TITLE 1. ADMINISTRATION

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 351. COORDINATED PLANNING AND DELIVERY OF HEALTH AND HUMAN SERVICES

SUBCHAPTER B. ADVISORY COMMITTEES

DIVISION 1. COMMITTEES

The Texas Health and Human Services Commission (HHSC) adopts the repeal of §351.819, concerning the Behavioral Health Integration Advisory Committee; §351.831, concerning the Employment First Task Force; and §351.835, concerning the Advisory Committee on Qualifications for Health Care Translators and Interpreters, without changes to the proposed text as published in the November 22, 2019, issue of the Texas Register (44 TexReg 7101). The repeals will not be republished. HHSC also adopts without changes amendments to §351.805, concerning the State Medicaid Managed Care Advisory Committee; §351.821, concerning the Value-Based Payment and Quality Improvement Advisory Committee; §351.823, concerning the e-Health Advisory Committee; §351.827, concerning the Palliative Care Interdisciplinary Advisory Council; and §351.833, concerning the STAR Kids Managed Care Advisory Committee. The rules will not be republished. Section 351.837, concerning the Texas Autism Council, is adopted with changes to the proposed text as published in the November 22, 2019, issue of the Texas Register (44 TexReg 7101). The rule will be republished.

BACKGROUND AND JUSTIFICATION

In 2015, the Texas Legislature removed 38 advisory committees from HHSC that were established by statute and, by adopting Texas Government Code §531.012, authorized the Executive Commissioner to establish advisory committees by rule. The Executive Commissioner's advisory committee rules were effective July 1, 2016. Consistent with Texas Government Code §2110.008, the advisory committee rules designated an abolition date for advisory committees established under Texas Government Code §531.012 approximately four years from the date of the rules' effective date. Several of the advisory committees are set to expire December 31, 2019.

The repeals are necessary to terminate advisory committees that have expired or are abolished. The amendments are necessary to extend committees whose terms expire December 31, 2019, and whose work is not completed. In addition, the amendments for the Palliative Care Interdisciplinary Advisory Council and the STAR Kids Managed Care Advisory Committee are necessary to comply with statute.

COMMENTS

The 14-day comment period ended December 7, 2019.

During this period, HHSC received comments regarding the proposed rules from 18 commenters, including Texas Parent to Parent, Autism Society of Texas, Texas Association for Behavior Analysis Public Policy Group, Easterseals Coalition Serving Texas, and 14 individuals. A summary of comments relating to the rules and HHSC's responses follows.

Comment: Some commenters favored the amendments to §351.805, extending the State Medicaid Managed Care Advisory Committee to December 31, 2023.

Response: HHSC appreciates the comments; no change is necessary.

Comment: One commenter was not in favor of the repeal of §351.831, concerning the Employment First Task Force.

Response: HHSC declines to continue this rule. The Employment First Task Force was established by statute, Texas Government Code §531.02448. That statute expired, by its terms, September 1, 2017. Consequently, the rule pertaining to the Employment First Task Force is no longer needed and will be repealed.

Comment: Some commenters favored the amendments to §351.833, extending the STAR Kids Managed Care Advisory Committee to December 31, 2023.

Response: HHSC appreciates the comments; no change is necessary.

Comment: Several commenters favored the amendments to §351.837, extending the Texas Autism Council to December 31, 2023.

Response: HHSC appreciates the comments. HHSC will, however, revise the proposed amendments to extend the council until December 31, 2020, to prioritize optimal placement of relevant issues. In addition to the council, several other advisory committees currently address issues regarding autism, and HHSC will work to identify the most effective forum(s) for the council's issues. HHSC agrees with the commenters that the issues the Autism Council addresses are extremely important, and HHSC continues its commitment to providing the issues the attention they deserve.

1 TAC §§351.805, 351.821, 351.823, 351.827, 351.833, 351.837

STATUTORY AUTHORITY

The amendments are 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, and Texas Government Code §531.012, which authorizes the Executive Commissioner to establish advisory committees by rule and to include in the rule a date of abolition. The amendment of §351.827 is consistent with Senate Bill 1731, §10, 85th Legislature, Regular Session, 2017, and the amendment of §351.833 is consistent with Texas Government Code §533.00254(b).

§351.837.Texas Autism Council.

(a) Statutory authority. The Texas Autism Council is established in accordance with HHSC's general authority to establish committees under Texas Government Code §531.012(a).

(b) Purpose. The Texas Autism Council advises and make recommendations to HHSC and the Executive Commissioner to ensure that the needs of persons of all ages with autism spectrum disorder and their families are addressed and that all available resources are coordinated to meet those needs.

(c) Tasks. The Texas Autism Council performs the following activities:

(1) makes recommendations to HHSC through regularly scheduled meetings and HHSC staff assigned to the committee; and

(2) other tasks consistent with its purpose that are requested by the Executive Commissioner.

