|(a) Purpose of methodology. Performance-based add-on payments
provide additional funding to nursing facilities that meet specific performance
(b) Funding source. Each fiscal year, the Commissioner of the
Texas Health and Human Services Commission (HHSC) will identify the portion,
if any, of Medicaid nursing facility service provider funding that will be
designated for performance-based add-on payments. This amount is subsequently
called the Performance-based Add-on Fund (PAF).
(c) Provider defined. For the purposes of this methodology,
a nursing facility provider is a Medicaid long-term care contracted provider
licensed and regulated by the Texas Department of Human Services (DHS).
(d) Provider eligibility. To be eligible for performance-based
add-on payments, a provider must have had Medicaid-certified beds during the
entire service period as defined in subsection (e) of this section.
(e) Service period. The service period for the first year of
performance-based add-on payments will begin on September 1, 2000. Each service
period will correspond to a state fiscal year that begins September 1 of one
year and continues through August 31 of the following year.
(f) Performance criteria. Provider performance will be judged
on the basis of compliance with state and federal regulations as well as on
the basis of resident outcomes.
(g) Regulatory compliance. Compliance with state and federal
regulations is a prerequisite for performance-based add-on payments.
(h) Regulatory compliance accountability period. Each provider's
regulatory compliance will be determined as the lowest level of compliance
attained on any regulatory visit to that provider during the service period
and recorded in the Long-Term Care-Regulatory (LTC-R) data warehouse as of
November 30 of the calendar year in which the service period ends. If the
service period does not encompass a certification survey to the provider,
then the most recently recorded certification visit prior to the service period
will be included in the determination of the provider's regulatory compliance.
(i) Levels of regulatory compliance. The levels of regulatory
compliance are based on Health Care Financing Administration (HCFA) State
Operations Manual, Transmittal 274, June 1995, HCFA-Pub. 7. The following
table provides the precise definition for each compliance level.
(j) Resident outcomes. Resident outcomes are determined using
a system of Quality Indicators (QIs) whose definitions were designed by the
Center for Health Systems Research and Analysis (CHSRA) under contract to
HCFA. These QIs are computed from resident assessment data transmitted directly
from the facilities to the HCFA Minimum Data Set (MDS) automation system.
The QI automation that will be used in the performance-based add-on system
is the DHS implementation already in use for the Quality Reporting System
(k) Resident outcomes performance indices. Provider performance
with respect to resident outcomes is scored using two indices derived from
QI scores. These indices are called the Potential Advantages Score (PAS) and
the Potential Disadvantages Score (PDS).
(l) Potential advantages score. The following table provides
the definitions for the PAS scale.
(m) Potential disadvantages score. The following table provides
the definitions for the PDS scale.
(n) Determination of PAS and PDS. The PAS index is calculated
by counting the number of QIs on which a provider appears at or below the
10th percentile performance threshold. The PDS index is calculated by counting
the number of QI conditions on which either a provider appears at or above
the 90th percentile performance threshold or on which it has a non-zero numerator
for any one of three sentinel event QIs. The sentinel event QIs are dehydration,
fecal impaction, and pressure sores in low risk residents. PAS and PDS indices
are converted to PAS and PDS ratings using the definitions in the tables in
subsection (l) and subsection (m) of this section.
(o) Determination of the 10th and 90th percentile QI performance
(1) For defining the 10th and 90th percentile performance thresholds,
the QI scale is divided into 100 steps. The PAS threshold is defined as the
smallest QI value (in .01 steps) that yields the largest percentile less than
or equal to 10%. The PDS threshold is defined as the largest QI value (in
.01 steps) that yields the smallest percentile greater than or equal to 90%.
(2) If because of the distribution of QI scores, the 10th percentile
performance threshold for a particular QI cannot be determined, then that
QI is excluded from those that can count toward PAS. Similarly, a QI is excluded
from those that can count toward PDS if the 90th percentile threshold cannot
(3) For the three QIs that HCFA identifies as sentinel events
(dehydration, pressure sores in low risk residents, and fecal impaction),
a single occurrence counts toward the PDS. Sentinel event QIs have neither
a PAS nor PDS threshold.
