| (a) Introduction. The Health and Human Services Commission
(HHSC) may reward or penalize a hospital under this section based
on the hospital's performance with respect to exceeding or failing
to meet outcome and process measures relative to all Texas Medicaid
and CHIP hospitals regarding the rates of potentially preventable
events.
(b) Definitions.
(1) Actual-to-Expected Ratio--A ratio that measures
the impact of potentially preventable readmissions (PPRs) by deriving
an actual hospital rate compared to an expected hospital rate based
on a methodology defined by HHSC. HHSC may use cost of PPR as a factor
in weighting PPRs and in calculating PPR Actual-to-Expected Ratio.
(2) Adjustment time period--The state fiscal year (September
through August) that a hospital's claims are adjusted in accordance
with subsection (f) of this section. Adjustments will be done on an
annual basis.
(3) All Patient Refined Diagnosis Related Group (APR
DRG)--A diagnosis and procedure code classification system for inpatient
services.
(4) Candidate admission--An admission that is at risk
of a PPR.
(5) Case-mix--A measure of the clinical characteristics
of patients treated during the reporting time period and measured
using APR DRG or its replacement classification system, severity of
illness, patient age, and the presence of a major mental health or
substance abuse comorbidity.
(6) Claims during the reporting time period--Includes
Medicaid traditional fee-for-service (FFS), Children's Health Insurance
Program or CHIP, and managed care inpatient hospital claims filed
for reimbursement by a hospital that:
(A) had a date of admission occurring within the reporting
period;
(B) were adjudicated and approved for payment during
the reporting period and the six-month grace period that immediately
followed, except for claims that had zero inpatient days;
(C) were not claims for patients who are covered by
Medicare;
(D) were not claims for individuals classified as undocumented
immigrants; and
(E) were not subject to other exclusions as determined
by HHSC.
(7) Children's Health Insurance Program or CHIP or
Program--The Texas State Children's Health Insurance Program established
under Title XXI of the federal Social Security Act (42 U.S.C. Chapter
7, Title XXI) and Chapters 62 and 63 of the Texas Health and Safety
Code.
(8) Clinically related--A requirement that the underlying
reason for readmission be plausibly related to the care rendered during
or immediately following the initial admission. A clinically related
readmission occurs within a specified readmission time interval resulting
from the process of care and treatment during the initial admission
or from a lack of post admission follow-up, but not from unrelated
events occurring after the initial admission.
(9) HHSC--The Health and Human Services Commission
or its designee.
(10) Hospital--A public or private institution licensed
under Chapter 241 or Chapter 577, Texas Health and Safety Code, including
a general or special hospital as defined by §241.003, Texas Health
and Safety Code.
(11) Initial admission--A candidate admission followed
by one or more readmissions that are clinically related.
(12) Managed care organization (MCO)--A provider or
organization under contract with HHSC to provide services to Medicaid
or CHIP recipients using a health care delivery system or dental services
delivery system in which provider or organization coordinates the
patient's overall care.
(13) Medicaid program--The medical assistance program
established under Chapter 32, Texas Human Resources Code.
(14) Potentially preventable event (PPE)--A potentially
preventable admission, a potentially preventable ancillary service,
a potentially preventable complication, a potentially preventable
emergency room visit, a potentially preventable readmission, or a
combination of these events, which are more fully defined in §354.1070
of this title.
(15) Potentially preventable readmission (PPR)--A return
hospitalization of a person within a period specified by HHSC that
may have resulted from deficiencies in the care or treatment provided
to the person during a previous hospital stay or from deficiencies
in post-hospital discharge follow-up. The term does not include a
hospital readmission necessitated by the occurrence of unrelated events
after the discharge. The term includes the readmission of a person
to a hospital for:
(A) the same condition or procedure for which the person
was previously admitted;
(B) an infection or other complication resulting from
care previously provided;
(C) a condition or procedure that indicates that a
surgical intervention performed during a previous admission was unsuccessful
in achieving the anticipated outcome; or
(D) another condition or procedure of a similar nature,
as determined by HHSC.
(16) Readmission chain--A sequence of PPRs that are
all clinically related to the Initial Admission. A readmission chain
may contain an Initial Admission and only one PPR, or may contain
multiple PPRs following the Initial Admission.
(17) Reporting time period--The period of time that
includes hospital claims that are assessed for PPRs. This may be a
state fiscal year (September through August) or other specified time
frame as determined by HHSC. PPR Reports will consist of statewide
and hospital-specific reports and will be done at least on an annual
basis, using the most complete data period available to HHSC.
(18) Safety-net hospital--As defined in §355.8052
of this title (relating to Inpatient Hospital Reimbursement).
(c) Calculating a PPR rate. Using claims during the
reporting time period and HHSC-designated software and methodology,
HHSC calculates an actual PPR rate and an expected PPR rate for each
hospital in the analysis. The methodology for inclusion of hospitals
in the analysis will be described in the statewide and hospital-specific
reports. The actual-to-expected ratio is rounded to two decimal places
and used to determine reimbursement adjustments described in subsection
(f) of this section.
