Reimbursement Methodology for PPECC

TO:
Medical Care Advisory Committee
DATE:
November 7, 2014
FROM:
Laura Marble
Rate Analyst for Long-Term Services and Supports
Agenda Item No. 15
SUBJECT: The Texas Health and Human Services Commission (HHSC) proposes new
§355.9080, concerning Reimbursement Methodology for Prescribed Pediatric Extended Care
Centers, under Title 1, Part 15, Chapter 355, Subchapter M, Division 6,
BACKGROUND:
Initiative
Federal Requirement
Legislative Requirement
Other: HHSC
HHSC, under its authority and responsibility to administer and implement rates, proposes new
§355.9080 to establish a reimbursement methodology for Prescribed Pediatric Extended Care
Centers (PPECCs). Health and Safety Code chapter 248A, as adopted by the Texas Legislature
in 2013, establishes PPECCs in Texas. See Act of May 22, 2013, 83d Leg., R.S., ch. 1168, §1,
2013 Tex. Gen. Laws 2898, 2893 (S.B. 492). A PPECC provides non-residential, facility-based
care as an alternative to private-duty nursing (PDN) for individuals under the age of 21 with
complex medical needs. Also in 2013, by the adoption of the same bill, the Texas Legislature
adopted Human Resources Code section 32.024(jj), requiring HHSC to establish PPECCs as a
separate Medicaid provider type and limiting the HHSC-established reimbursement rate to no
more than 70 percent of the average hourly PDN rate. See id. §§6, 8(c), 2013 Tex. Gen. Laws at
2907.
This proposed new rule describes the reimbursement methodology for PPECCs. HHSC may
require a contracted provider to submit a cost report for any service provided through this
program if necessary to obtain financial and statistical data upon which to base reimbursement; if
HHSC requires a cost report, the provider must follow cost reporting and allowable and
unallowable cost guidelines. HHSC may excuse a provider from the requirement to submit a cost
report in certain circumstances.
ISSUES AND ALTERNATIVES:
Potential providers of PPECC services may object to limiting the reimbursement for the new
service to 70 percent of the reimbursement for Private Duty Nursing Services. It is S.B. 492 that
imposes this limitation, however; thus, HHSC has no alternative.
STAKEHOLDER INVOLVEMENT:
HHSC will share the proposed rule with stakeholders.
FISCAL IMPACT:
None
Yes (if yes, please complete table below)
RULE DEVELOPMENT SCHEDULE:
November 7, 2014
November 21, 2014
February 20, 2015
May 22, 2015
June 1, 2015
Present to the Medical Care Advisory Committee
Present to HHSC Council
Publish proposed rules in Texas Register
Publish adopted rules in Texas Register
Effective date
REQUESTED ACTION:
The MCAC recommends approval of the proposed rules for publication.
The Council recommends approval of these rules.
Information Only
TITLE 1
PART 15
CHAPTER 355
SUBCHAPTER M
DIVISION 6
RULE §355.9080
ADMINISTRATION
TEXAS HEALTH AND HUMAN SERVICES COMMISSION
REIMBURSEMENT RATES
MISCELLANEOUS PROBRAMS
PRESCRIBED PEDIATRIC EXTENDED CARE CENTERS
Reimbursement Methodology for Prescribed Pediatric Extended Care
Centers
PROPOSED PREAMBLE
The Texas Health and Human Services Commission (HHSC) proposes new §355.9080,
concerning Reimbursement Setting Methodology, under Title 1 of the Texas Administrative
Code (TAC), Part 15, Chapter 355, Subchapter M.
Background and Justification
HHSC, under its authority and responsibility to administer and implement rates, proposes new
§355.9080 to establish a reimbursement methodology for Prescribed Pediatric Extended Care
Centers (PPECCs). Health and Safety Code chapter 248A, as adopted by the Texas Legislature
in 2013, establishes PPECCs in Texas. See Act of May 22, 2013, 83d Leg., R.S., ch. 1168, §1,
2013 Tex. Gen. Laws 2898, 2893 (S.B. 492). A PPECC provides non-residential, facility-based
care as an alternative to private-duty nursing (PDN) for individuals under the age of 21 with
complex medical needs. Also in 2013, by the adoption of the same bill, the Texas Legislature
adopted Human Resources Code section 32.024(jj), requiring HHSC to establish PPECCs as a
separate Medicaid provider type and limiting the HHSC-established reimbursement rate to no
more than 70 percent of the average hourly PDN rate. See id. §§6, 8(c), 2013 Tex. Gen. Laws at
2907.
This proposed new rule describes the reimbursement methodology for PPECCs. HHSC may
require a contracted provider to submit a cost report for any service provided through this
program if necessary to obtain financial and statistical data upon which to base reimbursement; if
HHSC requires a cost report, the provider must follow cost reporting and allowable and
unallowable cost guidelines. HHSC may excuse a provider from the requirement to submit a cost
report in certain circumstances.
HHSC will propose and adopt separate rules adding PPECCs as a Medicaid provider type.
Section-by-Section Summary
Proposed §355.9080(a) establishes that the payment rates for the PPECC program are developed
based on payment rates determined for other programs that provide similar services. If payment
rates are not available from other programs that provide similar services, HHSC will model rates
based on a pro forma analysis. A pro forma analysis makes assumptions about staff salaries and
service requirements and estimates the basic types and costs of products and services necessary
to deliver services that meet federal and state requirements. The payment rate is limited to 70
percent of the average PDN rate under the Texas Health Steps Program.
