Current through Reg. 49, No. 52; December 27, 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.
(c) Eligibility. To be eligible to
participate in the DSH program, a hospital must:
(1) be enrolled as a Medicaid hospital in the
State of Texas;
(2) 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;
and
(3) apply annually by
completing the application packet received from HHSC by the deadline specified
in the packet.
(A) Only a hospital that meets
the condition specified in paragraph (2) of this subsection will receive an
application packet from HHSC.
(B)
The application may request self-reported data that HHSC deems necessary to
determine each hospital's eligibility. HHSC may audit self-reported
data.
(C) A hospital that fails to
submit a completed application by the deadline specified by HHSC will not be
eligible to participate in the DSH program in the year being applied for or to
appeal HHSC's decision.
(D) For
purposes of DSH eligibility, a multi-site hospital is considered one provider
unless it submits separate Medicaid cost reports for each site. If a multi-site
hospital submits separate Medicaid cost reports for each site, for purposes of
DSH eligibility, it must submit a separate DSH application for each
site.
(E) Merged Hospitals.
(i) HHSC will consider a merger of two or
more hospitals for purposes of determining eligibility and calculating a
hospital's DSH program year payments under this section if:
(I) a hospital that was a party to the merger
submits to HHSC documents verifying the merger status with Medicare prior to
the deadline for submission of the DSH application; and
(II) the hospital submitting the information
under subclause (I) assumed all Medicaid-related liabilities of each hospital
that is a party to the merger, as determined by HHSC after review of the
applicable agreements.
(ii) If the requirements of clause (i) are
not met, HHSC will not consider the merger for purposes of determining
eligibility or calculating a hospital's DSH program year payments under this
section. Until HHSC determines that the hospitals are eligible for payments as
a merged hospital, each of the merging hospitals will continue to receive any
DSH payments to which it was entitled prior to the merger.
(d) Qualification. For
each DSH program year, in addition to meeting the eligibility requirements,
applicants must meet at least one of the following qualification criteria,
which are determined using information from a hospital's application, from
HHSC, or from HHSC's Medicaid contractors, as specified by HHSC.
(1) Medicaid inpatient utilization rate. A
hospital's Medicaid inpatient utilization rate is calculated by dividing the
hospital's total Medicaid inpatient days by its total inpatient census days for
the DSH data year.
(A) A hospital located
outside an MSA or PMSA must have a Medicaid inpatient utilization rate greater
than the mean Medicaid inpatient utilization rate for all Medicaid
hospitals.
(B) A hospital located
inside an MSA or PMSA must have a Medicaid inpatient utilization rate that is
at least one standard deviation above the mean Medicaid inpatient utilization
rate for all Medicaid hospitals.
(2) Low-income utilization rate. A hospital
must have a low-income utilization rate greater than 25 percent. For purposes
of paragraph (2) of this section, the term "low-income utilization rate" is
calculated using the calculation described in
42 U.S.C. §
1396r-4 (b)(3).
(3) Total Medicaid inpatient days.
(A) A hospital must have total Medicaid
inpatient days at least one standard deviation above the mean total Medicaid
inpatient days for all hospitals participating in the Medicaid program, except
a hospital in a county with a population of 290,000 persons or fewer, according
to the most recent decennial census, must have total Medicaid inpatient days at
least 70 percent of the sum of the mean total Medicaid inpatient days for all
hospitals in this subset plus one standard deviation above that mean.
(B) Days for dually eligible patients are not
included in the calculation of total Medicaid inpatient days under this
paragraph.
(4)
State-owned hospitals. State-owned hospitals that do not otherwise qualify as
disproportionate share hospitals under this subsection will be deemed to
qualify. A hospital deemed to qualify must still meet the eligibility
requirements under subsection (c) of this section and the conditions of
participation under subsection (e) of this section.
(5) Merged hospitals. Merged hospitals are
subject to the application requirement in subsection (c)(3)(E) of this section.
In accordance with requirements in subsection (c)(3)(E) of this section, HHSC
will aggregate the data used to determine qualification under this subsection
from the merged hospitals to determine whether the single Medicaid provider
that results from the merger qualifies as a Medicaid disproportionate share
hospital.
(6) Hospitals with
multiple Medicaid provider numbers. Hospitals that held a single Medicaid
provider number during the DSH data year, but later added one or more Medicaid
provider numbers. Upon request, HHSC will apportion the Medicaid DSH funding
determination attributable to a hospital that held a single Medicaid provider
number during the DSH data year (data year hospital), but subsequently added
one or more Medicaid provider numbers (new program year hospital(s)) between
the data year hospital and its associated new program year hospital(s). In
these instances, HHSC will apportion the Medicaid DSH funding determination for
the data year hospital between the data year hospital and the new program year
hospital(s) based on estimates of the division of Medicaid inpatient and low
income utilization between the data year hospital and the new program year
hospital(s) for the program year, so long as all affected providers satisfy the
Medicaid DSH conditions of participation under subsection (e) of this section
and qualify as separate hospitals under subsection (d) of this section based on
HHSC's Medicaid DSH qualification criteria in the applicable Medicaid DSH
program year. In determining whether the new program year hospital(s) meet the
Medicaid DSH conditions of participation and qualification, proxy program year
data may be used.
