology for 24-Hour
Residential Child-Care Reimbursements. HHSC, under its authority and
responsibility to administer and implement rates, is proposing changes
to this rule to outline how the 24-Hour Residential Child-Care rates
effective September 1, 2009, through August 31, 2011, will be determined.
The proposed amendment will adjust payment rates for the 24-Hour Residential
Child-Care program to comply with the 2010-11 General Appropriations
Act (Article II, Health and Human Services, 81st Legislature, Regular
Session, 2009), which appropriated general revenue funds for provider
rate increases for this program.
Section-by-Section Summary
The proposed amendments to §355.7103 are as follows:
Add a new subsection (q) to state that for the state fiscal year
2010 through 2011 biennium:
For foster families, the payments effective September 1, 2009,
through August 31, 2011 for each level of service will be equal to
the minimum rate paid to foster families for that level of service
in effect August 31, 2009, plus 3.33 percent.
For child placing agencies (CPAs), the rates effective September
1, 2009, through August 31, 2011, for each level of service will be
equal to the rate paid to CPAs for that level of service in effect
August 31, 2009, plus 2.41 percent, which is equivalent to a 1.33
percent increase for CPA retainage and a 3.33 percent increase in
pass-through funds for foster families. The following facility types
are included as CPAs: independent foster family/group homes; independent
therapeutic foster family/group homes; independent habilitative foster
family/group homes; and independent primary medical needs foster family/group
homes.
For residential care facilities (RCFs), the rates effective September
1, 2009, through August 31, 2011, for each level of service will be
equal to the rate paid to RCFs for that level of service in effect
August 31, 2009, plus 9.30 percent.
For emergency shelters, the rate effective September 1, 2009, through
August 31, 2011, will be equal to the rate in effect August 31, 2009,
plus 8.68 percent.
For psychiatric step-down services, the rate effective September
1, 2009, through August 31, 2011, will be equal to the rate in effect
on August 31, 2009.
Fiscal Note
Cindy Brown, Chief Financial Officer for the Department of Family
and Protective Services (DFPS), has determined that during the first
five-year period the amended rule is in effect there will be a fiscal
impact to state government of $6,250,289 for state fiscal year (FY)
2010, $6,725,087 for FY 2011, $7,304,545 for FY 2012, $7,661,159 for
FY 2013, and $7,974,747 for FY 2014. The proposed rule will not result
in any fiscal implications for local health and human services agencies.
There are no fiscal implications for local governments as a result
of enforcing or administering the section.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on
small businesses or micro-businesses as a result of enforcing or administering
the amendment. The implementation of the proposed rule amendment does
not require any changes in practice or any additional cost to the
contracted provider.
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 local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that,
for each of the first five years the amendment is in effect, the expected
public benefit is that foster families, CPAs, RTCs, emergency shelters
and providers of psychiatric step-down services will be paid the proper
reimbursement rates in compliance with legislative appropriations.
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.
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.
Public Comment
Questions about the content of this proposal may be directed to
Pam McDonald in the HHSC Rate Analysis Department by telephone at
(512) 491-1373. Written comments on the proposal may be submitted
to Ms. McDonald by facsimile at (512) 491-1998, by e-mail to pam.mcdonald@hhsc.state.tx.us,
or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200,
Austin, Texas 78708-5200, within 30 days of publication of this proposal
in the Texas Register.
Statutory Authority
The amendment is proposed under Texas Government Code §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules
necessary to carry out the Commission's duties; Texas Government Code §531.055,
which authorizes the Executive Commissioner to adopt rules for the
operation and provision of health and human services by the health
and human services agencies and to adopt or approve rates of payment
required by law to be adopted or approved by a health and human services
agency; and Human Resources Code §40.4004(c) and (d), which authorize
the Executive Commissioner to consider fully all written and oral
submissions to the DFPS Council about a proposed rule.
The amendment implements Government Code, §531.033 and §531.055.
§355.7103.Rate-Setting Methodology for 24-Hour Residential Child-Care Reimbursements.
(a) - (p) (No change.)
(q) For the state fiscal year 2010
through 2011 biennium, for foster families, the payments effective
September 1, 2009, through August 31, 2011, for each level of service
will be equal to the minimum rate paid to foster families for that
level of service in effect August 31, 2009, plus 3.33 percent. For
Child Placing Agencies (CPAs), the rates effective September 1, 2009,
through August 31, 2011, for each level of service will be equal to
the rate paid to CPAs for that level of service in effect August 31,
2009, plus 2.41 percent, which is equivalent to a 1.33 percent increase
for CPA retainage and a 3.33 percent increase in pass-through funds
for foster families. For Residential Care Facilities (RCFs), the rates
effective September 1, 2009, through August 31, 2011, for each level
of service will be equal to the rate paid to RCFs for that level of
service in effect August 31, 2009, plus 9.30 percent. For Emergency
Shelters, the rate effective September 1, 2009, through August 31,
2011, will be equal to the rate in effect August 31, 2009, plus 8.68
percent. For psychiatric step-down services, the rate effective September
1, 2009, through August 31, 2011, will be equal to the rate in effect
on August 31, 2009.
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 18, 2009.
TRD-200902482
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
DIVISION 4. MEDICAID HOSPITAL SERVICES
1 TAC §355.8052
The Texas Health and Human Services Commission (HHSC)
proposes to amend Title 1, Part 15, Subchapter J, §355.8052,
concerning Inpatient Hospital Reimbursement. The amendments update
the Medicaid inpatient hospital reimbursement methodology for fiscal
year 2010 and to remove references to fiscal year 2009 rebasing.
Background and Justification
This proposed amendment will change the Medicaid inpatient hospital
reimbursement methodology within §355.8052 to remove references
to fiscal year 2009 rebasing, and to give HHSC the authority to rebase
and proportionately adjust inpatient hospital payment division standard
dollar amounts within current appropriations for payments during fiscal
year 2010 in accordance with the 2010-11 General Appropriations Act
(Article II, Health and Human Services Commission, Rider 68, S.B.
1, 81st Legislature, Regular Session, 2009).
Rebasing inpatient hospital rates for fiscal year 2009, provided
for in the current version of §355.8052, was contingent on the
federal Centers for Medicare and Medicaid Services (CMS) approving
and HHSC implementing the Medicaid reform waiver. Because CMS has
not approved HHSC's pending Medicaid reform waiver, HHSC will not
rebase Medicaid inpatient hospital rates for fiscal year 2009.
The payment division standard dollar amount (PDSDA) is a component
of the Medicaid inpatient reimbursement formula for hospitals. The
PDSDA is the weighted average dollar amount per claim calculated for
all hospitals in a payment division, which is a grouping of hospital-specific
standard dollar amounts (HSDA). The HSDA is based on each hospital's
average cost per claim for a designated base year, adjusted by the
case mix index and cost-of-living index.
HHSC proposes to amend §355.8052 to rebase and adjust PDSDAs
during fiscal year 2010 to be applied prospectively. For fiscal year
2010, HHSC will rebase the PDSDAs for inpatient hospitals using a
base year of federal fiscal year 2008. The federal fiscal year 2008
base year will include the 6-month grace period through March 31,
2009. HHSC has elected to use the 12-month period of federal fiscal
year 2008 to reflect the change to Medicare Severity Diagnosis Related
Groups (DRG) that occurred in October 2007. HHSC will adjust PDSDAs
proportionately for each hospital so that the resulting expenditures
incurred using the recomputed PDSDAs are not higher than the funds
appropriated to HHSC for this purpose. In addition, a few identified
hospitals' current PDSDAs will be adjusted to correspond to current
payment divisions, and these adjusted PDSDAs will be used in the proportional
rebasing. This adjustment is intended to ensure that all hospitals
are consistently reimbursed based on legislative guidance and HHSC
policy and regulation.
Diagnosis Related Group (DRG) statistics (relative weight, mean
length of stay, and day outlier threshold) are another component of
the Medicaid inpatient hospital reimbursement formula. The proposed
amendment gives HHSC the authority to update all DRG statistics for
fiscal year 2010 based on federal fiscal year 2008 base-year claims
information. HHSC will implement the DRG update prospectively when
it implements the rebased PDADAs. HHSC is updating DRG statistics
as part of the rebasing and to better reflect differences in the complexity
of care.
The rebasing of the PDSDAs and the DRG changes described above
will not result in any fiscal impact to the state.
The proposed amendment also clarifies the sections of the rule
related to the rates for new hospitals and hospital mergers. The amendment
defines the duration of the new-hospital PDSDA as five years from
the effective date of the new hospital PDSDA rate. The proposed amendment
clarifies that for merged hospitals, the combined PDSDA, which results
in one reimbursement rate for the merged hospitals, applies as of
the date the Medicare program recognizes the merger. The amendment
proposes additional methodologies for calculating merged hospital
PDSDAs.
Section-by-Section Summary
Proposed §355.8052(a) updates paragraph (1) to remove references
to fiscal year 2009. Paragraph (3) provides that HHSC will send each
hospital a final notification letter reporting the hospital's PDSDA
for each fiscal year or any portion thereof designated by HHSC, including
any adjustment of its PDSDA. Subsection (a)(4) is updated to allow
HHSC to rebase at its discretion during the state fiscal year that
is three years after the last rebasing if funds have not been appropriated
for that purpose.
Proposed §355.8052(c)(28) adds a definition of "payment division
index (PDI)" as a list of all payment divisions and their corresponding
valid PDSDAs. Paragraphs following the new definition are renumbered.
Proposed §355.8052(c)(29) adds to the definition of PDSDA
that a PDSDA may be adjusted pursuant to §355.201 of this title,
if necessary.
Proposed §355.8052(c)(30) adds a definition of "rebasing"
as the process for calculating DRG statistics and each hospital's
PDSDA.
Proposed §355.8052(d) updates the subsection heading to include
"Calculations" to indicate this subsection is for the purpose of calculating
the hospitals' PDSDAs. Paragraph (1) removes the rule language specific
to recalculation of PDSDAs in fiscal year 2009.
Proposed §355.8052(d)(2) states that HHSC may adjust a hospital's
PDSDA in accordance with §355.201 of this title and removes the
rule language specific to adjustment of PDSDAs in fiscal year 2009.
The proposed amendment adds language regarding adjusting the PDSDA
of any hospital that was not active for reimbursement purposes during
any period in which HHSC adjusted rates and whose PDSDA is not reflected
in the PDI.
Proposed §355.8052(d)(5) explains that each payment division
is assigned a number in the payment division index (PDI) and provides
an example of how hospitals are grouped within a payment division.
Proposed §355.8052(d)(6)(D) contains the "Minimum PDSDA" language
that previously was in paragraph (7).
Proposed §355.8052(d)(7) adds a new paragraph, "Payment Division
Index (PDI)." Subparagraph (A) explains that after a hospital has
been assigned a payment division number, the corresponding PDSDA will
be subject to adjustment in accordance with subsection (d)(2). Subparagraph
(B) describes the application of the minimum PDSDA for adjusted PDSDAs
below this floor. Subparagraph (C) describes the universal mean PDSDA
calculation to include the applicable adjustment and the payment division
designation. Subparagraph (D) applies any adjustment in accordance
with subparagraph (A) of this paragraph to the "new hospital rate."
Proposed §355.8052(d)(8) removes the description of the calculation
of the PDSDA for specific types of hospitals receiving the universal
mean PDSDA, which was moved to subsection (d)(7)(C).
Proposed §355.8052(d)(8)(B) describes the rate determination
process for new hospitals and identifies the time period during which
the rate will be in effect. The amendment changes the duration period
of the rate for new hospitals from five years from enrollment to five
years from the effective date of the rate. Clause (iv) provides that
the calculation of the PDSDA for new hospitals is subject to the adjustments
described in paragraph (7).
Proposed §355.8052(d)(9)(A) clarifies that hospitals seeking
to merge must provide notice to HHSC.
Proposed §355.8052(d)(9)(B) describes different methodologies
for calculating the PDSDA for merging hospitals depending on the merging
hospitals' current PDSDAs and any adjustments or realignments of the
PDSDAs. Clauses (i) and (iii) set out procedures for merging hospitals
after rebasing has been completed. The procedure in clause (i) applies
when none of the merging hospitals received an adjusted or realigned
PDSDA. The procedure in clause (iii) applies when the merger involves
at least one hospital having a PDSDA that is not based on the average
base-year cost per claim for that hospital. The procedure in clause
(iv) is used when a merger is recognized during the rebasing of hospital
PDSDAs. Clauses (i), (iii), and (iv) clarify the effective date for
the merged hospital's PDSDA.
Proposed §355.8052(d)(9)(C) clarifies that HHSC will not recalculate
the PDSDA for a hospital acquired in an acquisition or buyout unless
the acquisition or buyout resulted in the purchased or acquired hospital
becoming part of another Medicaid participating provider. HHSC will
continue to reimburse based on the acquired hospital's PDSDA.
Proposed §355.8052(f)(2) clarifies that a hospital may not
request a review regarding the elements of the prospective payment
methodology used by HHSC.
Proposed §355.8052(h)(3) clarifies that HHSC may require a
hospital to provide additional data with its hospital cost report
in the specified format and timeframe prescribed by HHSC.
Other changes are made throughout the rule to update references
and for consistency with common usage.
Fiscal Note
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services,
has determined that during the first five-year period the proposed
rule is in effect there will be no fiscal impact to state government
as a result of rebasing and proportionately adjusting inpatient hospital
payment division standard dollar amounts within current appropriations.
HHSC anticipates that the net fiscal impact of the amendment to
all Medicaid hospitals will be zero. While the changes to the inpatient
reimbursement methodology may increase or decrease Medicaid revenue
to individual hospitals, including hospital districts, local governments
will not incur additional costs as a result of the amendment. The
proposed rule will not result in any fiscal implications for local
health and human services agencies.
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 the rule. There are no anticipated economic costs to persons who
are required to comply with the proposed rule.
HHSC is unable to determine the fiscal impact on acute care hospitals
that meet the state criteria for qualifying as a small business, either
positively or adversely. The information and data required to complete
the analysis for each hospital will not be available for at least
six months.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that for
each year of the first five years the proposed rule is in effect,
the public will benefit from adoption of the amendment. The anticipated
public benefit, as a result of enforcing the amendment, will be to
clarify that rebasing will not occur in fiscal year 2009 and that
HHSC will update the Medicaid inpatient hospital reimbursement methodology
during fiscal year 2010 within current appropriations in order to
pay inpatient reimbursement rates that more closely approximate all
hospitals' costs. Also, the rule clarifies how new hospital and merged
hospital payments are determined.
Regulatory Analysis
HHSC has determined that this proposal is not a "major environmental
rule" as defined by §2001.0225 of the Texas Government Code.
A "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
Written comments on the proposal may be submitted to Chris Dockal,
Senior Rate Analyst in the Rate Analysis Department, Texas Health
and Human Services Commission, P.O. Box 85200, MC-H400, Austin, Texas
78708-5200; by fax (512) 491-1983; or by e-mail at chris.dockal@hhsc.state.tx.us
within 30 days of publication of this proposal in the
Texas Register.
