Item 1

Opening comments: Gilbert Handal, M.D., Medical Care Advisory Committee Chair

Item 2

Comments from the Associate Commissioner for Medicaid and CHIP Services Department,
Jami Snyder, Health and Human Services Commission (HHSC)

Item 3

Approval of February 16, 2017, meeting minutes (Vote required)

Items 4 & 5

4. Inpatient Hospital Reimbursement
HHSC proposes amendments to Texas Administrative Code (TAC) Title 1, Part 15, Chapter
355, Subchapter J, Division 4, §355.8052, relating to Inpatient Hospital Reimbursement, to
modify the definition of a rural hospital. The proposed amendment is necessary to comply with
the 201819
General Appropriations Act, S.B. 1, 85th Legislature, Regular Session, 2017
(Article II, Health and Human Services Commission, Rider 37). Rider 37 directs HHSC to
define a rural hospital as (1) a hospital located in a county with 60,000 or fewer persons
according to the 2010 U.S. Census? or (2) a hospital designated by Medicare as a Critical
Access Hospital (CAH), Sole Community Hospital (SCH), or a Rural Referral Center (RRC) that
is not located in a Metropolitan Statistical Area (MSA)? or (3) a hospital that (a) has 100 or
fewer beds, (b) is designated by Medicare as a CAH, an SCH, or an RRC, and (c) is located in
an MSA. Current rule language defines a rural hospital as a hospital in a county with 60,000
or fewer persons based on the 2010 decennial census, a hospital designated by Medicare as a
CAH, an SCH, or an RRC.

-Selvadas Govind, HHSC Director of Rate Analysis for Hospitals

5. Waiver Payments to Hospitals for Uncompensated Care
HHSC proposes amendments to TAC Title 1, Part 15, Chapter 355, Subchapter J, Division 11,
§355.8201, relating to Waiver Payments to Hospitals for Uncompensated Care. The proposed
amendments are necessary to comply with the 20182019
General Appropriations Act, S.B. 1,
85th Legislature, Regular Session, 2017 (Article II, Health and Human Services Commission,
Rider 37), which revises the definition of a rural hospital as: (1) a hospital located in a county
with 60,000 or fewer persons according to the 2010 U.S. Census? or (2) a hospital designated
by Medicare as a CAH, an SCH, or an RRC that is not located in an MSA? or (3) a hospital that
(a) has 100 or fewer beds, (b) is designated by Medicare as a CAH, an SCH or an RRC, and (c)
is located in an MSA. The current rural hospital definition is a hospital located in a county with
60,000 or fewer persons according to the most recent United States Census, a Medicaredesignated
RRC, an SCH, or an CAH.

- Selvadas Govind, HHSC Director of Rate Analysis for Hospitals

Item 6

Federally Qualified Health Centers
HHSC proposes amendments to TAC Title 1, Part 15, Chapter 355, Subchapter J, Division 14,
§355.8261, relating to Federally Qualified Health Center Services Reimbursement, to comply
with Legacy Community Health Services, Inc. v. Janek, 184 F. Supp. 3d 407 (S.D. 2016),
which requires changes to the Federally Qualified Health Center (FQHC) payment process.Under federal law (42 U.S.C. § 1396a(bb)), FQHCs must be paid for services provided to
Medicaid clients in an amount that is equal to the average of the FQHC’s per visit costs. This
amount is called its encounter rate. If an FQHC provides services under a contract with a
managed care organization (MCO) or dental maintenance organization (DMO) (also referred to
in 1 Tex. Admin. Code § 355.8261 as dental managed care organization), 42 U.S.C. §
1396a(bb)(5) requires the state to make a supplemental, or "wrap," payment to the FQHC in
the amount of the difference between the federally required encounter rate and the amount of
the payments provided under the contract. Since September 1, 2011, HHSC has required
MCOs and DMOs, for both Medicaid and CHIP services, to pay FQHCs their full encounter rate,
rather than a contracted rate.

- Michelle Erwin, Director of Policy and Program Development, HHSC Medicaid and CHIP
Services Department

Item 7

Nursing Facility Direct Care Staff Enhancement Program Enrollment Electronic Notification
HHSC proposes amendments to TAC Title 1, Part 15, Chapter 355, Subchapter C, §355.308,
relating to Direct Care Staff Rate Component. Section 355.308 outlines procedures for the
Nursing Facility Direct Care Staff Enhancement program. The Direct Care Staff Enhancement
program is an optional program that offers contracted nursing facility providers the option to
receive increased payments if they meet certain staffing and spending requirements. HHSC
offers contracted providers the opportunity to enroll in the program annually.
The proposed amendments allow HHSC to notify contracted providers of (1) the open
enrollment period for this program, (2) their enrollment limitations (if any), and (3)
recoupments due to failure to meet the spending and staffing requirements (if any),
electronically or by other appropriate means as determined by HHSC. The proposed
amendments also allow contracted providers to submit requests for revisions or recalculations
electronically or by other appropriate means as determined by HHSC. These proposed
amendments will allow for the use of a broad array of communication methods between HHSC
staff and contracted providers, as the rule currently requires this communication to occur on
paper.

