Chris Traylor, as Executive Commissioner of the Texas Health and Human Services Commission And the Texas Health and Human Services Commission v. Diana D., as Next Friend of KD, a Child Karen G., as Next Friend of TG and ZM, Children Guadalupe P., as Next Friend of LP, a Child Sally L., as Next Friend of CH, a Child Dena D., as Next Friend of BD, a Child OCI Acquisition, LLC ( 2015 )

ACCEPTED
03-15-00657-CV
7810967
THIRD COURT OF APPEALS
AUSTIN, TEXAS
11/12/2015 11:26:21 PM
JEFFREY D. KYLE
CLERK
No. 03-15-00657-CV
In the Court of Appeals FILED IN
3rd COURT OF APPEALS
for the Third Judicial District AUSTIN, TEXAS
11/12/2015 11:26:21 PM
at Austin, Texas JEFFREY D. KYLE
Clerk
Chris Traylor, as Executive Commissioner of the Texas
Health and Human Services Commission, et al.
Appellants,
v.
Diana D., as Next Friend of KD, a Child, et al.
Appellees.
On Appeal from the
200th Judicial District Court of Travis County, Texas
Appellants’ Brief
Ken Paxton Scott A. Keller
Attorney General of Texas Solicitor General
Charles E. Roy Kristofer S. Monson
First Assistant Attorney General Assistant Solicitor General
State Bar No. 24037129
Office of the Attorney General
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-1820
kristofer.monson@texasattorneygeneral.gov
Counsel for Appellants
Oral Argument Requested
Identity of Parties and Counsel
Appellants:
Chris Traylor, as Executive Commissioner of the Texas Health and Human
Services Commission, et al.
Lead Appellate Counsel:
Kristofer S. Monson Office of the Attorney
Assistant Solicitor General General
State Bar No. 24037129 P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
[Tel.] (512) 936-1820
kristofer.monson@texasattorneygeneral.gov
Appellee:
Diana D., as Next Friend of KD, A Child, et al.
Lead Appellate Counsel:
Daniel R. Richards Richards Rodriguez & Skeith
State Bar No. 00791520 816 Congress Avenue
Benjamin H. Hathaway Suite 1200
State Bar No. 09224500 Austin, Texas 78701
[Tel.] (512) 476-0005
drichards@rrsfirm.com
bhathaway@rrsfirm.com
Table of Contents
Identity of Parties and Counsel ............................................................................... i
Table of Contents .................................................................................................. ii
Index of Authorities ...............................................................................................vi
Statement of the Case .......................................................................................... xvi
Issues Presented ................................................................................................. xvii
Statement of Facts ................................................................................................. 2
Summary of Argument.......................................................................................... 14
Standards of Review ............................................................................................. 17
Argument.............................................................................................................. 18
I. The Live Petition Does Not Attempt to Tie the Causes of
Action it Pleads to the Remedies it Seeks. ................................ 18
II. Plaintiffs’ Lawsuit Has No Arguable Basis in Law.................... 20
A. Plaintiffs Fail to Address the Distinction Between Review
and Adjustment. ................................................................ 20
B. Plaintiffs Fundamentally Misunderstand Rider 50. ............... 22
1. The rider’s plain text is not optional. ......................... 23
2. The post-enactment legislative history proffered by
plaintiffs cannot change statutory text. ....................... 26
C. There is No Basis in Texas Law For Obtaining Judicial
Review of Medicaid Rates that Are Not Required to be
Adopted Through Contested-Case Proceedings. .................. 27
ii
1. Plaintiffs’ approach of using § 2001.038 to attack
Medicaid rates has been rejected by the Texas
Supreme Court......................................................... 28
2. The ultra vires cause of action cannot be used to
retroactively undo rules that became effective on
October 1, but for the district court’s improper
counter-supersedeas order. ....................................... 29
III. That Texas Law Does Not Provide a Judicial Review
Mechanism Under Which Texas Courts Set Medicaid Rates
Makes Sense, Because Such a System Would Be Preempted
by Federal Law.......................................................................... 30
A. The Medicaid Act Makes Rates Subject to the Exclusive
Jurisdiction of the Secretary, Subject Only to Potential
Federal-Court Proceedings. ................................................ 31
B. The Medicaid Act Preempts Texas Remedies Related to
Medicaid Rates By Creating Exclusive Jurisdiction in the
Secretary. .......................................................................... 32
C. Both the Texas and Federal Constitutions Prohibit Judicial
Orders that Interfere with the Relationship Between the
State and Federal Governments. ......................................... 34
IV. Plaintiffs Lack a Vested Property Right in Medicaid Rates. ..... 36
A. Neither the Providers Nor the Beneficiaries Have a Vested
Property Right, and Cannot Raise Either A Due-Course or
Inherent-Judicial-Review Claim. ......................................... 36
1. The provider plaintiffs lack a vested property right...... 37
2. The beneficiary plaintiffs lack a vested property
right—in fact, they will suffer no cognizable change
in their legal status by a change in the rates. ................ 38
B. The Court Should Follow Justice Scalia’s Lead in
Armstrong and Hold that Providers and Beneficiaries Lack
iii
Constitutional Standing to Bring Suit Under the
Ratemaking Criteria of the Medicaid Act. ............................ 39
V. Even if plaintiffs have constitutional standing, they cannot
successfully invoke § 2001.038 or the Ultra Vires Cause of
Action. ...................................................................................... 40
A. Section 2001.038 and the Ultra Vires Cause of Action
Cannot Be Used to Obtain Judicial Review........................... 40
1. The ultra vires cause of action does not apply
retroactively because it is not a form of judicial
review...................................................................... 40
2. Section 2001.038 does not create judicial power to
review substantive agency actions, only agency
rules. ....................................................................... 41
3. Plaintiffs’ lawsuit is barred because it seeks to use
these causes of action retroactively and specifies no
remedy appropriate to the causes of action pleaded.
............................................................................... 43
B. Plaintiffs’ § 2001.038 Claims Are Barred. ............................ 44
1. Plaintiffs lack a right or privilege. ............................... 45
2. Plaintiffs have not “identified” an administrative
rule.......................................................................... 47
a. Plaintiffs cannot reverse engineer a rule
challenge from a rate challenge. ........................ 47
b. Plaintiffs ignore the application of
§ 355.201(d). .................................................. 48
C. Plaintiffs’ Ultra Vires Claims Would Fail Even if they Had
Been Properly Pleaded. ...................................................... 49
iv
1. Plaintiffs’ position regarding § 355.8021 would fail
to trigger an ultra vires claim in any event. .................. 50
2. Plaintiffs’ remaining claims likewise cannot
describe an ultra vires act. .......................................... 53
VI. Because there is no potential for recovery, the Court Should
vacate the Temporary Injunction. ................................................. 55
Prayer ................................................................................................................... 57
Certificate of Service............................................................................................. 58
Certificate of Compliance ..................................................................................... 58
v
INDEX OF AUTHORITIES
Cases
Adams v. Calvert,
396 S.W.2d 948 (Tex. 1965) ........................................................................ 35
Armstrong v. Exceptional Child Ctr., Inc.,
135 S. Ct. 1378 (2015)...............................................................2, 31, 32, 35, 39
Butnaru v. Ford Motor Co.,
84 S.W.3d 198 (Tex. 2002) ................................................................... 55, 56
Charlie Thomas Ford v. A.C. Collins Ford,
912 S.W.2d 271 (Tex. App.—Austin 1995, writ dism’d) ............................ 42
City of Amarillo v. Hancock,
150 Tex. 231, 239 S.W.2d 788 (1951) ..................................................... 36, 42
City of Austin v. Cannizzo,
153 Tex. 324, 267 S.W.2d 808 (1954) .......................................................... 25
City of Austin v. Chandler,
428 S.W.3d 398 (Tex. App.—Austin 2014, no pet.) .................................... 33
City of El Paso v. Heinrich,
284 S.W.3d 366 (Tex. 2009) ....................................................................... 41
City of Houston v. Williams,
216 S.W.3d 827 (Tex. 2007) (per curiam) .................................................. 40
Colorado Health Care Ass’n v. Colorado Dep’t of Soc. Servs.,
842 F.2d 1158 (10th Cir. 1988) ......................................................................3
Combs v. City of Webster,
311 S.W.3d 85 (Tex. App.—Austin 2009, pet. denied).......................... 36, 47
Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envt’l Quality,
307 S.W.3d 505 (Tex. App.—Austin 2010, no pet.) ...............................29-30
vi
Cullen Center Bank & Trust Co. v. Tex. Commerce Bank,
841 S.W.2d 116 (Tex. App.—Houston [14th Dist.] 1992, writ
denied)........................................................................................................ 25
Dallas Cnty. Mental Health & Mental Retardation v. Bossley,
968 S.W.2d 339 (Tex. 1998) ...................................................................17, 18
Douglas v. Indep. Living Ctr. of S. Calif., Inc.,
132 S. Ct. 1204 (2012) ....................................................................................3
El Paso Cnty. Hosp. Dist. v. Tex. Health & Human Servs. Comm’n,
400 S.W.3d 72 (Tex. 2013) ............................................................. 28, 44, 48
El Paso Hospital District v. Tex. Health & Human Services Commission,
247 S.W.3d 709 (Tex. 2008) ................................................................. 28, 44
Eldercare Props., Inc. v. Dep’t of Human Servs.,
63 S.W.3d 551 (Tex. App.—Austin 2001, pet. denied) ................................ 37
Entergy Gulf States, Inc. v. Pub. Util. Comm’n,
173 S.W.3d 199 (Tex. App.—Austin 2005, pet. denied) .............................. 32
Entergy Gulf States, Inc. v. Summers,
282 S.W.3d 433 (Tex. 2009) .......................................................................26
Equal Access for El Paso, Inc. v. Hawkins,
509 F.3d 697 (5th Cir. 2007) ........................................................................ 4
Ex Parte Mitchell,
783 S.W.2d 703 (Tex. App.—El Paso 1989, no writ) ................................... 25
Finance Commission of Texas v. Norwood,
418 S.W.3d 566 (Tex. 2013) ........................................................................ 45
Garcia v. Kubosh,
377 S.W.3d 89 (Tex. App.—Houston [1st Dist.] 2012, no pet.) ................. 44
vii
Gattis v. Duty,
349 S.W.3d 193 (Tex. App.—Austin 2011, no pet.) ..................................... 17
Gen. Servs. Comm’n v. Little-Tex Insulation Co.,
39 S.W.3d 591 (Tex. 2001) ......................................................................... 40
Gerst v. Nixon,
411 S.W.2d 350 (Tex. 1966) ........................................................................ 34
Gulf Land Co. v. Atl. Ref. Co.,
134 Tex. 59, 131 S.W.2d 73 (1939) ......................................................... 33, 41
Harris County v. Sykes,
136 S.W.3d 635 (Tex. 2004) ........................................................................ 18
Heckman v. Williamson Cnty.,
369 S.W.3d 137 (Tex. 2011) ................................................................... 38, 39
Houston Mun. Emps. Pension Sys. v. Ferrell,
248 S.W.3d 151 (Tex. 2007) .................................................................. 33, 42
In re Doe,
19 S.W.3d 346 (Tex.2000) .................................................................... 26, 27
In re Entergy Corp.,
142 S.W.3d 316 (Tex. 2004) ........................................................................ 33
In re Sw. Bell Tel. Co., L.P.,
226 S.W.3d 400 (Tex. 2007) ....................................................................... 18
Jessen Assocs., Inc. v. Bullock,
531 S.W.2d 593 (Tex. 1975) ......................................................................... 34
Lopez v. Pub. Util. Comm’n,
816 S.W.2d 776 (Tex. App.—Austin 1991, writ denied) ............................. 42
Mills v. Warner Lambert Co.,
157 S.W.3d 424 (Tex. 2005) ........................................................................ 32
viii
N. Alamo Water Supply Corp. v. Tex. Dep’t of Health,
839 S.W.2d 455 (Tex. App.—Austin 1992, writ denied) .............................30
Nat’l Fed’n of Indep. Bus. v. Sebelius,
132 S. Ct. 2566 (2012) .................................................................................. 31
Ojo v. Farmers Group,
356 S.W.3d 421 (Tex. 2011) ........................................................................ 27
Pers. Care Prods. v. Hawkins,
635 F.3d 155 (5th Cir. 2011)......................................................................... 37
Pharm. Research & Mfrs. of Am. v. Walsh,
538 U.S. 644 (2003) (plurality op. ......................................... 31, 32, 34, 35, 36
Prairie View A&M Univ. v. Chatha,
381 S.W.3d 500 (Tex. 2012) ....................................................................... 42
R.R. Comm’n v. Tex. Citizens for a Safe Future and Clean Water,
336 S.W.3d 619, 624-25 (Tex. 2011) ............................................................ 51
Richardson v. First Nat’l Life Ins. Co.,
419 S.W.2d 836 (Tex. 1967) ........................................................................ 17
S.C. San Antonio, Inc. v. Tex. Dep’t of Human Servs.,
891 S.W.2d 773 (Tex. App.—Austin 1995, writ denied) .............................. 37
Spring Branch Indep. Sch. Dist. v. Stamos,
695 S.W.2d 556 (Tex. 1985) ........................................................................ 36
SSC Mo. City Operating Co., LP v. Tex. Dep’t of Aging & Disability Servs.,
No. 03-09-00299-CV, 2009 WL 4725286 (Tex. App.—Austin
2009, pet. denied) (mem. op.) ..................................................................... 37
State Bar of Tex. v. Gomez,
891 S.W.2d 243 (Tex. 1994) ........................................................................ 18
State v. Holland,
221 S.W.3d 639, 644 (Tex. 2007) ................................................................ 19
ix
Sw. Pharmacy Solutions, Inc. v. Tex. Health & Human Servs. Comm’n,
408 S.W.3d 549 (Tex. App.—Austin 2013, pet. denied) ........................19, 37
Tex. A&M Univ. Sys. v. Koseoglu,
233 S.W.3d 835 (Tex. 2007) ........................................................................ 17
Tex. Ass’n of Bus. v. Tex. Air Control Bd.,
852 S.W.2d 440 (Tex. 1993) ............................................................ 17, 18, 38
Tex. Comm’n of Licensing & Regulation v. Model Search Am., Inc.,
953 S.W.2d 289 (Tex. App.—Austin 1997, no writ) ....................................30
Tex. Comm’n on Envtl. Quality v. Slay,
351 S.W.2d 532 (Tex. App.—Austin 2011, pet. denied) .............................. 45
Tex. Dep’t of Parks & Wildlife v. Miranda,
133 S.W.3d 217 (Tex. 2004) ...................................................................17, 18
Tex. Dep’t of Protective & Regulatory Servs. v. Mega Child Care, Inc.,
145 S.W.3d 170 (Tex. 2004) .................................................................. 29, 41
Tex. Dep’t of Pub. Safety v. Salazar,
304 S.W.3d 896 (Tex. App.—Austin 2009, no pet.) ................................... 45
Tex. Dep’t of State Health Servs. v. Balquinta,
429 S.W.3d 726 (Tex. App.—Austin 2014, pet. dism’d)....................... 44, 45
Tex. Health & Human Servs. Comm’n v. Advocates for Patient Access, Inc.,
399 S.W.3d 615 (Tex. App.—Austin 2013, no pet.)..................................... 56
Tex. Health & Human Servs. Comm’n v. El Paso Cnty. Hosp. Dist.,
351 S.W.3d 460 (Tex. App.—Austin 2011) ........................................... 28, 44
Tex. Parks & Wildlife Dep’t v. Sawyer Trust,
354 S.W.3d 384 (Tex. 2011) ....................................................................... 40
Thomas v. Groebl,
147 Tex. 70, 212 S.W.2d 625, 630 (1948) ................................................... 24
x
U.S. v. L.A. Tucker Truck Lines, Inc.,
344 U.S. 33 (1952) ..................................................................................... 44
Walling v. Metcalfe,
863 S.W.2d 56 (Tex. 1993) (per curiam) ..................................................... 17
Water Dev’pt Bd. v. Hearts Bluff Game Ranch, Inc.,
313 S.W.3d 479 (Tex. App.—Austin 2010), aff’d 381 S.W.3d 468
(Tex. 2012) ............................................................................................ 19-20
Wichita Falls State Hosp. v. Taylor,
106 S.W.3d 692 (Tex. 2003) ........................................................... 42, 45, 46
Constitutional Provisions, Statutes & Rules
TEX. CONST. art. I, § 28 ........................................................................................ 33
TEX. CONST. art. II, § 1 ......................................................................................... 33
TEX. CONST. art. IV, § 10 ..................................................................................... 35
U.S. Const. art. VI, cl. 2 ........................................................................................ 32
1 TEX. ADMIN. CODE § 353.411(a)(5)............................................................... 13, 54
1 TEX. ADMIN. CODE ch. 355 subch. B .................................................................... 6
1 TEX. ADMIN. CODE § 355.201 ...............................................................................5
1 TEX. ADMIN. CODE § 355.201(c) ..................................................................... 8, 10
1 TEX. ADMIN. CODE § 355.201(c)(4) ............................................................ 3, 8, 53
1 TEX. ADMIN. CODE § 355.201(d) .............................................................. 9, 21, 22
1 TEX. ADMIN. CODE § 355.201(d)(1)(A) ......................................... 9, 10, 12, 21, 48
1 TEX. ADMIN. CODE § 355.201(d)(1) (D) ................................... 9, 10, 12, 21, 48
1 TEX. ADMIN. CODE § 355.201(e) ........................................................... 7, 9, 10, 13
xi
1 TEX. ADMIN. CODE § 355.201(f) ................................................................ 7, 10, 13
1 TEX. ADMIN. CODE § 355.8021 ....................................................................... 8, 13
1 TEX. ADMIN. CODE § 355.8021(a)(2) ........................................................8, 22
1 TEX. ADMIN. CODE §355.8021(a)(2)(A) ........................................ 8, 21, 22, 50
1 TEX. ADMIN. CODE §355.8021(a)(2)(B) .............................................. 8, 21, 22
1 TEX. ADMIN. CODE 355.8021(B)........................................................................49
1 TEX. ADMIN. CODE § 355.8063(k)(1)(A) (2010), repealed by 35 TEX.
REG. 6511, 6513 (2010) ............................................................................... 28
1 TEX. ADMIN. CODE § 355.8085 ..................................................................... 13
1 TEX. ADMIN. CODE § 355.8085(g)(3) ................................................................... 8
1 TEX. ADMIN. CODE § 355.8441.................................................................. 8, 13
1 TEX. ADMIN. CODE § 355.8441(3)(B) .................................................................. 8
1 TEX. ADMIN. CODE § 355.8441(5)(B) ............................................................. 8
1 TEX. ADMIN. CODE § 355.8441(6)(B) ............................................................. 8
1 TEX. ADMIN. CODE § 355.8441(7)(B) ............................................................. 8
42 U.S.C. § 1396a(a) .............................................................................................. 2
42 U.S.C. § 1396a(a)(3) ..........................................................................................3
42 U.S.C. § 1396a(a)(5) ..........................................................................................5
42 U.S.C. § 1396a(a)(30)(A) ....................................................................... 3, 54, 26
42 U.S.C. § 1396b ............................................................................................31, 53
42 U.S.C. § 1396b(a) ...............................................................................................3
xii
42 U.S.C. § 1396b(m)(1)(A)(i) .............................................................................. 55
42 U.S.C. § 1396c ...............................................................................................2, 4
5 U.S.C. § 702 ...................................................................................................... 41
TEX. CIV. PRAC. & REM. CODE § 37.011 ................................................................ 33
TEX. GOV’T CODE § 2001.022 ......................................................................... 53
TEX. GOV’T CODE § 2001.022(a) ............................................................... 13, 46
TEX. GOV’T CODE § 2001.023(a) .......................................................... 13, 46, 53
TEX. GOV’T CODE § 2001.024 ................................................................... 13, 54
TEX. GOV’T CODE § 2001.038 ......................................................................... 41
TEX. GOV’T CODE § 2001.038(a) .............................................................. 16, 42, 43
TEX. GOV’T CODE § 2001.171 ......................................................................... 42
TEX. GOV’T CODE § 2001.174 .................................................................... 41, 42
TEX. GOV’T CODE § 2006.002 ....................................................................13, 53
TEX. GOV’T CODE § 2006.002(c) ....................................................................46
TEX. GOV’T CODE § 311.016 ................................................................................ 24
TEX. GOV’T CODE § 311.034 ................................................................................ 42
TEX. GOV’T CODE ch. 531 .......................................................................................5
TEX. GOV’T CODE ch. 531 subch. B .........................................................................5
TEX. GOV’T CODE § 531.021(b-1)............................................................................5
TEX. GOV’T CODE § 531.021(d) .......................................................................... 8, 9
TEX. GOV’T CODE § 531.021(e) ........................................................................ 9
xiii
TEX. GOV’T CODE § 531.02113.......................................................................... 5, 13
TEX. GOV’T CODE § 531.02113(1) ......................................................................... 53
TEX. GOV’T CODE § 531.0212(b)(2) ...................................................................... 38
TEX. GOV’T CODE § 533.005(a)(21) ...................................................................... 13
TEX. GOV’T CODE § 533.005(a)(21)(c) ................................................................. 54
TEX. HUM. RES. CODE ch. 32 ..................................................................................5
TEX. HUM. RES. CODE § 32.002 ........................................................................5
TEX. HUM. RES. CODE § 32.021 .................................................................. 5, 35
TEX. HUM. RES. CODE § 32.021(a) ..........................................................................5
TEX. HUM. RES. CODE § 32.028 ................................................................... 3, 31, 53
TEX. HUM. RES. CODE § 32.028(a)...................................................................... 5, 6
TEX. HUM. RES. CODE § 32.0281.......................................................................5
TEX. HUM. RES. CODE § 32.0281(b)(1)............................................................. 6
TEX. HUM. RES. CODE § 32.0281(d)....................................................................... 6
TEX. HUM. RES. CODE § 32.0281(e) ............................................................ 6, 29
TEX. HUM. RES. CODE § 32.0282 ................................................................ 6, 10, 52
TEX. HUM. RES. CODE § 32.0282(a) .......................................................................7
TEX. R. CIV. P. 683 ................................................................................................ 56
Rule 24........................................................................................................... 22, 52
xiv
Other Authorities
2016-17 Gen. Appropriations Act,
84th Leg., R.S., ch. 1281, art. II, 2015 TEX. SESS. LAW SERV. 4343,
4547 (Health & Human Servs. Comm’n), Rider 50..................................... 11
A DICTIONARY OF MODERN LEGAL USAGE (2d ed. 1995) ................................ 24, 46
AMER. HERITAGE DICTIONARY 691 (4th ed. 1994) ................................................ 21
AMER. HERITAGE DICTIONARY 1612 (4th ed. 1994) ............................................. 24
BLACK’S LAW DICTIONARY 1436 (9th ed. 2009) ....................................................46
Gen. Appropriations Act, 2012-13 Biennium, 82d Leg., R.S., ch. 1355, art.
II, § 16, 2011 TEX. GEN. LAWS 4025, 4241 (Special Provisions Re:
All Health & Human Servs. Agencies, Provider Rates) ............................... 10
xv
STATEMENT OF THE CASE
Nature of the Case: Plaintiffs sought to impede the
implementation of a set of Medicaid rates
for home therapy services that were to go
into effect on October 1. They attempted to
invoke § 2001.038 of the APA and the ultra
vires cause of action, and asked the district
court to foreclose the Commission from
superseding the judgment.
Trial Court: 200th Judicial District Court,
Travis County
The Hon. Tim Sulak Presiding
Trial Court Disposition: The trial court denied the plea, CR.673
(Appendix Tab B),1 and granted a
temporary injunction, CR.587-672
(Appendix Tab A). The court foreclosed
supersedeas based on a bond of $500; that
matter is being challenged by a separate
motion in the same cause.
1 References to the Clerk’s Record appear as “CR.__,” with a numeral indicating the page number
and, as appropriate, a paragraph reference. References to the Reporter’s Record appear as
__.RR.__, with the first numeral indicating a volume and the second a page number, sometimes
followed by a line number. The Supplemental Reporter’s Record is referred to as “SRR.”
xvi
ISSUES PRESENTED
Plaintiffs sought ultra vires and declaratory relief under the Administrative
Procedure Act related to the Commission’s adjustment of Medicaid rates for certain
therapy services, which were arrived at as a rate adjustment triggered by a decreased
appropriation for Medicaid funding. Plaintiffs allege in their trial-court briefing (but
not in their live petition) that they are entitled to relief related to the rates, because
they are implicitly in conflict with separate administrative rules governing periodic
rate review related to costs. Claims regarding the amount of Medicaid rates are
subject to the exclusive jurisdiction of the federal Secretary of Health and Human
Services, and Texas law does not provide for an administrative process or judicial
review related to the rate-setting process.
1. Does plaintiffs’ petition establish jurisdiction based on any of the
causes of action asserted? Are the jurisdictional defects
incurable?
2. Are Texas-law claims and remedies related to the amount
of Medicaid rates preempted by the federal Medicaid Act?
Does Texas law purport to create an independent basis for
challenging Medicaid rates in state court?
3. Do plaintiffs have a standing to challenge the Medicaid rates or a
vested right in a particular level of Medicaid rates?
4. Do plaintiffs have a vested property right on which to base
a constitutional due-course-of-law claim or seek inherent
judicial review?
xvii
No. 03-15-00657-CV
In the Court of Appeals
for the Third Judicial District
at Austin, Texas
CHRIS TRAYLOR, AS EXECUTIVE COMMISSIONER OF THE TEXAS HEALTH AND
HUMAN SERVICES COMMISSION, et al.
Appellants,
v.
DIANA D., AS NEXT FRIEND OF KD, A CHILD, et al.
Appellees.
On Appeal from the
200th Judicial District Court of Travis County, Texas
APPELLANTS’ BRIEF
TO THE HONORABLE THIRD COURT OF APPEALS:
Plaintiffs seek to challenge the result of a Medicaid rates adjustment, through
a series of procedural mechanisms governing the adoption of the administrative rules
governing the Medicaid process. The remedy plaintiffs seek—to keep the old
rates—is incompatible with the exceptions to sovereign immunity on which they
rely. Those exceptions apply at most to rules, not rates; there is no Texas-law
mechanism to challenge the amount of Medicaid rates. The lack of a Texas-law
remedy for ratemaking is entirely sensible, because federal law preempts all state law
remedies that impact the amount of Medicaid fees related to considerations such as
access to care. The federal Secretary of Health and Human Services has exclusive
authority to review the amount of Medicaid rates, subject to the remedy of
withdrawing federal funds if state levels are too low. 42 U.S.C. § 1396c.
Because there is no Texas-court lawsuit that can change the rates, plaintiffs
should direct their concerns about access to care to the Secretary. The lawsuit should
be dismissed.
STATEMENT OF FACTS
Plaintiffs would engraft a substantive Texas-law access requirement on the
federal Medicaid Act, and to establish a new legal basis for judicial review of
Medicaid rates through statutes that allow review of the underlying administrative
rules. A full understanding of the procedural and jurisdictional issues in this case
requires an understanding of the Medicaid Act’s rate structure and the Texas-law
requirements for adopting administrative rules, periodically setting Medicaid rates,
and adjusting those rates in other circumstances.
