Health Care Advocate: April 6, 2023


Table of Contents

Advocacy News 
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Texas Sues CMS Over Health Care Taxes Bulletin

The state of Texas has sued the Centers for Medicare & Medicaid Services (CMS) in U.S. District Court in Tyler challenging CMS’ Feb. 17 informational bulletin regarding health care-related taxes and hold harmless arrangements involving the redistribution of Medicaid payments.

The lawsuit, filed Wednesday, argues that the bulletin exceeds CMS’ authority, was noncompliant with public notice and comment requirements, is arbitrary and capricious, and attempts to implement with subregulatory guidance policies CMS previously withdrew in the proposed Medicaid Fiscal Accountability Regulation, which were rejected in previous litigation over CMS rescinding Texas’ Medicaid 1115 Transformation waiver. (The waiver was later reinstated and now is in place through September 2030.)

Texas asks the court to declare the bulletin unlawful and prevent CMS from enforcing it. The suit also asks the court to require ongoing audits of Texas’ local provider participation funds by the federal Office of Inspector General to proceed without consideration of the bulletin. THA is monitoring the progress of the litigation. (Steve Wohleb, J.D./Anna Stelter)

Memorial Hermann, THA Stand Against Itemized-Billing Legislation

The financial side of hospital operations – including its impact on both patients and facilities – took center stage this week in committee testimony where THA played an integral role.

That included a hard look at the complicated nuances of price transparency that kicked off THA’s week at the Capitol on Monday, when the House Public Health Committee looked at House Bill 1973 by Rep. Caroline Harris (R-Round Rock), a proposal that hospitals oppose.

Michelle Lindsley, vice president of managed care for Memorial Hermann Health System, testified for THA to detail the weaknesses of HB 1973, which would require all providers to supply “a written, itemized bill of charges for all health care services and supplies provided” in order to receive payment. Failure to provide the itemized bill would prohibit providers from pursuing debt collection against a patient.

“We support price transparency and currently provide patients, and notify them of their right to obtain, itemized statements upon request in compliance with existing law,” Lindsley said. But she noted Memorial Hermann’s and THA’s concerns with the bill included potential patient confusion and the operational and expense-related challenges in implementing what HB 1973 would require.

Less than 2% of the patients in Memorial Hermann’s 1.6 million annual patient encounters request itemized statements, she told the committee.

“Under the proposed requirement, we estimated the cost to be upwards of $3-to-5 million annually, covering technical-related enhancements and our new processes requiring additional resources, increased staffing aligned with an anticipated increase in patient calls and cost to manage enhancements of space available through patient portals and/or sending potentially large documents by U.S. mail or other delivery, certified receipt, regarding sensitive patient information,” she said. “Hospitals continue to be well-intended and committed to transparency specific to a patient’s health care costs.”

Lindsley – who also handled detailed questions from multiple committee members – told the panel that instead of preparing an itemized statement for every patient, “we can explore methods and frequency with which we notify patients of the right to receive. So [a] different font, bigger, have different conversations with the patients, look at our consent forms, look at our patient statements, etc.” The bill was left pending in committee. (Cameron Duncan, J.D.)

THA Testifies Against Ban on Hospital Outpatient Payments

Last week, THA advocacy helped put the issue of hospital outpatient payments on ice for a couple of weeks while the author of the House bill outlawing those payments took another look at his bill – or so hospitals thought.

Then on Monday, Senate Bill 1275 by Sen. Kelly Hancock (R-North Richland Hills) was added to Wednesday’s agenda in the Senate Health & Human Services Committee, putting hospital outpatient payments back in play – and THA had to quickly mobilize again and get ready to testify.

SB 1275 – the companion bill to the legislation shelved last week, House Bill 1692 by Rep. James Frank (R-Richmond) – would prohibit hospital outpatient payments for health care services provided off a hospital campus. Both it and HB 1692 would decimate access to care in Texas by eliminating the hospital payments that pay for every piece of outpatient care aside from a physician’s charges. Shutting down those payments would lead to widespread outpatient clinic shutdowns – including many in rural and underserved areas of the state – leaving vulnerable people without care and eliminating $3 billion in annual traditional Medicare reimbursements for Texas hospitals.

THA General Counsel Steve Wohleb, J.D., appeared before the Senate committee Wednesday, warning members of what SB 1275 would unleash on the state’s health care landscape.

