TITLE 1. ADMINISTRATION

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 354. MEDICAID HEALTH SERVICES

SUBCHAPTER D. TEXAS HEALTHCARE TRANSFORMATION AND QUALITY IMPROVEMENT PROGRAM

DIVISION 8. DSRIP PROGRAM DEMONSTRATION YEARS 9-10

1 TAC §§354.1729, 354.1735, 354.1737, 354.1753, 354.1757

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes amendments to §354.1729, concerning Definitions; §354.1735, concerning Participants; §354.1737, concerning RHP Plan Update for DY9-10; §354.1753, concerning Category C Requirements for Performers; and §354.1757, concerning Disbursement of Funds.

BACKGROUND AND PURPOSE

On December 21, 2017, the Centers for Medicare & Medicaid Services (CMS) approved Texas' request to extend the Medicaid demonstration waiver entitled "Texas Healthcare Transformation and Quality Improvement Program" for an additional five years. The Delivery System Reform Incentive Payment (DSRIP) program is included in this waiver and provides incentive payments to participating Medicaid providers, primarily for improving their performance on selected health outcome measures. Even though the Transformation Waiver was approved for five more years, CMS approved DSRIP funding only for an additional four years (demonstration years [DYs] 7-10).

Texas DSRIP for DYs 7-10 is governed by the Program Funding and Mechanics (PFM) Protocol, the Measure Bundle Protocol (MBP), and associated rules. HHSC negotiates the protocols with CMS and adopts rules reflecting the CMS-approved protocols.

HHSC posted the PFM Protocol proposal for DYs 9-10, along with a survey to solicit feedback on the proposal, to the Transformation Waiver website on January 3, 2019. HHSC considered the survey responses in finalizing the proposal that HHSC submitted to CMS on March 29, 2019. HHSC adopted rules, November 12, 2019, for DYs 9-10 that reflect this PFM Protocol proposal.

HHSC posted the MBP proposal for DYs 9-10, along with a survey to solicit feedback on the proposal, to the Transformation Waiver website on June 6, 2019. HHSC considered the survey responses in finalizing the proposal that HHSC submitted to CMS on July 31, 2019.

During the approval process, CMS required certain changes to the state's PFM protocol proposal and the MBP proposal. Once these changes were made, CMS approved both protocols on September 17, 2019. This amendment reflects the final versions of the PFM protocol and MBP approved by CMS.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §354.1729 revises the definition of the term "encounter" to clarify that an email is not considered an encounter. It also revises the definition of the term "innovative measure." DY7-8 innovative measures were pay-for-reporting (P4R). If performers did not support converting a DY7-8 innovative measure to pay-for-performance (P4P) for DY9-10, the measure was discontinued for DY9-10. This left only one remaining innovative measure for DY9-10: F1-T03 (Preventative Care & Screening: Oral Cancer Screening), which will be P4P for DY10. In addition, the proposed amendment deletes the definition of the term "quality improvement collaborative activity," as there are no quality improvement collaborative activities for DY9-10.

The proposed amendment to §354.1735 clarifies that anchors are required to hold at least one public meeting prior to submitting the Regional Healthcare Partnership (RHP) plan update for DY9-10 to HHSC, as specified in the PFM Protocol.

The proposed amendment to §354.1737 adds references to provisions that are being added to another section relating to limitations on allowable changes to selected Category C Measure Bundles and measures. It also deletes the requirement that the RHP Plan Update for DY9-10 include for each performer the related strategies associated with each of the performer's Category C Measure Bundles for DY7-8 that the performer implemented in DY7-8.

The proposed amendment to §354.1753 clarifies that each Measure Bundle is assigned a point value for DY9-10 for Measure Bundle selection as described in the MBP. The point values for Measure Bundles D1, E1, E2, and F1 as specified in the Measure Bundle Protocol have changed from DY7-8 to DY9-10. The new point values for these Measure Bundles apply for Measure Bundle selection regardless of whether the performer: 1) selected one of these Measure Bundles for DY7-8 and is continuing that Measure Bundle into DY9-10; or 2) is newly-selecting one of these Measure Bundles for DY9-10.

The proposed amendment to §354.1753(a)(1) limits the number of points worth of a hospital's or physician practice's DY7-8 Measure Bundles and measures that it can delete for DY9-10 to 20 points, as required by CMS. Further, it adds the requirement that hospitals and physician practices must have good cause for deleting a Measure Bundle or measure and defines what constitutes good cause.

The proposed amendment of §354.1753(a)(1) also deletes subparagraph (I), which allows a hospital with a valuation less than or equal to $2,500,000 per DY to select a Measure Bundle identified as a rural Measure Bundle in the MBP. Hospitals that selected a rural Measure Bundle for DY7-8 may continue it in DY9-10, but no hospitals may newly select a rural Measure Bundle for DY9-10.

The proposed amendment to §354.1753(a)(4) simplifies and clarifies the language describing the methodology for determining the valuation for measures in a selected Measure Bundle for which a hospital's or physician practice's denominator for a required measure or numerator for a population-based clinical outcome measure has no volume.

The proposed amendment to §354.1753(a)(5) replaces DY7-8 with DY9-10 for the measure milestones and corresponding valuations described in subsection (e) of this section.

The proposed amendment to §354.1753(a)(6) clarifies that a hospital's Medicaid and uninsured inpatient days and uninsured outpatient costs that are used to calculate the hospital's statewide hospital factor are those reported for federal fiscal year 2016 in the Texas Hospital Uncompensated Care Tool.

The proposed amendment to §354.1753(b)(1) limits the number of points worth of a community mental health center's (CMHC's) DY7-8 Measure Bundles and measures that it can delete for DY9-10 to 20 points, as required by CMS. Further, it adds the requirement that CMHCs must have good cause for deleting a Measure Bundle or measure and defines what constitutes good cause.

The proposed amendment to §354.1753(c)(1) clarifies that a local health department (LHD) may only select one of its DY6 Category 3 P4P measures for DY9-10 if the LHD selected that measure for DY7-8. It also deletes language prohibiting an LHD from selecting the same measure from both the LHD Measure Menu of the MBP and its DY6 Category 3 P4P measures, as LHDs may not newly select one of their DY6 Category 3 P4P measures for DY9-10.

The proposed amendment to §354.1753(c)(1) also limits the number of points worth of a LHD's DY7-8 Measure Bundles and measures that it can delete for DY9-10 to 20 points, as required by CMS. Further, it adds the requirement that LHDs must have good cause for deleting a Measure Bundle or measure and defines what constitutes good cause.

The proposed amendment to §354.1753(d) deletes Performance Year (PY) 5.

The proposed amendment to §354.1753(e) changes the innovative measure's DY10 milestones and corresponding valuations from one Reporting Year (RY) 4 reporting milestone worth 100 percent of the measure's valuation to one RY4 reporting milestone worth 25 percent of the measure's valuation and one achievement milestone worth 75 percent of the measure's valuation.

The proposed amendment to §354.1753(e) also changes the P4P measures' DY9-10 milestone valuations from those in the PFM protocol proposal HHSC submitted to CMS on January 3, 2019, back to those that were in effect in DY7-8 and included in the final PFM protocol language for DY9-10 approved by CMS on September 17, 2019. It changes the total valuations for the DY9-10 reporting milestones from 33 percent of the measure's valuation back to 25 percent and changes the valuations for the DY9-10 goal achievement milestones from 67 percent of the measure's valuation back to 75 percent.