(d) Reporting requirements. The Texas Autism Council performs reporting activities assigned by Texas Human Resources Code §114.008.

(e) Abolition. The Texas Autism Council is abolished, and this section expires, on December 31, 2020.

(f) Membership.

(1) The Texas Autism Council consists of no more than 24 members.

(A) Each public member is appointed by the Executive Commissioner.

(B) Each ex officio member is appointed by the commissioner or executive head of the represented state agency.

(C) Each member must have knowledge of and an interest in autism spectrum disorder.

(D) Texas Autism Council membership is allocated as follows:

(i) The majority of public members are family members of a person with autism spectrum disorder.

(ii) A representative from each of the following state agencies will serve as an ex officio member:

(I) Texas Department of Aging and Disability Services;

(II) Texas Department of Family and Protective Services;

(III) Texas Department of State Health Services;

(IV) Texas Health and Human Services Commission;

(V) Texas Workforce Commission; and

(VI) Texas Education Agency.

(2) Except as necessary to stagger terms, each public member is appointed to serve a term of two years.

(3) An ex officio member serves in an advisory capacity only and may not:

(A) serve as an officer; or

(B) vote.

(g) Presiding officer.

(1) The Texas Autism Council selects a presiding officer from among its members.

(2) Unless reelected, the presiding officer serves a term of one year.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 7, 2020.

TRD-202000040

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: January 27, 2020

Proposal publication date: November 22, 2019

For further information, please call: (512) 707-6101


1 TAC §§351.819, 351.831, 351.835

STATUTORY AUTHORITY

The repeals are 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, and Texas Government Code §531.012, which authorizes the Executive Commissioner to establish advisory committees by rule and to include in the rule a date of abolition. The amendment of §351.827 is consistent with Senate Bill 1731, §10, 85th Legislature, Regular Session, 2017, and the amendment of §351.833 is consistent with Texas Government Code §533.00254(b).

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 7, 2020.

TRD-202000041

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: January 27, 2020

Proposal publication date: November 22, 2019

For further information, please call: (512) 707-6101


DIVISION 1. COMMITTEES

1 TAC §351.839

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) adopts §351.839, concerning Nursing Facility Payment Methodology Advisory Committee. Section 351.839 is adopted without changes to the proposed text as published in the November 29, 2019, issue of the Texas Register (44 TexReg 7237). This rule will not be republished.

BACKGROUND AND JUSTIFICATION

The Centers for Medicare & Medicaid Services implemented a new payment model for Medicare Skilled Nursing Facilities effective October 1, 2019. Due to changes resulting from this implementation, the data HHSC uses to calculate the current Texas Medicaid reimbursement methodology for nursing facilities (NFs) will not be accessible through the current federal source after September 30, 2020. HHSC is using this opportunity to consider revisions to the Medicaid NF payment rate methodology.

The new section creates the Nursing Facility Payment Methodology Advisory Committee (NF-PMAC) to advise HHSC on the establishment and implementation of recommended improvements to the NF payment methodology and other NF reimbursement topics. By establishing the NF-PMAC, HHSC will benefit from stakeholder knowledge and expertise as HHSC considers possible changes to the NF payment methodology.

COMMENTS

The 31-day comment period ended December 30, 2019. During this period, HHSC did not receive any comments regarding the proposed rule.

STATUTORY AUTHORITY

The new section 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, and 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; and Texas Government Code §531.012, which provides that the Executive Commissioner of HHSC shall establish and maintain advisory committees and adopt rules governing such advisory committees in compliance with Chapter 2110 of the Texas Government Code.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 9, 2020.

TRD-202000077

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: February 1, 2020

Proposal publication date: November 29, 2019

For further information, please call: (512) 424-6637


CHAPTER 355. REIMBURSEMENT RATES

SUBCHAPTER J. PURCHASED HEALTH SERVICES

The Texas Health and Human Services Commission (HHSC) adopts amendments to §355.8065, concerning Disproportionate Share Hospital Reimbursement Methodology, §355.8066, concerning Hospital-Specific Limit Methodology, and §355.8212, concerning Waiver Payments to Hospitals for Uncompensated Charity Care. The amendments are adopted without changes to the proposed text as published in the November 29, 2019, issue of the Texas Register (44 TexReg 7239), and therefore will not be republished.

BACKGROUND AND JUSTIFICATION

The rule amendments describe new payment caps for the Disproportionate Share Hospital (DSH) and Uncompensated Care (UC) Medicaid supplemental payment programs. When combined, DSH and UC represent almost $5.5 billion in Medicaid payments for Texas hospitals. The programs are meant to reimburse hospitals that provide services to predominantly Medicaid and low-income patients. So, the allocation methodology among such providers should account for the relative amounts of Medicaid and low-income patients served, as well as the overall payments hospitals receive for those patients.