Statutory Authority
The amendment is proposed under Texas Government Code §531.033,
which provides the Executive Commissioner of HHSC with broad rulemaking
authority; and Human Resources Code §32.021 and Texas Government
Code §531.021(a), which provide HHSC with the authority to administer
the federal medical assistance (Medicaid) program in Texas.
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.
§355.8052.Inpatient Hospital Reimbursement.
(a) Application and general reimbursement method.
(1) The prospective payment system described in this
section applies to inpatient hospital payments [
(2) HHSC calculates reimbursement for a covered inpatient
hospital service, determined in subsection (g) of this section, by
multiplying the hospital's payment division standard dollar amount,
determined in subsection (d) of this section, by the relative weight
for the appropriate diagnosis-related group, determined in subsection
(e) of this section.
(3) HHSC will send a hospital an initial notification
letter describing the hospital-specific and payment division standard
dollar amounts resulting from the rebasing process referenced
[
(4) HHSC will rebase hospital-specific and payment
division standard dollar amounts [
(b) Exceptions. The prospective payment system described
in this section does not apply to the following types of hospitals
for covered inpatient hospital services:
(1) In-state and out-of-state children's hospitals.
In-state and out-of-state children's hospitals are reimbursed using
the methodology described in §355.8054 of this chapter (relating
to Children's Hospital Reimbursement Methodology).
(2) State-owned teaching hospitals. A state-owned teaching
hospital is reimbursed in accordance with the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) principles using the methodology
described in §355.8056 of this chapter (relating to State-Owned
Teaching Hospital Reimbursement Methodology).
(3) Freestanding psychiatric hospitals. A freestanding
psychiatric hospital is reimbursed under the methodology described
in §355.8063 of this chapter (relating to Reimbursement Methodology
for Inpatient Hospital Services).
(c) Definitions. When used in this section, and §355.8054
and §355.8056 of this chapter, the following words and terms
will have the following meanings, unless the context clearly indicates
otherwise.
(1) Adjudicated--The approval or denial of an inpatient
hospital claim by HHSC.
(2) Average base year cost per claim--One factor used
in arriving at the hospital-specific standard dollar amount; the arithmetic
mean of base year costs per claim for a hospital, obtained by dividing
the sum of all base year costs per claim for that hospital by the
number of base year claims in the set.
(3) Base year--A period of 12 consecutive months selected by HHSC.
(4) Base year claims--All Medicaid inpatient hospital
claims for reimbursement filed by a hospital that:
(A) Have a date of admission occurring within the base year;
(B) Are adjudicated and approved for payment during
the base year and the six-month grace period that immediately follows
the base year or another grace period designated by HHSC and communicated
in writing to all hospitals;
(C) Are not claims for patients who are covered by Medicare; and
(D) Are not Medicaid spend-down claims.
(5) Base year cost per claim--One factor used in arriving
at the hospital-specific standard dollar amount; the cost for a claim
that would have been made to a hospital if HHSC reimbursed the hospital
under methods and procedures used in the Tax Equity and Fiscal Responsibility
Act of 1982 (TEFRA), described in subsection (d)(3)(A) of this section.
(6) Case mix index--The average relative weight of
a hospital's base year claims, obtained by summing the hospital's
relative weights for all base year claims divided by the total number
of that hospital's base year claims.
(7) Cost-of-Living Index--An adjustment applied to
hospital-specific standard dollar amounts based on the Market Basket
Index to account for changes in cost of living.
(8) Cost outlier payment adjustment--A payment adjustment
for a claim with extraordinarily high costs.
(9) Cost outlier threshold--One factor used in determining
the cost outlier payment adjustment.
(10) Data entry error--An error resulting from mis-keyed
or mistyped data that is different from the intended entry. This type
of error does not include the omission of claims approved for payment
after the base year and grace period.
(11) Day outlier threshold--One factor used in determining
the day outlier payment adjustment.
(12) Day outlier payment adjustment--A payment adjustment
for a claim with an extended length of stay.
(13) Diagnosis-related group (DRG)--The classification
of medical diagnoses as defined in the Medicare DRG system or as otherwise
specified by HHSC.
(14) Final settlement--Reconciliation of cost in the
Medicare/Medicaid hospital fiscal year end cost report performed by
HHSC within six months after HHSC receives the cost report audited
by a Medicare intermediary, or in the case of children's hospitals,
audited by HHSC.
(15) HHSC--The Texas Health and Human Services Commission
or its designee.
(16) Hospital-specific [
(17) In-state children's hospital--A hospital located
within Texas that is recognized by Medicare as a children's hospital
and is exempted by Medicare from the Medicare prospective payment
system.
(18) Interim payment--An initial payment made to a
hospital that is later settled to Medicaid-allowable costs, for hospitals
reimbursed under methods and procedures in the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA).
(19) Interim rate--The ratio of Medicaid allowed inpatient
costs to Medicaid allowed inpatient charges filed on a hospital's
Medicare/Medicaid cost report, or inpatient cost-to-charge ratio,
expressed as a percentage. The interim rate established at tentative
settlement includes incentive and penalty payments associated with
TEFRA target caps to the extent that they continue to be permitted
by federal law and regulation.
(20) Market Basket Index--The Centers for Medicare
and Medicaid Services (CMS) projection of the annual percentage increase
in hospital inpatient operating costs, as defined in 42 C.F.R. §413.40.
(21) Mathematical error--An error that results from
the erroneous application of variables, quotients, or functions within
a methodology formula resulting in a different result than intended
methodology results. This type of error does not include the omission
of claims approved for payment after the base year and grace period.
(22) Mean length of stay (MLOS)--One factor used in
determining the payment amount calculated for each diagnosis related
group; for each diagnosis related group, the average number of days
that a patient stays in the hospital.
(23) Military hospital--A hospital operated by the
armed forces of the United States.
(24) New hospital--A hospital that was newly constructed
and enrolled as a Medicaid provider after the end of the base year.
(25) Newly enrolled hospital--A hospital that was assigned
a new Texas Provider Identification number (TPI) and was enrolled
as a Medicaid provider after the end of the base year.
(26) Out-of-state children's hospital--A hospital located
outside of Texas that is recognized by Medicare as a children's hospital
and is exempted by Medicare from the Medicare prospective payment
system.
(27) Payment division--A group of hospitals whose calculated
hospital-specific standard dollar amounts fall within a $100 range,
where the $100 increments begin at zero.
(28) Payment division index
(PDI)--A list of all payment divisions and their corresponding valid
payment division standard dollar amounts.
(29) [
(30) Rebasing--Calculation
of the TEFRA cost for base year claims for each Medicaid inpatient
hospital. The TEFRA costs for base year claims will be used to recalculate
HSDAs, PDSDAs, and DRG statistics (relative weight, mean length of
stay, and day outlier threshold) using the methods described in this
section.
(31) [
(32) [
(33) [
(34) [
(35) [
(36) [
(37) [
(d) Payment Division Standard Dollar Amount (PDSDA) Calculations.
HHSC will use the methodologies described in this subsection to determine
the PDSDA for a hospital.
(1) Rebasing [
[
[
(2) Adjustment of PDSDAs.
(A) HHSC may adjust a hospital's PDSDA [
(B) For a hospital that
was inactive for reimbursement purposes during any period in which
HHSC made an adjustment:
(i) HHSC will adjust the hospital's PDSDA accordingly; and
(ii) HHSC will assign the hospital to a
payment division within the PDI that corresponds to the PDSDA as determined
in clause (i) of this subparagraph.
[(i) Adjust PDSDAs pro rata among hospitals to available funds;]
[(ii) Exempt a hospital from the adjustment
in clause (i) of this subparagraph if such adjustment would result
in a lower rate than the hospital received as of August 31, 2008,
in order to preserve the Medicaid provider base, ensure access to
Medicaid hospital services, and minimize the effects of PDSDA decreases;]
[(iii) Apply a rate in place of the PDSDA,
for a hospital that is exempted under clause (ii) of this subparagraph,
that is the lesser of:]
[(I) the rate the hospital received as of
August 31, 2008; or]
[(II) the fully rebased PDSDA before applying
the adjustment described in clause (i) of this subparagraph;]
[(iv) Apply the PDSDA described in clause
(i) of this subparagraph for all hospitals that are not exempted under
clause (ii) of this subparagraph, without any recalculation within
the payment divisions; and]
[(v) Not apply to any hospital a rate lower
than the minimum PDSDA described in paragraph (7) of this subsection.]
(3) Hospital-specific standard dollar amount (HSDA).
Using base year claims, HHSC calculates an HSDA for each hospital as follows:
(A) Determines for each claim, the base year cost per
claim, which is the greater of:
(i) the amount of TEFRA cost for rebasing, which is
calculated under paragraph (10) of this subsection; or
(ii) payments from other insurance;
(B) Sums the dollar amount for each hospital's base
year costs per claim determined in subparagraph (A) of this paragraph;
(C) Calculates the average base year cost per claim
by dividing the result in subparagraph (B) of this paragraph by the
total number of base year claims for the hospital;
(D) Calculates the case mix index by summing the hospital's
relative weights for all base year claims divided by the total number
of that hospital's base year claims;
(E) Divides the average base year cost per claim determined
in subparagraph (C) of this paragraph by the hospital's case mix index
determined in subparagraph (D) of this paragraph; and
(F) Multiplies the result in subparagraph (E) of this
paragraph by the cost-of-living index described in paragraph (4) of
this subsection to adjust costs from the base year to the
rebased-rate year, which results in the HSDA.
(4) Cost-of-Living Index. HHSC updates HSDAs by applying
a cost-of-living index to the HSDA established for the base year.
HHSC uses the CMS Prospective Payment System Hospital Market Basket
Index based on a federal fiscal year adjusted to a state fiscal year.
(5) Payment Divisions. HHSC groups hospital HSDAs into
payment divisions by one-hundred-dollar ($100) increments beginning
at zero. Each payment division is assigned a number in the PDI. For
example, all hospitals with HSDAs between $1,700.00 and $1,799.99
[
(6) Payment Division Standard Dollar Amount (PDSDA).
(A) HHSC computes a PDSDA for all hospitals within
a payment division as follows:
(i) multiplies each hospital's HSDA by the hospital's
total number of base year claims, resulting in a weighted HSDA;
(ii) sums the weighted HSDAs determined in clause (i)
of this subparagraph for all hospitals within a payment division; and
(iii) divides the result in clause (ii) of this subparagraph
by the total number of base year claims for all hospitals within a
payment division, which results in the PDSDA.
(B) The PDSDA calculation does not include data from
the following types of hospitals:
(i) out-of-state hospitals;
(ii) military hospitals;
(iii) new or newly enrolled hospitals;
(iv) in-state and out-of-state children's hospitals;
(v) inpatient psychiatric hospitals; and
(vi) state-owned teaching hospitals.
(C) If a payment division has fewer than 20 total base
year claims, HHSC considers that payment division to be [
(D) [
(7) Payment Division Index (PDI).
(A) After all hospitals have been assigned
a payment division number, HHSC will adjust the standard dollar amount
for that payment division in accordance with paragraph (2) of this
subsection. The resulting PDSDA is the reimbursement rate for all
hospitals assigned that payment division number. The PDI is the list
of all payment division numbers and the corresponding valid PDSDAs.
(B) If the resulting PDSDA is less than
$1,600.00, the minimum PDSDA is applied.
(C) HHSC will assign a payment division
designation to the universal mean plus the cost-of-living update used
in the most recent rebasing calculation and will apply any adjustments
under subparagraph (A) of this paragraph. The resulting amount is
the PDSDA for the payment division assigned to hospitals listed in
paragraph (8)(A) of this subsection.
(D) HHSC will assign a payment division
designation to be used for a new hospital reimbursement rate. HHSC
will calculate the rate as described in paragraph (8)(B) of this subsection
and will apply any adjustments under subparagraph (A) of this paragraph,
which will be the PDSDA for this designation.
(8) PDSDAs [
(A) The following types of hospitals are assigned the
PDSDA described in paragraph (7)(C) of this subsection [
(i) military hospitals;
(ii) out-of-state hospitals; and
(iii) newly enrolled hospitals.
(B) New Hospitals.
(i) For a new hospital [
(ii) This rate is effective [
(iii) [
(iv) Any PDSDA assigned
under this subparagraph is subject to paragraph (7) of this subsection.
(9) Merged hospitals.
(A) Notice. When two or more Medicaid participating
hospitals merge to become one participating provider and the
participating provider is recognized by Medicare, the participating
provider must submit written notification to HHSC's provider enrollment
contact, including documents verifying the merger status with Medicare.
HHSC will assign to the merged entity a PDSDA, including adjustments,
determined using a methodology described in subparagraph (B) of this
paragraph for all hospitals involved in the merger [
(B) Determining a merged entity's PDSDA. HHSC
will use the following process to determine a merged entity's PDSDA: [
(i) When HHSC recognizes
a merged entity after HHSC has completed a rebasing in which each
of the merging hospitals had been a participating provider and after
which none of the merging hospitals were a replacement facility receiving
the new-hospital rate as referenced in paragraph (8)(B)(iii) of this
subsection, HHSC will determine the merged entity's PDSDA as follows:
(I) HHSC will calculate a new HSDA for the
entity by combining the original base year cost per claim determined
in paragraph (3)(A) of this subsection from the rebasing period for
all hospitals involved in the merger;
(II) Using the resulting HSDA, HHSC will
assign the merged entity to a payment division as described in paragraph
(5) of this subsection. HHSC will reimburse the merged entity at the
PDSDA corresponding to that payment division number within the PDI
described in paragraph (7) of this subsection;
(III) HHSC will apply the resulting PDSDA
to the surviving and terminated entities' Texas provider numbers retroactive
to the date on which Medicare recognized the merged participating
provider; and
(IV) HHSC will notify the merged entity
of the PDSDA and the effective and termination dates of the Texas
provider numbers for the involved hospitals.
(ii) When HHSC recognizes
a merged entity involving at least one hospital having a PDSDA that
is not based on the average base year cost per claim for that hospital,
HHSC will assign the merged entity's PDSDA using the methodology in
clause (iii) of this subparagraph. Hospitals in this category may
include:
(I) New hospitals;
(II) Newly enrolled hospitals; and
(III) Hospitals assigned the new-hospital
PDSDA based on construction of a replacement facility.
(iii) When HHSC recognizes
a merged entity described in clause (ii) of this subparagraph, HHSC
will determine the merged entity's PDSDA as follows:
(I) For each merging hospital, multiply
the hospital's pre-merger PDSDA by the hospital's total number of
claims for the state fiscal year claims file preceding the Medicare
effective date of the merger;
(II) Sum the results of subclause (I) of
this clause for all merging hospitals;
(III) Divide the result of subclause (II)
of this clause by the total number of claims for all merging hospitals;
(IV) HHSC will assign the hospital to the
payment division within the PDI that corresponds to the result of
the calculation in subclause (III) of this clause;
(V) HHSC will apply the resulting PDSDA
to the surviving and terminated entities' Texas provider numbers retroactive
to the date on which Medicare recognized the merged participating
provider; and
(VI) HHSC will notify the merged entity
of the PDSDA and the effective and termination dates of the Texas
provider numbers for the involved hospitals.
