SECTION 355.458. Supplemental Payments to Non-State Government-Owned Facilities

(a) Introduction. Notwithstanding other provisions of this subchapter and subject to the availability of funds, supplemental payments are available under this section for intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID) services provided by eligible non-state government-owned ICFs/IID.

(b) Definitions. When used in this section, the following definitions apply:

(1) Aggregate upper payment limit--A reasonable estimate of the amount that would be paid for the services furnished by non-state government-owned ICFs/IID under Medicare payment principles, as calculated in subsection (f) of this section.

(2) HHSC--The Texas Health and Human Services Commission or its designee.

(3) Intergovernmental transfer (IGT)--A transfer of public funds from a governmental entity to HHSC.

(4) Medicaid supplemental payment limit--The maximum supplemental payment available to a participating non-state government-owned ICF/IID for a specific Medicaid supplemental payment limit calculation period as calculated in subsection (f) of this section.

(5) Medicaid supplemental payment limit calculation period--The federal fiscal quarter determined by HHSC for which supplemental payment amounts are calculated.

(6) Non-state government-owned ICF/IID--An ICF/IID where a non-state governmental entity is party to the facility's Medicaid contract.

(7) Non-state governmental entity--A community center established under Chapter 534, Subchapter A of the Texas Health and Safety Code or a hospital authority, hospital district, healthcare district, city, or county.

(8) Public funds--Funds derived from taxes, assessments, levies, investments, and other public revenues within the sole and unrestricted control of the governmental entity that is party to the Medicaid contract of the ICF/IID identified in subsection (c) of this section. 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.

(c) Eligible ICFs/IID.

(1) Supplemental payments are available under this section to all non-state government-owned ICFs/IID that comply with the requirements described in subsection (d) of this section.

(2) An ICF/IID participating in this supplemental payment program must notify the HHSC Provider Finance Department of changes in ownership that may affect the ICF/IID's continued eligibility within 30 days after such change.

(3) An ICF/IID that has not received a payment under this supplemental payment program for four consecutive quarters is ineligible for future supplemental payments unless the ICF/IID applies again for the supplemental payment program in accordance with subsection (d) of this section.

(d) Required application. Before a non-state government-owned ICF/IID may receive supplemental payments under this section, the appropriate governmental entity must certify certain facts, representations, and assurances regarding program requirements.

(1) The appropriate governmental entity must certify the following facts on a form prescribed by HHSC before the first day of the next scheduled Medicaid supplemental payment limit calculation period in order for the ICF/IID to receive a supplemental payment for that period:

(A) That a non-state governmental entity is party to the ICF/IID's Medicaid contract.

(B) That all funds transferred to HHSC via IGT for use as the state share of supplemental payments are public funds.

(C) That no part of any supplemental payment paid to the ICF/IID under this section will be used to pay a contingent fee, consulting fee, or legal fee associated with the ICF/IID's receipt of the supplemental funds.

(D) That the person signing the certification on behalf of the ICF/IID is legally authorized to bind the ICF/IID and to certify the matters described in the application; and

(2) The ICF/IID is eligible for supplemental payments for Medicaid supplemental payment limit calculation periods that begin after HHSC receives completed application forms from the appropriate governmental entity.

(e) Source of funding.

(1) State funding for supplemental payments authorized under this section is limited to and obtained through IGTs of public funds from the governmental entity that is party to the Medicaid contract of the ICF/IID identified in subsection (c) of this section.

(2) An IGT that is not received by the date specified by HHSC may not be accepted. In such a situation, the IGT will be returned to the governmental entity and the ICF/IID will not be eligible to receive a supplemental payment.

(f) Medicaid supplemental payment limits.

(1) The aggregate supplemental payment amount for non-state government-owned ICFs/IID is calculated for each Medicaid supplemental payment limit calculation period by taking the difference between the aggregate upper payment limit from subparagraph (A) of this paragraph and the aggregate Medicaid payment from subparagraph (B) of this paragraph:

(A) The aggregate upper payment limit for non-state government-owned ICFs/IID will be calculated based on Medicare payment principles and in accordance with the Medicaid upper payment limit provisions codified at Title 42 Code of Federal Regulations (CFR) §447.272. The aggregate upper payment limit is equal to the sum of the Medicare-equivalent payments for all non-state government-owned ICFs/IID. The Medicare-equivalent payment for each non-state government-owned ICF/IID is calculated as follows based on data from the most recent reliable Medicaid cost report:

(i) Determine the Medicare adjusted cost by subtracting ancillary and fixed capital costs from total Medicaid allowable costs and multiplying the remaining costs by 1.12.

(ii) Determine the Medicare adjusted cost per day of service by dividing the value from clause (i) of this subparagraph by the total days of service.

(iii) Determine the Medicare-equivalent payment by multiplying the dividend from clause (ii) of this subparagraph by the total Medicaid days of service.

(B) The aggregate Medicaid payment for non-state government-owned ICFs/IID prior to the supplemental payment will be the sum of Medicaid Level of Need (LON) payments for all non-state government-owned ICFs/IID as captured on the most recent reliable Medicaid cost report.

