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TITLE 1ADMINISTRATION
PART 15TEXAS HEALTH AND HUMAN SERVICES COMMISSION
CHAPTER 354MEDICAID HEALTH SERVICES
SUBCHAPTER DTEXAS HEALTHCARE TRANSFORMATION AND QUALITY IMPROVEMENT PROGRAM
DIVISION 4DSRIP
RULE §354.1634Waiver Pool Allocation

(a) Purpose. In an effort to provide certainty to waiver participants, HHSC will provide performer specific allocations. This process requires that certain individual entities receive an allocation based upon a Regional Healthcare Partnership (RHP) specific allocation.

(b) RHP allocation. All available DSRIP funds are allocated among the RHPs for each demonstration year. The share of the DSRIP pool allocated to an RHP will be calculated using the formula: RHP Share of DSRIP Pool = (200%FPL + %MedicaidAcute + 2011UPL)/3, where:

  (1) "200%FPL" is the region's share of the state's population with income below 200% of the federal poverty level as determined by the 2006-2010 American Community Survey for Texas;

  (2) "%MedicaidAcute" is the region's share of all Texas Medicaid acute care payments in state fiscal year (SFY) 2011. Texas Medicaid acute care payments consist of the sum of Medicaid fee-for-service, Medicaid managed care, Vendor Drug Program, and Primary Care Case Management payments; and

  (3) "2011UPL" is the region's share of the state's Medicaid supplemental payments through the former Upper Payment Limit program made to providers in the RHP for SFY 2011.

(c) DSRIP allocation among performers for the first demonstration year. Anchors and performers may receive a DSRIP for the first demonstration year after review and approval of the RHP plan by HHSC.

  (1) An anchor is allocated 20% of the RHP allocation for the first demonstration year. An anchor may also receive a portion of the allocation in paragraph (2) of this subsection if it independently qualifies under that paragraph.

  (2) The amount of the RHP allocation for the first demonstration year not allocated to the anchor as described in paragraph (1) of this subsection is allocated to performers as follows:

    (A) First, divide the value of all of a performer's DSRIP projects, as submitted by HHSC for CMS approval, by the total value of all DSRIP projects in an RHP.

    (B) Second, multiply the result in subparagraph (A) of this paragraph by 80% of the RHP allocation for the first demonstration year for that RHP. The result is the first demonstration year DSRIP to the performer.

  (3) In the event that the RHP plan or a DSRIP project is not approved by the Centers for Medicare and Medicaid Services or an RHP deletes a DSRIP project without a replacement, HHSC may recoup the DSRIP for the first demonstration year.

(d) Three-pass process for allocating DSRIP. The DSRIP pool is allocated to performers for the second through fifth demonstration years through a three-stage process.

  (1) The first stage (Pass One) sets an initial allocation to each potential performer, described further in subsection (e) of this section.

  (2) Any unused DSRIP funds allocated in Pass One remain in the RHP for the second stage (Pass Two). An RHP may begin Pass Two if:

    (A) the RHP funds the minimum number of Category 1 and Category 2 projects in accordance with §354.1632 of this subchapter (relating to DSRIP Requirements for Regional Healthcare Partnerships);

    (B) each performer meets the allocation requirements among the four DSRIP categories as described in subsection (h) of this section;

    (C) the minimum percentage of the Pass One allocation to non-profit and other private hospitals is met as follows:

      (i) A Tier 1 RHP must fund 30% of the Pass One allocation to non-profit and other private hospitals.

      (ii) A Tier 2 RHP must fund 30% of the Pass One allocation to non-profit and other private hospitals.

      (iii) A Tier 3 RHP must fund 15% of the Pass One allocation to non-profit and other private hospitals.

      (iv) A Tier 4 RHP must fund 5% of the Pass One allocation to non-profit and other private hospitals; and

    (D) the minimum number of safety net hospitals in an RHP perform DSRIP projects. If there are fewer safety net hospitals in an RHP than are required to perform as follows, then all safety net hospitals in that RHP must perform DSRIP projects.

      (i) At least five safety net hospitals in a Tier 1 RHP must perform DSRIP projects.

      (ii) At least four safety net hospitals in a Tier 2 RHP must perform DSRIP projects.

      (iii) At least two safety net hospitals in a Tier 3 RHP must perform DSRIP projects.

      (iv) At least one safety net hospital in a Tier 4 RHP must perform DSRIP projects.

  (3) For purposes of this subsection, a safety net hospital is any hospital that, as described in subsection (e) of this section:

    (A) participated in the Disproportionate Share Hospital (DSH) program and:

      (i) received at least 15% of the RHP's Medicaid acute care payments in SFY 2011 for all hospitals that receive a Pass One allocation; or

      (ii) has a trended 2012 hospital-specific limit (HSL) that represents at least 15% of the RHP's total HSL; or

    (B) has a Pass One allocation for demonstration years two through five of greater than $60 million.