(iv) When HHSC recognizes
a merged entity during a rebasing in which each of the merging hospitals
had been a participating provider:
(I) HHSC will calculate a new HSDA by combining
the amounts determined in paragraph (3)(A) of this subsection for
all hospitals involved in the merger;
(II) Using the resulting HSDA, HHSC will
assign a PDSDA for the merged entity as described for all other hospitals
in this subsection;
(III) For any concurrent or retroactive
reimbursements prior to the effective date of a rebasing, HHSC will
assign the merged entity's PDSDA determined using either the methodology
described in clause (i) or (iii) of this subparagraph.
(C) HHSC will not recalculate [
(10) TEFRA Cost for Rebasing. HHSC adjusts base year
claims to arrive at a result based on cost reimbursement principles
described in the Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA), and calculates TEFRA cost for rebasing as follows:
(A) HHSC adjusts each hospital's base year claims using
the interim rate computed as a result of tentative or final cost reports
covering the base year. The adjustments are applied to claims in months
within the base year that coincide with months within the hospital's
cost reporting periods.
(B) The TEFRA cost for rebasing is calculated by multiplying
the Medicaid allowed charges for each base year claim by the interim
rate described in subparagraph (A) of this paragraph.
(C) HHSC uses the tentative or final cost report settlement
that is complete and available on the date HHSC sends the initial
PDSDA notification letter to the hospital. The results of a tentative
or final cost report settlement completed after the date HHSC sends
the initial PDSDA notification letter to the hospital are not considered
for purposes of this subsection.
(D) If there is no tentative or final cost report settlement
available, the TEFRA cost for rebasing is calculated using an assigned
interim rate of 50 percent.
(11) Correction of payment division error and reprocessing of claims.
(A) HHSC will place a hospital in the correct payment
division if HHSC determines that the hospital was incorrectly assigned
to a payment division due to a mathematical error or data entry error
by HHSC.
(B) HHSC will reprocess all claims adjudicated during
that state fiscal year that were paid to the hospital using the incorrect
PDSDA by applying the corrected PDSDA to the claims. No corrections
are made for claims adjudicated in previous state fiscal years.
(e) Diagnosis Related Groups (DRGs) Statistical Calculations.
HHSC adopts the classification of diagnoses defined in the Medicare
DRG prospective payment system unless a revision is required based
on Texas claims data or other factors, as determined by HHSC. HHSC
recalibrates the relative weights, mean length of stay, and day outlier
threshold whenever the PDSDAs are recalculated.
(1) Recalibration of relative weights. HHSC calculates
a relative weight for each DRG as follows:
(A) Base year claims are grouped by DRG;
(B) For each DRG, HHSC:
(i) sums the base year costs per claim as determined
in subsection (d)(3)(A) of this section;
(ii) divides the result in clause (i) of this subparagraph
by the number of claims in the DRG; and
(iii) divides the result in clause (ii) of this subparagraph
by the universal mean [
(2) Recalibration of mean length of stay (MLOS). HHSC
calculates a mean length of stay (MLOS) for each DRG as follows:
(A) Base year claims are grouped by DRG;
(B) For each DRG, HHSC:
(i) sums the number of days billed for all base year claims;
(ii) divides the result in clause (i) of this subparagraph
by the number of claims in the DRG, resulting in the MLOS for the DRG.
(3) Recalibration of day outlier thresholds. HHSC calculates
a day outlier threshold for each DRG as follows:
(A) Calculates for all claims the standard deviations
from the MLOS in paragraph (2) of this subsection;
(B) Removes each claim with a length of stay (number
of days billed by a hospital) greater than or equal to three standard
deviations above or below the MLOS. The remaining claims are those
with a length of stay less than three standard deviations above or
below the MLOS;
(C) Sums the number of days billed by all hospitals
for a DRG for the remaining claims in subparagraph (B) of this paragraph;
(D) Divides the result in subparagraph (C) of this
paragraph by the number of remaining claims in subparagraph (B) of
this paragraph;
(E) Calculates one standard deviation for the result
in subparagraph (D) of this paragraph; and
(F) Multiplies the result in subparagraph (E) of this
paragraph by two and adds that to the result in subparagraph (D) of
this paragraph; resulting in the day outlier threshold for the DRG.
(4) If a DRG has fewer than ten base year claims, HHSC
will assign the corresponding Medicare relative weight and Medicare
mean length of stay and will calculate the day outlier threshold based
on the Medicare mean length of stay and standard deviation.
(5) If one of the DRGs specific to an organ transplant
has less than five base year claims, HHSC will assign the corresponding
Medicare relative weight and Medicare mean length of stay and will
calculate the day outlier threshold based on the Medicare mean length
of stay and standard deviation. In addition, HHSC adds a relative
weight to account for the cost of procuring the organ to the Medicare
relative weight for the DRG. HHSC uses the organ procurement costs
published by the Acquisition of Organ Procurement Organization (AOPO).
To calculate the relative weight for procurement, HHSC divides the
average cost of organ procurement by the universal mean for all claims.
(f) Request for Review. Except as otherwise provided
in this subsection, HHSC uses the following process for reviews and appeals.
(1) If a hospital believes that HHSC made a mathematical
error or data entry error in calculating the hospital's PDSDA, the
hospital may request a review of the disputed calculation.
(A) A review of the calculation of a hospital's PDSDA
will not be granted if the disputed calculation is the result of the
hospital's submission of incorrect data or the result of the use of
an interim rate derived from a cost reporting period occurring before
the base year.
(B) The hospital must submit to HHSC a written request
for review and appropriate specific documentation supporting its contention
that there has been a mathematical or data entry error. The written
request for review must be printed on the hospital's letterhead. HHSC
Rate Analysis must receive a written request for an informal review
by hand delivery, United States (U.S.) mail, or special mail delivery
no later than 45 calendar days from the date of the initial PDSDA
notification letter. If the 45th calendar day is a weekend day, national
holiday, or state holiday, then the first business day following the
45th calendar day is the final day the receipt of the written request
will be accepted. HHSC will not grant extensions of the 45-day deadline.
(C) If the hospital disagrees with the outcome of the
review, the hospital may formally appeal in accordance with §§357.481
- 357.490 of this title (relating to Hearings Under the Administrative
Procedure Act).
(2) A hospital may not request a review pursuant
to this paragraph regardin [
(A) the payment division methodologies, including the
HSDA, PDI, and PDSDA calculations;
(B) the DRGs assigned through claims adjudication;
(C) the DRGs assigned to base year claims as a result
of HHSC updating to a new version of the Medicare DRGs;
(D) the relative weights assigned to the DRGs;
(E) the adequacy of payments;
(F) the exclusion of claims that were not adjudicated
and paid within the base year or six-month grace period; and
(G) the interim rate, computed as a result of tentative
or final cost reports covering the base year that are completed after
the date HHSC sends the initial PDSDA notification letter to the hospital.
(g) Reimbursements.
(1) Calculating the payment amount. HHSC reimburses
a hospital a prospective payment for covered inpatient hospital services
by multiplying the PDSDA for the hospital's payment division by the
relative weight for the DRG assigned to the adjudicated claim. The
resulting amount is the payment amount to the hospital.
(2) The prospective payment as described in paragraph
(1) of this subsection is considered full payment for covered inpatient
hospital services. A hospital's request for payment in an amount higher
than the prospective payment will be denied. The PDSDA result in subsection
(d) of this section includes but is not limited to the following:
(A) capital costs;
(B) cost of indirect medical education;
(C) cost of malpractice insurance; and
(D) return on equity.
(3) Day and cost outlier adjustments. HHSC pays a day
outlier or a cost outlier for medically necessary inpatient services
provided to clients under age 21 in all Medicaid participating hospitals
that are reimbursed under the prospective payment system. If a patient
age 20 is admitted to and remains in a hospital past his or her twenty-first
(21st) birthday, inpatient days and hospital charges after the patient
reaches age 21 are included in calculating the amount of any day outlier
or cost outlier payment adjustment.
(A) Day outlier payment adjustment. HHSC [
(i) determines whether the number of medically necessary
days allowed for a claim exceeds:
(I) the MLOS by more than two days; and
(II) the DRG day outlier threshold as calculated in
subsection (e)(3)(F) of this section;
(ii) if clause (i) of this subparagraph is true, subtracts
the DRG day outlier threshold from the number of medically necessary
days allowed for the claim;
(iii) multiplies the DRG relative weight by the PDSDA;
(iv) divides the result in clause (iii) of this subparagraph
by the DRG MLOS described in subsection (e)(2) of this section, to
arrive at the DRG per diem amount;
(v) multiplies the number of days in clause (ii) of
this subparagraph by the result in clause (iv) of this subparagraph;
and
(vi) multiplies the result in clause (v) of this subparagraph
by 70 percent.
(B) Cost outlier payment adjustment. HHSC makes a cost
outlier payment adjustment for an extraordinarily high-cost claim
as follows:
(i) to establish a cost outlier, the cost outlier threshold
must be determined by first selecting the lesser of the
universal mean [
(ii) the full DRG prospective payment amount is multiplied
by 1.5;
(iii) the cost outlier threshold is the greater of
clause (i) or (ii) of this subparagraph;
(iv) the cost outlier threshold is subtracted from
the amount of reimbursement for the claim established under cost reimbursement
principles described in the Tax Equity and Fiscal Responsibility Act
of 1982 (TEFRA); and
(v) the result in clause (iv) of this subparagraph
is multiplied by 70 percent to determine the amount of the cost outlier
payment.
(C) If an admission qualifies for both a day outlier
and a cost outlier payment adjustment, HHSC pays the higher outlier
payment.
(4) A hospital may submit a claim to HHSC before a
patient is discharged, but only the first claim for that patient will
be reimbursed the prospective payment described in paragraph (1) of
this subsection. Subsequent claims for that stay are paid zero dollars.
When the patient is discharged and the hospital submits a final claim
to ensure accurate calculation for potential outlier payments for
clients younger than 21 years of age, HHSC recoups the first prospective
payment and issues a final payment in accordance with paragraphs (1)
and (3) of this subsection.
(5) Patient transfers and split billing. If a patient
is transferred, HHSC establishes payment amounts as specified in subparagraphs
(A) - (D) of this paragraph. HHSC manually reviews transfers for medical
necessity and payment.
(A) If the patient is transferred from a hospital to
a nursing facility, HHSC pays the transferring hospital the total
payment amount of the patient's DRG.
(B) If the patient is transferred from one hospital
(transferring hospital) to another hospital (discharging hospital),
HHSC pays the discharging hospital the total payment amount of the
patient's DRG. HHSC calculates a DRG per diem and a payment amount
for the transferring hospital as follows:
(i) multiplies the DRG relative weight by the PDSDA;
(ii) divides the result in clause (i) of this subparagraph
by the DRG MLOS described in subsection (e)(2) of this section, to
arrive at the DRG per diem amount; and
(iii) to arrive at the transferring hospital's payment amount:
(I) multiplies the result in clause (ii) of this subparagraph
by the lesser of the DRG MLOS, the transferring hospital's number
of medically necessary days allowed for the claim, or 30 days; or
(II) for a patient under age 21, multiplies the result
in clause (ii) of this subparagraph by the lesser of the DRG MLOS
or the transferring hospital's number of medically necessary days
allowed for the claim.
(C) HHSC makes payments to multiple hospitals transferring
the same patient by applying the per diem formula in subparagraph
(B) of this paragraph to all the transferring hospitals and the total
DRG payment amount to the discharging hospital.
(D) HHSC performs a post-payment review to determine
if the hospital that provided the most significant amount of care
received the total DRG payment. If the review reveals that the hospital
that provided the most significant amount of care did not receive
the total DRG payment, an adjustment is initiated to reverse the payment
amounts. The transferring hospital is paid the total DRG payment amount
and the discharging hospital is paid the DRG per diem.
(h) Cost reports. Each hospital must submit an initial
cost report at periodic intervals as prescribed by Medicare or as
otherwise prescribed by HHSC.
(1) Each hospital must send a copy of all cost reports
audited and amended by a Medicare intermediary to HHSC within 30 days
after the hospital's receipt of the cost report. Failure to submit
copies or respond to inquiries on the status of the Medicare cost
report will result in provider vendor hold.
(2) HHSC uses data from these reports in rebasing
rate years to recalculate PDSDAs and make [
(3) HHSC may require a
hospital to provide additional data in a format and at a time specified
as otherwise prescribed by HHSC.
(4) [
(5) [
(i) Hospitals in counties with 50,000 or fewer persons
and certain other hospitals.
(1) Hospitals are reimbursed under this subsection
if, as of the most recent decentennial census, the hospital is:
(A) located in a county with 50,000 or fewer persons;
(B) a Medicare-designated Rural Referral Center (RRC)
or Sole Community Hospital (SCH) not located in a metropolitan statistical
area (MSA), as defined by the U.S. Office of Management and Budget; or
(C) a Medicare-designated Critical Access Hospital (CAH).
(2) A hospital that qualifies under this subsection
is reimbursed for a cost reporting period the greater of:
(A) All Medicaid payments based on the prospective
payment system; or
(B) The cost-reimbursement methodology described in
the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) without
the imposition of the TEFRA target cap described in subsection
(c)(34) [
(3) The amounts in this subsection are calculated using
the most recent data for Medicaid Fee-for-Service (FFS) and Primary
Care Case Management (PCCM) inpatient services.
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 22, 2009.
TRD-200902561
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
DIVISION 4. MEDICAID HOSPITAL SERVICES
The Texas Health and Human Services Commission (HHSC) proposes
to repeal §355.8065, Additional Reimbursement to Disproportionate
Share Hospitals, and §355.8067, Disproportionate Share Hospital
Reimbursement Methodology for State-Owned Teaching Hospitals. HHSC
proposes new §355.8065, which will combine pertinent elements
of §355.8065 and §355.8067 into one new rule. The proposed
new §355.8065 is titled Disproportionate Share Hospital (DSH)
Reimbursement Methodology.
Background and Justification
Hospitals participating in the Texas Medicaid program that meet
the Disproportionate Share Hospital (DSH) program conditions of participation
and that serve a disproportionate share of low-income patients are
eligible for additional reimbursement through the DSH program. HHSC,
as the Medicaid single state agency, establishes each hospital's eligibility
for DSH reimbursement and the amount of reimbursement, as set out
in new §355.8065.
Proposed new §355.8065 contains the following changes.
First, HHSC is combining pertinent language from existing §355.8065
and §355.8067 into new §355.8065. Current §355.8065
contains the DSH methodology for all hospitals other than state-owned
teaching hospitals. Section 355.8067 contains the DSH reimbursement
methodology for state-owned teaching hospitals. Language from both
current rules will be included in new §355.8065 so that the qualification
and payment methodologies for all DSH hospitals will be contained
in one rule.
Second, the new rule modifies the rule language from current §355.8065
to account for changes required with the adoption of the Centers for
Medicare and Medicaid Services' (CMS) DSH audit rule published on
December 19, 2008, in the Federal Register, Vol.