(e)
Conditions of participation. HHSC will require each hospital to meet and
continue to meet for each DSH program year the following conditions of
participation.
(1) Two-physician requirement.
(A) In accordance with Social Security Act
§1923(e)(2), a hospital must have at least two licensed physicians (doctor
of medicine or osteopathy) who have hospital staff privileges and who have
agreed to provide nonemergency obstetrical services to individuals who are
entitled to medical assistance for such services.
(B) Subparagraph (A) of this paragraph does
not apply if the hospital:
(i) serves
inpatients who are predominantly under 18 years of age; or
(ii) was operating but did not offer
nonemergency obstetrical services as of December 22, 1987.
(C) A hospital must certify on the DSH
application that it meets the conditions of either subparagraph (A) or (B) of
this paragraph, as applicable, at the time the DSH application is
submitted.
(2) Medicaid
inpatient utilization rate. At the time of qualification and during the DSH
program year, a hospital must have a Medicaid inpatient utilization rate, as
calculated in subsection (d)(1) of this section, of at least one
percent.
(3) Trauma system.
(A) The hospital must be in active pursuit of
designation or have obtained a trauma facility designation as defined in
§780.004 and §§773.111 -
773.120, Texas
Health and Safety Code, respectively, and consistent with 25 TAC §
157.125(relating to Requirements
for Trauma Facility Designation) and §157.131 (relating to the Designated
Trauma Facility and Emergency Medical Services Account). A hospital that has
obtained its trauma facility designation must maintain that designation for the
entire DSH program year.
(B) HHSC
will receive an annual report from the Office of EMS/Trauma Systems
Coordination regarding hospital participation in regional trauma system
development, application for trauma facility designation, and trauma facility
designation or active pursuit of designation status before final qualification
determination for interim DSH payments. HHSC will use this report to confirm
compliance with this condition of participation by a hospital applying for DSH
funds.
(C) The following hospital
types are exempted from the condition of participation described in this
paragraph: Children's Hospitals, IMDs, Public Health Hospitals, and State
IMDs.
(4) Maintenance of
local funding effort. A hospital district in one of the state's largest MSAs or
in a PMSA must not reduce local tax revenues to its associated hospitals as a
result of disproportionate share funds received by the hospital. For this
provision to apply, the hospital must have more than 250 licensed
beds.
(5) Retention of and access
to records. A hospital must retain and make available to HHSC records and
accounting systems related to DSH data for at least five years from the end of
each DSH program year in which the hospital qualifies, or until an open audit
is completed, whichever is later.
(6) Compliance with audit requirements. A
hospital must agree to comply with the audit requirements described in
subsection (o) of this section.
(7)
Merged hospitals. Merged hospitals are subject to the application requirement
in subsection (c)(3)(E) of this section. If HHSC receives documents verifying
the merger status with Medicare prior to the deadline for submission of the DSH
application, the merged entity must meet all conditions of participation. If
HHSC does not receive the documents verifying the merger status with Medicare
prior to the deadline for submission of the DSH application, any proposed
merging hospitals that are receiving DSH payments must continue to meet all
conditions of participation as individual hospitals to continue receiving DSH
payments for the remainder of the DSH program year.
(8) Changes that may affect DSH
participation. A hospital receiving payments under this section must notify
HHSC's Provider Finance Department within 30 days of changes in ownership,
operation, provider identifier, designation as a trauma facility or as a
children's hospital, or any other change that may affect the hospital's
continued eligibility, qualification, or compliance with DSH conditions of
participation. At the request of HHSC, the hospital must submit any
documentation supporting the change.
(9) Participation in all voluntary Medicaid
programs. Beginning in Federal Fiscal Year (FFY) 2024, it will be required for
all non-rural hospitals, except for state-owned hospitals, to enroll,
participate in, and comply with requirements for all voluntary supplemental
Medicaid or directed Medicaid programs for which the hospital is eligible,
including all components of those programs, within the State of Texas to
participate in DSH, unless:
(A) a hospital is
not required to enroll, participate in, and comply with the requirements:
(i) of a program without multiple components
if the hospital's estimated payment from the entire program is less than
$25,000; or
(ii) of a program's
component for programs that have multiple components if the hospital's
estimated payment from the program's component is less than $25,000;
and
(B) enrollment for
the program concluded after the effective date of this requirement.
(f) State payment cap
and hospital-specific limit calculation. HHSC uses the methodology described in
§
355.8066 of this title to calculate
a state payment cap for each Medicaid hospital that applies and qualifies to
receive payments for the DSH program year under this section, and a
hospital-specific limit for each hospital that received payments in a prior
program year under this section. For payments for each DSH program year
beginning before October 1, 2017, the state payment cap calculated as described
in § 355.8066 will be reduced by the amount of prior payments received by
each participating hospital for that DSH program year. These prior payments
will not be considered anywhere else in the calculation.
