Texas Administrative Code
Title 1 - ADMINISTRATION
Part 15 - TEXAS HEALTH AND HUMAN SERVICES COMMISSION
Chapter 355 - REIMBURSEMENT RATES
Subchapter J - PURCHASED HEALTH SERVICES
Division 4 - MEDICAID HOSPITAL SERVICES
Section 355.8070 - Hospital Augmented Reimbursement Program
Universal Citation: 1 TX Admin Code § 355.8070
Current through Reg. 50, No. 13; March 28, 2025
(a) Introduction. This section establishes the Hospital Augmented Reimbursement (HARP) Program, wherein the Texas Health and Human Services Commission (HHSC) directs payments to certain providers that serve Texas Medicaid fee-for-service patients, including eligible non-state government owned hospitals, private hospitals, state-owned hospitals, state government-owned Institutions for Mental Diseases (IMDs), and private IMDs. This section also describes the methodology used by HHSC to calculate and administer such payments. A provider is eligible for a payment under this section only if HHSC has submitted and CMS has approved a state plan amendment permitting HHSC to make payments under this section to the hospital class to which the provider belongs.
(b) Definitions. The following definitions apply when the terms are used in this section.
(1) Fee-for-Service (FFS)--A system of the
health insurance payment in which a health care provider is paid a fee by HHSC
through the contracted Medicaid claims administrator directly, for each service
rendered. For Texas Medicaid purposes, fee-for-service excludes any service
rendered under a managed care program through a managed care
organization.
(2) Inpatient
hospital services--Services ordinarily furnished in a hospital for the care and
treatment of inpatients under the direction of a physician or dentist, or a
subset of these services identified by HHSC. Inpatient hospital services do not
include services furnished in a skilled nursing facility, intermediate care
facility services furnished by a hospital with swing-bed approval, or any other
services that HHSC determines should not be subject to payment.
(3) Intergovernmental transfer (IGT)--A
transfer of public funds from another state agency or a non-state governmental
entity to HHSC.
(4) Medicare
payment gap--The difference between what Medicare is estimated to pay for the
services and what Medicaid actually paid for the same services from the most
recent FFS upper payment limit (UPL) demonstration.
(5) Nominal charge provider--A provider that
charges an amount equal to 60 percent or less of the reasonable cost of service
or services. Nominal charges mean Medicare charges are at or below a ratio
equal to 0.6 of reasonable costs which equates to a Medicare ratio of cost to
charge (RCC) that exceeds 1.67. Charges and costs are based on inpatient
hospital services only.
(6)
Non-state government-owned and operated hospital--A hospital that is owned and
operated by a local government entity, including but not limited to a city,
county, or hospital district.
(7)
Outpatient hospital services--Preventive, diagnostic, therapeutic,
rehabilitative, or palliative services that are furnished to outpatients of a
hospital under the direction of a physician or dentist, or a subset of these
services identified by HHSC.
(8)
Private hospital--Any hospital that is not government-owned and
operated.
(9) Private Institution
for Mental Diseases (IMD)--A hospital that is primarily engaged in providing
psychiatric diagnosis, treatment or care of individuals with mental illness and
that is not government-owned and operated.
(10) Program period--Each program period is
equal to a federal fiscal year beginning October 1 and ending September 30 of
the following year.
(11)
Prospective Payment System--A method of reimbursement in which payment is made
based on a predetermined, fixed amount.
(12) Sponsoring governmental entity--A state
or non-state governmental entity that agrees to transfer to HHSC some or all of
the non-federal share of program expenditures under this subchapter.
(13) State government-owned hospital--Any
hospital owned by the state of Texas that is not considered an IMD.
(14) State government-owned IMD--A hospital
that is primarily engaged in providing psychiatric diagnosis, treatment or care
of individuals with mental illness and that is owned by the state of Texas that
is considered an IMD.
(c) Participation requirements. As a condition of participation, all hospitals participating in the program must allow for the following.
(1) The hospital must
submit a properly completed enrollment application by the due date determined
by HHSC. The enrollment period must be no less than 15 business days, and the
final date of the enrollment period will be at least nine days prior to the
intergovernmental transfer (IGT) notification.
(2) If a provider has changed ownership in
the past five years in a way that impacts eligibility for this program, the
provider must submit to HHSC, upon demand, copies of contracts it has with
third parties with respect to the transfer of ownership or the management of
the provider and which reference the administration of, or payment from, this
program.
(d) Payments for non-state government-owned and operated hospitals.
(1) Eligible hospitals. Payments under this
subsection will be limited to hospitals defined as "non-state government owned
and operated hospital" that are enrolled in Medicare and participate in Texas
Medicaid fee-for-service.
(2)
Non-federal share of program payments. The non-federal share of the payments is
funded through IGTs from sponsoring governmental entities. No state general
revenue is available to support the program.
(A) HHSC will communicate suggested IGT
responsibilities. Suggested IGT responsibilities will be based on the maximum
dollars to be available under the program for the program period as determined
by HHSC. HHSC will also communicate estimated revenues each enrolled hospital
could earn under the program for the program period with those estimates based
on HHSC's suggested IGT responsibilities.
