| (a) Purpose. The purpose of this subchapter is to describe
the circumstances and programs under which the Texas Health and Human
Services Commission may direct expenditures for delivery system and
provider payment initiatives through its contracts with Medicaid managed
care organizations. Federal authority for such directed expenditures
is codified at 42 C.F.R. §438.6(c).
(b) Definitions. The following definitions apply when
the terms are used in this subchapter. Terms that are used in only
one program described in this subchapter may be defined in the section
of this subchapter describing that program.
(1) Capitation rate--A fixed, predetermined fee paid
by HHSC to the managed care organization each month, in accordance
with the contract, for each enrolled member. In exchange for this,
the managed care organization arranges for or provides a defined set
of covered services to the enrolled member, regardless of the amount
of covered services used by the enrolled member.
(2) Centers for Medicare & Medicaid Services (CMS)--The
federal agency within the United States Department of Health and Human
Services responsible for overseeing and directing Medicare and Medicaid.
(3) HHSC--The Texas Health and Human Services Commission
or its designee.
(4) Intergovernmental transfer (IGT)--A transfer of
public funds from another state agency or a non-state governmental
entity to HHSC.
(5) Managed care organization (MCO)--A Medicaid managed
care organization contracted with HHSC to provide health care services
to Medicaid recipients.
(6) Non-federal share--The portion of program expenditures
that is not federal funds. The non-federal share is equal to 100 percent
minus the federal medical assistance percentage (FMAP) for Texas for
the state fiscal year corresponding to the program year and for the
population served.
(7) Non-state governmental entity--A hospital authority,
hospital district, health district, city, or county.
(8) Program rate component--The fixed percentage of
the capitation rate that is attributable to the delivery system or
provider payment initiative.
(9) Provider--A credentialed and licensed individual,
facility, agency, institution, organization, or other entity that
has a contract with the MCO for the delivery of covered services to
the MCO's members.
(10) Public funds--Funds derived from taxes, assessments,
levies, and investments. Public funds also include other public revenues
within the sole and unrestricted control of a governmental entity.
Public funds do not include gifts, grants, trusts, or donations, the
use of which is conditioned on supplying a benefit solely to the donor
or grantor of the funds.
(11) Service delivery area (SDA)--The counties included
in any HHSC-defined geographic area as applicable to each MCO.
(12) Sponsoring governmental entity--A state or non-state
governmental entity that agrees to transfer to HHSC some or all of
the non-federal share of program expenditures under this subchapter.
(c) CMS approval. Implementation of each of the programs
described in this subchapter is contingent upon HHSC receiving written
approval from CMS of the contract provisions directing the MCO expenditures.
Federal requirements for CMS approval of directed MCO expenditures
are codified in 42 C.F.R. §438.6(c)(2).
(d) Program specifications, provider eligibility, and
payment calculations. Descriptions of program specifications, provider
eligibility, and payment calculations are contained in the sections
of this subchapter that describe each delivery system or provider
payment initiative program.
(e) Source of the non-federal share. The non-federal
share of expenditures under this subchapter is limited to timely receipt
by HHSC of public funds from sponsoring governmental entities.
(1) State-owned providers. A state-owned provider may
transfer to HHSC any non-federal funds within the control of the provider,
including appropriated state general revenue funds, as the non-federal
share of program expenditures associated with that provider.
(2) All other providers. For all other providers, the
non-federal share of program expenditures is funded through IGTs.
No state general revenue appropriated to HHSC is available to support
program expenditures to non-state providers under this subchapter.
(f) Amount and timing of transfer of the non-federal
share. The amount of the non-federal share that governmental entities
transfer to HHSC for expenditures under this subchapter and the timing
of such transfers are specific to each delivery system or provider
payment initiative and are described in the section of this subchapter
governing each such program.
(g) Reconciliation of the non-federal share.
(1) Purpose. The amount of HHSC's expenditures under
this subchapter is dependent on member enrollment in each participating
MCO, which may fluctuate from month to month. HHSC's actual expenditures
cannot be determined until final member enrollment data is available,
which may not occur for up to two years following the end of the program
period. The purpose of the reconciliation process is to ensure that
HHSC's actual total expenditures for each program are determined based
on accurate and final member enrollment data for each program period,
and that the non-federal share of HHSC's actual expenditures are borne
by the appropriate governmental entity or entities.
(2) Methodology. For each program described in this
subchapter, HHSC reconciles the amount of the non-federal funds actually
expended during the program period with the amount of funds transferred
to HHSC by the sponsoring governmental entities. For programs with
multiple provider classes, HHSC reconciles expenditures for each provider
class. HHSC completes each reconciliation in multiple parts.
