TITLE 1. ADMINISTRATION

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 353. MEDICAID MANAGED CARE

SUBCHAPTER G. STAR+PLUS

1 TAC §353.608

The Texas Health and Human Services Commission (HHSC) proposes amendments to Title 1, Part 15, Chapter 353, Subchapter G, §353.608, concerning Minimum Payment Amounts to Qualified Nursing Facilities.

BACKGROUND AND JUSTIFICATION

During the 84th Session, the Texas Legislature, through the 2016-17 General Appropriations Act (Article II, House Bill 1, 84th Legislature, Regular Session, 2015, Rider 97), directed HHSC to transition the Nursing Facility Minimum Payment Amounts Program (MPAP) from a program solely based on enhanced payment rates to publically owned nursing facilities to a Quality Incentive Payment Program (QIPP) for all nursing facilities that have a source of public funding for the non-federal share. The additional payments to nursing facilities through the QIPP are to be based on improvements in quality and innovation in the provision of nursing facility services.

Proposed new §353.1301 (42 TexReg 169), concerning Quality Incentive Payment Program for Nursing Facilities, describes the QIPP.

Initially, HHSC intended to implement QIPP effective March 1, 2017, with the MPAP program ending February 28, 2017, as reflected in the current MPAP administrative code rules. HHSC was unable to secure an agreement with the Centers for Medicare & Medicaid Services (CMS) for a March 1 implementation. As a result, QIPP implementation was delayed to September 1, 2017. Simultaneously, a dispute with CMS as to the allowability of MPAP led HHSC to suspend MPAP effective August 31, 2016.

The proposed amendment to §353.608 allows a final MPAP eligibility period for existing MPAP participants prior to the shift to QIPP. This final eligibility period will allow qualified nursing facilities to receive MPAP payments for dates of service from April 1, 2017 until August 31, 2017. Facilities not previously enrolled in MPAP will not be eligible for these MPAP payments.

The proposed amendment also corrects an error in the calculation of the adjustment to the minimum payment amount described in subsection (d)(2)(F) of the rule. Current language states that the adjustment to the Minimum Payment Amount is calculated by subtracting the result of subsection (d)(2)(E) from the result of subsection (d)(2)(C). The proposed amendment states that the adjustment is calculated by adding the result from subsection (d)(2)(E) to the result of subsection (d)(2)(C).

In addition, the proposed amendment:

- deletes references to intergovernmental transfer (IGT) Responsibility agreements, instead requiring the non-state governmental entity that owns the nursing facility to submit its estimated MPAP IGT for the entire eligibility period no later than a date determined by HHSC;

- updates language regarding timing of IGT responsibility determination to indicate that HHSC will determine IGT responsibilities prior to finalizing the managed care capitation rates that include the increase in payments to the MCOs due to MPAP for the eligibility period in question;

- updates the time period during which HHSC may complete interim IGT reconciliations for eligibility period three to August 31, 2017, through August 31, 2019;

- deletes language indicating that nursing facilities owned by non-state governmental entities that fail to timely complete their IGTs as described in the rule are ineligible to participate in the MPAP for future eligibility periods; and

- updates the end date for the MPAP from February 28, 2017, to August 31, 2017.

SECTION-BY-SECTION SUMMARY

Proposed subsection (b)(1) updates the definition of "calculation period" to include listings of the number of calculation periods in each eligibility period.

Proposed subsection (b)(4) updates the definition of "DADS" to include "or its successor agency," since the Department of Aging and Disability Services (DADS) is in the process of merging with HHSC.

Proposed subsection (b)(9) updates the definition of "Eligibility Period Three" to indicate it covers dates of service from April 1, 2017 to August 31, 2017.

Proposed subsection (d)(2)(F) corrects an error in the calculation of the adjustment to the minimum payment amount. Current language states that the adjustment to the Minimum Payment Amount is calculated by subtracting the result from subsection (d)(2)(E) from the result of subsection (d)(2)(C). The proposed amendment states that the adjustment is calculated by adding the result from subsection (d)(2)(E) to the result of subsection (d)(2)(C).

