| (B) A hospital must notify HHSC Rate Analysis Department
in writing within 30 days of the filing of bankruptcy or of changes
in ownership, operation, licensure, Medicare or Medicaid enrollment,
or affiliation that may affect the hospital's continued eligibility
for payments under this section.
(d) Source of funding. The non-federal share of funding
for payments under this section is limited to public funds from governmental
entities. Prior to processing uncompensated-care payments for the
final payment period within a waiver demonstration year for any uncompensated-care
pool or sub-pool described in subsection (f)(2) of this section, HHSC
will survey the governmental entities that provide public funds for
the hospitals in that pool or sub-pool to determine the amount of
funding available to support payments from that pool or sub-pool.
(e) Payment frequency. HHSC will distribute waiver
payments on a schedule to be determined by HHSC and posted on HHSC's
(f) Funding limitations.
(1) Payments made under this section are limited by
the maximum aggregate amount of funds allocated to the provider's
uncompensated-care pool for the demonstration year. If payments for
uncompensated care for an uncompensated-care pool attributable to
a demonstration year are expected to exceed the aggregate amount of
funds allocated to that pool by HHSC for that demonstration year,
HHSC will reduce payments to providers in the pool as described in
subsection (g)(6) of this section.
(2) HHSC will establish the following uncompensated-care
pools: a state-owned hospital pool, a non-state-owned hospital pool,
a physician group practice pool, a governmental ambulance provider
pool, and a publicly owned dental provider pool.
(A) The state-owned hospital pool.
(i) The state-owned hospital pool funds uncompensated-care
payments to state-owned teaching hospitals, state-owned IMDs, and
the Texas Center for Infectious Disease.
(ii) HHSC will determine the allocation for this pool
at an amount less than or equal to the total annual maximum uncompensated-care
payment amount for these hospitals as calculated in subsection (g)(2)
of this section.
(B) Non-state-owned provider pools. HHSC will allocate
the remaining available uncompensated-care funds, if any, among the
non-state-owned provider pools as described in this subparagraph.
The remaining available uncompensated-care funds equal the amount
of funds approved by CMS for uncompensated-care payments for the demonstration
year less the sum of funds allocated to the state-owned hospital pool
under subparagraph (A) of this paragraph. HHSC will allocate the funds
among non-state-owned provider pools based on the following amounts.
(i) For the physician group practice pool, the governmental
ambulance provider pool, and the publicly owned dental provider pool:
(I) for demonstration year nine, an amount to equal
the percentage of the applicable total uncompensated-care pool amount
paid to each group in demonstration year six; and
(II) for demonstration years ten and after, an amount
to equal a percentage determined by HHSC annually based on factors
including the amount of reported charity-care costs for the previous
demonstration year and the ratio of reported charity-care costs to
hospitals' charity-care costs.
(ii) For the non-state-owned hospital pool, all of
the remaining funds after the allocations described in clause (i)
of this subparagraph. HHSC will further allocate the funds in the
non-state-owned hospital pool among all hospitals in the pool and
create non-state-owned hospital sub-pools as follows:
(I) calculate a revised maximum payment amount for
each non-state-owned hospital as described in subsection (g)(6) of
this section and allocate that amount to the hospital; and
(II) group all non-state-owned hospitals into sub-pools
based on their geographic location within one of the state's Medicaid
service delivery areas (SDAs), as described in subsection (g)(7) of
(3) Payments made under this section are limited by
the availability of funds identified in subsection (d) of this section
and timely received by HHSC. If sufficient funds are not available
for all payments for which the providers in each pool or sub-pool
are eligible, HHSC will reduce payments as described in subsection
(h)(2) of this section.
(4) If for any reason funds allocated to a provider
pool or to individual providers within a sub-pool are not paid to
providers in that pool or sub-pool for the demonstration year, the
funds will be redistributed to other provider pools based on each
pool's pro-rata share of remaining uncompensated costs for the same
demonstration year. The redistribution will occur when the reconciliation
for that demonstration year is performed.
(g) Uncompensated-care payment amount.
(A) Cost and payment data reported by a hospital in
the uncompensated-care application is used to calculate the annual
maximum uncompensated-care payment amount for the applicable demonstration
year, as described in paragraph (2) of this subsection.
(B) Unless otherwise instructed in the application,
a hospital must base the cost and payment data reported in the application
on its applicable as-filed CMS 2552 Cost Report(s) For Electronic
Filing Of Hospitals corresponding to the data year and must comply
with the application instructions or other guidance issued by HHSC.
(i) When the application requests data or information
outside of the as-filed cost report(s), a hospital must provide all
requested documentation to support the reported data or information.
(ii) For a new hospital, the cost and payment data
period may differ from the data year, resulting in the eligible uncompensated
costs based only on services provided after the hospital's Medicaid
enrollment date. HHSC will determine the data period in such situations.
(A) A hospital's annual maximum uncompensated-care
payment amount is the sum of the components described in clauses (i)
- (iv) of this subparagraph.
