1 Tex. Admin. Code § 355.456 - Reimbursement Methodology
(a) Types of
facilities. There are two types of facilities for purposes of rate setting:
state-operated and non-state operated. Facilities are further divided into
classes that are determined by the size of the facility.
(b) Classes of non-state operated facilities.
There is a separate set of reimbursement rates for each class of non-state
operated facilities, which are as follows.
(1) Large facility--A facility with a
Medicaid certified capacity of 14 or more as of the first day of the full month
immediately preceding a rate's effective date or, if certified for the first
time after a rate's effective date, as of the date of initial
certification.
(2) Medium
facility--A facility with a Medicaid certified capacity of nine through 13 as
of the first day of the full month immediately preceding a rate's effective
date or, if certified for the first time after a rate's effective date, as of
the date of initial certification.
(3) Small facility--A facility with a
Medicaid certified capacity of eight or fewer as of the first day of the full
month immediately preceding a rate's effective date or, if certified for the
first time after a rate's effective date, as of the date of initial
certification.
(c)
Classes of state-operated facilities. There is a separate interim rate for each
class of state-operated facilities, which are as follows:
(1) Large facility--A facility with a
Medicaid certified capacity of 17 or more as of the first day of the full month
immediately preceding a rate's effective date or, if certified for the first
time after a rate's effective date, as of the date of initial
certification.
(2) Small
facility--A facility with a Medicaid certified capacity of 16 or less as of the
first day of the full month immediately preceding a rate's effective date or,
if certified for the first time after a rate's effective date, as of the date
of initial certification.
(d) Reimbursement rate determination for
non-state operated facilities. The Texas Health and Human Services Commission
(HHSC) will adopt the reimbursement rates for non-state operated facilities in
accordance with §
355.101 of this title (relating to
Introduction) and this subchapter.
(1) Covered
services. Reimbursement rates combine residential and day program services,
i.e., payment for the full 24 hours of daily service.
(2) Level of need (LON) differentiation.
Reimbursement rates are differentiated based on the level of need (LON) of the
individual receiving the service. The levels of need are intermittent, limited,
extensive, pervasive, and pervasive plus.
(3) Cost components determination. The
recommended modeled rates are based on cost components deemed appropriate for
economically and efficiently operated services. The determination of these
components is based on cost reports submitted by Intermediate Care Facilities
for Individuals with an Intellectual Disability or Related Conditions (ICF/IID)
providers.
(4) Direct service
workers cost area. This cost area includes direct service workers' salaries and
wages, benefits, and mileage reimbursement expenses. The reimbursement rate for
this cost area is calculated as specified in §
355.112 of this title (relating to
Attendant Compensation Rate Enhancement).
(5) Direct care trainers and job coaches cost
area. This cost area includes direct care trainers' and job coaches' salaries
and wages, benefits, and mileage reimbursement expenses. The reimbursement rate
for this cost area is calculated as specified in §
355.112 of this title.
(6) High Medical Needs Add-on reimbursement
rate before September 1, 2025. There is an available add-on reimbursement rate,
in addition to the daily reimbursement rate, for certain individuals.
(A) The add-on is based on the Resource
Utilization Group (RUG-III) 34 group classification system as described in
§
355.307 of this title (relating to
Reimbursement Setting Methodology before September 1, 2025).
(B) There are three add-on groupings based on
certain RUG-III 34 classification groups and the assessed Activities of Daily
Living (ADL) score.
(i) Group 1 includes
Extensive Services 3 (SE3), Extensive Services 2 (SE2), and Rehabilitation with
ADL score of 17-18 (RAD).
(ii)
Group 2 includes Rehabilitation with ADL score of 14-16 (RAC), Rehabilitation
with ADL score of 10-13 (RAB), Extensive Services 1 (SE1), Special Care with
ADL score of 17-18 (SSC), Special Care with ADL score of 15-16 (SSB), and
Special Care with ADL score of 4-14 (SSA).
(iii) Group 3 includes Rehabilitation with
ADL score of 4-9 (RAA), Clinically Complex with Depression and ADL score of
17-18 (CC2), Clinically Complex with ADL score of 17-18 (CC1), Clinically
Complex with Depression and ADL score of 12-16 (CB2), Clinically Complex and
ADL score of 12-16 (CB1), Clinically Complex with Depression and ADL score of
4-11 (CA2), and Clinically Complex and ADL score of 4-11 (CA1).
