TITLE 1.ADMINISTRATION

Part 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

Chapter 355. MEDICAID REIMBURSEMENT RATES

The Government Code, §531.021(b), transferred rulemaking authority for Medicaid provider reimbursement rates to the Texas Health and Human Services Commission. In accordance with that statute, we are transferring 25 TAC §33.310 and §33.311, which concern dental services under the Early and Periodic Screening, Diagnosis, and Treatment Program. The rules are being renumbered as 1 TAC §355.8443 and §355.8445 under Title 1, Part 15, Chapter 355, Subchapter J, Division 23 of the Texas Administrative Code. The transfer became effective September 1, 1997.

A complete conversion chart is published in the Tables and Graphics section of this issue.

Figure: 1 TAC Chapter 355

Filed with the Office of the Secretary of State on March 4, 2003.

TRD-200301727

Chapter 371. MEDICAID FRAUD AND ABUSE PROGRAM INTEGRITY

The Health and Human Services Commission (HHSC) adopts amendments to §§371.200, 371.201 and 371.210 and new §371.208, without changes to the proposed text as published in the October 4, 2002 issue of the Texas Register (27 TexReg 9241). The text of the rules will not be republished. HHSC adopts amendments to §371.203, §371.204 and §371.206 with changes to the proposed text as published in the October 4, 2002 issue of the Texas Register (27 TexReg 9239). The text of the rules will be republished. HHSC adopts the proposed repeal of §§371.202, 371.205, 371.207, 371.209, and 371.211, without changes to the proposed text as published in the October 4, 2002 issue of the Texas Register (27 TexReg 9244) and will not be republished.

The rules are amended, repealed, and adopted, respectively, in part to implement the utilization review function assigned to HHSC by Senate Bill 30, enacted by the 75th Legislature in 1997. The rules reflect the transfer of authority from the Texas Department of Human Services (TDHS) to HHSC. The amended rules also reflect updated review processes and current terminology, clarify language, and correct grammatical errors. The rule repeal eliminates redundancy.

HHSC received comments from the Texas Hospital Association (THA) and MHSHealth.com.

Comment: Concerning §371.203(a)(2), THA comments that the addition of the sentence "Insignificant conditions or signs or symptoms that resolve without treatment are not to be considered for DRG assignment" is inconsistent with the current version of the Coding Clinic guidelines. THA recommends that the proposed sentence prohibiting the coding of conditions, signs, or symptoms that have not been treated be deleted.

Response: HHSC agrees with the comment that the sentence is inconsistent with the recent revision of the ICD-9-CM Official Guidelines For Coding and Reporting. The sentence has been deleted from the adopted rule.

Comment: THA comments that the on-site review process should be clearly specified in rules §371.203 and §371.210.

Response: HHSC disagrees with THA regarding the clarity of the on-site review process set out in rules §371.203 and §371.210. The cited rules specify the required components of the review process. In addition, further details of the on-site review process are communicated to the hospitals prior to and during each review, both by correspondence and discussions between HHSC and hospital staff.

Comment: THA comments that the proposed deletion of the word "practicing" in §371.203(c), §371.206(a), and §371.210(c) not be adopted. THA suggests new language should be added describing the qualification of physician reviewers as practicing physician consultants under contract with the Commission and board-certified in the area of medical care under review. THA suggests an alternative definition of a qualified physician consultant as one who is board-certified in the area of medical review and actively engaged in the practice of medicine, or has been engaged in the active practice of medicine in the last three years.

Response: HHSC disagrees with the THA recommendation concerning new language describing the qualifications of physician consultant reviewers. HHSC does not believe and has not received any evidence to support the necessity for physician consultant reviewers to be board-certified in the area of medical care under review in order for the review to be credible and fair. HHSC also disagrees with the THA recommendation to retain the word "practicing". HHSC does not believe and has not received any evidence to support the necessity for physician consultant reviewers to diagnose and treat patients on a regular basis in order for the review to be credible and fair.

Comment: THA comments that the last sentence of proposed rule §371.204(a) be deleted based upon the opinion that it is illogical and inappropriate for physician reviewers to deny an admission that has met admission criteria.

Response: HHSC disagrees with the THA recommendation to delete the last sentence of proposed rule §371.204(a) as there are other relevant criteria to be considered in determining the medical necessity of an inpatient admission. See 42 C.F.R. §440.2(a). HHSC does agree, however, that the proposed rule as written does not explain sufficiently the basis on which the physician consultant reviewer may determine that an inpatient admission was not medically necessary even though screening criteria has been met. HHSC has added explanatory language to §371.204(a).

Comment: THA recommends that §371.206(a)(4) be revised to read that, if it is determined that any days qualifying as outlier days during the admission were not medically necessary, HHSC will deny those days.