(g) Distribution of available DSH funds. HHSC
will distribute the available DSH funds as defined in subsection (b)(2) of this
section among eligible, qualifying DSH hospitals using the following
priorities.
(1) State-owned hospitals. HHSC
may reimburse state-owned teaching hospitals, state-owned IMDs, and public
health hospitals an amount less than or equal to its state payment caps, except
that aggregate payments to IMDs statewide may not exceed federally mandated
reimbursement limits for IMDs.
(2)
Rural public hospitals. HHSC will set aside an amount for rural public
hospitals. While the funds are set aside before the non-state hospital funding,
the payments will be calculated for each hospital after the non-state hospital
payments are calculated.
(3) Rural
private hospitals. If funds remain from the amount set aside in subsection
(g)(2) of this section for rural public hospitals after paying all hospitals up
to their state payment caps, HHSC may set aside a portion of the remaining
funds for rural private hospitals.
(4) Non-state hospitals. HHSC distributes the
remaining available DSH funds, if any, to other qualifying hospitals using the
methodology described in subsection (h) of this section, including rural public
and rural private hospitals.
(A) The remaining
available DSH funds equal the lesser of the funds as defined in subsection
(b)(2) of this section less funds expended under paragraph (1), (2), and (3) of
this subsection or the sum of remaining qualifying hospitals' state payment
caps.
(B) The remaining available
general revenue funds equal the funds as defined in subsection (b)(3) of this
section.
(h)
DSH payment calculation.
(1) Data
verification. HHSC uses the methodology described in §
355.8066(e) of
this title to verify the data used for the DSH payment calculations described
in this subsection. The verification process includes:
(A) data sources for the application will
include but not limited to Tax Assessor Receipts/Invoices or other official
documentation of tax revenue/statements, Medicare Cost Report, and third-party
data sources;
(B) notice to
hospitals of the data provided to HHSC by Medicaid contractors; and
(C) an opportunity for hospitals to request
HHSC review of disputed data.
(2) Establishment of DSH funding pools for
non-state hospitals. From the amount of remaining DSH funds determined in
subsection (g)(3) of this section, HHSC will establish three DSH funding pools.
(A) Pool One.
(i) Pool One is equal to the sum of the
remaining available general revenue funds and associated federal matching
funds.
(ii) Pool One payments are
available to all non-state-owned hospitals, including non-state-owned public
hospitals.
(B) Pool Two.
(i) Pool Two is equal to the lesser of:
(I) the amount of remaining DSH funds
determined in subsection (g)(3) of this section less the amount determined in
paragraph (2)(A) of this subsection multiplied by the FMAP in effect for the
program year; or
(II) the federal
matching funds associated with the intergovernmental transfers received by HHSC
that make up the funds for Pool Three; and
(ii) Pool Two payments are available to all
non-state-owned hospitals except for any transferring public hospitals as
defined in subsection (b) of this section; or non-urban public hospital as
defined in subsection (b) of this section that does not transfer any funds to
HHSC for Pool Three as described in subparagraph (C)(iii) of this
paragraph.
(C) Pool
Three.
(i) Pool Three is equal to the sum of
intergovernmental transfers for DSH payments received by HHSC from governmental
entities that own and operate transferring public hospitals and non-urban
public hospitals.
(ii) Pool Three
payments are available to the hospitals that are operated by or under lease
contracts with the governmental entities described in clause (i) of this
subparagraph that provide intergovernmental transfers.
(iii) HHSC will allocate responsibility for
funding Pool Three as follows.
(I) Non-urban
public hospitals. Each governmental entity that operates or is under a lease
contract with a non-urban public hospital is responsible for funding the
non-federal share of the hospital's DSH payments from Pool Two (calculated as
described in paragraphs (3) and (4) of this subsection) to that
hospital.
(II) Transferring public
hospitals. Each governmental entity that owns and operates a transferring
public hospital is responsible for funding the non-federal share of the DSH
payments from Pool Two (calculated as described in paragraphs (3) and (4) of
this subsection) to its affiliated hospital and a portion of the non-federal
share of the DSH payments from Pool Two to private hospitals. For funding
payments to private hospitals, HHSC will initially suggest an amount in
proportion to each transferring public hospitals' individual state payment cap
relative to total state payment caps for all transferring public hospitals. If
an entity transfers less than the suggested amount, HHSC will take the steps
described in paragraph (4)(H) of this subsection.
(III) Following the calculations described in
paragraph (5) of this subsection, HHSC will notify each governmental entity of
its allocated intergovernmental transfer amount.
(3) Distribution and
payment calculation for Pools One and Two initial payment, Standard DSH
payment.
(A) HHSC will first determine the
state payment cap for the hospital in accordance with § 355.8066 of this
division, including any year-to-date uncompensated-care (UC) payments as
defined in §
355.8212 of this subchapter
(relating to Waiver Payments to Hospitals for Uncompensated Charity Care)
attributable to the state payment cap.
(B) All hospitals that meet DSH qualification
and eligibility criteria will be allocated an initial payment from Pools One
and Two. Initial payments will be allocated as follows.