Medicaid
Medicaid is a Spending Clause program, cooperatively managed by the state
and federal governments. E.g., Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct.
1378, 1382 (2015). The program functions as a contract between the states and the
federal government: to qualify for funding, the State tenders and the federal
government accepts a Medicaid “plan,” see 42 U.S.C. § 1396a(a), to be administered
2
by the State, see Douglas v. Indep. Living Ctr. of S. Calif., Inc., 132 S. Ct. 1204, 1210
(2012) (federal governments’ acceptance of Medicaid plan, within its expertise,
precluded rate claim against state and required plaintiffs to go to federal forum). The
availability of funds is predicated on the availability of money appropriated to pay
Medicaid benefits. 42 U.S.C. § 1396b(a) (setting amount to be distributed to states
“[f]rom the sums appropriated therefor”); accord, e.g., TEX. HUM. RES. CODE
§ 32.028, 1 TEX. ADMIN. CODE § 355.201(c)(4) (requiring consideration of “levels
of appropriated state . . . funds . . . that limit, restrict, or condition the availability of
appropriated funds for medical assistance”). A shortfall in Medicaid appropriations
requires either further appropriations, or, more rarely, cuts to Medicaid rates. E.g.,
Colorado Health Care Ass’n v. Colorado Dep’t of Soc. Servs., 842 F.2d 1158, 1171-72
(10th Cir. 1988).
The state plan must meet a number of requirements, such as providing a
hearing before a State agency for any individual whose claim for medical assistance
under the plan is denied. E.g., 42 U.S.C. § 1396a(a)(3). One requirement of the
Medicaid Act is “access.” Rates must be:
sufficient to enlist enough providers so that care and services are
available under the plan at least to the extent that such care and services
are available to the general population in the geographic area
42 U.S.C. § 1396a(a)(30)(A).
3
Consistent with the contractual nature of the program, many of its
requirements are subjected to the discretion of the federal Secretary of Health and
Human Services, who has ultimate authority to suspend Medicaid payments to the
states for non-compliance with the Act, 42 U.S.C. § 1396c. For example, the Fifth
Circuit has held that the “access” requirement cannot give rise to a statutory cause
of action in federal court, because discretion over setting rates to meet the access
requirement is vested in the Secretary, rather than the courts. Equal Access for El
Paso, Inc. v. Hawkins, 509 F.3d 697, 701 (5th Cir. 2007).
The amount of rates is, ultimately, reviewed by the Secretary through the
Centers for Medicare and Medicaid Services (“CMS”). This review currently takes
place on an ad hoc basis, but CMS is currently pursuing a formal rulemaking that
would standardize the data requirements and standards for demonstrating access to
care. Medicaid Program; Methods for Assuring Access to Covered Medicaid
Services, 80 Fed. Reg. 67576 (Nov. 2, 2015) (to be codified at 42 C.F.R. pt. 447)
(Appendix, Tab C). This new rule will establish specific criteria for establishing
access to care, including documentation requirements. Id.
Texas Statutes and Rules
In Texas, Medicaid is governed by Chapter 32 of the Human Resources Code
and some provisions in subchapter B of Chapter 531 of the Government Code. See
4
TEX. HUM. RES. CODE ch. 32., TEX. GOV’T CODE ch. 531 subch. B. The statutory
provisions—unsurprisingly—mirror federal law. See TEX. HUM. RES. CODE
§ 32.002 (requiring Chapter be construed in light of federal law and that any
provisions that would render Texas ineligible to receive funds inoperative to that
extent).
The program is administered by the Health and Human Service Commission,
and the Commissioner is charged with adopting the necessary administrative rules
to implement the system. See id. § 32.021; see also TEX. GOV’T CODE ch. 531 (setting
out Commission’s authority and duties). Consistent with the Medicaid Act, the
Commission is charged with presenting the State’s medical assistance plan to the
federal government for approval by the Secretary. See TEX. HUM. RES. CODE
§ 32.021(a) (referring to 42 U.S.C. § 1396a(a)(5)). A separate provision of the
Government Code creates a general duty to “optimize” Medicaid financing by,
among other things, maximizing the receipt of federal funds, creating incentives to
use preventive care, increasing and retaining providers in the system to maintain an
“adequate provider network.” TEX. GOV’T CODE § 531.02113.
Rulemaking:
Rates are adopted under a system set out by administrative rule. TEX. HUM.
RES. CODE § 32.028(a), § 32.0281; TEX. GOV’T CODE § 531.021(b-1); see 1 TEX.
ADMIN. CODE § 355.201. These rules are promulgated under the formal rulemaking
5
requirements of the Administrative Procedure Act. TEX. HUM. RES. CODE
§ 32.0281(d).2
Ratemaking:
The rate making process, by contrast to the underlying rulemaking, is
governed by requirements that are different in form and substance from the APA’s.
See TEX. HUM. RES. CODE § 32.0282 (setting out public-hearing requirement,
different from APA’s). The Human Resources Code makes clear that something
different from formal APA process is required. Id. §§ 32.028(a), 32.0281(b)(1). The
Medicaid-rate-specific process further distinguishes between the processes for
“establishment” and “periodic review,” on the one hand, and “adjustment” on the
other. See 1 TEX. ADMIN. CODE ch. 355 subch. B.
2Somewhat confusingly, § 32.0281 states that the adoption of rules is subject both to the APA’s
rulemaking provisions, TEX. HUM. RES. CODE § 32.0281(d), and that the same rules are subject to
an “appeal” under the contested-case provisions of the APA, id. § 32.0281(e). Subsection (e) is
not implicated in this case, which involves no contested-case proceeding. See infra, n. 9.
6
Ratemaking: Establishment and Periodic Review
When a rule is “established,” the Commission considers the information
detailed in § 355.201(c). HHSC ratemaking staff regularly review new rates based on
all required inputs, and consider stakeholder comments regarding potential access-
to-care issues. Periodic rate changes are adopted at a public hearing “to allow
interested persons to present comments relating to proposed payment rates for
medical assistance.” TEX. HUM. RES. CODE § 32.0282(a). By contrast to public
hearing requirements for APA rulemaking, there is no requirement that the
Commission respond to public comment before the new rate goes into effect, only a
notice requirement.
The notice requirement is satisfied by publication in the Texas Register, no
later than 10 state working days before the effective date of the adjustment. 1 TEX.
ADMIN. CODE § 355.201(e). The published notice must include a description of the
specific increase or reduction, the date on which it will take effect, a description of
the legal and factual bases therefor, a description of any rate setting requirements
that cannot be met, and instructions for interested parties to submit written
comments prior to the hearing on the rates. 1 TEX. ADMIN. CODE § 355.201(f).
Substantively, periodic rate changes are circumscribed by the Commission’s
rules, the requirements of state and federal law, economic factors, and “levels of
appropriated state and federal funds or state or federal laws or enactments that limit,
7
restrict, or condition the availability of appropriated funds for medical assistance.”
See id. §§ 355.201(c), 355.201(c)(4); see also TEX. GOV’T CODE § 531.021(d).
With regard to home health programs, an additional provision § 355.8021,
governs rates for establishment and periodic review of services. See 1 TEX. ADMIN.
CODE § 355.8021. The Commission will “update” schedules for home care “as
needed.” Id. § 355.8021(a)(2). Fees are to be based on an analysis of other fees
authorized by the federal government for similar services, Medicaid fees paid by
other states, a survey of costs reported by home health agencies, the Medicare Low
Utilization Payment Adjustment (LUPA) fees; previous payments for these services,
or “some combination thereof.” Id. § 355.8021(a)(2)(A).
Periodic rate reviews “include,” but are not “limited to, payments for as well
as costs associated with providing” home health services. Id. § 355.8021(a)(2)(B).
Rates for early-intervention therapeutic intervention are subject to the same inquiry.
See 1 TEX. ADMIN. CODE § 355.8441(3)(B); (5)(B); (6)(B); (7)(B) (referring back to
§ 355.8021 when discussing “EPSDT”3 services by home health agencies); 1 TEX.
ADMIN. CODE § 355.8085(g)(3) (specifying that EPSDT services are governed by
§ 355.8441). Thus, for services governed by § 355.8021(a)(2), review is related to
costs.
3 “EPSDT” stands for “Early and Periodic Screening, Diagnosis, and Treatment.”
8
Ratemaking: Adjustments
While rates are ‘established’ and periodically ‘reviewed’ under the relevant
administrative rules, separate provisions govern adjusting rates. 1 TEX. ADMIN. CODE
§§ 355.201(d)(1)(A), (D) (mirroring factors set out in § 531.021(d) of the
Government Code for changing rates notwithstanding other legal requirements),
355.201(e) (discussing procedural requirements therefor). Echoing the Government
Code’s requirement that rates be adjusted “[n]otwithstanding any other provision”
to accommodate the factors such as reduced appropriations, TEX. GOV’T CODE
§ 531.021(d), (e), the rules provide:
Adjustment of fees, rates, and charges. Notwithstanding any other
provision of this chapter, the Commission may adjust fees, rates, and
charges paid for medical assistance if:
(1) state or federal law is enacted, amended, judicially interpreted,
or implemented to:
(A) require the Commission to increase or reduce a fee, rate or
charge paid to a provider for medical assistance;
* * *
(D) restrict, limit, or condition the availability of appropriated
funds to the Commission for payment or reimbursement
of medical assistance.
1 TEX. ADMIN. CODE § 355.201(d). The substantive requirements for an adjustment,
under subsection (d), are different from those for establishment or periodic review
of a rate, under subsection (c), compare id. (allowing a change in rates when
9
appropriations are cut “notwithstanding” other law), with § 355.201(c) (setting out
various data to be considered in establishing rates).
Adjustments are subject to the same procedural requirements as the rate
establishment and review process; interested parties are entitled to submit written
comments and attend a public hearing. Id. § 355.201(f) (requiring same type of
hearing as for establishment of rule under TEX. HUM. RES. CODE § 32.0282). The
administrative rules expressly contemplate the changes in legislation will require
new rates, specifying that such changes will not take effect until the new law does.
Id. § 355.201(e). One example of a non-periodic rate adjustment occurred in the
2012-13 biennium, when the Legislature mandated specific cuts to particular rates.
Gen. Appropriations Act, 2012-13 Biennium, 82d Leg., R.S., ch. 1355, art. II, § 16,
2011 TEX. GEN. LAWS 4025, 4241 (Special Provisions Re: All Health & Human
Servs. Agencies, Provider Rates). By contrast to periodic review based on cost,
adjustments are triggered by discreet events such as a decrease in appropriations for
Medicaid reimbursement. 1 TEX. ADMIN. CODE §§ 355.201(d)(1)(A), (D); see TEX.
GOV’T CODE § 531.021(d), (e).
The Current Dispute
The current state budget contains a rider cutting $186,500,000 in General
Revenue Funds and $249,349,498 in Federal Funds in 2016, and similar numbers in
10
2016. 2016-17 Gen. Appropriations Act, 84th Leg., R.S., ch. 1281, art. II, 2015 TEX.
SESS. LAW SERV. 4343, 4547 (Health & Human Servs. Comm’n), Rider 50 (“Rider
50”) (Appendix Tab D). The rider specifies cuts for acute care therapy services
(including physical, occupational, and speech therapies. Id. It states:
HHSC shall reform reimbursement methodology to be in line with
industry standards, policies, and utilization for acute care therapy
services (including physical, occupational, and speech therapies) while
considering stakeholder input and access to care. Out of the amount in
subsection (a), in each fiscal year at least $50,000,000 in General Revenue
Funds savings should be achieved through rate reductions.
Id. (emphasis added).
The rider separately addresses $25,000,000 to be made through various
medical policy initiatives, setting out initiatives the Commission “may” undertake.
Id. Thus, by contrast to the rate cuts, the Commission has flexibility regarding efforts
such as “[c]larifying policy language,” Rider 50(c)(1), and requiring “a primary care
or treating physician to initiate a signed order or referral prior to an initial therapy
evaluation,” id. 50(c)(4).
In response, the Commission attempted to change the rates in accordance
with Rider 50(c). See CR.18-39. That attempt triggered this lawsuit.
The first notice of changed rates under Rider 50 failed to mention the
adjustment process, see CR.20 (reciting other rate-related provisions). Following
public comment, an internal memorandum suggested that the original rates be
11
changed for various reasons and suggested that the new rates be based on a
modification of the prior announcement and hearing, see CR.235-261. As explained
above, however, the internal memorandum by Commission staff could not trigger
changed rules, because there is no formal requirement or mechanism for addressing
the public’s concerns. Accordingly, the Commission withdrew the entire first rate
proposal, in light of the internal memorandum plaintiffs describe as a second rate
proposal (but which never attempted to meet the procedural requirements to change
the rates). CR.235-261. It then proposed the new, October 1, rates. CR.351-373
(Appendix Tab E). The October 1 rates were proposed under the “adjustment”
procedure. CR.352 (citing 1 TEX. ADMIN. CODE §§ 355.201(d)(1)(A), (D)).
The District Court
Plaintiffs instituted suit Travis County district court while the first set of rates
was in the administrative process, see CR.4-17, and amended their petition following
the internal memorandum, which they have described as a second set of rates,
CR.196-210. After the agency announced the October 1 rates, plaintiffs amended
their petition again and sought a temporary injunction precluding the Commission
from applying the rates while this lawsuit is pending. CR.336-392 (Appendix Tab F).
The second amended petition asserted that the providers would go out of
business, and the beneficiaries might no longer be able to obtain services. CR.342-43
¶ 24. They asserted that the rates were adopted without complying with the
administrative rules governing establishment and periodic review of rates (1 TEX.
12
ADMIN. CODE §§ 355.8021, 355.8441, 355.8085); several provisions related to formal
rulemaking (TEX. GOV’T CODE §§ 2001.022(a), 2001.023(a), 2001.024, 2006.002);
that there had been no published notice under the Medicaid Rate setting rule (1 TEX.
ADMIN. CODE § 355.201(e), (f)). CR.343 ¶ 25, CR.505 ¶ 2. They further asserted
substantive rights to (1) have Medicaid rates ‘maximized,’ CR.343-44 ¶ 26 (citing
TEX. GOV’T CODE § 531.02113); and (2) ensure access to care for each beneficiary
under the provisions governing MCO rates, CR.344 ¶ 27 (citing TEX. GOV’T CODE
§ 533.005(a)(21) and 1 TEX. ADMIN. CODE § 353.411(a)(5)). Finally, plaintiffs
asserted a due-course of law claim. CR.344-45 ¶ 28.
The Commission and Commissioner filed a plea to the jurisdiction and
opposed the temporary injunction in the hearing. CR.581-84. The district court
granted the temporary injunction and denied defendants’ plea. CR.673, CR.587-672
(Appendix Tab A).The district court’s analysis of the probable right of recovery
element accepted plaintiffs’ argument that it is appropriate to enjoin a change in
rates because the rate adjustment allegedly violated the administrative rules
governing rate establishment and periodic rate review or adoption of an administrative
rule under the APA. See CR.591 ¶ 18. The district court incorporated a counter-
supersedeas order into the temporary injunction, requiring a bond of $500 to cover
the potential expense to the State of not implementing Rider 50(c). CR.596-97. That
order is currently being challenged in this Court under Rule of Appellate Procedure
24.
13
While the Rule 24 motion was pending, the trial court heard Appellants’
motion to modify the temporary injunction. The district court denied the motion and
stated that the scope of the injunction could be determined in subsequent sanctions
proceedings, if the State did not choose to comport with plaintiffs’ view of how rates
should be set. SRR.37-39.
Summary of Argument
Plaintiffs have not stated a claim within either of the exceptions to sovereign
immunity they attempt to invoke. That defect is incurable, because (1) Rider 50
mandates the cuts resulting in the rate adjustment that became effective October 1;
(2) plaintiffs’ complaints are all about the standards for rate review, not rate
adjustment; and (3) consistent with the exclusive federal, executive-department
remedy provided by the Medicaid Act, Texas law does not provide judicial review of
Medicaid rates.
Plaintiffs’ petition avers that the adoption of rates in this case violated several
administrative rules (although they never say how), that (implicitly) the adoption of
the rate constituted an amendment of some rule (though they don’t say which), and
they throw in a substantive argument based on the access requirements for
Medicaid-paying managed care organizations (which are not covered by these rates).
In short, their petition fails to invoke trial-court jurisdiction regardless of what the
record shows. A plaintiff cannot rely on the notice-pleading standard against the
14
State; it must articulate a legal theory within a waiver of immunity from suit and
allege facts to support it.
The next step would ordinarily be to look at the record to see whether it
supports remand for repleading. It does not, as explained below. But the ordinary
next step does not apply, because it is first necessary to determine whether plaintiffs
can obtain the remedy they seek, regardless of the facts. To the extent plaintiffs
complain about the October 1 rates, qua rates, their lawsuit is preempted by federal
law. The Medicaid Act preempts contrary state remedies by making claims regarding
“access to care”—a claim that is governed exclusively by federal law and is the only
cited basis for attacking the substance of the rates—subject to the sole remedy of the
federal Secretary of Health and Human Service’s control over rate settings. While
the United States Supreme Court has left open the question whether the Secretary’s
actions are subject to further federal court proceedings, there can be no doubt that
those proceedings must be in federal court, because they will be against, or brought
by, the United States.
That any right to particular rates is contingent on the Secretary’s actions
precludes constitutional standing, any due-course-of-law claim, and any invocation
of inherent judicial review.
And to the extent plaintiffs complain about the adoption and application of
administrative rules, they cannot obtain relief regarding the rate amounts under the
causes of action they attempt to invoke. Section 2001.038 cannot be used to
15
challenge particular applications of administrative rules: it is limited to
“applicability,” not application, and does not provide for injunctive relief. TEX.
GOV’T CODE § 2001.038(a). Nor can the ultra vires cause of action result in the
reversal of a particular action taken pursuant to a rule: it operates prospectively only.
If plaintiffs’ view of jurisdiction were correct, both § 2001.038 and the ultra vires
cause of action would constitute independent bases for judicial review. The Supreme
Court and this Court have long rejected both propositions.
Finally, the pleadings and evidence affirmatively negate any alternative claim.
(1) Plaintiffs have not, as a matter of law, “identified” an administrative rule as
required by Third Court precedent, because the only substantive arguments they
make are that the rules have been misapplied. That cannot result in a declaration
regarding the rules themselves. (2) Their ultra vires claim fails because the
Commissioner has done, and threatens to do, nothing that is not provided by law. As
with any application of administrative rules, if there is no statutory basis for judicial
review and no constitutional basis for inherent review, the defendant’s actions
cannot be the basis for an ultra vires claim. And (3), even assuming (in the face of
overwhelming precedent), that there could be an ultra vires claim, it fails because as
a matter of law the ratemaking was proper exercise of the power to adjust rates
pursuant to decreased appropriations.
16
Standards of Review
A plaintiff must demonstrate that the allegations in his petition fall within the
court’s jurisdiction. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446
(Tex. 1993) (citing Richardson v. First Nat’l Life Ins. Co., 419 S.W.2d 836, 839 (Tex.
1967). Notice pleading is not enough: the “real substance” of the petition must state
a valid legal theory within an exception to sovereign immunity. E.g., Dallas Cnty.
Mental Health & Mental Retardation v. Bossley, 968 S.W.2d 339, 343 (Tex. 1998). A
defendant’s plea to the jurisdiction based on sovereign immunity is analyzed in two
steps: (1) examining the plaintiff’s petition to see if it articulates a claim within the
scope of a valid waiver of immunity and (2) determining whether undisputed
evidence of jurisdictional facts negates the trial court’s jurisdiction. Tex. Dep’t of
Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). The legal question
whether the alleged facts invoke an exception to immunity can require an inquiry
into the merits of the claim; conclusory legal allegations are insufficient, without
supporting facts, to establish jurisdiction. E.g., Gattis v. Duty, 349 S.W.3d 193, 201
(Tex. App.—Austin 2011, no pet.) If either the pleadings themselves or the evidence
affirmatively negates jurisdiction over the claim, the claim must be dismissed. Tex.
A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 847 (Tex. 2007).
A temporary injunction is reviewed for abuse of discretion. E.g., Walling v.
Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993) (per curiam). A trial court abuses its
17
discretion when it fails to analyze or apply the law correctly. In re Sw. Bell Tel. Co.,
L.P., 226 S.W.3d 400, 403 (Tex. 2007).
Argument
I. THE LIVE PETITION DOES NOT ATTEMPT TO TIE THE CAUSES OF
ACTION IT PLEADS TO THE REMEDIES IT SEEKS.
To invoke an exception to immunity a petition must, based on alleged facts,
articulate a legal theory that falls within an exception to sovereign immunity as a
matter of law. E.g., Bossley, 968 S.W.2d at 343. Plaintiffs’ petition makes no such
effort: it merely alleges inconsistencies between the rate-adoption and various
administrative rules and statutes. Nowhere does it articulate how the alleged facts
support a claim within a waiver of sovereign immunity.
It is the plaintiffs’ burden to file a petition that invokes the court’s jurisdiction.
Tex. Ass’n of Bus., 852 S.W.2d at 446. Jurisdiction must appear based on the
allegations, because the defendant is entitled to a ruling on the plea as early as
possible. E.g., State Bar of Tex. v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994). The
petition is tested to see whether the pleading party has “alleged facts that
affirmatively demonstrate a trial court’s subject-matter jurisdiction.” Tex. Dep’t of
Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). It is not enough
merely to mention a cause of action for which immunity is waived: the plaintiff must
allege facts sufficient to support the waiver. See Harris County v. Sykes, 136 S.W.3d
635, 639-640 (Tex. 2004) (lawsuit of plaintiff who does not amend petition to include
18
sufficient facts to trigger immunity waiver must be dismissed); see also State v.
Holland, 221 S.W.3d 639, 644 (Tex. 2007) (dismissing takings claim that was based
on invalid legal theory). More specifically, if the case involves an ultra vires claim
against an official, the plaintiff must plead acts that are, as a matter of law, ultra vires.
E.g., Sw. Pharmacy Solutions, Inc. v. Tex. Health & Human Servs. Comm’n, 408
S.W.3d 549, 557-58 (Tex. App.—Austin 2013, pet. denied) (ultra vires analysis
involves legal inquiry to determine whether alleged acts are prohibited). In sum, a
petition that merely names a waiver of immunity, but does not attempt to allege facts
and assert a legal claim invoking that waiver of immunity, must be dismissed on a
plea to the jurisdiction.
The live petition makes no attempt to tie the relief it requests to the legal
theories or causes of action invoked in the petition (and is thus jurisdictionally
defective), plaintiffs try to circle the square in their trial-court briefing and in the
district court’s temporary-injunction order. There, they assert that the adoption of
the rules manifests an implicit amendment of the administrative rules. That briefing
can’t fix the disconnect between the waivers of immunity plaintiffs invoke and the
legal theories on which they rely. The proper inquiry in this lawsuit is not whether
plaintiffs’ allegations in the petition successfully trigger jurisdiction, but whether
there is any basis for repleading. Holland, 21 S.W.3d at 643, 644; Water Dev’pt Bd. v.
Hearts Bluff Game Ranch, Inc., 313 S.W.3d 479, 485, 490 (Tex. App.—Austin 2010),
19
aff’d 381 S.W.3d 468 (Tex. 2012) (no takings claim asserted in pleadings where
State’s actions were subsidiary to actions of federal government).
II. Plaintiffs’ Lawsuit Has No Arguable Basis in Law.
The core of plaintiffs’ lawsuit—which is found not in their live petition but
rather in their briefing, CR.509 ¶ 6, and in the text of the temporary injunction order,
CR.590 ¶ 11—is that the rate adjustment resulting in the October 1 rates implicitly
invalidates the underlying administrative rules by amending them to reach the
current rates. Thus, plaintiffs seek to use the mechanism for challenging formal
administrative rules under the APA as a collateral vehicle for obtaining judicial
review when there is none. And even if they had pleaded a valid rule challenge—
which they have not, see infra, Part V.B.2—it would fail as a matter of law because
plaintiffs allege violations of the APA and the administrative rules relating to the
establishment and periodic review of Medicaid rates. The October 1 rates, however,
result from a rate “adjustment” triggered by Rider 50. CR.352. So even if plaintiffs’
view of the procedural requirements of Texas law were correct, there lawsuit would
fail for want of jurisdiction.
A. Plaintiffs Fail to Address the Distinction Between Review and
Adjustment.
Plaintiffs’ view of this case depends primarily on the assertion that the
October 1 rates are invalid because there is evidence that the Commission did not
comply with § 355.8021 and, by extrapolation, with various other procedural
20
requirements and with the APA. CR.343 ¶ 25. They suggest that § 355.8021 has been
violated because the rates have not been set according to a particular “formula” set
out therein.4 CR.508 ¶ 2.
More specifically, plaintiffs appear to suggest that there is a violation of
§ 355.8021(a)(2), which relates to the periodic review of rates. 1 TEX. ADMIN. CODE
§ 355.8021(a)(2)(A), (B). Those provisions do not apply at all. And if they did apply,
plaintiffs’ lawsuit would nonetheless be jurisdictionally barred because plaintiffs
misconstrue their requirements. See infra, Part V.C.1.
The October 1 rate notice references §§ 355.201(d)(1)(A) and (D). CR.352.
Those provisions are triggered when state law is amended to (1) require the
Commission to increase or reduce a rate, 1 TEX. ADMIN. CODE § 355.201(d)(1)(A),
or when a law restricts the availability of appropriate funds to the Commission for
the payment or reimbursement of medical assistance, 1 TEX. ADMIN. CODE
§ 355.201(d)(1)(D). When § 355.201(d) is triggered, the Commission may “adjust”
rates “notwithstanding any other provision” in the administrative rules. 1 TEX.
ADMIN. CODE § 355.201(d) (“Adjustment of fees, rates, and charges”).
4 Far from imposing a formula, § 355.8021 (and its dependent provisions, § 355.8441 and
§ 355.8085) creates no substantive requirement except that the Commission consider various data
in some combination and form. A list of data, stating that it can be considered in any combination,
is hardly a “formula.” See AMER. HERITAGE DICTIONARY 691 (4th ed. 1994) (“A method of doing
or treating something that relies on an established uncontroversial model or approach.”).
21
All the procedural rules invoked by plaintiffs, CR.343 ¶ 25, expressly apply to
the establishment and periodic review of Medicaid rates. E.g., 1 TEX. ADMIN. CODE
§§ 355.8021(a)(2) (the Commission will “update the fee schedules . . . as needed);
(a)(2)(A) (fee schedules arrived at in these reviews will be made using a list of data
“or some combination thereof”); (a)(2)(B) (the Commission “may conduct
periodic rate reviews that will include, but not be limited to, payments for as well as
the costs associated with providing” these services). Those provisions do not on
their face apply to the adjustment of the rates resulting in the October 1 rates because
§ 355.8021(a)(2) expressly relates to periodic review of rates. By contrast, when the
Legislature changes the underlying funding for Medicaid, the adjustment process
occurs “notwithstanding” the other requirements of the chapter. 1 TEX. ADMIN.
