Part 15.
TEXAS HEALTH AND HUMAN SERVICES COMMISSION
Chapter 354.
MEDICAID HEALTH SERVICES
Subchapter J. MEDICAID THIRD PARTY RECOVERY
The Health and Human Services Commission (HHSC) adopts amendments
to Chapter 354; Subchapter J, concerning Medicaid Third Party Recovery. Specifically,
the HHSC adopts amendments to Division 1, §354.2301, §354.2302,
Division 2, §§354.2311, 354.2313, 354.2315, Division 3, §354.2321, §354.2322,
Division 4, §354.2331-354.2334, Division 5, §§354.2341, 354.2343,
354.2344 and new Division 6, §§354.2354-354.2356. The rules are
adopted without changes to the proposed text as published in the December
12, 2003, issue of the
Texas Register
(28
TexReg 11063) and will not be republished.
The rules are a result of House Bill 2292, 78th Legislature, 2003, Regular
Session, which contained a number of provisions designed to increase the state's
cost avoidance and recoveries under the Third Party Liability (TPL) program.
The new rules require that the Commission bill all Medicare fiscal intermediaries,
that long term care providers bill Medicare prior to billing Medicaid and
appeal Medicare denials as directed by the State, and require, to the extent
allowed by federal law, that providers bill third party health coverage or
insurance prior to billing Medicaid. All amendments to Divisions 1 - 5 only
address terminology and updates to section references. They are administrative
in nature and contain no programmatic impact.
This section provides the Commission and Stakeholders with guidelines to
perform Third Party Recovery functions in Texas.
Summary of Public Comments
HHSC received comments from the following organizations:
The Texas Department of Health
Texas Medical Association
The Texas Federation of Drug Stores
The National Association of Chain Drug Stores (NACDS)
Comment
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) services
are exempt from third party recovery. The phrase in the proposed new rule, §354.2356,
"To the extent allowed by federal law?" is very general. The Commission should
state in this section that, in accordance with 42 CFR §433.139, health
care service providers of EPSDT services, known in Texas as Texas Health Steps
(THSteps), are exempt from this requirement. THSteps services include medical,
dental and case management services.
Commission Response
THSteps services are subject to third party recovery activities, but not
cost avoidance activities. Section 354.2321(b) already requires that providers
bill a third party health insurer before submitting a claim for payment to
the Commission. This is a strengthening provision to clarify that the Commission
shall require all providers to bill third parties prior to the Medicaid program
to the extent allowed by federal law.
A review of Medicaid Acute Care services, currently bypassed for cost avoidance
editing, is underway to determine if any additional services should be cost
avoided. Excluding pharmacy providers, the Commission expects little to no
changes in claims submission guidelines for traditional Medicaid services.
THSteps services will continue to bypass cost avoidance editing and are not
impacted by this rule amendment. In addition to the non-existence of a third
party liability, the following meet the definition of federally approved for
cost avoidance exclusion:
The claim is for a service covered under the State plan that is provided
to an individual on whose behalf child support enforcement is being carried
out by the State Title IV-D agency (Texas Office of Attorney General Medical
Support Enforcement Division).
The claim is for prenatal care for pregnant women, or
The claim is for preventative pediatric services including (EPSDT)
The rule was intentionally written as stated in HB 2292 to eliminate the
need to make future rule amendments due to changes in federal policy, the
implementation of new State programs, and to limit the complexity in writing
to every possible exclusion scenario.
Comment
Section 354.2354 - The Commission does not need a rule to implement an
internal policy.
Section 354.2355 - Long Term Care Providers - There is already a division
related to Provider requirements and the Commission should add this section
to Division three (3), Provider Requirements, versus creating a new Division
six (6).
Section 354.2355 - Provider Requirements to Bill Third Party Health Coverage
- This is already included as a requirement in Division three (3), Section
354.2321(b). Unless the Commission is looking to strengthen the language,
this requirement has always been in the rule.
Commission Response
Section 354.2354 requires the Commission to pursue reimbursement of Medicaid
expenditures from all fiscal intermediaries who make payment to a provider
on behalf of Medicare. In some situations Medicare stipulates that the provider
of a service bill the fiscal intermediary. In those circumstances, to comply
with this requirement, the Commission will be required to recover claims payments
from a provider, and the provider will be required to bill Medicare. The Commission
believes that it is prudent to leave this rule as proposed.
At a later time the Commission may choose to incorporate Section 354.2355
into Section 354.2321 and strike Division six (6).
The Commission is attempting to strengthen the language in 354.2321(b).