(C) An individual must meet the
following criteria to be eligible to receive the add-on rate:
(i) be assigned a RUG-III 34 classification
in Group 1, Group 2, or Group 3;
(ii) be a resident of a large state-operated
facility for at least six months immediately prior to referral or a resident of
a Medicaid-certified nursing facility immediately prior to referral;
and
(iii) for residents of a large
state-operated facility only, have a LON which includes a medical LON increase
as described in 26 TAC §
261.241 (relating to Level of Need
Criteria), but not be assessed a LON of pervasive plus.
(D) The add-on for each Group is determined
based on data and costs from the most recent nursing facility cost reports
accepted by HHSC.
(i) For each Group, compute
the median direct care staff per diem base rate component for all facilities as
specified in §
355.308 of this title (relating to
Direct Care Staff Rate Component before September 1, 2025); and
(ii) Subtract the average nursing portion of
the current recommended modeled rates as specified in subsection (d)(3) of this
section.
(7)
High Medical Needs Add-on reimbursement rate on or after September 1, 2025.
This add-on methodology will be implemented pending implementation of the
Patient Driven Payment Model (PDPM) for Long-Term Care (LTC), as specified in
§
355.318 of this chapter (relating
to Reimbursement Setting Methodology for Nursing Facilities on or after
September 1, 2025).
(A) The add-on is based
on the PDPM LTC classification system as described in §
355.318 of this chapter.
(B) There are three add-on groupings based on
PDPM LTC classification and nursing case-mix classifiers, associated with the
assessed nursing score.
(i) Group 1 includes
nursing case-mix classifier "E" relating to the Extensive Services category.
(ii) Group 2 includes nursing
case-mix classifiers "H" and "L" relating to the Special Care High and Special
Care Low categories.
(iii) Group 3
includes nursing case-mix "C" relating to the Clinically Complex
category.
(C) An
individual must meet the following criteria to be eligible to receive the
add-on rate:
(i) be assigned a PDPM LTC
nursing case-mix classifier in Group 1, Group 2, or Group 3;
(ii) be a resident of a large state-operated
facility for at least six months immediately prior to referral or a resident of
a Medicaid-certified nursing facility immediately prior to referral;
and
(iii) for residents of a large
state-operated facility only, have a LON which includes a medical LON increase
as described in 26 TAC §
261.241 (relating to Level of Need
Criteria), but not be assessed a LON of pervasive plus.
(D) The add-on for each Group is determined
based on data and costs from the most recent nursing facility cost reports
accepted by HHSC.
(i) Calculate the average
number of nursing hours per daily unit of service by dividing total nursing
hours by total days of service.
(ii) Calculate the average licensed
vocational nurse (LVN) cost per day by multiplying estimated LVN hourly wages
by the average number of nursing hours per daily unit of service.
(iii) For each Group, compute the median per
diem amount of the nursing care base case-mix adjusted rate component for all
facilities as specified in §
355.320 of this chapter (relating
to Nursing Care Staff Rate Enhancement Program for Nursing Facilities on or
after September 1, 2025); and
(iv)
Subtract the average nursing daily cost as specified in clause (ii) of this
subparagraph from the median per diem amount of the nursing care rate component
as specified in clause (iii) of this subparagraph current recommended modeled
rates as specified in subsection (d)(3) of this section.
(e) Reimbursement
determination for state-operated facilities. Except as provided in paragraph
(2) of this subsection and subsection (f) of this section, state-operated
facilities are reimbursed an interim rate with a settlement conducted in
accordance with paragraph (1)(B) of this subsection. HHSC will adopt the
interim reimbursement rates for state-operated facilities in accordance with
§
355.101 of this title and this
subchapter.
(1) State-operated facilities
certified prior to January 1, 2001, will be reimbursed using an interim
reimbursement rate and settlement process.
(A) Interim reimbursement rates for
state-operated facilities are based on the most recent cost report accepted by
HHSC.
(B) Settlement is conducted
each state fiscal year by class of facility. If there is a difference between
allowable costs and the reimbursement paid under the interim rate, including
applied income, for a state fiscal year, federal funds to the state will be
adjusted based on that difference.