Proposed subsection (e)(5)(B) deletes references to IGT Responsibility agreements for eligibility period three and instead requires that a Non-state governmental entity submit the entire estimated IGT responsibility by a date to be determined by HHSC.

Proposed subsection (g)(1) indicates that HHSC will determine IGT responsibilities prior to finalizing the managed care capitation rates that include the increase in payments to the MCOs due to MPAP for the eligibility period in question.

Proposed subsection (g)(4)(B) updates the period during which HHSC may complete interim IGT reconciliations for eligibility period three to August 31, 2017, through August 31, 2019.

Proposed subsection (g)(4)(D) revises possible penalties to apply when a non-state governmental entity does not timely complete an IGT required as part of the IGT reconciliation process by deleting the option that HHSC determine that all nursing facilities owned by the entity are ineligible to participate in MPAP for future eligibility periods.

Proposed subsection (j) updates the end date of the MPAP from February 28, 2017, to August 31, 2017.

The proposed rule also includes numbering revisions.

FISCAL NOTE

Greta Rymal, Deputy Executive Commissioner for Financial Services, has determined that for each year of the first five years the proposed rule is in effect, capitation amounts for managed care payments could increase to provide MPAP payments for NFs. The increase would be funded with federal funds and with the non-federal share provided through IGTs from non-state governmental entities. The amounts of such funds are dependent upon the actions of local units of government and cannot be estimated, but could be significant.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

HHSC has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because there are no small businesses or micro-businesses currently participating in MPAP.

PUBLIC BENEFITS AND COSTS

Pam McDonald, Director of Rate Analysis, has determined that, for each year of the first five years the rule will be in effect, the public benefit expected as a result of adopting the proposed rule amendment is that prior MPAP participants will be able to access additional funds to support their provision of nursing facility care until the QIPP program rolls out on September 1, 2017.

Ms. McDonald has also determined that there are no probable economic costs to persons required to comply with the proposed rule as participation in MPAP is voluntary.

HHSC has determined that the proposed rule will have a fiscal impact on some local governments, but there is insufficient detail to provide an estimate because the amount of funds the various non-state governmental entities will IGT is unknown at this time. There is no anticipated negative impact on local employment.

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 Pam McDonald, Health and Human Services Commission, Mail Code-H400, P.O. Box 149030, Austin, Texas 78714-9030; by fax to (512) 730-7475; or by e-mail to Pam.McDonald@hhsc.state.tx.us, within 30 days after publication of this proposal in the Texas Register.

Statutory Authority

The amended rule is proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and Texas Human Resources Code, §32.021 and Texas Government Code, §531.021, which authorize HHSC to administer the federal medical assistance (Medicaid) program in Texas.

The amended rule implements Texas Government Code, Chapter 531. No other statutes, articles, or codes are affected by this proposal.

§353.608.Minimum Payment Amounts to Qualified Nursing Facilities.

(a) Introduction. This section establishes minimum payment amounts for certain non-state government-owned nursing facility providers participating in the STAR+PLUS Program, or other Medicaid managed care programs offering nursing facility services, and the conditions for receipt of these amounts.

(b) Definitions.

(1) Calculation Period--A month used to calculate the Minimum Payment Amount. There are six calculation periods in Eligibility Period One, [and] twelve calculation periods in Eligibility Period Two, nine calculation periods in Eligibility Period Two-A, and five calculation periods in Eligibility Period Three.

(2) - (3) (No change.)

(4) DADS--The Texas Department of Aging and Disability Services, or its successor agency.

(5) - (8) (No change.)

(9) Eligibility Period Three--The fourth period of time for which a Qualified Nursing Facility may receive the Minimum Payment Amounts described in this section, covering dates of service from April 1, 2017, to August 31, 2017 [September 1, 2016, to February 28, 2017].

(10) - (25) (No change.)

(c) (No change.)

(d) Calculation of the Second Payment. HHSC will calculate the Second Payment for each Qualified Nursing Facility using the methodology detailed in this subsection. If a Qualified Nursing Facility is contracted with more than one MCO, HHSC will calculate a separate Second Payment for each MCO with which the Qualified Nursing Facility is contracted.