CODE § 355.201(d).
To sum up: Rider 50 triggered the adjustment process of § 355.201(d), which
occurs notwithstanding other requirements of the Commission’s rules. Plaintiffs
complain exclusively about rules that apply to the periodic review of rules based on
cost, not the adjustment of rules based on a change in appropriations.
B. Plaintiffs Fundamentally Misunderstand Rider 50.
Plaintiffs suggest that Rider 50 creates the option to cut the rates, not a
mandate to do so. See Rule 24 Resp. at 5 n.2, 6 ¶ 8. Not so: Rider 50(c) made rate
cuts for these services a mandatory element of the broader cuts to the Medicaid
reimbursement program.
22
1. The rider’s plain text is not optional.
The rate cuts in Rider 50(c) are not optional. Part 50(a) makes clear that
funding has already been cut from the Medicaid portion of the budget. Rider 50(a).
(“Included in appropriations above in Goal B, Medicaid, is a reduction of . . . a
biennial total of $373,000,000 in General Revenue Funds and $496,570,428 in
Federal Funds.”) Portions of this larger cut “may” include various initiatives. Rider
50(b) (“This reduction shall be achieved through the implementation of the plan
described under subsection d which may include any or all of the following
initiatives:”).
Rider 50(c) is the kicker. After requiring a change in reimbursement
methodology to meet industry standards, “while considering stakeholder input and
access to care,” the Rider makes specific requirements regarding Medicaid therapy
rates:
Out of the amount [already cut] in subsection (a), in each fiscal year at
least $50,000,000 in General Revenue Funds savings should be
achieved through rate reductions. . . . .
Rider 50(c). Plaintiffs’ view that the rate cuts are optional hangs entirely on the word
“should,” which addresses “rate cuts” that are to be used to account for money that
23
was already cut from the budget, according to Rider 50(a).5 In this context, the word
“should” creates a mandatory obligation.
Rider 50(a), not Rider 50(c), cuts funds from the budget. The word “should”
is an instruction to the Commission regarding the proportion of the total cuts that
are to be directed to Medicaid therapy rate reductions.
A sentence containing “should” can, in context, create a mandatory
obligation. The word “should” is not included in the list of words given a
background meaning by the Code Construction Act, see TEX. GOV’T CODE § 311.016,
nor is there a large body of case law governing its use as opposed to the more common
statutory terms “shall” and “may,” see Thomas v. Groebl, 147 Tex. 70, 78-79, 212
S.W.2d 625, 630 (1948) (“shall” can mean “may,” and vice versa). “Should” is the
past tense of “shall,” and, though it is sometimes used to express “probability or
expectation,” it also serves to indicate “obligation or duty.” AMER. HERITAGE
DICTIONARY 1612 (4th ed. 1994). Thus, like “shall” and “may,” the word “should”
can create a mandatory standard in some contexts. See A DICTIONARY OF MODERN
LEGAL USAGE (2d ed. 1995) (“Oddly, should, like may . . . is sometimes used to create
5The response suggests that the word “may” also applies to the rate cuts. Resp. at 16 ¶ 21. This is
wrong. The word “may” applies to the various initiatives in which the Commission is empowered
to initiate to cut an additional $25 million in funding. Rider 50(c). Moreover, while the later
reference in Rider 50(d) to Rider 50(c) addresses some optional programs, it is referring to the
optional programs to cut the additional $25 million. Rider 50(d) does not make the rate cuts in
Rider 50(c) optional, contrary to the plain text of Rider 50(c) and its reference back to Rider 50(a).
24
mandatory standards, as in the ABA Code of Judicial Conduct”). Texas courts have
routinely applied decrees using the word “should” as creating mandatory duties in
statutes, orders, and instructions.6
It makes sense to treat ‘should’ as mandatory in this context. Rider 50(a) sets
out a total amount of cuts, and Rider 50(c) sets out instructions for how to achieve
at least $100,000,000 of those cuts during the biennium. Given that the word
“should” is directed at a portion of the cuts already made, nothing in the context
suggests that the cuts themselves, or their amount, is either conditional or
conditioned upon any particular data or analysis.
Plaintiffs have implied that the reference to “access to care” impacts the rate
changes. See Resp. at 16 ¶ 21 (putting “access to care” next to the rate cuts with an
ellipsis). This is misleading: Rider 50 ties access to reformation of reimbursement
methodology, not to rate cuts. Rider 50(c). The rate cuts are in a separate sentence.
And even if the rate cuts were subject to procedural requirement to perform an
“access to care” inquiry, the reference to “access to care” necessarily invokes the
6 See City of Austin v. Cannizzo, 153 Tex. 324, 331, 267 S.W.2d 808, 813 (1954) (“Whatever
distinctions may be made between the words will and should by lexicographers and between the
phrases ‘the price which the property will bring’ and ‘the price which the property should bring’
by grammarians, the ordinary signification of the latter word and phrase would, by contrast at least,
be calculated to lead the jury to award a greater sum, including purely speculative elements of
damages.”); Ex Parte Mitchell, 783 S.W.2d 703, 705 (Tex. App.—El Paso 1989, no writ) (support
order enforceable even though it says obligor “should” pay); Cullen Ctr. Bank & Trust Co. v. Tex.
Commerce Bank, 841 S.W.2d 116, 125 (Tex. App.—Houston [14th Dist.] 1992, writ denied) (use of
word “should” does not render finding speculative).
25
Medicaid Act’s interpretation of the term, because there is no contrary definition in
Texas law and because Medicaid is a Spending Clause program. 42 U.S.C.
§ 1396a(a)(30)(A). Thus, the only potential legal question is whether the data
supporting the adjustment pass muster under federal law—and that inquiry is in the
hands of the Secretary.
2. The post-enactment legislative history proffered by plaintiffs
cannot change statutory text.
Plaintiffs appear to believe that the number of legislator signatures they can
marshal in support of their lawsuit changes the law. E.g., CR.679 ¶ 14, 731-32.7 But
such letters are of little, or no, value in determining the meaning of a Legislative
enactment. In re Doe, 19 S.W.3d 346, 352 (Tex. 2000) (“[C]ourts construing
statutory language should give little weight to post-enactment statements by
legislators. Explanations produced, after the fact, by individual legislators are not
statutory history, and can provide little guidance as to what the legislature
collectively intended.”).
“The very notion of ‘subsequent legislative history’ is oxymoronic.” Entergy
Gulf States, Inc. v. Summers, 282 S.W.3d 433, 470 n.46 (Tex. 2009). Like all post-
7 Plaintiffs attach even more letters to their response to the Commission’s rule 24 motion. These
examples prove the rule: far from indicating the Legislature’s intent, these letters include policy
statements from members of the Legislature and even letters from a members of Congress, who
have no insight whatsoever into the intent behind Rider 50. Medicaid policy is beyond the judicial
power.
26
enactment legislative history, the Legislator letters are of little use to the courts,
because they represent the views of the Legislators, not the Legislature as a body at
the time of enactment. See Ojo v. Farmers Group, 356 S.W.3d 421, 433 (Tex. 2011)
(using Commissioner of Insurance report implemented pursuant to statute as
evidence of Legislature’s knowledge of report’s contents). The letters attached to
plaintiffs reply are the type of oxymoronic attempt to sway the outcome of a case on
political grounds the Supreme Court has long decried: they “are not statutory
history.” Doe, 19 S.W.3d at 352. They should not sway the Court to take an
unrealistic view of the word “should,” read—as it must be—in light of the
Legislature’s choice to cut far more money from the Medicaid budget and dedicate
$100 million of that cut to rate cuts—as opposed to other aspects of therapy
provision, which are subject to separate cuts of different amounts of money—
addressed to home therapy.
C. There is No Basis in Texas Law For Obtaining Judicial Review of
Medicaid Rates that Are Not Required to be Adopted Through
Contested-Case Proceedings.
Plaintiffs have repeatedly asserted, though curiously enough not in their live
petition, that it is permissible to bring suit to challenge the amount of Medicaid rates
through the vehicle of §2001.038, which governs rule challenges. The district
court’s temporary-injunction order erroneously presupposes that a rule challenge
27
can be used to obtain injunctive relief requiring a change in Medicaid rates. CR.592-
93. The Supreme Court has expressly rejected that proposition.
1. Plaintiffs’ approach of using § 2001.038 to attack Medicaid
rates has been rejected by the Texas Supreme Court.
Plaintiffs justify their attempt to obtain substantive relief regarding Medicaid
rates through the vehicle of a § 2001.038 suit based on El Paso Hospital District v.
Tex. Health & Human Services Commission, 247 S.W.3d 709, 711, 714-15 (Tex. 2008)
(“El Paso Hospital District I”). The Supreme Court held that the plaintiff hospitals
could seek review of their rates in already-pending, exhausted administrative
proceedings based on a new rule. Id. at 715 (allowing Hospitals to obtain “review of
the disputed calculation” under then-existing administrative rule, former 1 TEX.
ADMIN. CODE § 355.8063(k)(1)(A) (2010), repealed by 35 TEX. REG. 6511, 6513
(2010)).
The crux of plaintiffs’ argument is that, by challenging a rule, a plaintiff can
necessarily obtain judicial relief regarding the rates adopted under that rule. E.g.,
CR.507-508. That is precisely the approach that this Court and the Supreme Court
rejected following remand. El Paso Cnty. Hosp. Dist. v. Tex. Health & Human Servs.
Comm’n, 400 S.W.3d 72, 81 (Tex. 2013) (“El Paso Hospital District II”) (“our prior
opinion and judgment did not create a remedy for the hospitals’ past reimbursement
claims”); see also Tex. Health & Human Servs. Comm’n v. El Paso Cnty. Hosp. Dist.,
351 S.W.3d 460, 487 (Tex. App.—Austin 2011) aff’d 400 S.W.3d 72 (Section
28
2001.038’s scope is limited “solely to the extent of permitting suits against state
agencies for declaratory relief concerning the validity or applicability of their
rules”).8 The former rule gave the only relief related to rates, not § 2001.038.
2. The ultra vires cause of action cannot be used to retroactively
undo rules that became effective on October 1, but for the
district court’s improper counter-supersedeas order.
Plaintiffs’ argument appears to be that, because they believe that the rates
were improperly adopted, they are entitled to injunctive relief against the
Commissioner to prevent his implementation of the rates. E.g., CR.246 ¶ 34. But the
Commissioner is expressly entitled to implement the Medicaid plan according to the
rates adopted through the ratemaking process. Thus, even if the rates were wrong,
there could be no ultra vires claim based upon them, because the Commissioner is
expressly entitled by law to implement the existing rates.9
An ultra vires claim must be based on an act outside the defendant official’s
discretion. E.g., Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envt’l
8Tellingly, in plaintiffs’ sur-reply related to the Rule 24 motion, the only response to this point
about El Paso Hospital District II is to double down on El Paso Hospital District I. See Rule 24 Sur-
Reply (served but not yet filed) at 5 ¶6.
9 The Human Resources Code includes a provision, now superseded by case law, see see Tex. Dep’t
of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 198 (Tex. 2004)
(providing that if a statute requires a contested-case proceeding, the APA allows judicial review),
mandating judicial review when rates are required to be adopted through contested-case
procedures, TEX. HUM. RES. CODE § 32.0281(e). The rates in question are not subject to
contested-case proceedings by the current text of the Code, but rather to the non-APA “review”
and “adjustment” procedures. See supra, n.2.
29
Quality, 307 S.W.3d 505, 517-18 (Tex. App.—Austin 2010, no pet.). The violation
must be more than a mistake in judgment: mistaken exercise of a clear grant of
executive power is not subject to common-law judicial remedy. Tex. Comm’n of
Licensing & Regulation v. Model Search Am., Inc., 953 S.W.2d 289, 292 (Tex. App.—
Austin 1997, no writ) (that officials “might decide ‘wrongly’” does not vitiate its
authority to act (quoting N. Alamo Water Supply Corp. v. Tex. Dep’t of Health, 839
S.W.2d 455, 459 (Tex. App.—Austin 1992, writ denied)). If the Commission acted
consistent with the adjustment rules and Rider 50(c) (which requires that access be
considered, but does not mandate a particular form that analysis will take), the
Commissioner cannot act ultra vires in implementing the resulting rates.
III. That Texas Law Does Not Provide a Judicial Review
Mechanism Under Which Texas Courts Set Medicaid
Rates Makes Sense, Because Such a System Would Be
Preempted by Federal Law.
The reason that plaintiffs allege a series of causes of action in state law related
to administrative rules, but then seek a series of remedies related to rates based upon
those rules, is that Texas law allows challenges to the rules but not the rates. See
supra, Part II.A. While there is no jurisdiction over plaintiffs’ claims by operation of
Texas law, there could be no jurisdiction over plaintiffs’ only requested relief—
declarations regarding the amount of money in the rates and injunctive relief
foreclosing application of a particular rate—because any claim related to the amount
of Medicaid rates themselves is preempted by federal law.
30
A. The Medicaid Act Makes Rates Subject to the Exclusive
Jurisdiction of the Secretary, Subject Only to Potential Federal-
Court Proceedings.
Armstrong rejected the idea that there is a free-standing right to sue in federal
court to enforce provisions of the Medicaid Act that are not, themselves, amenable
to judicial enforcement, 135 S. Ct. at 1385, 1387 (judicial right of action must be
“unambiguously conferred” in Spending Clause context). This makes sense in light
of the broad discretion given to the Secretary to determine whether Medicaid rates
meet the Act’s requirements. Moreover, rates are always subject to prior
appropriations, which means that there is not only executive discretion in play, but
also legislative discretion. 42 U.S.C. § 1396b; TEX. HUM. RES. CODE § 32.028.
Spending Clause preemption entails the very specific question whether the
State has agreed to the condition of the federal-law remedy by accepting federal
funds. See Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2606 (2012) (holding
that § 1396a would be unconstitutional as applied to withhold funding from states
based on failure to comply with newly imposed Medicaid requirements, absent
voluntary state acceptance). There is no doubt that Spending Clause statutes have
preemptive effect. See Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 661-
69 (2003) (plurality op.). Supremacy Clause provisions preempt state law, although
statute in question was not preempted); id. at 684-690 (O’Connor, J., dissenting on
ground that statute was preempted); id. at 675 (Scalia, J., concurring on ground that
31
exclusive remedy of § 1396c has preemptive effect); id. at 683 (Thomas, J.,
concurring, expressing doubt that private parties have standing to enforce Spending
Clause program requirements). But the scope of that preemption must be tied to the
State’s acceptance of funding.
B. The Medicaid Act Preempts Texas Remedies Related to Medicaid
Rates By Creating Exclusive Jurisdiction in the Secretary.
The Supremacy Clause makes federal law “the supreme Law of the Land.”
U.S. Const. art. VI, cl. 2. The existence of an exclusive federal forum deprives the
Texas courts of jurisdiction over a claim. See Mills v. Warner Lambert Co., 157 S.W.3d
424, 427-28 (Tex. 2005). Accordingly, federal statutes that empower federal
executive department agencies to act impose a remedy regarding a particular subject
matter preempt Texas judicial proceedings. E.g., Entergy Gulf States, Inc. v. Pub. Util.
Comm’n, 173 S.W.3d 199, 207 (Tex. App.—Austin 2005, pet. denied) (Texas
agency’s failure to give effect to federal agency’s action within its exclusive
jurisdiction was preempted).
The only potential for judicial action regarding Medicaid rates would be
recourse to the Secretary, see Armstrong, 135 S. Ct. at 1385, or potentially a suit in
federal court against the Secretary or, hypothetically, the State, id. at 1389 (Breyer,
J. concurring) (discussing same process). That exclusive remedy, regardless of
whether it allows ancillary federal-court proceedings involving the United States as
a party, necessarily preempts any state-law remedy.
32
This result is, likewise, compelled by Article II, § 1 of the Texas Constitution,
which prohibits the judicial branch from exercising authority conferred on the
executive. TEX. CONST. art. II, § 1. The Texas statutes and rules related to Medicaid
mirror the federal Act, which, in turn, creates an exclusive remedy in the federal
executive branch. Implying a judicial cause of action in contravention of the
Legislature’s choice not to create one would violate the separation of powers. E.g.,
In re Entergy Corp., 142 S.W.3d 316, 321-22 (Tex. 2004) (rejecting separation-of-
powers argument regarding executive exercise of putatively judicial determination
on ground that there is no general right to judicial review of executive-department
action). Put another way, some executive-department actions are necessarily
unreviewable by the judiciary. E.g., Gulf Land Co. v. Atl. Ref. Co., 134 Tex. 59, 73-74,
131 S.W.2d 73, 82 (1939). This is particularly true when a procedure is created by
statute, because a statute that creates rights can place them outside judicial review.
Houston Mun. Emps. Pension Sys. v. Ferrell, 248 S.W.3d 151, 157-58 (Tex. 2007). And
a statute can be designed to incorporate federal standards. E.g., City of Austin v.
Chandler, 428 S.W.3d 398, 411 (Tex. App.—Austin 2014, no pet.). Texas law
incorporates federal law in this context and, as a result, the exclusive remedy of
federal law.
Similarly, there are constitutional limitations on the Legislature’s power to
impose remedies on the Legislative branch. The suspension of laws provision, TEX.
CONST. art. I, § 28, affirmatively limits the judiciary’s power to exercise policy
33
discretion to avoid executive-branch action. E.g., Gerst v. Nixon, 411 S.W.2d 350, 354
(Tex. 1966) (striking down statute allowing court to determine the public good by
preponderance of the evidence). Accordingly, the courts lack power to change the
budget adopted by the Legislature absent a finding of a constitutional violation. E.g.,
Jessen Assocs., Inc. v. Bullock, 531 S.W.2d 593, 601-02 (Tex. 1975) (declining to
change effect of constitutionally valid budget rider).
Judicial review of the October 1 rates would subject a federal decision to state-
court second-guessing, transfer executive department functions to the judiciary, and
result in non-constitutional review (and suspension) of Rider 50’s spending cuts.
The claims related to the amount of rates are preempted.
C. Both the Texas and Federal Constitutions Prohibit Judicial Orders
that Interfere with the Relationship Between the State and Federal
Governments.
Put another way, the Secretary’s exclusive remedy powers make Medicaid,
like all Spending Clause programs, a continuously negotiated contract between the
state and federal governments. As Justice Thomas pointed out in his Walsh
concurrence, the Secretary’s power to terminate Medicaid funding carries with it
the power to forgive or accept particular policy outcomes for the purpose of
encouraging the state to perform better in other areas, or as a recognition of the
particular health challenges facing individual states, 538 U.S. at 680-81 (Thomas, J.,
concurring). Judicial interference with Medicaid rates would mark a direct
34
interference with that discretion. Accordingly, Justice Thomas has questioned
whether Medicaid providers and beneficiaries have constitutional standing to
complain about the Secretary’s actions. Walsh, 538 U.S. at 683 (Thomas, J.,
concurring); see also Armstrong, 135 S. Ct. at 1387 (Scalia, J.); see infra, Part IV.B.
A cognate provision of the Texas Constitution precludes Texas courts from
issuing judgments in this area. The Texas Constitution requires that the Governor
“conduct, in person, or in such manner as shall be prescribed by law, all intercourse
and business of the State with other States and with the United States.” TEX.
CONST. art. IV, § 10. The Legislature has designated the Commission as the
Governor’s agent. TEX. HUM. RES. CODE § 32.021. So long as the Commission’s
state rates are acceptable to the Secretary, and are not subject to additional, separate
requirements of Texas law, they are binding on the courts. Adams v. Calvert, 396
S.W.2d 948, 950 (Tex. 1965) (Governor’s decisions within gap between
requirements of state law and of federal law unassailable). This is the flip side of the
Secretary’s discretion. If the Commissioner and CMS agree on rates, it would violate
the Constitution for a court to set rates differently. Any judicial remedy that does not
take into account that rates are the subject of continuous back and forth between the
Commission and the federal government violates Article IV, § 10.
35
IV. Plaintiffs Lack a Vested Property Right in Medicaid
Rates.
The amount of Medicaid rates is always contingent. It is contingent on
Legislative and Congressional appropriations. It is contingent on the Secretary’s
view of the federal Medicaid Act’s requirements. It is contingent on changes in the
market. It is contingent on the State maintaining its current model of providing
Medicaid care, and not changing to another.
A contingent right is insufficient to invoke the Texas Constitution’s due-
course provision. Spring Branch Indep. Sch. Dist. v. Stamos, 695 S.W.2d 556, 560-62
(Tex. 1985); Combs v. City of Webster, 311 S.W.3d 85, 92 (Tex. App.—Austin 2009,
pet. denied). And a contingent right as a third-party beneficiary to a government
contract may preclude any assertion of constitutional standing. Walsh, 538 U.S. at
680-81 (Thomas, J., concurring).
A. Neither the Providers Nor the Beneficiaries Have a Vested
Property Right, and Cannot Raise Either A Due-Course or
Inherent-Judicial-Review Claim.
Any due-course claim must be predicated on a vested right. Stamos, 695
S.W.2d at 560-62. Likewise, inherent review under the Texas Constitution requires
a vested right. City of Amarillo v. Hancock, 150 Tex. 231, 233, 239 S.W.2d 788, 790
(1951). If plaintiffs lack a vested right, there is no due-course protection and no
inherent review available.
36
1. The provider plaintiffs lack a vested property right.
A Medicaid provider has no vested interest in a particular level of Medicaid
rates. See S.C. San Antonio, Inc. v. Tex. Dep’t of Human Servs., 891 S.W.2d 773, 778
(Tex. App.—Austin 1995, writ denied) (dismissing rate challenge because plaintiff
provider had no vested right in amount of payment, apart from right to
reimbursement under applicable rate for services already rendered); Pers. Care Prods.
v. Hawkins, 635 F.3d 155, 158-59 (5th Cir. 2011) (no vested right in future rates). It
does not have a vested right in avoiding a decrease in rates or profitability based on
statutory changes to the Medicaid program. Sw. Pharmacy Solutions, 408 S.W.3d at
564. Nor does it have a cognizable interest in its business model based on an earlier
set of rates or rules. Eldercare Props., Inc. v. Dep’t of Human Servs., 63 S.W.3d 551,
556 (Tex. App.—Austin 2001, pet. denied).
This does not leave providers without recourse. They have, for example, a
vested property interest in remaining part of the Medicaid system and cannot be
ejected without process. But it leaves them without a trigger for constitutional
protections in this circumstance, where they can easily remain part of the Medicaid
program, but complain that their profitability will be impaired by lower Medicaid
rates. SSC Mo. City Operating Co., LP v. Tex. Dep’t of Aging & Disability Servs., No.
03-09-00299-CV, 2009 WL 4725286, at *6 (Tex. App.—Austin 2009, pet. denied)
(mem. op.) (mere expectation of providing services insufficient to trigger providers’
inherent review claim). The lack of a vested right is fatal to their due-course claim.
37
2. The beneficiary plaintiffs lack a vested property right—in
fact, they will suffer no cognizable change in their legal status
by a change in the rates.
There is a difference between the beneficiary plaintiffs’ asserted potential
injuries and their legal rights under Texas law and the Medicaid Act. To be clear, the
Commission does not dispute that plaintiffs’ allegations of decreased access are
within the scope of the courts’ constitutional authority and, therefore, legally
cognizable in the abstract. But it does not follow that they have a sufficient interest
to trigger the due-course provision.
Moreover, the beneficiaries nonetheless lack standing because their alleged
injuries are non-redressable. See Heckman v. Williamson Cnty., 369 S.W.3d 137, 155
(Tex. 2011). Failure to establish redressability is a jurisdictional bar. Tex. Ass’n of
Bus., 852 S.W.2d at 446. There is no change in the beneficiaries’ legal status to be
redressed. Nothing in the Medicaid Act or the cognate Texas statutes creates a right
to care, or a right to access care. They are entitled to have the costs of care
reimbursed if they seek care from a participating health care provider, and a
“reasonable opportunity to choose a health care plan and primary care provider,”
not an absolute right See TEX. GOV’T CODE § 531.0212(b)(2). That is all. That status
will not change under the new rates. Accordingly, their due-course claim, and any
inherent-review claim, fail.
38
B. The Court Should Follow Justice Scalia’s Lead in Armstrong and
Hold that Providers and Beneficiaries Lack Constitutional
Standing to Bring Suit Under the Ratemaking Criteria of the
Medicaid Act.
In part IV of the Armstrong opinion, Justice Scalia referred back to a prior
concurrence by Justice Thomas suggesting that private parties cannot establish
standing to challenge Medicaid rates because they are merely third-party
beneficiaries to the ongoing contractual arrangement between the states and the
federal government, 135 S. Ct. at 1387 (Scalia, J.) (plurality op.). This renders any
claim non-redressable in the courts, which is a jurisdictional bar to standing. See
Heckman, 369 S.W.3d at 155.
That view should prevail here. For the same reasons neither the providers nor
the beneficiaries have a vested right—primarily that the rates are subject to constant
change based on legislative appropriation and other factors, and that the Medicaid
Act contemplates resolution of those issues through the Executive Department, see
supra, Part III.C—they cannot establish constitutional standing to challenge the
amount of Medicaid rates. While they may have demonstrable inconvenience or even
injury related to the plan, there can ultimately be no judicial redress because the
Executive Department remains free to adopt a contrary view.
39
V. Even if plaintiffs have constitutional standing, they
cannot successfully invoke § 2001.038 or the Ultra
Vires Cause of Action.
Even assuming plaintiffs’ asserted injuries trigger standing, their lawsuit
would be barred by sovereign immunity in any event. Plaintiffs attempt to create
judicial review of Medicaid rates through the mechanism of § 2001.038 and the ultra
vires cause of action, in derogation of the common law and the plain text of the APA.
A. Section 2001.038 and the Ultra Vires Cause of Action Cannot Be
Used to Obtain Judicial Review.
Plaintiffs rely on the ultra vires cause of action and § 2001.038 to seek relief
regarding the Commission’s application of its rules to adopt the October 1 rates. A
claim for a remedy that is not supported by the invoked waiver of immunity from suit
is jurisdictionally barred. E.g., Tex. Parks & Wildlife Dep’t v. Sawyer Trust, 354
S.W.3d 384, 388 (Tex. 2011) (citing City of Houston v. Williams, 216 S.W.3d 827,
828-29 (Tex. 2007) (per curiam)). Plaintiffs cannot achieve judicial review of the rate
determination through causes of action that don’t allow this form of relief.
1. The ultra vires cause of action does not apply retroactively
because it is not a form of judicial review.
The background presumption of Texas administrative law is that there is no
judicial review absent a vested property right or another basis for constitutional
inquiry. Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 599 (Tex.
2001). The ultra vires cause of action is an exception to this general principle,
40
allowing prospective relief to foreclose action in contravention of law. City of El Paso
v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009) (plaintiff must “allege” and
“ultimately prove” act that is outside defendant official’s authority); id. at 376 (relief
must be prospective). Ultra vires relief cannot reach back in time to undo past
executive action, even by prospectively enjoining the results of an administrative
proceeding, without becoming a common-law basis for judicial review—which Little-
Tex and Heinrich teach us does not exist.