The proposed amendment to §354.1753(e) also clarifies the methodology for determining the valuation for the goal achievement milestones for the measures in a selected Measure Bundle that includes a P4R population-based clinical outcome measure for which a hospital's or physician practice's numerator has insignificant volume.

The proposed amendment to §354.1753(f) clarifies that performers are only required to update previous reporting on related strategies associated with each Measure Bundle, measure, or group of measures to be eligible for payment of a measure's reporting milestones for each DY.

The proposed amendment to §354.1753(g) clarifies the goals for DY9-10 goal achievement milestones for QISMC P4P measures selected for DY7-10 that have a baseline below the Minimum Performance Level (MPL). It also specifies that the innovative measure selected for DY7-10 will be treated as an Improvement Over Self (IOS) measure in DY10 and will have a gap closure of 12.5 percent over baseline unless an alternate goal based on benchmark data is recommended by the measure developer as part of the measure validation process.

The proposed amendment to §354.1753(g) also clarifies the goals for DY9-10 goal achievement milestones for Quality Improvement System for Managed Care (QISMC) P4P measures newly-selected for DY9-10 that have a baseline below the MPL. It also specifies that the innovative measure newly-selected for DY9-10 will be treated as an IOS measure in DY10 and will have a gap closure of 10 percent over baseline unless an alternate goal based on benchmark data is recommended by the measure developer as part of the measure validation process.

The proposed amendment to §354.1753(g) also prohibits performers from using a numerator of zero for the baseline measurement period for measures newly-selected for DY9-10. It specifies that if a performer received HHSC approval to use a numerator of zero for the baseline measurement period for a DY7-8 P4P measure, and the performer continues that measure in DY9-10, the goals for the DY9 and DY10 goal achievement milestones are determined in accordance with §354.1753(g)(3) using an updated baseline that is set at the PY1 rate.

The proposed amendment to §354.1753(h) prohibits performers from carrying forward achievement of a measure's DY10 goal achievement milestone to PY5. CMS did not approve HHSC's proposal to allow performers to carry forward achievement of a measure's DY10 goal achievement milestone to PY5 because DSRIP expenditure authority ends in DY10.

The proposed amendment to §354.1757 makes the goal achievement milestone for a hospital safety measure with perfect performance at baseline eligible for full payment for maintenance of high performance if certain conditions are met.

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, enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of state governments.

There could be fiscal implications to local governments as a result of enforcing and administering the amendments as proposed. The proposed rules prohibit performing providers from carrying forward achievement of a measure's DY 10 goal achievement milestone to PY 5. HHSC lacks sufficient data to provide an estimate of the possible local government 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 or eliminate 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 not expand, limit, or repeal existing rules;

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

(8) the proposed rules will not affect the state's economy.

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

Trey Wood has also determined that there may be an adverse economic effect on small businesses, micro-businesses, or rural communities related to the proposed rules. The proposed rules prohibit performing providers from carrying forward achievement of a measure's DY 10 goal achievement milestone to PY 5. There are 300 DSRIP participating providers. HHSC lacks sufficient information on which DSRIP performing providers are considered a small business, micro-business, or rural community, and which of those providers would request to carry forward achievement. As a result, HHSC lacks sufficient information to provide an estimate of the potential economic impact.

HHSC did not consider any alternative methods to achieve the purpose of the proposed rules for small businesses, micro-businesses, or rural communities because the proposed rules are necessary to comply with the terms of the Transformation Waiver.

LOCAL EMPLOYMENT IMPACT

The proposed rules will not affect a local economy.

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 and are necessary to receive a source of federal funds or comply with federal law.

PUBLIC BENEFIT AND COSTS

Stephanie Stephens, State Medicaid Director, has determined that for each year of the first five years the rules are in effect, the public will benefit from the adoption of the rules. The anticipated public benefit will be improved quality of care for individuals served by DSRIP performers.

Trey Wood 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. There is no requirement for performing providers to alter their business practices.

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

Written comments on the proposal may be submitted to HHSC, Mail Code W-201, P.O. Box 13247, Austin, Texas 78711-3247, or by email to TXHealthcareTransformation@hhsc.state.tx.us.

To be considered, comments must be submitted no later than 31 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 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 19R067" in the subject line.

STATUTORY AUTHORITY

The amendments are authorized by 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), which provides HHSC with the authority to propose and adopt rules governing the determination of Medicaid payments.

The amendments affect Chapter 531 of the Texas Government Code and Chapter 32 of the Texas Human Resources Code. No other statutes, articles, or codes are affected by this proposal.

§354.1729.Definitions.

The following words and terms, when used in this division, have the following meanings unless the context clearly indicates otherwise.

(1) Core activity--An activity implemented by a performer to improve patient health or quality of care. It may be implemented by a performer to achieve the performer's Category C measure goals or it may be connected to the mission of the performer's organization.

(2) Delivery System Reform Incentive Payment (DSRIP) pool--Funds available to DSRIP performers under the waiver for their efforts to enhance access to health care, the quality of care, and the health of patients and families they serve.

(3) Demonstration Year (DY) 6--Federal fiscal year 2017 (October 1, 2016 - September 30, 2017).

(4) Demonstration Year (DY) 7--Federal fiscal year 2018 (October 1, 2017 - September 30, 2018).

(5) Demonstration Year (DY) 8--Federal fiscal year 2019 (October 1, 2018 - September 30, 2019).

(6) Demonstration Year (DY) 9--Federal fiscal year 2020 (October 1, 2019 - September 30, 2020).

(7) Demonstration Year (DY) 10--Federal fiscal year 2021 (October 1, 2020 - September 30, 2021).

(8) Demonstration Year (DY) 11--Federal fiscal year 2022 (October 1, 2021 - September 30, 2022).

(9) Denominator--As it relates to a Category C measure's volume:

(A) the number of Medicaid and low-income or uninsured (MLIU) cases; or

(B) one of the following, which the performer receives approval from HHSC to use for the measure:

(i) the number of all-payer cases;

(ii) the number of Medicaid cases; or

(iii) the number of low-income or uninsured (LIU) cases.

(10) Encounter--An encounter, for the purposes of Patient Population by Provider, is any physical or virtual contact between a performer and a patient during which an assessment or clinical activity is performed, with exceptions including those in subparagraph (B) of this definition.

(A) An encounter must be documented by the performer.

(B) An email, [A] phone call, or text message is not considered an encounter.

(11) Federal poverty level (FPL)--The household income guidelines issued annually and published in the Federal Register by the United States Department of Health and Human Services.

(12) Initial demonstration period--The first five demonstration years (DYs) of the waiver, or December 12, 2011 through September 30, 2016.

(13) Innovative measure--F1-T03 (Preventative Care & Screening: Oral Cancer Screening) [A new measure developed for use in Category C].

(14) Insignificant volume--For most Category C measures, the denominator is considered to have insignificant volume if its volume is greater than zero but less than 30.

(15) Low-income or Uninsured (LIU)--An individual who is not enrolled in Medicaid or the Children's Health Insurance Program who meets one of the following criteria:

(A) is at or below 200 percent of the FPL; or

(B) does not have health insurance.

(16) Measure--A mechanism to assign a quantity to an attribute by comparison to a criterion. As it relates to Category C, a measure is a standardized tool to measure or quantify healthcare processes, outcomes, patient perceptions, organizational structure, or systems that are associated with the ability to provide high-quality health care.