(2) The Medicaid supplemental payment limit for each participating non-state government-owned ICF/IID for each Medicaid supplemental payment limit calculation period will be determined by dividing that facility's Medicaid units of service during the Medicaid supplemental payment limit calculation period by the total Medicaid units of service during the Medicaid supplemental payment limit calculation period for all non-state government-owned ICFs/IID, multiplying the resulting percentage by the aggregate supplemental payment amount from paragraph (1) of this subsection, and dividing the resulting product by four.

(g) Payment frequency. HHSC will distribute supplemental payments to participating non-state government-owned ICFs/IID on a quarterly basis subsequent to the Medicaid supplemental payment limit calculation period.

(h) Supplemental payment methodology.

(1) HHSC will give notice of the non-state government-owned ICF/IID Medicaid supplemental payment limits determined in subsection (f) of this section, the maximum IGT amount that can be provided for each participating ICF/IID based on the Federal Medical Assistance Percentage (FMAP) in place at the time notice is given, and the deadline for completing the transfer.

(2) The amount of the supplemental payment to the ICF/IID will be calculated in proportion to the amount transferred by the governmental entity.

(A) For governmental entities that own a single ICF/IID:

(i) If the governmental entity transfers the maximum IGT described in paragraph (1) of this subsection, the ICF/IID will receive the Medicaid supplemental payment limit amount calculated for it in subsection (f) of this section.

(ii) If the governmental entity transfers less than the maximum IGT described in paragraph (1) of this subsection, the ICF/IID will receive a supplemental payment that is proportionate to the percentage of the maximum IGT that was actually transferred.

(B) For governmental entities that own multiple ICFs/IID:

(i) If the governmental entity transfers the maximum IGT described in paragraph (1) of this subsection for all of the ICFs/IID it owns, each of the ICFs/IID will receive the Medicaid supplemental payment limit amount calculated for it in subsection (f) of this section.

(ii) If the governmental entity transfers less than the maximum IGT described in paragraph (1) of this subsection for all of the ICFs/IID it owns, each of the ICFs/IID will receive a proportion of the Medicaid supplemental payment limit amount calculated for it in subsection (f) of this section based on the proportion of the total maximum IGT for all of the ICFs/IID owned by the governmental entity that was actually transferred.

(C) Supplemental payments to remaining non-state government-owned ICFs/IID will not be increased due to the failure of a governmental entity to transfer the maximum IGT described in paragraph (1) of this subsection.

(3) A governmental entity that did not transfer the maximum IGT described in paragraph (1) of this subsection in one or more of the first three quarters in a federal fiscal year will be allowed to fund the remaining Medicaid supplemental payment limit during the fourth quarter of that fiscal year, subject to the following:

(A) HHSC will give notice of the remaining Medicaid supplemental payment limits and the maximum IGT that can be provided for each non-state government-owned ICF/IID. Such notice will also contain instructions and deadlines for governmental entities to notify HHSC of the fourth-quarter transfer amount.

(B) Following the deadline for notification described in subparagraph (A) of this paragraph, if HHSC determines that the supplemental payments for the federal fiscal year will exceed the applicable aggregate supplemental payment amount for non-state government-owned ICFs/IID, HHSC will reduce the amount of the transfer for the fourth-quarter payment under this clause proportionately for each participating ICF/IID in an amount sufficient to ensure compliance with the applicable aggregate supplemental payment amount.

(4) The amount of the payment to the ICF/IID will be calculated using the FMAP in place when HHSC gave notice as described in paragraph (1) or (3) of this subsection, as applicable.

(i) Recoupment.

(1) If payments under this section result in overpayment to an ICF/IID, or in the event of a disallowance by the federal Centers for Medicare and Medicaid Services (CMS) of federal participation related to an ICF/IID's receipt or use of supplemental payments authorized under this section, HHSC may recoup an amount equivalent to the amount of supplemental payments overpaid or disallowed.

(2) Supplemental payments under this section may be subject to any adjustments for payments made in error, including, without limitation, adjustments made under the Texas Administrative Code, the Code of Federal Regulations and state and federal statutes. HHSC may recoup an amount equivalent to any such adjustment.

(3) HHSC may recoup from any current or future Medicaid payments as follows:

(A) HHSC will recoup from the ICF/IID to which an overpayment was made or against which any disallowance was directed.

(B) If, within 30 days of the ICF/IID's receipt of HHSC's written notice of recoupment, the ICF/IID has not paid the full amount of the recoupment or entered into a written agreement with HHSC to do so, HHSC may withhold any or all Medicaid payments from the ICF/IID until HHSC has recovered an amount equal to the amount overpaid or disallowed. If funds identified for recoupment cannot be repaid from the ICF/IID's Medicaid payments, the governmental entity that owns the ICF/IID will be liable for any additional payment due to HHSC or its designee. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in the recoupment of the owed funds from other Medicaid contracts controlled by the governmental entity and will bar the governmental entity from receiving any new contracts with HHSC or its designees until repayment is made in full.

Source Note: The provisions of this §355.458 adopted to be effective September 1, 2012, 37 TexReg 6296; amended to be effective February 22, 2024, 49 TexReg 858