If the Legislature prohibits hospitals from collecting payments for services provided off the hospital’s campus, “what you’re saying is, the clinic can’t get paid for the services that are rendered, and those clinics will close,” Wohleb said. “If they can’t bill and collect for the services being provided in the clinic to cover the operating expenses of operating that clinic, they will go out of business. I mean, what business would be able to sustain itself if it can’t get paid for the services it’s rendering?”

The setting of SB 1275 for hearing also prompted the second THA Advocacy Alert in as many weeks on the topic of hospital outpatient payments, known colloquially as “facility fees.” By late this afternoon, nearly 290 THA members had sent over 2,600 messages, spread out to each of the nine members of the Health & Human Services Committee, asking them to oppose SB 1275.

During the hearing, Sen. Hancock signaled his intent for the legislation to “establish some guardrails for a revenue stream that’s coming out of the pockets of our constituents that seems to be growing at a rapid pace.” He urged stakeholders to “Help us do it right.” THA is working with the author to provide additional information on the legislation. (Steve Wohleb, J.D./Cameron Duncan, J.D.)

Partial Hospitalization “Very Effective for Kids,” THA Member Testifies

Requiring Medicaid to cover partial hospitalization programs (PHP) and intensive outpatient therapy (IOT) is one of hospitals’ top priorities for this session. Chris Bryan, vice president of IT and public policy for Clarity Child Guidance Center in San Antonio, testified for THA in favor of House Bill 2337 by Rep. Tom Oliverson, MD (R-Cypress) when it was brought up for hearing Tuesday in the House Human Services Committee.

In his layout of the bill, Rep. Oliverson described his firsthand experience treating mental health patients in residency training and seeing the need for step-down or step-up services, like PHP and IOT, to help decrease readmissions and improve patient stabilization.

Clarity is a children-only psychiatric hospital that provides partial hospitalization and outpatient services. Bryan lauded the benefits of both PHP and IOT programs, which Medicaid payers would be required to cover under the bill. Both are great for all ages, she said.

Partial hospitalization is “a great program for kids, because they’re going home at night,” she testified. “And probably a little bit more than half of our kids do come in as a direct admission to partial, as a preventative to not having to come inpatient. Because we don’t want to bring kids inpatient if we don’t have to.”

She also noted the cost of PHP is about half that of a traditional inpatient stay. When the young patients are home at night, Bryan added, “they’re with their folks, and they get to work on the coping skills and the treatment that they had during the day, and then the next morning we debrief with the parents and see how it goes. And so that moves along very nicely for the family, bringing them all together. This is a Medicaid value-add service, and I say that because we do not have this benefit with all of our Medicaid payers – as wonderful as it is – including one of our larger ones.”

With IOT, Bryan said, Clarity has had trouble getting contracts with payers to implement it “for a sundry of reasons that I don’t need to get into here. But we’ve been unable to stand up that program, and that would be a great program. Because right now, if you think in terms of the psychiatric continuum of care, you have outpatient, you have inpatient, and we are just trying to fill in to create a more robust continuum of care.” (Sara González)

Capitol Roundup: THA Opposes Restrictions on Noncompetes

SB 1275, the hospital outpatient payments bill, was just one of several problematic bills examined in Senate Health & Human, necessitating a Wednesday opposing spree by Wohleb, THA’s general counsel. He also spoke out against a measure to restrict health care practitioner noncompete agreements, Senate Bill 1534 by Sen. Charles Schwertner, MD (R-Georgetown). The bill would require any such noncompete to provide for a buyout, to expire after one year of the end of the health care worker’s previous job and to be limited to a five-mile radius.

Wohleb’s testimony noted Texas’ long history “of respecting the right of private parties to freely negotiate and enter into contracts that suit the needs of the parties, and where it has chosen to restrict this right, it has done so cautiously.” He said current law “has provided certainty to physicians and their employers” and warned that SB 1534 “will hardwire arbitrary restrictions on physician noncompetes into statute that we think are better left to the parties to the agreement, as it has been for decades.” He noted THA has been working with Sen. Schwertner’s office on the bill and looks forward to continuing discussion.