73, No. 245, made effective on January 19, 2009. The federal DSH audit
rule incorporates new reporting requirements and audit requirements
that states must adhere to in order to be eligible to receive federal
DSH funds. Under the new federal DSH audit rule, an independent certified
audit must be performed for each completed Medicaid State Plan rate
year beginning with the 2005 DSH program year. The audits will determine
whether HHSC computed hospital-specific DSH limits in accordance with
the stricter DSH audit rule definitions and whether the payments made
to any hospital exceeded the audited hospital-specific limits. Beginning
with the 2011 DSH program year, HHSC will recoup DSH overpayments
made to individual hospitals identified during the audit process and
redistribute the recouped funds to other qualified DSH hospitals,
if sufficient amounts of uncompensated care expenses are available
for additional DSH payments.
Third, proposed new §355.8065 does not include the language
in current §§355.8065(f)(2), 355.8065(i), and 355.8067(j),
which relate to Medicaid reform initiatives set out in Chapter 531,
Texas Government Code, Subchapter N, Texas Health Opportunity Pool
Trust Fund. HHSC is removing this language because the Medicaid reform
initiatives were contingent on CMS's approval of Texas' Medicaid reform
waiver, which is still pending.
Finally, HHSC adds language to clarify current practices and expands
the definition section in proposed new §355.8065 to better explain
the complex processes used in the DSH reimbursement program.
Section-by-Section Summary of new §355.8065
Subsection (a) is a high-level summary of the DSH program.
Subsection (b), the definition subsection, retains some prior definitions
and adds definitions related to the new federal DSH audit requirements.
Beginning in 2011, definitions for "DSH data year" and "DSH program
year" will coincide with the federal fiscal year beginning in 2011.
Subsection (c) defines DSH program eligibility requirements, with
emphasis on application timelines. Subsection (c)(3)(E) contains new
language describing the treatment of merged hospitals in each DSH
program year.
Subsection (d) outlines the criteria and sources of data used to
determine if a Medicaid hospital qualifies to participate in the DSH
program. Qualification methodologies used in DSH calculations are
clarified in the proposed rule language. Many of the calculations
refer to the newly defined DSH program year and/or DSH data year.
Subsection (e) sets out the conditions for participation in the
DSH program. A hospital must certify during the annual DSH application
process that, as of the date of the certification, it meets and will
continue to meet the conditions of participation during the DSH program
year. Subsection (e)(6) requires compliance with the new federal audit
requirements, which are set out in subsection (o) of the new rule.
Subsection (f) clarifies elements used to calculate a hospital-specific
limit, including uninsured costs, Medicaid shortfall, and ratio of
cost-to-charges. Federal audit rules require that payments received
for emergency health services furnished to undocumented aliens under
Section 1011 of the Medicare Prescription Drug, Improvement and Modernization
Act of 2003, Pub. L. No. 108-173, be included on the DSH application.
Subsection (f)(2)(B) defines the Medicaid shortfall calculation. The
Medicaid shortfall calculation includes charges and payments for dually
eligible patients. The rule language also specifies that charges and
payments included in the calculation of the Medicaid shortfall will
be limited to covered Medicaid services and that claims submitted
after the filing deadline will be excluded from the calculation. Subsection
(f)(2)(C) changes the time period for which inflation factors will
be applied in order to coincide with the DSH data year. Also, all
time periods were changed to reflect the DSH program year or DSH data
year, as applicable.
Subsection (g) explains that Texas receives an annual allotment
of DSH federal funds to allocate to qualified hospitals in the DSH
program. This subsection describes how the state allocates DSH funds
between state and non-state hospitals.
Subsection (h) describes how DSH payments are calculated for qualifying
hospitals and how frequently HHSC makes DSH payments to qualified
hospitals. The subsection describes how individual hospitals will
work with the state's Medicaid contractors to resolve data issues
prior to the start of each DSH program year for which payments are
calculated.
Subsection (i) clarifies that if a hospital is located in a federally
declared natural disaster area, it may request special consideration
in the calculation of its qualification for the DSH program. The rule
language specifies how a hospital may apply for this consideration
and how HHSC will determine qualification under this subsection.
Subsection (j) requires that HHSC notify each hospital applicant
of its eligibility, qualification, and estimated payment amount. Subsection
(j) also provides that a hospital may request a review of its ineligibility
or disqualification for DSH payments or its estimated DSH payment
amounts. The subsection also describes the review process, including
the acceptable grounds for review and the procedure and timelines
for requesting a review.
Subsection (k) discusses why and how DSH funds are held in reserve.
Subsection (k) also provides that a hospital may request a review
by HHSC if DSH payments are held in reserve.
Subsection (l) describes the recoupment and redistribution of DSH
funds if an overpayment has been made to a hospital.
Subsection (m) specifies that, if a hospital fails to maintain
and provide adequate documentation to support its data, HHSC will
exclude those data from DSH calculations for that hospital.
Subsection (n) discusses the eligibility of hospitals that voluntarily
withdraw from the DSH program for future DSH payments.
Subsection (o) provides an overview of the DSH audit process. Subsection
(o)(1) discusses the new, federally required audits. Subsection (o)(1)(F)
allows HHSC to recover from an audited hospital the costs of such
audit.
Other changes were made throughout the rule to update references,
move language, and reorder provisions as necessary to reflect changes.
Fiscal Note
Thomas M. Suehs, Deputy Executive Commissioner for Financial Services,
has determined that for the first five-year period the proposed rules
are in effect, there would be a cost to the state of $2,352,607 in
general revenue each year as a result of enforcing or administering
the rules. The agency would be required to hire an independent audit
firm to audit the final DSH hospital-specific limits and payments
for each DSH program year and additional staff would be needed. If
HHSC recovers from audited hospitals the costs of such audits, the
impact to general revenue would be zero, as the state share of the
cost of the DSH audits would be funded with recovered costs. The amount
of DSH funds allocated to each state is determined by the federal
government and HHSC does not anticipate that the changes proposed
in this rule will impact the total DSH funds received by the state.
The proposed rules will not result in any fiscal implications for
local health and human services agencies. Local governments will not
incur additional costs.
Small Business and Micro-Business Impact Analysis
HHSC has 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 the rules.
There are no anticipated economic costs to persons who are required
to comply with the proposed rules. There is no anticipated negative
impact on local employment.
Language in the proposed new rule will allow HHSC to recover audit
costs that HHSC incurs, which will offset the costs of the federal
DSH audits.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that for
each of the first five years the rules are in effect, the public benefit
expected as a result of enforcing the rules will be that the state
will conform to the federal audit requirements relating to the DSH
program. In addition, the revisions contained in the proposed new
rule are made to assist interested parties in understanding the DSH
reimbursement methodology by providing clearer language that can be
more easily understood.
Regulatory Analysis
HHSC has determined that this proposal is not a "major environmental
rule" as defined by §2001.0225 of the Texas Government Code.
A "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
Written comments on the proposal may be submitted to Diana Miller,
Senior Rate Analyst in the Rate Analysis Department, by mail at HHSC
Rate Analysis, Mail Code H-400, P.O. Box 85200, Austin, TX 78708-5200,
by fax to (512) 491-1436, or by e-mail to diana.miller@hhsc.state.tx.us
within 30 days of publication of this proposal in the
Texas Register.
Public Hearing
A public hearing is scheduled for July 14, 2009, from 8:00 a.m.
to 12:00 p.m. in the HHSC Lone Star Conference Room at 11209 Metric
Boulevard, Austin, Texas 78758. Persons requiring further information,
special assistance, or accommodations should contact Diana Miller
at (512) 491-1436.
1 TAC §355.8065, §355.8067
(Editor's note: The text of the following sections proposed
for repeal will not be published. The sections may be examined in
the offices of the Texas Health and Human Services Commission or in
the Texas Register office, Room 245, James Earl Rudder Building, 1019
Brazos Street, Austin, Texas.)
Statutory Authority
The repeals are proposed under Texas Government Code §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules
necessary to carry out HHSC's duties; Human Resources Code §32.021
and Texas Government Code §531.021(a), which provide HHSC with
the authority to administer the federal medical assistance (Medicaid)
program in Texas; and Texas Government Code §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 (Medicaid) payments under Human Resources Code
Chapter 32.
The proposal affects Texas Government Code Chapter 531 and Human
Resources Code Chapter 32. No other statutes, articles, or codes are
affected by this proposal.
§355.8065.Additional Reimbursement to Disproportionate Share Hospitals.
§355.8067.Disproportionate Share Hospital Reimbursement Methodology for State-Owned Teaching Hospitals.
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 22, 2009.
TRD-200902562
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
1 TAC §355.8065
Statutory Authority
The new rule is proposed under Texas Government Code §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules
necessary to carry out HHSC's duties; Human Resources Code §32.021
and Texas Government Code §531.021(a), which provide HHSC with
the authority to administer the federal medical assistance (Medicaid)
program in Texas; and Texas Government Code §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 (Medicaid) payments under Human Resources Code
Chapter 32.
The proposal affects Texas Government Code Chapter 531 and Human
Resources Code Chapter 32. No other statutes, articles, or codes are
affected by this proposal.
§355.8065.Disproportionate Share Hospital (DSH) Reimbursement Methodology.
(a) Introduction. Hospitals participating in the Texas
Medical Assistance (Medicaid) program that meet the conditions of
participation and that serve a disproportionate share of low-income
patients are eligible for additional reimbursement from the disproportionate
share hospital (DSH) fund. HHSC will establish each hospital's eligibility
for and amount of reimbursement. This section applies to all hospitals
that participate in the DSH program.
(b) Definitions. For the purposes of this section,
the following words and terms have the following meanings unless the
context clearly indicates otherwise.
(1) Adjudicated claim--A hospital claim for payment
for a covered Medicaid service that is paid or adjusted by HHSC or
another payer.
(2) Available DSH funds--The annual allotment of funds
that may be reimbursed to all DSH-eligible providers.
(3) Bad debt--A debt arising when there is nonpayment
on behalf of an individual who has third-party coverage.
(4) Centers for Medicare and Medicaid Services (CMS)--The
federal agency within the United States Department of Health and Human
Services responsible for overseeing and directing Medicare and Medicaid.
(5) Charity care--The unreimbursed cost to a hospital
of providing, funding, or otherwise financially supporting health
care services on an inpatient or outpatient basis to indigent individuals,
either directly or through other nonprofit or public outpatient clinics,
hospitals, or health care organizations. A hospital must set the income
level for eligibility for charity care consistent with the criteria
established in §311.031, Texas Health and Safety Code.
(6) Charity charges--Total amount of hospital charges
for inpatient and outpatient services attributed to charity care in
a DSH data year. These charges do not include bad debt charges, contractual
allowances, or discounts given to other legally liable third-party payers.
(7) Children's hospital--A hospital within Texas that
is recognized by Medicare as a children's hospital and is exempted
by Medicare from the Medicare prospective payment system.
(8) Disproportionate share hospital--A hospital identified
by HHSC that meets the Disproportionate Share Hospital (DSH) program
conditions of participation and that serves a disproportionate share
of Medicaid and/or indigent patients.
(9) DSH data year--A twelve-month period from which
HHSC will compile data to determine DSH program qualification and payment.
(A) For DSH program year 2010, the DSH data year will
be each hospital's fiscal year ending in calendar year 2008.
(B) For DSH program years beginning in 2011 and thereafter,
the DSH data year will be October 1 through September 30 two years
prior to the DSH program year. For example, the DSH data year is 2009
(October 1, 2008 - September 30, 2009) for the 2011 DSH program year
(October 1, 2010 - September 30, 2011).
(10) DSH program year--The twelve-month period beginning
October 1 and ending September 30. This corresponds with the Medicaid
state plan rate year.
(11) Dually eligible patient--A patient who is simultaneously
eligible for Medicare and Medicaid. The term excludes a Medicare beneficiary
for whom Medicaid pays only Medicare deductibles, coinsurance, Medicare
Part A premiums, or Medicare Part B premiums.
(12) HHSC--The Texas Health and Human Services Commission
or its designee.
(13) Hospital fiscal year--A twelve-month accounting
period designated by a hospital.
(14) Hospital-specific limit--The maximum amount a
hospital may receive in a DSH program year, based on costs arising
from individuals receiving hospital services who are Medicaid eligible
or uninsured, not costs arising from individuals who have third-party
coverage.
(A) An interim hospital-specific limit will be trended
forward to the DSH program year using an inflation update factor to
account for inflation since the DSH data year.
(B) A final hospital-specific limit will be calculated
using actual DSH program year cost and payment data.
(15) Independent certified audit--An audit that is
conducted by an auditor that operates independently from the Medicaid
agency and the audited hospitals and that is eligible to perform the
DSH audit required by CMS.
(16) Indigent individual--An individual classified
by a hospital as eligible for charity care.
(17) Inflation update factor--Cost of living index
based on the annual CMS Prospective Payment System Hospital Market
Basket Index.
(18) Inpatient day--Each day that an individual is
an inpatient in the hospital, whether or not the individual is in
a specialized ward and whether or not the individual remains in the
hospital for lack of suitable placement elsewhere. The term includes
observation days, rehabilitation days, psychiatric days, and newborn
days. The term does not include swing bed days or skilled nursing
facility days.
(19) Inpatient revenue--Amount of gross inpatient revenue
(charges) derived from the most recent completed Medicaid cost report
or reports related to the applicable DSH data year. Gross inpatient
revenue excludes revenue related to the professional services of hospital-based
physicians, swing bed facilities, skilled nursing facilities, intermediate
care facilities, other nonhospital revenue, and revenue not identified
by the hospital.
(20) Institution for Mental Disease (IMD)--A hospital
that is primarily engaged in providing psychiatric diagnosis, treatment,
or care of individuals with mental illness.
(21) Low-income days--Number of inpatient days attributed
to indigent patients.
(22) Low-income utilization rate--A DSH qualification
criterion calculated as described in subsection (d)(2) of this section.
(23) Mean Medicaid inpatient utilization rate--The
average of all active Medicaid hospitals' Medicaid inpatient utilization rates.
(24) Medicaid contractor--Fiscal agents and managed
care organizations with which HHSC contracts to process data related
to the Medicaid program.
(25) Medicaid cost report--Hospital and Hospital Health
Care Complex Cost Report (Form CMS 2552), also known as the Medicare
cost report.
(26) Medicaid hospital--A hospital meeting the qualifications
set forth in §354.1077 of this title (relating to Provider Participation
Requirements) to participate in the Texas Medical Assistance program.
(27) Medicaid inpatient utilization rate--A DSH qualification
criterion calculated as described in subsection (d)(1) of this section.
(28) Medicaid shortfall--The unreimbursed cost of Medicaid
eligible services (inpatient and outpatient) that a hospital furnishes
to Medicaid patients.
(29) Medicaid state plan rate year--The twelve-month
period corresponding to the DSH program year.
(30) MSA--Metropolitan Statistical Area as defined
by the United States Office of Management and Budget. MSAs with populations
greater than or equal to 121,000, according to the most recent decennial
census, are considered "the largest MSAs."
(31) Obstetrical services--The medical care of a woman
during pregnancy, delivery, and the post-partum period provided at
the hospital listed on the DSH application.
(32) PMSA--Primary Metropolitan Statistical Area as
defined by the United States Office of Management and Budget.