(B) HHSC will issue an IGT notification to
specify the date that IGT is requested to be transferred not fewer than 14
business days before IGT transfers are due. HHSC may post the IGT deadlines and
other associated information on HHSC's website, send the information through
the established Medicaid notification procedures used by HHSC's fiscal
intermediary, send through other direct mailing, send through GovDelivery, or
provide the information to the hospital associations to disseminate to their
member hospitals.
(3)
Payment Methodology. To determine each participating non-state government-owned
and operated hospital's payment under this section, HHSC will sum the
hospital's inpatient FFS Medicare payment gap and the hospital's outpatient FFS
Medicare payment gap. HARP payments will be limited such that total inpatient
Medicaid payments including supplemental payments and the portion of HARP
payments for the inpatient FFS Medicare payment gap do not exceed Medicaid
charges. Nominal charge providers as defined in subsection (b) of this section
are exempt from this limitation.
(e) Payments for private hospitals.
(1) Eligible hospitals. Payments under this
subsection will be limited to hospitals defined as "private hospital" in
subsection (b) of this section that are enrolled in Medicare and participate in
Texas Medicaid fee-for-service.
(2)
Non-federal share of program payments. The non-federal share of the payments is
funded through IGTs from sponsoring governmental entities. No state general
revenue is available to support the program.
(A) HHSC must receive the non-federal portion
of reimbursement for HARP through a method approved by HHSC and Centers for
Medicare & Medicaid Services (CMS) for reimbursement through this
program.
(B) A hospital under this
subsection must designate a single local governmental entity to provide the
non-federal share of the payment through a method determined by HHSC. If the
single local governmental entity transfers less than the full non-federal share
of a hospital's payment amount calculated in any paragraph under this
subchapter, HHSC will recalculate that specific hospital's payment based on the
amount of the non-federal share actually transferred.
(C) HHSC will communicate suggested IGT
responsibilities. Suggested IGT responsibilities will be based on the maximum
dollars to be available under the program for the program period as determined
by HHSC. HHSC will also communicate estimated revenues each enrolled hospital
could earn under the program for the program period with those estimates based
on HHSC's suggested IGT responsibilities.
(D) HHSC will issue an IGT notification to
specify the date that IGT is requested to be transferred not fewer than 14
business days before IGT transfers are due. HHSC may post the IGT deadlines and
other associated information on HHSC's website, send the information through
the established Medicaid notification procedures used by HHSC's fiscal
intermediary, send through other direct mailing, send through GovDelivery, or
provide the information to the hospital associations to disseminate to their
member hospitals.
(3)
Payment Methodology. To determine each participating private hospital's payment
under this section, HHSC will sum the hospital's inpatient FFS Medicare payment
gap and the hospital's outpatient FFS Medicare payment gap. HARP payments will
be limited such that total inpatient Medicaid payments including supplemental
payments and the portion of HARP payments for the inpatient FFS Medicare
payment gap do not exceed Medicaid charges. Nominal charge providers as defined
in subsection (b) of this section are exempt from this limitation.
(f) Payments for state government-owned hospitals.
(1) Eligible
hospitals. Payments under this subsection will be limited to hospitals defined
as "state government-owned hospital" in subsection (b) of this section that are
enrolled in Medicare and participate in Texas Medicaid
fee-for-service.
(2) Non-federal
share of program payments. The non-federal share of the payments is funded
through IGTs from sponsoring governmental entities. No state general revenue is
available to support the program.
(A) HHSC
must receive the non-federal portion of reimbursement for HARP through a method
approved by HHSC and CMS for reimbursement through this program.
(B) A hospital under this subsection must
designate a single local governmental entity to provide the non-federal share
of the payment through a method determined by HHSC. If the single local
governmental entity transfers less than the full non-federal share of a
hospital's payment amount calculated in any paragraph under this subchapter,
HHSC will recalculate that specific hospital's payment based on the amount of
the non-federal share actually transferred.
(C) HHSC will communicate suggested IGT
responsibilities. Suggested IGT responsibilities will be based on the maximum
dollars to be available under the program for the program period as determined
by HHSC. HHSC will also communicate estimated revenues each enrolled hospital
could earn under the program for the program period with those estimates based
on HHSC's suggested IGT responsibilities.
(D) HHSC will issue an IGT notification to
specify the date that IGT is requested to be transferred not fewer than 14
business days before IGT transfers are due. HHSC will publish the IGT deadlines
and all associated dates on its Internet website.
(3) Payment Methodology.
(A) To determine payment under this section
for each participating state-owned hospital reimbursed through Prospective
Payment System (PPS), HHSC will sum the hospital's inpatient FFS Medicare
payment gap and the hospital's outpatient FFS Medicare payment gap. HARP
payments will be limited such that total inpatient Medicaid payments including
supplemental payments and the portion of HARP payments for the inpatient FFS
Medicare payment gap do not exceed Medicaid charges. Nominal charge providers
as defined in subsection (b) of this section are exempt from this
limitation.
(B) To determine
payment under this section for each participating state-owned hospital not
reimbursed through Prospective Payment System (PPS), HHSC will use the
hospital's FFS outpatient Medicare payment gap.
