THHSC Council Reviews Revised Medicaid Inpatient Rate Rebasing Plan

by John Hawkins, Jennifer Banda, J.D., Michelle Apodaca, J.D., and John Berta

On Aug. 26, the Texas Health and Human Services Commission’s Council reviewed a new Medicaid rate rebasing plan put forth by the agency. THHSC Executive Commissioner Tom Suehs informed council members that the agency received direction from state leadership to modify the rule that rebases Medicaid inpatient hospital payment rates and weights. The rule had been adopted in the Aug. 6 Texas Register, and was to be effective on Sept. 1. Under the revised plan laid out by Suehs, the agency will:

• Halt implementation of the Medicaid inpatient rate rebasing rule adopted earlier this month;
• Retain the current Medicaid inpatient Standard Dollar Amount rates and Medicaid MS-DRG weights until Nov. 1  (reduced by 1 percent);
• Implement a 1 percent payment reduction on the current rates (mandated earlier this year by state leaders), effective Sept. 1;
• Develop a revised Medicaid SDA methodology on Nov. 1 that:
  • Mitigates the impact to hospitals that would have experienced major losses tied to rebasing by developing new SDAs that limit the loss in funds to no more than 10 percent of the original plan; and 
  • Limits the gains that hospitals otherwise would have experienced in rebasing to approximately 38 percent of the original gain;
• Incorporate an expedited rulemaking process that will allow the agency to implement the revised SDA rule described above by Nov. 1; and
• Conduct a public hearing on the revised rule before Nov. 1.

The Texas Hospital Association’s Policy Committee on Hospital Reimbursement met on Aug. 27 to discuss the revised rebasing plan and review the proposal with THHSC hospital rate-setting personnel. THHSC is preparing new hospital-specific rates related to the amended rule and will share that information with hospitals later this week.