(33) Ratio of cost-to-charges (inpatient only)--An
all-payer ratio that covers all applicable hospital costs and charges
relating to inpatient care. This ratio does not distinguish between
payer types such as Medicare, Medicaid, or private pay.
(34) Ratio of cost-to-charges (inpatient and outpatient)--A
Medicaid cost report-derived all-payer ratio that covers all applicable
hospital costs and charges relating to patient care, inpatient and
outpatient. This ratio does not distinguish between payer types such
as Medicare, Medicaid, or private pay.
(35) Rural area--Area outside an MSA or a PMSA.
(36) State chest hospital--A public health facility
operated by the Department of State Health Services designated for
the care and treatment of patients with tuberculosis.
(37) State fiscal year--September 1 through August 31.
(38) State-owned teaching hospital--A hospital owned
and operated by a state university or other state agency.
(39) Third-party coverage--Creditable insurance coverage
consistent with the definitions in 45 Code of Federal Regulations
(CFR) Parts 144 and 146, or coverage based on a legally liable third-party
payer.
(40) Total Medicaid inpatient days--Total number of
inpatient days based on adjudicated claims data for covered services
for state fiscal year 2008 for DSH program year 2010. Beginning with
DSH program year 2011, the relevant DSH data year will be used for
Medicaid-eligible patients.
(A) The term includes:
(i) Medicaid-eligible days of care adjudicated by managed
care organizations;
(ii) days that were denied payment for spell-of-illness
limitations;
(iii) days attributable to individuals eligible for
Medicaid in other states, including dually eligible patients;
(iv) days with adjudicated dates during the period; and
(v) days for dually eligible patients.
(B) The term excludes:
(i) days attributable to Medicaid patients between
the ages of 21 and 65 in an IMD; and
(ii) days denied for late filing and other reasons.
(41) Total Medicaid inpatient hospital payments--Total
amount of Medicaid funds that a hospital received for adjudicated
claims for inpatient services during the DSH data year. The term includes
payments that the hospital received:
(A) for inpatient services from managed care organizations; and
(B) for patients eligible for Medicaid in other states.
(42) Total state and local revenue--Total amount of
state and local payments that a hospital received for inpatient care
during the DSH data year. The term includes payments under state and
local programs that are funded entirely with state general revenue
funds and state or local tax funds, such as County Indigent Health
Care, Children with Special Health Care Needs, Kidney Health Care,
and certain Children's Health Insurance Program (CHIP) payments. The
term excludes payment sources that contain federal dollars such as
Medicaid payments, Children's Health Insurance Program (CHIP) payments
funded under Title XXI of the Social Security Act, Substance Abuse
and Mental Health Services Administration, Ryan White Title I, Ryan
White Title II, Ryan White Title III, and contractual discounts and
allowances related to TRICARE, Medicare, and Medicaid.
(43) Uninsured cost--The cost to a hospital of providing
health care services to uninsured patients.
(44) Uninsured patient--An individual who has no health
insurance or other source of third-party coverage for services. Subject
to federal statutes and regulations, an individual whose third-party
coverage does not include the service provided is considered by HHSC
to be uninsured for that service.
(45) Upper Payment Limit (UPL) program--Supplemental
Medicaid payments made to certain eligible hospitals for inpatient
and outpatient services based on State and Federal guidelines.
(46) Urban area--Area inside an MSA or PMSA.
(47) Weighted low-income days--Low-income days that
are adjusted based on the population of the MSA or PMSA in which a
hospital is located.
(48) Weighted Medicaid days--Medicaid days that are
adjusted based on the population of the MSA or PMSA in which a hospital
is located.
(c) Eligibility. To be eligible to participate in the
DSH program, a hospital must:
(1) be enrolled as a Medicaid hospital in the State
of Texas;
(2) have received a Medicaid payment for a claim that
was adjudicated during the relevant time period:
(A) for DSH program year 2010, adjudicated during state
fiscal year 2008; and
(B) beginning with DSH program year 2011 and thereafter,
adjudicated during the relevant DSH data year.
(3) apply annually by completing the application packet
received from HHSC by the deadline specified in the packet.
(A) Only a hospital that meets the condition specified
in paragraph (2) of this subsection will receive an application packet
from HHSC.
(B) The application may request self-reported data
that HHSC deems necessary to determine each hospital's eligibility.
HHSC may audit self-reported data.
(C) A hospital that fails to submit a completed application
by the deadline specified by HHSC will not be eligible to participate
in the DSH program in the year being applied for or to appeal HHSC's
decision.
(D) For purposes of DSH eligibility, a multi-site hospital
is considered one provider unless it submits separate Medicaid cost
reports for each site. If a multi-site hospital submits separate Medicaid
cost reports for each site, for purposes of DSH eligibility, it must
submit a separate DSH application for each eligible site.
(E) HHSC will consider a merger of two or more hospitals
for purposes of the DSH program for any hospital that submits a CMS
tie-in notice prior to the DSH program year. Otherwise, HHSC will
determine the merged entity's eligibility for the subsequent DSH program
year. Until the time that the merged hospitals are determined eligible
for payments as a merged hospital, each of the merging hospitals will
continue to receive any DSH payments to which it was entitled prior
to the merger.
(d) Qualification. For each DSH program year, in addition
to meeting the eligibility requirements, applicants must meet at least
one of the following qualification criteria, which are determined
using information from a hospital's application, the annual hospital
survey conducted under Chapter 311, Health and Safety Code, or from
HHSC's Medicaid contractors, as specified by HHSC:
(1) Medicaid inpatient utilization rate. A hospital's
inpatient utilization rate is calculated by dividing the hospital's
Medicaid inpatient days by its total inpatient census days for the
DSH data year.
(A) Rural hospital: A rural hospital must have a Medicaid
inpatient utilization rate greater than the mean Medicaid inpatient
utilization rate for all Medicaid hospitals.
(B) Urban hospital: An urban hospital must have a Medicaid
inpatient utilization rate that is at least one standard deviation
above the mean Medicaid inpatient utilization rate for all Medicaid
hospitals.
(2) Low-income utilization rate. A hospital must have
a low-income utilization rate greater than 25 percent.
(A) The low-income utilization rate is the sum (expressed
as a percentage) of the fractions calculated in clauses (i) and (ii)
of this subparagraph:
(i) The sum of the total Medicaid inpatient hospital
payments and the total state and local revenue paid to the hospital
for inpatient care in the DSH data year, divided by a hospital's gross
inpatient revenue multiplied by the hospital's ratio of cost-to-charges
(inpatient only) for the same period: (Medicaid Inpatient Hospital
Payments + Total State and Local Revenue)/(Gross Inpatient Revenue
x Ratio of Costs to Charges).
(ii) Inpatient charity charges in the DSH data year
minus the amount of payments for inpatient hospital services received
directly from state and local governments, excluding all Medicaid
payments, in the DSH data year, divided by the gross inpatient revenue
in the same period: (Total Inpatient Charity Charges - Total State
and Local Payments)/Gross Inpatient Revenue.
(iii) If a hospital fails to allocate state and local
tax revenue between inpatient and outpatient revenue, HHSC will make
the proportional allocation using data contained in the latest available
Medicaid cost report(s) or Medicaid cost report for the DSH data year.
(B) HHSC will determine the ratio of cost-to-charges
(inpatient only) as follows:
(i) HHSC will first compute the ratio of total inpatient
revenue to total patient revenue using Worksheet G-2, Part I, of the
Medicaid cost report.
(ii) The total costs from Worksheet B, Part I, are
then multiplied by this computed ratio to determine the total inpatient
costs.
(iii) To calculate the ratio of cost-to-charges (inpatient
only), HHSC will divide the computed inpatient costs of Worksheet
B, Part I, by the inpatient revenue of Worksheet G-2, Part I.
(iv) HHSC will exclude those inpatient costs and inpatient
revenue for nonhospital services such as ambulance, rural health clinics,
primary home care, home health agencies, hospice, and skilled nursing
facilities.
(3) Medicaid inpatient days.
(A) A hospital must have Medicaid inpatient days at
least one standard deviation above the mean Medicaid inpatient days
for all hospitals participating in the Medicaid program, except;
(B) A hospital in an urban county with a population
of 250,000 persons or fewer, according to the most recent decennial
census, must have Medicaid inpatient days at least 70 percent of the
sum of the mean Medicaid inpatient days for hospitals in this subset
plus one standard deviation above that mean.
(4) Children's hospitals. Children's hospitals that
do not otherwise qualify as disproportionate share hospitals will
be deemed disproportionate share hospitals.
(5) Merged hospitals. Merged hospitals are subject
to subsection (c)(3)(E) of this section. HHSC will aggregate the data
used to determine qualification under this subsection from the merged
hospitals to determine whether the single Medicaid provider that results
from the merger qualifies as a Medicaid disproportionate share hospital.
(e) Conditions of participation. HHSC will require
each hospital to certify during the application process that, as of
the date of the certification, it meets and will continue to meet
during the DSH program year the following conditions of participation:
(1) Two-physician requirement. A hospital must have
at least two licensed physicians (doctor of medicine or osteopathy)
who have hospital staff privileges and who have agreed to provide
nonemergency obstetrical services to individuals who are entitled
to medical assistance for such services. The two-physician requirement
does not apply to a children's hospital or to a hospital that was
operating but did not offer nonemergency obstetrical services as of
December 22, 1987.
(2) Medicaid inpatient utilization rate. Each hospital
must have a Medicaid inpatient utilization rate of at least one percent.
A hospital's inpatient utilization rate is calculated by dividing
the hospital's Medicaid inpatient days by its total inpatient census days.
(3) Trauma system.
(A) Disproportionate share hospitals must obtain and
maintain a trauma facility designation as defined in §§773.111
- 773.120, Health and Safety Code, and consistent with 25 TAC §157.125
(relating to Requirements for Trauma Facility Designation).
(B) HHSC will receive an annual report from the Office
of EMS/Trauma Systems Coordination regarding hospital participation
in regional trauma system development, application for trauma facility
designation, and trauma facility designation status. HHSC will use
this report to confirm compliance with this condition of participation
by a hospital applying for DSH funds.
(4) Maintenance of local funding effort. A hospital
district in one of the state's largest MSAs or in a PMSA must not
reduce local tax revenues to its associated hospitals as a result
of disproportionate share funds received by the hospital. For this
provision to apply, the hospital must have more than 250 licensed beds.
(5) Access to records. HHSC must have access to the
hospital's records and accounting systems during regular business hours.
(6) Compliance with audit requirements. A hospital
must agree to comply with the audit requirements described in subsection
(o) of this section.
(7) Merged hospitals. Merged hospitals are subject
to subsection (c)(3)(E) of this section. If HHSC receives the CMS
tie-in notice prior to the DSH program year, the merged entity must
meet all conditions of participation. If HHSC does not receive the
CMS tie-in notice prior to the DSH program year, any proposed merging
hospitals that are receiving DSH payments must continue to meet all
conditions of participation as individual hospitals to continue receiving
DSH payments for the remainder of the DSH program year.
(f) Calculating a hospital-specific limit. Using information
from each hospital's DSH application and HHSC's Medicaid contractors,
HHSC annually will determine the interim hospital-specific limit for
each hospital applying for DSH funds in compliance with paragraphs
(1) - (3) of this subsection. HHSC will also determine the final hospital-specific
limit in compliance with paragraph (4) of this subsection.
(1) HHSC will calculate a hospital's interim hospital-specific
limit by adding the hospital's net uninsured costs and its Medicaid
shortfall, both adjusted for inflation.
(2) HHSC will determine the individual components of
the hospital-specific limit as follows:
(A) Uninsured costs.
(i) Each hospital will report in its DSH application
its inpatient and outpatient charges incurred for services to uninsured
patients admitted during the DSH data year.
(ii) Each hospital will report in its DSH application
all payments received for services to uninsured patients admitted
during the DSH data year.
(I) For purposes of this rule, a payment received is
any payment from an uninsured patient or from a third party (other
than an insurer) on the patient's behalf, including payments received
for emergency health services furnished to undocumented aliens under
section 1011 of the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003, Pub. L. No. 108-173, except that;
(II) State and local payments to hospitals for indigent
care are not included as payments made by or on behalf of uninsured patients.
(iii) HHSC will convert uninsured charges to uninsured
costs using the ratio of cost-to-charges (inpatient and outpatient)
as calculated under paragraph (3) of this subsection.
(iv) HHSC will subtract all payments received under
clause (ii) of this subparagraph from the uninsured costs under clause
(iii) of this subparagraph, resulting in net uninsured costs.
(B) Medicaid shortfall.
(i) HHSC will request from its Medicaid contractors
the inpatient and outpatient Medicaid charge and payment data for
claims adjudicated during the DSH data year for all active Medicaid
participating hospitals. There are circumstances, including the following,
in which HHSC will request modifications to the adjudicated data.
(I) HHSC will include as appropriate:
(-a-) Charges and payments associated with the care
of dually eligible patients, including Medicare charges and payments; and
(-b-) Charges for claims or portions of claims that
were not paid because they exceeded the spell-of-illness limitation.
(II) HHSC will exclude:
(-a-) Charges associated with services not covered
by Medicaid; and
(-b-) Charges associated with claims submitted after
the 95-day filing deadline.
(ii) Upon receipt of the requested data from the Medicaid
contractors, HHSC will review the information for accuracy and make
additional adjustments as necessary.
(iii) HHSC will convert the Medicaid charges to Medicaid
costs using the ratio of cost-to-charges (inpatient and outpatient)
as calculated under paragraph (3) of this subsection.
(iv) HHSC will subtract each hospital's Medicaid payments,
including cost report settlements and graduate medical education payments,
from its Medicaid costs. For purposes of calculating the interim hospital-specific
limit for non-state hospitals, supplemental payments received under
the Upper Payment Limit program are not included in the hospital's
Medicaid payments.
(v) If a hospital's payments are less than its costs,
the hospital has a positive Medicaid shortfall. If a hospital's payments
are greater than its costs, the hospital has a negative Medicaid shortfall.
(C) Inflation adjustment.
(i) HHSC will trend each hospital's hospital-specific
limit using the inflation update factor as defined in subsection (b)(17)
of this section.
(ii) HHSC will use the inflation update factors for
the period beginning at the midpoint of each DSH data year to the
midpoint of the DSH program year.
(iii) HHSC will multiply each hospital's sum of the
net uninsured costs and Medicaid shortfall by the inflation update
factor to obtain its interim hospital-specific limit.
(3) Ratio of cost-to-charges. HHSC will calculate the
ratio of cost-to-charges used in setting hospital-specific limits
in conformity with the following conditions and procedures:
(A) HHSC will convert the total Medicaid charges related
to adjudicated claims for each hospital to cost, utilizing a calculated
ratio of cost-to-charges (inpatient and outpatient). The ratio is
the total allowable costs divided by the total allowable charges,
as described in subparagraph (C) of this paragraph.
(B) HHSC will calculate the ratio of cost-to-charges
using information from the hospital's Medicaid cost report or reports
corresponding to the DSH data year. In the absence of a Medicaid cost
report for that period, HHSC will use the latest available submitted
Medicaid cost report or reports.