(g) Payments for state government-owned IMDs.
(1) Eligible hospitals.
(A) Payments under this subsection will be
limited to hospitals defined as "state government-owned IMD" in subsection (b)
of this section that are enrolled in Medicare and participate in Texas Medicaid
fee-for-service.
(B) The hospital
must have submitted at least one adjudicated FFS Medicaid claim for each
reporting period to be eligible for payment.
(2) Non-federal share of program payments.
The non-federal share of the payments is funded through IGTs from sponsoring
governmental entities. No state general revenue is available to support the
program.
(A) HHSC must receive the non-federal
portion of reimbursement for HARP through a method approved by HHSC and CMS for
reimbursement through this program.
(B) A hospital under this subsection must
designate a single local governmental entity to provide the non-federal share
of the payment through a method determined by HHSC. If the single local
governmental entity transfers less than the full non-federal share of a
hospital's payment amount calculated in any paragraph under this subchapter,
HHSC will recalculate that specific hospital's payment based on the amount of
the non-federal share actually transferred.
(C) HHSC will communicate suggested IGT
responsibilities. Suggested IGT responsibilities will be based on the maximum
dollars to be available under the program for the program period as determined
by HHSC. HHSC will also communicate estimated revenues each enrolled hospital
could earn under the program for the program period with those estimates based
on HHSC's suggested IGT responsibilities.
(D) HHSC will issue an IGT notification to
specify the date that IGT is requested to be transferred not fewer than 14
business days before IGT transfers are due. HHSC may post the IGT deadlines and
other associated information on HHSC's website, send the information through
the established Medicaid notification procedures used by HHSC's fiscal
intermediary, send through other direct mailing, send through GovDelivery, or
provide the information to the hospital associations to disseminate to their
member hospitals.
(3)
Payment Methodology. To determine each participating state government-owned IMD
hospital's payment under this section, HHSC will use the hospital's inpatient
FFS Medicare payment gap. HARP payments will be limited such that total
inpatient Medicaid payments including supplemental payments and the portion of
HARP payments for the inpatient FFS Medicare payment gap do not exceed Medicaid
charges. Nominal charge providers as defined in subsection (b) of this section
are exempt from this limitation.
(h) Payments for private IMDs.
(1) Eligible hospitals.
(A) Payments under this subsection will be
limited to hospitals defined as "private IMD" in subsection (b) of this section
that participate in Texas Medicaid fee-for-service.
(B) The hospital must have submitted at least
one adjudicated FFS Medicaid claim for each reporting period to be eligible for
payment.
(2) Non-federal
share of program payments. The non-federal share of the payments is funded
through IGTs from sponsoring governmental entities. No state general revenue is
available to support the program.
(A) HHSC
must receive the non-federal portion of reimbursement for HARP through a method
approved by HHSC and CMS for reimbursement through this program.
(B) A hospital under this subsection must
designate a single local governmental entity to provide the non-federal share
of the payment through a method determined by HHSC. If the single local
governmental entity transfers less than the full non-federal share of a
hospital's payment amount calculated in any paragraph under this subchapter,
HHSC will recalculate that specific hospital's payment based on the amount of
the non-federal share actually transferred.
(C) HHSC will communicate suggested IGT
responsibilities. Suggested IGT responsibilities will be based on the maximum
dollars to be available under the program for the program period as determined
by HHSC. HHSC will also communicate estimated revenues each enrolled hospital
could earn under the program for the program period with those estimates based
on HHSC's suggested IGT responsibilities.
(D) HHSC will issue an IGT notification to
specify the date that IGT is requested to be transferred not fewer than 14
business days before IGT transfers are due. HHSC may post the IGT deadlines and
other associated information on HHSC's website, send the information through
the established Medicaid notification procedures used by HHSC's fiscal
intermediary, send through other direct mailing, send through GovDelivery, or
provide the information to the hospital associations to disseminate to their
member hospitals.
(3)
Payment Methodology. To determine each participating private IMD hospital's
payment under this section, HHSC will use the hospital's inpatient FFS Medicare
payment gap. HARP payments will be limited such that total inpatient Medicaid
payments including supplemental payments and the portion of HARP payments for
the inpatient FFS Medicare payment gap do not exceed Medicaid charges. Nominal
charge providers as defined in subsection (b) of this section are exempt from
this limitation.
(i) Changes in operation. If an enrolled hospital closes voluntarily or ceases to provide hospital services in its facility, the hospital must notify the HHSC Provider Finance Department by hand delivery, United States (U.S.) mail, or special mail delivery within 10 business days of closing or ceasing to provide hospital services. Notification is considered to have occurred when the HHSC Provider Finance Department receives the notice.
(j) Reconciliation. HHSC will reconcile the amount of the non-federal funds actually expended under this section during the program period with the amount of funds transferred to HHSC by the sponsoring governmental entities for that same period. If the amount of non-federal funds actually expended under this section is less than the amount transferred to HHSC, HHSC will refund the balance proportionally to how it was received.
(k) Payments under this section will be made on a semi-annual basis.
Disclaimer: These regulations may not be the most recent version. Texas may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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