(i) The hospital's inpatient and outpatient charity-care
costs pre-populated in or reported on the uncompensated-care application,
as described in paragraph (3) of this subsection, reduced by interim
DSH payments for the same program period, if any, that reimburse the
hospital for the same costs. To identify DSH payments that reimburse
the hospital for the same costs, HHSC will:
(I) Use self-reported information on the application
to identify charges that can be claimed by the hospital in both DSH
and UC and convert the charges to cost;
(II) Calculate a DSH-only uninsured shortfall by reducing
the hospital's total uninsured costs, calculated as described in §355.8066
of this chapter, by the result from subclause (I) of this clause;
(III) Reduce the interim DSH payment amount by the
(-a-) the DSH-only uninsured shortfall calculated as
described in subclause (II) of this clause; and
(-b-) the hospital's Medicaid shortfall, calculated
as described in §355.8066 of this chapter.
(ii) Other eligible costs for the data year, as described
in paragraph (4) of this subsection;
(iii) Cost and payment adjustments, if any, as described
in paragraph (5) of this subsection; and
(iv) For each large public hospital, the amount transferred
to HHSC by that hospital's affiliated governmental entity to support
DSH payments to that hospital and private hospitals for the same demonstration
(B) A hospital also participating in the DSH program
cannot receive total uncompensated-care payments under this section
(related to inpatient and outpatient hospital services provided to
uninsured charity-care individuals) and DSH payments that exceed the
hospital's total eligible uncompensated costs. For purposes of this
requirement, "total eligible uncompensated costs" means the hospital's
DSH hospital-specific limit (HSL) plus the unreimbursed costs of non-covered
inpatient and outpatient services provided to uninsured charity-care
(3) Hospital charity-care costs.
(A) For each hospital required by Medicare to submit
schedule S-10 of the CMS 2552-10 cost report, HHSC will pre-populate
the uncompensated-care application described in paragraph (1) of this
subsection with the uninsured charity-care charges reported by the
hospital on schedule S-10 for the hospital's cost reporting period
ending in the calendar year two years before the demonstration year.
For example, for demonstration year 9, which coincides with federal
fiscal year 2020, HHSC will use data from the hospital's cost reporting
period ending in calendar year 2018.
(B) For each hospital not required by Medicare to submit
schedule S-10 of the CMS 2552-10 cost report, the hospital must report
its hospital charity-care charges for services provided to uninsured
patients for the hospital's cost reporting period ending in the calendar
year two years before the demonstration year on the uncompensated-care
application described in paragraph (1) of this subsection.
(i) The instructions for reporting eligible charity-care
costs in the application will be consistent with instructions contained
in schedule S-10.
(ii) An IMD may not report charity-care charges for
services provided during the data year to patients aged 21 through
(4) Other eligible costs.
(A) In addition to inpatient and outpatient charity-care
costs, a hospital may also claim reimbursement under this section
for uncompensated charity care, as specified in the uncompensated-care
application, that is related to the following services provided to
uninsured patients who meet the hospital's charity-care policy:
(i) direct patient-care services of physicians and
mid-level professionals; and
(ii) certain pharmacy services.
(B) A payment under this section for the costs described
in subparagraph (A) of this paragraph are not considered inpatient
or outpatient Medicaid payments for the purpose of the DSH audit described
in §355.8065 of this subchapter.
(5) Adjustments. When submitting the uncompensated-care
application, a hospital may request that cost and payment data from
the data year be adjusted to reflect increases or decreases in costs
resulting from changes in operations or circumstances.
(A) A hospital:
(i) may request that costs not reflected on the as-filed
cost report, but which would be incurred for the demonstration year,
be included when calculating payment amounts; and
(ii) may request that costs reflected on the as-filed
cost report, but which would not be incurred for the demonstration
year, be excluded when calculating payment amounts.
(B) Documentation supporting the request must accompany
the application, and provide sufficient information for HHSC to verify
the link between the changes to the hospital's operations or circumstances
and the specified numbers used to calculate the amount of the adjustment.
(i) Such supporting documentation must include:
(I) a detailed description of the specific changes
to the hospital's operations or circumstances;
(II) verifiable information from the hospital's general
ledger, financial statements, patient accounting records or other
relevant sources that support the numbers used to calculate the adjustment;
(III) if applicable, a copy of any relevant contracts,
financial assistance policies or other policies/procedures that verify
the change to the hospital's operations or circumstances.
(ii) HHSC will deny a request if it cannot verify that
costs not reflected on the as-filed cost report will be incurred for
the demonstration year.
(C) Notwithstanding the availability of adjustments
impacting the cost and payment data described in this section, no
adjustments to the state payment cap will be considered for purposes
of Medicaid DSH payment calculations described in §355.8065 of
(6) Reduction to stay within uncompensated-care pool
allocation amounts. Prior to processing uncompensated-care payments
for any payment period within a waiver demonstration year for any
uncompensated-care pool described in subsection (f)(2) of this section,
HHSC will determine if such a payment would cause total uncompensated-care
payments for the demonstration year for the pool to exceed the allocation
amount for the pool and will reduce the maximum uncompensated-care
payment amounts providers in the pool are eligible to receive for
that period as required to remain within the pool allocation amount.
(A) Calculations in this paragraph will be applied
to each of the uncompensated-care pools separately.
(B) HHSC will calculate the following data points:
(i) For each provider, prior period payments to equal
prior period uncompensated-care payments for the demonstration year.
(ii) For each provider, a maximum uncompensated-care
payment for the payment period to equal the sum of:
(I) the portion of the annual maximum uncompensated-care
payment amount calculated for that provider (as described in this
section and the sections referenced in subsection (f)(2)(B) of this
section) that is attributable to the payment period; and