(C) To determine the ratio of cost-to-charges (inpatient
and outpatient) for each hospital, HHSC will divide the costs reported
on the Medicaid cost report, Worksheet B, Part 1, by the total charges
reported on Worksheet C, Part 1. HHSC will exclude those costs and
charges for nonhospital services such as ambulance, rural health clinics,
primary home care, home health agencies, hospice, and skilled nursing
facilities.
(4) Final hospital-specific limit.
(A) HHSC will calculate the individual components of
a hospital's final hospital-specific limit using the calculation set
out in paragraphs (2) and (3) of this subsection, except that:
(i) HHSC will use the hospital's actual costs incurred
and payments received during the DSH program year.
(ii) HHSC will include supplemental payments made under
the Upper Payment Limit program in the computation of each hospital's
Medicaid shortfall.
(iii) HHSC will use the actual ratio of cost-to-charges
for the DSH program year for each hospital.
(B) The final hospital-specific limit will be used
in the audit conducted under subsection (o) of this section.
(g) Distribution of available DSH funds. DSH payments
are subject to the availability of appropriated state and federal
funds. Before the start of each DSH program year, CMS publishes the
federal DSH allotment for each state. Based on CMS's DSH allotment
for Texas, and subject to appropriated state funds and other factors,
HHSC will determine the total amount of DSH funds that will be available
for distribution to eligible qualifying DSH hospitals during the DSH
program year. HHSC will distribute the available DSH funds among such
hospitals using the following priorities:
(1) State-owned teaching hospitals and state chest
hospitals. HHSC may reimburse state-owned teaching hospitals and state
chest hospitals an amount less than or equal to their interim hospital-specific
limits.
(2) IMDs.
(A) Limits. Aggregate payments made to IMD facilities
statewide are subject to federally mandated reimbursement limits.
(B) State IMDs. HHSC may reimburse a state-owned or
state-operated IMD an amount less than or equal to its interim hospital-specific
limit.
(C) Non-state IMDs. A non-state IMD is reimbursed as
other non-state hospitals as described in subsection (h)(2) of this
section.
(D) Amount. A non-state IMD that satisfies the DSH
requirements and provides inpatient psychiatric services receives
up to 100 percent of its interim hospital-specific limit within available
DSH funds. If sufficient DSH funds are not available to fully fund
interim hospital-specific limits, each hospital's funding is adjusted
pro rata within the DSH funds available under federal law as described
in subparagraph (A) of this paragraph.
(3) Other non-state hospitals. HHSC distributes the
remaining DSH funds, if any, to other qualifying hospitals. The available
DSH funds for the remaining hospitals equal the lesser of the funds
remaining in the state's annual disproportionate share allotment or
the sum of qualifying hospitals' interim hospital-specific limits.
(h) DSH payment calculation and frequency.
(1) Medicaid data verification.
(A) On or about April 1 of each year, HHSC will send
each Medicaid participating hospital a report of adjudicated data
received from Medicaid contractors reflecting the hospital's Medicaid
days, Medicaid charges, and Medicaid payments during the DSH data
year.
(B) A hospital must communicate directly with the appropriate
Medicaid contractors to request correction of any data the hospital
believes is inaccurate or incomplete.
(C) Each Medicaid contractor will submit a final report
to HHSC by July 1 of each year or a date specified by HHSC, which
will include all agreed-upon corrections resulting from requests submitted
by hospitals. Unless a hospital contacts HHSC pursuant to subparagraph
(D) of this paragraph, HHSC will use the corrected report for DSH
calculations described in this rule.
(D) At a hospital's request, HHSC will review instances
in which a hospital and a Medicaid contractor cannot resolve disputes
concerning data included in or excluded from the final report. HHSC
will make the final determination in such a case and notify the hospital
of the final determination.
(E) A hospital's right to request a review of eligibility,
qualification, and estimated payment amount is addressed in subsection
(j) of this section.
(2) Payment calculation for non-state hospitals. HHSC
will calculate payments for a non-state hospital in the following
manner unless the hospital's proposed reimbursement would exceed its
interim hospital-specific limit. Payments will be made based on inpatient
Medicaid days and low-income days, both of which have been weighted
by the factors described in subparagraph (C) of this paragraph.
(A) Inpatient Medicaid days. HHSC will base each hospital's
inpatient Medicaid days on the data reported by HHSC's Medicaid contractors.
For DSH program year 2010, the data will come from state fiscal year
2008, and beginning with DSH program year 2011, the data will come
from the relevant DSH data year.
(B) Low-income days. HHSC will calculate low-income
days by multiplying a hospital's total inpatient census days for the
DSH data year by its low-income utilization rate.
(C) Weighting factors. All MSA population data which
are used to determine the weighting factors are from the most recent
decennial census.
(i) Children's hospitals are weighted at 1.25 because
of the special nature of the services they provide.
(ii) Hospitals with more than 250 licensed beds, associated
with hospital districts in the state's largest MSAs, will receive
weights based proportionally on the MSA population. The specific weights
for these hospitals are as follows:
(I) MSAs with populations greater than or equal to
121,000 and less than 300,000 are weighted at 2.5.
(II) MSAs with populations greater than or equal to
300,000 and less than 1,000,000 are weighted at 2.75.
(III) MSAs with populations greater than or equal to
1,000,000 and less than 3,000,000 are weighted at 3.0.
(IV) MSAs with populations greater than or equal to
3,000,000 are weighted at 3.5.
(iii) The weighting factor for all other hospitals is 1.0.
(iv) HHSC may change the weights as needed in the DSH
program to address changes in program size.
(D) Allocation of DSH funds to non-state urban and
rural hospitals.
(i) HHSC will divide the amount determined in subsection
(g)(3) of this section into two parts:
(I) One-half of the funds will reimburse each qualifying
hospital by its percent of the total inpatient Medicaid days.
(II) One-half of the funds will reimburse each qualifying
hospital by its percent of low income days.
(ii) After applying clause (i) of this subparagraph,
HHSC will test to determine whether qualifying hospitals in rural
areas will receive 5.5 percent or more of the funds determined in
subsection (g)(3) of this section.
(I) If hospitals in rural areas receive at least 5.5
percent of the funds, HHSC will reimburse them as calculated in clause
(i) of this subparagraph.
(II) If hospitals in rural areas will not receive at
least 5.5 percent of the funds, HHSC will allocate 5.5 percent of
the funds in subsection (g)(3) of this section for reimbursement of
such hospitals. After the reallocation of funds to meet the 5.5 percent
test, HHSC will determine payment amounts to each urban and rural
hospital, as described in clause (i) of this subparagraph.
(3) DSH distribution methodology for non-state hospitals.
(A) HHSC will calculate the number of weighted Medicaid
inpatient days and weighted low-income days for each qualifying hospital
as described in paragraph (2) of this subsection.
(B) Using the results obtained under subparagraph (A)
of this paragraph, HHSC will calculate each qualifying hospital's
annual DSH payment based on the following formula:
Figure: 1 TAC §355.8065(h)(3)(B)
(C) HHSC will compare the projected payment for each
qualifying hospital with its interim hospital-specific limit. If the
hospital's projected payment is greater than its interim hospital-specific
limit, HHSC will reduce the hospital's payment to its interim hospital-specific
limit.
(D) If there are funds remaining out of the total available
DSH funds because some hospitals have had their DSH payments reduced
to their interim hospital-specific limits, HHSC will distribute the
excess funds to qualifying hospitals that had projected payments below
their interim hospital-specific limits as follows. HHSC will:
(i) Calculate the difference between a hospital's interim
hospital-specific limit and its projected DSH payment;
(ii) Add all of the differences from clause (i) of
this subparagraph;
(iii) Calculate a ratio for each hospital by dividing
the difference from clause (i) of this subparagraph by the sum from
clause (ii) of this subparagraph; and
(iv) Multiply the ratio from clause (iii) of this subparagraph
by the remaining available DSH funds.
(E) Each hospital's total DSH payment (including the
redistribution of excess funds) may not exceed its interim hospital-specific
limit.
(4) Payment Frequency. HHSC may reimburse DSH qualifying
hospitals on a monthly basis. Monthly payments equal one-twelfth of
annual payments unless it is necessary to adjust the amount because
payments are not made for a full 12-month period, to comply with the
annual state disproportionate share hospital allotment, or to comply
with other state or federal disproportionate share hospital program
requirements.
(5) If a hospital that is receiving DSH funds closes,
loses its license, or loses its Medicare or Medicaid eligibility during
a DSH program year, HHSC will reallocate that hospital's disproportionate
share funds going forward among all DSH providers that are eligible
for additional payments.
(i) Hospital located in a federal natural disaster
area. A hospital that is located in a county that is declared a federal
natural disaster area and that was participating in the DSH program
at the time of the natural disaster may request that HHSC determine
its DSH qualification and payment amount under this subsection for
the next DSH program year. The following conditions and procedures
will apply to all such requests received by HHSC:
(1) The hospital must submit its request in writing
to HHSC with its annual DSH application.
(2) If HHSC approves the request, HHSC will determine
the hospital's DSH qualification using the hospital's data from the
DSH data year prior to the natural disaster. However, HHSC will calculate
the one percent Medicaid minimum utilization rate, the interim hospital-specific
limit, and the payment amount using data from the DSH data year. The
final hospital- specific limit will be computed based on the actual
data for the DSH program year.
(3) HHSC will notify the hospital of the qualification
and payment determinations.
(4) A hospital may request an administrative review
of HHSC's qualification and payment determinations. The review will
be conducted under the provisions of subsection (j) of this section.
(j) Review of HHSC determination of eligibility, qualification,
and estimated payment amount.
(1) Prior to the first payment of the DSH program year,
HHSC will notify each hospital that applied to participate in the
DSH program whether it is eligible and qualified to participate. An
eligible hospital will be notified of its estimated annual DSH payment amount.
(2) A hospital that either does not qualify or disputes
the payment amount may request a review by HHSC in accordance with
paragraph (3) of this subsection. Initial qualification determinations
and estimated payment amounts for all hospitals may change depending
on the outcome of the review.
(3) Except as specified in paragraph (6) of this subsection,
a request for review must be submitted in writing to HHSC within 15
calendar days of the date the hospital received the notification under
this subsection.
(A) The written request for review and all supporting
documentation must be sent to HHSC's Director of Hospital Reimbursement,
Rate Analysis Department.
(B) The request must allege the specific factual or
calculation errors the hospital contends HHSC made that, if corrected,
would result in the hospital's qualifying for payments or receiving
a more accurate payment amount.
(C) Beginning with DSH program year 2011, a hospital
may not base a request for review on a claim that the data the hospital
or a Medicaid contractor submitted to HHSC is incorrect or incomplete.
The hospital will have an opportunity to resolve disputed data with
the Medicaid contractor under subsection (h)(1) of this section.
(D) The request may not dispute HHSC's eligibility,
qualification, or payment methodologies.
(E) Within 30 calendar days of the date of the notification,
the hospital must submit documentation supporting its allegations.
(4) The review is:
(A) limited to the hospital's allegations of factual
or calculation errors;
(B) supported by documentation submitted by the hospital
or used by HHSC in making its original determination;
(C) solely a paper review; and
(D) not an adversarial hearing.
(5) HHSC will notify the hospital of the results of the review.
(6) HHSC will not consider requests for review submitted
after the deadline specified in paragraph (3) of this subsection unless
HHSC subsequently notifies a hospital that it no longer qualifies
for DSH funding. In that case, the hospital may request a review in
accordance with paragraph (3) of this subsection.
(k) Disproportionate share funds held in reserve.
(1) If HHSC has reason to believe that a hospital is
not in compliance with the conditions of participation listed in subsection
(e) of this section, HHSC will notify the hospital of possible noncompliance.
Upon receipt of such notice, the hospital will have 30 calendar days
to demonstrate compliance.
(2) If the hospital demonstrates compliance within
30 calendar days, HHSC will not hold the hospital's DSH payments in reserve.
(3) If the hospital fails to demonstrate compliance
within 30 calendar days, HHSC will notify the hospital that HHSC is
holding the hospital's DSH payments in reserve. HHSC will release
the funds corresponding to any period for which a hospital subsequently
demonstrates that it was in compliance. HHSC will not make DSH payments
for any period in which the hospital is out of compliance with the
conditions of participation listed in subsection (e)(1) and (2) of
this section. HHSC may choose not to make DSH payments for any period
in which the hospital is out of compliance with the conditions of
participation listed in subsection (e)(3) - (7) of this section.
(4) If a hospital's DSH payments are being held in
reserve on the date of the last payment in the DSH program year, and
no request for review is pending under paragraph (5) of this subsection,
the amount of the payments is not restored to the hospital, but is
divided proportionately among the hospitals receiving a last payment.
(5) Hospitals that have DSH payments held in reserve
may request a review by HHSC.
(A) The hospital's written request for a review must:
(i) be sent to HHSC's Director of Hospital Reimbursement,
Rate Analysis Department;
(ii) be received by HHSC within 15 calendar days after
notification that the hospital's DSH payments are held in reserve; and
(iii) contain specific documentation supporting its
contention that it is in compliance with the conditions of participation.
(B) The review is:
(i) limited to allegations of noncompliance with conditions
of participation;
(ii) limited to a review of documentation submitted
by the hospital or used by HHSC in making its original determination; and
(iii) not conducted as an adversarial hearing.
(C) HHSC will conduct the review and notify the hospital
requesting the review of the results.
(l) Recovery of DSH funds. Notwithstanding any other
provision of this section, HHSC will recoup any overpayment of DSH
funds made to a hospital, including an overpayment that results from
HHSC error or that is identified in an audit. These funds will be
redistributed proportionately to DSH providers that are eligible for
additional payments.
(m) Failure to provide supporting documentation. HHSC
will exclude data from DSH calculations under this section if a hospital
fails to maintain and provide adequate documentation to support that data.
(n) Voluntary withdrawal from the DSH program.
(1) HHSC will recoup all DSH payments made during the
same DSH program year to a hospital that voluntarily terminates its
participation in the DSH program. HHSC will redistribute the recouped
funds according to the distribution methodology described in this
section to DSH providers eligible for additional payments.
(2) A hospital that voluntarily terminates from the
DSH program will be ineligible to receive payments for the next DSH
program year after the hospital's termination.
(3) If a hospital does not apply for DSH funding in
the DSH program year following a DSH program year in which it received
DSH funding, even though it would have qualified for DSH funding in
that year, the hospital will be ineligible to receive payments for
the next DSH program year after the year in which it did not apply.
(4) The hospital may reapply to receive DSH payments
in the second DSH program year after the year in which it did not apply.
(o) Audit process.
(1) Independent certified audit. HHSC is required by
the Social Security Act (Act) to annually complete an independent
certified audit of each hospital participating in the DSH program
in Texas. Audits will comply with all applicable federal law and directives,
including the Act, the Omnibus Budget and Reconciliation Act of 1993
(OBRA '93), the Medicare Prescription Drug, Improvement and Modernization
Act of 2003 (MMA), pertinent federal rules, and any amendments to
such provisions.
(A) Each audit report will contain the verifications
set forth in 42 CFR §455.304(d).