(17) Measure Bundle--A grouping of measures under Category C that share a unified theme, apply to a similar population, and are impacted by similar activities. Measure Bundles are selected by hospitals and physician practices. All Measure Bundles include required measures, and some Measure Bundles also include optional measures.

(18) Measure Bundle Protocol--A master list of potential Category C Measure Bundles and measures, as well as Category D Statewide Reporting Measure Bundles and measures.

(19) Medicaid and low-income or uninsured (MLIU)--An individual who:

(A) is enrolled in Medicaid;

(B) is enrolled in the Children's Health Insurance Program;

(C) is at or below 200 percent of the FPL; or

(D) does not have health insurance.

(20) Milestone--An objective of DSRIP performance on which DSRIP payments are based.

(21) Minimum point threshold (MPT)--The minimum number of points that a performer must meet in selecting its Category C Measure Bundles or measures, as described in §354.1753 of this division (relating to Category C Requirements for Performers).

(22) No volume--For Category C measures, the denominator is considered to have no volume if its volume is equal to zero. For a Category C population-based clinical outcome measure, the numerator is considered to have no volume if the volume is equal to zero.

[(23) Quality improvement collaborative activity--An activity related to participating in a learning collaborative to improve targeted health outcomes. As included in Category C, a quality improvement collaborative activity is pay-for-reporting (P4R) in DY7-8.]

(23) [(24)] Patient Population by Provider (PPP)--The number of individuals in a performer's system for which there was an encounter during the applicable DY.

(24) [(25)] Patient Population by Provider Goal (PPP Goal)--The target number of individuals in a performer's system for which there will be an encounter during the applicable DY.

(25) [(26)] Performer--A provider enrolled in Texas Medicaid that participates in DSRIP and receives DSRIP payments.

(26) [(27)] Population-based clinical outcome measure--A Category C clinical outcome measure that measures emergency department utilization or admissions for select conditions for all individuals in the Measure Bundle's target population. It may be required as pay-for-performance (P4P) or pay-for-reporting (P4R) based on the Measure Bundle and the hospital's or physician practice's MPT as specified in the Measure Bundle Protocol.

(27) [(28)] Regional Healthcare Partnership (RHP) plan update--An RHP plan update for DY7-8 that is further updated for DY9-10, as further described in §354.1737 of this division (relating to RHP Plan Update).

(28) [(29)] Related strategy--A strategy employed by a performer to improve performance on a measure.

(29) [(30)] Significant volume--For most Category C measures, the denominator is considered to have significant volume if its volume is greater than or equal to 30.

(30) [(31)] Statewide hospital factor (SHF)--A factor used to determine the MPT that takes into account a hospital's MLIU inpatient days and MLIU outpatient costs compared to all hospitals, as described in §354.1753 of this division.

(31) [(32)] Statewide hospital ratio (SHR)--A factor used to determine the MPT that takes into account whether a hospital's DY7 DSRIP valuation is higher or lower than would be expected based on the hospital's MLIU inpatient days and MLIU outpatient costs compared to other hospitals, as described in §354.1753 of this division.

(32) [(33)] System--A performer's patient care landscape, as defined by the performer, in accordance with the Program Funding and Mechanics Protocol and Measure Bundle Protocol. Essential functions or departments of a performer's provider type are required components that must be included in a performer's system definition.

(33) [(34)] Target population--For a Category C Measure Bundle, the pool of individuals to be included in a measure denominator for which a hospital or physician practice is accountable for improvement.

(34) [(35)] Volume--For Category C measure denominators, the total number of measured units in the denominator. Volume is used to determine the size of the population for which improvement is being measured.

§354.1735.Participants.

(a) Anchors.

(1) An anchor must:

(A) serve as the RHP's single point of contact with HHSC, except as specified in rule;

(B) facilitate transparent and inclusive meetings among participants to discuss RHP activities;

(C) coordinate RHP activities to help ensure that participants properly address both the needs of the region and the requirements placed upon the RHP;

(D) coordinate the update of the community needs assessment included in the RHP plan and submit the updated community needs assessment to HHSC, as prescribed by HHSC;

(E) coordinate with the RHP participants to update the RHP plan in accordance with §354.1737 of this division (relating to RHP Plan Update for DY9-10), the Program Funding and Mechanics Protocol, the Measure Bundle Protocol, and all other state or waiver requirements;

(F) hold at least one public meeting before submitting the RHP plan update to HHSC;

(G) [(F)] submit the RHP plan update to HHSC, as prescribed by HHSC;

(H) [(G)] post the approved RHP plan update to the RHP website;

(I) [(H)] develop and submit an annual progress report on behalf of the RHP, in accordance with the Program Funding and Mechanics Protocol and HHSC requirements;

(J) [(I)] develop and submit a learning collaborative plan, in accordance with the Program Funding and Mechanics Protocol and HHSC requirements;

(K) [(J)] ensure that all confidential information obtained through its role as an anchor remains confidential as required by state and federal laws and regulations;

(L) [(K)] ensure that all waiver information provided to it in its capacity as anchor is distributed to the RHP participants; and

(M) [(L)] meet all other requirements as specified in the Program Funding and Mechanics Protocol.

(2) An anchor must not:

(A) request reimbursement from a Medicaid provider for the discharge of the anchor's responsibilities, although an anchor and other governmental entities within the RHP may agree to share such costs;

(B) delegate decision-making responsibilities concerning the interpretation of the waiver, HHSC policy, or actions or decisions that involve the exercise of discretion or judgment;

(C) require any IGT entity to provide DSRIP funds to any performers;

(D) require any participant to act as a DSRIP performer; or

(E) prevent or in any way prohibit the collaboration between an IGT entity and a performer.

(3) An anchor may delegate ministerial functions such as data collection and reporting. Any entity to which ministerial functions are delegated under this division must comply with the roles, responsibilities, and limitations of an anchor.

(4) In addition to any funds received under §354.1747 of this division (relating to Performer Valuations), an anchor may be reimbursed for the cost of its administrative duties conducted on behalf of the RHP. The anchor must provide an IGT to HHSC for the purpose of obtaining federal matching funds in accordance with the Administrative Cost Claiming Protocol so that it can be reimbursed for such costs. An anchor may not recover more than the anchor's actual costs.

(b) IGT entities. An IGT entity:

(1) determines the allocation of its IGT funding consistent with state and federal requirements;

(2) participates in RHP planning;

(3) acting as a performer, selects Category C Measure Bundles or measures in accordance with §354.1753 of this division (relating to Category C Requirements for Performers);

(4) not acting as a performer, cooperates with a performer to select Category C Measure Bundles or measures in accordance with §354.1753 of this division;

(5) provides the non-federal share of DSRIP pool payments for the entities with which it collaborates; and

(6) may review DSRIP data submitted by associated performers.

(c) Performers. A performer:

(1) is one of the following provider types:

(A) hospital;

(B) physician practice;

(C) community mental health center; or

(D) local health department;

(2) submits to the anchor the information required for the RHP plan update, including the performer's selected Category C Measure Bundles or measures and other required information as described in §354.1737 of this division, the Program Funding and Mechanics Protocol, and the Measure Bundle Protocol;

(3) implements core activities to achieve the Category C measure goals in the RHP plan update;

(4) prepares and submits DSRIP data on a semi-annual basis;

(5) prepares and submits reports as required by HHSC and the Centers for Medicare & Medicaid Services;

(6) participates in RHP planning; and

(7) receives DSRIP.

