| (a) Introduction. The Texas Health and Human Services
Commission (HHSC) uses the methodology described in this section to
calculate a hospital-specific limit for each Medicaid hospital participating
in either the Disproportionate Share Hospital (DSH) program, described
in §355.8065 of this title (relating to Disproportionate Share
Hospital Reimbursement Methodology), or in the Texas Healthcare Transformation
and Quality Improvement Program (the waiver), described in §355.8201
of this title (relating to Waiver Payments to Hospitals).
(b) Definitions.
(1) Adjudicated claim--A hospital claim for payment
for a covered Medicaid service that is paid or adjusted by HHSC or
another payor.
(2) Centers for Medicare and 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.
(3) Data year--A 12-month period that is two years
before the program year from which HHSC will compile data to determine
DSH or uncompensated-care waiver program qualification and payment.
(4) 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.
(5) DSH survey--The HHSC data collection tool completed
by each DSH hospital and used by HHSC to calculate the state payment
cap and hospital-specific limit, as described in this section, and
to estimate the hospital's DSH payments for the program year, as described
in §355.8065 of this title. A hospital may be required to complete
multiple surveys due to different data requirements between the state
payment cap and hospital-specific limit calculations.
(6) Dually eligible patient--A patient who is simultaneously
enrolled in Medicare and Medicaid.
(7) HHSC--The Texas Health and Human Services Commission
or its designee.
(8) Hospital-specific limit--The maximum payment amount,
as applied to payments made during a prior 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
amount is calculated as described in subsection (c)(2) of this section
using actual cost and payment data from that period. The term does
not apply to payment for costs of providing services to non-Medicaid-eligible
individuals who have third-party coverage; costs associated with pharmacies,
clinics, and physicians; or costs associated with Delivery System
Reform Incentive Payment projects. The calculation of the hospital-specific
limit must be consistent with federal law.
(9) Inflation update factor--Cost of living index based
on the annual CMS Prospective Payment System Hospital Market Basket
Index.
(10) 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.
(11) Medicaid contractor--Fiscal agents and managed
care organizations with which HHSC contracts to process data related
to the Medicaid program.
(12) Medicaid cost-to-charge ratio (inpatient and outpatient)--A
Medicaid cost report-derived cost center ratio calculated for each
ancillary cost center that covers all applicable hospital costs and
charges relating to inpatient and outpatient care for that cost center.
This ratio is used in calculating the hospital-specific limit and
does not distinguish between payor types such as Medicare, Medicaid,
or private pay.
(13) Medicaid cost report--Hospital and Hospital Health
Care Complex Cost Report (Form CMS 2552), also known as the Medicare
cost report.
(14) 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.
(15) Non-DSH survey--The HHSC data collection tool
completed by non-DSH hospitals and used by HHSC to calculate the state
payment cap and hospital-specific limit, as described in this section,
and to calculate uncompensated care waiver payments for the program
year, as described in §355.8201 of this title. A hospital may
be required to complete multiple surveys due to different data requirements
between the state payment cap and hospital-specific limit calculations.
(16) Outpatient charges--Amount of gross outpatient
charges related to the applicable data year and used in the calculation
of the hospital specific limit.
(17) Program year--The 12-month period beginning October
1 and ending September 30. The period corresponds to the waiver demonstration
year.
(18) Ratio of cost-to-charges.
(A) Inpatient ratio of cost-to-charges--A ratio that
covers all applicable hospital costs and charges relating to inpatient
care. This ratio does not distinguish between payer types such as
Medicare, Medicaid, or private pay.
(B) Outpatient ratio of cost-to-charges--A ratio that
covers all applicable hospital costs and charges relating to outpatient
care. This ratio does not distinguish between payer types such as
Medicare, Medicaid, or private pay.
(C) The terms "ratio of cost-to-charges"; "inpatient
ratio of cost-to-charges"; and "outpatient ratio of cost-to-charges"
are only used in the definition of "Medicaid allowable cost" as laid
out in subsection (b)(11) of this section.
(19) State payment cap--The maximum payment amount,
as applied to payments that will be made for the 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 amount is calculated as described in subsection
(c)(1) of this section using interim cost and payment data from the
data year. The term does not apply to payment for costs of providing
services to non-Medicaid-eligible individuals who have third-party
coverage; costs associated with pharmacies, clinics, and physicians;
or costs associated with Delivery System Reform Incentive Payment
projects.
(20) The waiver--The Texas Healthcare Transformation
and Quality Improvement Program, a Medicaid demonstration waiver under §1115
of the Social Security Act that was approved by CMS. Pertinent to
this section, the waiver establishes a funding pool to assist hospitals
with uncompensated-care costs.
(21) Third-party coverage--Creditable insurance coverage
consistent with the definitions in 45 Code of Federal Regulations
(CFR) Parts 144 and 146, or coverage based on a legally liable third-party
payor.