- Sarah Hambrick, HHSC Rate Analyst

Item 8

Home and Communitybased
Services (HCS) Supported Home Living Rate Methodology
Changes, HCS High Medical Needs Services and Attendant Compensation Rate Enhancement
Program Enrollment Electronic Notification
HHSC proposes amendments to TAC Title 1, Part 15, Chapter 355, Subchapter A, §355.112,
relating to Attendant Compensation Rate Enhancement? and Subchapter F, §355.723, relating
to Reimbursement Methodology for Home and Communitybased
Services and Texas Home Living Programs.
Methods of Communication between HHSC and Contracted Providers Section 355.112 outlines procedures for the Attendant Compensation Rate Enhancement program. The Rate Enhancement program is an optional program that offers contracted
providers increased payments if they meet certain spending requirements. HHSC offers
contracted providers the opportunity to enroll in the program annually. The proposed
amendments allow HHSC to notify contracted providers of (1) the open enrollment period, (2)
their enrollment limitations (if any), and (3) recoupments due to failure to meet spending
requirements (if any), electronically or by other appropriate means as determined by HHSC.
The proposed amendments also allow contracted providers to submit requests for revisions or
recalculations electronically or by other appropriate means as determined by HHSC. These
proposed amendments allow for the use of a broad array of communication methods between
HHSC staff and contracted providers, as the rule currently requires this communication to
occur on paper.

Aligning Certain Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Rates with Costs and Rates for Similar Services

TxHmL is projected to be carvedin to Medicaid managed care under STAR+PLUS effective
September 1, 2018, and HCS is projected to be carvedin effective September 1, 2021.
Currently, STAR+PLUS covers attendant and habilitation services for individuals with
disabilities through STAR+PLUS Community First Choice (CFC), including services for
individuals with intellectual and developmental disabilities. When TxHmL and HCS are carvedin
to Medicaid managed care, attendant care and habilitation services will be provided through
STAR+PLUS CFC. There will be no differential between individuals receiving additional waiver
benefits and those receiving only CFC services with respect to those services.
Currently, payment rates for TxHmL Community Support Services (CSS) and HCS Supported
Home Living (SHL) services are higher than the STAR+PLUS CFC rate and the costs of
providing these services. In preparation for the managed care carvein
of these services,
HHSC proposes amendments governing their rate determination to more closely align them
with the STAR+PLUS CFC rate.
As outlined in 1 Tex. Admin. Code § 355.112(l), the attendant compensation rate component
for nonparticipating contracts is frozen at the rates in effect August 31, 2010, for the HCS and
TxHmL programs. Currently, 1 Tex. Admin. Code § 355.112(l) requires the attendant
compensation rate component for nonparticipating contracts to remain constant over time,
except in the case of increases mandated by the Texas Legislature or necessitated by an
increase in the federal minimum wage. HHSC is amending this rule to indicate that the
attendant compensation rate component for nonparticipating contracts for HCS SHL and
TxHmL CSS is equal to $14.52 per hour, which is the level currently justified by HCS and
TxHmL provider cost reports.Section 355.723 establishes the rate methodology for all other HCS SHL and TxHmL CSS cost
components. HHSC is amending this rule to align its rate methodology for these cost
components with rate methodologies for similar services. Specifically, HHSC is tying the HCS
SHL and TxHmL indirect cost component (also known as the administration and facility cost
component) to the administrative and facility cost component of the Community Living
Assistance and Support Services (CLASS) waiver program residential habilitation service and
deleting the other direct service staffing cost component. The CLASS residential habilitation
service has similar requirements for these cost areas and was incorporated in the calculation of
the STAR+PLUS CFC proxy rate as described in 1 Tex. Admin. Code § 355.9090, relating to
Reimbursement Methodology for Community First Choice. Specifically, 1 Tex. Admin. Code §
355.9090(b)(1) states that the STAR+PLUS CFC rate will be equal to a weighted average of
rates established for CLASS habilitation services and proxy rates for attendant services under
the Communitybased
Alternatives waiver prior to its termination.
Rate Methodology for HCS High Medical Needs Services and Correction to Rate Methodology
for HCS Nursing Services
As indicated above, 1 Tex. Admin. Code § 355.723 establishes the reimbursement
methodology for the HCS and TxHmL waiver programs. Additional proposed amendments
include: (1) adding the new HCS High Medical Needs Support, High Medical Needs Registered
Nurse (RN), and High Medical Needs Licensed Vocational Nurse (LVN) services to the list of
nonvariable
rates (2) adding the rate methodology for the new HCS High Medical Needs
Support Services and (3) correcting an error in the projected weighted units calculation for
nursing services.
High Medical Needs Support, High Medical Needs RN, and High Medical Needs LVN services
will provide additional support for eligible persons who have medical needs that exceed the
service specification for existing HCS services and who need additional support in order to
remain in a community setting. However, these services have not been added as reimbursable
services by HHSC. While the rate methodology for High Medical Needs Support, High Medical
Needs RN, and High Medical Needs LVN will be effective with the effective date of the rule, the
associated rate cannot be paid until the services are reimbursable.
The indirect cost component per unit of service for each HCS service is determined by
calculating the projected weighted units of service for each service type, and then using the
projected weighted units to allocate administration and operation costs to the specific service
type. These weights are codified in the reimbursement methodology however, the weighting
factor for nursing services is incorrect in the rule and does not match the weighting factor
used in the calculation of the rates. The proposed amendments correct this error.
Other Changes
The proposed amendments to 1 Tex. Admin. Code § 355.112 also correct punctuation and an
outdated rule reference.

- Sarah Hambrick, HHSC Rate Analyst

Items 9 & 12

9. Pharmacy Claims
HHSC proposes amendments to TAC Title 1, Part 15, Chapter 353, Subchapter J, §353.905,
Managed Care Organization Requirements Chapter 354, Subchapter F, relating to Prescription
Requirements. 42 C.F.R. § 455.410 requires that all ordering and referring physicians or other
professionals providing services under the Medicaid state plan or under a waiver of the plan be
enrolled as participating providers. The proposed amendments clarify, for both managed care
and fee-for-service Medicaid, that a prescribing provider must be enrolled in Medicaid for the
pharmacy to be reimbursed for filling the prescription.

- Priscilla Parrilla, HHSC Director of VDP Pharmacy Operations and Contract Oversight

12. Adjourn