The Texas Health and Human Services Commission (HHSC) adopts an amendment to §353.1305, concerning Uniform Hospital Rate Increase Program. The amendment is adopted with changes to the proposed text as published in the April 24, 2020, issue of the Texas Register (45 TexReg 2620). The rule will be republished.

BACKGROUND AND JUSTIFICATION

The purpose of the rule amendment is to include non-state-owned institutions for mental diseases (IMDs) as a class of hospital eligible for rate increases under the uniform hospital rate increase program (UHRIP).

UHRIP is a Medicaid managed care directed payment program authorized by 42 CFR §438.6(c). HHSC launched UHRIP as a pilot project in December 2017 in the El Paso and Bexar managed care service delivery areas (SDAs). In September 2018, UHRIP expanded to the entire state. Through UHRIP, managed care organizations (MCOs) are contractually required to increase the reimbursement rate paid to hospitals for inpatient and outpatient services. The rate increase is a uniform percentage that varies by hospital class. UHRIP is a voluntary program and requires participation from all MCOs and network hospitals in an SDA.

Federal regulation has largely prohibited states from receiving federal Medicaid funds for services provided to beneficiaries in IMDs. This restriction is commonly referred to as the "Medicaid IMD Exclusion." However, two exemptions exist under §1905(a) of the Social Security Act: (1) inpatient hospital services and nursing facility services for individuals 65 years of age or older, and (2) inpatient psychiatric hospital services for individuals under age 21.

The rule amendment includes non-state-owned IMDs among the classes of hospitals eligible for rate increases under UHRIP. Rate increases will apply only to payments made for inpatient psychiatric hospital services provided by non-state-owned IMDs to individuals under the age of 21 or inpatient hospital services provided by non-state-owned IMDs to individuals 65 years of age or older. Expanding UHRIP to these providers will increase the availability of services for eligible Medicaid beneficiaries with behavioral health needs.

The rule amendment provides that UHRIP rate increases apply only to the in-network managed care claims billed under the primary National Provider Identifier (NPI) number associated with the hospital. The amendment clarifies that a non-hospital sub-provider owned or operated by a hospital is not eligible to receive the increase.

COMMENTS

The 31-day comment period ended May 26, 2020.

During this period, HHSC received written comments regarding the proposed rule from four commenters: Signature Healthcare Services, LLC, Texas Hospital Association (THA), Teaching Hospitals of Texas (THOT), and Universal Health Services, Inc.

A summary of comments relating to the rule and HHSC's responses to the comments follow.

Comment: Most commenters supported the proposed amendment to include non-state-owned IMDs as a class of hospital eligible for rate increases under UHRIP.

Response: HHSC appreciates the support. No changes were made in response to this comment.

Comment: One commenter supported the proposed amendment to include non-state-owned IMDs as a class of hospital eligible for rate increases under UHRIP, if the UHRIP pool size is increased to accommodate the additional class of hospital. The commenter was concerned that adding a class to the program without increasing the pool will result in reductions to current hospital classes participating in UHRIP.

Response: HHSC understands the comment but notes that the pool size and rate increase for hospitals participating in UHRIP can change from year to year, depending on the implementation of the program. Additionally, HHSC must obtain approval on an annual basis from the Centers for Medicare and Medicaid Services (CMS) to operate the program. No changes were made in response to this comment.

Comment: Three commenters requested HHSC expand the UHRIP rate increases for non-state-owned IMDs to include inpatient services provided to Medicaid individuals ages 21 through 64. The commenters pointed out that under HHSC's policy, Texas Medicaid MCOs can reimburse IMDs for such services up to 15 days in a month. One commenter acknowledged that HHSC must adhere to CMS actuarial requirements related to IMDs and their costs for this population and requested that HHSC work with CMS to determine an appropriate way to capture this population in UHRIP.

Response: HHSC declines to make the suggested change. As one of the commenters pointed out, there are certain federal regulations, including actuarial requirements, related to IMDs providing services to individuals ages 21 through 64. These requirements make it difficult to provide a UHRIP rate increase for this population. HHSC will not include rate increases for this population at this time but will take it into consideration for a future rule amendment. No changes were made in response to this comment.

STATUTORY AUTHORITY

The amendment is adopted under Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies; Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC's duties; 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-1), 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 Texas Government Code §533.002, which authorizes HHSC to implement the Medicaid managed care program.