| (a) Introduction. Hospitals participating in the Texas
Medicaid program that meet the conditions of participation and that
serve a disproportionate share of low-income patients are eligible
for reimbursement from the disproportionate share hospital (DSH) fund.
The Texas Health and Human Services Commission (HHSC) will establish
each hospital's eligibility for and amount of reimbursement using
the methodology described in this section beginning with the DSH program
year corresponding with federal fiscal year 2024. For program periods
that correspond with federal fiscal year 2023, eligibility and payments
will be made in accordance with the rule text as it existed on June
1, 2023.
(b) Definitions.
(1) Adjudicated claim--A hospital claim for payment
for a covered Medicaid service that is paid or adjusted by HHSC or
another payer.
(2) Available DSH funds--The total amount of funds
that may be distributed to eligible qualifying DSH hospitals for the
DSH program year, based on the federal DSH allotment for Texas (as
determined by the Centers for Medicare & Medicaid Services) and
available non-federal funds. HHSC may divide available DSH funds for
a program year into one or more portions of funds to allow for partial
payment(s) of total available DSH funds at any one time with remaining
funds to be distributed at a later date(s). If HHSC chooses to make
a partial payment, the available DSH funds for that partial payment
are limited to the portion of funds identified by HHSC for that partial
payment.
(3) Available general revenue funds--The total amount
of state general revenue funds appropriated to provide a portion of
the non-federal share of DSH payments for the DSH program year for
non-state-owned hospitals. If HHSC divides available DSH funds for
a program year into one or more portions of funds to allow for partial
payment(s) of total available DSH funds as described in paragraph
(2) of this subsection, the available general revenue funds for that
partial payment are limited to the portion of general revenue funds
identified by HHSC for that partial payment.
(4) Bad debt--A debt arising when there is nonpayment
on behalf of an individual who has third-party coverage.
(5) 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,
or its successor.
(6) Charity care--The unreimbursed cost to a hospital
of providing, funding, or otherwise financially supporting health
care services on an inpatient or outpatient basis to indigent individuals,
either directly or through other nonprofit or public outpatient clinics,
hospitals, or health care organizations. A hospital must set the income
level for eligibility for charity care consistent with the criteria
established in §311.031, Texas Health and Safety Code.
(7) Charity charges--Total amount of hospital charges
for inpatient and outpatient services attributed to charity care in
a DSH data year. These charges do not include bad debt charges, contractual
allowances, or discounts given to other legally liable third-party
payers.
(8) Children's hospital--A hospital that is a Children's
hospital as defined in §355.8052 of this chapter (relating to
Inpatient Hospital Reimbursement).
(9) Disproportionate share hospital (DSH)--A hospital
identified by HHSC that meets the DSH program conditions of participation
and that serves a disproportionate share of Medicaid or indigent patients.
(10) DSH data year--A twelve-month period, two years
before the DSH program year, from which HHSC will compile data to
determine DSH program qualification and payment.
(11) DSH program year--The twelve-month period beginning
October 1 and ending September 30.
(12) Dually eligible patient--A patient who is simultaneously
eligible for Medicare and Medicaid.
(13) Governmental entity--A state agency or a political
subdivision of the state. A governmental entity includes a hospital
authority, hospital district, city, county, or state entity.
(14) HHSC--The Texas Health and Human Services Commission
or its designee.
(15) Hospital-specific limit (HSL) --The maximum payment
amount, as applied to payments made during a prior DSH program year,
that a hospital may receive in reimbursement for the cost of providing
Medicaid-allowable services to individuals who are Medicaid-eligible
or uninsured. The hospital-specific limit is calculated using the
methodology described in §355.8066 of this division (relating
to State Payment Cap and Hospital-Specific Limit Methodology) using
actual cost and payment data from the DSH program year.
(16) Independent certified audit--An audit that is
conducted by an auditor that operates independently from the Medicaid
agency and the audited hospitals and that is eligible to perform the
DSH audit required by CMS.
(17) Indigent individual--An individual classified
by a hospital as eligible for charity care.
(18) Inflation update factor--Cost of living index
based on annual CMS prospective payment system hospital market basket
index.
(19) Inpatient day--Each day that an individual is
an inpatient in the hospital, whether or not the individual is in
a specialized ward and whether or not the individual remains in the
hospital for lack of suitable placement elsewhere. The term includes
observation days, rehabilitation days, psychiatric days, and newborn
days. The term does not include swing bed days or skilled nursing
facility days.
(20) Inpatient revenue--Amount of gross inpatient revenue
derived from the most recent completed Medicaid cost report or reports
related to the applicable DSH data year. Gross inpatient revenue excludes
revenue related to the professional services of hospital-based physicians,
swing bed facilities, skilled nursing facilities, intermediate care
facilities, other nonhospital revenue, and revenue not identified
by the hospital.
(21) Institution for mental diseases (IMD)--A hospital
that is primarily engaged in providing psychiatric diagnosis, treatment,
or care of individuals with mental illness, defined in §1905(i)
of the Social Security Act. IMD hospitals are reimbursed as freestanding
psychiatric facilities under §355.8060 of this division (relating
to Reimbursement Methodology for Freestanding Psychiatric Facilities)
and §355.761 of this chapter (relating to Reimbursement Methodology
for Institutions for Mental Diseases (IMD).
(22) Institution for mental diseases (IMD) cap--An
IMD limit determined each fiscal year and as described under Section
1923(h) of the Social Security Act.
(23) Intergovernmental transfer (IGT)--A transfer of
public funds from a governmental entity to HHSC.
(24) Low-income days--Number of inpatient days attributed
to indigent patients are calculated using the following methodology.
Low-income days are equal to the hospitals low-income utilization
rate as calculated in subsection (d)(2) of this section multiplied
by the hospitals total inpatient days.
(25) Low-income utilization rate--A ratio, calculated
as described in subsection (d)(2) of this section, that represents
the hospital's volume of inpatient charity care relative to total
inpatient services.
(26) Mean Medicaid inpatient utilization rate--The
average of Medicaid inpatient utilization rates for all hospitals
that have received a Medicaid payment for an inpatient claim, other
than a claim for a dually eligible patient, that was adjudicated during
the relevant DSH data year.
(27) Medicaid contractor--Fiscal agents and managed
care organizations with which HHSC contracts to process data related
to the Medicaid program.
(28) Medicaid cost report--Hospital and Hospital Health
Care Complex Cost Report (Form CMS 2552), also known as the Medicare
cost report.
(29) Medicaid hospital--A hospital meeting the qualifications
set forth in §354.1077 of this title (relating to Provider Participation
Requirements) to participate in the Texas Medicaid program.
(30) Medicaid inpatient utilization rate (MIUR)--A
ratio, calculated as described in subsection (d)(1) of this section,
that represents a hospital's volume of Medicaid inpatient services
relative to total inpatient services.
(31) MSA--Metropolitan Statistical Area as defined
by the United States Office of Management and Budget. MSAs with populations
greater than or equal to 137,000, according to the most recent decennial
census, are considered "the largest MSAs."
(32) Non-federal percentage--The non-federal percentage
equals one minus the federal medical assistance percentage (FMAP)
for the program year.
(33) Non-rural hospital--Any hospital that does not
meet the definition of rural hospital as defined in §355.8052
of this chapter.
(34) Non-urban public hospital--A hospital other than
a transferring public hospital that is:
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