At a later time, the Commission may choose to amend Section 354.2355(b) by
incorporating this rule amendment into that section and strike Division six
(6).
Comment
It is not appropriate to force community pharmacies to act as a billing
agent for the state Medicaid program. Cost avoidance measures must be carried
out in a way that reduces administrative burdens on recipients and pharmacies.
The state has an obligation at the time the original prescription is filled
to provide information to the pharmacy indicating that the recipient has other
sources of coverage, including Medicare through the Point of Sale (POS) system.
Cost avoidance policies should not be interpreted to mean that the pharmacies
are responsible for identifying and chasing liable third parties for payment.
State Medicaid agencies must also attempt to seek recovery for claims involving
third party liability procedures set forth in 42 CFR 433.139 (b) through (f).
Specifically, if the Medicaid agency determines that there is third party
liability at the time the claim is filed, the claim must be rejected and returned
to the provider for determination of liability. If liability is not determined,
the agency must pay the claim. This regulation does not allow the agency to
seek reimbursement from a provider if liability is later determined.
We do not believe that the Commission can require pharmacies to resubmit
claims to Medicare if the claim has already been paid by Medicaid, because
such a determination must be made at the time the original service is provided.
Section 354.2354 of the proposed rule "Billing Medicare Intermediaries" states:
The Commission shall pursue reimbursement of Medicaid expenditures from
each fiscal intermediary who makes a payment to a service provider on behalf
of the Medicare program, including a reimbursement for a payment made to a
home health services provider or nursing facility for services rendered to
a dually eligible individual.
The proposed rule requires the Commission to seek recovery from Medicare
intermediaries and not from providers if Medicaid failed to identify a liable
third party and pays the provider.
Suppliers can only submit claims, to Medicare, if they are within the claims
submission timeline. Additionally, 42 CFR §424.32(a) states that a provider
must have been enrolled as a Medicare supplier at the time of service. The
proposed rule has no provisions reflecting this federal requirement.
Additionally, pursuant to 42 CFR 433.139(d), if the state operated under
a pay and chase waiver at the time the service was provided the state was
required to seek recovery from liable third parties within 60-days after learning
of the existence of a third party. This responsibility cannot be transferred
to pharmacy providers under the recovery action.
A list of conditions was provided, by Texas Federation of Drug Stores,
which will cause Medicare to reject the claim as outside the coverage of Medicare.
We do not believe that the recovery action complies with federal requirements.
We urge the State to abandon this recoupment process, and work with the pharmacy
community to assure that future billings for covered health care items and
services are made appropriately.
Commission Response
The Commission is not forcing community pharmacies to act as a billing
agent for the State, rather the Commission is working to ensure that Medicaid
remains the payer of last resort and expand the enforcement of 42 CFR 433.139
(b)(1) which states: "If the agency has established the probable existence
of third party liability at the time the claim is filed, the agency must reject
the claim and return it to the provider for a determination of the amount
of liability?"
The Commission is in agreement that cost avoidance measures should be carried
out in a way that to the extent possible minimizes administrative burdens
on recipients and pharmacies. Although it is the Commission's hope that we
are able to provide third party insurance information through the POS system,
we are unaware of any obligation to do so.
As set forth in Rule §354.2321, "Providers must make a good faith
effort to determine whether a recipient is or may be insured by a third party
health insurer at the time services are provided, including examining the
recipient's Medicaid eligibility card for third party resources and making
reasonable oral or written inquiry of the recipient." To at least that extent,
pharmacies are responsible for identifying third parties. When other insurance
is identified by the pharmacy or when such information is provided to the
pharmacy by the state or other entity, a pharmacy provider will be required
to seek payment from that third party prior to receiving payment from Medicaid.
"This regulation (42 CFR 433.139 (b) through (f)) does not allow the agency
to seek reimbursement from a provider if liability is later determined." The
Commission has reviewed this reference and does not agree with the interpretation
of this statement. Although it is not the Commission's intent, at this time,
to recoup a provider's claim because other insurance information was made
available to the Commission after a claim has been paid, there is no such
limiting factor placed on the State. In cases where insurance information
is identified retroactively, it is the intent of the Commission to bill the
other insurance directly. This billing system currently exists and will continue
to be employed by the Commission. However, in cases where the Commission cannot
bill a third party or can reasonably expect that a provider billing a third
party will yield a higher probability of payment, the Commission reserves
the right to recoup a provider's claim for other insurance.
The section regarding "Billing all Medicare Intermediaries," has been withdrawn.