(i) A hospital will receive a payment that is
the greater of:
(I) the hospital's Medicaid
shortfall; or
(II) a standard DSH
payment.
(ii) If the
amount calculated in clause (i) of this subparagraph is greater than the
hospital's state payment cap after considering the state share required to fund
the standard DSH payment, the hospital will receive their state payment
cap.
(C) HHSC will
determine the standard DSH payment amount described in subparagraph (B)(i)(II)
of this paragraph annually in an amount not to exceed $10,000,000 per hospital
for hospitals that have reported residents on their Medicare cost report or in
an amount not to exceed $10,000,000 per hospital for hospitals that have not
reported residents on their Medicare cost report.
(D) For a privately-owned institution of
mental disease their minimum payment amount may be reduced to ensure that
payments for all IMDs remain below the IMD cap.
(4) Distribution and payment calculation for
Pools One and Two secondary payment, percentage of costs covered.
(A) The costs considered for the percentage
of costs covered will be the costs included in the state payment cap in
paragraph (3)(A) of this subsection.
(B) The payments considered for the
percentage of costs covered will be the payments included in the state payment
cap in paragraph (3)(A) of this subsection plus the standard DSH payment after
considering the state share required to fund the hospital's payment.
Transferring hospitals will not have IGT paid for private hospitals for the
standard DSH payment included in their percentage of cost covered.
(C) The hospital's percentage of cost covered
will be equal to the payments in subparagraph (B) of this paragraph divided by
the cost in subparagraph (A) of this paragraph.
(D) HHSC will determine an allocation
percentage such that all hospitals receive a uniform percentage of their costs
covered to fully utilize Pools One and Two, Pass Two.
(E) If a hospital's percentage of cost
covered is greater than the allocation percentage, it will not be eligible for
a Pool One and Two secondary payment.
(F) If a hospital's percentage of cost
covered is lower than the allocation percentage, it will be allocated a
projected payment such that its percentage of cost covered is equal to the
uniform percentage in subparagraph (D) of this paragraph.
(G) If a governmental entity that operates or
is under a lease contract with a non-urban public hospital does not fully fund
the amount described in paragraph (2)(C)(iii)(I) of this subsection, HHSC will
reduce that portion of the hospital's Pool Two payment to the level supported
by the amount of the intergovernmental transfer.
(H) If a governmental entity that owns and
operates a transferring public hospital does not fully fund the amount
described in paragraph (2)(C)(iii)(II) of this subsection, HHSC will take the
following steps.
(i) Provide an opportunity
for the governmental entities affiliated with the other transferring public
hospitals to transfer additional funds to HHSC.
(ii) Recalculate total Pool Two payments for
transferring public hospitals and private hospitals based on actual IGT
provided by each transferring public hospital using a methodology determined by
HHSC.
(5) Pass
One distribution and payment calculation for Pool Three.
(A) HHSC will calculate the initial payment
from Pool Three as follows.
(i) For each
transferring public hospital:
(I) divide the
Pool Two payments from paragraphs (3) and (4) of this subsection by the FMAP
for the program year; and
(II)
multiply the result from subclause (I) of this clause by the non-federal
percentage. The result is the Pass One initial payment from Pool Three for
these hospitals.
(ii) For
each Non-urban public hospital:
(I) divide the
Pool Two payments from paragraphs (3) and (4) of this subsection by the FMAP
for the program year; and
(II)
multiply the result from subclause (I) of this clause by the non-federal
percentage. The result is the Pass One initial payment from Pool Three for
these hospitals.
(iii) For
all other hospitals, the Pass One initial payment from Pool Three is equal to
zero.
(B) HHSC will
calculate the secondary payment from Pool Three for each transferring public
hospital as follows.
(i) Sum the
intergovernmental transfers made on behalf of all transferring public
hospitals.
(ii) For each
transferring public hospital, divide the intergovernmental transfer made on
behalf of that hospital by the sum of the intergovernmental transfers made on
behalf of all transferring public hospitals from clause (i) of this
subparagraph.
(iii) Sum all Pass
One initial payments from Pool Three from subparagraph (A) of this
paragraph.
(iv) Subtract the sum
from clause (iii) of this subparagraph from the total value of Pool
Three.
(v) Multiply the result from
clause (ii) of this subparagraph by the result from clause (iv) of this
subparagraph for each transferring public hospital. The result is the Pass One
secondary payment from Pool Three for that hospital.
(vi) For all other hospitals, the Pass One
secondary payment from Pool Three is equal to zero.
(C) HHSC will calculate each hospital's total
Pass One payment from Pool Three by adding its Pass One initial payment from
Pool Three and its Pass One secondary payment from Pool Three.