Other bills THA testified in opposition to this week included:

  • Senate Bill 730 by Sen. Juan “Chuy” Hinojosa (D-McAllen), which would add podiatrists to the list of clinical staff who may not be discriminated against for the purposes of hospital privileges, also examined during Wednesday’s Health & Human hearing. “We think it’s important that the hospital be able to independently determine with its medical staff the appropriate scope of practice for the particular facility,” Wohleb testified. “This bill would usurp the medical staff and the governing bodies’ freedom to evaluate the particular community circumstances and needs, quality and safety and other considerations.”
  • House Bill 2960 by Rep. Briscoe Cain (R-Deer Park), which would repeal the law allowing someone to provide notice of firearms being prohibited on a property. In the House Select Committee on Community Safety on Tuesday, Wohleb noted this repeal would affect hospitals and mental health facilities and highlighted THA’s work to prevent workplace violence. In order to prevent firearms from coming onto the property, he noted, “authorized personnel of a hospital or mental health facility would have to personally confront a person with a firearm and advise them that weapons are prohibited. And only if the person at that point fails to depart the premises promptly – whatever that means – will criminal liability attach.”
  • House Bill 2401 by Rep. Oliverson, on which THA supplied written remarks. The bill would repeal a requirement in law for HHSC to award Medicaid contracts to all hospital district-owned nonprofit health plans that meet managed care contract requirements. THA argued that mandatory contracting promotes a competitive managed care organization (MCO) marketplace and recognizes the cost public hospital districts incur in providing safety-net care. Repealing the requirement, THA wrote, would “further consolidate the Medicaid MCO market and reduce patient access.”

THA also supplied written remarks this week in testifying on:

  • House Bill 3218 by Rep. Stephanie Klick (R-Fort Worth) to modify a provider’s requirement to provide a good-faith estimate to patients before they undergo a nonemergency elective service or procedure. THA’s letter noted it has provided proposed edits to strengthen and clarify the legislation, including language to make clear that the estimate is for the facility’s billed charges, to allow for the inclusion of weekends and holidays in the facility’s deadline to provide the estimate and to clarify that the penalty for a violation would be an inability to collect any amount above the estimate, instead of the entire amount due.
  • House Bill 3414 by Rep. Oliverson, which would allow commercial entities to access data from the state’s All-Payor Claims Database (APCD) that isn’t available through the database’s public portal. THA’s letter expressed concern that doing so “removes the objectivity component that should accompany analysis and uses of the data collected and submitted to the APCD,” and noted the bill doesn’t clearly outline how commercially driven use of the database “could not be manipulated or presented to enrollees or consumers in a manner that could misrepresent the services provided by health care providers.” THA wants to see access to the APCD remain with “legitimate research institutions and individuals whose mission should be objective analysis and transparency of health care information that improves the quality of care provided to Texas citizens.”

Also this week, a scheduled floor consideration of House Bill 112 by Rep. Donna Howard (D-Austin), a THA-initiated workplace violence prevention measure, was postponed at Rep. Howard’s request – a legislative strategy to ensure quick final passage of the bill’s companion. That bill, Senate Bill 240 by Sen. Donna Campbell, MD (R-New Braunfels) has already passed out of the Senate, and the House can take it up quickly thanks to the postponement request.

(Steve Wohleb, J.D./Cameron Duncan, J.D./Cesar Lopez, J.D.)

THA Comments on Rural Medicaid Rate Realignment

Last week, THA submitted comments to the Texas Health and Human Services Commission (HHSC) on proposed realignment of rural hospital Medicaid inpatient rates. THA recommended HHSC consider a stop-loss provision to prevent an individual hospital’s standard dollar amount from decreasing more than 5% biennially, which would minimize uncertainty in payment.

With the rate realignment, HHSC is implementing direction from Senate Bill 170 in the 2019 session of the Texas Legislature to realign rural hospital Medicaid rates to current costs every two years. THA strongly supported this legislation and the full funding that followed in the 2021 Legislature. (Anna Stelter)

Local Government Entities: Complete IGT Reporting Survey for Medicaid Payments

The Texas Health and Human Services Commission now requires local government entities that submit intergovernmental transfer (IGT) funds to finance non-hospital supplemental payments to complete a mandatory reporting survey to the Office of Local Funds Monitoring. The survey is located here and a user guide is also available. The deadline for this month’s survey is April 30 at 11:59 p.m.

