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(a)Introduction. This section establishes the Comprehensive
Hospital Increase Reimbursement Program (CHIRP) for program periods
on or after September 1, 2021, wherein the Health and Human Services
Commission (HHSC) directs a managed care organization (MCO) to provide
a uniform reimbursement increase to hospitals in the MCO's network
in a designated service delivery area (SDA) for the provision of inpatient
services, outpatient services, or both. This section also describes
the methodology used by HHSC to calculate and administer such reimbursement
increases. CHIRP is designed to incentivize hospitals to improve access,
quality, and innovation in the provision of hospital services to Medicaid
recipients through the use of metrics that are expected to advance
at least one of the goals and objectives of the state's managed care
quality strategy.
(b)Definitions. The following definitions apply when
the terms are used in this section. Terms that are used in this section
may be defined in §353.1301 of this subchapter (relating to General
Provisions).
(1)Average Commercial Reimbursement (ACR) gap--The
difference between what an average commercial payer is estimated to
pay for the services and what Medicaid actually paid for the same
services.
(2)Children's hospital--A children's hospital as defined
by §355.8052 of this title (relating to Inpatient Hospital Reimbursement).
(3)Inpatient hospital services--Services ordinarily
furnished in a hospital for the care and treatment of inpatients under
the direction of a physician or dentist, or a subset of these services
identified by HHSC. Inpatient hospital services do not include skilled
nursing facility or intermediate care facility services furnished
by a hospital with swing-bed approval, or any other services that
HHSC determines should not be subject to the rate increase.
(4)Institution for mental diseases (IMD)--A hospital
that is primarily engaged in providing psychiatric diagnosis, treatment,
or care of individuals with mental illness.
(5)Medicare payment gap--The difference between what
Medicare is estimated to pay for the services and what Medicaid actually
paid for the same services.
(6)Outpatient hospital services--Preventive, diagnostic,
therapeutic, rehabilitative, or palliative services that are furnished
to outpatients of a hospital under the direction of a physician or
dentist, or a subset of these services identified by HHSC. HHSC may,
in its contracts with MCOs governing rate increases under this section,
exclude from the definition of outpatient hospital services such services
as are not generally furnished by most hospitals in the state, or
such services that HHSC determines should not be subject to the rate
increase.
(7)Program period--A period of time for which HHSC
will contract with participating MCOs to pay increased capitation
rates for the purpose of provider payments under this section. Each
program period is equal to a state fiscal year beginning September
1 and ending August 31 of the following year. An SDA that is unable
to participate in the program described in this section beginning
September 1 may apply to participate beginning March 1 of the program
period and ending August 31. Participation during such a modified
program period is subject to the application and intergovernmental-transfer
(IGT) deadlines described in subsections (c) and (j) of this section.
(8)Rural hospital--A hospital that is a rural hospital
as defined in §355.8052 of this title (relating to Inpatient
Hospital Reimbursement).
(9)State-owned non-IMD hospital--A hospital that is
owned and operated by a state university or other state agency that
is not primarily engaged in providing psychiatric diagnosis, treatment,
or care of individuals with mental disease.
(10)Urban hospital--An urban hospital as defined by
§355.8052 of this title.
(c)Participation requirements. As a condition of participation,
all hospitals participating in CHIRP must allow for the following.
(1)The hospital must submit a properly completed enrollment
application by the due date determined by HHSC. The enrollment period
must be no less than 21 calendar days and the final date of the enrollment
period will be at least nine days prior to the IGT notification.
(A)In the application, the hospital must select whether
it will participate in optional program components described in subsection
(g)(2) and (3) of this section.
(B)If the hospital chooses to participate in the optional
program component described in subsection (g)(3) of this section,
the hospital may be required to submit certain necessary data to calculate
the ACR gap.
(C)A hospital is required to maintain all supporting
documentation at the hospital for any information provided under subparagraph
(B) of this paragraph for a period of no less than 5 years.
(2)The entity that owns the hospital must certify,
on a form prescribed by HHSC, that no part of any payment made under
the CHIRP will be used to pay a contingent fee, consulting fee, or
legal fee associated with the hospitals receipt of CHIRP funds. The
certification must be received by HHSC with the enrollment application
described in paragraph (1) of this subsection.
(3)The entity that owns the hospital must submit to
HHSC, upon demand, copies of contracts it has with third parties that
reference the administration of, or payments from, CHIRP.