(6) Pass Two - Secondary
redistribution of amounts in excess of state payment caps for Pool Three. For
each hospital that received a Pass One initial or secondary payment from Pool
Three, HHSC will sum the result from paragraph (4) of this subsection and the
result from paragraph (5) of this subsection to determine the hospital's total
projected DSH payment. In the event this sum plus any previous payment amounts
for the program year exceeds a hospital's state payment cap, the payment amount
will be reduced such that the sum of the payment amount plus any previous
payment amounts is equal to the state payment cap. HHSC will sum all resulting
excess funds and redistribute that amount to qualifying non-state-owned
hospitals eligible for payments from Pool Three that have projected payments,
including any previous payment amounts for the program year, below its state
payment caps. For each such hospital, HHSC will:
(A) subtract the hospital's projected DSH
payment plus any previous payment amounts for the program year from its state
payment cap;
(B) sum the results of
subparagraph (A) of this paragraph for all hospitals; and
(C) compare the sum from subparagraph (B) of
this paragraph to the total excess funds calculated for all non-state-owned
hospitals.
(i) If the sum of subparagraph (B)
of this paragraph is less than or equal to the total excess funds, HHSC will
pay all such hospitals up to the state payment cap.
(ii) If the sum of subparagraph (B) of this
paragraph is greater than the total excess funds, HHSC will calculate payments
to all such hospitals as follows.
(I) Divide
the result of subparagraph (A) of this paragraph for each hospital by the sum
from subparagraph (B) of this paragraph.
(II) Multiply the ratio from subclause (I) of
this clause by the sum of the excess funds from all non-state-owned
hospitals.
(III) Add the result of
subclause (II) of this clause to the projected total DSH payment for that
hospital to calculate a revised projected payment amount from Pools One, Two
and Three after Pass Two.
(7) Rural public hospital pool distribution
and payment calculation.
(A) HHSC will
determine an allocation percentage such that all rural public hospitals receive
a uniform percentage of the costs covered to fully utilize the rural public all
funds allocation. The percentage of cost covered will consider all previous DSH
payments for the program year, including the funds for the non-state
hospitals.
(B) If a hospital's
percentage of cost covered is greater than the allocation percentage, it will
not be eligible for any DSH payments from the rural public hospital
pool.
(C) If a hospital's
percentage of cost covered is lower than the allocation percentage, it will be
allocated a projected payment such that the percentage of cost covered is equal
to the uniform percentage in subparagraph (A) of this paragraph.
(D) Each rural public hospital is responsible
for funding the rural public payment multiplied by the non-federal percentage.
If the hospital does not fully fund the rural public payment, HHSC will reduce
the hospital's rural public payment to the level supported by the amount of the
intergovernmental transfer.
(8) Rural private hospital pool distribution
and payment calculation.
(A) If any funds
remain from the rural public pool described in paragraph (7) of this
subsection, HHSC will allocate a percentage of the remaining funds to rural
private hospitals.
(B) HHSC will
determine an allocation percentage such that all rural private hospitals
receive a uniform percentage of the costs covered to fully utilize the rural
public federal funds allocation. The percentage of cost covered will consider
all previous DSH payments for the program year, including the funds for the
non-state hospitals.
(C) If a
hospital's percentage of cost covered is greater than the allocation
percentage, it will not be eligible for any DSH payments from the rural private
hospital pool.
(D) If a hospital's
percentage of cost covered is lower than the allocation percentage, it will be
allocated a projected payment such that the percentage of cost covered is equal
to the uniform percentage in subparagraph (B) of this paragraph.
(E) Each governmental entity that owns and
operates a transferring public hospital is responsible for funding the
non-federal share of the DSH payments from the rural private hospital pool to
rural private hospitals. If an entity transfers less than the suggested amount,
HHSC will reduce the rural private hospitals' payments to the level supported
by the amount of the intergovernmental transfer.
(F) Any remaining funds from the percentage
allocation described in subparagraph (A) of this paragraph and any
undistributed funds from this pool will be redistributed back into the pool two
secondary payment as described in paragraph (4) of this subsection.
(9) Pass Three - If any portion
non-federal share of the available DSH funds is not fully funded, the remaining
allocation will be available to non-urban public hospitals that met the funding
requirements described in paragraph (2)(C)(iii)(I) of this subsection.
(A) For each non-urban public hospital that
met the funding requirements described in paragraph (2)(C)(iii)(I) of this
subsection, HHSC will determine the projected payment amount plus any previous
payment amounts for the program year calculated in accordance with paragraphs
(4) - (8) of this subsection, as appropriate.
(B) HHSC will subtract each hospital's
projected payment amount plus any previous payment amounts for the program year
from subparagraph (A) of this paragraph from each hospital's state payment cap
to determine the maximum additional DSH allocation.
(C) The governmental entity that owns the
hospital or leases the hospital may provide the non-federal share of funding
through an intergovernmental transfer to fund up to the maximum additional DSH
allocation calculated in subparagraph (B) of this paragraph. These governmental
entities will be queried by HHSC as to the amount of funding they intend to
provide through an intergovernmental transfer for this additional allocation.
The query may be conducted through e-mail, through the various hospital
associations or through postings on the HHSC website.
