SECTION 351.16. Procedures to Address Program Budget Alignment

(a) The department must analyze actuarial cost projections concerning program administrative and client services to estimate the amount of funds needed in the fiscal year by the program to serve program clients and shall monitor such program cost projections and funding analyses at least monthly to determine whether the estimated amount of funds needed by the program will:

(1) exceed the program's appropriated funds and other available resources for the fiscal year; or

(2) be less than the program's appropriated funds and other available resources for the fiscal year.

(b) When the program projects that the estimated amount of funds needed in the fiscal year by the program to serve program clients will exceed the program's appropriated funds and other available resources for the fiscal year, the program shall use the following methodology to reduce or limit the amount of funds to be expended by the program:

(1) give clients and providers who will be directly affected written notice of any reductions or limitations of services, coverage, or reimbursements;

(2) take the following actions in the order listed only until the projected amount of funds to be expended by the program approximately equals, but does not exceed, the program's appropriated funds and other available resources:

(A) implement administrative efficiencies while avoiding changes which may jeopardize the quality and integrity of the program service delivery;

(B) establish and administer a waiting list for health care benefits according to the procedures in this section;

(C) at the same time the waiting list is established, the program shall:

(i) provide only limited prior authorization for family support services for ongoing clients, as determined by the medical director or other designated medical staff, only in order to continue services already being provided at the time the waiting list is established, when the specific services are required to prevent out-of-home placement of the client (as documented by the program regional case management staff or contractors), or when the provision of such services is cost effective for the program;

(ii) disallow prior authorization (coverage) of diagnosis and evaluation services for applicants who qualify for up to 60 days of program coverage for diagnosis and evaluation services only and refer such applicants to case management services; and

(iii) allow limited prior authorization of diagnosis and evaluation services on a short-term basis only when such information is needed to assess whether clients on the waiting list have "urgent need for health care benefits" as described in subsection (e) of this section and only with prior authorization and approval by the medical director or other designated medical staff.

(D) place new applicants or re-applicants with lapsed eligibility who are determined eligible for program health care benefits (new clients for health care benefits) on the waiting list. These clients will be ordered on the waiting list according to the date and time the client is determined eligible for program health care benefits;

(E) reduce or limit reimbursements for contractual service providers while avoiding changes which may jeopardize the integrity of the contractor base and thereby decrease client access to services;

(F) place clients who are eligible to receive program health care benefits and who currently are not on the waiting list (ongoing clients for health care benefits) on the waiting list. These clients will be ordered on the waiting list according to the original date and time that starts the client's latest uninterrupted sequence of eligibility for program health care benefits and in the following order of movement to the waiting list:

(i) ongoing clients for health care benefits who have one or more sources of substantial health insurance coverage (such as Medicaid, CHIP, or other private health insurance similar in scope) in addition to the CSHCN Services Program (not including those ongoing clients for whom the program pays the insurance premiums);

(ii) ongoing clients for health care benefits in the following order by age groups: 21 years of age or older, 20 years of age, 19 years of age, 18 years of age; and

(iii) all other ongoing clients for health care benefits who do not have an urgent need for health care benefits;

(G) employ additional measures to reduce or limit the amount of funds to be expended by the program as directed by rule.

(c) If the procedures described in subsection (b)(2)(A) - (G) of this section enable the program to project that the estimated amount of funds to be expended by the program in the fiscal year approximately equals, but does not exceed, the program's appropriated funds and other available resources, the program shall take the following additional steps in order to provide health care benefits to as many clients with urgent need for health care benefits as possible who are currently on the waiting list.

(1) generate cost savings by taking the following steps in the order listed:

(A) give clients and providers who will be directly affected written notice of any reductions or limitations of services, coverage, or reimbursements;

(B) reduce or limit reimbursements for contractual service providers while avoiding changes which may jeopardize the integrity of the contractor base and thereby decrease client access to services; and

(C) employ additional measures to generate cost savings as directed by rule.

