(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 payor is estimated to
pay for the services and what Medicaid actually paid for the same
services.
(2)Average Commercial Reimbursement
(ACR) Upper Payment Limit (UPL)--A calculated estimation of what an
average commercial payor pays for the same Medicaid services.
(3)[(2)] Children's hospital--A
children's hospital as defined by §355.8052 of this title (relating
to Inpatient Hospital Reimbursement).
(4)[(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.
(5)[(4)] Institution for mental
diseases (IMD)--A hospital that is primarily engaged in providing
psychiatric diagnosis, treatment, or care of individuals with mental
illness. IMD hospitals are reimbursed as freestanding psychiatric
facilities under §355.8060 of this title (relating to Reimbursement
Methodology for Freestanding Psychiatric Facilities).
(6)[(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.
(7)[(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.
(8)[(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.
(9)[(8)] Rural hospital--A hospital
that is a rural hospital as defined in §355.8052 of this title.
(10)[(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.
(11)[(10)] Urban hospital--An
urban hospital as defined by §355.8052 of this title.
(c)Conditions of Participation. 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 the optional program components [component
] described in subsections [subsection]
(g)(3) and (g)(4) of this section. A hospital cannot participate
in the program component described in subsection (g)(3) or (g)(4) of
this section without also participating in the program component described
in subsection (g)(2) of this section.
(B)All hospitals must submit certain necessary data
to calculate the ACR gap. However, a hospital may indicate that it
does not wish to participate in the optional program component described
in subsection (g)(3) of this section.
(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.
(D)For a program period that begins on or after September
1, 2021, any hospital that did not report the data described in subparagraph
(B) of this paragraph in the application for the program must report
the data within four months of Centers for Medicare and Medicaid Services
(CMS) approval of the program.
(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 and that the entity's
agreement with the hospital does not use a reimbursement methodology
that contains any type of incentive, directly or indirectly, for inappropriately
inflating, in any way, claims billed to the Medicaid program, including
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)If a provider has changed ownership in the past
five years in a way that impacts eligibility for this program, the
provider must submit to HHSC, upon demand, copies of contracts it
has with third parties with respect to the transfer of ownership or
the management of the provider and which reference the administration
of, or payment from, this program.
(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.
(5)Failure to meet any conditions of participation
described in this subsection will result in removal of the provider
from the program and recoupment of all funds previously paid during
the program period.
(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 or another type of payment 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 hospitals;
(E)non-state-owned IMDs; and
(F)state-owned IMDs.
(2)If HHSC directs rate increases or other payments to
more than one class of hospital within the SDA, the percentage rate
increases or other payments directed by HHSC may vary between
classes of hospital.
(e)Eligibility. HHSC determines eligibility for rate
increases and other payments 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 or other
payment. HHSC will consider the following factors when identifying
the class or classes of hospital eligible for a rate increase or
other payment 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 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 and other
payment.
(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. For program
periods beginning on or before September 1, 2023, but on or after
September 1, 2021, CHIRP funds will be paid to MCOs through
two components of the managed care per member per month (PMPM) capitation
rates. For program periods beginning on or after September 1,
2024, CHIRP funds will be paid to MCOs through three components of
the managed care per member per month (PMPM) capitation rates. The
MCOs' distribution of CHIRP [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 (relating to Quality Metrics for [and Required
Reporting Used to Evaluate the Success of] the Comprehensive
Hospital Increase Reimbursement Program). 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 percentage increases [
percentages] described under subsection (h)(1) [(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 the combined Medicare gap of each hospital class
within an SDA to the total Medicare gap of all hospital classes within
the SDA.
(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, subject to
the limitations described by subparagraph (B) of this paragraph.
(B)The maximum ACIA payments for each class will
be equal to a percentage of the total estimated ACR UPL [
gap] for the class, less what Medicaid paid for the services
and any payments received under UHRIP, including hospitals that
are not participating in ACIA. For program periods beginning
on or before September 1, 2023, but on or after [the program
period proposed to begin on] September 1, 2021, [and program
periods thereafter,] the percentage is 90 percent. For
program periods beginning on or after September 1, 2024, the percentage
may not exceed 90 percent.
(C)The ACIA payment for the class
will be equal to the minimum of the sum of the ACIA payment in subparagraph
(A) of this paragraph and the limit in subparagraph (B) of this paragraph.
If the amount calculated under subparagraph (B) of this paragraph
is negative, the maximum, aggregated ACIA payments for that class
will be equal to zero.
(D)[(C)] The ACIA payment
for each provider will be equal to the amount in subparagraph (A)
of this paragraph multiplied by the amount determined in subparagraph
(C) of this paragraph for the class divided by the sum of the preliminary
ACIA payment determined in subparagraph (A) of this paragraph for
the class, rounded down to the nearest percentage. [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 in the SDA.] For example, if two hospitals in a class
in an SDA both have anticipated base payments of $100 and UHRIP payments
of $50, but one hospital has an estimated ACR UPL of $400 and
an ACR gap of $300 between its base payment and ACR UPL [
the estimate payment it would have received from a commercial payor],
and the other hospital has an estimated ACR UPL of $600 and an ACR
gap of $500 [$100], HHSC will first reduce the
gaps by the UHRIP payment of $50 to a gap of $250 and $450 [
$50], respectively. The preliminary ACIA rates are 250
percent and 450 percent. These are the amounts available under subparagraph
(A) of this paragraph. HHSC would then sum the ACR UPLs for the two
hospitals to get $1000 available to the class and apply the percentage
in subparagraph (B) of this paragraph (e.g., 50 percent of the gap),
which results in an ACR UPL of $500. Then HHSC will subtract the $200
in base payments and $100 in UHRIP payments from the reduced ACR UPL
for a total of $200 of maximum ACIA payments under subparagraph (B)
of this paragraph. The amount under subparagraph (A) for the class
was $700, and the limit under subparagraph (B) of this paragraph is
$200, so all provider in the SDA will have their ACIA percentage multiplied
by $200 divided by $700 to stay under the $200 cap. The individual
ACIA rates would be 71 percent (e.g., 200/700*250 percent) and 128
percent (e.g., 200/700*450 percent), respectively. The estimated ACIA
payments would be $71 and $128. [HHSC would then apply
a uniform percentage of the gap (e.g., 50 percent of the gap) and
would calculate an ACIA payment of $125 and $25, respectively.]
HHSC will then direct the MCOs to pay a percentage increase for the
first hospital of 71 [125] percent in addition
to the 50 percent increase under UHRIP for the first hospital for
a total increase of 121 [175] percent above
the contracted base rate, and 128 [25] percent
in addition to the 50 percent increase under UHRIP for the second
hospital for a total increase of 178 [75] percent.
(4)For program periods beginning
on or after September 1, 2024, the Alternate Participating Hospital
Reimbursement for Improving Quality Award (APHRIQA) is the third component.
(A)The total value of APHRIQA will be equal to the
sum of:
(i)a percentage of the Medicare gap, not to exceed
100 percent, on a per class basis less the amount determined in paragraph
(2)(A) of this subsection; and
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