The Texas Health and Human Services Commission (HHSC) proposes new Subchapter O, Delivery System and Provider Payment Initiatives, §353.1301, concerning General Provisions.

BACKGROUND AND JUSTIFICATION

This proposed new rule describes certain general provisions that apply to all Medicaid managed care delivery system and provider payment initiatives, or directed payments. As part of the recent overhaul of federal Medicaid managed care (MMC) rules, the Centers for Medicare & Medicaid Services (CMS) allowed states that operate MMC to direct managed care organizations' (MCOs') payments to providers. This rule describes provisions HHSC considers to be universal to all such directed payment programs that are, or will be, implemented in Texas.

All such provisions of the rule are described in the section-by-section summary below. However, HHSC believes four provisions of the rule require additional explanation: reconciliation of the non-federal share, disallowance of federal funds, recoupment, and the state's cost of administering programs authorized under Subchapter O.

The reconciliation provision describes the same process previously used for other enhanced payment programs. The programs included in this subchapter are funded with intergovernmental transfers (IGTs). Since actual expenditures are based on MCO member enrollment, which may fluctuate, HHSC initially requires governmental entities to transfer 10% more non-federal funds than anticipated in order to protect state general revenue in the event that member months increase beyond that which is expected. If there is no increase in member months, or the increase in cost due to increased member months does not go beyond 10%, the difference is returned to the governmental entity that transferred the non-federal funds. If, however, the increase in cost due to increased member months does go beyond 10%, HHSC will require additional funds from the governmental entities.

The disallowance provision describes the actions HHSC will take in the event of a disallowance of federal funds by CMS related to payments under this subchapter. If the disallowance is based on a finding by CMS of an impermissible provider donation related to payments under this subchapter, HHSC proposes that the governmental entity responsible for the non-federal share of the payments must transfer to HHSC the amount of the disallowance. HHSC proposes this approach in light of recent heightened scrutiny by CMS of the funding arrangements underlying payments to private providers and because of the uncertain authority of HHSC to recoup from providers or the MCO when CMS disallows federal funds on these grounds. HHSC is particularly interested in receiving comments on this provision of the proposed rule.

If CMS disallows federal funds related to payments under this subchapter on grounds other than provider donations, HHSC proposes relying on other federal and state law and contract authority to recoup from MCOs, providers, or governmental entities.

The recoupment provision describes circumstances other than disallowances under which HHSC may recoup from MCOs or MCOs may recoup from providers, or under which adjustments to payments may be made.

The state's cost of administering programs provision indicates that, to the extent authorized under state and federal law, HHSC will collect the state's cost of administering a program authorized under Subchapter O from participants in the program generating the costs.

SECTION-BY-SECTION SUMMARY

Proposed new §353.1301(a) describes the purpose of this subchapter.

Proposed new §353.1301(b) defines key terms used in the subchapter.

Proposed new §353.1301(c) details that CMS approval is necessary prior to implementation of any directed payment program.

Proposed new §353.1301(d) states that other sections within the subchapter describe program specific requirements.

Proposed new §353.1301(e) describes the different sources of the non-federal share of these Medicaid payments.

Proposed new §353.1301(f) states that each program will detail its own requirements surrounding the transfer of the non-federal share of the Medicaid payments.

Proposed new §353.1301(g) describes the reconciliation process for IGT.

Proposed new §353.1301(h) describes the consequences for a governmental entity not transferring the non-federal share of a Medicaid payment.

Proposed new §353.1301(i) describes the consequences for an MCO not complying with a contract provision described in this subchapter.

Proposed new §353.1301(j) describes the methods by which payments will be recouped and the procedure in the event of a disallowance.

Proposed new §353.1301(k) describes circumstances under which HHSC or an MCO may recoup overpayments or payments made in error or as the result of fraud.

Proposed new §353.1301(l) indicates that, to the extent authorized under state and federal law, HHSC will collect the state's cost of administering a program authorized under Subchapter O from participants in the program generating the costs.

FISCAL NOTE

Greta Rymal, Deputy Executive Commissioner for Financial Services, has determined that for the each year of the first five years the proposed rule is in effect, there will be no fiscal impact to state government or local governments as a result of this rule. This rule sets out the general requirements for directed payment models but does not create any such model.

PUBLIC BENEFIT AND COST

Pam McDonald, Director of Rate Analysis, has determined that for each year of the first five years the rule is in effect, the anticipated public benefit of adopting the proposed rule is the understanding of basic elements applicable to all directed payment programs.

Ms. McDonald has also determined that there are no probable economic costs to persons required to comply with the proposed rule.

HHSC has determined that the proposed rule will not affect a local economy. There is no anticipated negative impact on local employment.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

HHSC has determined that there will be no adverse economic effect on small businesses or micro-businesses to comply with the proposed rule. The implementation of the proposed rule does not require any changes in practice or any additional cost.

REGULATORY ANALYSIS

HHSC has determined that this proposal is not a "major environmental rule" as defined by §2001.0225 of the Texas Government Code. A "major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risk to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment or the public health and safety of a state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that this proposal does not restrict or limit an owner’s right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under §2007.043 of the Government Code.

PUBLIC COMMENT

Written comments on the proposal may be submitted to Monica Leo, Staff Counsel, Brown Heatly Building, MC: 1100, 4900 North Lamar Blvd, Austin, TX 78714-9030; by fax to (512) 424-6586; or by e-mail to Monica.Leo@hhsc.state.tx.us within 30 days of publication of this proposal in the Texas Register.

PUBLIC HEARING

A public hearing is scheduled for February 1, 2017, from 2:00 p.m. to 4:15 p.m. (Central Time) in the Public Hearing Room, Brown Heatly Building, 4900 North Lamar Blvd, Austin, TX 78714-9030. Persons requiring further information, special assistance, or accommodations should contact Amy Chandler at (512) 487-3419.

STATUTORY AUTHORITY

The new rule is proposed under Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with board rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; Texas Government Code §531.021(b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter 32; and with Texas Government Code §533.002, which authorizes HHSC to implement the Medicaid managed care program.

The proposed new rule implements Texas Human Resources Code, Chapter 32, and Texas Government Code, Chapter 531; and Texas Government Code Chapter 533. No other statutes, articles, or codes are affected by this proposal.