<<Prev Rule

Texas Administrative Code

Next Rule>>
TITLE 1ADMINISTRATION
PART 15TEXAS HEALTH AND HUMAN SERVICES COMMISSION
CHAPTER 353MEDICAID MANAGED CARE
SUBCHAPTER ODELIVERY SYSTEM AND PROVIDER PAYMENT INITIATIVES
RULE §353.1306Comprehensive Hospital Increase Reimbursement Program for program periods on or after September 1, 2021

(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.

  (3) CHIRP rate increases will apply only to the in-network managed care claims billed under a hospital's primary National Provider Identifier (NPI) and will not be applicable to NPIs associated with non-hospital sub-providers owned or operated by a hospital.

(g) CHIRP capitation rate components. CHIRP funds will be paid to MCOs through two components of the managed care per member per month (PMPM) capitation rates. The MCOs' distribution of CHRIP funds to the enrolled hospitals may be based on each hospital's performance related to the quality metrics as described in §353.1307 of this subchapter (relating to Quality Metrics and Required Reporting Used to Evaluate the Success of the Comprehensive Hospital Increase Reimbursement Program). The hospital must have provided at least one Medicaid service to a Medicaid client for each reporting period to be eligible for payments.

  (1) In determining the percentages described under subsection (i)(1) and (2) of this section, HHSC will consider:

    (A) information from the participants in the SDA (including hospitals, managed-care organizations, and sponsoring governmental entities) on the amount of IGT the sponsoring governmental entities propose to transfer to HHSC to support the non-federal share of the increased rates for the first six months of a program period, as indicated on the applications described in subsection (c) of this section;

    (B) the class or classes of hospital determined in subsection (e)(2) of this section;

    (C) the type of service or services determined in subsection (f) of this section;

    (D) actuarial soundness of the capitation payment needed to support the rate increase;

    (E) available budget neutrality room under any applicable federal waiver programs;

    (F) hospital market dynamics within the SDA; and

    (G) other HHSC goals and priorities.

  (2) The Uniform Hospital Rate Increase Payment (UHRIP) is the first component.

    (A) The total value of UHRIP will be equal to a percentage of the estimated Medicare gap on a per class basis.

    (B) Allocation of funds across hospital classes will be proportional to the combined Medicare gap of each hospital class within an SDA to the total Medicare gap of all hospital classes within the SDA.

  (3) The Average Commercial Incentive Award (ACIA) is the second component.

    (A) The total value of ACIA will be equal to a percentage of the ACR gap less payments received under UHRIP.

    (B) Allocation of funds across hospitals will be proportional to each participating hospital's individual ACR gap to the total ACR gap for all participating hospitals in the SDA. For example, if two hospitals in a class in an SDA both have anticipated base payments of $100 and UHRIP payments of $50, but one hospital has an estimated ACR gap of $300 between its base payment and the estimate payment it would have received from a commercial payor, and the other hospital has an estimated ACR gap of $100, HHSC will first reduce the gaps by the UHRIP payment of $50 to a gap of $250 and $50, respectively. HHSC would then apply a uniform percentage of the gap (e.g., 50 percent of the gap) and would calculate an ACIA payment of $125 and $25, respectively. HHSC will then direct the MCOs to pay a percentage increase for the first hospital of 125 percent in addition to the 50 percent increase under UHRIP for the first hospital for a total increase of 175 percent above the contracted base rate, and 25 percent in addition to the 50 percent increase under UHRIP for the second hospital for a total increase of 75 percent.

(h) Distribution of CHIRP payments. CHIRP payments will be based upon actual utilization and will be paid as a percentage increase above the contracted rate between the MCO and the hospital.

(i) Determination of percentage of rate increase.

  (1) HHSC will determine the percentage of rate increase applicable to one or more classes of hospital by program component.

    (A) UHRIP rate increases will be determined by HHSC to be the percentage that is estimated to result in payments for the class that are equivalent to the amount described under subsection (g)(2)(A) of this section.

Cont'd...

Next Page

Link to Texas Secretary of State Home Page | link to Texas Register home page | link to Texas Administrative Code home page | link to Open Meetings home page