2. Section 2001.038 does not create judicial power to review
substantive agency actions, only agency rules.
By contrast to the federal system, in which the federal APA provides a general
right to review of executive-department action, see 5 U.S.C. § 702, Texas has a
limited system of review, in which some executive department determinations are
not subject to judicial review, e.g., Gulf Land Co, 134 Tex. at 73-74, 131 S.W.2d at 82,
and the others are generally reviewable only if the government’s actions take (or
should take) the form of a formal contested-case proceeding or rulemaking, TEX.
GOV’T CODE §§ 2001.038, 2001.174; see Tex. Dep’t of Protective & Regulatory Servs.
v. Mega Child Care, Inc., 145 S.W.3d 170, 198 (Tex. 2004) (judicial review triggered
by requirement that agency proceed under APA). That the Legislature provided for
formal administrative rules, but not a contested-case proceeding, to govern Medicaid
rates dovetails neatly with the preemptive effect of the Medicaid Act: federal law
41
does not permit judicial review of rate determinations, and Texas law does not
contemplate such review. E.g., Ferrell, 248 S.W.3d at 157-58.
The two review structures of the APA are a statutory exception to this bar on
review, but they are narrow in scope. Because the remedies are statutory, not
common law, they are subject to restrictions on statutory waivers of immunity. E.g.,
City of Amarillo, 150 Tex. at 233, 239 S.W.2d at 790. Ambiguities are resolved in
favor of immunity. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 697 (Tex.
2003); TEX. GOV’T CODE § 311.034. And the pleading requirements are
jurisdictional. Prairie View A&M Univ. v. Chatha, 381 S.W.3d 500, 510-513 (Tex.
2012). Section 2001.038 applies to rules. TEX. GOV’T CODE § 2001.038(a). Section
2001.174 applies to contested-case proceedings applying those rules. Id. § 2001.174.
The text of § 2001.038 forecloses its use to attack action taken under rules: it
addresses the “applicability” of rules, not their application, for a reason. See Id. §
2001.038(a). Contested-case judicial review is subject to strict exhaustion rules. Id.
§ 2001.171. If § 2001.038 could be used retroactively to challenge application of a
rule, it would be an ancillary form of judicial review and render § 2001.171’s
exhaustion requirement meaningless. See Charlie Thomas Ford v. A.C. Collins Ford,
912 S.W.2d 271, 275 (Tex. App.—Austin 1995, writ dism’d); Lopez v. Pub. Util.
Comm’n, 816 S.W.2d 776, 782 (Tex. App.—Austin 1991, writ denied).
42
3. Plaintiffs’ lawsuit is barred because it seeks to use these
causes of action retroactively and specifies no remedy
appropriate to the causes of action pleaded.
Plaintiffs’ petition relies on these two causes of action to enjoin the outcome
of the rate adjustment that resulted in the October 1 rates. Plaintiffs, strikingly, recite
only past actions as the basis for their ultra vires claim. See CR.346 ¶ 34 (“the actions
of Commissioner Traylor are ultra vires in that his actions taken in promulgating the
Rates are outside his statutory and legal authority”). The Commissioner’s actions
had already been taken. To the extent that the petition seeks to reach back and undo
past action, it is jurisdictionally defective.
The ultra vires cause of action cannot be used to obtain that remedy, because
it cannot be a form of judicial review: allowing injunctive relief based on an alleged
error in past action would render the remedy retroactive, in contravention of
Heinrich, and turn it into a basis for common-law judicial review, in derogation of
Little-Tex. And § 2001.038 cannot be used to review the application of a rule, because
to do so would ignore the text of the APA and vitiate that statute’s exhaustion
requirement.10 Because the remedy plaintiffs seek is incommensurate with the either
§ 2001.038 or the ultra vires cause of action.
10 Nor does § 2001.038 provide a basis for injunctive relief. Compare TEX. GOV’T CODE
§ 2001.038(a) (providing for declaratory, not injunctive relief) with TEX. CIV. PRAC. & REM. CODE
§ 37.011 (expressly providing for injunctive relief ancillary to declaratory relief). Because the
Legislature provides a statutory basis for injunctive relief when it intends declaratory and
injunctive relief to be issued together, § 2001.038’s remedy cannot implicitly allow injunctive
43
To be clear, § 2001.038 does provide a remedy with regard to past actions
related to Medicaid rules: they can be declared invalid despite the fact that they were
implemented in the past. E.g., El Paso Hosp. Dist. I, 247 S.W.3d at 711, 714-15. But it
does not follow that invalidity triggers a right to different rates. El Paso Hosp. Dist.
II, 400 S.W.3d at 81. Likewise, the ultra vires cause of action would be available to
enjoin the Commissioner from proceeding to adopt rates without regard to the
relevant statutes and rules, but it would do so only prospectively. In each
circumstance, the invalidity of the rule or the injunction against extra-legal activity
is prospective from issuance of the mandate.
B. Plaintiffs’ § 2001.038 Claims Are Barred.
As explained above, plaintiffs’ theory that they can obtain relief related to the
rates, as opposed to prospective relief related to the underlying administrative rules,
has been expressly rejected by this Court and the Texas Supreme Court, which have
both held that § 2001.038 addresses only rules, not the resulting rates. El Paso Hosp.
Dist. II, 400 S.W.3d at 81; El Paso Hosp. Dist. II, 351 S.W.3d at 487; see supra, Part
II.C. The next question is whether the jurisdictional defect caused by plaintiffs’
relief. Recognizing that the Court has relied on El Paso Hospital District I for the proposition that
injunctive relief is appropriate, Tex. Dep’t of State Health Servs. v. Balquinta, 429 S.W.3d 726, 749-
750 (Tex. App.—Austin 2014, pet. dism’d, the Commission asks the Court to reconsider that view.
The issue of injunctive relief was raised sua sponte in El Paso Hospital District I, which means that
the parties did not brief it and the issuance of injunctive relief is, as a result, non-precedential. See
U.S. v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 38 (1952); Garcia v. Kubosh, 377 S.W.3d 89, 106
(Tex. App.—Houston [1st Dist.] 2012, no pet.).
44
misplaced reliance on a foreclosed legal theory is incurable. The defect cannot be
cured.
1. Plaintiffs lack a right or privilege.
To be clear, constitutional standing does not require a vested property right;
the Commission does not challenge plaintiffs’ asserted injury to their businesses, nor
does it suggest that the beneficiary plaintiffs will not be inconvenienced if they have
to find new providers. In some legal contexts, those injuries would be sufficient to
trigger constitutional standing. However, for the same reason plaintiffs have no
vested property interests, they cannot articulate a “right or privilege” sufficient to
trigger the waiver of immunity in § 2001.038. Because § 2001.038 is a statutory
waiver of immunity, e.g., Tex. Comm’n on Envtl. Quality v. Slay, 351 S.W.2d 532, 543
(Tex. App.—Austin 2011, pet. denied), its requirements are strictly construed in
favor of preserving immunity, Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692,
697 (Tex. 2003).11 Thus, failure to meet the pleading requirements of § 2001,038 is
a jurisdictional bar.
11The Commission acknowledges this Court’s prior holding that the “right or privilege” inquiry
extends to any claim for which there is constitutional standing. Balquinta, 429 S.W.3d at 742-43.
Balquinta wrongly extends Finance Commission of Texas v. Norwood, 418 S.W.3d 566, 582 n.83 (Tex.
2013). Footnote 83 of Norwood merely rejected the argument that there is a lower standing
requirement for §2001.038 claims than is required by the constitution; it did not address whether
the “right or privilege” requirement is more restrictive than the scope of allowable constitutional
standing, id. This Court has previously held that a § 2001.038 claim based on something that is not
a right or privilege results in dismissal; that is the appropriate rule. Tex. Dep’t of Pub. Safety v.
Salazar, 304 S.W.3d 896, 907-08 (Tex. App.—Austin 2009, no pet.). The issue is not squarely
45
A “right” is “an interest or expectation guaranteed by law.” A DICTIONARY
OF MODERN LEGAL USAGE 772 (2d ed. 1995). “Privilege” is generally defined as a
“person’s legal freedom to do or not to do a given act.” Id. at 693.12 In either case,
to be a basis for a § 2001.038 suit, a claim would have to be presently enforceable,
not merely legally cognizable; having a legal existence, not merely legal potential.
That standard is more narrow than constitutional standing.
The temporary injunction order fleshes out plaintiffs’ administrative-law
claim, with the assertion that there are formal defects in the ratemaking that render
the rates improper because the Commission did not comply with formal
requirements for adopting new administrative rules. See CR. 590-91 (asserting that
rate adoption requires application of TEX. GOV’T CODE § 2001.022(a) (employment
impact statement); § 2001.023(a) (30 days’ notice); § 2006.002(c) (small-business
impact statement)). Even assuming plaintiffs’ request for relief threads the two
needles of preemption and the prohibition on implied judicial review of past actions,
plaintiffs’ legal theory is insufficient to trigger jurisdiction.
presented here, because the claims are barred by standing and failure to invoke §2001.038, but the
analysis of each claim should be distinct.
12 Accord BLACK’S LAW DICTIONARY 1436 (9th ed. 2009) (defining a “right” as “a legally
enforceable claim that another will do or will not do a given act; a recognized and protected interest
the violation of which is a wrong”), 1316 (defining “privilege” as a “special legal right, exemption,
or immunity granted to a person or class of persons; an exception to a duty”).
46
The providers have no legally cognizable interest in their business model or
the continued receipt of particular rates; the only recourse regarding the amount of
rates is the discretion of the Secretary. See supra, Part III. The beneficiaries’ situation
is not changed at all: they are entitled to have payments made to providers on their
behalf, at the rate indicated by law. See supra, Part IV.A. Accordingly, they have no
“interest” that can be “affected” by the relevant administrative rules or their
application in a ratemaking. For the same reason that these claims are unredressable,
they cannot trigger jurisdiction under § 2001.038.
2. Plaintiffs have not “identified” an administrative rule.
Nor have plaintiffs successfully identified a particular administrative rule that
has been violated. City of Webster, 311 S.W.3d at 101. This is a rate adjustment, not a
rulemaking, so none of the Government Code provisions they cite apply. They have
cited only administrative rules that govern periodic rate review. See supra, Part II.C.
Their jurisdictional hook is that the Commission’s proceedings implicitly amended
those rules. But, if completely different rules applied, then plaintiffs have not
“identified” a rule the validity or applicability of which they challenge. Under City
of Webster, their § 2001.038 claim must be dismissed.
a. Plaintiffs cannot reverse engineer a rule challenge from
a rate challenge.
Plaintiffs seek to strike at the rates by arguing that the issuance of a rate within
which they disagree implicitly amends the requirements of the underlying
47
administrative rules. CR.509 ¶ 6. Raising that issue in the briefing does not
“identify” it in the petition; plaintiffs have asserted only a potential, contingent
application of a rule that they assert, without merit, has been violated. In fact, the
Commission’s actions were based on different rules governing the adjustment
process, see supra, Part II.C. There is, as a result, no jurisdictional hook based on
implied amendment to support plaintiffs’ lawsuit. Certainly, that is the position
taken by the Texas Supreme Court when it held that a § 2001.038 proceeding did
not entitle plaintiffs to a change in already-final rates. El Paso Hosp. Dist. II, 400
S.W.3d at 81.
b. Plaintiffs ignore the application of § 355.201(d).
The first defect in plaintiffs’ claim is that it relies on rules that do not apply to
rate adjustments triggered by changes in appropriations. Plaintiffs cite § 355.8021
and provisions that refer to it, as well as the reporting requirements for rule adoption
under the APA. CR.343 ¶ 25. That argument fails to take into account that the
adjustment was made under § 355.201(d), which provides for rate adjustments
“notwithstanding” any other statutory or rule-based requirement, when, among
other things, the Legislature cuts funding. CR.352 (citing 1 TEX. ADMIN. CODE
§§ 355.201(d)(1)(A), (D)).
Plaintiffs also assert that there was improper notice of the October 1 rates.
CR.343 ¶ 25. The proper notice standard is set out in §§ 355.201(e) and (f). The
Commission tendered evidence showing that the notice was properly published on
48
September 4, 2015, in the Texas Register and on the Commission’s website, setting
the hearing for September 18, 2015. CR.577-580. Because the relevant statute
requires nothing more, the existence of adequate notice is a jurisdictional fact issue
that plaintiffs have failed to controvert.
C. Plaintiffs’ Ultra Vires Claims Would Fail Even if they Had Been
Properly Pleaded.
As explained above, the Commissioner cannot act ultra vires in implementing
Medicaid rates that are already final: that is his job. See supra, Part II.A. Plaintiffs’
claim might be construed to construed to be that, in issuing the current rates, the
Commission’s cost analysis includes none of the data included in
§ 355.8021(a)(2)(A), or that it is a “periodic rate review” that includes, but is not
limited, to analysis of payments and costs for therapy. See CR.591-92.
Even if these claims were framed prospectively—applied to future
ratemaking, an ultra vires claim could result in relief preventing the Commissioner
from acting contrary to statute or rule in future proceedings, see supra, Part II—they
would nonetheless be jurisdictionally barred, and the defect is incurable. As
explained above, the Commission was not circumscribed by § 355.8021(a)(2)(A),
complied with its requirements by providing a “combination” of the data required,
and is entitled to do so under deference principles. And § 355.8021(B) cannot be
applied to rate adjustments triggered by legislative action. At most, plaintiffs
complain that information was not in a particular format (which the rule does not in
49
fact require) and that it was not analyzed using a particular methodology (even
though the rule imposes no particular methodology, but rather allows consideration
of “some combination” of data). Accordingly, implementation of the October 1 rates
is not, as a matter of law, ultra vires. And because the act described is intra vires, suit
against the Commissioner must be dismissed.
1. Plaintiffs’ position regarding § 355.8021 would fail to trigger
an ultra vires claim in any event.
The temporary-injunction order incorrectly suggests that there has been a
violation of § 355.8021(a)(2)(A). CR.590 ¶ 9. Not so. Section 355.8021(a)(2)(A)
requires the Commission to address a series of data in setting rates or “some
combination thereof.” 1 TEX. ADMIN. CODE § 355.8021(a)(2)(A). Regardless of the
methodology, there is no dispute that the report incorporates at least some of the
elements of § 355.8021(a)(2)(A). And that fact precludes jurisdiction, because the
rule does not require consideration of all the data listed in (a)(2)(A), nor does it
require it to be in any given format. It requires only “some combination thereof.” If
the report aggregates any of the (a)(2)(A) data, in any form, it complies with
(a)(2)(A).13
13Plaintiffs’ petition might be read to imply an argument that Rider 50(c) itself requires an
independent access analysis. As explained above, that language does not apply to the rate cuts. See
supra, Part II.B & n.5. Of course, the federal access requirement still applies. But both the substance
and remedy for the access requirement preempt state law either because there is no judicial
recourse, per Justice Scalia, or because the only available judicial proceedings are a federal APA
50
Consider how this issue would be resolved if the Legislature had provided
judicial review under the APA. The Commission would be entitled to deference on
its construction of the technical requirements of its own rule. E.g., R.R. Comm’n v.
Tex. Citizens for a Safe Future and Clean Water, 336 S.W.3d 619, 624-25 (Tex. 2011).
Because the words “some combination thereof” cannot be read to require,
unambiguously, that all the data in (a)(2)(A) be considered, or that it be considered
in some particular format, the Commission would prevail. This aspect of plaintiffs’
petition highlights the degree to which they ask for something procedurally new: to
invalidate the rule under § 2001.038, based not on the rule itself but on its
application, thereby sidestepping the Commission’s discretion—which is entitled to
deference—to interpret its own rules. There is no viable rule challenge hidden in
plaintiffs’ attack on the October 1 rates.
The weakness of plaintiffs’ position is underscored by their trial court briefing.
At the end of the day, all of plaintiffs’ jurisdictional allegations boil down to the
assertion that the administrative rules impose a particular formula for funding, when
in fact they require only that the Commission consider certain information in no
particular format, giving none of it a particular weight. See CR.343 ¶ 25. Without a
“formula,” the Gordian knot of plaintiffs’ lawsuit is cut, and it must be dismissed.
suit against the Secretary, per Justice Breyer, see supra, Part III.B. Under neither view of the law
would it be appropriate for a Texas court to answer an access question.
51
They do not require the Commission to respond to public comment regarding
this data. They do not require the Commission to publish the contents of any studies
on which it relies. And that makes sense, because (1) there is no administrative
process in which the public can contest the studies, only a requirement of comment,
TEX. HUM. RES. CODE § 32.0282; (2) that requirement is entirely consistent with the
Medicaid Act’s provision of an exclusive executive-department remedy for access-
to-care issues, see supra, Part III; (3) and it is mandated by the Legislature’s choice,
consistent with the Medicaid Act and two centuries of Texas law, not to provide
judicial review of rate setting. What matters, at the end of the day, is whether the
Secretary is satisfied with the Commission’s access-to-care analysis. There is no
Texas-law vehicle for addressing the issue.
The temporary injunction order likewise invokes § 355.8021(a)(2)(B). CR.590
¶ 10; see also Rule 24 Resp. at 5 ¶ 6 (citing testimony at 3.RR.229-230 to effect that
October 1 rates were not required to be based on § 355.8021(a)(2)(B)). The easy
response to this is that § 355.8021(a)(2)(B) expressly applies only to periodic
reviews, not to adjustments. See supra, Part II.A. That Commission employees
voluntarily used data that complied with § 355.8021(a)(2)(A) goes only to their
efforts to ensure that the rates are acceptable to the Secretary. And that distinction
makes sense: periodic rate review updates costs, while adjustment respond to
changes made by Congress and the Legislature. A cost study is not necessary to carry
out the Legislature’s instruction in Rider 50.
52
2. Plaintiffs’ remaining claims likewise cannot describe an ultra
vires act.
In addition to the notice and data requirements that directly apply to home
care Medicaid rights, plaintiffs raise a number other claims, based on broader
statutory requirements. Those claims necessarily fail, both as § 2001.038 and as ultra
vires claims
Plaintiffs invoke § 531.02113 of the Government Code, which requires
“Optimization of Medicaid Financing” and instructs the Commission to “maximize
the state’s receipt of federal funds.” TEX. GOV’T CODE § 531.02113(1); CR.343-44
¶ 26. Plaintiffs appear to view the section as creating a generic vehicle for judicial
review of the policy behind setting Medicaid rates. That view is untenable in light of
Rider 50(c): the Commission cannot increase the amount of federal Medicaid funds
spent contrary to the budget. Nor can the term “maximize” be extended to create a
judicial right to a particular amount of funding to set rates at a particular level—
Medicaid rates are always subject to being cut by Congress and the Legislature. 42
U.S.C. § 1396b; TEX. HUM. RES. CODE § 32.028, 1 TEX. ADMIN. CODE
§ 355.201(c)(4).
Plaintiffs cite several reporting requirements related to the formal rulemaking
process. CR.343 ¶ 25 (referring to TEX. GOV’T CODE § 2006.002 (economic impact
analysis and regulatory flexibility analysis for “rules with adverse economic effect”);
§§ 2001.022 (local employment impact statement for rulemaking); 2001.023(a),
53
2001.24 (requiring 30 days’ notice before rulemaking, implementing requirements
notice)). None of these statutes apply, because ratemaking is not subject to the
APA’s formal rulemaking process. To the contrary, as explained above, rates are
subject to a shorter, less-involved notice requirement, do not require response to
public input, and need not be justified after the public comment period is over. See
supra, Part II.A.
Finally, plaintiffs suggest that various statutes and rules create a separate
“access to care” requirement under Texas law that is independently actionable.
CR.344 ¶ 27 (invoking 1 TEX. ADMIN. CODE § 353.411(a)(5) (requiring MCOs to
“ensure reasonable availability of specialists); TEX. GOV’T CODE
§ 533.005(a)(21)(c) (providing that “health care services will be accessible . . . to a
comparable extent that health care services would be available to recipients under a
fee-for-service or primary care case management model”). Plaintiffs suggest that,
because the rates will put the beneficiaries’ current care providers out of business, it
will violate this statute. CR.344 ¶ 27. That argument fails. It attempts to cherry-pick
language that, when excerpted, gives the impression that there is a separate, greater
Texas requirement of access to care that supplements the federal standard. But each
of these provisions is entirely coterminous with the federal standard. The federal
standard requires rates be set at a level that gives beneficiaries access to care that is
comparable to patients with private insurance in the same geographic area. 42 U.S.C.
§ 1396(a)(30)(A). Each MCO is created to cover a particular geographic area.
54
Indeed, the Texas law provisions on which plaintiffs rely merely echo the language
of the Medicaid Act provision that authorizes MCOs. See 42 U.S.C.
§ 1396b(m)(1)(A)(i).14 And the Medicaid Act requires only that rates be set to ensure
there is similar provider availability as would otherwise be available under private
insurance, not a general right of all beneficiaries to access care qua care. See supra,
Part III.
VI. BECAUSE THERE IS NO POTENTIAL FOR RECOVERY, THE COURT SHOULD
VACATE THE TEMPORARY INJUNCTION.
A temporary injunction must be reversed if the trial court’s decision was so
arbitrary that it exceeds the bounds of reasonable discretion. Butnaru v. Ford Motor
Co., 84 S.W.3d 198, 204 (Tex. 2002). An element of that discretion requires the
court to determine whether there is a cause of action against the defendant. Id. That
this lawsuit is barred by immunity in its entirety, yet was allowed to proceed, is an
arbitrary abuse of discretion and a failure to determine whether there is a cause of
action against defendants.
So is issuing an order restraining a change in the amount of Medicaid rates in
contravention of the Medicaid Act’s exclusive remedy provision. See supra, Part III.
Indeed, the district court has underscored the impropriety of its order in denying
14An MCO “makes services it provides to individuals eligible for benefits under this subchapter
accessible to such individuals, within the area served by the organization, to the same extent as
such services are made accessible to individuals (eligible for medical assistance under the State
plan) not enrolled with the organization.” 42 U.S.C. § 1396b(m)(1)(A)(i).
55
defendants’ motion to modify the temporary injunction. See SRR.37-39. To be
enforceable a temporary injunction—indeed any injunction in the Texas system—
must “describe in reasonable detail . . . the act or acts sought to be restrained.” TEX.
R. CIV. P. 683; Tex. Health & Human Servs. Comm’n v. Advocates for Patient Access,
Inc., 399 S.W.3d 615, 628-29 (Tex. App.—Austin 2013, no pet.) (vacating portions
of temporary injunction that did not adequately put Commission on notice of its
obligations under the injunction). The district court suggested that it was
appropriate to require the Commission to confer with plaintiffs before taking future
action, and stated that whether the Commission had violated the injunction could be
decided at the sanctions hearing. SRR.38. Taking discretion over Medicaid rates
from both the Commission and the Secretary and predicating that usurpation of
power on a $500 bond, was arbitrary.
Likewise, it was an abuse of discretion to treat plaintiffs’ assertions of harm—
many of which were contingent on the acts of third parties, e.g., CR.342-43 ¶ 24
(asserting that beneficiaries will lose treatment because providers will go out of
business)—as satisfying the probable-right-of-recovery requirement, see Butnaru, 84
S.W.3d at 204. Plaintiffs’ claims are non-redressable as a matter of law, because their
legally protected rights and vested interests have not been impacted. See supra, Part
IV.A. Accordingly, there is no probable right of recovery.
56
Prayer
The Court should render judgment dismissing plaintiffs’ lawsuit. It should
also reverse and vacate the temporary injunction.
Respectfully submitted.
Ken Paxton
Attorney General of Texas
Charles E. Roy
First Assistant Attorney General
Scott A. Keller
Solicitor General
_/s/ Kristofer S. Monson_
Kristofer S. Monson
Assistant Solicitor General
State Bar No. 24037129
OFFICE OF THE ATTORNEY GENERAL
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-1820
Fax: (512) 474-2697
kristofer.monson@texasattorneygeneral.gov
Counsel for Appellants
57
CERTIFICATE OF SERVICE
On November 12, 2015 this document was served via File&Serve Xpress on:
Daniel R. Richards
Benjamin H. Hathaway
Richards Rodriguez & Skeith LLP
816 Congress Avenue
Suite 1200
Austin, Texas 78701
drichards@rrsfirm.com
bhathaway@rrsfirm.com
Counsel for Appellees
/s/ Kristofer S. Monson
CERTIFICATE OF COMPLIANCE
In compliance with Texas Rule of Appellate Procedure 9.4(i)(2), this brief
contains 14,002 words, excluding the portions of the brief exempted by Rule
9.4(i)(1).
/s/ Kristofer S. Monson
Kristofer S. Monson
58
APPENDIX
TABLE OF CONTENTS
Tab
CR.587-672 Order Granting Temporary Injunction and Denying
Supersedeas .....................................................................................................A
CR.673 Order Denying Defendants’ Plea to the Jurisdiction
......................................................................................................................... B
Medicaid Program; Methods for Assuring Access to Covered Medicaid
Services, 80 Fed. Reg. 67576 (Nov. 2, 2015) (to be codified at 42 C.F.R. pt.
447) ................................................................................................................C
2016-17 Gen. Appropriations Act, 84th Leg., R.S., ch. 1281, art. II, 2015
Tex. Sess. Law Serv. 4343, 4547 (Health & Human Servs. Comm’n),
Rider 50 ..........................................................................................................D
CR.351-73 Tex. Health & Human Servs. Comm’n Rate Analysis Dep’t:
Notice of Proposed Adjustments .................................................................... E
CR.336-92 Plaintiffs’ Second Amended Original Petition and Application
for Injunctive Relief ........................................................................................ F
Relevant State Statutes and Rules.................................................................. G
Relevant Federal Statutes............................................................................... H
A
DC BK15274 PG1420
CAUSE NO. D-1-GN-15-003263
DIANA D., as next of friend of KD, a child, § IN THE DISTRICT COURT
KAREN G., as next friend of TG and ZM, §
children, GUADALUPE P., as next of friend §
of LP, a child, SALLY L., as next of friend of §
CH, DENA D., as next friend of BD, a child, § Filed in The Distiict Court
of Travis County, Texas
OCI ACQUISITION, LLC d/b/a §
CARE OPTIONS FOR KIDS, §
CONNECTCARE SOLUTIONS, LLC § SEP2~
d/b/a CONNECTCARE THERAPY FOR § At 'lfi!_f M.
Velva L. Price, District Clerk
KIDS, ATLAS PEDIATRIC THERAPY §
CONSULTANTS LLC, and PATHFINDER §
PEDIATRIC HOME CARE, INC., §
§ 200th JUDICIAL DISTRICT OF
Plaintiffs, §
§
v. §
§
CHRIS TRAYLOR, as EXECUTIVE §
COMMISSIONER of TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, and TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, §
§
Defendants. § TRAVIS COUNTY, TEXAS
ORDER GRANTING TEMPORARY INJUNCTION AND DENYING SUPERSEDEAS
On the 21 51 and 22"d days of September, 2015 the Court held a hearing on Plaintiffs'
application for temporary injunction in the above entitled and numbered cause. The Court has
considered the testimony, documentary evidence, pleadings, briefs, and arguments of counsel
and GRANTS the Temporary Injunction based on the following:
General History:
1) Plaintiffs include the parents as next friends of several minor children who suffer from
severe and disabling conditions, including seizure disorders, delayed development, autism,
speech developmental delays, epilepsy, cerebral palsy, and other conditions. These Plaintiffs and
II Page
1``m~m~m~Mnrn``~m~m````
004236981 587
DC BK15274 PG1421
many other minor children suffering from similar conditions across the State of Texas can
exhibit a wide variety of disabling symptoms, including:
a. nonverbal
b. non-ambulatory
c. difficulty with speech
d. uncontrolled behavioral outbursts
e. difficulty with motor control over their limbs
f. difficulty with mental processing of information.
