The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) adopts 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.

Sections 353.1302, 353.1304, 353.1306, 353.1307, 353.1309, 353.1315, and 353.1320 are adopted without changes to the proposed text as published in the March 18, 2022, issue of the Texas Register (47 TexReg 1337). The rules will not be republished.

Sections 353.1311, 353.1317, and 353.1322 are adopted with changes. These rules will be republished.

BACKGROUND AND JUSTIFICATION

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

Texas has received approval of five DPPs: the Quality Incentive Payment Program (QIPP), 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 met every two business days between August 20, 2021, and March 24, 2022, to work towards a resolution. The two entities exchanged multiple rounds of written modifications, questions, and responses. The written exchanges can be found posted to the HHSC website at: https://pfd.hhs.texas.gov/provider-finance-communications. CMS approval of DPP BHS and QIPP was received in November 2021, and approval of CHIRP, RAPPS, and TIPPS was received in March 2022. SFY 2023 preprints for all five programs, CHIRP, DPP BHS, QIPP, RAPPS, and TIPPS were submitted to CMS on March 1, 2022, and responses are in process.

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.

COMMENTS

The 21-day comment period ended April 8, 2022.

During this period, HHSC received comments regarding the proposed amendments from two commenters, including the University of Texas at Southwestern Medical Center (UTSW) and the Texas Medical Association. A summary of comments relating to the rules and HHSC's responses follows.

Comment: One commenter provided recommendations in relation to §353.1309 and the change in the TIPPS structure from quality based to reporting as a condition of participation. The change results in recoupment of all payments received and removal from the program for failure to report. The commenter recommended revising §353.1309 so that (1) recoupments are not disproportionate to the underlying error, (2) physicians are notified of identified errors and given an opportunity to submit additional information, and (3) the rule includes due process rights to notice and appeal.

Response: To clarify, physicians will be notified by HHSC if they fail to report, or their reporting is incomplete, and will be given an opportunity to correct prior to recoupments being issued. The provider will need to respond within the timeline communicated by HHSC to meet condition of participation requirements. HHSC added clarification to the quality metric rules §§353.1311, 353.1317, and 353.1322 that specifies that providers will have 30 calendar days to respond after a request from HHSC for more information.

HHSC declines to make the other two recommended updates as changes recommended are not allowable under the program structure as approved by CMS. Per the approved program, reporting is a condition of participation, which is different than pay-for-reporting, and failure to report results in recoupment of all payments. Pay-for-reporting would allow for proportional recoupments, but CMS explicitly prohibits pay-for-reporting in the Special Terms and Conditions of the approved 1115 Waiver. The rules process does not include a right to notice and appeal as that is not contemplated in the approved structure for the program as approved by CMS. The change in the structure of the program to strictly require reporting as a condition of participation was required by CMS prior to approval so updates would require additional negotiations with CMS.

Comment: One commenter requested that the TIPPS recoupment language in §353.1309 be amended to add detail to allow for guidance on determining the amount of recoupment, notice requirements, and the conditions required for recoupment. The commenter also requested additional updates to address the process for removing a provider from the program, giving the provider an opportunity to correct identified noncompliance, and appealing an intended recoupment or removal from the program.

Response: To clarify, physicians will be notified by HHSC if they fail to report, or their reporting is incomplete, and will be given an opportunity to correct prior to recoupments being issued. The provider will need to respond within the timeline communicated by HHSC to meet condition of participation requirements. HHSC added clarification to the quality metric rules §§353.1311, 353.1317, and 353.1322 that specifies that providers will have 30 calendar days to respond after a request from HHSC for more information.

HHSC declines to make the other recommended updates as changes recommended are not allowable under the program structure as approved by CMS. Per the approved program, reporting is a condition of participation, which is different than pay-for-reporting, and failure to report results in recoupment of all payments without exception. Pay-for-reporting would allow for proportional recoupments, but CMS explicitly prohibits pay-for-reporting in the Special Terms and Conditions of the approved 1115 Waiver. The rules process does not include a right to notice and appeal as that is not contemplated in the approved structure for the program as approved by CMS. The change in the structure of the program to strictly require reporting as a condition of participation was required by CMS prior to approval so updates would require additional negotiations with CMS.

Comment: One commenter requested that §353.1309(g)(1)(C) which describes TIPPS Component 1 payments as a "uniform rate increase" should be amended as follows: "(C) Monthly payments to HRI and IME physician groups will be a uniform dollar increase multiplied by unique Medicaid clients served."

Response: HHSC declines to make the suggested update as Component 1 is a uniform rate in terms of an additional payment rate per Medicaid client served. A uniform dollar increase implies that the additional dollars are applied on a per claim basis, which is not the structure of this component.

HHSC revises §353.1311(d)(2), §353.1317(e), and §353.1322(d)(2) to include additional clarifying information regarding timelines for provider response to inquiries to reflect current practice. These revisions were made to clarify existing practices. No other edits were made.

STATUTORY AUTHORITY

The amendments are adopted 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.