(2) A state-operated facility certified on or
after January 1, 2001, will be reimbursed using a pro forma rate determined in
accordance with §
355.101(c)(2)(B)
and §
355.105(h) of
this title (relating to Introduction and General Reporting and Documentation
Requirements, Methods, and Procedures). A facility will be reimbursed under the
pro forma rate methodology until HHSC receives an acceptable cost report which
includes at least 12 months of the facility's cost data and is available to be
included in the annual interim rate determination process.
(f) HHSC may define experimental classes of
service to be used in research and demonstration projects on new reimbursement
methods. Demonstration or pilot projects based on experimental classes may be
implemented on a statewide basis or may be limited to a specific region of the
state or to a selected group of providers. Reimbursement for an experimental
class is not implemented, however, unless HHSC and the Centers for Medicare and
Medicaid Services (CMS) approve the experimental methodology.
(g) Cost Reporting.
(1) Providers must follow the cost-reporting
guidelines as specified in §
355.105 of this title.
(2) Providers must follow the guidelines in
determining whether a cost is allowable or unallowable as specified in §
355.102 and §
355.103 of this title (relating to
General Principles of Allowable and Unallowable Costs, and Specifications for
Allowable and Unallowable Costs).
(3) Revenues must be reported on the cost
report in accordance with §
355.104 of this title (relating to
Revenues).
(h) Adjusting
costs. Each provider's total reported allowable costs, excluding depreciation
and mortgage interest, are projected from the historical cost-reporting period
to the prospective reimbursement period as described in §
355.108 of this title (relating to
Determination of Inflation Indices). HHSC may adjust reimbursement if new
legislation, regulations, or economic factors affect costs, according to §
355.109 of this title (relating to
Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors
Affect Costs).
(i) Field Audit and
Desk Review. Desk reviews or field audits are performed on cost reports for all
contracted providers. The frequency and nature of the field audits are
determined by HHSC to ensure the fiscal integrity of the program. Desk reviews
and field audits will be conducted in accordance with §
355.106 of this title (relating to
Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and
providers will be notified of the results of a desk review or a field audit in
accordance with §
355.107 of this title (relating to
Notification of Exclusions and Adjustments). Providers may request an informal
review and, if necessary, an administrative hearing to dispute an action taken
under §
355.110 of this title (relating to
Informal Reviews and Formal Appeals).
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
(a) Types of facilities. There are two types of facilities for purposes of rate setting: state-operated and non-state operated. Facilities are further divided into classes that are determined by the size of the facility.
(b) Classes of non-state operated facilities. There is a separate set of reimbursement rates for each class of non-state operated facilities, which are as follows.
(1) Large facility--A facility with a Medicaid certified capacity of 14 or more as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.
(2) Medium facility--A facility with a Medicaid certified capacity of nine through 13 as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.
(3) Small facility--A facility with a Medicaid certified capacity of eight or fewer as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.
(c) Classes of state-operated facilities. There is a separate interim rate for each class of state-operated facilities, which are as follows:
(1) Large facility--A facility with a Medicaid certified capacity of 17 or more as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.
(2) Small facility--A facility with a Medicaid certified capacity of 16 or less as of the first day of the full month immediately preceding a rate's effective date or, if certified for the first time after a rate's effective date, as of the date of initial certification.
(d) Reimbursement rate determination for non-state operated facilities. HHSC will adopt the reimbursement rates for non-state operated facilities in accordance with § 355.101 of this title (relating to Introduction) and this subchapter.
(1) Reimbursement rates combine residential and day program services, i.e., payment for the full 24 hours of daily service.
(2) Reimbursement rates are differentiated based on the level of need (LON) of the individual receiving the service. The levels of need are intermittent, limited, extensive, pervasive, and pervasive plus.
(3) The recommended modeled rates are based on cost components deemed appropriate for economically and efficiently operated services. The determination of these components is based on cost reports submitted by Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/IID) providers.
(4) Direct service workers cost area. This cost area includes direct service workers' salaries and wages, benefits, and mileage reimbursement expenses. The reimbursement rate for this cost area is calculated as specified in § 355.112 of this title (relating to Attendant Compensation Rate Enhancement).