§354.1737.RHP Plan Update for DY9-10.

(a) A performer may receive DSRIP only if HHSC has approved the RHP plan update for DY9-10 for the performer's RHP.

(b) An RHP plan update for DY9-10 must:

(1) meet the requirements listed in the Program Funding and Mechanics Protocol and the Measure Bundle Protocol;

(2) update the RHP's community needs assessment, if needed;

(3) include a list of IGT entities, performers, and other stakeholders involved in the development of the RHP plan update;

(4) include signed certifications from the performer's leadership and the performer's affiliated IGT entities that all the information contained within the RHP plan update for DY9-10 is true and accurate;

(5) describe the processes used to engage stakeholders including the public meetings held;

(6) include the total amount of estimated DSRIP funding to be used by demonstration year (DY);

(7) include for each performer:

(A) an updated definition of the performer's system, if needed;

(B) any updates to the performer's DY7-8 Category A core activities for DY9-10;

(C) updates to the performer's Category B total Patient Population by Provider (PPP) or MLIU PPP for DYs 5-8, if needed;

(D) the forecasted number of Medicaid individuals served in DY9-10 and the forecasted number of LIU individuals served in DY9-10 based on the number of MLIU individuals served in DY7-8;

(E) if the performer is a hospital or physician practice:

(i) the performer's selected Category C Measure Bundles and measures for DY9-10;

(ii) the performer's requests for allowable changes to its selected Category C Measure Bundles and measures, as described in §354.1753(a)(1)(E) of this division (relating to Category C Requirements for Performers), the Program Funding and Mechanics Protocol and Measure Bundle Protocol; and

(iii) the related strategies associated with each of the performer's Category C Measure Bundles for DY9-10. [DY7-8 that the performer implemented in DY7-8; and]

[(iv the related strategies associated with each of the performer's Category C Measure Bundles for DY9-10 that the performer plans to implement in DY9.]

(F) if the performer is a community mental health center or local health department:

(i) the performer's selected Category C measures for DY9-10;

(ii) the performer's requests for allowable changes to its selected Category C measures, as described in §354.1753(b)(1)(E) and §354.1753(c)(1)(F) of this division, the Program Funding and Mechanics Protocol and Measure Bundle Protocol; and

(iii) the related strategies associated with each of the performer's Category C measures for DY9-10. [DY7-8 that the performer implemented in DY7-8; and]

[(iv) the related strategies associated with each of the performer's Category C measures for DY9-10 that the performer plans to implement in DY9.]

(G) the performer's Category D Statewide Reporting Measure Bundle;

(H) the performer's DSRIP valuation amounts; and

(I) the performer's sources of non-federal funds by category and DY; and

(8) include a narrative explaining the performer's rationale for its Category C Measure Bundle and measure selections for DY9-10.

§354.1753.Category C Requirements for Performers.

(a) Requirements for hospitals and physician practices.

(1) Measure Bundle and measure selection.

(A) A hospital or physician practice, with the exception of those described in subparagraph (J) of this paragraph, must select Measure Bundles from the Hospital and Physician Practice Measure Bundle Menu of the Measure Bundle Protocol in accordance with the requirements in subparagraphs (B) - (I) of this paragraph in the RHP plan update for DY9-10 for its RHP.

(B) Each Measure Bundle is assigned a point value for DY9-10 as described in the Measure Bundle Protocol.

(C) A hospital or physician practice is assigned a minimum point threshold (MPT) for Measure Bundle selection as described in paragraphs (6) and (7) of this subsection.

(D) A hospital or physician practice must select Measure Bundles worth enough points to meet its MPT in order to maintain its total valuation for DY9 and DY10. If a hospital or physician practice does not select Measure Bundles worth enough points to meet its MPT, its total DY9 valuation will be reduced proportionately across its Categories B-D funds for DY9, and its total DY10 valuation will be reduced proportionately across its Categories B-D funds for DY10, based on the point values of the Measure Bundles it selects.

(E) A hospital or physician practice may request to delete a maximum of 20 points worth of its DY7-8 Measure Bundles and measures for DY9-10 with good cause. In this context, good cause is defined as:

(i) a significant system change, such as a hospital merger;

(ii) updated community needs; or

(iii) a significant change in a Measure Bundle's required system component of outpatient services or hospital services as described in the Measure Bundle Protocol.

(F) [(G)] A hospital or physician practice may only select a Measure Bundle for which its denominators for the baseline measurement period for at least half of the required measures in the Measure Bundle have significant volume.

(G) [(F)] A hospital or physician practice with a valuation greater than $2,500,000 per demonstration year (DY) for DY7-8 or with a valuation greater than $2,000,000 [$2 million] in DY10 must:

(i) select at least one Measure Bundle with at least one required three-point measure for which its denominator for the baseline measurement period has significant volume; or

(ii) select at least one Measure Bundle with at least one optional three-point measure for which its denominator for the baseline measurement period has significant volume and select at least one optional three-point measure in that Measure Bundle for which its denominator for the baseline measurement period has significant volume.

(H) [(G)] A hospital or physician practice with an MPT of 75 must report at least two population-based clinical outcome measures as P4P as specified in the Measure Bundle Protocol.

(I) [(H)] A hospital or physician practice may only select an optional measure in a selected Measure Bundle for which its denominator for the baseline measurement period has significant volume.

[(I) Only a hospital with a valuation less than or equal to $2,500,000 per DY may select a Measure Bundle identified as a rural Measure Bundle in accordance with the requirements in the Measure Bundle Protocol.]

(J) If a hospital or physician practice has a limited scope of practice, cannot reasonably report on at least half of the required measures in the Measure Bundle(s) appropriate for it based on its scope of practice and community partnerships, and consequently cannot meet its MPT for Measure Bundle selection, the hospital or physician practice may request HHSC approval to select measures, rather than Measure Bundles, from the Measure Bundle Protocol. The hospital or physician practice must submit a request for such approval to HHSC prior to the RHP plan update for DY9-10 submission, by a date determined by HHSC. Such a request may be subject to review by the Centers for Medicare & Medicaid Services (CMS). If HHSC and CMS, as appropriate, approve such a request, the following requirements apply:

(i) the hospital's or physician practice's total valuation for DY9 and DY10 may be reduced;

(ii) the hospital or physician practice must select measures from the following menus of the Measure Bundle Protocol in accordance with the requirements in clauses (iii) - (v) of this subparagraph in the RHP plan update for its RHP:

(I) the Measure Bundles on the Hospital and Physician Practice Measure Bundle Menu;

(II) the Community Mental Health Center Measure Menu; or

(III) the Local Health Department Measure Menu;

(iii) each measure in a Measure Bundle on the Hospital and Physician Practice Measure Bundle Menu, and each measure on the Community Mental Health Center Measure Menu and the Local Health Department Measure Menu, is assigned a point value as described in the Measure Bundle Protocol;

(iv) the hospital or physician practice is assigned an MPT for measure selection as described in paragraphs (5) and (6) of this subsection; and

(v) the hospital or physician practice must select measures worth enough points to meet its MPT in order to maintain its total valuation for DY9 and DY10. If the hospital or physician practice does not select measures worth enough points to meet its MPT, its total DY9 valuation will be reduced proportionately across its Categories B-D funds for DY9, and its total DY10 valuation will be reduced proportionately across its Categories B-D funds for DY10, based on the point values of the measures it selects.