(1) The actual PPR rate is the number of readmission
chains divided by the number of candidate admissions.
(2) The expected PPR rate is the expected number of
readmission chains divided by the number of candidate admissions.
The expected number of readmission chains is based on the hospital's
case-mix relative to the case-mix of all hospitals included in the
analysis during the reporting period.
(3) HHSC may weight PPRs based on expected resource
use.
(d) Comparing the PPR performance of all hospitals
included in analysis. Using the rates determined in subsection (c)
of this section, HHSC calculates a ratio of actual-to-expected PPR
rates.
(e) Reporting results of PPR rate calculations. HHSC
provides a confidential report to each hospital included in the analysis
regarding the hospital's performance with respect to potentially preventable
readmissions, including the PPR rates calculated as described in subsection
(c) of this section and the hospital's actual-to-expected ratio calculated
as described in subsection (d) of this section.
(1) A hospital may request the underlying data used
in the analysis to generate the report via an email request to the
HHSC email address found on the report.
(2) The underlying data contains patient-level identifiers,
information on all hospitals where the readmissions occurred, and
other information deemed relevant by HHSC.
(f) Hospitals subject to reimbursement adjustment and
amount of adjustment.
(1) A hospital with an actual-to-expected PPR ratio
equal to or greater than 1.10 and equal to or less than 1.25 is subject
to a reimbursement adjustment of -1%;
(2) A hospital with an actual-to-expected PPR ratio
greater than 1.25 is subject to a reimbursement adjustment of -2%.
(g) Claims subject to reimbursement adjustment.
(1) The reimbursement adjustments described in subsection
(f) of this section will apply to all Medicaid fee-for-service claims,
based on patient discharge date, for the adjustment time period after
the confidential report on which the reimbursement adjustments are
based is made available to hospitals.
(2) The reimbursement adjustments for a hospital will
cease in the adjustment time period that is after the hospital receives
a confidential report indicating an actual-to-expected ratio of less
than 1.10.
(3) On an annual basis and based on review of the data
quality and accuracy, HHSC may determine if reimbursement adjustments
are appropriate.
(h) Targeted incentive payments for safety-net hospitals.
(1) HHSC determines annually whether a safety-net hospital
may receive an incentive payment for performance on PPR incidence.
(2) The appropriated funds for the targeted incentive
payments are split in half, 50 percent for PPRs and 50 percent for
potentially preventable complications. HHSC may change the allocated
percentages based on review of data and the changing needs of the
program.
(3) The dataset used in the incentive analysis is the
same as the dataset used in the PPR reimbursement adjustments.
(4) Hospitals that are eligible for a targeted incentive
payment must meet the following requirements:
(A) be a safety-net hospital;
(B) have an actual-to-expected ratio of at least 10
percent lower than the statewide average (actual-to-expected ratio
is less than or equal to 0.90);
(C) have not received a penalty for either PPRs or
potentially preventable complications; and
(D) are not low-volume, as defined by HHSC.
(5) Calculation of targeted incentive payments.
(A) Calculate base allocation. Each eligible hospital
is awarded a base allocation not to exceed $100,000.
(B) Calculate variable allocation. Each eligible hospital
is awarded a variable allocation, which is calculated from remaining
funds after distribution of base allocations to all eligible hospitals.
The variable allocation has the following components:
(i) Hospital size score. Each eligible hospital's size
divided by the average size of the whole group of hospitals within
each incentive pool. Size is calculated based on total inpatient facility
claims paid to each eligible hospital. Each eligible hospital's size
calculation is capped at 2.00.
(ii) Hospital Performance score. Each eligible hospital's
performance divided by the average performance of the whole group
of hospitals within each incentive pool. Performance is calculated
by actual to expected ratio.
(iii) Composite score. Each eligible hospital receives
a composite score, which is the hospital's size score multiplied by
the hospital's performance score.
(iv) Each hospital's composite score divided by the
sum of all eligible hospitals' composite scores is multiplied by the
remaining incentive funds, after distribution of base allocations.
(C) Calculate final allocation: The final allocation
to each eligible hospital is equal to the eligible hospital's base
allocation plus the eligible hospital's variable allocation.
(6) Each eligible hospital's PPR incentive payment
will be divided between FFS and MCO reimbursements based on the percentage
of its total paid FFS and MCO Medicaid inpatient hospital reimbursements
for the reporting time period accruing from FFS.
(7) PPR incentive payments may be made as lump sum
payments or tied to particular claims or recipients, at HHSC's discretion.
(8) HHSC will post the methodology for calculating
and distributing incentives on its public website.
(9) Targeted incentive payments for safety-net hospitals
are not included in the calculation of a hospital's hospital-specific
limit or low income utilization rate.
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| Source Note: The provisions of this §354.1445 adopted to be effective April 21, 2013, 38 TexReg 2315; amended to be effective September 1, 2014, 39 TexReg 6403; amended to be effective May 15, 2016, 41 TexReg 3291 |