The intent of this section was to ensure that the Commission was billing all
Medicare Intermediaries during its post payment recovery process, which will
be established via an internal policy. However, this section did not preclude
the Commission from recouping a provider claim requiring a provider to seek
reimbursement from Medicare after previously being paid by Medicaid.
The Commission acknowledges 42 CFR §424.32(a) places claims submission
guidelines on providers.
42 CFR 433.139 (d) does require the State to seek recovery from liable
third parties within 60-days after learning of the existence of a third party.
The Commission meets this objective through monthly submissions of both Medicaid
Acute Care and Pharmacy claims to other insurance carriers and Medicare. The
Commission is unaware of any rule that prevents a State from recouping a claim
directly from a provider, for other insurance, after Medicaid has made payment.
However, when the Commission identifies other insurance retroactively, it
is the intent of the Commission, at this time, to directly seek reimbursement
from that liable third party. In cases where the Commission cannot bill a
third party or can reasonably expect that a provider billing a third party
will yield a higher probability of payment, the Commission reserves the right
to recoup a provider's claim.
The Commission is unclear on the last statement, "We urge the state to
abandon this recoupment process?" as the rules set forth within this section
do not address a recoupment process.
Comment
1 TAC §354.2356 applies to all healthcare providers, including physicians.
It is not clear from the proposed rule how the Health and Human Services Commission
will determine when a physician "should have known" to bill a third party
payer. We recommend that HHSC develop criterion that would defined under what
circumstances the physician "should have known" to bill a third party payer.
Commission Response
The criterion in which a provider "should have known" is set forth in Rule §354.2321
which states, "Providers must make a good faith effort to determine whether
a recipient is or may be insured by a third party health insurer at the time
services are provided, including examining the recipient's Medicaid eligibility
card for third party resources and making reasonable oral or written inquiry
of the recipient."
1.
GENERAL PROVISIONS
1 TAC §354.2301, §354.2302
The amendments are adopted under government code §531.033,
which provides the Commissioner of HHSC with broad rule-making authority;
and Human Resource Code §32.021, and the Texas Government Code §531.021,
which provide HHSC with the authority to administer the Federal Medical Assistance
(Medicaid) program in Texas.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on March 8, 2004.
TRD-200401754
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Effective date: March 28, 2004
Proposal publication date: December 12, 2003
For further information, please call: (512) 424-6576
1 TAC §§354.2311, 354.2313, 354.2315
The amendments are adopted under government code §531.033,
which provides the Commissioner of HHSC with broad rule-making authority;
and Human Resource Code §32.021, and the Texas Government Code §531.021,
which provide HHSC with the authority to administer the Federal Medical Assistance
(Medicaid) program in Texas.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on March 8, 2004.
TRD-200401755
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Effective date: March 28, 2004
Proposal publication date: December 12, 2003
For further information, please call: (512) 424-6576
1 TAC §354.2321, §354.2322
The amendments are adopted under government code §531.033,
which provides the Commissioner of HHSC with broad rule-making authority;
and Human Resource Code §32.021, and the Texas Government Code §531.021,
which provide HHSC with the authority to administer the Federal Medical Assistance
(Medicaid) program in Texas.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on March 8, 2004.
TRD-200401756
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Effective date: March 28, 2004
Proposal publication date: December 12, 2003
For further information, please call: (512) 424-6576
1 TAC §§354.2331 - 354.2334
The amendments are adopted under government code §531.033,
which provides the Commissioner of HHSC with broad rule-making authority;
and Human Resource Code §32.021, and the Texas Government Code §531.021,
which provide HHSC with the authority to administer the Federal Medical Assistance
(Medicaid) program in Texas.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on March 8, 2004.
TRD-200401757
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Effective date: March 28, 2004
Proposal publication date: December 12, 2003
For further information, please call: (512) 424-6576
1 TAC §§354.2341, 354.2343, 354.2344
The amendments are adopted under government code §531.033,
which provides the Commissioner of HHSC with broad rule-making authority;
and Human Resource Code §32.021, and the Texas Government Code §531.021,
which provide HHSC with the authority to administer the Federal Medical Assistance
(Medicaid) program in Texas.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on March 8, 2004.
TRD-200401758
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Effective date: March 28, 2004
Proposal publication date: December 12, 2003
For further information, please call: (512) 424-6576
2.
APPLICANT AND RECIPIENT REQUIREMENTS
3.
PROVIDER REQUIREMENTS
4.
DUTIES OF THE COMMISSION
5.
HEALTH INSURER REQUIREMENTS
6.
BILLING AND PAYMENT GUIDELINES