(2) DSRIP-attributed population. A hospital or physician practice must determine its DSRIP-attributed population to be applied to its selected Measure Bundles and measures as specified in the Measure Bundle Protocol.

(3) Measure Bundle valuation. Each Measure Bundle selected by a hospital or physician practice for DY9-10 is allocated a percentage of the hospital's or physician practice's Category C valuation that is equal to the Measure Bundle's point value as a percentage of all of the hospital's or physician practice's selected Measure Bundles' point values.

(4) Measure valuation. The valuation for each measure in a selected Measure Bundle is equal to the Measure Bundle valuation divided by the number of measures in the selected Measure Bundle, so that the valuations of the measures in the selected Measure Bundle are equal, with the following exceptions:

(A) If a Measure Bundle includes the [an] innovative measure:

(i) the valuation for the [each] innovative measure in the Measure Bundle is equal to the Measure Bundle valuation divided by the number of [the] measures in the Measure Bundle subtracted by 0.5 for the [each] innovative measure and divided by 2; and

(ii) the valuation for each measure in the Measure Bundle that is not the [an] innovative measure is equal to the Measure Bundle valuation divided by the number of measures in the Measure Bundle subtracted by 0.5 for the [each] innovative measure.

(B) If a hospital's or physician practice's denominator for a required measure or numerator for a population-based clinical outcome measure in a selected Measure Bundle for the baseline measurement period or a performance year has no volume, the measure is removed from the Measure Bundle, and its valuation for the applicable DY is redistributed among the remaining measures in the Measure Bundle for which the hospital's or physician practice's denominator for the baseline measurement period or performance year has significant volume for the applicable DY. The valuation for the applicable DY for each of the remaining measures [in the Measure Bundle for which the hospital's or physician practice's denominator for the baseline measurement period or performance year has significant volume] is equal to the valuation for the Measure Bundle for the applicable DY divided by the number of measures for which the hospital's or physician practice's denominator for the baseline measurement period or performance year has significant volume, so that the valuations for the applicable DY for the measures in the Measure Bundle for which the hospital's or physician practice's denominator for the baseline measurement period or performance year has significant volume are equal.

(C) If a hospital's or physician practice's denominator for a required measure or numerator for a P4R population-based clinical outcome measure in a selected Measure Bundle for the baseline measurement period or a performance year has insignificant volume, the measure's milestone valuations are adjusted in accordance with subsection (e)(2) of this section.

(5) Milestone valuation. The measure milestones and corresponding valuations for DY9-10 [DY7-8] are as described in subsection (e) of this section.

(6) MPTs for hospitals.

(A) The MPT for hospitals, with the exception of those described in subparagraphs (B) and (C) of this paragraph, is calculated as follows:

(i) First, the hospital's statewide hospital factor (SHF) is equal to (.64 multiplied by (the hospital's Medicaid and uninsured inpatient days divided by the sum of all hospitals' Medicaid and uninsured inpatient days)) plus (.36 multiplied by (the hospital's Medicaid and uninsured outpatient costs divided by the sum of all hospitals' Medicaid and uninsured outpatient costs)). A hospital's Medicaid and uninsured inpatient days and uninsured outpatient costs are those reported for federal fiscal year 2016 in the Texas Hospital Uncompensated Care Tool.

(ii) Second, the hospital's statewide hospital ratio (SHR) is equal to (the hospital's DY10 valuation divided by the sum of all hospitals' DY10 valuations) divided by the SHF.

(iii) Third, the hospital's MPT is determined as follows:

(I) If the SHR is less than or equal to 3, the MPT is the lesser of:

(-a-) the DY10 valuation divided by $500,000; or

(-b-) 75.

(II) If the SHR is greater than 3 but less than or equal to 10, the MPT is the lesser of:

(-a-) (the DY10 valuation divided by $500,000 multiplied by (the SHR divided by 3); or

(-b-) 75.

(III) If the SHR is greater than 10 and the DY10 valuation is less than or equal to $15 million, the MPT is the lesser of:

(-a-) the DY10 valuation divided by $500,000 multiplied by (the SHR divided by 3); or

(-b-) 40.

(IV) If the SHR is greater than 10 and the DY10 valuation is greater than $15 million, the MPT is the lesser of:

(-a-) the DY10 valuation divided by $500,000 multiplied by (the SHR divided by 3); or

(-b-) 75.

(B) If a hospital does not have the data needed for the SHF calculation in paragraph (5)(A)(i) of this subsection, or if a hospital did not participate in DSRIP during the initial demonstration period or DY6, its MPT is the lesser of:

(i) the hospital's DY10 valuation divided by $500,000; or

(ii) 75.

(C) The MPT for a hospital for DY9-10 must not be reduced by more than 10 points from the hospital's MPT for DY7-8.

(D) If a hospital has a limited scope of practice, cannot reasonably report on at least half of the required measures in the Measure Bundle(s) appropriate for it based on its scope of practice and community partnerships, and consequently cannot meet its MPT for Measure Bundle selection, the hospital may request HHSC approval for a reduced MPT equal to the sum of the points for all the Measure Bundles for which the hospital could reasonably report on at least half of the required measures in the Measure Bundle. The hospital must submit a request for such approval to HHSC prior to the RHP plan update submission, by a date determined by HHSC. Such a request may be subject to review by the Centers for Medicare & Medicaid Services (CMS). If HHSC and CMS, as appropriate, approve such a request, the hospital's total valuation for DY9 and DY10 may be reduced.

(7) MPTs for physician practices.

(A) The MPT for a physician practice for DY9-10, with the exception of a physician practice described in subparagraph (C) of this paragraph, is the lesser of:

(i) the physician practice's DY10 valuation divided by $500,000; or

(ii) 75.

(B) The MPT for a physician practice for DY9-10 must not be reduced by more than 10 points from the physician practice's MPT for DY7-8.

(C) If a physician practice has a limited scope of practice, cannot reasonably report on at least half of the required measures in the Measure Bundles appropriate for it based on its scope of practice and community partnerships, and consequently cannot meet its MPT for Measure Bundle selection, the physician practice may request HHSC approval for a reduced MPT equal to the sum of the points for all the Measure Bundles for which the physician practice could reasonably report on at least half of the required measures in the Measure Bundle. The physician practice must submit a request for such approval to HHSC prior to the RHP plan update submission, by a date determined by HHSC. Such a request may be subject to review by CMS. If HHSC and CMS, as appropriate, approve such a request, the physician practice's total valuation for DY9 and DY10 may be reduced.

(b) Requirements for community mental health centers (CMHCs).

(1) Measure selection.

(A) A CMHC must select measures from the Community Mental Health Center Measure Menu of the Measure Bundle Protocol.

(B) Each measure is assigned a point value as described in the Measure Bundle Protocol.

(C) A CMHC is assigned an MPT for measure selection as described in paragraph (3) of this subsection.

(D) A CMHC must select measures worth enough points to meet its MPT in order to maintain its total valuation for DY9 and DY10. If a CMHC does not select measures worth enough points to meet its MPT, its total DY9 valuation will be reduced proportionately across its Categories B-D funds for DY9, and its total DY10 valuation will be reduced proportionately across its Categories B-D funds for DY10, based on the point values of the measures it selects.

(E) A CMHC may request to delete a maximum of 20 points worth of its DY7-8 measures for DY9-10 with good cause. In this context, good cause is defined as:

(i) a significant system change; or

(ii) updated community needs.