2) Because of these disabling conditions and symptoms, these children depend on home-
health providers for physical, occupational, and speech therapy services under the Texas
Medicaid program to develop basic skills such as walking, talking, dressing themselves, feeding
themselves, understanding simple communications, and maintaining control over their own
behavior. The Plaintiffs include several home health service providers who deliver physical,
occupational, and speech therapy services under the Texas Medicaid program to the children of
Texas who depend on such services.
3) Texas Health and Human Services Commission ("HHSC") and Chris Traylor, as
Executive Commissioner of HHSC ("Commissioner Traylor") have developed proposed
decreases to the reimbursement rates for physical, occupational, and speech therapy services that
will probably result in a decrease, or complete elimination, of available home health services for
Medicaid-dependent children across Texas.
Proposed Rate Changes:
4) On or about July 20, 2015, HHSC and Commissioner Traylor held a hearing regarding
new proposed reimbursement rates to be implemented on September 1, 2015 for physical,
21Page
588
DC BK15274 PG1422
occupational, and speech therapy services under the Texas Medicaid program (the "July 20, 2015
Proposed Rates"). A copy of the July 20, 2015 Proposed Rates is attached hereto as Exhibit A.
5) Following the commencement of this lawsuit, on or about August 20, 2015, HHSC and
Commissioner Traylor produced a different set of new proposed reimbursement rates to be
implemented on September 1, 2015 for physical, occupational, and speech therapy services
under the Texas Medicaid program (the "August 20, 2015 Proposed Rates"). A copy of the
August 20, 2015 Proposed Rates is attached hereto as Exhibit A-I.
6) Prior to a temporary injunction hearing at which Plaintiffs sought to enjoin HHSC and
Commissioner Traylor from implementing either the July 20, 2015 Proposed Rates or the August
20, 2015 Proposed Rates, HHSC and Commissioner Traylor withdrew both sets of rates and
advised the Court that they would start over with a new rate proposal.
7) Nine days later, on September 4, 2015, HHSC and Commissioner Traylor proposed new
rates to be implemented on October 1, 2015 for physical, occupational, and speech therapy
services under the Texas Medicaid program (the "September 4, 2015 Proposed Rates"). A copy
of the September 4, 2015 Proposed Rates is attached hereto as Exhibit A-2.
8) Defendants have exhibited a pattern of behavior attempting to impose new rates, and
have withdrawn the rates or taken other steps, resulting in Plaintiffs' challenge to the rates
arguably becoming moot. This issue is appropriate for the Court to adjudicate, however, based
on the "capable of repetition yet evading review" exception to the mootness doctrine. Davis v.
Burnam, 137 S.W.3d 325, 333 (Tex. App.-Austin 2004, no pet.). Defendants' actions
withdrawing the proposed rates demonstrate that the action is too short in duration to be litigated
fully before the action ceases or expires. Id. Defendants' choice to withdraw the rates and
propose similar ones as soon as a hearing has passed creates a reasonable expectation that the
31Page
589
DC BK15274 PG1423
same complaining parties will be subjected to the same action again should the Defendants
withdraw the currently pending rates and assert that this case is moot. Id.
9) Pursuant to 1 TAC §355.8021(a)(2)(A), reimbursement rates must be based on:
a. an analysis of the Centers for Medicare and Medicaid Services fees for similar
services;
b. Medicaid fees paid by other states;
c. a survey of costs reported by Medicaid home health agencies;
d. the Medicare Low Utilization Payment Adjustment (LUPA) fees;
e. previous Medicaid payments for Medicaid-reimbursable therapy, nursing, and aide
services; or
f. some combination thereof.
10) Pursuant to 1 TAC §355.802l(a)(2)(B), periodic rate reviews conducted by HHSC must
include, but will not be limited to, consideration of the payments for, as well as all costs
associated with, providing these Medicaid-reimbursable therapy services.
11) Any proposed reimbursement rates that modify or disregard the key components of the
methodology set forth in 1 TAC §355.8021(a)(2) could constitute a rule change. Accord, El Paso
Hosp. Dist. v. Tex. HHS Comm 'n, 247 S.W.3d 709, 714-15 (Tex. 2008). To be valid, rates
resulting from a rule change must be adopted through proper rule-making procedures. Id. at 715.
12) Those rule-making procedures include:
a. Determining whether a rule may affect a local economy before proposing the rule for
adoption. If so, preparing a local employment impact statement for the proposed rule.
TEX. Gov'T CODE§ 2001.022(a).
b. Providing at least 30 days' notice of the intention to adopt the new rule. TEX. Gov'T
CODE § 2001.023(a). The notice must comply with section 2001.024 of the Texas
Government Code. This includes, among other things, a note about the public benefits
and costs associated with the new rule. TEX. Gov'T CODE § 2001.024(a)(5).
c. Preparing, for rules that may have an adverse economic impact on small businesses,:
4JPage
590
DC BK15274 PG1424
i. an economic impact statement that estimates the number of small
businesses subject to the proposed rule, projects the economic impact of
the rule on small businesses, and describes alternative methods of
achieving the purpose of the proposed rule; and
u. a regulatory flexibility analysis that includes the agency's consideration of
alternative methods of achieving the purpose of the proposed rule.
TEX. Gov'T CooE § 2006.002( c).
The September 4, 2015 Proposed Rates:
13) The September 4, 2015 Proposed Rates affect at least one local economy.
14) The September 4, 2015 Proposed Rates may have an adverse impact on small businesses.
15) The September 4, 2015 Proposed Rates were probably not determined in compliance with
1 TAC §355.802l(a)(2)(A).
16) The September 4, 2015 Proposed Rates are the result of a periodic rate review under 1
TAC §355.802l(a)(2)(B) that was probably not in compliance with adequate or appropriate
consideration of payments for, as well as the costs associated with, providing these Medicaid-
reimbursable therapy services.
17) Defendants probably did not adequately or appropriately consider the impact that the
September 4, 2015 Proposed Rates would have on access to care if implemented.
Failure to Comply with Rule 355.802l(a)(2):
18) The Proposed Rates are probably not adequately or appropriately based on the formula
set forth in 1 TAC §355.802l(a)(2)(A); therefore, they may constitute a rule change, which must
be adopted through proper rule-making procedures.
19) The September 4, 2015 Proposed Rates are also not based on any identifiable
documented criteria. The Truven Data is not data representing Medicaid fees paid by other states,
so even if the September 4, 2015 Proposed Rates are based on Truven Data, the September 4,
5 JP a g I.'
591
DC BK15274 PG1425
2015 Proposed Rates are based on something other than the key components of the formula set
forth in 1 TAC §355.8021(a)(2)(A).
20) Should it be determined that any of the Proposed Rates comply with the methodology and
formula in 1 TAC §355.8021(a)(2)(A), those Proposed Rates could still amount to a rule change
because they are probably the result of a periodic rate re:view that failed to adequately or
appropriately consider payments for, as well as all costs associated with, providing these
Medicaid-reimbursable therapy services. 1 TAC §355.8021(a)(2)(B).
21) The margins analysis conducted by Texas A&M University is seriously flawed and not
sufficient to meet the requirements of 1 TAC §355.8021(a)(2)(B). Defendants appear to have
performed no other competent cost analysis. Defendants' own purported analysis fails to include
overhead, administrative, benefits, employer taxes, therapy materials, testing kits and other costs
of providing these Medicaid-reimbursable therapy services.
22) In proposing to promulgate each set of Proposed Rates, Defendants did not follow proper
rule-making procedures. Defendants did not:
a. determine whether the rule would affect a local economy or prepare a local
employment impact statement;
b. provide at least 30 days' proper notice of the intention to adopt the new rule. The
notice provided did not comply with section 2001.024 of the Texas Government
Code;
c. prepare an economic impact statement or a regulatory flexibility analysis.
23) The September 4, 2015 Proposed Rates are likely a rule that HHSC did not properly
promulgate. They may be invalid and may be enjoined. El Paso Hosp. Dist., 247 S.W.3d at 715.
Access to Care:
24) In addition to the above violations of the rule-making process, Texas law requires that
HHSC provide Medicaid recipients with proper access to care. Pursuant to the provisions of 1
61Page
592
DC BK15274 PG1426
TAC 353.41 l(a)(S), 1 TAC 353.413(a), and 1 TAC 353.413(d), Texas law requires: that service
providers ensure the reasonable availability and accessibility of speech, occupational, and
physical therapist specialists for all Medicaid service recipients; that service providers must
provide comprehensive and timely speech, occupational and physical therapy services for all
Medicaid service recipients; and that HHSC will not delegate its responsibility to deliver speech,
occupational, and physical therapy services to all eligible children.
25) HHSC likely neither conducted nor received an adequate, appropriate, or reliable study or
analysis on the impact of any of the Proposed Rates on access to care as required by the above
regulations.
26) The implementation of the Proposed Rates will likely result in service providers being
unable to deliver speech, occupational, and physical therapy services to all eligible children.
Because HHSC only provides services to eligible children through service providers, the
implementation of either of the proposed rates will probably render service providers unable to
comply with 1 TAC 353.41 l(a)(S), and/or 1 TAC 353.413(a), and will probably result in HHSC
failing to comply with its responsibility to deliver speech, occupational, and physical therapy
services to all eligible children.
27) Any proposed change to reimbursement rates for physical, occupational, and speech
therapy services under the Texas Medicaid program during the pendency of this lawsuit would
constitute a periodic rate review pursuant to 1 TAC §355.802l(a)(2)(B) and which will include a
review of payments for providing Medicaid-reimbursable therapy services and which will
include a review of costs associated with providing Medicaid-reimbursable therapy services.
71Page
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DC BK15274 PG1427
Additional Violations:
28) In addition to the above violations of the rule-making process, each set of Proposed Rates
will likely violate Defendants' statutory duty to maximize the Medicaid finance system. TEX.
Gov'T CODE §531.02113.
29) HHSC must optimize the Medicaid finance system to:
a. maximize the state's receipt of federal funds;
b. create incentives for providers to use preventive care;
c. increase and retain providers in the system to maintain an adequate provider network;
d. more accurately reflect the costs borne by providers; and
e. encourage the improvement of the quality of care.
Id.
30) If implemented, the Proposed Rates will likely not create incentives for providers to use
preventive care, dramatically decrease the number of providers in the system, fail to accurately
reflect the costs borne by the providers, and not encourage the improvement of the quality of
care.
31) The September 4, 2015 Proposed Rates are probably based on arbitrary criteria that lack
adequate or appropriate consideration for the impact on service providers or recipients, and
probably lack adequate or appropriate consideration for the legal obligations of Commissioner
Traylor and HHSC with regard to the adoption of reimbursement rates. Therefore the September
4, 2015 Proposed Rates are likely in violation of the due course of law provision of the Texas
Constitution Art. I, § 19.
Need for Temporary Injunction:
32) Plaintiffs have shown a probable right to recovery on their claim for all the above
reasons.
81Page
594
DC BK15274 PG1428
33) If a temporary injunction is not granted, Plaintiffs will probably suffer irreparable injury
because:
a. the minor children represented in this lawsuit, plus thousands of other Texas children
receiving pediatric services under the Texas Medicaid program, will probably be
deprived of those critical services;
b. Defendants' actions will probably cause multiple Texas Medicaid providers to go out
of business and/or stop providing Medicaid services;
c. Defendants' actions will probably create disincentives for Medicaid providers to use
preventive care;
d. Defendants' actions will probably decrease the quality of care provided to Medicaid
recipients in Texas; and
e. Defendants' actions will probably prevent Texas Medicaid beneficiaries from
receiving critical services.
34) The probable harm is imminent because the Septembt::r 4, 2015 Proposed Rates are set to
take effect on October 1, 2015, likely immediately cutting off care for Medicaid beneficiaries.
The adoption or implementation of any of the Proposed Rates may be ultra vires violations of
Texas law. Therefore the issuance of a temporary injunction causes less prejudice or harm to the
State of Texas, Commissioner Traylor, or HHSC, and the balance of the equities weighs in favor
of granting a temporary injunction.
Temporary Injunction:
Accordingly, it is hereby ORDERED, ADJUDGED and DECREED that a Temporary
Injunction is GRANTED to Plaintiffs, and that Commissioner Traylor and HHSC are
commanded forthwith to desist and refrain from taking any action to implement the
reimbursement rates described in Exhibit A-2 from the date of entry of this Order until final trial
in this lawsuit or until further order of this Court.
IT IS FURTHER ORDERED, ADJUDGED and DECREED that a Temporary Injunction
is GRANTED to Plaintiffs, and that Commissioner Traylor and HHSC are commanded forthwith
9 JP a gt'
595
DC BK15274 PG1429
to desist and refrain from taking any action to propose or implement any change in
reimbursement rates for physical, occupational, and speech therapy services under the Texas
Medicaid program without conducting a review of payments for providing Medicaid-
reimbursable therapy services and conducting a review of costs associated with providing
Medicaid-reimbursable therapy services as required by 1 TAC §355.8021(a)(2)(B) from the date
of entry of this Order until final trial in this lawsuit or until fu1ther order of this Court.
This Order does not affect HHSC's ability to seek CMS's approval of the State Plan
Amendment.
It is further ORDERED that trial on the merits of this cause is set for January 18, 2016.
The Court GRANTS Plaintiffs leave to deposit a check with the trial court clerk in lieu of
bond. Five hundred of the $1000.00 deposited by Plaintiffs into the Court's registry on
September 23, 2015 shall satisfy the bond requirement to make this Temporary Injunction
effective.
It is the Court's understanding that the Defendants intend to file a Notice of Appeal and
may assert that pursuant to Civil Practice & Remedies Code §6.001 and Texas Rules of
Appellate Procedure 24.1 and 25.1, the filing of a Notice of Appeal constitutes automatic
supersedeas of this Court's Temporary Injunction. See, Jn re State Bd. for Educator
Certification, 452 S.W.3d 802, 804 (Tex. 2014). The Plaintiffs have requested that the Court
decline to permit the Temporary Injunction to be superseded. The Court finds and concludes that
permitting the Defendants to supersede the Temporary Injunction would render any relief in this
matter ineffective. In re State Bd. for Educator Certification, 452 S.W.3d 802, 808 (Tex. 2014).
Accordingly, it is ORDERED, ADJUDGED and DECREED that pursuant to Texas Rule of
Appellate Procedure 24.2(a)(3), the Court DECLINES to permit the Temporary Injunction to be
superseded. Pursuant to Texas Rule of Appellate Procedure 24.2(a)(3), the additional $500.00
IO IP age
596
DC BK15274 PG1430
paid in the above-described deposited check in the amount of $1,000.00 shall serve as the
security for this Order declining to permit the Temporary Injunction to be superseded.
The clerk of the above-entitled Court shall forthwith, on the filing by Plaintiffs of the
bond required, and on approving the same according to the law, issue a Temporary Injunction in
conformity with the law and the terms of this Order.
.f~
SIGNED on this day ZS of September, 2015. °"..{- <-f-1.1 S-- r· M,
Ill Page
597
B
DC BK15274 PG1653
Filed in The District Court
of Travis County, Texas
SEP 2 5 2015
CAUSE NO. D-1-GN-15-003263 At lf.7,!l;y M.
Velva L. Price Dislr.il;.LCJ.e.z:k
DIANA D., as next of friend of KD, a § IN THE DISTRICT CUlJKT
child, Et Al., §
Plaintiffs, §
§
v. § 201st JUDICIAL DISTRICT OF
§
CHRIS TRAYLOR, as EXECUTIVE §
COMMISSIONER of TEXAS HEALTH §
AND HUMAN SERVICES §
COMMISSION, Et Al., §
Defendants. § TRAVIS COUNTY, TEXAS
ORDER DENYING DEFENDANTS' PLEA TO THE JURISDICTION
On September 22, 2015, the Court took under consideration Defendants' Plea to the
Jurisdiction. All parties appeared through their respective counsel. After considering the
pleadings and the arguments of counsel, the Court enters the following order.
Having considered Defendants' plea to the jurisdiction and supporting brief, Plaintiffs'
response, and the evidence, and having heard the argument of counsel, the Court finds that the plea
to the jurisdiction should be denied.
IT IS THEREFORE ORDERED that Defendants' Plea to the Jurisdiction is DENIED.
JTIS SO ORDERED this~September, 2015 . ..t- <./-? 2-~ f•"·
Illllll 111111111111111111111111111111111111111111111111
004237057
1
673
C
Vol. 80 Monday,
No. 211 November 2, 2015
Part III
Department of Health and Human Services
Centers for Medicare & Medicaid Services
42 CFR Part 447
Medicaid Program; Methods for Assuring Access to Covered Medicaid
Services; Final Rule
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67576 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
DEPARTMENT OF HEALTH AND 3. By express or overnight mail. You the Centers for Medicare & Medicaid
HUMAN SERVICES may send written comments to the Services, 7500 Security Boulevard,
following address ONLY: Centers for Baltimore, Maryland 21244, Monday
Centers for Medicare & Medicaid Medicare & Medicaid Services, through Friday of each week from 8:30
Services Department of Health and Human a.m. to 4 p.m. To schedule an
Services, Attention: CMS–2328–FC, appointment to view public comments,
42 CFR Part 447 Mail Stop C4–26–05, 7500 Security phone 1–800–743–3951.
[CMS–2328–FC] Boulevard, Baltimore, MD 21244–1850. Provisions for Public Comment: We
4. By hand or courier. Alternatively, are issuing this final rule with comment
RIN 0938–AQ54 you may deliver (by hand or courier) period to provide the opportunity for
your written comments ONLY to the further comment on § 447.203(b)(5) to
Medicaid Program; Methods for
following addresses prior to the close of determine whether further adjustments
Assuring Access to Covered Medicaid
the comment period: a. For delivery in to the access review requirements
Services
Washington, DC—Centers for Medicare would be warranted, including the
AGENCY: Centers for Medicare & & Medicaid Services, Department of scope of regular state access reviews in
Medicaid Services (CMS), HHS. Health and Human Services, Room 445– the absence of a triggering circumstance.
ACTION: Final rule with comment period. G, Hubert H. Humphrey Building, 200 After consideration of public comments,
Independence Avenue SW., this final rule with comment period
SUMMARY: This final rule with comment Washington, DC 20201. limits the scope of services for which
period provides for a transparent data- (Because access to the interior of the states will be required to review
driven process for states to document Hubert H. Humphrey Building is not beneficiary access, in order to balance
whether Medicaid payments are readily available to persons without the need for stronger data and processes
sufficient to enlist providers to assure federal government identification, to ensure beneficiary access with
beneficiary access to covered care and commenters are encouraged to leave minimizing administrative burden. We
services consistent with section their comments in the CMS drop slots believe that additional input would be
1902(a)(30)(A) of the Social Security Act located in the main lobby of the useful to determine whether
(the Act) and to address issues raised by building. A stamp-in clock is available modifications of these state access
that process. The final rule with for persons wishing to retain a proof of
comment period also recognizes review requirements may be warranted.
filing by stamping in and retaining an Therefore, we are providing an
electronic publication as an optional extra copy of the comments being filed.)
means of providing public notice of opportunity for comment specifically on
b. For delivery in Baltimore, MD— the access review requirements,
proposed changes in rates or ratesetting Centers for Medicare & Medicaid
methodologies that the state intends to including the service categories required
Services, Department of Health and for ongoing review, elements of the
include in a Medicaid state plan Human Services, 7500 Security
amendment (SPA). We are providing an review, and the timeframe for
Boulevard, Baltimore, MD 21244–1850. submission. CMS also requests
opportunity for comment on whether If you intend to deliver your
future adjustments would be warranted comment on whether we should allow
comments to the Baltimore address, call exemptions based on state program
to the provisions setting forth telephone number (410) 786–7195 in
requirements for ongoing state reviews characteristics (for example, high
advance to schedule your arrival with managed care enrollment), the
of beneficiary access. one of our staff members. provisions of this rule from which states
DATES: Effective Date: These regulations Comments erroneously mailed to the
are effective on January 4, 2016. could be exempted based on these
addresses indicated as appropriate for specific program characteristics, and
Comment Date: To be assured of hand or courier delivery may be delayed
consideration, comments on alternatives to ensuring compliance
and received after the comment period. with section 1902(a)(30)(A) of the Act
§ 447.203(b)(5) must be received at one For information on viewing public
of the addresses provided below, no for any exempted services in lieu of the
comments, see the beginning of the procedures described in this final rule
later than 5 p.m. on January 4, 2016. SUPPLEMENTARY INFORMATION section.
ADDRESSES: In commenting, please refer
with comment period. For example, the
FOR FURTHER INFORMATION CONTACT: proposed rule included the requirement
to file code CMS–2328–FC. Because of Jeremy Silanskis, (410) 786–1592.
staff and resource limitations, we cannot for states to conduct an access review
accept comments by facsimile (FAX) SUPPLEMENTARY INFORMATION: for all services every 5 years and this
transmission. Inspection of Public Comments: All final rule with comment period will
You may submit comments in one of comments received before the close of require that states conduct an access
four ways (please choose only one of the the comment period are available for review on five specific service
ways listed): viewing by the public, including any categories (and other categories when
1. Electronically. You may submit personally identifiable or confidential the state or CMS has received a
electronic comments on this regulation business information that is included in significantly higher than usual volume
to http://www.regulations.gov. Follow a comment. We post all comments of beneficiary or provider access
the ‘‘Submit a comment’’ instructions. received before the close of the complaints for a geographic area) every
2. By regular mail. You may mail comment period on the following Web 3 years. The changes in this final rule
written comments to the following site as soon as possible after they have with comment period resulted in large
asabaliauskas on DSK5VPTVN1PROD with RULES
address ONLY: Centers for Medicare & been received: http://regulations.gov. part from our consideration of
Medicaid Services, Department of Follow the search instructions on that comments received from the public,
Health and Human Services, Attention: Web site to view public comments. including requests for additional clarity
CMS–2328–FC, P.O. Box 8016, Comments received timely will be with respect to some of these matters.
Baltimore, MD 21244–8016. also available for public inspection as While we believe these changes will
Please allow sufficient time for mailed they are received, generally beginning assist states in implementing the access
comments to be received before the approximately 3 weeks after publication review and monitoring requirements,
close of the comment period. of a document, at the headquarters of we are seeking additional comment on
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67577
these provisions so that we can standardized, transparent process, Medicaid service payment rates to
determine whether future adjustment of rather than setting nationwide providers. To align with the statutory
these requirements through additional standards. requirements, states may employ any
rulemaking would be warranted. In In this final rule with comment number of strategies to ensure or
addition, we are publishing a request for period, we are providing increased state improve access to care that are targeted
information (RFI) that solicits feedback flexibility within a framework to toward one or more of these factors.
from stakeholders on whether and document measures supporting We have not previously defined
which core access measures, thresholds, beneficiary access to services. This final through federal regulation an approach
and appeals processes would provide rule with comment period implements to guide states in meeting the statutory
additional information or approaches methods for states to use in complying access requirement at section
that would be useful to us and states in with section 1902(a)(30)(A) of the Act 1902(a)(30)(A) of the Act. In the absence
ensuring access to care for Medicaid by requiring that states review data and of federal guidance and a clear process
beneficiaries. We are interested in trends to evaluate access to care for for monitoring and ensuring access, at
access measures that would apply covered services and conduct public times budget-driven payment changes in
regardless of the service delivery processes to obtain public input on the state Medicaid programs led to
approach adopted by the state, and adequacy of access to covered services confusion and litigation for states and to
would include access measures in the Medicaid program. This possible access problems for
applicable for populations enrolled in information will be updated and beneficiaries. CMS’s review of state
managed care. Ultimately, our RFI- monitored regularly. Should the data payment rate methodologies for
related goals are to better measure, reveal short-comings in Medicaid compliance with this requirement was
monitor, and ensure Medicaid access beneficiaries’ access to care, states must on a case-by-case basis and was
across state program and delivery take corrective actions. The final rule hampered by the lack of consistent
systems and understand the economic with comment period also recognizes information related to beneficiary
and policy factors that affect access to electronic publication as an optional access. We historically relied on state
care. The RFI is published elsewhere in means of providing public notice of certifications and available supporting
this Federal Register along with proposed changes in rates or ratesetting information to conclude that Medicaid
information on where respondents can methodologies that the state intends to payment rates met the statutory
send their responses. include in a Medicaid state plan standards.
amendment (SPA). This final rule with In the May 6, 2011 proposed rule, we
I. Background comment period will meet the proposed to adopt an approach for states
A. General Information expectations of the May 6, 2011 to analyze access to care for Medicaid
proposed rule to establish a transparent services through data and information
In the May 6, 2011 Federal Register data-driven process that ensures that from beneficiaries and providers. The
(76 FR 26342), we published the rates are consistent with section approach specifically focused on: (1)
‘‘Medicaid Program; Methods for 1902(a)(30)(A) of the Act. The extent to which enrollee needs are
Assuring Access to Covered Medicaid met; (2) the availability of care and
Services’’ proposed rule (hereinafter B. State Ratesetting and Access to Care providers; and (3) changes in
referred to as the ‘‘May 6, 2011 The Medicaid statute requires that beneficiary utilization. The purpose of
proposed rule’’) that outlined a states provide coverage to certain groups the proposed regulation was not to
standardized, transparent, data-driven of individuals, and also requires that create an access standard or rate
process for states to document that such coverage include certain minimum thresholds that each state must meet,
provider payment rates are consistent benefits. States may elect to cover other but to develop a standard process for
with efficiency, economy, and quality of populations and benefits. To give each state to follow in documenting
care and are sufficient to enlist enough meaning to coverage requirements and access to care. The regulation proposed
providers so that care and services are options, beneficiaries must have to require that states conduct regular
available under the plan at least to the meaningful access to the health care reviews of Medicaid access to care that
extent that such care and services are items and services that are within the rely upon: Payment data, trends in
available to the general population in scope of the covered benefits. This is utilization, provider enrollment,
the geographic area as required by consistent with the requirements of feedback from providers and
section 1902(a)(30)(A) of the Social section 1902(a)(30)(A) of the Act, which beneficiaries, and other pertinent
Security Act (the Act). In the May 6, provides that states must have methods information that describes access to
2011 proposed rule, we recognized that and procedures to assure that payments Medicaid services. The access data
states must have some flexibility in to providers are ‘‘sufficient to enlist reviews would be used to inform state
designing appropriate approaches to enough providers so that care and payment changes as well as our
demonstrate and monitor access to care, services are available under the plan at approval decisions when states
which reflects unique and evolving state least to the same extent that such care proposed provider payment reductions.
