Texas Administrative Code › Title 1 - ADMINISTRATION › Part 15 - TEXAS HEALTH AND HUMAN SERVICES COMMISSION › Chapter 355 - REIMBURSEMENT RATES › Subchapter J - PURCHASED HEALTH SERVICES › Division 6 - RURAL HEALTH CLINICS › Section 355.8101 - Rural Health Clinics Reimbursement

Current through Reg. 49, No. 28; July 12, 2024
(a) Prospective Payment System Methodology.
					 Rural health clinics (RHCs) employing the Prospective Payment System (PPS)
					 methodology, in accordance with section 1902(bb) of the Social Security Act as
					 amended by the Benefits Improvement and Protection Act (BIPA) of 2000
					 (RSA
					 1396a(bb)) , will be
					 reimbursed a prospective rate for Medicaid covered services. The Alternative
					 Prospective Payment System (APPS) methodology is an option through August 31,
					 2010. Starting September 1, 2010, all RHCs will be reimbursed using the PPS
					 methodology as described in this section. RHCs are reimbursed a prospective per
					 visit encounter rate for a visit that meets the requirements of subsections (m)
					 and (n) of this section.
(b) The
					 final base rate for both hospital-based and freestanding RHCs existing in 2000
					 was calculated based on one hundred percent (100%) of the average of the RHC's
					 reasonable costs for providing Medicaid covered services as determined from
					 audited cost reports for the RHC's 1999 and 2000 fiscal years. The final base
					 rates were calculated by adding the total audited reimbursable costs as
					 determined from the 1999 and 2000 cost reports and dividing by the total
					 audited visits for these same two periods. In the event an audited cost report
					 was not received from the Medicare Intermediary, the final base rate for both
					 hospital-based and freestanding RHCs was calculated based on one hundred
					 percent (100%) of the average of the RHC's reasonable costs for providing
					 Medicaid covered services as determined from audited or unaudited cost reports
					 for the RHC's 1999 and 2000 fiscal years.
(c) For hospital-based RHCs existing in 2000,
					 an interim base rate for each RHC was calculated from the latest finalized cost
					 report settlement, adjusted as provided for in subsection (l) of this section.
					 For freestanding RHCs existing in 2000, the interim base rate for each RHC was
					 based upon the per-visit rate in the Medicaid payment system as of December 31,
					 2000, adjusted as provided for in subsection (l) of this section. When the
					 Texas Health and Human Services Commission (HHSC) determined a final base rate,
					 interim payments were reconciled back to January 1, 2001. For RHCs that agreed
					 to the APPS methodology prior to August 31, 2010, adjustments were made to the
					 RHCs' interim rates only if the interim payments were less than what would have
					 occurred under the final base rate. Subsection (k) of this section contains the
					 interim and final base rate methodology for new RHCs.
(d) Reasonable costs, as used in setting the
					 interim or final base rate, or any subsequent effective rate, are defined as
					 those costs that are allowable under Medicare Cost Principles as outlined in 42
					 CFR Part 413 . The cost limits that were in place on December 31, 2000, shall
					 be maintained in determining reasonable costs. Reasonable costs do not include
					 unallowable costs.
(e) Unallowable
					 costs are expenses that are incurred by an RHC and that are not directly or
					 indirectly related to the provision of covered services, according to
					 applicable laws, rules, and standards. An RHC may expend funds on unallowable
					 cost items, but those costs must not be included in the cost report/survey, and
					 they are not used in calculating an interim or final base rate determination.
					 Unallowable costs include, but are not necessarily limited to, the following:
(1) compensation in the form of salaries,
					 benefits, or any form of compensation given to individuals who are not directly
					 or indirectly related to the provision of covered services;
(2) personal expenses not directly related to
					 the provision of covered services;
(3) management fees or indirect costs that
					 are not derived from the actual cost of materials, supplies, or services
					 necessary for the delivery of covered services, unless the operational need and
					 cost-effectiveness can be demonstrated;
(4) advertising expenses other than those for
					 advertising in the telephone directory yellow pages, for employee or contract
					 labor recruitment, and for meeting any statutory or regulatory
					 requirement;
(5) business expenses
					 not directly related to the provision of covered services. For example,
					 expenses associated with the sale or purchase of a business or expenses
					 associated with the sale or purchase of investments;
(6) political contributions;
(7) depreciation and amortization of
					 unallowable costs, including amounts in excess of those resulting from the
					 straight-line depreciation method; capitalized lease expenses, less any
					 maintenance expenses, in excess of the actual lease payment; and goodwill or
					 any excess above the actual value of the physical assets at the time of
					 purchase. Regarding the purchase of a business, the depreciable basis will be
					 the lesser of the historical but not depreciated cost to the previous owner or
					 the purchase price of the assets. Any depreciation in excess of this amount is
					 unallowable;
(8) trade discounts
					 and allowances of all types, including returns, allowances, and refunds
					 received on purchases of goods or services. These are reductions of costs to
					 which they relate and thus, by reference, are unallowable;
(9) donated facilities, materials, supplies,
					 and services including the values assigned to the services of unpaid workers
					 and volunteers whether directly or indirectly related to covered services,
					 except as permitted in 42 CFR Part 413;
(10) dues to all types of political and
					 social organizations and to professional associations whose functions and
					 purpose are not reasonably related to the development and operation of patient
					 care facilities and programs or the rendering of patient care
					 services;
(11) entertainment
					 expenses except those incurred for entertainment provided to the staff of the
					 RHC as an employee benefit. An example of entertainment expenses is lunch
					 during the provision of continuing medical education on-site;
(12) board of directors' fees, including
					 travel costs and meals, provided for these directors;
(13) fines and penalties for violations of
					 statutes, regulations, and ordinances of all types;
(14) fund-raising and promotional expenses,
					 except as noted in paragraph (4) of this subsection;
(15) interest expenses on loans pertaining to
					 unallowable items, such as investments. Also, the interest expense on that
					 portion of interest paid that is reduced or offset by interest
					 income;
(16) insurance premiums
					 pertaining to items of unallowable cost;
(17) any accrued expenses that are not a
					 legal obligation of the provider or are not clearly enumerated as to dollar
					 amount;
(18) mileage expense
					 exceeding the current reimbursement rate set by the federal government for its
					 employee travel;
(19) cost for
					 goods or services that are purchased from a related party and which exceed the
					 original cost to the related party;
(20) out-of-state travel expenses not related
					 to the provision of covered services, except out-of-state travel expenses for
					 training courses that increase the quality of medical care and/or the operating
					 efficiency of the RHC; and
(21)
					 over-funding contributions to self-insurance funds that do not represent
					 payments based on current liabilities.