(5) Direct care trainers and job coaches cost area. This cost area includes direct care trainers' and job coaches' salaries and wages, benefits, and mileage reimbursement expenses. The reimbursement rate for this cost area is calculated as specified in § 355.112 of this title.
(6) Add-on reimbursement rate. There is an available add-on reimbursement rate, in addition to the daily reimbursement rate, for certain individuals.
(A) The add-on is based on the Resource Utilization Group (RUG-III) 34 group classification system as described in § 355.307 of this title (relating to Reimbursement Setting Methodology).
(B) There are three add-on groupings based on certain RUG-III 34 classification groups and the assessed Activities of Daily Living (ADL) score.
(i) Group 1 includes Extensive Services 3 (SE3), Extensive Services 2 (SE2), and Rehabilitation with ADL score of 17-18 (RAD).
(ii) Group 2 includes Rehabilitation with ADL score of 14-16 (RAC), Rehabilitation with ADL score of 10-13 (RAB), Extensive Services 1 (SE1), Special Care with ADL score of 17-18 (SSC), Special Care with ADL score of 15-16 (SSB), and Special Care with ADL score of 4-14 (SSA).
(iii) Group 3 includes Rehabilitation with ADL score of 4-9 (RAA), Clinically Complex with Depression and ADL score of 17-18 (CC2), Clinically Complex with ADL score of 17-18 (CC1), Clinically Complex with Depression and ADL score of 12-16 (CB2), Clinically Complex and ADL score of 12-16 (CB1), Clinically Complex with Depression and ADL score of 4-11 (CA2), and Clinically Complex and ADL score of 4-11 (CA1).
(C) An individual must meet the following criteria to be eligible to receive the add-on rate:
(i) be assigned a RUG-III 34 classification in Group 1, Group 2, or Group 3;
(ii) be a resident of a large state-operated facility for at least six months immediately prior to referral or a resident of a Medicaid-certified nursing facility immediately prior to referral; and
(iii) for residents of a large state-operated facility only, have a LON which includes a medical LON increase as described in 40 TAC § 9.241(relating to Level of Need Criteria), but not be assessed a LON of pervasive plus.
(D) The add-on for each Group is determined based on data and costs from the most recent nursing facility cost reports accepted by HHSC.
(i) For each Group, compute the median direct care staff per diem base rate component for all facilities as specified in § 355.308 of this title (relating to Direct Care Staff Rate Component); and
(ii) Subtract the average nursing portion of the current recommended modeled rates as specified in subsection (d)(3) of this section.
(e) Reimbursement determination for state-operated facilities. Except as provided in paragraph (2) of this subsection and subsection (f) of this section, state-operated facilities are reimbursed an interim rate with a settlement conducted in accordance with paragraph (1)(B) of this subsection. HHSC will adopt the interim reimbursement rates for state-operated facilities in accordance with § 355.101 of this title and this subchapter.
(1) State-operated facilities certified prior to January 1, 2001, will be reimbursed using an interim reimbursement rate and settlement process.
(A) Interim reimbursement rates for state-operated facilities are based on the most recent cost report accepted by HHSC.
(B) Settlement is conducted each state fiscal year by class of facility. If there is a difference between allowable costs and the reimbursement paid under the interim rate, including applied income, for a state fiscal year, federal funds to the state will be adjusted based on that difference.
(2) A state-operated facility certified on or after January 1, 2001, will be reimbursed using a pro forma rate determined in accordance with § 355.101(c)(2)(B) and § 355.105(h) of this title (relating to Introduction and General Reporting and Documentation Requirements, Methods, and Procedures). A facility will be reimbursed under the pro forma rate methodology until HHSC receives an acceptable cost report which includes at least 12 months of the facility's cost data and is available to be included in the annual interim rate determination process.
(f) HHSC may define experimental classes of service to be used in research and demonstration projects on new reimbursement methods. Demonstration or pilot projects based on experimental classes may be implemented on a statewide basis or may be limited to a specific region of the state or to a selected group of providers. Reimbursement for an experimental class is not implemented, however, unless HHSC and the Centers for Medicare and Medicaid Services (CMS) approve the experimental methodology.
(g) Cost Reporting.