(B) The sources of data utilized by HHSC, the hospitals,
and the independent auditors to complete the DSH audit and report include:
(i) The Medicaid cost report;
(ii) Medicaid Management Information System data; and
(iii) Hospital financial statements and other auditable
hospital accounting records.
(C) A hospital must provide HHSC or the independent
auditor with the necessary information in the time specified by HHSC
or the independent auditor.
(D) A hospital that fails to provide requested information
or to otherwise comply with the independent certified audit requirements
may be subject to a withholding of Medicaid disproportionate share
payments or other appropriate sanctions.
(E) HHSC will recoup any overpayment of DSH funds made
to a hospital that is identified in the independent certified audit
and will redistribute the recouped funds proportionately to DSH providers
that are eligible for additional payments subject to their final hospital-specific limits.
(F) HHSC may recover from audited non-state hospitals
the costs of audits that are required by federal law.
(2) HHSC may conduct or require additional audits.
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 22, 2009.
TRD-200902564
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
1 TAC §355.8181
(Editor's note: The text of the following section proposed
for repeal will not be published. The section may be examined in the
offices of the Texas Health and Human Services Commission or in the
Texas Register office, Room 245, James Earl Rudder Building, 1019
Brazos Street, Austin, Texas.)
The Texas Health and Human Services Commission
(HHSC) proposes to repeal the Medicaid reimbursement rule, 1 TAC §355.8181,
Reimbursement (for birthing center services).
Background and Justification
The proposed repeal of 1 TAC §355.8181, Reimbursement (for
birthing center services), is a result of a federal mandate from the
Centers for Medicare and Medicaid Services (CMS), which instructed
Texas to discontinue Medicaid payments to birthing centers for services
rendered in the facility by a certified nurse midwife (CNM) or physician.
This proposed repeal of the reimbursement rule for birthing center
services will bring HHSC into compliance with the federal mandate
from CMS.
Section-by-Section Summary
The proposed repeal of §355.8181 will discontinue Medicaid
payments to birthing centers for services provided in the facility
by a CNM or physician.
Fiscal Note
Thomas Suehs, Deputy Executive Commissioner for HHSC, has determined
that during the first five-year period the repeal is in effect there
will be no significant fiscal impact as a result of the repeal of
this rule. Even though the payments to birthing centers will be discontinued,
the payments that were formerly paid to birthing centers will instead
be paid directly to the CNM, or physician, who, as a result of this
rule, will then reimburse the birthing center for the use of the facility.
Therefore, the elimination of payments to birthing centers will be
offset by the increase in rates to CNMs and physicians for services
in a birthing center. This change in payment methodology is mandated
by CMS.
Small and Micro-business Impact Analysis
The proposed rule repeal will not result in any significant fiscal
implications for small businesses, local health and human service
agencies or local governments. Those that provide birthing center
services will no longer receive direct reimbursement from Medicaid
and will instead bill the CNM for reimbursement for Medicaid-covered
births. Billing the midwife for services could increase administrative
costs. A CNM may incur an administrative cost when complying with
this rule because the midwife will have to reimburse the birthing
center for its Medicaid services. This change is required by federal
regulation. There is no anticipated negative impact on local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that for
each of the first five years the repeal is in effect, the expected
public benefit of the repeal of this rule is that HHSC will be in
compliance with the CMS directive to discontinue direct payments to
birthing centers.
Regulatory Analysis
HHSC has determined that this proposal is not a "major environmental
rule" as defined by §2001.0225 of the Texas Government Code.
A "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
Written comments on the proposal may be submitted to Dan Huggins,
Director of Acute Care Services, Rate Analysis Department, Texas Health
and Human Services Commission, P.O. Box 85200, MC-H400, Austin, Texas
78708-5200; by fax to (512) 491-1998; or by e-mail to Dan.Huggins@hhsc.state.tx.us
within 30 days of publication of this proposal in the
Texas Register.
Statutory Authority
The repeal is proposed under Texas Government Code §531.033,
which authorizes the Executive Commissioner of HHSC to adopt rules
necessary to carry out the commission's duties; Texas Human Resources
Code §32.021 and Texas Government Code §531.021(a), which
provide HHSC with the authority to administer the federal medical
assistance (Medicaid) program in Texas; and Texas Government Code §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 repeal 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.
§355.8181.Reimbursement.
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 18, 2009.
TRD-200902483
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: August 2, 2009
For further information, please call: (512) 424-6900
DIVISION 2. MEDICAID WAIVER PROGRAM FOR PEOPLE WITH DEAF-BLINDNESS AND MULTIPLE DISABILITIES
before] an ambulance is
used to transport a recipient in circumstances not involving an emergency.
(B)] A person denied payment
for ambulance services rendered is entitled to payment from the nursing
facility, healthcare provider, or other responsible party that requested
the services if:
(3)] Hearings. For information
about recipient fair hearings, refer to the Commission's fair hearing
rules, Chapter 357 of this title (relating to Hearings).
(4)] Provider Appeal. An
ambulance provider denied payment for services rendered because of
failure to obtain prior authorization, or because a request for prior
authorization was denied, is entitled to appeal the denial of payment
to the Commission or its designee. A denial of a claim may be appealed
by a provider under the Commission's appeals procedures contained
in the Texas Medicaid Provider Procedures Manual and §354.1003
of this title (relating to Time Limits for Submitted Claims).
DIVISION 17. BIRTHING CENTER SERVICES
CHAPTER 355. REIMBURSEMENT RATEShours,] hourly wage rate
and benefits for direct service work must be the lesser of the actual
[hours worked,] hourly wage rate paid and benefits paid
or the [hours,] hourly wage rate and benefits for a comparable
direct care staff person assumed in the fully-funded model. The fully-funded
model is the model as calculated under §355.456(d) of this title
(relating to Reimbursement Methodology) prior to any adjustments made
in accordance with §355.101 of this title (relating to Introduction)
and §355.109 of this title (relating to Adjusting Reimbursement
When New Legislation, Regulations or Economic Factors Affect Costs)
for the rate period.
(iii)] Exception to
related-party adjustment. If at least 40 percent of total labor
hours in a specific related-party's direct service type were provided
by non-related-parties, the related-party's hourly wage rate may be
the higher of the model assumption for that direct service type described
in clause (ii) of this subparagraph or the non-related party average
for that direct service type, so long as the non-related party average
does not exceed the related-party's actual hourly wage.
(iv)] Maximum direct-care hours.
During any single fiscal year, the sum of all direct
care hours reported on ICF/MR cost report(s) for any individual owner
or related party cannot exceed 2,600.
(v)] Classification
of hours over the limit. Hours, hourly wages and benefits above
the limits described in clauses (ii) - (vi) [iv]
of this subparagraph are to be reported as administrative hours, hourly
wages and benefits.
.] For an
entity defined in clause (iii) of this subparagraph that controls,
as defined in clause (iv) of this subparagraph, more than one ICF/MR
component code, the process of determining compliance with the spending
requirements detailed in paragraph (1) of this subsection for all
component codes controlled by the entity in the aggregate rather than
requiring each component code to meet its spending requirement individually.
For commonly owned corporations defined in clause (ii) of this subparagraph,
the process of determining compliance with the spending requirements
detailed in paragraph (1) of this subsection for all component codes
in the controlled small group in the aggregate rather than requiring
each component code to meet its spending requirement individually.
Corporations that do not meet the definitions under clauses (ii) -
(iii) of this subparagraph are not eligible for aggregation.
SUBCHAPTER E. COMMUNITY CARE FOR AGED AND DISABLEDand the Integrated Care Management-Home and Community Support Services and Assisted Living/Residential Care Programs].(b)] [General.] Texas Medicaid
contracted providers will be reimbursed for waiver services provided
to individuals who meet the criteria for alternatives to nursing facility
care. Additionally, Texas Medicaid contracted providers will be reimbursed
for a pre-enrollment assessment of potential waiver participants.
The pre-enrollment assessment covers care planning for the participant
and is reimbursed by a one-time administrative expense fee which is
not included in the waiver services but will be paid from Medicaid
administrative funds.
(c)] Other sources of cost
information. If HHSC has determined that there is not sufficient reliable
cost report data from which to determine reimbursements and reimbursement
ceilings for waiver services, reimbursements and reimbursement ceilings
will be developed by using data from surveys; cost report data from
other similar programs, consultation with other service providers
[and/]or professionals experienced in delivering contracted
services; and other sources.
(d)] Waiver reimbursement
determination. Recommended reimbursements are determined in the following
manner:[.]
, and in-home respite care services
] will be
determined on a fee-for-service basis in the following manner:[.]
costs
] per unit of service, for each contracted provider cost
report is multiplied by 1.044. This adjusted [are arrayed.
The units of service for each contracted provider in the array are
summed until the median unit of service is reached. The corresponding
expense to the median unit of service is determined and is multiplied
by 1.044. The] allowable cost [costs]
per unit of service may be combined into an array with the allowable
cost per unit of service of similar services provided by other programs
in determining rates for these services in accordance with §355.502
of this title (relating to Reimbursement Methodology for Professional
Services in Home and Community-Based Services Waivers) [the
weighted median cost per unit of service].
costs]
per unit of service for each contracted provider cost report are
arrayed. The units of service for each contracted provider cost
report in the array are summed until the median unit of service
is reached. The corresponding expense to the median unit of service
is determined and is multiplied by 1.044.
and/]or professionals
experienced in delivering contracted services; and other sources.
The room and board payments for AFC Services are not covered in these
reimbursements and will be paid to providers from the client's Supplemental
Security Income, less a personal needs allowance.
[(6) Specialized nursing reimbursement
add-on. A specialized nursing reimbursement add-on will be paid in
addition to the unit-of-service reimbursements for skilled nursing
services provided by an RN or by an LVN. The specialized nursing reimbursement
add-on is paid when a client requires, as determined by a physician,
daily skilled nursing to cleanse, dress, and suction a tracheostomy
or daily skilled nursing assistance with ventilator or respirator
care. The client must be unable to do self-care and require the assistance
of a nurse for the ventilator, respirator, or tracheostomy care. This
specialized nursing reimbursement add-on will be determined in accordance
with subsection (c) of this section]
(7)] Exceptions to the
reimbursement determination methodology. HHSC may adjust reimbursement
if new legislation, regulations, or economic factors affect costs,
according to §355.109 of this title (relating to Adjusting Reimbursement
When New Legislation, Regulations, or Economic Factors Affect Costs).
(e)] Authority to determine
reimbursement. The authority to determine reimbursement is specified
in §355.101 of this title (relating to Introduction).
(f)] Reporting of cost.
(relating to Specifications for Allowable and
Unallowable Costs)].
(g)] Reporting revenue.
Revenues must be reported on the cost report in accordance with §355.104
of this title (relating to Revenues).
(h)] Reviews and field
audits of cost reports. Desk reviews or field audits are performed
on cost reports for all contracted providers. The frequency and nature
of the field audits are determined by HHSC to ensure the fiscal integrity
of the program. Desk reviews and field audits will be conducted in
accordance with §355.106 of this title (relating to Basic Objectives
and Criteria for Audit and Desk Review of Cost Reports), and providers
will be notified of the results of a desk review or a field audit
in accordance with §355.107 of this title (relating to Notification
of Exclusions and Adjustments). Providers may request an informal
review and, if necessary, an administrative hearing to dispute an
action taken under §355.110 of this title (relating to Informal
Reviews and Formal Appeals).
(b)] [General.] Texas Medicaid
contracted providers will be reimbursed for waiver services provided
to Medicaid-eligible persons with related conditions (waiver services).
Additionally, Texas Medicaid contracted providers will be reimbursed
for a pre-enrollment assessment of potential waiver participants.
The pre-enrollment assessment covers care planning for the participant
and is reimbursed by a one-time administrative expense fee which is
not included in the waiver services but will be paid from Medicaid
administrative funds.
(c)] Reporting of cost.
(d)] Waiver reimbursement
determination methodology.
an RN
], nursing services [facilities
] provided by a licensed
vocational nurse (LVN) [an LVN
], physical therapy,
occupational therapy, speech pathology,
behavioral support, auditory
integration training/auditory enhancement training, nutritional services,
day activity and health services, [
and psychological]
and respite care services will be determined on a fee-for-service
basis. These services are provided under §1915(c) of the Social
Security Act Medicaid waiver for persons with related conditions.
the
related-conditions] case management waiver service will be determined
as a monthly reimbursement. This service is provided under the §1915(c)
of the Social Security Act Medicaid waiver for persons with related
conditions.
and psychological services
], are determined in the following manner:
Total allowable costs for each provider]
will be determined by analyzing the allowable historical costs reported
on the cost report and other pertinent cost survey information.
Total
allowable costs are] reduced by the amount of the administrative
expense fee and requisition fee revenues accrued for the reporting
period.
costs], excluding depreciation and mortgage interest,
is [are
] projected from the historical cost reporting period to
the prospective reimbursement period as described in §355.108
of this title (relating to Determination of Inflation Indices).
(v)] Each provider's projected
total allowable cost is [costs are] divided
by the number of [monthly] units of service to determine
the projected cost per unit [client month] of
service.
(vi)] For nursing services
provided by an RN, nursing services provided by an LVN, physical therapy,
occupational therapy, speech pathology, behavioral support services,
auditory integration training/auditory enhancement training, and nutritional
services, the projected cost per unit of service, for each provider
is multiplied by 1.044. This adjusted allowable cost per unit of service
may be combined into an array with the allowable cost per unit of
service of similar services provided by other programs in determining
rates for these services in accordance with §355.502 of this
title (relating to Reimbursement Methodology for Professional Services
in Home and Community-Based Services Waivers). [
and psychological services:]
[(I) An allowable cost per unit of
service is calculated for each service. The allowable costs per unit
of service for each contracted provider are arrayed and weighted by
the number of units of service, and the median cost per unit of service
is calculated. The allowable costs per unit of service may be combined
into an array with the allowable cost per unit of service of similar
services provided by other programs in determining the median cost
per unit of service.]
[(II) The median cost per unit of
service for each waiver service is multiplied by 1.044.]
[(III) Specialized nursing reimbursement
add-on. A specialized nursing reimbursement add-on will be paid in
addition to the unit-of-service reimbursements for skilled nursing
services provided by an RN or by an LVN. The specialized nursing reimbursement
add-on is paid when a client requires, as determined by a physician,
daily skilled nursing to cleanse, dress, and suction a tracheostomy
or daily skilled nursing assistance with ventilator or respirator
care. The client must be unable to do self-care and require the assistance
of a nurse for the ventilator, respirator, or tracheostomy care. This
specialized nursing reimbursement add-on will be determined in accordance
with §355.105(h) of this title (relating to General Reporting
and Documentation Requirements, Methods, and Procedures).]
(vii)] For habilitation
services two cost areas are created:
(D)] HHSC also adjusts
reimbursement according to §355.109 of this title (relating to
Adjusting Reimbursement When New Legislation, Regulations, or Economic
Factors Affect Costs) if new legislation, regulations, or economic
factors affect costs.
(e)] Administrative expense
fee determination methodology.
(f)] Requisition fees.