(D) Prior to processing any full or partial
DSH payment that includes an additional allocation of DSH funds as described in
this paragraph, HHSC will determine if such a payment would cause total DSH
payments for the full or partial payment to exceed the available DSH funds for
the payment as described in subsection (b)(2) of this section. If HHSC makes
such a determination, it will reduce the DSH payment amounts non-urban public
hospitals are eligible to receive through the additional allocation as required
to remain within the available DSH funds for the payment. This reduction will
be applied proportionally to all additional allocations. HHSC will:
(i) determine remaining available funds by
subtracting payment amounts for all DSH hospitals calculated in paragraphs (4)
- (8) of this subsection from the amount in subsection (g)(3) of this
section;
(ii) determine the total
additional allocation supported by an intergovernmental transfer by summing the
amounts supported by intergovernmental transfers identified in subparagraph (C)
of this paragraph;
(iii) determine
an available proportion statistic by dividing the remaining available funds
from clause (i) of this subparagraph by the total additional allocation
supported by an intergovernmental transfer from clause (ii) of this
subparagraph; and
(iv) multiply
each intergovernmental transfer supported payment from subparagraph (C) of this
paragraph by the proportion statistic determined in clause (iii) of this
subparagraph. The resulting product will be the additional allowable allocation
for the payment.
(E)
Non-urban public hospitals that do not meet the funding requirements of
paragraph (2)(C)(iii)(I) of this subsection are not eligible for participation
on Pass Three.
(10)
Reallocating funds if hospital closes, loses its license or eligibility, or
files bankruptcy. If a hospital closes, loses its license, loses its Medicare
or Medicaid eligibility, or files bankruptcy before receiving DSH payments for
all or a portion of a DSH program year, HHSC will determine the hospital's
eligibility to receive DSH payments going forward on a case-by-case basis. In
making the determination, HHSC will consider multiple factors including whether
the hospital was in compliance with all requirements during the program year
and whether it can meet the audit requirements described in subsection (o) of
this section. If HHSC determines that the hospital is not eligible to receive
DSH payments going forward, HHSC will notify the hospital and reallocate that
hospital's disproportionate share funds to state hospitals then amongst all DSH
hospitals in the same category that are eligible for additional
payments.
(11) HHSC will give
notice of the amounts determined in this subsection.
(12) The sum of the annual payment amounts
for state owned and non-state owned IMDs are summed and compared to the federal
IMD limit. If the sum of the annual payment amounts exceeds the federal IMD
limit, the non-state owned IMDs are reduced first on a pro-rata basis so that
the sum is equal to the federal IMD limit. In the case that the non-state owned
IMD payments are eliminated and the payments for the state owned IMD still
exceed the federal IMD limit, then the state owned IMD payments will be reduced
on a pro-rata basis until they equal the federal IMD limit.
(13) For any DSH program year for which HHSC
has calculated the hospital-specific limit described in §
355.8066(c)(2) of
this chapter, HHSC will compare the interim DSH payment amount as calculated in
subsection (h) of this section to the hospital-specific limit.
(A) HHSC will limit the payment amount to the
hospital-specific limit if the payment amount exceeds the hospital's
hospital-specific limit.
(B) HHSC
will redistribute dollars made available as a result of the capping described
in subparagraph (A) of this paragraph to providers eligible for additional
payments subject to the hospital-specific limits, as described in subsection
(l) of this section.
(i) Hospital located in a state or federal
natural disaster area. A hospital that is located in a county that is declared
a state or federal natural disaster area and that was participating in the DSH
program at the time of the natural disaster may request that HHSC determine its
DSH qualification and interim reimbursement payment amount under this
subsection for subsequent DSH program years. The following conditions and
procedures will apply to all such requests received by HHSC.
(1) The hospital must submit its request in
writing to HHSC with its annual DSH application.
(2) If HHSC approves the request, HHSC will
determine the hospital's DSH qualification using the hospital's data from the
DSH data year prior to the natural disaster. However, HHSC will calculate the
one percent Medicaid minimum utilization rate, the state payment cap, and the
payment amount using data from the DSH data year. The hospital-specific limit
will be computed based on the actual data for the DSH program year.
(3) HHSC will notify the hospital of the
qualification and interim reimbursement.
(j) HHSC determination of eligibility or
qualification. HHSC uses the methodology described in §355.8066(e) of this
division to verify the data and other information used to determine eligibility
and qualification under this section. The verification process includes:
(1) notice to hospitals of the data provided
to HHSC by Medicaid contractors; and
(2) an opportunity for hospitals to request
HHSC review of disputed data and other information the hospital believes is
erroneous.
(k)
Disproportionate share funds held in reserve.
(1) If HHSC has reason to believe that a
hospital is not in compliance with the conditions of participation listed in
subsection (e) of this section, HHSC will notify the hospital of possible
noncompliance. Upon receipt of such notice, the hospital will have 30 calendar
days to demonstrate compliance.
(2)
If the hospital demonstrates compliance within 30 calendar days, HHSC will not
hold the hospital's DSH payments in reserve.
