| care provider provides written assurances that the terms of its individual proposal were arrived at independently without consultation with any other health care provider or combination of health care providers, and have not been communicated to any competitor or group of competitors. The department does not intend any action by the State of Texas in the contracting process to require or sanction any form of communication or joint action by competitors in the market for inpatient hospital services (with respect to either individual or joint applications) that fails to comply with the provisions of this section. (3) The department shall send solicitation packages, inviting proposals for selective provider agreements, to each health care provider serving residents of the counties selected for participation. Health care providers will be required at all times to be eligible to participate in the Medicare and Medicaid programs. Health care providers that are not sent solicitation packages for Medicaid recipients of a particular market will be able to request a package after demonstrating their intent to offer services to Medicaid recipients in those markets. (d) Proposals for selective provider agreements. Health care providers seeking selective provider agreements shall be required to submit the following information in their proposals: (1) a schedule of proposed payment rates to be applied to all covered health care provider inpatient services during the term of the agreement; (2) a proposed level of volume of services to Medicaid recipients that the health care provider would agree to serve during the contract period (this proposed level shall serve only as an estimate of services to assist the department in evaluating the availability of services within the relevant market area; it shall not serve as a limit on the amount of reimbursable services to be supplied by a contracting hospital); (3) data to assist the department in evaluating the effective service area and specialized service offerings of the health care provider; (4) assurances and certifications required to ensure health care provider compliance with the requirements of federal and Texas law and regulations, and the requirements of the department's selective contracting process; (5) a narrative description of the proposed plans (if any) of the acute care hospital to furnish optional volume management programs for Medicaid recipients; and (6) evidence that the application of the health care provider constitutes a binding quotation authorized by the corporate governance of the health care provider. (e) Evaluation of proposals for selective provider agreements for comprehensive market area selective contracting. The department shall evaluate health care provider proposals, except proposals from new facilities according to the following criteria. (1) Health care provider proposals shall be due to the department within one month of the release of proposal packages. All health care provider materials submitted to the department during the proposal process, and materials developed by the department or its contractors during the course of evaluation and negotiation, shall be confidential until all agreements are executed for all market areas in the state. (2) The department shall evaluate health care provider proposals on a market-by-market basis and determine a negotiation strategy to pursue in each market area following its evaluation of all market areas. Based on the application of pre-specified evaluation criteria for each market area, the department shall prepare a recommended strategy for contracting in each market area. Each market area strategy shall be subject to approval by the Executive Oversight Committee established by the department. (3) The department shall retain the option to make awards without negotiation. In some circumstances, the department may accept the proposals offered by every health care provider in the market area. In most cases, however, the department expects to enter into negotiations with those health care providers whose proposals, taken together, appear to represent the best combination of providers consistent with the overall objectives of the Medical Assistance Program. After negotiation, the department reserves the right not to award an agreement in a specific market area. In most cases, however, the department shall proceed to finalize and execute agreements with some subset of the health care providers in each market area. In that event, coverage restrictions associated with the use of non-contracted health care providers Medicaid recipients shall apply. (f) Evaluation criteria and methodology for comprehensive market area selective contracting. The department's evaluation of proposals, except proposals from new facilities, for selective provider agreements for comprehensive coverage of each market area shall be conducted in two phases. Phase One shall include determining minimally acceptable network combinations and Phase Two shall include cost evaluation. A description of each phase follows. (1) In Phase One, the department shall enter the information included in health care provider proposals in each market area into a personal computer based (PC-based) micro-simulation model designed to aid in the evaluation of the department's contracting options for each market. Data from health care provider proposals shall be combined with data from the department's eligibility systems and claims processing records to construct the data base required for this phase of the evaluation. Each health care provider's record in the data base shall contain information necessary to determine each health care provider's: (A) effective service area for Medicaid recipients in that market area; and (B) capacity to provide specialized services required by Medicaid recipients in the market area. (2) The PC-based micro-simulation model shall be used to test all possible combinations of health care providers applying for selective provider agreements to determine potential networks that shall meet the department's requirements for access to services for Medicaid patients. Where health care providers have submitted a joint proposal for selective provider agreements, the department shall evaluate the proposed provider network and the proposed network in all possible combinations with remaining health care providers that submitted proposals. (3) In Phase Two, each potential network shall be eligible for further consideration. If the Phase One evaluation fails to identify a potential network of applicant health care providers that meet the department's specified criteria, the department reserves the right to enter into direct negotiations with any health care provider serving the market area. The purpose of these negotiations shall be to develop a minimally acceptable potential network, and allow the department to initiate negotiations with a health care provider that failed to submit a proposal during the proposal period. (4) In Phase Two, each potential network identified in a market area in Phase One shall be evaluated to determine the estimated reduction in program costs that would result from entering into selective provider agreements with all of the health care providers in that potential network, while excluding all other health care providers from serving non-emergency cases. The department shall use the PC-based micro-simulation model to produce an estimate of the total change in Medicaid program costs that would result by entering into agreements with those health care providers during the base contract period. The estimate by the department shall consider: (A) changes in unit prices to be paid to providers for inpatient services; (B) changes in the distribution of service volumes (and case mix) across health care providers that would result from the reallocation of service volume from non-selected to selected providers; and (C) savings in Medicaid program costs likely to result from the changes in service volumes induced by optional volume management activities proposed by acute care hospitals, including both savings in aggregate acute care hospital service use and offsetting increases in non-hospital service costs. (5) The result of the evaluation by the department will be a range of values for each potential network. The ranges shall be constructed using best case, worst case, and expected value assumptions about the distribution of service volumes across hospitals in the network. (6) Following the evaluation, the department shall prepare a recommendation to the Executive Oversight Committee that includes the outcome of both phases of the evaluation for each market area, as well as a proposed strategy for the department to meet the best interests of the Medical Assistance Program. Department options shall include: (A) making an award without negotiations--including an award at the proposed price schedules to all health care providers in the market; (B) entering into negotiations with health care providers a single potential network to improve proposed pricing, if possible, and to finalize an agreement about key program features; or Cont'd... |