Response: HHSC agrees. The language of §371.206(a)(4) is revised in the adopted rule to indicate that, if it is determined that any days qualifying as outlier days during the admission were not medically necessary, HHSC will deny those days.

Comment: THA recommends revising proposed rules §371.203(c), §371.204(a), §371.206(a) and (b), and §371.210(c) by adding language which allows HHSC to deny physician claims associated with the hospital inpatient claim denials for lack of medical necessity or for being provided in an inappropriate setting.

Response: HHSC agrees in principle with the recommendation by THA to add language to §§371.203(c), 371.204(a), 371.206(a) and (b), and 371.210(c) which would allow HHSC to consider denial of physician claims which are associated with hospital inpatient claim denials for lack of medical necessity of inpatient admission or for being provided in an inappropriate setting. The proposed additions will be submitted separately as new proposed rule changes.

Comment: THA recommends that additional language be added to §371.203(c) and §371.210(c), to clarify that medical necessity is based on the prevailing community medical and hospital standards and practices, and to§§371.203(c), 371.204(a), 371.206(a) and (b), and §371.210(c) to state that the hospital denial notice provide an explanation of the clinical basis and rationale for the denial.

Response: HHSC disagrees with the THA’s proposed changes to §§371.203(c), 371.204(a), 371.206(a) and (b), and 371.210(c). HHSC believes that the proposed rule language concerning medical necessity is appropriate for the purposes of utilization review. In addition, rationales for denials are already provided through correspondence with the hospital.

Comment: THA recommends providing language in §371.208 describing the appeal process.

Response: HHSC disagrees with this recommendation. A department within HHSC other than the Utilization Review Department handles appeals of review decisions. The Utilization Review Department has neither the authority nor the responsibility to promulgate rules for that department. In addition, the process of appeal is already described in the Texas Medicaid Provider Procedures Manual.

Comment: MHSHealth.com recommends describing the appeal process in §371.208.

Subchapter C. UTILIZATION REVIEW

1 TAC §§371.200, 371.201, 371.203, 371.204, 371.206, 371.208, 371.210

The proposed amendments and new section are adopted under authority granted to HHSC by §531.033, Texas Government Code, which provides the Commissioner of HHSC with broad rulemaking authority, and under §531.021 (a), Texas Government Code, which authorizes HHSC to administer the federal medical assistance (Medicaid) program in Texas.

§371.203.Texas Medical Review Program (TMRP) Review Process.

(a) The TMRP review process includes, but is not limited to:

(1) Admission review to evaluate the medical necessity of the admission. For purposes of the TMRP, Tax Equity and Fiscal Responsibility Act (TEFRA), and LoneSTAR Select II Contract reviews, medical necessity means the patient has a condition requiring treatment that can be safely provided only in the inpatient setting.

(2) Diagnosis related group (DRG) validation to confirm that the critical elements necessary to assign a DRG are present in the medical record. Hospital staff are responsible and held accountable for the accuracy of the required critical elements. Those elements are age, sex, discharge status, admission date, discharge date, principal diagnosis, principal and secondary procedures, and any complications or comorbidities (secondary diagnoses). This process also determines that the principal and secondary diagnoses and procedures are sequenced correctly. The principal diagnosis is the diagnosis (condition) established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care. The secondary diagnoses are conditions that affect the patient care in terms of requiring: clinical evaluation, therapeutic treatment, diagnostic procedures, extended length of hospital stay, increased nursing care and/or monitoring, or in the case of a newborn, conditions the physician deems to have clinically significant implications for future health care needs. If the principal diagnosis, secondary diagnoses, or procedures are not substantiated in the medical record, are not sequenced correctly, or have been omitted, codes may be deleted, changed, or added. When the correct diagnosis and procedure coding and sequencing have been determined, the information will be entered into the applicable version of the Grouper software for a DRG assignment. The Centers For Medicare and Medicaid Services (CMS) approved DRG Grouper software considers the required critical elements and determines the final DRG assignment. If the DRG validation process results in deletions, changes, or additions to the critical elements, and these changes cause the DRG to be reassigned, the Texas Health and Human Services Commission (Commission) will direct the claims administrator to adjust the payment to the hospital accordingly.

(3) Quality of care review to assess whether the quality of care provided meets generally accepted standards of medical and hospital care practices or puts the patient at risk of unnecessary injury, disease, or death. Quality of care review includes the use of discharge screens and generic quality screens. If quality of care issues are identified, physician consultants under contract with the Commission, and of the specialty related to the care provided, will determine possible clinical recommendations or corrective actions.

(4) Readmission review to evaluate each admission on its individual merits and determine if the second or subsequent admissions resulted from a premature discharge or were required to provide services that should have been provided in a previous admission.

(5) Day outlier review to verify the medical necessity of each day of the admission and includes DRG validation.

(6) Cost outlier review to verify that services billed were medically necessary, ordered by a physician, rendered and billed appropriately, and substantiated in the medical record.