(22) Total state and local payments--Total amount of
state and local payments that a hospital received for inpatient care
during the data year. The term includes payments under state and local
programs that are funded entirely with state general revenue funds
and state or local tax funds, such as County Indigent Health Care,
Children with Special Health Care Needs, and Kidney Health Care. The
term excludes payment sources that contain federal dollars such as
Medicaid payments, Children's Health Insurance Program (CHIP) payments
funded under Title XXI of the Social Security Act, Substance Abuse
and Mental Health Services Administration, Ryan White Title I, Ryan
White Title II, Ryan White Title III, and contractual discounts and
allowances related to TRICARE, Medicare, and Medicaid.
(23) Uncompensated-care waiver payments--Payments to
hospitals participating in the waiver that are intended to defray
the uncompensated costs of eligible services provided to eligible
individuals.
(24) Uninsured cost--The cost to a hospital of providing
inpatient and outpatient hospital services to uninsured patients as
defined by CMS.
(c) Calculating a state payment cap and hospital-specific
limit. Using information from each hospital's DSH or non-DSH survey,
Medicaid cost report and from HHSC's Medicaid contractors, HHSC will
determine the hospital's state payment cap in compliance with paragraph
(1) of this subsection. The state payment cap will be used for both
DSH and uncompensated care waiver interim payment determinations.
HHSC will determine the hospital's hospital-specific limit in compliance
with paragraph (2) of this subsection.
(1) State Payment Cap.
(A) Uninsured charges and payments.
(i) Each hospital will report in its survey its inpatient
and outpatient charges for services that would be covered by Medicaid
that were provided to uninsured patients discharged during the data
year. In addition to the charges in the previous sentence, for DSH
calculation purposes only, an IMD may report charges for Medicaid-allowable
services that were provided during the data year to Medicaid-eligible
and uninsured patients ages 21 through 64.
(ii) Each hospital will report in its survey all payments
received during the data year, regardless of when the service was
provided, for services that would be covered by Medicaid and were
provided to uninsured patients.
(I) For purposes of this paragraph, a payment received
is any payment from an uninsured patient or from a third party (other
than an insurer) on the patient's behalf, including payments received
for emergency health services furnished to undocumented aliens under §1011
of the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003, Pub. L. No. 108-173, except as described in subclause
(II) of this clause.
(II) State and local payments to hospitals for indigent
care are not included as payments made by or on behalf of uninsured
patients.
(B) Medicaid charges and payments.
(i) HHSC will request from its Medicaid contractors
the inpatient and outpatient charge and payment data for claims for
services provided to Medicaid-enrolled individuals that are adjudicated
during the data year.
(I) The requested data will include, but is not limited
to, charges and payments for:
(-a-) claims associated with the care of dually eligible
patients, including Medicare charges and payments;
(-b-) claims or portions of claims that were not paid
because they exceeded the spell-of-illness limitation;
(-c-) outpatient claims associated with the Women's
Health Program; and
(-d-) claims for which the hospital received payment
from a third-party payor for a Medicaid-enrolled patient.
(II) HHSC will exclude charges and payments for:
(-a-) claims for services that do not meet the definition
of "medical assistance" contained in §1905(a) of the Social Security
Act. Examples include:
(-1-) claims for the Children's Health Insurance Program;
and
(-2-) inpatient claims associated with the Women's
Health Program or any successor program; and
(-b-) claims submitted after the 95-day filing deadline.
(ii) HHSC will request from its Medicaid contractors
the inpatient and outpatient Medicaid cost settlement payment or recoupment
amounts attributable to the cost report period determined in subparagraph
(C)(i) of this paragraph.
(iii) HHSC will notify hospitals following HHSC's receipt
of the requested data from the Medicaid contractors. A hospital's
right to request a review of data it believes is incorrect or incomplete
is addressed in subsection (e) of this section.
(iv) Each hospital will report on the survey the inpatient
and outpatient Medicaid days, charges and payment data for out-of-state
claims adjudicated during the data year.
(v) HHSC may apply an adjustment factor to Medicaid
payment data to more accurately approximate Medicaid payments following
a rebasing or other change in reimbursement rates under other sections
of this division.
(C) Calculation of in-state and out-of-state Medicaid
and uninsured total costs for the data year.
(i) Cost report period for data used to calculate cost-per-day
amounts and cost-to-charge ratios. HHSC will use information from
the Medicaid cost report for the hospital's fiscal year that ends
during the calendar year that falls two years before the end of the
program year for the calculations described in clauses (ii)(I) and
(iii)(I) of this subparagraph. For example, for program year 2013,
the cost report year is the provider's fiscal year that ends between
January 1, 2011, and December 31, 2011.
(I) For hospitals that do not have a full year cost
report that meets this criteria, a partial year cost report for the
hospital's fiscal year that ends during the calendar year that falls
two years before the end of the program year will be used if the cost
report covers a period greater than or equal to six months in length.
(II) The partial year cost report will not be prorated.
If the provider's cost report that ends during this time period is
less than six months in length, the most recent full year cost report
will be used.
(ii) Determining inpatient routine costs.
(I) Medicaid inpatient cost per day for routine cost
centers. Using data from the Medicaid cost report, HHSC will divide
the allowable inpatient costs by the inpatient days for each routine
cost center to determine a Medicaid inpatient cost per day for each
routine cost center.
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