(a) Introduction. This section establishes the Comprehensive
Hospital Increase Reimbursement Program (CHIRP) for program periods
on or after September 1, 2021, wherein the Health and Human Services
Commission (HHSC) directs a managed care organization (MCO) to provide
a uniform reimbursement increase to hospitals in the MCO's network
in a designated service delivery area (SDA) for the provision of inpatient
services, outpatient services, or both. This section also describes
the methodology used by HHSC to calculate and administer such reimbursement
increases. CHIRP is designed to incentivize hospitals to improve access,
quality, and innovation in the provision of hospital services to Medicaid
recipients through the use of metrics that are expected to advance
at least one of the goals and objectives of the state's managed care
quality strategy.
(b) Definitions. The following definitions apply when
the terms are used in this section. Terms that are used in this section
may be defined in §353.1301 of this subchapter (relating to General
Provisions).
(1) Average Commercial Reimbursement (ACR) gap--The
difference between what an average commercial payor is estimated to
pay for the services and what Medicaid actually paid for the same
services.
(2) Children's hospital--A children's hospital as defined
by §355.8052 of this title (relating to Inpatient Hospital Reimbursement).
(3) Inpatient hospital services--Services ordinarily
furnished in a hospital for the care and treatment of inpatients under
the direction of a physician or dentist, or a subset of these services
identified by HHSC. Inpatient hospital services do not include skilled
nursing facility or intermediate care facility services furnished
by a hospital with swing-bed approval, or any other services that
HHSC determines should not be subject to the rate increase.
(4) Institution for mental diseases (IMD)--A hospital
that is primarily engaged in providing psychiatric diagnosis, treatment,
or care of individuals with mental illness. IMD hospitals are reimbursed
as freestanding psychiatric facilities under §355.8060 of this
title (relating to Reimbursement Methodology for Freestanding Psychiatric
Facilities).
(5) Medicare payment gap--The difference between what
Medicare is estimated to pay for the services and what Medicaid actually
paid for the same services.
(6) Outpatient hospital services--Preventive, diagnostic,
therapeutic, rehabilitative, or palliative services that are furnished
to outpatients of a hospital under the direction of a physician or
dentist, or a subset of these services identified by HHSC. HHSC may,
in its contracts with MCOs governing rate increases under this section,
exclude from the definition of outpatient hospital services such services
as are not generally furnished by most hospitals in the state, or
such services that HHSC determines should not be subject to the rate
increase.
(7) Program period--A period of time for which HHSC
will contract with participating MCOs to pay increased capitation
rates for the purpose of provider payments under this section. Each
program period is equal to a state fiscal year beginning September
1 and ending August 31 of the following year.
(8) Rural hospital--A hospital that is a rural hospital
as defined in §355.8052 of this title.
(9) State-owned non-IMD hospital--A hospital that is
owned and operated by a state university or other state agency that
is not primarily engaged in providing psychiatric diagnosis, treatment,
or care of individuals with mental disease.
(10) Urban hospital--An urban hospital as defined by §355.8052
of this title.
(c) Participation requirements. As a condition of participation,
all hospitals participating in CHIRP must allow for the following.
(1) The hospital must submit a properly completed enrollment
application by the due date determined by HHSC. The enrollment period
must be no less than 21 calendar days and the final date of the enrollment
period will be at least nine days prior to the IGT notification.
(A) In the application, the hospital must select whether
it will participate in the optional program component described in
subsection (g)(3) of this section. A hospital cannot participate in
the program component described in subsection (g)(3) of this section
without also participating in the program component described in subsection
(g)(2) of this section.
(B) If the hospital chooses to participate in the optional
program component described in subsection (g)(3) of this section,
the hospital may be required to submit certain necessary data to calculate
the ACR gap.
(C) A hospital is required to maintain all supporting
documentation at the hospital for any information provided under subparagraph
(B) of this paragraph for a period of no less than 5 years.
(2) The entity that owns the hospital must certify,
on a form prescribed by HHSC, that no part of any payment made under
the CHIRP will be used to pay a contingent fee and that the entity's
agreement with the hospital does not use a reimbursement methodology
that contains any type of incentive, directly or indirectly, for inappropriately
inflating, in any way, claims billed to the Medicaid program, including
the hospitals' receipt of CHIRP funds. The certification must be received
by HHSC with the enrollment application described in paragraph (1)
of this subsection.
(3) If a provider has changed ownership in the past
five years in a way that impacts eligibility for this program, the
provider must submit to HHSC, upon demand, copies of contracts it
has with third parties with respect to the transfer of ownership or
the management of the provider and which reference the administration
of, or payment from, this program.
(4) All quality metrics for which a hospital is eligible
based on class, as described in subsection (d) of this section, must
be reported by the participating hospital to be eligible for payment.
(d) Classes of participating hospitals.
(1) HHSC may direct the MCOs in an SDA that is participating
in the program described in this section to provide a uniform percentage
rate increase to all hospitals within one or more of the following
classes of hospital with which the MCO contracts for inpatient or
outpatient services:
(A) children's hospitals;
(B) rural hospitals;
(C) state-owned non-IMD hospitals;
(D) urban hospitals;
(E) non-state-owned IMDs; and
(F) state-owned IMDs.
(2) If HHSC directs rate increases to more than one
class of hospital within the SDA, the percentage rate increases directed
by HHSC may vary between classes of hospital.
(e) Eligibility. HHSC determines eligibility for rate
increases by SDA and class of hospital.
(1) Service delivery area. Only hospitals in an SDA
that includes at least one sponsoring governmental entity are eligible
for a rate increase.
(2) Class of hospital. HHSC will identify the class
or classes of hospital within each SDA described in paragraph (1)
of this subsection to be eligible for a rate increase. HHSC will consider
the following factors when identifying the class or classes of hospital
eligible for a rate increase and the percent increase applicable to
each class:
(A) whether a class of hospital contributes more or
less significantly to the goals and objectives in HHSC's managed care
quality strategy, as required in 42 C.F.R. §438.340, relative
to other classes;
(B) which class or classes of hospital the sponsoring
governmental entity wishes to support through IGTs of public funds,
as indicated on the application described in subsection (c) of this
section;
(C) the estimated Medicare gap for the class of hospitals,
based upon the upper payment limit demonstration most recently submitted
by HHSC to the Centers for Medicare and Medicaid Services (CMS);
(D) the estimated ACR gap for the class or individual
hospitals, as indicated on the application described in subsection
(c) of this section; and
(E) the percentage of Medicaid costs incurred by the
class of hospital in providing care to Medicaid managed care clients
that are reimbursed by Medicaid MCOs prior to any rate increase administered
under this section.
(f) Services subject to rate increase.
(1) HHSC may direct the MCOs in an SDA to increase
rates for all or a subset of inpatient services, all or a subset of
outpatient services, or all or a subset of both, based on the service
or services that will best advance the goals and objectives of HHSC's
managed care quality strategy.
(2) In addition to the limitations described in paragraph
(1) of this subsection, rate increases for a state-owned IMD or non-state-owned
IMD are limited to inpatient psychiatric hospital services provided
to individuals under the age of 21 and to inpatient hospital services
provided to individuals 65 years or older.
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