In Texas, two payment caps exist for hospitals that participate in DSH and UC. There is a federal payment cap, known as the final hospital-specific limit (final HSL), that is described in federal law. There is also a state payment cap, known as the interim hospital-specific limit (interim HSL), that HHSC may define. The state payment cap is calculated in the payment year for DSH and UC, but the federal payment cap is calculated two years after the payment year using updated data. HHSC linked the interim HSL to the final HSL so that there would be a limited chance that a recoupment would occur after the final HSL was calculated.

The federal payment cap has been the subject of ongoing federal litigation for several years. That litigation relates to the inclusion of payments from other insurance payors and Medicare when a Medicaid client also has other insurance or Medicare. HHSC will continue to monitor this litigation and examine if the Texas payment cap should change in response to the outcome of the federal litigation. However, HHSC is implementing a full offset methodology for the state payment cap. That means any payment for services provided to a Medicaid client from any source will be included as an offset to all appropriate Medicaid costs.

HHSC seriously considered two other options for the state payment cap before proposing this amendment. HHSC considered the approach recommended by the Medicaid and CHIP Payment and Access Commission (MACPAC), where the Texas payment caps would not contain either the costs or payments for a Medicaid client who also has other insurance or Medicare. HHSC also considered capping, in the aggregate, other insurance and Medicare payments at the Medicaid allowable cost. However, HHSC determined that including all Medicaid costs and all third-party payments provides a more appropriate measure of financial need given the purpose of the payment programs at issue.

HHSC met with and received feedback from stakeholders prior to publication of the proposal. After publication, HHSC evaluated both written comments and oral testimony that was received during a public hearing.

COMMENTS

The 31-day comment period ended December 30, 2019.

During this period, HHSC received comments regarding the proposed rules from 15 commenters: Children's Hospital Association of Texas (CHAT), CHRISTUS Health Community Health Systems (CHS), Community Hospital Corporation, Doctors Hospital at Renaissance Health System (DHR Health), HCA Healthcare (HCA), LifePoint Health, Parkland Health and Hospital System, Steward Health Care System, Teaching Hospitals of Texas (THOT), Tenet Healthcare, Texas Children's Hospital, Texas Organization of Rural & Community Hospitals (TORCH), Universal Health Services, Inc., and University Medical Center of El Paso.

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

Comment: Multiple commenters support the proposed state payment cap methodology. Specifically, several commenters wrote that they support HHSC's proposal because it properly allocates scarce funds based on actual unreimbursed costs and that including all Medicaid costs and third-party payments provides the most accurate measure of the financial burden of treating low-income patients for hospitals and reduces the likelihood of recoupments. One commenter wrote that HHSC's proposed policy aligns with state and federal policy requiring that Medicaid be the payor of last resort.

Response: HHSC appreciates and agrees with the feedback. No changes were made in response to this comment.

Comment: Three commenters proposed HHSC adopt a different methodology that would exclude Medicaid-secondary costs and payments, as recommended by the Medicaid and CHIP Payment and Access Commission (MACPAC) in June 2019.

Response: HHSC declines to adopt the MACPAC methodology at this time. The MACPAC approach was one of the two other options HHSC seriously considered before proposing this amendment. Medicaid is the payor of last resort and HHSC has determined that including all Medicaid costs and all third-party payments provides a more appropriate measure of financial need given the purpose of the payment programs at issue.

HHSC understands that there is proposed legislation that would adopt the MACPAC methodology. HHSC will continue to monitor the legislation and determine if there is a need for future rule amendments. No changes were made in response to this comment.

Comment: One commenter urged HHSC to adopt the Senate Bill (S.B.) 7 methodology that would include Medicare and other insurance payments up to the Medicaid allowable cost. The commenter also suggested that HHSC reconsider utilizing the proposed full-offset methodology because it will result in locking some hospitals out of DSH altogether, even if their final HSL would show a shortfall, because the state payment cap uses two-year-old data. The commenter added that once a hospital is locked out of the DSH program it will have no opportunity to access funds, even if recouped funds are redistributed, because they're not part of the audit that calculates final HSLs.

Response: HHSC declines to adopt the S.B. 7 methodology. The S.B. 7 approach was one of the two other options HHSC seriously considered before proposing this amendment. Medicaid is the payor of last resort and HHSC has determined that including all Medicaid costs and all third-party payments provides a more appropriate measure of financial need given the purpose of the payment programs at issue. No changes were made in response to this comment.

Comment: Several commenters did not support a methodology that would exclude all costs and payments for Medicaid patients with commercial or Medicare coverage (the MACPAC methodology). The commenters wrote that excluding an entire segment of the Medicaid population from the state payment cap calculation diminishes the accuracy of HHSC's ultimate goal to determine the amount of uncompensated care hospitals provided to Medicaid-eligible patients. Several commenters encouraged HHSC to utilize a more conservative interim method for allocating DSH payments, such as the proposed state payment cap, even if Congress adopts the MACPAC methodology for the annual audits.