(3) If the hospital fails to demonstrate
compliance within 30 calendar days, HHSC will notify the hospital that HHSC is
holding the hospital's DSH payments in reserve. HHSC will release the funds
corresponding to any period for which a hospital subsequently demonstrates that
it was in compliance. HHSC will not make DSH payments for any period in which
the hospital is out of compliance with the conditions of participation listed
in subsection (e)(1) and (2) of this section. HHSC may choose not to make DSH
payments for any period in which the hospital is out of compliance with the
conditions of participation listed in subsection (e)(3) - (7) of this
section.
(4) If a hospital's DSH
payments are being held in reserve on the date of the last payment in the DSH
program year, and no request for review is pending under paragraph (5) of this
subsection, the amount of the payments is not restored to the hospital, but is
divided proportionately among the hospitals receiving a last payment.
(5) Hospitals that have DSH payments held in
reserve may request a review by HHSC.
(A) The
hospital's written request for a review must:
(i) be sent to HHSC's Director of Hospital
Finance, Provider Finance Department;
(ii) be received by HHSC within 15 calendar
days after notification that the hospital's DSH payments are held in reserve;
and
(iii) contain specific
documentation supporting its contention that it is in compliance with the
conditions of participation.
(B) The review is:
(i) limited to allegations of noncompliance
with conditions of participation;
(ii) limited to a review of documentation
submitted by the hospital or used by HHSC in making its original determination;
and
(iii) not conducted as an
adversarial hearing.
(C)
HHSC will conduct the review and notify the hospital requesting the review of
the results.
(l) Recovery and redistribution of DSH funds.
As described in subsection (o) of this section, HHSC will recoup any
overpayment of DSH funds made to a hospital, including an overpayment that
results from HHSC error or that is identified in an audit. Recovered funds will
be redistributed as described in subsection (p) of this section.
(n) Voluntary withdrawal
from the DSH program.
(1) HHSC will recoup all
DSH payments made during the same DSH program year to a hospital that
voluntarily terminates its participation in the DSH program. HHSC will
redistribute the recouped funds according to the distribution methodology
described in subsection (l) of this section.
(2) A hospital that voluntarily terminates
from the DSH program will be ineligible to receive payments for the next DSH
program year after the hospital's termination.
(3) If a hospital does not apply for DSH
funding in the DSH program year following a DSH program year in which it
received DSH funding, even though it would have qualified for DSH funding in
that year, the hospital will be ineligible to receive payments for the next DSH
program year after the year in which it did not apply.
(4) The hospital may reapply to receive DSH
payments in the second DSH program year after the year in which it did not
apply.
(o) Audit process.
(1) Independent certified audit. HHSC is
required by the Social Security Act (Act) to annually complete an independent
certified audit of each hospital participating in the DSH program in Texas.
Audits will comply with all applicable federal law and directives, including
the Act, the Omnibus Budget and Reconciliation Act of 1993 (OBRA '93), the
Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA),
pertinent federal rules, and any amendments to such provisions.
(A) Each audit report will contain the
verifications set forth in 42 CFR §
455.304(d).
(B) The sources of data utilized by HHSC, the
hospitals, and the independent auditors to complete the DSH audit and report
include:
(i) The Medicaid cost
report;
(ii) Medicaid Management
Information System data; and
(iii)
Hospital financial statements and other auditable hospital accounting
records.
(C) A hospital
must provide HHSC or the independent auditor with the necessary information in
the time specified by HHSC or the independent auditor. HHSC or the independent
auditor will notify hospitals of the required information and provide a
reasonable time for each hospital to comply.
(D) A hospital that fails to provide
requested information or to otherwise comply with the independent certified
audit requirements may be subject to a withholding of Medicaid disproportionate
share payments or other appropriate sanctions.
(E) HHSC will recoup any overpayment of DSH
funds made to a hospital that is identified in the independent certified audit
as described in this subsection and will redistribute the recouped funds to DSH
providers in accordance with subsection (p) that received interim payments,
subject to the hospital-specific limits, as described in subsections (q) and
(l) of this section.
(F) Review of
preliminary audit finding of overpayment.
(i)
Before finalizing the audit, HHSC will notify each hospital that has a
preliminary audit finding of overpayment.
(ii) A hospital that disputes the finding or
the amount of the overpayment may request a review in accordance with the
following procedures.
(I) A request for review
must be received by the HHSC Provider Finance Department in writing by regular
mail, hand delivery or special mail delivery, from the hospital within 30
calendar days of the date the hospital receives the notification described in
clause (i) of this subparagraph.
(II) The request must allege the specific
factual or calculation errors the hospital contends the auditors made that, if
corrected, would change the preliminary audit finding.
(III) All documentation supporting the
request for review must accompany the written request for review or the request
will be denied.
(IV) The request
for review may not dispute the federal audit requirements or the audit
methodologies.
(iii) The
review is:
(I) limited to the hospital's
allegations of factual or calculation errors;
(II) solely a data review based on
documentation submitted by the hospital with its request for review or that was
used by the auditors in making the preliminary finding; and
(III) not an adversarial hearing.
(iv) HHSC will submit to the
auditors all requests for review that meet the procedural requirements
described in clause (ii) of this subparagraph.
