Texas Administrative Code › Title 1 - ADMINISTRATION › Part 15 - TEXAS HEALTH AND HUMAN SERVICES COMMISSION › Chapter 355 - REIMBURSEMENT RATES › Subchapter J - PURCHASED HEALTH SERVICES › Division 4 - MEDICAID HOSPITAL SERVICES › Section 355.8065 - Disproportionate Share Hospital Reimbursement Methodology

Current through Reg. 49, No. 28; July 12, 2024
(a) Introduction. Hospitals participating in
					 the Texas Medicaid program that meet the conditions of participation and that
					 serve a disproportionate share of low-income patients are eligible for
					 reimbursement from the disproportionate share hospital (DSH) fund. The Texas
					 Health and Human Services Commission (HHSC) will establish each hospital's
					 eligibility for and amount of reimbursement using the methodology described in
					 this section beginning with the DSH program year corresponding with federal
					 fiscal year 2024. For program periods that correspond with federal fiscal year
					 2023, eligibility and payments will be made in accordance with the rule text as
					 it existed on June 1, 2023.
(b)
					 Definitions.
(1) Adjudicated claim--A
					 hospital claim for payment for a covered Medicaid service that is paid or
					 adjusted by HHSC or another payer.
(2) Available DSH funds--The total amount of
					 funds that may be distributed to eligible qualifying DSH hospitals for the DSH
					 program year, based on the federal DSH allotment for Texas (as determined by
					 the Centers for Medicare & Medicaid Services) and available non-federal
					 funds. HHSC may divide available DSH funds for a program year into one or more
					 portions of funds to allow for partial payment(s) of total available DSH funds
					 at any one time with remaining funds to be distributed at a later date(s). If
					 HHSC chooses to make a partial payment, the available DSH funds for that
					 partial payment are limited to the portion of funds identified by HHSC for that
					 partial payment.
(3) Available
					 general revenue funds--The total amount of state general revenue funds
					 appropriated to provide a portion of the non-federal share of DSH payments for
					 the DSH program year for non-state-owned hospitals. If HHSC divides available
					 DSH funds for a program year into one or more portions of funds to allow for
					 partial payment(s) of total available DSH funds as described in paragraph (2)
					 of this subsection, the available general revenue funds for that partial
					 payment are limited to the portion of general revenue funds identified by HHSC
					 for that partial payment.
(4) Bad
					 debt--A debt arising when there is nonpayment on behalf of an individual who
					 has third-party coverage.
(5)
					 Centers for Medicare & Medicaid Services (CMS)--The federal agency within
					 the United States Department of Health and Human Services responsible for
					 overseeing and directing Medicare and Medicaid, or its successor.
(6) Charity care--The unreimbursed cost to a
					 hospital of providing, funding, or otherwise financially supporting health care
					 services on an inpatient or outpatient basis to indigent individuals, either
					 directly or through other nonprofit or public outpatient clinics, hospitals, or
					 health care organizations. A hospital must set the income level for eligibility
					 for charity care consistent with the criteria established in §
												311.031, Texas
					 Health and Safety Code.
(7) Charity
					 charges--Total amount of hospital charges for inpatient and outpatient services
					 attributed to charity care in a DSH data year. These charges do not include bad
					 debt charges, contractual allowances, or discounts given to other legally
					 liable third-party payers.
(8)
					 Children's hospital--A hospital that is a Children's hospital as defined in
					 §
												355.8052 of this chapter (relating
					 to Inpatient Hospital Reimbursement).
(9) Disproportionate share hospital (DSH)--A
					 hospital identified by HHSC that meets the DSH program conditions of
					 participation and that serves a disproportionate share of Medicaid or indigent
					 patients.
(10) DSH data year--A
					 twelve-month period, two years before the DSH program year, from which HHSC
					 will compile data to determine DSH program qualification and payment.
(11) DSH program year--The twelve-month
					 period beginning October 1 and ending September 30.
(12) Dually eligible patient--A patient who
					 is simultaneously eligible for Medicare and Medicaid.
(13) Governmental entity--A state agency or a
					 political subdivision of the state. A governmental entity includes a hospital
					 authority, hospital district, city, county, or state entity.
(14) HHSC--The Texas Health and Human
					 Services Commission or its designee.
(15) Hospital-specific limit (HSL) --The
					 maximum payment amount, as applied to payments made during a prior DSH program
					 year, that a hospital may receive in reimbursement for the cost of providing
					 Medicaid-allowable services to individuals who are Medicaid-eligible or
					 uninsured. The hospital-specific limit is calculated using the methodology
					 described in § 355.8066 of this division (relating to State Payment Cap
					 and Hospital-Specific Limit Methodology) using actual cost and payment data
					 from the DSH program year.
(16)
					 Independent certified audit--An audit that is conducted by an auditor that
					 operates independently from the Medicaid agency and the audited hospitals and
					 that is eligible to perform the DSH audit required by CMS.