Local governmental entities required to complete reporting include those that submitted IGT between Oct. 1, 2021, and Sept. 30, 2022, for any of the following programs:

  • Quality Incentive Payment Program (QIPP)
  • Texas Incentives for Physicians and Professional Services (TIPPS)
  • Rural Access to Primary and Preventive Services (RAPPS)
  • Network Access Improvement Program (NAIP)
  • Delivery System Reform Incentive Payment (DSRIP) for non-hospital services
  • Uncompensated care (UC) – dental
  • Uncompensated care (UC) – physician
  • Intermediate Care Facility – Upper Payment Limit (ICF-UPL)

Local governmental entities were already required to complete similar reporting for hospital payment programs, including the Comprehensive Hospital Increase Reimbursement Program. HHSC launched the latest phase of its local funds oversight effort by requiring similar reporting for local governmental entities submitting IGT for non-hospital DPPs.

For more information:

(Anna Stelter)

HHS Roundtable: Communication Lessons From COVID-19

The U.S. Department of Health and Human Services will broadcast a webinar, Lessons Learned in Healthcare Communication Strategies, from 2 to 3:15 p.m. CT on Thursday, April 20, focusing on lessons learned from three years of dealing with COVID-19.

The Administration for Strategic Preparedness and Response Technical Resources, Assistance Center, and Information Exchange (ASPR TRACIE) is inviting health care stakeholders and public health information disseminators to register here to attend the online event live. Guest speakers will represent a wide range of jurisdictions and speak from a range of stakeholder positions to share lessons learned from the pandemic and other emergencies. More information about the webinar can be found here and questions about the event can be directed to, 844/587-2243 or the ASPR TRACIE website. (Carrie Kroll)

Texas Register Highlights

The Texas Health and Human Services Commission (HHSC) proposed a rule concerning notification requirements for the creation of a Local Provider Participation Fund (LPPF). The purpose of the proposal is to implement House Bill 4289, 86th Legislature, Regular Session, 2019 by establishing a process that requires certain political subdivisions to notify HHSC of the creation of a new LPPF as authorized by Texas Health and Safety Code Chapter 300 or Texas Health and Safety Code Chapter 300A. This rule will ensure HHSC receives appropriate and timely notices of new LPPFs, which will enable the agency to maintain oversight and reduce the risk of federal recoupment. (March 31)

The Texas Behavioral Health Executive Council proposed the repeal of 22 TAC Sec. 882.10, relating to applicants with pending complaints. The proposed repeal of this rule is necessary because it is proposed to be replaced with a new rule. The new rule will allow for the abeyance of an application up to 180 days when there is a pending complaint against the applicant that involves sexual misconduct or imminent physical harm to the public. All other applicants with complaints will have their application processed as normal. The complaint will not impact the licensure application. The pending complaint will still be investigated and processed via the normal route as well. (March 31)

The Texas Behavioral Health Executive Council proposed amendments to 22 TAC Sec. 884.10, relating to investigation of complaints. The proposed amendments reduce the priority rating system for complaints from four levels to two. Complaints involving sexual misconduct or imminent physical harm will be designated as high priority while all other complaints will remain normal priority. (March 31) (Cesar Lopez J.D.)

Federal Register Highlights

The Centers for Medicare & Medicaid Services (CMS) announced a proposed rule which would update the hospice wage index, payment rates and aggregate cap amount for fiscal year (FY) 2024. This rule includes information on hospice utilization trends and solicits comments regarding information related to higher levels of hospice care; spending patterns for non-hospice services provided during the election of the hospice benefit; ownership transparency; equipping patients and caregivers with information for hospice selection; and ways to examine health equity under the hospice benefit. This rule also proposes conforming regulatory text changes related to the anticipated expiration of the COVID-19 public health emergency (PHE).

This rule also proposes updates to the Hospice Quality Reporting Program; discusses the Hospice Outcomes and Patient Evaluation tool; provides an update on health equity and future quality measures; and provides updates on the Consumer Assessment of Healthcare Providers and Systems, Hospice Survey Mode Experiment. This rule also proposes to codify hospice data submission thresholds and discusses updates to hospice survey and enforcement procedures. Additionally, the rule proposes to require hospice-certifying physicians to be Medicare-enrolled or to have validly opted-out. (April 4) (Cesar Lopez J.D.)

The Health Care Advocate is a publication of the Texas Hospital Association, 1108 Lavaca, Austin Tx 78701. Telephone 512/465-1570 for information. For additional information regarding specific articles, please contact the THA staff member(s) listed at the bottom of each full article. According to Texas Government Code 305.027, this material may be considered “legislative advertising.” Authorization for its publication is made by Jennifer Banda, J.D., Texas Hospital Association, 1108 Lavaca, Suite 700, Austin, Texas 78701-2180.