(F) [(E)] A CMHC may only select a measure for which its denominator for the baseline measurement period has significant volume.

(G) [(F)] A CMHC must select at least two measures.

(H) [(G)] A CMHC with a valuation greater than $2,500,000 per DY for DY7-8 and a valuation of more than $2,000,000 for DY10 must select at least one three-point measure.

(2) DSRIP-attributed population. A CMHC must determine its DSRIP-attributed population to be applied to its selected measures as specified in the Measure Bundle Protocol.

(3) Measure valuation. All measures selected by a CMHC for DY9-10 are valued equally.

(4) Milestone valuation. The measure milestones and corresponding valuations for DY9-10 are as described in subsection (e) of this section.

(5) MPTs.

(A) A CMHC's MPT is the lesser of:

(i) the CMHC's DY10 valuation divided by the standard point valuation ($500,000); or

(ii) 40.

(B) A CMHC's MPT for DY9-10 must not be reduced by more than 10 points from the CMHC's MPT for DY7-8.

(c) Requirements for local health departments (LHDs).

(1) Measure selection.

(A) An LHD must select measures from[:]

[(i)] the Local Health Department Measure Menu of the Measure Bundle Protocol, unless [; or]

[(ii)] the LHD selected one of its DY6 Category 3 pay-for-performance (P4P) measures for DY7-8, in which case the LHD may select that measure for DY9-10.

[(B) An LHD may not select the same measure from both the Local Health Department Measure Menu of the Measure Bundle Protocol and its DY6 Category 3 P4P measures.]

[(C) If an LHD's DY6 Category 3 P4P measures include multiple versions of the same measure, the LHD may select multiple versions of that measure, but the points associated with that measure will only count once toward the LHD's MPT.]

(B) [(D)] Each measure on the Local Health Department Measure Menu is assigned a point value as described in the Measure Bundle Protocol.

(C) [(E)] Each LHD DY6 Category 3 P4P measure is assigned a point value as described in the Measure Bundle Protocol.

(D) [(F)] An LHD is assigned an MPT for measure selection as described in paragraph (4) of this subsection.

(E) [(G)] An LHD must select measures worth enough points to meet its MPT in order to maintain its total valuation for DY9 and DY10. If an LHD does not select measures worth enough points to meet its MPT, its total DY9 valuation will be reduced proportionately across its Categories B-D funds for DY9, and its total DY10 valuation will be reduced proportionately across its Categories B-D funds for DY10, based on the point values of the measures it selects.

(F) An LHD may request to delete a maximum of 20 points worth of its DY7-8 measures for DY9-10 with good cause. In this context, good cause is defined as:

(i) a significant system change; or

(ii) updated community needs.

(G) [(H)] An LHD may only select a measure for which its denominator for the baseline measurement period has significant volume.

(H) [(I)] An LHD must select at least two measures.

(I) [(J)] An LHD with a valuation of more than $2,500,000 per DY for DY7-8 and a valuation of more than $2,000,000 for DY10 must select at least one three-point measure.

(2) DSRIP-attributed population. An LHD must determine its DSRIP-attributed population to be applied to its selected measures as specified in the Measure Bundle Protocol.

(3) Measure valuation. All measures selected by a LHD for DY9-10 are valued equally.

(4) Milestone valuation. The measure milestones and corresponding valuations for DY9-10 are as described in subsection (e) of this section.

(5) MPTs.

(A) An LHD's MPT is the lesser of:

(i) the LHD's DY10 valuation divided by the standard point valuation ($500,000); or

(ii) 20.

(B) An LHD's MPT for DY9-10 must not be reduced by more than 10 points from the LHD's MPT for DY7-8.

(d) Measurement periods.

(1) Baseline measurement periods.

(A) The baseline measurement period for a measure selected for DY7-10 is calendar year 2017 with the following exceptions:

(i) the baseline measurement period for a DY6 Category 3 P4P measure selected by a LHD is DY6;

(ii) HHSC approved the measure to have a shorter baseline measurement period consisting of no fewer than six months as specified in the Program Funding and Mechanics Protocol and HHSC guidance;

(iii) HHSC approved the measure to have a delayed baseline measurement period that ended no later than September 30, 2018, as specified in the Program Funding and Mechanics Protocol and HHSC guidance; and

(iv) any other exception specified in the Measure Bundle Protocol or one of its appendices.

(B) The baseline measurement period for a measure newly selected for DY9-10 is calendar year 2019 with the following exceptions:

(i) a performer that demonstrates good cause may request for a measure to have a shorter baseline measurement period consisting of no fewer than six months as specified in the Program Funding and Mechanics Protocol and HHSC guidance;

(ii) a performer that demonstrates good cause may request for a measure to have a delayed baseline measurement period that ends no later than September 30, 2020, as specified in the Program Funding and Mechanics Protocol and HHSC guidance; and

(iii) any other exception specified in the Measure Bundle Protocol or one of its appendices.

(2) Performance measurement periods. The performance measurement periods for a P4P measure are as follows:

(A) Performance Year (PY) 1 for a measure is calendar year 2018 unless otherwise specified in the Measure Bundle Protocol or one of its appendices;

(B) PY2 for a measure is calendar year 2019 unless otherwise specified in the Measure Bundle Protocol or one of its appendices;

(C) PY3 for a measure is calendar year 2020 unless otherwise specified in the Measure Bundle Protocol or one of its appendices; and

(D) PY4 for a measure is calendar year 2021 unless otherwise specified in the Measure Bundle Protocol or one of its appendices. [; and]

[(E) PY5 for a measure is calendar year 2022 otherwise specified in the Measure Bundle Protocol or one of its appendices.]

(3) Reporting measurement periods. The reporting measurement periods for a pay-for-reporting (P4R) measure are as follows unless otherwise specified in the Measure Bundle Protocol:

(A) Reporting Year (RY) 1 for a measure is DY7;

(B) RY2 for a measure is DY8;

(C) RY3 for a measure is DY9; and

(D) RY4 for a measure is DY10.

(e) Measure milestones.

(1) The milestones and corresponding valuations for DY9-10 are as follows, with the exceptions specified in paragraphs (2) and (3) of this subsection:

Figure: 1 TAC §354.1753(e)(1) (.pdf)

[Figure: 1 TAC §354.1753(e)(1)]

(2) If a hospital's or physician practice's denominator for a required measure or numerator for a P4R population-based clinical outcome measure in a selected Measure Bundle for the baseline measurement period or a performance measurement period has insignificant volume, the valuation for the measure's goal achievement milestone for the DY is redistributed among the goal achievement milestones for the measures in the Measure Bundle for which the hospital's or physician practice's denominator for the baseline measurement period or performance measurement period has significant volume for the applicable DY. The valuations for the goal achievement milestones for the measures in the Measure Bundle for which the hospital's or physician practice's denominator has significant volume for the DY are calculated as follows:

(A) the valuation for the DY9 goal achievement milestone is equal to 75 [67] percent of the valuation for the Measure Bundle divided by the number of measures in the Measure Bundle for which the hospital's or physician practice's denominator has significant volume, so that the valuations for the DY9 goal achievement milestones for the measures in the Measure Bundle for which the hospital's or physician practice's denominator has significant volume are equal; and

(B) the valuation for the DY10 goal achievement milestone is equal to 75 [67] percent of the valuation for the Measure Bundle divided by the number of measures in the Measure Bundle for which the hospital's or physician practice's denominator has significant volume, so that the valuations for the DY10 goal achievement milestones for the measures in the Measure Bundle for which the hospital's or physician practice's denominator has significant volume are equal.

