The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §353.1302, concerning Quality Incentive Payment Program for Nursing Facilities on or after September 1, 2019; §353.1304, concerning Quality Metrics for the Quality Incentive Payment Program for Nursing Facilities on or after September 1, 2019; §353.1306, concerning Comprehensive Hospital Increase Reimbursement Program for program periods on or after September 1, 2021; §353.1307, concerning Quality Metrics and Required Reporting Used to Evaluate the Success of the Comprehensive Hospital Increase Reimbursement Program; §353.1309, concerning Texas Incentives for Physicians and Professional Services; §353.1311, concerning Quality Metrics for the Texas Incentives for Physicians and Professional Services Program; §353.1315, concerning Rural Access to Primary and Preventive Services Program; §353.1317, concerning Quality Metrics for Rural Access to Primary and Preventive Services Program; §353.1320, concerning Directed Payment Program for Behavioral Health Services; and §353.1322, concerning Quality Metrics for the Directed Payment Program for Behavioral Health Services, in Texas Administration Code Title 1, Part 15, Chapter 353, Subchapter O.

BACKGROUND AND PURPOSE

The proposal is necessary to comply with approval requirements imposed by the Centers for Medicare and Medicaid Services (CMS), which required the Texas Health and Human Services Commission (HHSC) to make modifications related to proposed state-directed payment programs (DPPs) for state fiscal year 2022 and after.

Texas has pursued approval of five DPPs: the Quality Incentive Payment Program (QIPP), the Comprehensive Hospital Increased Reimbursement Program (CHIRP), the Texas Incentives for Physicians and Professional Services program (TIPPS), the Rural Access to Primary and Preventive Services program (RAPPS), and the Directed Payment Program for Behavioral Health Services (DPP BHS) for state fiscal year 2022. In March 2021, in accordance with 42 CFR 438.6(c) and the Special Terms and Conditions (STCs) of the January 15, 2021, 1115 Waiver, Texas submitted "pre-prints" for CMS review and approval. The STCs were drafted and agreed to by Texas and CMS to govern the framework for approval of DPPs, with the clear intention to have an approved program(s) as the ultimate result. Based upon these STCs, Texas expected that CMS would participate in a collaborative process designed to work through and approve each program individually.

On August 18, 2021, CMS and Texas met for the first time in compliance with STC 34. During the call, CMS stated that the DPPs were not approvable, specifically noting the aggregate size of the proposed programs and CMS's purported belief that the amounts proposed were not actuarially sound. Texas requested a specific list of modifications required for each proposed DPP that would result in an approval. On August 20, 2021, CMS sent Texas a list of 19 issues, which can be grouped into five topics, and requested modifications for each program. HHSC and CMS have met every two business days since August 20, 2021, to work towards a resolution. The two entities have exchanged multiple rounds of written modifications, questions, and responses. The written exchanges can be found posted to the HHSC website at: https://www.hhs.texas.gov/providers/medicaid-supplemental-payment-directed-payment-programs/directed-payment-programs.

In November 2021, HHSC and CMS reached an agreement on four identified topic areas, but rule amendments are necessary to reflect those agreements. Without the agreed changes, CMS will not approve the DPPs proposed by Texas, and the programs will either cease to operate or not be implemented. A summary of the topics and the agreed modifications by HHSC are identified below.

Reconciliation

QIPP, TIPPS, RAPPS, and DPP BHS each included at least one component wherein the component payments would be allocated on an interim basis to providers based upon historical data, with a planned reconciliation performed to actual data to determine final payments at the end of the program year. In each case, the reconciliation was only triggered if a statistically significant percentage deviation between historical to actual data occurred. Otherwise, the interim payments would become final. CMS objected to this procedure and required the state to eliminate it. To advance the program approvals and work collaboratively with CMS, HHSC agreed to remove the triggering threshold and conduct the reconciliation at the end of the year.

Program Size

CHIRP payments were initially proposed to allow providers to receive average commercial incentive award (ACIA) rate increases up to their individual average commercial reimbursement (ACR) gap amounts. CMS stated that they believed that the resulting proposed program size and payments to providers on a class basis were not reasonable and attainable. To advance the program approvals and work collaboratively with CMS, Texas agreed to cap ACIA increases so a class of providers could receive in aggregate only 90 percent of the classes' ACR gap amount.