(A) The first reconciliation occurs no later than 120
days after the end of the program period.
(i) Using the best-available member enrollment data
at the time of the first reconciliation, HHSC:
(I) calculates the amount expended for the program
period by multiplying the program rate component by the total member
months included in the program period;
(II) calculates the non-federal share of the amount
determined in subclause (I) of this clause; and
(III) compares the amount determined in subclause (II)
of this clause to the amount previously transferred to HHSC by the
participating governmental entities for the program period.
(ii) If the amount previously transferred is less than
102 percent of the amount determined in clause (i)(II) of this subparagraph:
(I) the participating governmental entities must transfer
additional funds to HHSC such that total transferred funds equals
102 percent of the amount determined in clause (i)(II) of this subparagraph;
(II) if more than one governmental entity is responsible
for the non-federal share of payments under the program, the additional
required funds are allocated proportional to each governmental entity's
initial contribution to funding the program; and
(III) HHSC notifies the governmental entities of the
amount and timing of the required transfers.
(iii) If the amount previously transferred is more
than 102 percent of the amount determined in clause (i)(II) of this
subparagraph, HHSC refunds the excess amount to the governmental entities
in proportion to each entity's initial contribution to funding the
program.
(B) Interim reconciliations may occur as updated member
enrollment data for the program period becomes available. HHSC follows
the process described in subparagraph (A) of this paragraph for such
interim reconciliations.
(C) The final reconciliation occurs no later than 25
months after the end of the program period.
(i) Using the final member enrollment data for the
program period, HHSC:
(I) calculates the amount expended for the program
period by multiplying the program rate component by the total member
months included in the program period;
(II) calculates the non-federal share of the amount
determined in subclause (I) of this clause; and
(III) compares the amount determined in subclause (II)
of this clause to the amount previously transferred to HHSC by the
sponsoring governmental entities for the program period, including
any amounts transferred pursuant to subparagraphs (A)(ii) or (B) of
this paragraph.
(ii) If the amount previously transferred is less than
the non-federal share of the amount expended:
(I) the participating governmental entities must transfer
additional funds to HHSC such that total transferred funds equals
the amount determined in clause (i)(II) of this subparagraph;
(II) if more than one governmental entity is responsible
for the non-federal share of payments under the program, the additional
required funds are allocated proportional to each governmental entity's
initial contribution to funding the program; and
(III) HHSC notifies the governmental entities of the
amount and timing of the required transfers.
(iii) If the amount previously transferred is more
than the amount determined in clause (i)(II) of this subparagraph,
HHSC refunds the excess amount to the governmental entities in proportion
to each entity's initial contribution to funding the program.
(h) Failure of a governmental entity to transfer funds.
If a governmental entity does not timely complete the transfer of
funds described in this section, HHSC withholds Medicaid payments
from any provider operated by the governmental entity until HHSC has
recovered an amount equal to the amount of the funding shortfall.
(i) Failure of an MCO to comply with contract provisions.
HHSC may review MCO payments to network providers or other documentation
to verify that the MCO is in compliance with contract provisions directing
expenditures for delivery system and provider payment initiatives.
HHSC must investigate provider claims of contract violations. In the
event HHSC identifies any contract deficiency or violation, HHSC takes
corrective action to remedy such deficiency or violation, as authorized
by §353.5 of this chapter (relating to Internet Posting of Sanctions
Imposed For Contractual Violations).
(j) Disallowance of federal funds.
If payments under this subchapter are disallowed by CMS, HHSC
may recoup the amount of the disallowance from MCOs, providers, or
governmental entities that participated in the program associated
with the disallowance. If the recoupment from an MCO, provider, or
governmental entity for such a disallowance results in a subsequent
disallowance, HHSC will recoup the amount of that subsequent disallowance
from the same entity.
(k) Overpayment.
(1) If payments under this subchapter result in an
overpayment to an MCO, HHSC may recoup the amount of the overpayment
from the MCO, pursuant to the terms of the contract between them.
(2) If payments under this subchapter result in an
overpayment to a provider, the MCO may recoup an amount equivalent
to the overpayment.
(3) Payments made under this subchapter may be subject
to any adjustments for payments made in error or due to fraud, including
without limitation adjustments made under the Texas Administrative
Code, the Code of Federal Regulations, and state and federal statutes.
The MCOs may recoup an amount equal to any such adjustments from the
providers in question. Nothing in this section may be construed to
limit the independent authority of another federal or state agency
or organization to recover from the provider for a payment made due
to fraud.
(l) State's cost of administering programs. To the
extent authorized under state and federal law, HHSC will collect the
state's cost of administering a program authorized under this subchapter
from participants in the program generating the costs.
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