Item 1

Opening comments: Bill Galinsky, Hospital Payment Advisory Committee Chair

Item 2

Approval of June 8, 2017, meeting minutes (vote required)

Item 6

Texas Healthcare Transformation and Quality Improvement Program extension update
- HHSC Staff

Item 5

Amendments to Uniform Hospital Rate Increase Program
HHSC proposes amendments to TAC Title 1, Part 15, Chapter 355, Subchapter O, §355.1305,
relating to the Uniform Hospital Rate Increase Program. In March 2017, HHSC adopted rules
governing a provider payment initiative through Medicaid MCOs called the Uniform Hospital Rate
Increase Program (UHRIP). See 42 Tex. Reg. 13 (2017). Under the UHRIP initiative, a service delivery
area (SDA) may apply to receive an increase in certain hospital rates that would vary by class of
hospital. Although UHRIP was supposed to begin in September 2017 and be available to any SDA,
operational issues necessitated a delay. The issues included lack of readiness by MCOs, lack of
program understanding among providers, and incomplete approvals from the CMS.
HHSC proposes to amend the UHRIP rules in three ways.
First, HHSC proposes to amend §353.1305(b)(7) and (8), the definitions of "rural private hospital"
and "rural public hospital," to be consistent with a revised definition of "rural hospital" that
HHSC adopted earlier this year in §355.8052 (relating to Inpatient Hospital Reimbursement).
The definitions in this rule now refer to the definition of "rural hospital" in §355.8052
Second, HHSC proposes to add §353.1305(k), which allows for a limited Dec. 1, 2017, entry into
UHRIP for a subset of SDAs. Specifically, if HHSC received an approval from CMS for any
particular SDA by July 1, 2017, that SDA would be able to participate in UHRIP for dates of service beginning Dec. 1, 2017.
Third, HHSC standardizes references to SDAs throughout the section.
Pam McDonald, Director of HHSC Rate Analysis

Item 3

Delivery System Reform Incentive Payment (DSRIP) Program Demonstration Years 7-8
Health and Human Services Commission (HHSC) proposes new rules to Texas Administrative Code
(TAC), Title 1, Part 15, Chapter 354, Subchapter D, Division 7, relating to DSRIP Program
Demonstration Years 7-8; Chapter 355, Subchapter J, Division 11, §355.8205, relating to DSRIP for
Demonstration Years 7-8; and §355.8206, relating to Funding for DSRIP Monitoring Program for
Demonstration Years 7-8. On Dec. 12, 2011, the Centers for Medicare and Medicaid Services (CMS)
approved Texas's request for a new Medicaid demonstration waiver entitled "Texas Healthcare
Transformation and Quality Improvement Program" in accordance with section 1115 of the Social
Security Act. The DSRIP program is one of the three main components of this waiver. The initial
waiver was approved through Sept. 30, 2016, and an initial extension was granted through Dec. 31,
2017. HHSC has requested an additional 21 months that would extend the waiver through Sept. 30,
2019. The framework for DSRIP payments is governed by the Program Funding and Mechanics
(PFM) protocol that is referenced in the waiver's Special Terms and Conditions. HHSC developed the
draft PFM protocol proposal for the requested additional 21 months (demonstration years 7-8) and
submitted it to CMS on May 17, 2017. These proposed new rules closely mirror the PFM protocol
proposal that HHSC submitted to CMS.
Ardas Khalsa, HHSC Medicaid and Children's Health Insurance Program (CHIP) Services Department,
Deputy Director for Transformation Waiver Operations

Item 4

Amendments to Disallowance Provisions in Directed Payment General Provisions
HHSC proposes amendments to TAC Title 1, Part 15, Chapter 355, Subchapter O, §353.1301,
relating to General Provisions. In March 2017, HHSC adopted a series of rules governing delivery
system and provider payment initiatives through Medicaid managed care organizations (MCOs).
These initiatives are generally funded through intergovernmental transfers from local governmental
entities. Given that these programs are not funded with state general revenue, HHSC must ensure that no state dollars are at risk through the operation of these programs. A disallowance by CMS is
one potential risk to general revenue, unless HHSC can ensure that funds from another source are
available.
Section 353.1301(j) describes the procedure HHSC would use for a disallowance. The rule
delineates between a disallowance for impermissible provider-related donations and all other
disallowances. At present, if there is a disallowance for impermissible provider-related
donations, the rule requires HHSC to recoup the disallowed amount from transferring
governmental entities that caused the disallowance. If there is a disallowance for reasons other
than an impermissible provider-related donation, HHSC reserves the right to recoup the
disallowed amount from MCOs, providers, or governmental entities.
In an effort to provide HHSC more flexibility when determining the appropriate entity from
which to recoup, HHSC proposes to amend §353.1301 to remove the requirement to recoup
only from governmental entities in the case of a disallowance for impermissible providerrelated
donations. Instead, HHSC reserves the right to recoup from MCOs, providers, or
governmental entities for any disallowance. To minimize the risk to general revenue, HHSC
requires that if a recoupment for a disallowance results in a subsequent disallowance, the entity
that HHSC initially recouped against faces a recoupment for the subsequent disallowance.
In addition, HHSC clarifies the heading for §353.1301(k) by changing the name from
"Recoupment" to "Overpayment."
Pam McDonald, Director of HHSC Rate Analysis

Items 7 & 9

7. Public comment

9. Adjourn