(4)All quality metrics for which a hospital is eligible
based on class, as described in subsection (d) of this section, must
be reported by the participating hospital to be eligible for payment.
(d)Classes of participating hospitals.
(1)HHSC may direct the MCOs in an SDA that is participating
in the program described in this section to provide a uniform percentage
rate increase to all hospitals within one or more of the following
classes of hospital with which the MCO contracts for inpatient or
outpatient services:
(A)children's hospitals;
(B)rural hospitals;
(C)state-owned non-IMD hospitals;
(D)urban public hospitals;
(E)non-state-owned IMDs; and
(F)state-owned IMDs.
(2)If HHSC directs rate increases to more than one
class of hospital within the SDA, the percentage rate increases directed
by HHSC may vary between classes of hospital.
(e)Eligibility. HHSC determines eligibility for rate
increases by SDA and class of hospital.
(1)Service delivery area. Only hospitals in an SDA
that includes at least one sponsoring governmental entity are eligible
for a rate increase.
(2)Class of hospital. HHSC will identify the class
or classes of hospital within each SDA described in paragraph (1)
of this subsection to be eligible for a rate increase. HHSC will consider
the following factors when identifying the class or classes of hospital
eligible for a rate increase and the percent increase applicable to
each class:
(A)whether a class of hospital contributes more or
less significantly to the goals and objectives in HHSC's managed care
quality strategy, as required in 42 C.F.R. §438.340, relative
to other classes;
(B)which class or classes of hospital the sponsoring
governmental entity wishes to support through IGTs of public funds,
as indicated on the application described in subsection (c) of this
section;
(C)the estimated Medicare gap for the class of hospitals,
based upon the upper payment limit demonstration most recently submitted
by HHSC to the Centers for Medicare and Medicaid Services (CMS);
(D)the estimated ACR gap for the class or individual
hospitals, as indicated on the application described in subsection
(c) of this section; and
(E)the percentage of Medicaid costs incurred by the
class of hospital in providing care to Medicaid managed care clients
that are reimbursed by Medicaid MCOs prior to any rate increase administered
under this section.
(f)Services subject to rate increase.
(1)HHSC may direct the MCOs in an SDA to increase
rates for all or a subset of inpatient services, all or a subset of
outpatient services, or all or a subset of both, based on the service
or services that will best advance the goals and objectives of HHSC's
managed care quality strategy.
(2)In addition to the limitations described in paragraph
(1) of this subsection, rate increases for a state-owned IMD or non-state-owned
IMD are limited to inpatient psychiatric hospital services provided
to individuals under the age of 21 and to inpatient hospital services
provided to individuals 65 years or older.
(3)CHIRP rate increases will apply only to the in-network
managed care claims billed under a hospital's primary National Provider
Identifier (NPI) and will not be applicable to NPIs associated with
non-hospital sub-providers owned or operated by a hospital.
(g)CHIRP capitation rate components. CHIRP funds will
be paid to MCOs through two components of the managed care per member
per month (PMPM) capitation rates. The MCOs' distribution of CHRIP
funds to the enrolled hospitals may be based on each hospital's performance
related to the quality metrics as described in §353.1307 of this
subchapter. The hospital must have provided at least one Medicaid
service to a Medicaid client for each reporting period to be eligible
for payments.
(1)In determining the percentages described under
subsection (i)(1) and (2) of this section, HHSC will consider:
(A)information from the participants in the SDA (including
hospitals, managed-care organizations, and sponsoring governmental
entities) on the amount of IGT the sponsoring governmental entities
propose to transfer to HHSC to support the non-federal share of the
increased rates for the first six months of a program period, as indicated
on the applications described in subsection (c) of this section;
(B)the class or classes of hospital determined in
subsection (e)(2) of this section;
(C)the type of service or services determined in subsection
(f) of this section;
(D)actuarial soundness of the capitation payment needed
to support the rate increase;
(E)available budget neutrality room under any applicable
federal waiver programs;
(F)hospital market dynamics within the SDA; and
(G)other HHSC goals and priorities.
(2)The Uniform Hospital Rate Increase Payment (UHRIP)
is the first component.
(A)The total value of UHRIP will be equal to a percentage
of the estimated Medicare gap on a per class basis.
(B)Allocation of funds across hospital classes will
be proportional to each statewide hospital class's combined Medicare
gap to the total Medicare gap of all hospitals.
(3)The Average Commercial Incentive Award (ACIA) is
the second component.