service delivery models and service rate and services are available to the general In addition, the proposed rule specified
structures. Within the proposed rule, we population in the geographic area,’’ that states must conduct a public
discussed how a uniform approach to which we refer to as the ‘‘access process when reducing Medicaid
meeting the statutory requirement under requirement.’’ Many factors affect payment rates and monitor changes in
section 1902(a)(30)(A) of the Act could whether beneficiaries have access to access to care after payment reductions
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prove difficult given current limitations Medicaid services, including but not are approved by us and go into effect.
on data, local variations in service limited to: The beneficiaries’ health care Earlier this year, the Supreme Court
delivery, beneficiary needs, and needs and characteristics; state or local decided in Armstrong v. Exceptional
provider practice roles. For these service delivery models; procedures for Child Center, Inc., 135 S. Ct. 1378 (2015)
reasons, we proposed federal guidelines enrolling and reimbursing qualified that the Medicaid statute does not
to frame alternative approaches for providers; the availability of providers provide a private right of action to
states to demonstrate consistency with in the community; the capacity of providers to enforce state compliance
the access requirement using a Medicaid participating providers; and with section 1902(a)(30)(A) of the Act in
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67578 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
federal court. As a result, provider and services. The delivery system design service utilization or overall provider
beneficiary legal challenges are not and accompanying payment payments for high cost services as a
available to supplement CMS review methodologies can significantly shape result of program innovations that
and enforcement to ensure beneficiary beneficiaries’ abilities to access needed emphasize preventive care and divert
access to covered services. To care by facilitating the availability of individuals into more appropriate
strengthen CMS review and such care. In addition, the delivery treatment modalities, including serving
enforcement capabilities, this final rule system model and payment them in the most integrated setting
with comment period provides for the methodologies can improve access to appropriate to the needs of the
development of needed information to care by making available care individual consistent with Olmstead v.
monitor and measure Medicaid access management teams, physician L.C. 527 S. Ct. 581 (1999), we do not see
to care. The final rule with comment assistants, community care those reductions as being at odds with
period will provide more transparency coordinators, telemedicine and the statutory requirements or provisions
on access in Medicaid fee-for-service telehealth, nurse help lines, health described in this final rule with
(FFS) systems than ever before and information technology and other comment period. The provisions of the
allow us to make informed data-driven methods for providing coordinated care final rule with comment period allow
decisions and document our decisions and services and support in a setting states the opportunity to transparently
when considering proposed rate and timeframe that meet beneficiary discuss the methods and analyses that
reductions and other methodology needs. they use to demonstrate compliance
changes that may reduce beneficiaries’ We have issued a series of State with section 1902(a)(30)(A) of the Act.
abilities to receive needed care. In Medicaid Directors (SMD) letters to The analysis and the follow-up
addition, because the proposed rule was promote and provide guidance on monitoring data should clarify whether
issued several years prior to the pathways to implementing integrated and how changes in care and payment
Armstrong decision and therefore does care models which can provide higher data result from delivery and payment
not address CMS’ or states’ role in light quality care at lower cost. We have also systems reform rather than reductions in
of Armstrong’s limits on providers’ and worked with states to explore access to care.
beneficiaries’ ability to take legal action innovative approaches to improving The flexibility in designing service
regarding access, CMS is also issuing a care and lowering cost through the delivery systems and provider payment
Request for Information to obtain public Innovation Accelerator Program, the methodologies, as described above, is
input into additional approaches to Medicaid Value-Based Learning consistent with the requirement in
Medicaid’s statutory access Collaborative series, group workshop section 1902(a)(30)(A) of the Act that
requirements for CMS to consider. sessions, and one-to-one technical state Medicaid plans must provide:
While states will continue to have the assistance discussions. All of these Such methods and procedures relating
discretion to set program rates and efforts seek to drive systemic changes in to the utilization of, and the payment
improve access to care through a variety the Medicaid program that manage for, care and services available under
of strategies, this final rule, and any program costs consistent with the the plan as may be necessary to
additional measures we adopt, will economy and efficiency provisions of safeguard against unnecessary
increase the information available to section 1902(a)(30)(A) of the Act while utilization of such care and services. As
CMS, to ensure that rates meet the also promoting the quality of care. well, states must assure that payments
requirements of section 1902(a)(30)(A) As state delivery system models have are consistent with efficiency, economy,
of the Act and that access improvement evolved, so have their provider payment and quality of care and are sufficient to
strategies work to improve care delivery systems. For most services, states enlist enough providers so that care and
when there are deficiencies. We are also develop rates based on the costs of services are available under the plan at
developing internal standard operating providing the service, a review of the least to the same extent that such care
procedures to bolster the administrative amount paid by commercial payers in and services are available to the general
record that is used to document the private market, or as a percentage of population in the geographic area.
compliance with the final rule for rates paid under the Medicare program Consistent with the requirement in
individual SPAs and ensure that there is for equivalent services. Often, rates are section 1902(a)(30)(A) of the Act to
consistent national application of these updated based on specific trending provide payment for quality care in an
policies. factors such as the Medicare Economic effective and efficient manner, states
Index or a Medicaid trend factor that can use their ratesetting policies to seek
C. Medicaid Service Delivery Systems incorporates a state-determined the best value. Achieving best value has
and Provider Payment Methodologies inflation adjustment rate. Rates may been a key strategy for some states that
States have broad flexibility under the include incentive payments that have attempted to reduce costs in the
Act to establish service delivery systems encourage providers to serve Medicaid Medicaid program in these difficult
for covered health care items and populations and improve care. For fiscal times. We do not intend to impair
services, to design the procedures for instance, some states have authorized states’ abilities to pursue that goal, or to
enrolling providers of such care, and to Medicaid providers to receive separate impair states’ abilities to explore
set the methods for establishing payments for treatment services and for innovative approaches to providing
provider payment rates. For instance, care coordination and care management. services and lowering costs for other
many states provide medical assistance Some states have increased provider reasons. In this final rule with comment
primarily through capitated managed payments based on achievement of period, we hope to clarify that, although
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care arrangements, while others use FFS certain specified quality or health states must demonstrate that
payment arrangements (with or without outcome measures. beneficiaries have access to covered
primary care case management). We have worked with states to design services at least comparable to others in
Increasingly, states are developing payment and service delivery systems to the geographic area, this access can be
service delivery models that emphasize ensure program savings are aligned with through service delivery networks,
medical homes, health homes, or better care quality and promote rather using payment methodologies different
broader integrated care models to than reduce access to services. Although from other individuals in the geographic
provide and coordinate medical states may experience reductions in area. Comparable access does not
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necessarily require that beneficiaries challenging payment rate reductions as data used to measure and analyze access
obtain services from the same providers, inconsistent with the statutory access to care and mechanisms to receive
or the same number of providers, as provision. Further, resulting court information from beneficiaries and other
other individuals in the geographic area. decisions have not offered consistent stakeholders.
approaches to compliance. These This final rule with comment period
D. Modifications to State Payment Rates recognizes the importance of stronger
decisions have at times left states,
Payment rates should be neither too providers, and beneficiaries without processes and data to ensure access to
low nor too high to ensure access to care clear and consistent guidelines and care while supporting state flexibility to
for Medicaid beneficiaries and to ensure resulted in uncertainty in moving design the appropriate measures to
the economy and efficiency of Medicaid forward in designing service delivery demonstrate and monitor access to care,
services and spending. Setting total systems and payment methodologies. which reflect the unique and evolving
payments too high does not necessarily For instance, several federal Courts of state service delivery models and
improve beneficiary access. This is Appeals have addressed access and service rate structures. A uniform
particularly true when higher payments payment issues, but there has been no approach to meeting the statutory
are targeted to select providers and do consensus concerning the data or requirement under section
not necessarily translate into improved standards that would be relevant in 1902(a)(30)(A) of the Act could prove
access to services. Payment reductions determining compliance with the challenging at this time, given local
or other adjustments to payment rates Medicaid statute. More recently, in variations in service delivery,
can help to manage Medicaid program March 2015, the Supreme Court ruled in beneficiary needs, provider practice
costs and ensure efficiency of service Armstrong v. Exceptional Child Center, roles, and limitations on data. At this
provision, without necessarily violating Inc., 135 S. Ct. 1378 (2015) that the time, we are issuing this final rule with
requirements to ensure access to care. Medicaid statute does not provide a comment period to establish approaches
For example, a state may amend its private right of action for providers and for states to demonstrate consistency
program to use a selective contract to beneficiaries to challenge payment rates with the access requirement using a
provide incontinence supplies which in federal court. The lack of a private consistent, transparent process, rather
results in lower payment rates for those right of action underscores the need for than setting nationwide standards.
supplies while maintaining statewide stronger non-judicial processes to These approaches will also strengthen
access to those supplies. Or a state may ensure access, including stronger our ability to make sound and data-
reduce payments for hospital processes at both the state and federal driven decisions about the adequacy of
readmissions to encourage the hospital state payment rates.
levels for developing data on beneficiary
to collaborate with a primary care case This final rule with comment period
access and reviewing the effect on
management provider in the will not directly require states to adjust
beneficiary access of changes to
community. A state may also rebalance payment rates; nor will it require states
payment methodologies. In issuing this
its long term services and supports to adopt policies that are inconsistent
final rule with comment period, we
spending consistent with Olmstead v. with efficiency, economy, and quality of
have reviewed options to ensure that
L.C. 527 S. Ct. 581 (1999) to ensure that care. Even if access issues are
states are adhering to the statute in light
older adults and individuals with discovered as a result of the analysis
of the absence of a private right of action
disabilities can receive high quality that is required under this rule, states
for noncompliance in federal court
community-based services. may be able to resolve those issues
However, payment reductions or following the Armstrong decision.
through means other than increasing
other adjustments can, in some In the May 6, 2011 proposed rule, we payment rates. This rule requires that
circumstances, compromise beneficiary intended to establish consistent beneficiary access must be considered
access to services. Consequently, we procedures that all states would follow in setting and adjusting payment
affirm in this final rule with comment in reviewing and understanding methodologies for Medicaid services. If
period that such payment rate changes Medicaid access to care on an ongoing a problem is identified, any number of
be made only with consideration of the basis and monitoring access after steps, including payment increases,
potential impact on access to care for reducing or restructuring rates. might be appropriate to address the
Medicaid beneficiaries and with Specifically, we proposed that states problem, such as: Redesigning service
effective processes for assuring access. conduct ongoing access reviews for all delivery strategies or improving
Payment rate changes do not comply Medicaid services over 5-year periods provider enrollment and retention
with the Medicaid access requirements that evaluate: The extent to which efforts. This final rule with comment
if they result in a denial of sufficient enrollee needs are met; the availability period provides that we will review
access to covered care and services. of care and providers; and changes in these access issues in making SPA
Non-compliant changes could adversely beneficiary utilization of covered approval decisions, and describes a
affect beneficiaries’ abilities to obtain services. We proposed that within the more consistent and transparent way for
needed, cost-effective preventive care, reviews, states would need to include states to collect and analyze the
create stress on safety-net providers, and information about access gathered necessary information to support such
counteract state delivery reform efforts through ongoing beneficiary feedback reviews.
that seek to reduce cost and increase mechanisms and comparisons of We consider the requirements of this
quality. Medicaid payments to Medicare, final rule with comment period as a
At times, budget-driven payment commercials rates, or Medicaid service component of a broader strategy to
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changes have led to confusion among costs. We proposed that when states ensure access in the Medicaid program.
states and providers about the analysis reduce or restructure rates in ways that However, the 2011 proposed rule did
required to demonstrate compliance could harm access to care, they consider not anticipate the Supreme Court
with Medicaid access requirements at concerns raised by beneficiaries and decision: Armstrong v. Exceptional
section 1902(a)(30)(A) of the Act. States stakeholders and develop and monitor Child Center, Inc., 135 S. Ct. 1378
attempting to reduce Medicaid costs indices to ensure sustained access after (2015), which underscored the primacy
through payment rate changes have implementing the rate changes. States of CMS’s role in ensuring access. For
increasingly been faced with litigation would have the discretion to choose the this reason, CMS may consider
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67580 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
additional approaches to promote access demonstrate access to care by states describe the measures that were
to care. We will, for example, examine documenting in an access monitoring used to conduct the review and their
the feasibility of establishing a core set review plan their consideration of: relationship to enrollee needs, the
of access metrics and thresholds that Enrollee needs; the availability of care availability of care and providers,
can be universally applied across all and providers; and the utilization of service utilization and Medicaid
states and services, as well as services. The experiences of payment rates as compared to other
appropriate ways to gather that beneficiaries should be a primary payment structures.
information. Additionally, we will determinant of whether access is Proposed § 447.203(b)(2) described
assess the feasibility of processes that sufficient. We solicited comments that the timeframe for states to conduct the
target and resolve access to care issues would serve to help states narrow the data review and make the information
at an individual level, such as robust focus of the data review to core available to the public through
complaint resolution or formal hearings elements that would demonstrate accessible public records or Web sites
processes. sufficient access to care. We received, on an on-going basis for all covered
Specifically, as we issue this final rule through public comments, many services. We proposed that the annual
with comment period, we are suggested elements that states could reviews begin no later than 2013, so
concurrently issuing a request for incorporate into access reviews, but states would have the discretion to
information (RFI) that solicits feedback there was no consensus among determine a timeframe to review each
from stakeholders on whether and commenters as to measures that could covered Medicaid service, as long as the
which core access measures, thresholds, be universally applied across all state reviewed a subset of services each
and appeals processes would provide services. We will continue to study year and each covered service is
additional information or approaches whether a core set of measures and reviewed at least once every 5 years. We
that would be useful to us and states in thresholds should be applied to provided states this 5-year cycle to
ensuring access to care for Medicaid Medicaid access to care and are reduce the burden while
beneficiaries. We are interested in soliciting more information from accommodating the need for review to
access measures that would apply stakeholders on this question through assure compliance with section
regardless of the service delivery the RFI process. 1902(a)(30)(A) of the Act.
approach adopted by the state, and Proposed § 447.203(b)(1)(i) through Because of the need to demonstrate
would include access measures (iii) would have required states to service access in the context of a
applicable for populations enrolled in review and make publically available payment rate reduction, we proposed in
managed care. Ultimately, our RFI- data trends and factors that measure: § 447.203(b)(3)(i) that states would need
related goals are to better measure, Enrollee needs; availability of care and to conduct the review relevant to the
monitor, and ensure Medicaid access providers; and utilization of services. affected service prior to submission of a
across state program and delivery Consistent with the statutory SPA implementing a reduction. If the
systems and understand the economic requirement, we proposed that states state had already reviewed access
and policy factors that affect access to review this data by state designated relating to the types of services that are
care. The RFI is published elsewhere in geographic location. subject to the rate reduction within 12
this Federal Register along with We proposed revisions to months prior to the proposed rate
information on where respondents can § 447.203(b)(1)(iii)(B) to require that the reduction, and maintained an ongoing
send their responses. review must include: (1) An estimate of monitoring mechanism for beneficiary
In addition to issuing this final rule the percentile which Medicaid payment complaints, its review relative to the
with comment period and the RFI, we represents of the estimated average rate reduction could be referenced in
also will improve our administrative customary provider charges; (2) an the previous review. To ensure
processes associated with documenting estimate of the percentile which sustained access to care, we included
the basis for approval and disapprovals Medicaid payment represents of one, or provisions at § 447.203(b)(3)(ii) that
when states propose SPAs that reduce more, of the following: Medicare would require states to develop ongoing
rates or restructure payments in ways payment rates, the average commercial monitoring procedures through which
that may affect access to care. The payment rates, or the applicable they periodically review indices to
information that is gathered by states Medicaid allowable cost of the services; measure sustained access to care. We
through the processes described in this and (3) an estimate of the composite also proposed at § 447.203(b)(4) to
final rule with comment, as well as average percentage increase or decrease require states to have a mechanism for
through additional state and CMS resulting from any proposed revision in beneficiary input on access to care, such
processes for ensuring Medicaid access payment rates. as hotlines, surveys, ombudsman or
to care, will be the basis for our We proposed in other equivalent mechanisms.
approval decisions and we will build § 447.203(b)(1)(iii)(B)(3) that the Additionally, we proposed at
our administrative SPA records with Medicaid payment rates must include § 447.203(b)(5) a corrective action
this information. both base and supplemental payments procedure requiring states to submit a
for Medicaid services. Since states often remediation plan should access issues
II. Summary of Proposed Provisions reimburse service providers according be discovered through the access review
We proposed to address state to different payment schedules based on or monitoring processes. These
processes for setting payment rates by governmental status, we proposed at requirements were proposed to ensure
amending existing regulations at § 447.203(b)(1)(iii)(C) that states stratify that states would oversee and address
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§ 447.203, § 447.204, and § 447.205. The the access review data by state future access concerns.
following is a summary of our government owned or operated, non-
state government owned or operated B. Medicaid Provider Participation and
proposals.
and private providers. Public Process To Inform Access to Care
A. Documentation of Access to Care and In § 447.203(b)(1)(iii)(D), we proposed In § 447.204, we proposed to
Service Payment Rates to describe the minimum content that implement the statutory requirement
We proposed to revise § 447.203(b) to must be in included in the rate review. that Medicaid payment rates must be
require state Medicaid agencies to Specifically, we proposed to require that consistent with efficiency, economy,
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67581
and quality and are sufficient to enlist The following are brief summaries of a more systematic approach than
enough providers so that services under the public comments received, and our currently exists in the Medicaid
the plan are available to beneficiaries at responses to those public comments: program for states and us to evaluate
least to the extent that those services are beneficiary access to services. The
A. General Comments
available to the general population. We regulatory framework also seeks to
proposed to revise § 447.204(a)(1) We received many comments that ensure that states will have the
through (a)(2) to require that states were general in nature and were not information necessary to consider and
consider, when proposing to reduce or specific to any of the provisions of the evaluate access issues. We will continue
restructure Medicaid payment rates, the May 6, 2011 proposed rule. We have to work closely with states and other
data collected through the proposed summarized and responded to those partners to appropriately review access
requirement at § 447.203 and undertake comments below. to care and address access issues, while
Comment: Several commenters urged remaining cognizant that states need to
a public process that solicits input on
CMS to delay implementation of the make program adjustments and operate
the potential impact of the proposed
final rule and work with states to find within budgets. In addition, the RFI will
reduction of Medicaid service payment
alternative approaches to measuring solicit further information on whether
rates on beneficiary access to care. In
access. Commenters also recommended and which core access measures,
§ 447.204(b), we also proposed to clarify that CMS convene a workgroup with
that we may disapprove a proposed rate thresholds and appeals processes would
state Medicaid agencies to develop provide additional information or
reduction or restructuring SPA that does access thresholds. One commenter
not include or consider the data review approaches that would be useful to us
wrote that CMS and states would be and states in ensuring access to care to
and a public process. Disapproving the better served to work together to
SPA means that a state would not have Medicaid beneficiaries.
identify reasonable criteria under which Comment: A number of commenters
authority to implement the proposed state legislatures could make timely and requested that CMS provide an
rate reduction or restructuring and meaningful adjustments to provider incentive mechanism to encourage
would continue to pay providers rates and states could document the states to address access issues in a
according to the rate methodology potential impact to access. timely manner. Commenters specifically
described in the state plan. Response: We have worked with suggested that an enhanced
C. Public Notice of Changes in states and federal partners to identify administrative matching rate be made
Statewide Methods and Standards for appropriate access measures and a available for costs associated with the
manageable process for state Medicaid final rule.
Setting Payment Rates
agencies to meet the statutory Response: To receive federal financial
We proposed to clarify and modernize requirements of section 1902(a)(30)(A) participation (FFP) for Medicaid
changes to the public notice of the Act. This included listening services, states must comply with the
requirement at § 447.205. We also sessions with the National Association applicable statutory and regulatory
solicited comments on whether it is of Medicaid Directors to hear state requirements. To the extent that state
advisable to delete the term concerns regarding Medicaid access to activities described in this final rule
‘‘significant’’ from § 447.205(a) and care and how states were working to with comment period are for the proper
explicitly state that notice is required address access issues. We worked with and efficient administration of the
for any change in rates. Alternatively, many states and providers individually Medicaid state plan, the administrative
we solicited comments on whether to to understand state-specific access match rate is available to states. We do
adopt a threshold for significance and issues and the types of information that not have the statutory authority to
what that threshold might be. states and providers rely upon to provide an enhanced administrative
discuss access to care. Finally, we match rate for these activities.
Further, we proposed to recognize worked with HHS’ Assistant Secretary Comment: Several commenters
electronic publication as an optional for Planning and Evaluation (ASPE) to requested that CMS clarify what
means of publishing payment notice. To investigate if there are national access constitutes a payment change. A
do so, we proposed adding measures that may be applied across all commenter noted that providers often
§ 447.205(d)(iv), which would allow states and services for compliance with view years when rates do not increase
notice to be published on a Web site section 1902(a)(30)(A) of the Act. The as payment reductions. Another noted
developed and maintained by the single policies reflected in this final rule with that the preamble of the May 6, 2011
state Medicaid agency or other comment period are consistent with proposed rule refers to ‘‘payments’’ and
responsible state agency that is these efforts and the public comments ‘‘rates’’ interchangeably but that courts
accessible to the general public on the we received. This final rule with have defined payments to include all
Internet. comment period is being published after Medicaid provider revenues rather than
III. Analysis of and Responses to Public extensive consultation, 4 years after we only Medicaid FFS rates. The
Comments issued the proposed rule. Further commenter stated that if the final rule
delaying this rule could result in considers all Medicaid revenues
We received at total of 181 comments confusion as to the application of the received by providers, states may be
from states, advocacy groups, providers, access requirements of section challenged to make any change to the
provider organizations and individuals 1902(a)(30)(A) of the Act, especially Medicaid program that might reduce
on the May 6, 2011 proposed rule. The given the Supreme Court’s decision in provider revenues. The commenter also
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comments ranged from support for the Armstrong v. Exceptional Child Center, suggested that the final rule clarify that
proposal to specific questions or Inc., 135 S. Ct. 1378 (2015), which the statute refers to specific service rates
comments regarding the proposed specifically stated that providers do not under the Medicaid state plan or waiver
changes. We received some comments have a private right of action to enforce rather than all Medicaid provider
that were outside of the scope of the section 1902(a)(30)(A) of the Act and payments.
proposed rule, and therefore, not that CMS is ultimately responsible for Response: The statute requires that
addressed in this final rule with enforcing the statutory requirements. states have methods and procedures
comment period. This final rule with comment provides relating to Medicaid payment rates so
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67582 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
that such rates are sufficient to enlist state actions pertaining to provider Comment: Many commenters
enough providers to ensure access to payment rate setting, including requested that we broaden the proposed
care. The final rule refers to actions to legislatively mandated rate reductions, regulatory framework to apply to
reduce or restructure rates which may are subject to the access analysis and provider payment rates beyond those
result in less access to care. While the public process requirements and that authorized under the Medicaid state
final rule applies only to Medicaid fee- legislatively mandated rate cuts cannot plan. Commenters specifically requested
for-service rates for state plan covered be implemented retroactively. that the regulation apply to rates paid by
services, which may not include all Response: We agree with the Medicaid managed care organizations
Medicaid revenues received by a commenters that it is important for and rates paid under Medicaid waiver
provider, the rule does contemplate states to evaluate access any time the programs. Many commenters were
broader payment changes that may state proposes a change to its Medicaid concerned that a proposal to address
affect access, such as reductions to reimbursement methodologies that will access issues under managed care
supplemental provider payments. In result in a reduction or restructuring of delivery systems is needed. Some
addition, reviewing additional data will provider rates. This final rule with commenters called for specific revisions
enable CMS to better identify and work comment period does not provide for to managed care regulations to set forth
with states to address access exceptions to this requirement to review clearer standards for managed care rate
deficiencies that may arise if rates are access when there is a state legislative reviews. One commenter suggested that
not updated for many years, and if requirement. But nothing in this rule CMS should incorporate into the
necessary to address them through changes the longstanding policies that actuarial soundness review, standards
compliance action. At this time, we permit a state to submit a SPA with an for transparency in rate setting for
generally do not review individual effective date as early as the first day of managed care organizations and require
Medicaid payment rates as part of the the quarter in which a plan is submitted states to evaluate the impact of managed
SPA process, but we review the (but only after public notice of the new care rate cuts on access. Another
methodologies that states apply to set rates have been issued). This policy commenter offered that the rule should
their provider rates or payments. permits states flexibility to implement be extended to apply to children
This final rule with comment period approvable rate changes without delay enrolled in managed care.
requires states to review access while it undergoes federal review. Thus,
Response: As stated in the May 6,
information on an ongoing basis for states may continue to implement rate
2011 proposed rule, section
primary care services, including reductions retroactively to the first day
physician, federally qualified health of the quarter in which an approvable 1902(a)(30)(A) of the Act specifically
centers (FQHC), clinic, dental care, etc.; SPA is submitted to CMS. applies to payment for care and services
physician specialist services (for Comment: Several commenters available under the state plan, which we
example, cardiology, urology, requested that we make the following interpret to refer to payments to
radiology); behavioral health services, data public for all providers, providers and not to capitated payments
including mental health and substance beneficiaries, and stakeholders to to managed care entities. While
abuse disorder treatment; pre- and post- review and comment upon: (1) Data Medicaid access to services under
natal obstetric services including labor analysis and any supporting managed care arrangements is an
and delivery; and home health services documentation; (2) SPA submissions important issue, that issue is addressed
(as defined in § 440.70), whether or not and supporting documentation; and (3) through reviews of network sufficiency
the payment methodologies change. all communication between CMS and and managed care quality review
States may also choose to select states pertaining to data analysis and processes. As a result, we are not
additional services to review through SPAs. addressing access to care under
the access monitoring review plan. In Response: In this rule, we require managed care arrangements in this
addition, when changes to payment states to make the data analysis and rulemaking effort. Similarly, methods to
methodologies are made through the supporting documentation available assure access to care, including payment
SPA process, the state must be able to both to the public and to CMS. While methodologies, are reviewed in the
support that change with publication of specific information approval process for Medicaid waiver
documentation that access to care will related to SPA submissions and and demonstration programs (and, when
not be adversely affected, and must disposition is not required under this appropriate, may be monitored in the
monitor access after the change is made. final rule with comment period, these evaluation of a demonstration program).