Quality Improvement Measures

CMS stated that they believed that some quality measures were not outcome measures. They did not think Texas should use these measures to determine pay-for-performance and that, in some cases, the achievement requirements did not require providers to demonstrate continual improvement. Texas agreed to modify all program proposals, except for QIPP, to advance the program approvals and work collaboratively with CMS. These modifications pay all components as a uniform rate or payment increase, rather than considering them pay-for-performance. Texas also agreed to make modifications to achievement requirements in QIPP. Therefore, quality measure data submission would be considered a condition of participation for several components in the various programs.

Evaluation

CMS stated that they believed evaluations of the programs should isolate exclusively quality goal advancement for Medicaid managed care beneficiaries and not all Medicaid beneficiaries. CMS also required other modifications to the evaluations to ensure that the program evaluations were sufficiently detailed. Texas agreed to the required modifications to advance the program approvals and work collaboratively with CMS.

Non-Federal Share

CMS stated that they believed that some sources of local funds may not be permissible. This topic is unresolved, but the administrative rules that govern the DPPs are not impacted by this matter.

Additionally, the rules contain some modifications to appropriately align the rules with HHSC operational considerations. The rule amendments eliminate a potential mid-year enrollment process for RAPPS and DPP BHS. A program period is a 12-month rating period, and a mid-year enrollment is not feasible.

DPP BHS rules are also amended to clarify the eligible providers for the Program Period from September 1, 2021, through August 31, 2022, and eligible providers for Program Periods on or after September 1, 2022.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §353.1302(e) provides a reporting requirement for all quality data denoted in subsection (g) of this section and clarifies failure to meet any condition of participation will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

The proposed amendment to §353.1302(g) deletes the triggering threshold of 18 percent, provides the reconciliation will occur within 120 days after the last day of the program period, and provides the monthly payments to nursing facilities (NFs) will be triggered by the achievement of the performance requirements as described in §353.1304 of this subchapter or a uniform rate increase for which a NF must report quality data as described in §353.1304 of the subchapter as a condition of participation in the program.

The proposed amendment to §353.1302(h) provides the distribution of QIPP funds as a uniform rate increase will be equal to the total value of Component One for the Nursing Facility divided by twelve.

Proposed new §353.1304(h) provides alternate measures may be substituted for proposed or adopted measures as outlined in the subchapter, if required by CMS for federal approval.

The proposed amendment to §353.1306(c) provides that all participating hospitals must submit specific data to calculate the ACR gap unless the hospitals opt out of the optional program component. The proposed amendment also provides that hospitals are required to report the required data in subparagraph (B) of the subsection within four months of CMS approval, if the hospital did not report the required data in the program application. The proposed amendment also clarifies failure to meet any condition of participation will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

The proposed amendment to §353.1306(g) provides, in terms of eligibility, the maximum ACIA payments will be equal to 90 percent of the total estimated ACR gap for the class, including hospitals not participating in ACIA.

The proposed amendment to §353.1307(d) provides that hospitals must report all eligible quality metrics as a condition of participation, including data stratified by payor type.

The proposed amendment to §353.1307(e) provides that hospitals must report semiannually unless otherwise specified by the metric.

The proposed amendment to §353.1309(e) provides a reporting requirement for all quality data denoted in §353.1311 and clarifies failure to meet any condition of participation will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

The proposed amendment to §353.1309(g) provides monthly payments to health related institution and indirect medical education physician groups will be a uniform rate increase; deletes the triggering threshold of 18 percent, and provides the reconciliation will occur within 120 days after the last day of the program period.

The proposed amendment to §353.1309(h) deletes quality metric language and explanations of the calculations as these are no longer warranted.

The proposed amendment to §353.1311(b) deletes definitions for "Baseline," "Benchmark," and "Measurement Period."

The proposed amendment to §353.1311(d) deletes performance measure language and replaces it with quality metric requirements and deletes the current language providing that achievement of performance measures will trigger payments.

Proposed new §353.1311(g) provides HHSC will evaluate the success of the program based on a review of reported metrics; provides HHSC will publish interim findings; and provides HHSC will publish a final evaluation report within 270 days of the conclusion of the program period.

The proposed amendment to §353.1315(b) modifies the definition of "Program period" to delete language that currently allows a Rural health clinic (RHC) to apply to participate from March 1 until August 31 of the same program period.

The proposed amendment to §353.1315(f) provides entities are required to report all quality data denoted as required as a condition of participation in subsection (h) of the section and provides that failure to meet any condition of participation will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

The proposed amendment to §353.1315(h) deletes the current 10 percent reconciliation process; provides that providers must report quality data for Components One and Two as described in §353.1317.

The proposed amendment to §353.1315(i) deletes the current redistribution of non-dispersed funds process due to failure of one or more RHCs to meet performance requirements.