(1) Providers must follow the cost-reporting guidelines as specified in § 355.105 of this title.
(2) Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in § 355.102 and § 355.103 of this title (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs).
(3) Revenues must be reported on the cost report in accordance with § 355.104 of this title (relating to Revenues).
(h) Adjusting costs. Each provider's total reported allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost-reporting period to the prospective reimbursement period as described in § 355.108 of this title (relating to Determination of Inflation Indices). HHSC may adjust reimbursement if new legislation, regulations, or economic factors affect costs, according to § 355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).
(i) Field Audit and Desk Review. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with § 355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with § 355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken under § 355.110 of this title (relating to Informal Reviews and Formal Appeals).
(j) Total Medicaid Spending Requirement. Effective for costs and revenues accrued on or after September 1, 2015, through August 31, 2017, all non-state operated ICF/IID providers are required to spend at least 90 percent of revenues received through the ICF/IID daily Medicaid payment rates on Medicaid allowable costs under the ICF/IID program.
(1) Compliance with the total Medicaid spending requirement will be determined in the aggregate for all component codes controlled by the same entity across the ICF/IID, Home and Community-based Services (HCS), and Texas Home Living (TxHmL) programs within the same cost report year.
(2) Compliance with the spending requirement is determined on an annual basis using cost reports as described in Chapter 355, Subchapter A, of this title (relating to Cost Determination Process) and this subchapter.
(A) When a provider changes ownership through a contract assignment, the prior owner must submit a report covering the period from the beginning of the provider's fiscal year to the effective date of the contract assignment as determined by HHSC or its designee. This report is used as the basis for determining compliance with the spending requirement.
(B) Providers whose contracts are terminated voluntarily or involuntarily must submit a report covering the period from the beginning of the provider's fiscal year to the date recognized by HHSC or its designee as the contract termination date. This report is used as the basis for determining compliance with the spending requirement.
(C) When part of a cost reporting period is subject to spending accountability and part is not subject to spending accountability, a provider may choose to have HHSC divide their costs for the entire cost reporting period between the part of the period subject to spending accountability and the part of the period not subject to spending accountability on a pro-rata basis (i.e., pro-rata allocation). For example, if six months of a twelve month cost reporting period are subject to spending accountability, HHSC would divide the provider's costs for the entire cost reporting period by two to determine the costs subject to spending accountability. Providers who do not choose to have HHSC divide their costs on a pro-rata basis must report their costs for the period subject to spending accountability separately from their costs for the period not subject to spending accountability (i.e., direct reporting). Once a provider indicates to HHSC their choice between a pro-rata allocation and direct reporting for a specific cost reporting period, that choice is irrevocable for that cost reporting period.
(3) Allowable costs are those described in Chapter 355, Subchapter A, and this subchapter.
(4) The total Medicaid revenue for an ICF/IID provider participating in the attendant compensation rate enhancement is offset by any recoupment made under § 355.112(s) of this title prior to determining compliance with the spending requirement.
(5) Providers who fail to meet the 90 percent spending requirement are subject to a recoupment of the difference between the 90 percent spending requirement and their actual Medicaid allowable ICF/IID costs. Recoupments for each rate period under this subsection are limited to the difference between the provider's Medicaid revenues for services provided at the rates subject to spending accountability and what the provider's Medicaid revenues would have been for services provided at the Medicaid rates in effect on August 31, 2015.
(6) The contracted provider, owner, or legal entity which received the Medicaid payment is responsible for the repayment of the recoupment amount. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification results in placement of a vendor hold on all HHSC and Texas Department of Aging and Disability Services contracts controlled by the responsible entity.
(7) Prior to each rate period through August 31, 2017, providers will be given the option of receiving the Medicaid rates adopted by HHSC for the rate period and the Medicaid rates that were in effect on August 31, 2015. Providers who chose to receive the Medicaid rates that were in effect on August 31, 2015, will not be subject to the spending accountability requirements described in this subsection.
(8) For rate periods beginning on or after September 1, 2017, the Total Medicaid Spending Requirement described in this subsection will no longer apply. Additionally, providers who chose to receive the Medicaid rates that were in effect on August 31, 2015, will receive the rates that were adopted effective September 1, 2015.