Proposed §355.9080(b) establishes that 1 Tex. Admin. Code §355.101 (relating to Introduction)
and §355.105(g) (relating to General Reporting and Documentation Requirements, Methods, and
Procedures) govern payment rate development under the PPECC program.
Proposed §355.9080(c) states that, if HHSC needs to gather adequate financial and statistical
data to determine a proper reimbursement rate, HHSC may require a contracted provider to
submit a cost report for any service provided through the PPECC program. If HHSC requires a
cost report, the provider must follow the cost reporting guidelines specified in 1 Tex. Admin.
Code §355.102 (relating to General Principles of Allowable and Unallowable Costs); §355.103
(relating to Specifications for Allowable and Unallowable Costs); and §355.105. A provider is
excused from the requirement to submit a cost report if the provider meets one or more of the
conditions in 1 Tex. Admin. Code §355.105(b)(4)(D).
Fiscal Note
Greta Rymal, Deputy Executive Commissioner for Financial Services, has determined that
during the first five-year period the proposed rules are in effect, there will be no fiscal impact to
state government or local governments as a result of enforcing or administering the section.
Ms. Rymal does not anticipate that there will be any economic cost to persons who are required
to comply with the proposed amendment during the first five years the rule will be in effect. The
amendment will not affect local employment.
Small and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on small businesses or microbusinesses as a result of enforcing or administering the amendment. The implementation of the
proposed rule amendment does not require any change in business practices or any additional
cost to contracted providers.
Public Benefit
Pam McDonald, Director of Rate Analysis for HHSC, has determined that for each year of the
first five years the proposed rule is in effect, the anticipated public benefit is that the rule will
describe the reimbursement methodology used to develop rates for this program.
Regulatory Analysis
HHSC has determined that this proposal is not a “major environmental rule” as defined by
§2001.0225 of the Texas Government Code. A “major environmental rule” is defined to mean a
rule the specific intent of which is to protect the environment or reduce risk to human health
from environmental exposure and that may adversely affect, in a material way, the economy, a
sector of the economy, productivity, competition, jobs, the environment, or the public health and
safety of a state or a sector of the state. This proposal is not specifically intended to protect the
environment or reduce risks to human health from environmental exposure.
Takings Impact Assessment
HHSC has determined that this proposal does not restrict or limit an owner’s right to his or her
property that would otherwise exist in the absence of government action and, therefore, does not
constitute a taking under §2007.043 of the Government Code.
Public Comment
Questions about the content of this proposal may be directed to Laura Marble in the HHSC Rate
Analysis Department by telephone at (512) 707-6078. Written comments on the proposal may
be submitted to Ms. Marble by fax to (512) 730-7475; by e-mail to
[email protected]; or by mail to HHSC Rate Analysis, Mail Code H400, P.O. Box
149030, Austin, Texas, 78714-9030, within 30 days of publication of this proposal in the Texas
Register.
Statutory Authority
These new rules are proposed under Texas Government Code §531.033, which provides the
Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources
Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the
authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas
Human Resources Code §32.024(jj), which requires HHSC to allow PPECCs to enroll as
Medicaid providers.
The proposed new rules affect Texas Human Resources Code Chapter 32 and Texas Government
Code Chapter 531. No other statutes, articles, or codes are affected by this proposal.
This agency hereby certifies that this proposal has been reviewed by legal counsel and found to
be within the agency's legal authority to adopt.
Legend:
Single Underline = Proposed new language
[Strikethrough and brackets] = Current language proposed for deletion
Regular print = Current language
(No change.) = No changes are being considered for the designated subdivision
TITLE 1
PART 15
CHAPTER 355
SUBCHAPTER M
DIVISION 6
RULE §355.9080
ADMINISTRATION
TEXAS HEALTH AND HUMAN SERVICES COMMISSION
REIMBURSEMENT RATES
MISCELLANEOUS PROGRAMS
PRESCRIBED PEDIATRIC EXTENDED CARE CENTERS
Reimbursement Methodology for Prescribed Pediatric Extended Care
Centers
(a) Payment rate determination. Payment rates are developed based on payment rates determined
for other programs that provide similar services. If payment rates are not available from other
programs that provide similar services, payment rates are determined using a pro- forma analysis
in accordance with §355.105(h) of this chapter (relating to General Reporting and
Documentation Requirements, Methods, and Procedures). The payment rate cannot be more than
70 percent of the average Private Duty Nursing rate under the Texas Health Steps (THSteps)
program.
(b) Related information. The information in §355.101 of this chapter (relating to Introduction)
and §355.105(g) of this chapter applies to this section.
(c) Reporting of cost. To gather adequate financial and statistical information upon which to base
reimbursement, HHSC may require a contracted provider to submit a cost report for any service
provided through the Prescribed Pediatric Extended Care Centers program.
(1) If HHSC requires the provider to submit a cost report, the provider must follow the cost
reporting guidelines in §355.105 of this chapter and the guidelines for determining whether a
cost is allowable or unallowable in §355.102 of this chapter (relating to General Principles of
Allowable and Unallowable Costs) and §355.103 of this chapter (relating to Specifications for
Allowable and Unallowable Costs).
(2) A provider is excused from the requirement to submit a cost report if the provider meets one
or more of the conditions in §355.105(b)(4)(D) of this chapter.

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