(p) Resident outcomes performance accountability period. Each
provider's Resident Outcomes Performance Indices will be determined from MDS
resident assessments with assessment dates during the service period and recorded
in the DHS Quality Reporting System's MDS database as of November 30 of the
calendar year in which the service period ends.
(q) Calculation of yearlong quality indicators. QI values are
simple quotients consisting of a numerator and a denominator. The numerators
and denominators of each provider's QIs will be calculated for each of the
four quarters that span the service period. If a lack of provider MDS data
prevents QI calculations for any quarter, the provider will become ineligible
for performance-based add-on payments. The four numerators for each provider
QI will be summed to create a yearlong provider numerator. The four denominators
for each provider QI will be summed to create a yearlong provider denominator.
The resulting yearlong QI numerators and denominators will be used to determine
the 10th and 90th percentile performance thresholds using the methods described
in subsection (o) of this section.
(r) Determination of provider performance units. Total Performance
Units (TPU) will be calculated for each eligible provider using the formula:
Provider TPU = #Medicaid Days x C x (A + B), where "#Medicaid Days" is the
number of Medicaid days of service that were provided during the service period,
and "A", "B", and "C" are the performance weights as detailed in subsection
(l) of this section for PAS, subsection (m) of this section for PDS, and subsection
(i) of this section for Regulatory Compliance.
(s) Determination of add-on payment per performance unit. The
amount of additional payment for each performance unit (PPU) will be calculated
from the formula, PPU = PAF/ (sum of the provider TPU of all eligible facilities).
(t) Determination of provider performance pay. The total amount
of performance-based pay due to each provider will be calculated from the
formula, Provider Performance Pay = Provider TPU x PPU.
(u) Review of DHS determination.
(1) DHS or its designee notifies nursing facilities of their
tentative eligibility for provider performance pay during the service period.
Any nursing facility, including those nursing facilities that do not qualify
or that contend that the amount of payment to be disbursed is incorrect, is
allowed to request a review by DHS or its designee. The actual amount of payment
also may vary if a successful review request by one or more nursing facilities
necessitates an adjustment in the amount of payments to the other nursing
facilities in the program. The review must be completed before November 30
after the regulatory compliance accountability period. Because of the state's
ongoing review of data elements used in the formulas after DHS or its designee
notifies the nursing facilities of their dollar amount reward, it is possible
that a nursing facility may either gain or lose eligibility after receiving
tentative notification, which would affect payment amounts.
(2) Deficiencies recorded in the Long Term Care-Regulatory
(LTC-R) data systems as of November 30 of the calendar year in which the service
period ends will be included in the determination of performance weight C.
Contested deficiencies pending Informal Dispute Resolution (IDR), but recorded
in LTC-R data systems, will be included in the determination of performance
weight C. MDS assessment corrections that have not been recorded in the appropriate
automation system as of November 30 of the calendar year in which the service
period ends will not be considered in the determination of provider performance
weights A and B.
(3) The performance-based add-on payment methodology is designed
to disburse the entire performance-based add-on fund. Once the payments are
made, no additional review or appeal is available to the nursing facilities.
(A) A nursing facility's written request for a review must
be made to the DHS Director of Medical Quality Assurance, Office of Programs,
within 10 calendar days after the facility receives notification of its eligibility.
Facility performance data are posted on the DHS QRS website, which is updated
monthly. Providers have the opportunity to see their performance results on
the DHS QRS website during the entire service period. A facility's request
for a review must contain specific documentation supporting its contention
that factual or calculation errors were made which, if corrected, would result
in the facility qualifying for performance-based add-on payment or receiving
performance-based add-on payment in a corrected amount.
(B) The review is:
(i) limited to allegations of factual or calculation errors;
(ii) limited to a review of documentation submitted by the
nursing facility or used by DHS or its designee in making its original determination;
(iii) not conducted as an adversary hearing.
(C) DHS or its designee conducts the review as quickly as possible
and makes its decision before disbursing the entire performance-based add-on
(v) Performance-based add-on payment payee. The performance-based
add-on will be paid to the provider of record at the time that the payment