(2) utilize cost savings generated to remove as many clients with urgent need for health care benefits as possible from the waiting list and provide health care benefits to those clients. Clients with urgent need for health care benefits will be removed from the waiting list according to the original date and time that starts the client's latest uninterrupted sequence of eligibility for program health care benefits and in the following group order:

(A) clients who are less than 21 years old and who have an urgent need for health care benefits as described in subsection (e) of this section;

(B) clients who are 21 years of age or older and who have an urgent need for health care benefits as described in subsection (e) of this section;

(3) provide health care benefits (which may or may not include coverage of outstanding bills for health care benefits) for clients with urgent need for health care benefits who are removed from the waiting list;

(A) as long as program cost savings funds are available; and

(B) if the outstanding bills for health care benefits are for dates of service that are within the time period that program cost savings funds are available and provided the client was eligible for program health care benefits at the time of the dates of service;

(4) provide limited health care benefits or payment of outstanding bills for health care benefits for clients with urgent need for health care benefits who are on the waiting list and remain on the waiting list. The program's coverage of such health care benefits may be limited in scope, amount, and duration and is not intended to be sustained over time. If limited health care benefits coverage includes coverage of family support services, the coverage of family support services must be limited according to the parameters set forth in subsection (b)(2)(C)(i) of this section. Clients with urgent need for health care benefits who are on the waiting list will be served in the same order used in paragraph (2) of this subsection to remove clients with urgent need for health care benefits from the waiting list. This coverage may be provided to clients with urgent need on the waiting list prior to or at any point during activities described by paragraphs (2) - (3) of this subsection only:

(A) when projected cost savings funds are projected to be insufficient to remove clients with urgent need for health care benefits (or additional clients with urgent need for health care benefits) from the waiting list and maintain continuous program health care benefits coverage for those clients or when projected cost savings funds may lapse if not expended in this manner;

(B) as long as program cost savings funds are available; and

(C) if the outstanding bills for health care benefits are for dates of service that are within the time period that program cost savings funds are available and provided the client was eligible for program health care benefits at the time of the dates of service.

(d) When the program projects that the estimated amount of funds to be expended by the program in the fiscal year is less than the program's appropriated funds and other available resources due to the cost reduction, limitation, or deferral procedures implemented according to subsections (b) or (c) of this section, or the program's receipt of additional funding, or funding analysis resulting in a projected amount of unobligated funds, the program shall increase the amount of funds to be expended by the program.

(1) In an effort to expend unobligated funds (except for unobligated funds resulting from program actions taken according to subsection (c) of this section), the program shall utilize the following steps in the order listed only until the program projects that the estimated amount of unobligated funds will be expended by the program during the fiscal year:

(A) take clients off the waiting list according to the original date and time that starts the client's latest uninterrupted sequence of eligibility for program health care benefits and in the following group order:

(i) clients who are less than 21 years old and who have an urgent need for health care benefits as described in subsection (e) of this section;

(ii) clients who are 21 years of age or older and who have an urgent need for health care benefits as described in subsection (e) of this section;

(iii) all other clients who are less than 21 years old who do not have an urgent need for health care benefits; and

(iv) all other clients who are 21 years of age or older who do not have an urgent need for health care benefits;

(B) provide health care benefits for clients taken off the waiting list as long as program unobligated funds are available;

(C) provide limited health care benefits for clients who are on the waiting list and remain on the waiting list, payment of outstanding bills for health care benefits for clients who are on the waiting list and remain on the waiting list, or payment of outstanding bills for health care benefits for clients who have been taken off the waiting list. The program's coverage of such health care benefits may be limited in scope, amount, and duration and is not intended to be sustained over time. If limited health care benefits coverage includes coverage of family support services, the coverage of family support services must be limited according to the parameters set forth in subsection (b)(2)(C)(i) of this section. This coverage may be provided at any point during activities described by subparagraphs (A) and (B) of this paragraph only:

(i) when projected unobligated funds are projected to be insufficient to take clients (or additional clients) off the waiting list and maintain continuous program health care benefits coverage for those clients or when projected unobligated funds may lapse if not expended in this manner;

(ii) as long as program unobligated funds are available; and

(iii) if the outstanding bills for health care benefits are for dates of service that are within the time period that program unobligated funds are available and provided the client was eligible for program health care benefits at the time of the dates of service;

(D) if the program projects that the amount of funds to be expended by the program in the fiscal year will be less than the program's appropriated funds and other available resources after no clients eligible for program health care benefits remain on the waiting list, the program may take the following actions in the following order:

(i) eliminate limitations on prior authorization for family support services;

(ii) provide prior authorized coverage of diagnosis and evaluation services for applicants who qualify for up to 60 days of program coverage for diagnosis and evaluation services only;

(iii) remove any of the additional measures taken to reduce or limit the amount of funds to be expended by the program as directed by rule;

(iv) remove any reductions or limitations to contractor reimbursements that have been implemented; and

(v) expand program services.