(17) Indigent individual--An individual
					 classified by a hospital as eligible for charity care.
(18) Inflation update factor--Cost of living
					 index based on annual CMS prospective payment system hospital market basket
					 index.
(19) Inpatient day--Each day
					 that an individual is an inpatient in the hospital, whether or not the
					 individual is in a specialized ward and whether or not the individual remains
					 in the hospital for lack of suitable placement elsewhere. The term includes
					 observation days, rehabilitation days, psychiatric days, and newborn days. The
					 term does not include swing bed days or skilled nursing facility
					 days.
(20) Inpatient
					 revenue--Amount of gross inpatient revenue derived from the most recent
					 completed Medicaid cost report or reports related to the applicable DSH data
					 year. Gross inpatient revenue excludes revenue related to the professional
					 services of hospital-based physicians, swing bed facilities, skilled nursing
					 facilities, intermediate care facilities, other nonhospital revenue, and
					 revenue not identified by the hospital.
(21) Institution for mental diseases (IMD)--A
					 hospital that is primarily engaged in providing psychiatric diagnosis,
					 treatment, or care of individuals with mental illness, defined in §1905(i)
					 of the Social Security Act. IMD hospitals are reimbursed as freestanding
					 psychiatric facilities under §355.8060 of this division (relating to
					 Reimbursement Methodology for Freestanding Psychiatric Facilities) and §
												355.761 of this chapter (relating
					 to Reimbursement Methodology for Institutions for Mental Diseases
					 (IMD).
(22) Institution for mental
					 diseases (IMD) cap--An IMD limit determined each fiscal year and as described
					 under Section 1923(h) of the Social Security Act.
(23) Intergovernmental transfer (IGT)--A
					 transfer of public funds from a governmental entity to HHSC.
(24) Low-income days--Number of inpatient
					 days attributed to indigent patients are calculated using the following
					 methodology. Low-income days are equal to the hospitals low-income utilization
					 rate as calculated in subsection (d)(2) of this section multiplied by the
					 hospitals total inpatient days.
(25) Low-income utilization rate--A ratio,
					 calculated as described in subsection (d)(2) of this section, that represents
					 the hospital's volume of inpatient charity care relative to total inpatient
					 services.
(26) Mean Medicaid
					 inpatient utilization rate--The average of Medicaid inpatient utilization rates
					 for all hospitals that have received a Medicaid payment for an inpatient claim,
					 other than a claim for a dually eligible patient, that was adjudicated during
					 the relevant DSH data year.
(27)
					 Medicaid contractor--Fiscal agents and managed care organizations with which
					 HHSC contracts to process data related to the Medicaid program.
(28) Medicaid cost report--Hospital and
					 Hospital Health Care Complex Cost Report (Form CMS 2552), also known as the
					 Medicare cost report.
(29) Medicaid
					 hospital--A hospital meeting the qualifications set forth in §
												354.1077 of this title (relating to
					 Provider Participation Requirements) to participate in the Texas Medicaid
					 program.
(30) Medicaid inpatient
					 utilization rate (MIUR)--A ratio, calculated as described in subsection (d)(1)
					 of this section, that represents a hospital's volume of Medicaid inpatient
					 services relative to total inpatient services.
(31) MSA--Metropolitan Statistical Area as
					 defined by the United States Office of Management and Budget. MSAs with
					 populations greater than or equal to 137,000, according to the most recent
					 decennial census, are considered "the largest MSAs."
(32) Non-federal percentage--The non-federal
					 percentage equals one minus the federal medical assistance percentage (FMAP)
					 for the program year.
(33)
					 Non-rural hospital--Any hospital that does not meet the definition of rural
					 hospital as defined in §
												355.8052 of this chapter.
(34) Non-urban public hospital--A hospital
					 other than a transferring public hospital that is:
(A) owned and operated by a governmental
					 entity; or
(B) operated under a
					 lease from a governmental entity in which the hospital and governmental entity
					 are both located in the same county, and the hospital and governmental entity
					 have both signed an attestation that they wish the hospital to be treated as a
					 public hospital for all purposes under both this section and §
													355.8212 of this subchapter
					 (relating to Waiver Payments to Hospitals for Uncompensated Charity
					 Care).
(35) Obstetrical
					 services--The medical care of a woman during pregnancy, delivery, and the
					 post-partum period provided at the hospital listed on the DSH
					 application.
(36) PMSA--Primary
					 Metropolitan Statistical Area as defined by the United States Office of
					 Management and Budget.
(37) Public
					 funds--Funds derived from taxes, assessments, levies, investments, and other
					 public revenues within the sole and unrestricted control of a governmental
					 entity. Public funds do not include gifts, grants, trusts, or donations, the
					 use of which is conditioned on supplying a benefit solely to the donor or
					 grantor of the funds.