(3) Measures with multiple parts. Some P4P measures have multiple parts, as described in the Program Funding and Mechanics Protocol and Measure Bundle Protocol.

(A) A measure with multiple parts has one baseline reporting milestone per DY, one PY reporting milestone per DY, and multiple goal achievement milestones per DY.

(B) The valuation for each measure part's goal achievement milestone is equal to the measure's total goal achievement milestone valuation divided by the number of measure parts so that the measure parts' goal achievement milestone valuations are equal.

(C) All measure parts' baseline reporting milestones must be reported during the same reporting period.

(D) All measure parts' PY reporting milestones must be reported during the same reporting period.

(E) Each measure part's goal achievement milestone will have its own goal. Therefore, the percent of goal achieved, as described in §354.1757 of this division (relating to Disbursement of Funds) will be determined for a measure part's goal achievement milestone independently of the percent of goal achieved for the other measure parts' goal achievement milestones.

(4) For measures newly selected for DY9-10, a performer must report a baseline for a measure, and HHSC must approve the reported baseline for reporting purposes, before a performer can report PY3 (or PY4 if HHSC approved the use of a delayed baseline measurement period for the measure).

(A) A performer must adhere to measure specifications and maintain a record of any variances approved by HHSC prior to reporting a baseline for a measure.

(B) HHSC's approval of a reported baseline for reporting purposes does not constitute approval for a performer to report a measure outside measure specifications. If at any point HHSC or the independent assessor finds that a performer is reporting a measure outside measure specifications, reporting milestone payment and goal achievement milestone payment may be withheld or recouped while the performer works to bring reporting into compliance with measure specifications.

(5) A performer must report a P4P measure's reporting milestone and goal achievement milestone for a given PY during the same reporting period, with exceptions for P4P measures with a delayed baseline measurement period.

(f) Measure eligible denominator population.

(1) Each Measure Bundle for hospitals and physician practices has a target population as specified in the Measure Bundle Protocol.

(2) A measure's eligible denominator population must include all individuals served by the performer's system during a given measurement period that are included in the performer's DSRIP-attributed population and the target population for a measure for hospitals and physician practices, and that meet the measure's specifications as specified in the Measure Bundle Protocol.

(3) A performer may not use a performer-specific facility, co-morbid condition, age, gender, race, or ethnicity subset not otherwise specified in the Measure Bundle Protocol.

(4) Reporting milestones.

(A) A hospital or physician practice must do the following to be eligible for payment of a measure's reporting milestones for each DY, with the exceptions described in subparagraphs (C) and (D) of this paragraph:

(i) report its performance on the measure for the all-payer, Medicaid-only, and Low-income Uninsured-only (LIU-only) payer types; and

(ii) update reporting [report] on related strategies associated with each Measure Bundle.

(B) A CMHC or LHD must do the following to be eligible for payment of a measure's reporting milestones for each DY, with the exceptions described in subparagraphs (C) and (D) of this paragraph:

(i) report its performance on the measure for the all-payer, Medicaid-only, and Low-income Uninsured-only (LIU-only) payer types; and

(ii) update reporting [report] on related strategies associated with each measure or group of measures.

(C) A performer that demonstrates good cause may request in the RHP plan update submission to be exempted from reporting its performance on a measure for the Medicaid-only payer type or the LIU-only payer type as specified in the Program Funding and Mechanics Protocol.

(D) A performer that demonstrates good cause may submit a RHP plan update modification request to HHSC to be exempted from reporting its performance on a measure for the Medicaid-only payer type or the LIU-only payer type as specified in the Program Funding and Mechanics Protocol.

(5) Goal achievement milestones. Payment for a P4P measure's goal achievement milestone is based on the performer's performance on the measure for the MLIU payer type.

(A) A performer that demonstrates good cause may request in the RHP plan update submission that payment for a P4P measure's goal achievement milestone be based on the performer's performance on the measure for the all-payer, Medicaid-only, or LIU-only payer type as specified in the Program Funding and Mechanics Protocol.

(B) A performer that demonstrates good cause may submit a RHP plan update modification request to HHSC to change the payer type on which payment for a P4P measure's goal achievement milestone is based as specified in the Program Funding and Mechanics Protocol.

(g) Methodology for P4P measure goal setting.

(1) A P4P measure's goals are set as an improvement over the baseline.

(2) A P4P measure is designated as either Quality Improvement System for Managed Care (QISMC) or Improvement over Self (IOS) as specified in the Measure Bundle Protocol. A P4P measure designated as QISMC has a defined High Performance Level (HPL) and Minimum Performance Level (MPL) based on national or state benchmarks.

(3) If a P4P measure is selected for DY7-10, the goals for its goal achievement milestones for DY9-10 are set as follows:

Figure: 1 TAC §354.1753(g)(3) (.pdf)

[Figure: 1 TAC §354.1753(g)(3)]

(4) If a P4P measure is newly selected for DY9-10, the goals for its goal achievement milestones for DY9-10 are set as follows:

Figure: 1 TAC §354.1753(g)(4) (.pdf)

[Figure: 1 TAC §354.1753(g)(4)]

[(5) A performer may request HHSC approval to use a numerator of zero for the baseline measurement period for certain P4P measures, as described in the Program Funding and Mechanics Protocol and Measure Bundle Protocol.]

(5) [(A)] If a performer received [receives] HHSC approval to use a numerator of zero for the baseline measurement period for a DY7-8 P4P measure, and the performer decides to [that is] continue that measure in [continuing into] DY9-10, the goals [goal] for the DY9 and DY10 goal achievement milestones [milestone] are determined in accordance with paragraph (3) of this subsection using an updated baseline that is set at the PY1 rate [will be equal to a 12.5% gap closure between the 75th percentile and the HPL, and the goal for the DY10 goal achievement milestone will be equal to a 15% gap closure between the 75th percentile and the HPL, as described in the Program Funding and Mechanics Protocol and Measure Bundle Protocol].

[(B) If a performer receives HHSC approval to use a numerator of zero for the baseline measurement period for a P4P measure that is newly selected for DY9-10, the goal for the DY9 goal achievement milestone will be equal to the 75th percentile, and the goal for the DY10 goal achievement milestone will be equal to a 10% gap closure between the 75th percentile and the HPL, as described in the Program Funding and Mechanics Protocol and Measure Bundle Protocol.]

[(6) Certain QISMC measures with baselines below the MPL have alternate QISMC goals, as described in the Program Funding and Mechanics Protocol and Measure Bundle Protocol. For a measure that is continuing into DY9-10, the DY9 goal will be a 22.5% gap closure towards HPL, and the DY10 goal will be a 25% gap closure towards HPL. For a measure that is newly selected for DY9-10, the DY9 goal will be a 10% gap closure towards HPL, and the DY10 goal will be a 20% gap closure towards HPL.]

(h) Carry forward policy.

(1) Carry forward of reporting. If a performer does not report a measure's baseline reporting milestone or performance year reporting milestone during the first reporting period after the end of the milestone's measurement period, the performer may request to carry forward reporting of the milestone to the next reporting period.

(2) Carry forward of achievement.