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

Comment: Several commenters did not support a methodology that would cap aggregate third-party payments at Medicaid allowable costs. The commenters wrote that capping aggregate payments at allowable costs would be neither as accurate nor as efficient as using HHSC's proposed state payment cap method.

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

Comment: Two commenters requested that, in the event HHSC adopts the full-offset state payment methodology, the DSH rule be amended to include self-reported Medicaid days associated with the costs and payments for the Medicaid-secondary patients in all DSH calculations.

Response: Thank you for the comment. HHSC had not contemplated this when making the proposed amendments but will take it into consideration during future rule amendments. No changes were made in response to this comment.

Comment: Several commenters recommended HHSC consider using claims based on discharge date rather than adjudication date for the state payment cap and related DSH program calculations.

Response: HHSC declines to make the suggested change. This comment is outside the scope of the proposed amendments.

Comment: Several commenters recommended HHSC consider including charges and payments submitted after the 95-day filing deadline in the state payment cap calculation.

Response: HHSC declines to make the suggested change. This comment is outside the scope of the proposed amendments.

Comment: One commenter requested that, in the event HHSC adopts the full-offset state payment methodology, HHSC implement a one-year transition period for hospitals locked out of a DSH payment to adjust for the reduction in revenue that was unforeseen when 2020 budgets were set. The commenter added that providing a transition period to such hospitals alleviates some of the problems inherent in the full-offset methodology.

Response: HHSC declines to make the suggested change. The discussion surrounding the state payment cap and the HSL has been ongoing for over a year. Aligning the state payment cap and the final HSL will limit recoupments, and it would be imprudent to continue using different calculations for the two payment caps.

Comment: One commenter requested HHSC remove TAC §355.8212(g)(2)(A)(iv) from the rule as large public hospitals no longer require adjustment to their Uncompensated Care hospital-specific limits or intergovernmental transfers (IGTs) made in the Disproportionate Share program.

Response: HHSC declines to make the suggested change. This comment is outside the scope of the proposed amendments.

Comment: Several commenters requested confirmation from HHSC that it will enforce the state payment cap rule for UC payments, or alternatively, requested that HHSC propose a rule to amend or remove the language in §355.8212(g)(2)(B) and allow stakeholders the opportunity to comment. Some commenters suggested HHSC enforce the rule as it's written. However, two commenters suggested HHSC amend the rule to remove the cap because UC payments no longer reimburse hospitals for the same costs as DSH. One commenter requested clarification from HHSC on how it intends to enforce this rule.

Response: HHSC appreciates the feedback but declines to make the suggested changes. These comments are outside the scope of the proposed amendments.

Comment: One commenter suggested HHSC amend TAC §355.8212(g)(2)(A) so that the DSH credit is limited to only the amount transferred to HHSC by a large public hospital's affiliated governmental entity to support the portion of DSH payments to that hospital and private hospitals attributable to their inpatient and outpatient charity-care costs.

Response: HHSC declines to make the suggested change. This comment is outside the scope of the proposed amendments.

Comment: Several commenters suggested HHSC limit the DSH IGT credit to the actual amount that is necessary to eliminate the reduction in large public hospitals' UC entitlement. Some commenters wrote that the current DSH IGT credit provides a windfall for transferring hospitals at the expense of other participating Texas hospitals.

Response: HHSC declines to make the suggested change. This comment is outside the scope of the proposed amendments.

Comment: One commenter proposed that HHSC limit the DSH credit to the amount of IGT that supported uninsured costs reimbursed in DSH.

Response: HHSC declines to make the suggested change. This comment is outside the scope of the proposed amendments.

Comment: Multiple commenters requested HHSC remove the penalties under §355.8065(n) relating to hospitals withdrawing from the DSH program. These commenters also urged HHSC to define "participation in the DSH program".

Response: HHSC declines to make the suggested changes. These comments are outside the scope of the proposed amendments.

DIVISION 4. MEDICAID HOSPITAL SERVICES

1 TAC §355.8065, §355.8066

STATUTORY AUTHORITY

The amendments are 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 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; and 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.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 9, 2020.

TRD-202000075

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: February 1, 2020

Proposal publication date: November 29, 2019

For further information, please call: (512) 424-6863


DIVISION 11. TEXAS HEALTHCARE TRANSFORMATION AND QUALITY IMPROVEMENT PROGRAM REIMBURSEMENT

1 TAC §355.8212

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 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; and 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.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 9, 2020.

TRD-202000076

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: February 1, 2020

Proposal publication date: November 29, 2019

For further information, please call: (512) 424-6863