(38) Public
					 Health Hospital (PHH)--The Texas Center for Infectious Disease or any successor
					 facility operated by the Department of State Health Services.
(39) Ratio of cost-to-charges--A ratio that
					 covers all applicable hospital costs and charges relating to inpatient care and
					 outpatient care. This ratio will be calculated for inpatient and outpatient
					 services and, does not distinguish between payer types such as Medicare,
					 Medicaid, or private pay.
(40)
					 Rural public hospital--A hospital that is a rural hospital as defined in §
												355.8052 of this chapter and is
					 either:
(A) owned and operated by a
					 governmental entity; or
(B) is
					 under a lease from a governmental entity in which the hospital and governmental
					 entity are both located in the same county and the hospital and governmental
					 entity have both signed an attestation that they wish to be treated as a public
					 hospital for all purposes under this section.
(41) State institution for mental diseases
					 (State IMD)--A hospital that is primarily engaged in providing psychiatric
					 diagnosis, treatment, or care of individuals with mental illness defined in
					 §1905(i) of the Social Security Act and that is owned and operated by a
					 state university or other state agency. State IMD hospitals are reimbursed as
					 freestanding psychiatric facilities under §
												355.761 of this chapter.
(42) State-owned hospital--A hospital that is
					 defined as a state IMD, state-owned teaching hospital, or a Public Health
					 Hospital (PHH) in this section.
(43) State-owned teaching hospital--A
					 hospital that is a state-owned teaching hospital as defined in §
												355.8052 of this chapter.
(44) State payment cap--The maximum payment
					 amount, as applied to payments that will be made for the DSH program year, that
					 a hospital may receive in reimbursement for the cost of providing
					 Medicaid-allowable services to individuals who are Medicaid-eligible or
					 uninsured. The state payment cap is calculated using the methodology described
					 in §
												355.8066 of this title (relating to
					 Hospital-Specific Limit Methodology) using interim cost and payment data from
					 the DSH data year.
(45) Tax
					 Revenue--Funds derived from local taxes that are assessed and payable to a
					 hospital or a hospital district. For purposes of this section, Tax Revenue does
					 not include mandatory payments received by a local governmental entity that is
					 authorized by a relevant chapter of Subtitle D, Title 4, Texas Health and
					 Safety Code, to operate a Local Provider Participation Fund (LPPF).
(46) Third-party coverage--Creditable
					 insurance coverage consistent with the definitions in 45 Code of Federal
					 Regulations (CFR) Parts 144 and 146, or coverage based on a legally liable
					 third-party payer.
(47) Total
					 Medicaid inpatient days--Total number of inpatient days based on adjudicated
					 claims data for covered services for the relevant DSH data year.
(A) The term includes:
(i) Medicaid-eligible days of care
					 adjudicated by managed care organizations or HHSC;
(ii) days that were denied payment for
					 spell-of-illness limitations;
(iii)
					 days attributable to individuals eligible for Medicaid in other states,
					 including dually eligible patients;
(iv) days with adjudicated dates during the
					 period; and
(v) days for dually
					 eligible patients for purposes of the MIUR calculation described in subsection
					 (d)(1) of this section.
(B) The term excludes:
(i) days attributable to Medicaid-eligible
					 patients ages 21 through 64 in an IMD;
(ii) days denied for late filing and other
					 reasons; and
(iii) days for dually
					 eligible patients for purposes of the following calculations:
(I) Total Medicaid inpatient days, as
					 described in subsection (d)(3) of this section; and
(II) Pass one distribution, as described in
					 subsection (h)(4) of this section.
(48) Total Medicaid inpatient hospital
					 payments--Total amount of Medicaid funds that a hospital received for
					 adjudicated claims for covered inpatient services during the DSH data year. The
					 term includes payments that the hospital received:
(A) for covered inpatient services from
					 managed care organizations and HHSC; and
(B) for patients eligible for Medicaid in
					 other states.
(49) Total
					 state and local subsidies--Total amount of state and local payments that a
					 hospital received for inpatient and outpatient care during the DSH data year.
					 The term includes payments under state and local programs that are funded
					 entirely with state general revenue funds and state or local tax funds, such as
					 County Indigent Health Care, Children with Special Health Care Needs, and
					 Kidney Health Care. The term excludes payment sources that contain federal
					 dollars such as Medicaid payments, Children's Health Insurance Program (CHIP)
					 payments funded under Title XXI of the Social Security Act, Substance Abuse and
					 Mental Health Services Administration, Ryan White Title I, Ryan White Title II,
					 Ryan White Title III, and contractual discounts and allowances related to
					 TRICARE, Medicare, and Medicaid. The term also includes tax revenue.
(50) Transferring public hospital--A hospital
					 that is owned and operated by one of the following entities: the Dallas County
					 Hospital District, the El Paso County Hospital District, the Harris County
					 Hospital District, the Tarrant County Hospital District, or the University
					 Health System of Bexar County.