(A) A performer may request to carry forward achievement of a measure's DY9 goal achievement milestone so that the DY9 goal achievement milestone may be achieved in PY3 or PY4, [and the DY10 goal achievement milestone may be achieved in PY4 or PY5, ]with the exception described in subparagraph (B) of this paragraph.

(B) If a measure newly selected for DY9-10 has a delayed baseline measurement period, a performer will carry forward achievement of its goal achievement milestone so that the DY9 goal achievement milestone may be achieved in PY4.

(C) The performer must report the carried forward achievement of a measure's goal achievement milestone during the first reporting period after the end of the milestone's carried forward measurement period.

§354.1757.Disbursement of Funds.

(a) Category A and DSRIP payments. If a performer fails to fulfill all of the Category A requirements described in §354.1749 of this division (relating to Category A Requirements for Performers) for a demonstration year (DY), any DSRIP payments the performer received for the DY will be recouped, and prospective DSRIP payments to the performer will be withheld.

(1) DSRIP payments for DY9 include payments for DY9 Category B, Category C, or Category D milestones.

(2) DSRIP payments for DY10 include payments for DY10 Category B, Category C, or Category D milestones.

(b) Basis for payment of Category B. A performer's payment for its MLIU PPP milestone for a DY is calculated as follows.

(1) If the performer's MLIU PPP goal achievement is greater than or equal to 100 percent minus its allowable MLIU PPP goal variation, the performer's MLIU PPP milestone payment is equal to 100 percent of its MLIU PPP milestone valuation.

(2) If the performer's MLIU PPP goal achievement is greater than or equal to 90 percent, and less than 100 percent minus its allowable MLIU PPP goal variation, the performer's MLIU PPP milestone payment is equal to 90 percent of its MLIU PPP milestone valuation.

(3) If the performer's MLIU PPP goal achievement is greater than or equal to 75 percent, and less than 90 percent, the performer's MLIU PPP milestone payment is equal to 75 percent of its MLIU PPP milestone valuation.

(4) If the performer's MLIU PPP goal achievement is greater than or equal to 50 percent, and less than 75 percent, the performer's MLIU PPP milestone payment is equal to 50 percent of its MLIU PPP milestone valuation.

(5) If the performer's MLIU PPP goal achievement is less than 50 percent, the performer does not receive a MLIU PPP milestone payment.

(c) Basis for payment of Category C.

(1) Reporting milestones. A performer must fully achieve a reporting milestone to be eligible for payment related to the milestone.

(2) P4P measure goal achievement milestones. A P4P measure has a goal achievement milestone for each DY. With the exception of P4P measure goal achievement milestones described in subparagraph (B) of this paragraph, partial payment for P4P measure goal achievement milestones is available in quartiles for partial achievement measured over baseline in Performance Year (PY) 1, PY2, PY3, and PY4[, and PY5].

(A) To calculate the payment for a P4P measure goal achievement milestone, multiply the milestone valuation by the achievement value calculated in clause (ii) of this subparagraph.

(i) The percent of the milestone's goal achieved by the performer is determined as follows.

(I) Measures with a positive directionality where higher scores indicate improvement:

(-a-) DY7 achievement = (PY1 Achieved - Baseline/ (DY7 Goal - Baseline).

(-b-) Carryforward of DY7 achievement = (PY2 Achieved - Baseline)/ (DY7 Goal - Baseline).

(-c-) DY8 achievement = (PY2 Achieved - Baseline)/ (DY8 Goal - Baseline).

(-d-) Carryforward of DY8 achievement = (PY3 Achieved - Baseline)/ (DY8 Goal - Baseline).

(-e-) DY9 achievement = (PY3 Achieved - Baseline)/ (DY9 Goal - Baseline).

(-f-) Carryforward of DY9 achievement = (PY4 Achieved - Baseline)/ (DY9 Goal - Baseline).

(-g-) DY10 achievement = (PY4 Achieved - Baseline)/ (DY10 Goal - Baseline).

[(-h-) Carryforward of DY10 achievement = (PY5 Achieved - Baseline)/ (DY10 Goal - Baseline)]

(II) Measures with a negative directionality where lower scores indicate improvement:

(-a-) DY7 achievement = (Baseline - PY1 Achieved)/ (Baseline - DY7 Goal).

(-b-) Carryforward of DY7 achievement = (Baseline - PY2 Achieved)/ (Baseline - DY7 Goal).

(-c-) DY8 achievement = (Baseline - PY2 Achieved)/ (Baseline - DY8 Goal).

(-d-) Carryforward of DY8 achievement = (Baseline - PY3 Achieved)/ (Baseline - DY8 Goal).

(-e-) DY9 achievement = (Baseline - PY3 Achieved)/ (Baseline - DY9 Goal).

(-f-) Carryforward of DY9 achievement = (Baseline - PY4 Achieved)/ (Baseline - DY9 Goal).

(-g-) DY10 achievement = (Baseline - PY4 Achieved)/ (Baseline - DY10 Goal).

[(-h-) Carryforward of DY10 achievement = (Baseline - PY5 Achieved)/ (Baseline - DY10 Goal).]

(ii) The achievement value is determined as follows.

(I) If 100 percent of the goal is achieved, the achievement value is 1.0.

(II) If less than 100 percent but at least 75 percent of the goal is achieved, the achievement value is 0.75.

(III) If less than 75 percent but at least 50 percent of the goal is achieved, the achievement value is 0.5.

(IV) If less than 50 percent but at least 25 percent of the goal is achieved, the achievement value is 0.25.

(V) If less than 25 percent of the goal is achieved, the achievement value is 0.

(B) If a P4P measure designated as Quality Improvement System for Managed Care has a baseline above the High Performance Level, the performer must achieve 100 percent of the goal achievement milestone to be eligible for payment of the milestone; there is no payment for partial achievement.

(C) If a P4P measure identified as a hospital safety measure in the Measure Bundle Protocol has perfect performance at baseline, the measure's goal achievement milestone is eligible for full payment for maintenance of high performance.

(i) Perfect performance at baseline means that for the baseline measurement period, the performer reports:

(I) zero numerator cases; and

(II) at least one denominator case.

(ii) Maintenance of high performance means that for a performance year, the performer reports:

(I) zero numerator cases; and

(II) one numerator case that was not preventable.

(iii) If a performer wishes to report maintenance of high performance for a performance year for a measure that is eligible for full payment for maintenance of high performance, the performer must determine a valid definition for a numerator case that is not preventable and submit documentation of that definition to HHSC.

(iv) If HHSC determines that maintenance of high performance is achieved, the achievement value for the goal achievement milestone is 1.0.

(d) Basis for payment of Category D. A performer must report on a measure in the Category D - Statewide Reporting Measure Bundle for its provider type for a DY in accordance with §354.1755(d) of this division (relating to Category D Requirements for Performers) to be eligible for payment of the measure for that DY.

(e) At no point may a performer receive a DSRIP payment for a milestone more than two years after the end of the DY in which the milestone is to be completed.

(f) If a performer does not complete the remaining milestones as described in §354.1751 of this division (relating to Category B Requirements for Performers) or §354.1753 of this division (relating to Category C Requirements for Performers), or the Category D - Statewide Reporting Measure Bundle measures as described in subsection (d) of this section, the associated DSRIP funding is forfeited by the performer.

(g) Once the action associated with a milestone is reported by the performer as complete, that milestone may not be counted again toward DSRIP payment calculations.

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 June 29, 2020.

TRD-202002646

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: August 16, 2020

For further information, please call: (512) 923-0644