(2) In an effort to expend unobligated funds resulting from program actions taken according to subsection (c) of this section (unobligated cost savings funds that remain after all clients with urgent need for health care benefits have been removed from the waiting list and provided health care benefits), the program shall utilize the following steps in the order listed only until the program projects that the estimated amount of unobligated funds will be expended by the program during the fiscal year:

(A) take additional clients off the waiting list according to the original date and time that starts the client's latest uninterrupted sequence of eligibility for program health care benefits and in the following group order:

(i) clients who are less than 21 years old who do not have an urgent need for health care benefits and who are clients who were placed on the waiting list when they were ongoing clients and who have had no lapse in eligibility while on the waiting list;

(ii) clients who are 21 years of age or older who do not have an urgent need for health care benefits and who are clients who were placed on the waiting list when they were ongoing clients and who have had no lapse in eligibility while on the waiting list;

(B) provide health care benefits (which may or may not include coverage of outstanding bills for health care benefits) as stipulated in paragraph (1)(B) of this subsection for these clients taken off the waiting list;

(C) provide limited health care benefits for clients identified in subparagraph (A)(i) and (ii) of this paragraph who are on the waiting list and remain on the waiting list, payment of outstanding bills for health care benefits for clients identified in subparagraph (A)(i) and (ii) of this paragraph who are on the waiting list and remain on the waiting list, or payment of outstanding bills for health care benefits for clients who have been taken off the waiting list. The program's coverage of such health care benefits may be limited in scope, amount, and duration and is not intended to be sustained over time. If limited health care benefits coverage includes coverage of family support services, the coverage of family support services must be limited according to the parameters set forth in subsection (b)(2)(C)(i) of this section. This coverage may be provided at any point during activities described by subparagraphs (A) and (B) of this paragraph and only as stipulated in paragraph (1)(C)(i) - (iii) of this subsection;

(D) remove any of the additional measures taken to generate cost savings by rule according to subsection (c)(1)(C) of this section; and

(E) remove any reductions or limitations to contractor reimbursements that have been implemented.

(e) The program shall establish a protocol to be used by the medical director or other designated medical staff to determine whether a client has an "urgent need for health care benefits" by considering criteria including, but not limited to, the following:

(1) the physician or dentist who signs the client's application or the treating physician or dentist attests or documents the physician's or dentist's determination that delay in receiving health care benefits could result in loss of life, permanent increase in disability, or intense pain and suffering;

(2) the client or family states that no other source of health insurance coverage is available to the client;

(3) information on the application for health care benefits indicates the complexity of the client's condition or need for care;

(4) information received from program regional case management staff or contractors supports other information gathered or indicates that a delay in health care benefits could reasonably be expected to result in an out-of-home placement or institutionalization of the client because the family cannot continue to care for the client; and

(5) information obtained from diagnosis and evaluation services as prior authorized by the program medical director or other designated medical staff.

(f) The program central office may establish and administer the waiting list for health care benefits to address a budget shortfall.

(1) In order to facilitate contacting clients on the waiting list, the program shall collect information including, but not limited to the following:

(A) the client's name, address, and telephone number;

(B) the name, address, and telephone number of a contact person other than the client;

(C) the date of the client's earliest application for health care benefits;

(D) the date on which the client became eligible for health care benefits;

(E) the client's functional limitations or needs;

(F) the range of services needed by the client; and

(G) a date on which the client is scheduled for reassessment.

(2) The waiting list is maintained continually from one fiscal year to the next. Clients must maintain eligibility for health care benefits to remain on the waiting list. A lapse of eligibility for health care benefits constitutes loss of position on the waiting list.

(3) The program shall refer clients on the waiting list to other possible sources of services and shall contact waiting list clients periodically to confirm their continuing need for program services.

(4) The program will offer case management services as needed or desired to all clients who are eligible for health care benefits including those on the waiting list for health care benefits.

Source Note: The provisions of this §351.16 adopted to be effective March 27, 2003, 28 TexReg 2523; amended to be effective June 1, 2006, 31 TexReg 4200; amended to be effective October 3, 2010, 35 TexReg 8921; amended to be effective April 21, 2013, 38 TexReg 2362; transferred effective March 15, 2022, as published in the February 25, 2022 issue of the Texas Register, 47 TexReg 982