If, for example, a state removes an materials may be available through As a result, we did not specifically
annual inflation adjustment and Freedom of Information Act (FOIA) address those programs within the
therefore freezes rates from 1 year to the requests. We recommend that states context of this rulemaking process.
next when an increase in inflation was publish the access monitoring review Separate recent CMS initiatives have
anticipated, a current access review will plans and subsequent data collected addressed the framework for Medicaid
be required to support approval of a through those plans on their Web sites managed care and home and community
SPA, and the state will also need to for full transparency. Furthermore, we based service programs, including
continue to monitor access. In addition, continue to post approved SPAs on the access and quality review methods. In
whether or not the state changes www.Medicaid.gov Web site and will January 16, 2014, we issued the ‘‘Home
payment methodologies (including for post state access review plans so that and Community-Based State Plan
services outside of the ongoing they are publicly available. Issuing all of Services Program, Waivers, and
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monitoring and review requirements), the communications and documentation Provider Payment Reassignments’’ final
required ongoing mechanisms to receive associated with the SPA review process rule (79 FR 2947–3039), and on June 1,
beneficiary and provider feedback as it is ongoing would add burden 2015, we published the ‘‘Medicaid
would indicate to states and CMS access without adding significant relevant Managed Care, CHIP Delivered in
issues that arise for any Medicaid information, and would significantly Managed Care, Medicaid and CHIP
service. slow the process for CMS to review and Comprehensive Quality Strategies, and
Comment: Several commenters approve state submissions, many of Revisions related to Third Party
suggested the final rule clarify that all which are time sensitive. Liability’’ proposed rule (80 FR 31097–
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31297) which proposed to align the provider costs. Ultimately Medicaid be exempt from conducting the ongoing
rules governing Medicaid managed care payment rates must sufficient to ensure access data reviews and/or the rate
with those of other major sources of beneficiary access to care, whether or reduction monitoring procedures and
coverage, including coverage through not providers are shifting costs to other what threshold for such exemptions
Qualified Health Plans and Medicare payers. would be appropriate. We understand
Advantage plans. The Medicaid Comment: A commenter suggested that many states carve out certain
managed care proposed rule specifically that CMS exempt the effects of care services from managed care capitation
discusses requirements for network coordination initiatives from access rates and continue to pay for those
adequacy. documentation requirements. Other services through FFS. We also
Comment: A commenter requested commenters more specifically suggested understand that many of the individuals
that the regulation explicitly state that that CMS should exempt from access who remain in state FFS systems may
all Medicaid long-term services and documentation requirements services to have complex care needs. We note that
supports options must be included in which beneficiary access is limited by states already have significant flexibility
these reviews. coordination of care activities of home within the final provisions of the rule to
Response: All Medicaid services and community based providers, choose measures within their access
covered under the state plan are especially when these activities may monitoring review plans that are
included within the scope of the result in loss of access to care in tailored to state delivery systems. This
regulatory requirements of this final rule medically underserved or rural areas. could allow, for instance, a state with
with comment period. We will require Response: Care coordination is an high levels of managed care enrollment
an access analysis to support a request important aspect of a well-designed to focus on specific care needs of the
for approval of any rate reduction or health care system and this regulation populations that remain in FFS after a
restructuring for any service in the state does not intend to discourage states managed care transition.
plan. As a baseline, the final rule with from implementing care coordination Comment: A number of commenters
comment period will require that states programs or other efforts that seek to offered that the rule inhibits a state’s
review and publish access studies for lower cost and improve the quality of ability to make adjustments to payment
primary care services; physician care. Such activities should enhance rates that may be necessary to deal with
specialist services; behavioral health access to care by arranging for state economic and fiscal crisis.
services, including mental health and individuals to receive appropriate care Commenters also noted that CMS
substance abuse disorder treatment; pre- when needed. Therefore, we do not should acknowledge that states cannot
and post-natal obstetric services agree that exemptions to the dismiss local budgetary issues or
including labor and delivery; and home requirements of this final rule with casually increase revenue to address
health services on an ongoing basis. comment period should be applied to perceived access to care issues. Other
States may also select additional states that offer care coordination. commenters stated that the rule will
services to add to this list. In addition, Comment: Commenters requested infringe on states’ abilities to make
access studies and continued specific exceptions to the procedures budget decisions. Some commenters
monitoring will be required for covered described in the final rule based on state raised concerns that the timing of a state
services when payment rates have been Medicaid program features. As legislative session makes it difficult for
reduced or restructured, or when the examples, commenters requested states to comply with the due dates of
state receives a significant volume of exceptions for states with a majority of the access monitoring review plans.
public input raising access to care individuals enrolled in managed Response: The final rule with
issues. We are requesting public Medicaid and relatively few enrolled in comment period does not prohibit states
comment on the service categories FFS systems, states with all payer from implementing (through a SPA)
selected for inclusion in baseline access payment systems, states that pay payment rate reductions, as long as
analysis. Additional services will need Medicare rates, and for services where beneficiaries will maintain sufficient
to be reviewed as reductions to payment Medicaid is the only or primary payer access to care. In the May 6, 2011
rates or as access issues become of care. The commenters stated that proposed rule, we acknowledged the
apparent. These additional services requiring states with these program reality that state budgets often play a
must be monitored periodically for a features to follow the procedures role in Medicaid rate-setting. This final
minimum of 3 years following the initial described in the rule would be rule with comment period requires that
rate reduction. inefficient. states have a process in place to review
Comment: One commenter stated that Response: This final rule with and monitor access to care to determine
providers can practice cost-shifting by comment period applies to all covered the impact various program changes
overcharging some patients to make up services under the state plan for which have on beneficiary access. The rule
for low Medicaid rates. The commenter payment is made on a FFS basis. does not prescribe specific state actions
noted that cost-shifting permits equal However we are soliciting comments to address access to care issues. The rule
access even if Medicaid rates are not through the final rule with comment instead requires procedures that will
consistent with economy and efficiency. period on whether we should consider inform states and CMS of access
Response: The focus of this rule is to further rulemaking or guidance, as concerns before SPA approval and on an
provide a reasonable approach for states appropriate, to allow for such ongoing basis. This information should
to document access to care for Medicaid exemptions to the scope of required be useful to state legislators as they
services under the state plan. While we access reviews required under make budgetary decisions and is not
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agree with the commenter that the § 447.203(b)(5), including whether to intended to hamper the legislative
adequacy of payment rates in meeting permit streamlined approaches to process.
provider costs are not necessarily the measuring access to care based on Comment: A commenter requested
only or the decisive factor in ensuring specific circumstances within states. For that we clarify how CMS would handle
access to care, in this final rule with instance, we are particularly interested access issues that arise due to events
comment period, we do not require that in whether states with higher that are not within the state’s control,
states establish access by reviewing the percentages of beneficiaries enrolled such as through competitive bidding
relationship of payment rates to with managed care organizations should programs for certain Durable Medical
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67584 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
Equipment, Prosthetics, Orthotics, and state plan rates, and thus would need to concerns. We are soliciting comments in
Supplies (DMEPOS). make corrective payments if the this final rule with comment period on
Response: There may be any number amendment is disapproved. whether additional categories of service
of issues that contribute to inadequate Comment: Many commenters offered should be added to the list of required
service access within state Medicaid that CMS should require higher ongoing reviews included in the rule.
programs. Though some causes of access standards for services with known Comment: Commenters suggested that
issues may be out of a state’s control, access issues. Many providers and as part of the final rule, CMS should
the statutory requirements still apply provider groups highlighted access recognize that some states are entirely or
and a state must implement appropriate challenges unique to the services that in part Health Professional Shortage
remediation measures in an effort to they provide. These providers noted Areas (HPSA) or Medically Underserved
address access issues. The strategies for access challenges specific to many Areas (MUA) which makes increasing
remediation are not limited to increases services, including, but not limited to: access a more difficult challenge,
in payments and states may employ any Primary care services; mental health particularly in a 12-month frame.
number of approaches to assuring better services; maternity services; long term Response: We appreciate that some
access to Medicaid state plan services. care and supports; family planning and states or geographic areas within states
To competitively bid for medical contraception; pharmacy; specialty care; are in HPSAs or MUAs, which present
devices and supplies, states are dental care; hospital services; End Stage challenges in improving access to care.
currently required to waive ‘‘freedom of Renal Disease (ESRD) services; physical We are restating that this final rule with
choice’’ through the exception provided therapy; transplants for essential body comment period does not require
under section 1915(a)(1)(B) of the Act organs; and community and ambulatory specific improvements or timeframes for
and federal regulation at 42 CFR care. Similarly, commenters wrote that improvement in access to care when
431.54(d). Section 1915(a)(1)(B)(i) and state access reviews should be Medicaid access is consistent with the
the regulation at § 431.54(d) expressly segmented to identify the needs of statute and the availability of care for
require that adequate services or devices children and individuals with particular the general population in a geographic
must be available to recipients under a health care needs that may go unmet. area. We recognize that some areas
competitive bidding program. States Response: We agree that there are within states may face particular
should consider this requirement in unique qualities in service categories, challenges in meeting the health needs
structuring their competitive bidding delivery systems, and populations that of the individuals residing in those
programs and drafting requests for bids. require independent analysis and that areas, and states should describe the
If a state’s competitive bidding program certain categories of service are known challenges within their access reviews
does not meet this standard, than it is to be more prone to access to care issues and discuss how they affect the
not in compliance with § 431.54(d) and in the Medicaid program. This is one of Medicaid program in particular.
section 1915(a)(1)(B) of the Act. the challenges that CMS and states face Comment: Some commenters stated
Comment: One commenter requested in selecting access data and measures that the proposed rule did not provide
that CMS clarify whether states would that are appropriate and also addressing an appropriate balance between
need to have CMS approval for a change concerns on the part of states regarding economy and efficiency and access by
to payment rates or methodologies prior administrative burden. Based on the allowing states to invoke cost as a
to implementing a change. The public comments we received, the final constraint only when they can address
commenter noted that a SPA should be rule with comment period requires that access issues in some way other than an
necessary any time a state proposes to ongoing access reviews focus on the increase in payment rates. Other
implement changes in law, policy, or following categories of services: Primary commenters noted that emphasizing
practice that may result in reduction of care services; physician specialist access to care over economy and
payment, regardless of whether it services (for example, cardiology, efficiency is at odds with many state
requires modification of existing plan urology, radiology); behavioral health innovation strategies that aim to lower
language. Similarly, commenters urged services, including mental health and cost and improve care.
that state Medicaid programs cannot substance abuse disorder treatment; pre- Response: The rule does not limit a
implement provider payment reductions and post-natal obstetric services state’s ability to reduce or restructure
until they have complied with the including labor and delivery; and home rates based on information that the rates
proposed regulatory process for assuring health services. We believe these are not economic and efficient; rather, it
access to care and CMS has approved services are both in high demand and ensures that states take appropriate
the state’s SPA to reduce provider commonly utilized by Medicaid measures to document access to care
payments. beneficiaries (see: The Kaiser consistent with section 1902(a)(30)(A) of
Response: Without exception, our Commission on Medicaid and the the Act. Under the Act, rates are neither
policy, as set forth in § 447.201(b), is Uninsured. Medicaid Moving Forward. economic nor efficient if they do not
that states must receive approval Julia Paradise. March 2015). States may also ensure that individuals have
through the SPA process to modify also select additional services to add to appropriate access to covered services.
Medicaid payment methodologies. CMS this list. This final rule with comment We interpret section 1902(a)(30)(A) of
approval ensures that the changes in period also requires that all services that the Act as a balanced approach to
service payment methodologies comply are subject to reduced rates or Medicaid rate-setting and we encourage
with all applicable regulatory and restructured rates and that could impact states to utilize appropriate information
statutory requirements and are eligible access will also need to be reviewed and and program experience to develop rates
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for FFP. SPAs may be effective no monitored as part of a state’s access to meet all of its requirements. Further,
earlier than the first day of the quarter monitoring review plan. we expect states to document that
in which a state submits an amendment. We will work with states to identify, Medicaid rates are economic and
While there is no specific regulatory or based on feedback from beneficiaries efficient when the state submits changes
statutory requirement that a state wait and providers and other available to payment methodologies through a
until SPA approval to implement a information and data, additional SPA. We will continue to document as
reduction in payment rates, the state services that may require more regular part of our SPA review process why the
must reimburse providers at approved review based on data analysis or known methodology is in line with statutory
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67585
requirements. We will continue to work Response: The statute requires and the comparison of Medicaid rates to
with state leaders and stakeholders and Medicaid payment rates to be sufficient other payer systems.
will consider issuing policy guidance on to ensure access to care and services for Response: We agree that state
standards for economy and efficiency beneficiaries, and this final rule with oversight efforts and rate setting policies
through future rulemaking efforts. We comment provides considerable should discourage over-utilization. We
are actively working with states toward flexibility to consider relevant factors support state efforts to identify
innovative delivery system designs that including market rates. The requirement utilization associated with
promote economy and efficiency to assure access to services is not inappropriate care through processes
through person centered coordinated limited in scope to when a state is that can include prior authorization,
care and value-based purchasing. We do proposing a change to its payment rate claims review, and care management
not view the requirements described in methodology, but rather, applies to initiatives. Regulations at 42 CFR part
this final rule with comment period or current rates as well. If a state has not 456 specifically discuss the
the access provisions under section changed its Medicaid payment requirements concerning control of the
1902(a)(30)(A) of the Act in conflict methodology for many years, we believe utilization of Medicaid services in
with these efforts. it is just as important to assess those certain settings, or for certain services.
Comment: A commenter noted that by rates to determine if the rates are still The regulatory framework presented in
using only access metrics, it would be sufficient to ensure access as it is to this final rule with comment period
very unlikely that state access reviews evaluate the effect of proposed changes describes several data points that may
would ever show that emergency room to rate methodologies. The provisions of be indicators of access within a given
rates violate the statute because the final rule with comment period state; however, we recognize that no one
hospitals, in practice, usually do not opt allow for state flexibility to take into measure offers a precise indication of
out of serving Medicaid patients. The account market conditions in carrying sufficient or insufficient access to care.
commenter further stated that rates to out their access monitoring review If a state experiences a severe decline in
Medicaid hospitals could sustain equal plans. We have considered state service utilization without a plausible
access to emergency room services, but concerns with the burden associated explanation, there may be an access
could simultaneously be entirely with the rule and have focused the concern worthy of investigation. The
inconsistent with efficiency, economy, ongoing access reviews on: primary care same is true of beneficiary needs. If a
and quality of care. services; physician specialist services state experiences a spike in beneficiaries
Response: This final rule with (for example, cardiology, urology, who experience difficulty receiving a
comment period focuses specifically on radiology); behavioral health services, particular service in a geographic
documenting compliance with the including mental health and substance region, this could indicate access issues
access to care requirements of section abuse disorder treatment; pre- and post- and should be investigated. Because the
1902(a)(30)(A) of the Act. This rule statutory provisions at section
natal obstetric services including labor
includes a multi-faceted approach to 1902(a)(30)(A) of the Act refer to
and delivery; and home health services.
reviewing access data, soliciting payment rates and comparisons to the
Access to these services should be
feedback from beneficiaries, providers general population, it is necessary for
indicators that beneficiaries have
and other stakeholders, and public states to compare Medicaid payment
ongoing access to primary sources of
processes to raise issues specific to state rates to the rates of Medicare or private
care. States may also select additional
rate actions that may impact access to payers. We expect that states will
services to add to this list. Ongoing
care. We do not disagree that providers evaluate access in consideration of
access concerns with other services can
that have a requirement or mission to outcome-based care as new approaches
be addressed through public input
provide care could still receive to payment and deliver systems take
Medicaid payment that falls short of processes also required under this final
form. The final rule with comment
their full cost of providing the care rule with comment period. We note that
period allows states broad flexibility to
furnished. This is an issue that is the final rule with comment period does
consider the impact of new types of
relevant to the state’s rate-setting not require a payment floor for any
payments and care delivery in the
process, but not necessarily an access Medicaid service.
access monitoring review plans.
issue. These issues could be raised by Comment: One commenter Comment: One commenter requested
hospitals in the rate-setting procedures recommended that CMS clearly explain that CMS specifically examine out-of-
required under section 1902(a)(13)(A) of in the rule that the statute includes state Medicaid payments, particularly in
the Act, but we agree that there could strong policy against over-utilization of states with historically high-volume,
be additional opportunities for public medical services, and it is both out-of-state use of services.
input. We are including in the final rule appropriate and desirable that states Response: We have not set out
with comment period, requirements that adopt rate policies that will discourage specific requirements for out-of-state
states develop mechanisms for ongoing unnecessary utilization of services and providers in this final rule with
provider feedback, which should allow embody incentives for more efficient comment period. To the extent that
hospitals and other providers who seek use of health care resources. individuals in the state obtain access to
higher rates to raise concerns to states. Commenters wrote that measuring a particular type of service through out-
Comment: A commenter stated that utilization of covered services to of-state providers, including through
the proposed rule does not provide determine appropriate access is in telemedicine or telehealth, or to the
sufficient discretion to consider market conflict with and ignores many states’ extent that individuals in a geographic
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considerations and expressed concern efforts to ensure appropriate utilization. area generally obtain services through
that the proposed rule should require To remedy this conflict, commenters out-of-state providers, the state will
states to implement a process to suggested that CMS clarify the law need to consider such providers in
evaluate access regardless of whether a requires states to enroll enough reviewing access to care.
state is seeking changes to rates. providers to ensure access rather than Comment: One commenter stated that
Further, the commenter expressed ensure that people are actively seeking the regulatory effort should be expanded
concern regarding the establishment of treatment. These commenters also to address section 1902(a)(30)(A) of the
a price floor for Medicaid services. objected to measuring enrollee needs Act’s quality of care requirements.
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67586 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
Response: We currently have several consideration to comments from those obstetric services including labor and
initiatives in place to improve upon who advocate on behalf Medicaid delivery; and home health services. We
quality within Medicaid delivery beneficiaries. have made this change in consideration
systems and strengthen quality Response: The public comment of state burden and to focus ongoing
measures. We are actively engaged with period is a unique opportunity for the access monitoring on highly needed and
states and other stakeholders in public to contribute to the regulatory utilized services. States may also select
developing quality guidelines, for process. All comments are considered in additional services to add to this list.
example the Child and Adult Core the development of final regulations. While the suspension of a rate reduction
Health Care Quality Measurement Sets Input from beneficiaries and their may be an appropriate corrective action,
developed in conjunction with the advocates is essential because that input we are not requiring a specific approach
National Quality Forum. While the most directly reflects the success or to addressing access issues within the
focus of this final regulation is limited failure to obtain beneficiary access to final rule with comment period and we
in scope to access to care, we will care. And the importance of that input will work with states on appropriate
continue our work to promote quality is not limited to the rulemaking process. remedies.
improvement within state Medicaid This is why this final rule with Comment: A commenter requested
programs and may, in the future, comment period requires that states that CMS provide a list of the covered
develop regulatory or subregulatory maintain ongoing systems to collect and services and benefits that fall under the
guidance on quality standards. We also analyze beneficiary comments and 5-year access review cycles described in
recognize that access and quality can be complaints concerning access to care. the May 6, 2011 proposed rule to ensure
related and beneficiaries may provide The importance of beneficiary needs that all services are included.
beneficial input to states on this and ongoing feedback are highlighted in Response: We proposed that states
relationship through the processes states the framework described in the review all services covered in the
develop in accordance with this rule. proposed and final rules. Medicaid state plan over 5-year cycles.
Comment: Several commenters stated Medicaid allows states the option to
B. Documentation of Access to Care and cover certain services and the list of
that the requirements of the notice of
Service Payment Rates (§ 447.203) services that individual states would
proposed rule-making create a stricter
standard than what is required under Comment: Many commenters agreed have been required to review would
the statute. Some commenters offered that it is important for states to conduct vary. The scope of services proposed for
that the requirement will be difficult to access reviews to examine access and review are described in regulation at 42
meet and would effectively preclude a related data in different geographic CFR part 440. Based on public
state from making program changes. regions throughout the state. comments, we have revised the access
Response: Prior to the issuance of this Response: We appreciate support for review requirements in this final rule
final rule with comment period, several the proposed data analysis with comment period to be more
states implemented a number of the requirements. We have adopted without targeted so as to only require
regulatory provisions we proposed in change many of the proposed measurement of a discrete set of
the May 6, 2011 proposed rule. These requirements in this final rule with services, which provides additional data
states recognized the need to review and comment period. on access while reducing administrative
monitor data and to work with Comment: Many commenters burden on states. States must conduct
stakeholders to address potential access suggested that we modify the access access monitoring reviews every 3 years
issues in light of cuts to Medicaid review procedures to require baseline for the following categories of service:
payment rates. Based on the work of access analysis prior to taking action to Primary care services; physician
these states, we consider the approve provider rate reductions, specialist services (for example,
requirements of the final rule with ongoing monitoring to detect problems, cardiology, urology, radiology);
comment period to be reasonable and and corrective action when problems behavioral health services, including
achievable. As discussed in the May 6, are detected. Some commenters offered mental health and substance abuse
2011 proposed rule and in this final rule that CMS should suspend the rate disorder treatment; pre- and post-natal
with comment period, the requirements reduction until corrective measures are obstetric services including labor and
of the rule do not limit state flexibility taken. delivery; and home health services.
in program operation. Nor do the Response: Consistent with the States may also need to add additional
regulatory requirements go beyond the commenters’ suggestion, this final rule services to the access monitoring review
scope of what is necessary to reasonably with comment period requires that plan based on access to care concerns
document beneficiary access to care. states conduct baseline reviews of the that arise out of the information
Instead, the rule provides states with core services defined in this regulation received by states through the public
procedures to document compliance and monitor access data to ensure input processes described in this final
with the statutory requirement to ensure compliance with section 1902(a)(30)(A) rule with comment period. We note that
access to care. These procedures permit of the Act. States are also required to states may have additional alternative
states considerable flexibility in the review and submit access data when processes to identify access to care
analysis of data reflecting access, and in states submit rate proposals that may issues for services in addition to those
the measures that a state must take to have a negative impact on access to care required under the final rule. This rule
respond to access concerns. and continue monitoring for 3 years is not intended to preclude states from
Comment: One commenter stated that afterwards through the process outlined continuing to use those processes and
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Medicare and Social Security have not in the access monitoring review plan. In does not intend to limit additional state
experienced the same challenges facing addition, we have revised the ongoing access to care review activities for
Medicaid, likely because their access monitoring review plan activities Medicaid services that are already
beneficiaries have considerable political to require a review of primary care effective.
clout. The commenter stated that services; physician specialist services; Comment: We received several
policymakers must factor in this reality behavioral health services, including comments that requested additional
when reviewing the proposed rule mental health and substance abuse guidance on how states should review
comments and provide special disorder treatment; pre- and post-natal access to consider geography.
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Commenters recommended that CMS manner that appropriately reflects the statutory requirements, and the reasons
define the relevant ‘‘geographic area’’ local health care delivery system of each for our determination. We continue to
that states should use for access state, as outlined in this final rule with consider whether core measures and
comparisons, while others specifically comment period. A state’s rate of access thresholds would help states and
suggested that CMS should require insured and uninsured may not be CMS assure access to care in the
states to assess Medicaid beneficiary directly related to the ability of an Medicaid program and we are
access in designated rural geographic individual on Medicaid to access a accordingly issuing a RFI, as well as this
locations of a state. One commenter covered Medicaid benefit since the final rule with comment period, to
suggested that we require states to ability to access care is different from gather additional information on this
review trends and factors as they vary having the means to pay for care. While topic.
by state geography and to emphasize the the final rule with comment period does Comment: Commenters requested that
importance of geographic variation not specify how states should make we clarify scenarios when restructuring
through specific changes to the such comparisons to the general rate methodologies would result in
regulatory text. population, we note that a state’s access issues and trigger the
Response: To clarify, states must analysis should be robust and consider requirements of this rule.
assure that access is available to both demands for care and whether Response: There may be any number
Medicaid beneficiaries to the extent that individuals have an ability to pay for of payment methodology changes that
care is available to the general such care if individuals without could harm access to care and we
population in a geographic area. The coverage are included in the analysis. cannot set forth an exhaustive list. One
actual definition of geographic area may Comment: Several commenters noted common type of restructuring is a
vary by state and the extent and need to that courts have determined that the change in the targeting of supplemental
which states review and monitor access term ‘‘general population’’ only means payments. States may alter payments in
based on geographic area may depend people who have private insurance and ways that are budget neutral as a whole
on the data and other information that not the uninsured and requiring for the amendment action, but would
states are required to review as part of Medicaid to compare its coverage to reduce payments for some providers.
the framework of this final rule with private plans without accounting for the For instance, some states make up for
comment period. For instance, states access of the uninsured is an artificial low base payment rates through lump
may receive information that access to standard. sum supplemental provider payments.
care is an issue in one specific region Response: The final rule does not The supplemental payments are often
within the state and focus monitoring define standards for measuring medical targeted to certain providers and may be
and remediation strategies on that services available to the general dependent upon the availability of local
region. Other states may have more population in a geographic area. States governments to fund the nonfederal
statewide access concerns that require a are instead allowed to analyze access share of payments. A change in
county-by-county analysis and strategy issues within broad parameters in a supplemental payments that reduces the
to address access on a statewide basis. manner that appropriately reflects the total amounts that providers receive or
At this time, we are not defining state local health care delivery system of each shifts funds from one provider to
geographic areas or the specific state, as outlined in this final rule with another could result in access to care
geographic considerations that states comment period. issues and is one example of a potential
must include in access reviews. CMS Comment: Several commenters payment restructuring that could
will rely on states and the processes requested clarification as to how the negatively impact access to care. Where
described in this final rule with agency will evaluate the data from there is uncertainty, we will work with
comment period, including the public access reviews. The commenters also states to help identify other situations
processes that allow stakeholders to sought clarification as to how CMS where the processes described in this
comment on the access monitoring would apply or evaluate the data when final rule with comment period should
review plans, to determine appropriate deciding to approve or disapprove a apply.
geographic considerations. SPA. Comment: Several commenters
Comment: Commenters requested that Response: Under this final rule with requested that CMS mandate that states
we clarify the difference between a comment period, states will follow make the annual data reviews publically
‘‘comparable population’’ to Medicaid specific procedures to review and available. Commenters further requested
and statutory designation of ‘‘the monitor access to care and to solicit that CMS require states to disclose the
general population in a geographic feedback from stakeholders through reports with a sufficient amount of time
area.’’ A few commenters wrote that the ongoing public processes. We also to review the data and provide
regulations need to acknowledge that require a public review timeframe for comments prior to the state’s
the law requires Medicaid to be the access monitoring review plan submission of a SPA.
compared to the general population. which will allow interested parties to Response: We are finalizing the
Some commenters stated that the review and comment on states’ access provision to require that states make
appropriate comparison is between monitoring review plans for a period no access data reviews available to the
Medicaid and those in the general less than 30 days before the monitoring public and to CMS for review. In
population regardless of insurance plan is finalized and submitted to CMS. addition, prior to submitting a SPA that
status, while others stated that the We will review this information in total reduces or restructures Medicaid
comparison to the general population is when reviewing SPAs but have not, at payment rates or otherwise have a
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unrealistic and should be removed from this time, required any specific negative impact on access to care, states
consideration. thresholds that would determine an are required to conduct a public process
Response: The regulation adopts the amendment to be approved or that solicits feedback from stakeholders
statutory standard of ‘‘the general disapproved. We will document as part in consideration of the access reviews
population’’ and we have applied this in of our SPA review process that states are conducted by the states. Access
this final rule with comment period. following the process described in this monitoring review plans will be
States are allowed to analyze access final rule with comment period, that published and made available to the
issues within broad parameters in a access to care is consistent with the public for review and comment for a
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67588 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
period of no less than 30 days, prior to review timeframe for the access Comment: Several comments
being finalized and furnished to CMS monitoring review plan which will suggested that the scope of access
for review. allow interested parties to review and reviews should be limited to mandatory
Comment: We received many comment on the state’s monitoring services. Other comments urged that
comments that requested more detail on plans for a period of no less than 30 access reviews only be required where
how a state can sufficiently demonstrate days before the monitoring plan is there is considerable empirical evidence
access to care, including thresholds for finalized and submitted to CMS. of an access problem such as: Primary
sufficient access. Some commenters Comment: Commenters requested that care; and physician specialist services;
raised concerns that without mandatory the ongoing access reviews include the and dental services for children.
thresholds states would never know agency’s summary of the views of Additional commenters suggested state
CMS’ expectations for meeting the beneficiaries and of providers of the access reviews should focus on access to
requirements of the statute. Other covered service obtained through the specialists, especially pediatric
commenters recommended that we input of medical care advisory subspecialists.
provide states with the flexibility to committee under § 431.12(e). Response: After careful consideration
determine the elements most Response: We agree that feedback of all the comments received, we are
appropriate for review of access to care from beneficiaries and providers on revising this final rule with comment
that are meaningful for their specific access to care is important and should period to eliminate the requirement that
populations and programs. be considered by states in evaluating states review all covered services within
Response: Currently, there are no access and as they make decisions about a 5-year period, and instead will require
national standards to demonstrate Medicaid rates. This final rule with that states review a discrete set of
access for each Medicaid covered comment period requires that states services provided by various provider
service that would take into account have a mechanism for ongoing types and site of service that are related
differences in state geographic locations. beneficiary input and that states log the to particular types of beneficiary needs
Since the issuance of the May 6, 2011 volume and nature of responses to every 3 years. These are: Primary care
proposed rule, we have worked with beneficiary input. In addition, we have services; physician specialist services
many states to review state data sources added a requirement that states (for example, cardiology, urology,
and develop monitoring plans to establish and maintain a similar radiology); behavioral health services
demonstrate compliance with the provider feedback mechanism. Both (including both mental health and
statute. That experience and the public feedback mechanisms are incorporated substance abuse disorder treatment
comments received through this into state access monitoring review services); pre- and post-natal obstetric
rulemaking process have further plans within the final rule with services including labor and delivery;
suggested that particular measures may comment period. CMS will rely on and home health services. These
be specific to individual services and information from the beneficiary and categories represent frequently used
systems and that states should have provider feedback mechanisms to services in Medicaid and can serve as
some flexibility and discretion in understand real-time access to care indicators that beneficiaries are
determining the measures and concerns and may require states add receiving access to care. States may at
thresholds, to allow states to take into services to their access monitoring their discretion add additional services
account varying circumstances. We review plans based on this information. to their access review monitoring plans.
requested comments on specific Depending on the nature of the In addition, we have included a
thresholds that states could use to concerns, states may need to take requirement for states to review
measure access within their Medicaid actions to address more immediate additional service categories as
programs. While we received some needs though, as the concerns may vary, determined necessary based on the
comments with suggestions of CMS is not specifying actions or public input processes described in this
thresholds, we did not receive timeframes that states must take at this rule. We note that states may have
suggestions for metrics that could be time. alternative processes to identify access
applied across all states without States are expected to solicit feedback to care issues for services in addition to
additional consideration or compelling during the development of the access those required under the final rule. This
evidence that the standards offered in monitoring review plan and corrective rule is not intended to preclude states
comments would necessarily ensure action plans and could also use the from continuing to use those processes
consistency with section 1902(a)(30)(A) existing Medical Care Advisory and does not intend to limit additional
of the Act. We will continue to study Committees for input into the process. state access to care review activities for
whether a core set of measures or Comment: Several commenters Medicaid services that are already
thresholds should be applied to the suggested that CMS should develop a effective.