(A)The total value of ACIA will be equal to a percentage
of the ACR gap less payments received under UHRIP.
(B)Allocation of funds across hospitals will be proportional
to each participating hospital's individual ACR gap to the total ACR
gap for all participating hospitals.
(h)Distribution of CHIRP payments. CHIRP payments
will be based upon actual utilization and will be paid as a percentage
increase above the contracted rate between the MCO and the hospital.
(i)Determination of percentage of rate increase.
(1)HHSC will determine the percentage of rate increase
applicable to one or more classes of hospital by program component.
(A)UHRIP rate increases will be determined by HHSC
to be the percentage that is estimated to result in payments for the
class that are equivalent to the amount described under subsection
(g)(2)(A) of this section.
(B)ACIA will be determined by HHSC to be a percentage
that is estimated to result in payments for the hospital that are
equivalent to the amount described under subsection (g)(3)(A) of this
section.
(2)HHSC will limit the percentage rate increases determined
pursuant to this subsection to no more than the levels that are supported
by the amount described in subsection (j)(3) of this section. Nothing
in this section may be construed to limit the authority of the state
to require the sponsoring governmental entities to transfer additional
funds to HHSC following the reconciliation process described in §353.1301(g)
of this subchapter, if the amount previously transferred is less than
the non-federal share of the amount expended by HHSC in the SDA for
this program.
(3)After determining the percentage of rate increase
using the process described in paragraphs (1) and (2) of this subsection,
HHSC will modify its contracts with the MCOs in the SDA to direct
the percentage rate increases.
(j)Non-federal share of CHIRP payments. The non-federal
share of all CHIRP payments is funded through IGTs from sponsoring
governmental entities. No state general revenue is available to support
CHIRP.
(1)HHSC will communicate suggested IGT responsibilities
for the program period with all CHIRP hospitals at least 10 days prior
to the IGT declaration of intent deadline. Suggested IGT responsibilities
will be based on the maximum dollars to be available under the CHIRP
program for the program period as determined by HHSC, plus eight percent;
and forecast member months for the program period as determined by
HHSC. HHSC will also communicate estimated revenues each enrolled
hospital could earn under CHIRP for the program period with those
estimates based on HHSC's suggested IGT responsibilities and an assumption
that all enrolled hospitals will meet 100 percent of their quality
metrics and maintain consistent utilization with the prior year.
(2)Sponsoring governmental entities will determine
the amount of IGT they intend to transfer to HHSC for the entire program
period and provide a declaration of intent to HHSC no later than 15
business days before the first half of the IGT amount is transferred
to HHSC.
(A)The declaration of intent is a form prescribed
by HHSC that includes the total amount of IGT the sponsoring governmental
entity intends to transfer to HHSC.
(B)The declaration of intent is certified to the best
knowledge and belief of a person legally authorized to sign for the
sponsoring governmental entity but does not bind the sponsoring governmental
entity to transfer IGT.
(3)Sponsoring governmental entities will transfer
the first half of the IGT amount by a date determined by HHSC, but
no later than June 1. Sponsoring governmental entities will transfer
the second half of the IGT amount by a date determined by HHSC, but
no later than December 1. HHSC will publish the IGT deadlines and
all associated dates on its Internet website no later than March 15
of each year.
(k)Effective date of rate increases. HHSC will direct
MCOs to increase rates under this section beginning the first day
of the program period that includes the increased capitation rates
paid by HHSC to each MCO pursuant to the contract between them.
(l)Changes in operation. If an enrolled hospital closes
voluntarily or ceases to provide hospital services in its facility,
the hospital must notify the HHSC Provider Finance Department by hand
delivery, United States (U.S.) mail, or special mail delivery within
10 business days of closing or ceasing to provide hospital services.
Notification is considered to have occurred when the HHSC Provider
Finance Department receives the notice.
(m)Reconciliation. HHSC will reconcile the amount
of the non-federal funds actually expended under this section during
the program period with the amount of funds transferred to HHSC by
the sponsoring governmental entities for that same period using the
methodology described in §353.1301(g) of this subchapter.
(n)Recoupment. Payments under this section may be
subject to recoupment as described in §353.1301(j) and §353.1301(k)
of this subchapter.
The agency certifies that legal counsel has
reviewed the proposal and found it to be within the state agency's
legal authority to adopt.
Filed with the Office
of the Secretary of State on December 18, 2020
TRD-202005624 Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: January 31, 2021
For further information, please call: (512) 424-6637
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