The proposed amendment to §353.1317(d) deletes the performance requirement language and replaces it with quality metric requirements; deletes the current language that a payment will be triggered by the achievement of performance measures; and provides an RHC must report all quality metrics as a condition of participation in the program.

Proposed new §353.1317(h) provides HHSC will evaluate the success of the program based on a review of reported metrics; provides HHSC will publish interim findings; and provides HHSC will publish a final evaluation report within 270 days of the conclusion of the program.

The proposed amendment to §353.1320(a) deletes the terminology pertaining to community mental health centers (CMHC) and replaces it with behavioral health providers.

The proposed amendment to §353.1320(b) adds a definition for "local behavioral health authority (LBHA)," provides a definition for "providers" based on the applicable program year, and modifies the definition of "program period" to delete language allowing participation in a modified program period.

The proposed amendment to §353.1320(e) provides the provider is required to report all quality data denoted as required as a condition of participation and provides that failure to meet any conditions of participation will result in removal of the provider from the program and recoupment of all funds previously paid during the program period.

The proposed amendment to §353.1320(h) clarifies the provider must provide at least one Medicaid service to a Medicaid managed care client; provides the monthly payment will be paid as a uniform rate increase for Component One and Two; provides that the reconciliation will occur 120 days after the last day of the program period based on actual utilization; deletes the 10 percent trigger threshold for the reconciliation; and provides that providers must report quality data as described in §353.1322.

The proposed amendment to §353.1322(d) deletes the performance language and replaces it with quality metric requirements; deletes language pertaining to achievement of performance measures; and provides participating providers must report data stratified by payor type.

Proposed new §353.1322(g) provides HHSC will evaluate the success of the program based on a statewide review of reported metrics; provides HHSC will publish interim findings; and provides HHSC will publish a final evaluation report within 270 days of the conclusion of the program.

Additional edits are made throughout the rule for consistency and clarity.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each year of the first five years that the rules will be in effect, there will be an estimated increase in revenue to state government as a result of enforcing and administering the rules as proposed.

The potential effect on state government for each year of the first five years proposed rules are in effect is an estimated cost of $2,345,748,194 in Other Funds ($6,607,267,179 in All Funds (AF)) in fiscal year (FY) 2022, $2,646,105,975 in Other Funds ($6,607,267,179 in AF) in FY 2023, $2,651,391,580 in Other Funds ($6,607,267,179 in AF) in FY 2024, $2,651,391,580 in Other Funds ($6,607,267,179 in AF) in FY 2025, $2,651,391,580 in Other Funds ($6,607,267,179 in AF) in FY 2026. The estimates may fluctuate year to year based on HHSC's assessment of various factors or CMS's approval of all or some of the applicable programs.

For each year of the first five years the rules will be in effect, there may be an anticipated fiscal impact for local governments. HHSC lacks sufficient information to determine the potential fiscal impact.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years that the rules will be in effect:

(1) the proposed rules will not create a government program;

(2) implementation of the proposed rules will not affect the number of HHSC employee positions;

(3) implementation of the proposed rules will result in no assumed change in future legislative appropriations;

(4) the proposed rules will not affect fees paid to HHSC;

(5) the proposed rules will not create a new rule;

(6) the proposed rules will expand existing rules

(7) the proposed rules will not change the number of individuals subject to the rules; and

(8) the proposed rules will positively affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Trey Wood has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities.

Participation in the programs described in the proposed rules is optional.

LOCAL EMPLOYMENT IMPACT

The proposed rules will not have an effect on local economy as the program is voluntary.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to these rules because the rules do not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Victoria Grady, Director of Provider Finance, has determined that for each year of the first five years the rules are in effect, the public benefit will be the continued ability of Medicaid managed care clients to have continued access to care and to incentivize providers to improve the quality of services provided, as a result of the additional financial resources that will support continued provider operations.

Trey Wood, Chief Financial Officer, has also determined that for the first five years the rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules because participation in the programs is optional.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the 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 Texas Government Code §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Victoria Grady at (512) 438-2680 in the HHSC Provider Finance Department.

Written comments on the proposal may be submitted to Victoria Grady, Director of Provider Finance, HHSC Provider Finance Department, Mail Code H-400, P.O. Box 149030, Austin, Texas 78714-9030; or by email to ProviderFinanceDept@hhs.texas.gov.

To be considered, comments must be submitted no later than 21 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rule 22R009" in the subject line.

STATUTORY AUTHORITY

The amendments are proposed under Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad 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-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code, Chapter 32; and Texas Government Code §533.002, which authorizes HHSC to implement the Medicaid managed care program.

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