(I) If the auditors agree that a factual or
calculation error occurred and change the preliminary audit finding, HHSC will
notify the hospital of the revised finding.
(II) If the auditors do not agree that a
factual or calculation error occurred and do not change the preliminary audit
finding, HHSC will notify the hospital that the preliminary finding stands and
will initiate recoupment proceedings as described in this section.
(2) Additional
audits. HHSC may conduct or require additional audits.
(p) Redistribution of Recouped Funds.
Following the recoupments described in subsection (o) of this section, HHSC
will redistribute the recouped funds to eligible providers. To receive a
redistributed payment, the hospital must be in compliance with all requirements
during the program year, meet the audit requirements described in subsection
(o) of this section, and have already received a DSH payment in that DSH year
of at least one dollar. For purposes of this subsection, an eligible provider
is a provider that has room remaining in its final remaining Hospital-specific
limit (HSL) calculated in the audit findings described in subsection (o) of
this section after considering all DSH payments made for that program year.
Recouped funds from state providers will be redistributed proportionately to
eligible state providers based on the percentage that each eligible state
provider's remaining final HSL (calculated in the audit findings as described
in subsection (o) of this section) is of the total remaining final HSL
(calculated in the audit findings described in subsection (o) of this section)
of all eligible state providers. Recouped funds from non-state providers may be
redistributed proportionately to state providers or eligible non-state
providers as follows.
(1) For DSH program
years 2011-2017 (October 1, 2011 - September 30, 2017) and for DSH program
years 2020 and after (October 1, 2019 and after), HHSC will use the following
methodology to redistribute recouped funds:
(A) the non-federal share will be returned to
the governmental entity that provided it during the program year;
(B) the federal share will be distributed
proportionately among all non-state providers eligible for additional payments
that have a source of the non-federal share of the payments; and
(C) the federal share that does not have a
source of non-federal share will be returned to CMS.
(2) For DSH program years 2018-2019 (October
1, 2017 - September 30, 2019), HHSC will use the following methodology to
redistribute recouped funds.
(A) To calculate
a weight that will be applied to all non-state providers, HHSC will divide the
final hospital-specific limit described in §355.8066(c)(2) of this
division by the final hospital-specific limit described in §355.8066(c)(2)
of this division that has not offset payments for third-party and Medicare
claims and encounters where Medicaid was a secondary payer. HHSC will add 1 to
the quotient. Any non-state provider that has a resulting weight of less than 1
will receive a weight of 1.
(B)
HHSC will make a first pass allocation by multiplying the weight described in
subsection (p)(2)(A) of this section by the final remaining HSL calculated in
the audit findings described in subsection (o) of this section. HHSC will
divide the product by the total remaining HSLs for all non-state providers.
HHSC will multiply the quotient by the total amount of recouped dollars
available for redistribution described in subsection (p)(1) of this
section.
(C) After the first pass
allocation, HHSC will cap non-state providers at its final remaining HSL. A
second pass allocation will occur in the event non-state providers were paid
over its final remaining HSL after the weight in subsection (p)(2)(A) of this
section was applied. HHSC will calculate the second pass by dividing the final
remaining HSL calculated in the audit findings described in subsection (o) of
this section by the total remaining HSLs for all non-state providers after
accounting for first pass payments. HHSC will multiply the quotient by the
total amount of funds in excess of total HSLs for non-state providers capped at
its total HSL.
(q) Advance Payments
(1) In a DSH program year in which payments
will be delayed pending data submission or for other reasons, HHSC may make
advance payments to hospitals that meet the eligibility requirements described
in subsection (c) of this section, meet a qualification in subsection (d) of
this section, meet the conditions of participation in subsection (e) of this
section, and submitted an acceptable disproportionate share hospital
application for the preceding DSH program year from which HHSC calculated an
annual maximum disproportionate share hospital payment amount for that
year.
(2) Advance payments are
considered to be prior period payments.
(3) A hospital that did not submit an
acceptable disproportionate share hospital application for the preceding DSH
program year is not eligible for an advance payment.
(4) If a partial year disproportionate share
hospital application was used to determine the preceding DSH program year's
payments, data from that application may be annualized for use in computation
of an advance payment amount.
(5)
The amount of the advance payments:
(A) are
divided into three payments prior to a hospital receiving its final DSH payment
amount;
(B) in DSH program years
2020 and after a provider that received a payment in the previous DSH program
year is eligible to receive an advanced payment, and the calculations for
advanced payment 1, 2, and 3 are as follows:
(i) HHSC determines a percentage of the pool
to pay out in the advanced payments; and
(ii) the pool amount is fed through the
previous DSH program year calculation to determine the advanced
payments;
(C) in DSH
program year 2024, HHSC will run the application data for hospital applications
through an updated DSH qualification and calculation file to determine advanced
payment eligibility and amount to account for rule changes between program year
2023 and 2024 to prevent recoupments; and
(D) HHSC will determine the payment
allocation for the advances for 2025 and subsequent years by calculating a
percentage based on a hospital's payment in the preceding year divided by the
sum of all other hospitals' payment in the preceding year that are eligible for
an advance payment.