(1) (No change.)

(2) Calculate the Adjustment to the Minimum Payment Amount. The adjustment to the Minimum Payment Amount is equal to the sum of all adjustments for each RUG. The adjustment to the Minimum Payment Amount is determined as follows:

(A) - (E) (No change.)

(F) Sixth, determine the adjustment to the Minimum Payment Amount by adding [subtracting] the result from subparagraph (E) of this paragraph from the result from subparagraph (C) of this paragraph.

(3) Calculate the Second Payment. To determine the Second Payment, subtract the adjustment to the Minimum Payment Amount described in paragraph (2)(F) of this subsection from the Minimum Payment Amount described in paragraph (1) of this subsection.

(e) Eligibility for Receipt of Minimum Payment Amounts.

(1) - (4) (No change.)

(5) Eligibility Period Three. A nursing facility is eligible to receive the Minimum Payment Amounts for Eligibility Period Three if it has met the following requirements:

(A) The nursing facility was eligible to receive the Minimum Payment Amounts for Eligibility Period Two or Eligibility Period Two-A.

(B) The Non-state Governmental Entity that owns the nursing facility must have submitted its estimated IGT responsibility for the entire eligibility period no later than a date determined by HHSC [have entered into an IGT Responsibility agreement with HHSC by a date determined by HHSC. The IGT Responsibility agreement must cover the estimated IGT Responsibility for the nursing facility for the Eligibility Period].

(C) The Non-state Governmental Entity that owns the nursing facility must certify the following facts on a form prescribed by HHSC and the form must be received by HHSC by a date determined by HHSC:

(i) that it is a Non-state Government-owned Nursing Facility where a Non-state Governmental Entity holds the license and is party to the facility's Medicaid contract;

(ii) that all funds transferred to HHSC via IGT for use as the state share of payments are Public Funds; and

(iii) that no part of any payment made under the Minimum Payment Amount program under this section will be used to pay a contingent fee, consulting fee, or legal fee associated with the nursing facility's receipt of the Minimum Payment Amount funds.

(D) The Non-state Governmental Entity that owns the nursing facility must submit to HHSC, upon demand, copies of any contracts it has with third parties that reference the administration of, or payments from, the Minimum Payment Amount program.

(6) (No change.)

(f) (No change.)

(g) IGT Responsibility.

(1) Timing. HHSC will determine IGT responsibilities prior to finalizing the managed care capitation rates that include the increase in payments to the MCOs due to the Minimum Payment Amounts program for [the first day of] the Eligibility Period.

(2) - (3) (No change.)

(4) Reconciliation. HHSC will complete the reconciliation in two parts.

(A) (No change.)

(B) For Eligibility Period Three only, HHSC may complete interim reconciliations between August 31, 2017, and August 31, 2019 [February 28, 2017, and February 28, 2019], as updated enrollment data for the Program Period, as reflected in adjusted member months, becomes available. HHSC will follow the process described in subparagraph (A) of this paragraph for such interim reconciliations.

(C) (No change.)

(D) If the Non-state Governmental Entity does not timely complete the transfer described in subparagraph (A), (B), or (C) of this paragraph, HHSC may:

[(i) determine that all nursing facilities owned by the Non-state Governmental Entity are ineligible to receive the Minimum Payment Amount for future eligibility periods;]

(i) [(ii)] withhold any or all future Medicaid payments from the Non-state Governmental Entity until HHSC has recovered an amount equal to the shortfall; and

(ii) [(iii)] retain any funds that would normally be returned to the Non-state Governmental Entity as part of the reconciliation process.

(5) All IGT calculations are solely at the discretion of HHSC and are not open to desk review or appeal.

(h) - (i) (No change.)

(j) Dates the Minimum Payment Amount is available. The minimum payment requirements described in this section will only cover dates of service from the later of March 1, 2015, or the date on which nursing facility services become managed care services, to August 31, 2017 [February 28, 2017].

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 17, 2017.

TRD-201701114

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: April 30, 2017

For further information, please call: (512) 707-6079