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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 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)Children's hospital--A children's hospital as defined
by §355.8052 of this title (relating to Inpatient Hospital Reimbursement).
(4)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)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)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)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)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)Rural hospital--A hospital that is a rural hospital
as defined in §355.8052 of this title.
(10)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)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 described in
subsections (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. In the application,
the hospital must also select whether the hospital elects to receive
interim payments described by subsection (h)(2)(D) 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 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 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 described
under subsection (h)(1) 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 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 September 1, 2021, 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)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. 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, and the other hospital
has an estimated ACR UPL of $600 and an ACR gap of $500, HHSC will
first reduce the gaps by the UHRIP payment of $50 to a gap of $250
and $450, 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 will then direct the MCOs to
pay a percentage increase for the first hospital of 71 percent in
addition to the 50 percent increase under UHRIP for the first hospital
for a total increase of 121 percent above the contracted base rate,
and 128 percent in addition to the 50 percent increase under UHRIP
for the second hospital for a total increase of 178 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
(ii)a percentage of the total estimated ACR UPL, not
to exceed 90 percent, on a per class basis less what Medicaid paid
for the services and any payments received under UHRIP, including
hospitals that are not participating in ACIA and less any payments
received under ACIA.
(B)Allocation of funds across hospitals will be calculated
by allocating to each hospital the sum of:
(i)the difference in the amount the hospital is estimated
to be paid under paragraph (2)(A) of this subsection and the amount
they would be paid if the percentage described in paragraph (2)(A)
of this subsection were the same percentage cited in subparagraph
(A)(i) of this paragraph; and
(ii)the difference in the amount the hospital is estimated
to be paid under paragraph (3)(C) of this subsection and the amount
they would be paid if the percentage described in paragraph (3)(B)
of this subsection were the same percentage cited in subparagraph
(A)(ii) of this paragraph.
(h)Distribution of CHIRP payments.
(1)CHIRP payments for UHRIP and ACIA components will
be based upon actual utilization and will be paid as a percentage
increase above the contracted rate between the MCO and the hospital.
The determination of percentage of rate increase will be as follows.
(A)HHSC will determine the percentage of rate increase
applicable to one or more classes of hospital by program component.
(B)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.
Cont'd...
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