Requisition fees are reimbursements paid to the CLASS direct service
agency contracted providers for their efforts in acquiring adaptive
aids and minor home modifications for CLASS participants. Reimbursement
for adaptive aids and minor home modifications will vary based on
the actual cost of the adaptive aid and minor home modification. Reimbursements
are determined using a method based on modeled projected expenses
which are developed by using data from surveys; cost report data from
similar programs; consultation with other service providers and/or
professionals experienced in delivering contracted services; and/or
other sources.
(g)] Allowable and unallowable costs.
through] a voucher payment system is unallowable. Refer
to §355.103(b)(17)(K) of this title (relating to Specifications
for Allowable and Unallowable Costs).
(h)] Authority to determine
reimbursement. The authority to determine reimbursement is specified
in §355.101 of this title (relating to Introduction).
(i)] Reporting revenue.
Revenues must be reported on the cost report in accordance with §355.104
of this title (relating to Revenues).
(j)] Reviews and field
audits of cost reports. Desk reviews or field audits are performed
on all contracted providers' cost reports. The frequency and nature
of the field audits are determined by HHSC to ensure the fiscal integrity
of the program. Desk reviews and field audits will be conducted in
accordance with §355.106 of this title (relating to Basic Objectives
and Criteria for Audit and Desk Review of Cost Reports), and providers
will be notified of the results of a desk review or a field audit
in accordance with §355.107 of this title (relating to Notification
of Exclusions and Adjustments). Providers may request an informal
review and, if necessary, an administrative hearing to dispute an
action taken under §355.110 of this title (relating to Informal
Reviews and Formal Appeals).
(k)] Reporting requirements.
The program director's full salary is to be reported on the line item
of the cost report designated for the director.
[(b) Effective September 1, 2007,
rates for home-and-community-support-service agency (HCSS) registered
nurse (RN), HCSS agency licensed vocational nurse (LVN), and HCSS
agency personal assistance services (PAS) (with delegation of the
service by an RN and without delegation of the service by an RN)),
will be based upon the Community-Based Alternatives (CBA) HCSS-approved
rates for RN and LVN services in accordance with §355.503 of
this title (relating to Reimbursement Methodology for the Community-Based
Alternatives Waiver Program) and non-participant PAS in accordance
with §355.112(l) of this title (relating to Attendant Compensation
Rate Enhancement). However, if the rates in effect for these MDCP
services on August 31, 2007, are greater than the approved rates for
the CBA HCSS for RN, LVN, and non-participant PAS, the higher MDCP
rates will remain in effect on September 1, 2007. Effective September
1, 2007, the reimbursement rate for independent RNs will be equal
to 80 percent of the MDCP rate for HCSS agency RNs, and the reimbursement
rate for independent LVNs will be equal to 80 percent of the MDCP
rate for HCSS agency LVNs.]
(c)] The rate ceiling for
camp services will be equivalent to the Community Living Assistance
and Support Services direct service agency (CLASS DSA) out-of-home
respite rate. Actual payments for this service will be the lesser
of the rate ceiling or the actual cost of the camp.
(d)] Facility-based respite
care rates are determined on a 24-hour basis. The rates for facility-based
respite care are calculated at 77 percent of the daily nursing facility
base rates by level of care. The base rates used in this calculation
do not include nursing facility rate add-ons.
[(e) Payment rates may be determined
in the future on a pro forma basis in accordance with §355.105(h)
of this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures).]
SUBCHAPTER F. REIMBURSEMENT METHODOLOGY FOR PROGRAMS SERVING PERSONS WITH MENTAL ILLNESS AND MENTAL RETARDATIONhours,] hourly wage rate
and benefits for direct service work must be the lesser of the actual
[hours worked,] hourly wage rate paid and benefits paid
or the [hours,
] hourly wage rate and benefits for a comparable
direct care staff person assumed in the fully-funded model. The fully-funded
model is the model as calculated under §355.723(d) of this title
(relating to Reimbursement Methodology for Home and Community-based
Services) prior to any adjustments made in accordance with §355.101
of this title (relating to Introduction) and §355.109 of this
title (relating to Adjusting Reimbursement When New Legislation, Regulations
or Economic Factors Affect Costs) for the rate period.
(3)] Exception to
related-party adjustment. If at least 40 percent of total labor
hours in a specific related-party's direct service type were provided
by non-related-parties, the related-party's hourly wage rate may be
the higher of the model assumption for that direct service type described
in paragraph (2) of this subsection or the non-related party average
for that direct service type, so long as the non-related party average
does not exceed the related-party's actual hourly wage.
(4)] Maximum direct-care hours.
During any single fiscal year, the sum of all direct
care hours reported on HCS cost report(s) for any individual owner
or related party cannot exceed 2,600.
(5)] Classification
of hours over the limit. Hours, hourly wages and benefits above
the limits described in paragraphs (2) - (7) [(4)]
of this subsection are to be reported as administrative hours, hourly
wages and benefits.
Where applicable, providers] will be notified, by certified
mail, within 90 days of the determination of their recoupment amount
by HHSC of the amount to be repaid to HHSC or its designee. If a subsequent
review by HHSC or audit results in adjustments to the cost report
as described in subsection (a) of this section that change the amount
to be repaid to HHSC or its designee, the provider will be notified
in writing of the adjustments and the adjusted amount to be repaid.
Providers will submit the repayment amount within 60 days of notification.
.] For an
entity defined in clause (iii) of this subparagraph that controls,
as defined in clause (iv) of this subparagraph, more than one HCS
component code, the process of determining compliance with the spending
requirements detailed in paragraph (4) of this subsection for all
component codes controlled by the entity in the aggregate rather than
requiring each component code to meet its spending requirement individually.
For commonly owned corporations defined in clause (ii) of this subparagraph,
the process of determining compliance with the spending requirements
detailed in paragraph (4) of this subsection for all component codes
in the controlled small group in the aggregate rather than requiring
each component code to meet its spending requirement individually.
Corporations that do not meet the definitions under clauses (ii) -
(iii) of this subparagraph are not eligible for aggregation.
(relating to General Reporting and Documentation Requirements,
Methods, and Procedures)].
(relating to Specifications for Allowable and
Unallowable Costs)] and for owners and related parties §355.105(b)(2)(B)(xi)(I)
of this title [(relating to General Reporting and Documentation
Requirements, Methods, and Procedures)].
(relating to Specifications for Allowable and
Unallowable Costs)] and for owners and related parties §355.105(b)(2)(B)(xi)(II)
of this title [(relating to General Reporting and Documentation
Requirements, Methods, and Procedures)].
TDMHMR] to place the TxHmL Program provider [
and all waiver contracts] on vendor hold.
(relating to General
Reporting and Documentation Requirements, Methods, and Procedures)].
(relating to General Principles
of Allowable and Unallowable Costs, and Specifications for Allowable
and Unallowable Costs)]. Owner and related party employees who
provide both direct care and indirect services must maintain daily
time sheets that record the time spent on activities in each area.
The provider must maintain documentation relating to compensation,
bonuses, and benefits of each owner or related party in accordance
with §355.105(b)(2)(B)(xi) of this title [(relating to General
Reporting and Documentation Requirements, Methods, and Procedures)].
The maximum hours per fiscal year that an owner and related party
employee may report on the cost report is 2080 hours per fiscal year.
(relating to General Reporting and Documentation Requirements,
Methods, and Procedures)].
TDMHMR].
(relating
to General Reporting and Documentation Requirements, Methods, and
Procedures)].
(relating to Notification of Exclusions and Adjustments)
].
(relating to General Reporting and Documentation
Requirements, Methods, and Procedures)].
SUBCHAPTER H. REIMBURSEMENT METHODOLOGY FOR 24-HOUR CHILD CARE FACILITIES
SUBCHAPTER J. PURCHASED HEALTH SERVICES
for admissions beginning in Fiscal Year (FY) 2009].
, determined] in subsection (d)(1) of this section.
HHSC will send a hospital a final notification letter reporting the
hospital's PDSDA for a given fiscal year or any portion thereof designated
by HHSC, which may include any adjustment described in subsection
(d) of this section [payment division standard dollar amount,
adjusted as described in subsection (d)(2) of this section, to be
used in calculating the hospital's reimbursements].
in subsequent years]
when funds are appropriated for that purpose or, at its discretion,
during the state fiscal year that is three years after the last rebasing
year.
Hospital--specific
] standard dollar amount (HSDA)--One factor used in arriving
at the payment division standard dollar amount (PDSDA); the average
base year cost per claim for a hospital, adjusted by the case mix
index and cost-of-living index.
(28)] Payment division
standard dollar amount (PDSDA)--The weighted average dollar amount
per claim calculated for all hospitals in a payment division,
adjusted pursuant to §355.201 of this title (relating to Establishment
and Adjustment of Reimbursement Rates by the Health and Human Services
Commission), if necessary.
(29)] Relative weight--The
weighting factor HHSC assigns to a diagnosis related group representing
the time and resources associated with providing services for that
diagnosis related group.
(30)] State-owned teaching
hospital--The following hospitals: University of Texas Medical Branch
(UTMB); University of Texas Health Center Tyler; and M.D. Anderson
Hospital.
(31)] TEFRA cost for rebasing--One
factor used in arriving at the hospital-specific standard dollar amount;
Medicaid allowable charges for base year claims adjusted to cost by
the interim rate derived from tentative or final settlement of cost
reports that cover time periods in the base year.
(32)] TEFRA target cap--A
limit set under the Social Security Act §1886(b) (42 U.S.C. §1395ww(b))
and applied to the cost settlement for a hospital reimbursed under
methods and procedures in the Tax Equity and Fiscal Responsibility
Act of 1982 (TEFRA). TEFRA target cap is not applied to patients under
age 21, and incentive and penalty payments associated with this limit
are not applicable to patients under age 21.
(33)] Tentative settlement--Reconciliation
of cost in the Medicare/Medicaid hospital fiscal year-end cost report
performed by HHSC within six months after HHSC receives an acceptable
cost report filed by a hospital.
(34)] Universal mean [Mean
]--Average base year cost per claim for all hospitals.
(35)] Weighted hospital-specific
standard dollar amount (HSDA)--One factor used in arriving at the
payment division standard dollar amount; the product obtained by multiplying
a hospital's hospital-specific standard dollar amount by the number
of its base year claims.
Recalculation of] PDSDAs.
(A)] HHSC may [will]
recalculate a hospital's PDSDA using [
PDSDAs for payments in FY 2009 unless:]
[(i) HHSC's application
for the Medicaid reform waiver authorized under Senate Bill 10 (80th
Legislature, Regular Session, Chapter 268, §7 (2007) does not
receive federal approval;]
[(ii) HHSC does not implement
the Medicaid reform waiver authorized under Senate Bill 10 (80th Legislature,
Regular Session, Chapter 268, §7 (2007); or]
[(iii) Funds are not available
for the purpose of recalculating PDSDAs.]
[(B) In the event HHSC
does not recalculate PDSDAs for payments in FY 2009, payments will
be based on the rates in effect on August 31, 2008.]
(C)] [HHSC recalculates PDSDAs for
payments in FY 2009 using FY 2006] base year claims. HHSC will
not include claims that are adjudicated and approved for payment after
the base year and subsequent six-month grace period. The six-month
grace period is intended to allow HHSC to include [
inclusion of
] as many base year claims as possible, given practical time
constraints.
PDSDAs
] in accordance with §355.201 of this title [if HHSC
determines that a recalculated PDSDA may have a significant and measurable
effect on provider participation or have a significant and measurable
effect on a provider's ability to deliver services].
[(B) If HHSC recalculates
PDSDAs for payments in FY 2009, HHSC will:]
$1,600.00 and $1,699.99] are grouped together
in payment division number 18 within the PDI.
statistically] invalid. Hospitals within that payment division are assigned
a PDSDA equal to the mathematically closest valid PDSDA.
(7)] Minimum PDSDA. The
minimum PDSDA of $1,600.00 is applied to any hospital with an HSDA
equal to or less than $1,600.00.
PDSDA calculation]
for specific types of hospitals.
Universal
Mean plus the cost-of-living update as specified in paragraph (4)
of this subsection, as their PDSDA]:
hospitals
], HHSC will locate [assign a PDSDA that is
three percentile points higher than] the
universal mean [Universal Mean
] in an array of all hospitals' base
year costs per claim from lowest to highest. HHSC will then determine
the group of claims located three percentile points above the universal
mean. The new hospital is assigned the lowest dollar value claim within
that percentile group, plus the cost-of-living update
calculated at the most recent rebasing, as its PDSDA [
as specified in paragraph (4) of this subsection].
applies
] for five years [from enrollment as a new Medicaid hospital]
or until HHSC recalculates PDSDAs, whichever is earlier. After five
years from the date HHSC applied the rate determined under clause
(i) of this subparagraph, HHSC will assign the hospital the PDSDA
described in subparagraph (A) of this paragraph if HHSC has not recalculated
PDSDAs [enrollment, if HHSC has not recalculated PDSDAs,
the hospital's PDSDA will be the Universal Mean].
(ii)] A replacement facility
constructed for a hospital that is currently enrolled as a Medicaid
provider is reimbursed [by] using either the PDSDA of the
existing provider or the PDSDA for new hospitals, whichever is greater.
during
or after the base year but before the date of HHSC's final PDSDA notification
letter, HHSC combines the amounts determined in paragraph (3)(A) of
this subsection for all hospitals involved in the merger and calculates
the HSDA and PDSDA for the merged entity as described for all other
hospitals in this subsection].
When two or more Medicaid participating hospitals merge after the
base year and after the date of HHSC's final PDSDA notification letter,
HHSC combines the original base year costs per claim determined in
paragraph (3)(A) of this subsection from the most recent rebasing
period for all hospitals involved in the merger. HHSC calculates a
new HSDA for the merged entity and assigns a PDSDA equal to the mathematically
closest valid PDSDA.]
Acquisitions
and buyouts do not result in a recalculation of
] the PDSDA of a [an acquired] hospital
acquired in an acquisition or buyout unless
the acquisition [acquisitions]or
buyout resulted [buyouts result] in the purchased
or acquired hospital becoming part of another Medicaid participating
provider. HHSC will continue to reimburse the [The]
acquired hospital [will continue being reimbursed] based
on the PDSDA applied before the acquisition or buyout.
Universal Mean], resulting
in the relative weight for the DRG.
appeal] the elements
of the prospective payment methodology used by HHSC, including:
or its
designee] calculates a day outlier payment adjustment for each
claim as follows:
Universal Mean
] of base year claims multiplied
by 11.14 or the hospital's PDSDA multiplied by 11.14;
, in
making] adjustments as described in subsection (d) of this section,
and to complete [in completing] cost settlements
for children's hospitals and state-owned teaching hospitals as outlined
in §355.8054 and §355.8056 of this chapter.
(3)] Except as otherwise
specified in subsection (i) of this section, there are no cost settlements
for inpatient services under the prospective payment system in this
section.
(4)] The cost settlement
process is limited by the TEFRA target cap.
(h)(4)] of this section.
SUBCHAPTER J. PURCHASED HEALTH SERVICES
DIVISION 10. BIRTHING CENTER SERVICES
SUBCHAPTER M. MISCELLANEOUS MEDICAID PROGRAMS