  (4) Any unused funds allocated in Pass Two remain in the RHP for the third stage (Pass Three), described further in subsection (g) of this section.

(e) Pass One DSRIP allocation among performers. Entities within an RHP may be allocated an amount from the RHP allocation described in subsection (b) of this section.

  (1) The RHP allocation is divided among certain classes of providers within the RHP as follows:

    (A) hospitals are allocated 75%;

    (B) community mental health centers are allocated 10%;

    (C) academic health science centers are allocated 10%; and

    (D) local health departments are allocated 5%.

  (2) A hospital may receive a Pass One allocation only if the hospital participated in FFY 2012 Disproportionate Share Hospital program or the former Upper Payment Limit program in Federal Fiscal Year (FFY) 2011.

  (3) The share of the RHP allocation that is allocated to hospitals is further divided among the hospitals according to the following formula: Hospital Share of RHP Allocation = (.25 x 2011UPL) + (.25 x MedicaidAcute) + (.50 x HSLCharity), where:

    (A) "HSLCharity" is the hospital's share of the total hospital specific limit (HSL) for all hospitals in the RHP that receive a Pass One allocation. If a hospital eligible for a Pass One allocation does not have a FFY 2012 HSL, "HSLCharity" is measured by that hospital's charity care costs as reported in the 2010 Annual Hospital Survey trended to 2012 by a 4% total trend over the two-year period;

    (B) "MedicaidAcute" is the hospital's share of all Medicaid acute care payments in SFY 2011 to hospitals in the RHP that receive a Pass One allocation. Texas Medicaid acute care payments consist of the sum of Medicaid fee-for-service, Medicaid managed care, and Primary Care Case Management payments; and

    (C) "2011UPL" is the hospital's share of the Medicaid supplemental payments through the former Upper Payment Limit program made to hospitals that received a Pass One allocation in the RHP for SFY 2011.

  (4) Option for collaboration. Certain entities may combine their Pass One allocation to create one or more DSRIP projects that further the goal of regional transformation.

    (A) A hospital in an RHP may combine its Pass One allocation with other hospitals in the same RHP if all of the entities have a Pass One allocation at or below $2 million for the second demonstration year.

    (B) An entity in a Tier 3 or 4 RHP as described by §354.1611(f) of this subchapter (relating to Organization) may combine its Pass One allocation with other entities in the same RHP.

    (C) All entities involved in such collaboration must state in the RHP plan that they are collaborating freely.

    (D) Any DSRIP projects created under this paragraph must still have only one performer, and that performer must follow all other restrictions on performers.

(f) Pass Two DSRIP process. An RHP's unused DSRIP funds from Pass One are reallocated within the RHP.

  (1) Hospitals that are ineligible to participate in Pass One that are interested in becoming performers are allocated equal shares totaling 15% of their RHP's unused Pass One allocation.

  (2) Physician group practices not affiliated with academic health science centers that are interested in becoming performers are allocated equal shares totaling 10% of their RHP's unused Pass One allocation.

  (3) Performers that participated in Pass One are allocated 75% of the unused Pass One allocation.

    (A) To calculate an individual performer's Pass Two allocation:

      (i) First, determine each performer's percent of the total Pass One funding used for demonstration years two through five; and

      (ii) Second, multiply the result in clause (i) of this subparagraph by 75% of the RHP's unused Pass One allocation.

    (B) Performers must work cooperatively to implement complementary DSRIP projects and address outstanding community needs.

  (4) Within an RHP, performers may collaborate using individual Pass Two allocations to fund a DSRIP project that is a priority for the RHP in a manner similar to subsection (e)(4) of this section.

(g) Pass Three DSRIP process. If there are unused funds after Pass Two, the anchor may coordinate with performers in the RHP to determine which additional DSRIP projects to include in the RHP plan.

(h) One-time reassessment of RHP allocation. If at the time of plan modifications as described in §354.1623 of this division (relating to RHP Plan Modifications and the Addition of Three-Year DSRIP Projects), an RHP plan does not include the entire RHP allocation, the RHP will have one opportunity to use the remaining RHP allocation for demonstration years three through five.


Source Note: The provisions of this §354.1634 adopted to be effective October 31, 2012, 37 TexReg 8453; amended to be effective April 1, 2013, 38 TexReg 1971; amended to be effective September 1, 2013, 38 TexReg 5431; amended to be effective September 30, 2014, 39 TexReg 7570

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