Medicaid program and are soliciting template for access monitoring review Comment: One commenter suggested
more information from stakeholders plans that includes the Medicaid that FQHC reimbursement rates be given
through the RFI process described payment rate comparisons, stakeholder a separate category in the access review
earlier. feedback, and provider feedback. process as they receive an advantageous
Therefore, while we continue to study Response: Each state Medicaid Medicaid reimbursement rate which
this issue, in this final rule with program is unique, and as such, this could skew the lower rates for many
comment period we are adopting the final rule with comment period allows Medicaid family planning services.
proposed multi-faceted approach to states the flexibility to design and Response: The final rule requires
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reviewing access to care that includes implement access measures specific to states to identify payment rate
data analysis and feedback from the characteristics of their state. At this comparisons for service by provide type
beneficiaries, providers and time, we are not issuing a template or and site of service. This should address
stakeholders rather than national specific format for states to conduct the commenters concerns. We recognize
thresholds. The analysis of this their access monitoring review plans. the important role FQHCs play in
information must also weigh relevant However, CMS will identify model delivering health care services to
state-specific circumstances. As a result, plans for states to consider as they Medicaid beneficiaries. We expect that
we are requiring states to have a public develop their own plans. states would include them, as
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appropriate, in the ongoing access to Comment: Several commenters instance, one commenter suggested that
care reviews for the types of services requested that CMS clarify the CMS require an impact analysis of rate
that they provide. The statute requires anticipated approach for reviewing cuts on the ability of high Medicaid
that states pay an all-inclusive access when a state adds a new service volume providers to meet staffing
prospective payment system (PPS) rate or benefit. requirements and quality and safety
to FQHC providers or an alternative Response: This final rule with standards. Other commenters
payment methodology that results in comment period clarifies that states recommended that the numbers of
payment at least at the PPS rate. The must conduct a baseline access review providers willing to care for Medicaid
PPS rate recognizes costs associated for new services within 3 years of the patients be compared to some measure
with all of the Medicaid services that effective date of the SPAs that of patient need to provide an indication
FQHCs provide and is not specific to authorizes the service for FFP if the of whether access is adequate.
particular service. So, while services service falls under a certain subset of Commenters lamented that the rule did
furnished by FQHCs may increase service categories defined in this not specifically address circumstances
beneficiary access to certain categories regulation. All other new services will related to care in hospitals, family
of care, payments made to FQHCs are fall under the rate reduction or payment planning centers, long term services and
not going to be relevant to the payments restructuring protocol outlined in this supports and many additional benefit
made to other types of providers. final rule with comment period whereby categories.
Comment: Several commenters SPAs reducing or restructuring payment Response: While we are not adopting
suggested that state-level reviews of rates for the services are submitted with any specific metrics at this time, we are
beneficiary access to specialty an analysis of access to care and are continuing to evaluate the feasibility of
pharmacies are critically important for monitored periodically for a minimum establishing a set of core metrics and
assisting states in determining whether period of 3 years. thresholds and are soliciting input from
Medicaid beneficiaries’ access to Comment: Some commenters stakeholders on these approaches
specialty pharmacy services under the suggested that CMS allow independent through the RFI. We considered these
state plan is at least equivalent to that third parties to conduct the access comments in developing this final rule
available to the general population is reviews, stating that access reviews with comment period, and hope that the
the geographic area. Commenters also should be objective and conducted by information provided through the
noted that access issues may already an organization/academic institution public comment process informs state
exist in most states due to the that is impartial. access monitoring review plans. We
Response: Ultimately, states are included examples of a number of
combination of low dispensing fee rates
responsible for ensuring compliance metrics that states should consider
and insufficient reimbursement for
with statutory and regulatory within the regulatory text. These
specialty products.
requirements. States have flexibility in measures represent the type and scope
Response: As discussed, this final rule
determining the available resources to of information that states should review
with comment period will require states
meet the regulatory requirement through the access monitoring review
to review a certain subset of services
described in this final rule with process. As we review state access
every 3 years, including primary care
comment period. While we are not monitoring review plans, our
services; physician specialist services;
requiring use of an independent third expectation will be that the plans are
behavioral health services, including robust and are carefully designed to
party to conduct access reviews, the
mental health and substance abuse indicate access to care issues as they
option is certainly available to states.
disorder treatment; pre- and post-natal develop. We also anticipate that
Additionally, we will consider
obstetric services including labor and stakeholders will provide feedback on
alternative approaches to addressing
delivery; and home health services. state access monitoring review plans,
Medicaid access issues that
While we have not included specialty including on proposed, baselines,
beneficiaries face through a hearing or
pharmacies, we have included the metrics and thresholds, and that states
complaint driven process. We intend to
requirement for states to review access will review the feedback and make
solicit feedback on the feasibility and
for additional services based on a appropriate changes to their monitoring
implementation options for such an
significantly higher than usual level of plans.
approach through an RFI process.
beneficiary or provider access Comment: Some commenters
complaints. States may also select 1. Access Review Data Requirements suggested that the proposed regulations
additional services to add to reviews at Comment: Several commenters should be revised to allow for some
their discretion. suggested that CMS should require metrics that establish a prima facie
Comment: Another commenter states to disclose payment and other assurance that care and services for
expressed concern that states will claims data states use to conduct their Medicaid enrollees are available at least
attempt to satisfy pharmacy access access reviews. to the extent that they are available to
requirements simply by demonstrating Response: Section 447.203(b)(1) will the general population in the geographic
or offering the availability of mail order require states to review and make area. For instance, if at least 80 percent
pharmacy, which may not be adequate publically available data trends and or more of the service providers for a
for certain Medicaid beneficiaries. factors that measure access, as particular service such as hospitals,
Response: Access requirements are represented by beneficiary needs, physicians, labs, etc. in a geographic
not met by the ‘‘availability’’ of provider availability of care and providers, area are enrolled in the Medicaid
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types if the Medicaid population cannot utilization of services, and service program, the commenter offered that
obtain needed services from those payment information. These publically would reasonably mean access is
provider types. To the extent that mail available measures will support the SPA available.
order pharmacies are not adequate or submission. Response: As we discussed in the
appropriate for some Medicaid Comment: Comments suggested preamble of the May 6, 2011 proposed
beneficiaries, availability of mail order provider and service specific metrics, rule, CMS is not currently proposing
pharmacies would not constitute access threshold, and considerations should be national standards to be applied across
to pharmacy services. incorporated into the final rule. For all service categories or uniformly for all
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67590 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
states. We also think it is important to services. While some states pay for future rulemaking or subregulatory
note that enrollment alone in the services through rates based on guidance and are reviewing ways to
Medicaid program does not mean Medicare fee structures, many services standardize access monitoring and
sufficient access is available. There are are reimbursed through cost remediation efforts. In this rule, we
other factors that must be considered. reconciliation or other methodologies require that states review data that
However, we are continuing to study that do not follow Medicare approaches. considers enrollee needs, the
whether a core set of measures or Therefore, it would be difficult to availability of care and providers, and
thresholds should be applied to standardize an analysis similar to the service utilization. Within the
Medicaid, and, if so, what those specific MedPAC approach for assessing framework, this final rule with comment
measures would be, and are soliciting adequate Medicare payments. As period continues to provide states with
input through the RFI process. previously discussed, this final rule significant flexibility in reviewing data
Comment: Several commenters with comment period allows states to demonstrate and monitor access to
suggested that specific information for considerable discretion to review access care which reflects their local healthcare
specific populations be required data based on a state’s program and local delivery systems. States also have the
elements within the access reviews. In considerations as long as the review is ability to add to the framework to better
particular, one commenter suggested consistent with the standardized and represent access to services within the
children and young adults with ESRD transparent process described in this state.
should have specific consideration in final rule with comment period. Comment: Several commenters
access reviews since they have complex Comment: Some commenters recommended that CMS consider
care needs. Other commenters suggested suggested that the framework described identifying a set of uniform measures
that states should examine the needs of in the rule relies heavily on Medicaid that states must collect data on or that
adolescents ages 12 to 21 as a distinct provider reimbursement rates, CMS weighs more heavily in its
subgroup in the pediatric population beneficiary surveys, and provider analysis, based on CMS experience and
due to their significant unmet health engagement, with the latter two existing studies. While some
needs. Others requested that CMS considerations being subjective and commenters suggested such uniform
articulate that child and adolescent potentially at odds with one another. data elements would enable access
mental health services are a high Response: This final rule with comparisons across states and facilitate
priority for monitoring access in comment period requires that states best practices, other commenters
recognition of the severe shortages of review access information focused on: suggested that CMS provide flexibility
child and adolescent mental health the availability of care and providers, to states by permitting the use of other
professionals. enrollee needs, and service utilization. measures based on the strength of the
Response: We do not dispute the In addition, states must consider alternatives.
importance of these types of services information from beneficiaries and Response: We appreciate the value of
and we understand the commenters’ providers, as well as provider payments. common data sets to help compare
concerns. To the extent that states We do not view this information as access across states; however, we also
understand that there are specific access conflicting, but instead a comprehensive recognize the importance of allowing
issues for certain populations, it would review of access to care that considers states flexibility in designing and
be prudent to develop remediation a number of factors that may indicate implementing appropriate access
plans that focus on improving access for compliance with the statute. measures which reflect each state
those populations. States will be Comment: We received many Medicaid program. Because each state
required to review, at a minimum, comments that were critical of the Medicaid program faces unique
primary care services; physician framework of the May 6, 2011 proposed challenges and it is difficult to create
specialist services; behavioral health rule which focused on the availability of data sets that uniformly apply across all
services, including mental health and care and providers, enrollee needs and service categories, we are not at this
substance abuse disorder treatment; pre- service utilization. One commenter time requiring specific access measures
and post-natal obstetric services suggested that CMS should incorporate in the final rule with comment period.
including labor and delivery, home measures through future rulemaking As discussed, we will continue to study
health services, and other service and guidance, but only after Medicaid and solicit feedback on standard data
categories when the state or CMS has and CHIP Payment and Access sets through a RFI process.
received a significantly higher than Commission (MACPAC) completes its Comment: Several commenters
usual volume of beneficiary or provider process of identifying a set of measures suggested that consideration be given to
access complaints for a geographic area. to determine and track access levels. race, ethnicity, rural, and urban,
States may also select additional The commenter further suggested that primary language spoken, eligibility
services to add to this list. We are for purposes of the final rule, CMS subgroup, geography, age and income of
requesting comments on the selected should identify existing data and Medicaid beneficiaries.
categories of services outlined above. measures based on its experience and Response: We appreciate these
Comment: One commenter suggested existing resources rather than the suggestions. We have not specified the
that CMS should require that Medicaid framework described in the proposed level of detail at which states are
payment analyses determine the degree rule. required to investigate access to care.
to which Medicaid payments are Response: While we appreciate the States have the option to add the above
sufficient by, at a minimum, following comment and intend to continue to elements to their access monitoring
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the same set of analyses that MedPAC work with states to identify appropriate efforts and we hope that the access
undertakes when assessing the access measures, the components of the monitoring review plans become more
adequacy of Medicare Payments. broad framework that are described in sophisticated over time.
Response: States have significant this final rule with comment period are
discretion in establishing payment viewed by industry experts as good 2. Beneficiary Information
methods across services, providers, and indicators of access to health care Comment: Most commenters
states, whereas Medicare uses national services. We are considering providing expressed support for the provisions
rates adjusted for geography for all states with additional guidance through requiring a mechanism to solicit
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67591
feedback from beneficiaries on access will be independently heard by a payment rate analysis should only
issues. In addition to the feedback hearings officer. We may propose this include the net amount of payments,
mechanisms for beneficiaries, many process through future rulemaking, including supplemental payments, to
commenters also suggested mechanisms which will include notice and the provider, and that payment data
to gain feedback from service providers, opportunity for public comment. should appropriately deduct, or account
caregivers, and advocates. A few Comment: One commenter for any taxes or assessments that are
commenters urged that we target encouraged CMS to work with state required to be paid by Medicaid
feedback on specific issues (for Medicaid agencies to collect Consumer providers. Some commenters even
example, mental health, and women’s Assessment of Healthcare Providers and suggested a separate payment rate
health) and mandate types of feedback Systems (CAHPS) data for FFS metric to reflect public hospitals and
mechanisms, while other commenters beneficiaries in a similar manner to providers that pay the non-federal share
urged CMS to allow states flexibility to what is collected for Medicare FFS of the Medicaid payments.
determine the best tools to obtain beneficiaries. Response: Section 1902(a)(30)(A) of
feedback. Commenters also requested Response: We are currently working the Act describes payment rates for
clarification regarding the types of with state Medicaid agencies to collect Medicaid care and services. Our
feedback mechanisms CMS would and use the CAHPS survey data for regulatory purview is to review all state
consider acceptable and the standards institutional and primary care settings payment rate methodologies through the
that CMS would use when reviewing and we will continue to assist states in SPA process to ensure the payment rates
beneficiary input. collecting this or similar data in the are economic, efficient, and sufficient to
Response: We appreciate the future. To the extent possible, we will assure access. The requirements
commenters’ support for this provision work with states to use the CAHPS contained in this final rule with
and we are finalizing § 447.203(b)(4) survey data to support the analysis and comment period set forth a framework
that requires states to have mechanisms oversight procedures described in this for states to use to demonstrate their
for obtaining ongoing beneficiary final rule with comment period. payment rate methodologies are
feedback through hotlines, surveys, Comment: Commenters suggested that sufficient to ensure access. To the extent
ombudsman, or other equivalent states should also obtain provider and that payments are made to providers
mechanisms. We continue to offer states beneficiary feedback during the outside of a state plan rate methodology
the ability to implement feedback development of corrective action plans (for example, uncompensated care pool
mechanisms tailored to their program so that beneficiary and provider payments, Medicaid DSH, or HIT
characteristics and to use feedback experience may better inform the state’s payments), such payments would not be
mechanisms that are already in place actions. directly included in the state’s rate
and working to meet the objectives of Response: We are finalizing analysis. But rate analysis is only one
this final rule with comment period. In § 447.203(b)(4), which requires states to part of an overall access analysis, and
consideration of comments from have a mechanism for obtaining ongoing these other payments may affect
providers and provider groups, we are beneficiary feedback through hotlines, provider’s participation rates in
adding a requirement within the final surveys, ombudsman, or other Medicaid by providing additional
rule with comment period that states equivalent mechanisms. We are also incentive to serve Medicaid patients.
have a mechanism for ongoing provider adding a provision that requires states to Comment: We received a significant
feedback. While CMS will not formally have similar mechanisms in place for number of comments regarding the
approve state feedback mechanisms, provider feedback. One mechanism that proposed requirement to compare
states are required in this final rule with states could use is the Medical Care Medicaid rates to the rates of other
comment period to maintain a record of Advisory Committees that are already payers; some commenters supported the
the volume and nature of responses to required in federal regulations. We proposed requirement while other
beneficiary feedback. believe that states should solicit commenters opposed it. One commenter
Comment: One commenter suggested feedback during the development of suggested that the only way CMS could
that CMS establish a mechanism for corrective action plans or use the demonstrate that Medicaid access is at
beneficiaries and stakeholders to raise existing Medical Care Advisory least comparable to that of the general
concerns about access issues directly to Committees for input into the process. population is through a comparison to
CMS. commercial rates. Another commenter
Response: Because each state designs 3. Access Review Medicaid Payment
contended that it is difficult to
and administers its own Medicaid Data
determine actual commercial rates
program within the federal framework, Comment: We received numerous because often this information is
we believe it is most appropriate for comments regarding which factors considered proprietary. One state
beneficiaries and stakeholders to raise should or should not be included in the expressed concern about not being able
access concerns with the state directly, payment rate analysis. Many to meet this requirement because there
rather than to CMS. To the extent that commenters requested CMS exclude are no large commercial plans within
a beneficiary or stakeholder’s access Disproportionate Share Hospital (DSH) the state. Other commenters suggested
concerns are not addressed by the state payments in the analysis, while other that it is ineffective to base rate
adequately, those concerns may be commenters stated these payments comparisons on other payers’ rates
raised to CMS although we are not should be included. Commenters also alone and some states may be relying on
establishing a formal process at the suggested that uncompensated care pool unsound data for comparisons. A few
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federal level. As part of the final rule payments, Health Information commenters cautioned against using
with comment period, states will be Technology (HIT) payments and other Medicare rates as a comparison, citing
required to promptly respond to specific types of supplemental payments be that Medicare does not offer the same
access problems, with an appropriate excluded from the rate analysis. One benefits as Medicaid (for example,
investigation, analysis, and response. In commenter suggested that states should comprehensive dental and pediatric)
addition, we are exploring the feasibility separately show percentiles with and and that the Medicare payment rates do
of requiring a state level formal hearings without supplemental payments. not reflect the costs incurred by the
process where access to care concerns Additional commenters stated the Medicare provider to provide the
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67592 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
services. One commenter sought or restructured or where a significantly rates are sufficient to enlist providers
clarification on whether the review higher than usual volume of beneficiary, into the Medicaid program or not, since
must include all three proposed provider, or stakeholder access generally providers do not determine
comparisons or could be limited to at complaints. Within primary care whether to provide care to an individual
least one. services, we are including dental care as based on the rate for a single service.
Response: The framework in the final one of the service categories states must This final rule with comment period
rule with comment period recognizes review as part of the access monitoring requires states to provide an analysis to
that access to covered services may be review plan. We also agree that access compare Medicaid rates to other private
affected by multiple factors. One such needs may vary between pediatric and and public health payer rates. This
factor is the Medicaid payment rates in adult populations and we are requiring analysis will only serve as an indicator
comparison to other payers. We states to describe within their plans, the of whether low rates may be a source of
maintain that a comparison can be a characteristics of the beneficiary access issues. A better determination of
useful tool for states in determining the populations, including considerations whether the rates are sufficient to enlist
adequacy of their rates; however, it for care, services, and payment providers into the Medicaid program
should not be relied upon without variations for pediatric and adult will be the analysis of enrollee needs,
taking into account other factors that populations, as well as individuals with the availability of providers and
impact access. To the extent a state has disabilities. utilization trends, as well as beneficiary
issues making comparisons to private or Comment: One commenter urged and stakeholder feedback that will be
public health payer rates because the CMS not to require the publication of all received through the processes
data is not available for a particular payers’ rates. described in this rule.
service, we would expect the state to Response: This final rule with Comment: A commenter noted an
explain this as part of its analysis and comment period does not require a state error in the proposed regulatory text.
conduct other appropriate reviews of to publish the rates used by other Specifically, the May 6, 2011 proposed
Medicaid rates. payers. Although we are finalizing the rule would have required that states
Comment: Some commenters requirement for states to conduct a calculate the ‘‘percentile’’ estimate
expressed support for a two-pronged percentage comparison of Medicaid which Medicaid payment represents of
review: One comparing Medicaid FFS payment rates to other payers within the one, or more, of the following: Medicare
payments in relation to Medicare state, this is not intended to require the payment rates, the average commercial
payment rates; and Medicaid FFS publication of other payers’ specific rates, or the applicable Medicaid
payments in relation to the payment rates. allowable cost of the service. The
rates used by Medicaid managed care Comment: Commenters offered that commenter notes that CMS likely
organizations within the state. the May 6, 2011 proposed rule does not intended states to calculate the
Response: The final rule with clarify that access reviews of Medicaid ‘‘percentage’’ of which Medicaid
comment period requires that states payment data should be collected and payment represents the other payer or
include percentage comparisons of provided for each individual item or cost amounts.
Medicaid payment rates to other public service rather than in the aggregate. Response: We agree with the
and private health coverage rates within Commenters requested that CMS require commenter and we have corrected this
the state for all services reviewed under transparency of the state’s analysis of in this final rule with comment period.
the access monitoring review plan by provider rates and access determination We also note that, based on comments,
provider type and site of service (e.g. for stakeholders to provide meaningful we revised the payment analysis so that
primary care providers within office input of the changes to the state and states are required to determine the
settings). We would expect the state to CMS. The commenters noted that percentage of which Medicaid payments
include Medicaid managed care aggregate numbers would not allow an represent other public or private payer
payment rates in these comparisons to adequate review of potential access rates for the services subject to the
the extent practical. issues and would lack the specificity to access monitoring review plan
Comment: Some commenters identify any needed corrective action for requirements by provider type and site
suggested CMS specify that children’s individual types of Medicaid services. of service.
access to primary care, specialty care Some commenters suggested that CMS Comment: Some commenters agreed
and oral health services must be analyze rates for each code and that that the proposed use of fee percentiles
included in the first reviews conducted committees be established to determine as an effective way of representing the
by states. Additionally, other if rates for each code are sufficient. distribution of fees charged by providers
commenters suggested that CMS should Additionally, commenters stressed the in a particular area.
specify that children’s access to dental importance that states gather and Response: We are revising the
services must be included in the first compare similar data sets from regulations to require that states review
review conducted by states, as HHS has commercial insurers, Medicare, and percentage comparisons of Medicaid
placed considerable emphasis on this other payers within their state. payment rates to other public or private
issue and 5 years is an eternity in the Response: We approve states’ rate health coverage rates within geographic
lifetime of a child. methodologies for compliance with areas of the state.
Response: This final rule with regulation and statute, but generally do Comment: Many commenters
comment period requires that the access not approve individual service rates suggested that CMS require states to
monitoring review plan include a unless a state presents a final rate, or a compare Medicaid payment rates to the
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review of primary care services; fee schedule, as the output of a rate provider’s actual cost as part of the
physician specialist services; behavioral methodology. This final rule with access review. Some commenters stated
health services, including mental health comment period does not change that CMS should specifically clarify that
and substance abuse disorder treatment; policy or imply that CMS will review provider rates need not be tied to, or
pre- and post-natal obstetric services individual rates for sufficiency. based on provider costs, while others
including labor and delivery, home Reviewing individual rates within a fee suggested CMS should mandate that
health services, and for services where schedule would not necessarily provide rates meet a certain percentage of
either payment rates have been reduced a better determination of whether the provider cost. One commenter suggested
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67593
that CMS should require the access proposed requirements, we considered 4. Stratification Requirements
reviews to account for average comments related to burden in Comment: Some commenters
customary provider charges and also the developing this final rule with comment supported the proposed stratification
extent to which providers in the period. The requirements of the final requirement for the access review, while
geographic area are requiring these rule with comment period are not other commenters opposed such a
charges to be paid in full. Still other predicated upon a significant change in requirement.
commenters stated that healthcare payment policy, but whether the Response: After careful consideration,
charges have virtually no relationship to proposed changes could negatively we are not finalizing this requirement.
the true cost of procuring services, and impact access. Where there is confusion Section 1902(a)(30)(A) of the Act does
therefore, are not a valid reference for over whether a change may cause harm not specify that beneficiaries have
comparison. to access to care, we will work with access to care within specific provider
Response: The framework described states to make a determination. ownership categories, but rather that
in this final rule with comment period Comment: Some commenters stated
access be viewed within the service
addresses how states can demonstrate that Medicaid payment rates should be
categories as a whole and within
and monitor sufficient access to care as reviewed and analyzed as new
required by section 1902(a)(30)(A) of the technology is introduced into the associated geographic areas. We
Act. Neither provider cost nor charges is medical community to determine understand that payments do vary based
a required review element in meeting whether access to the new technology is on provider ownership status and we
the requirements of the final rule with limited. Commenters also suggested that intend to review those differences
comment period. We acknowledge and medical conditions affecting Medicaid outside of the scope of this final rule
support states’ efforts in working toward populations may develop that with comment period.
delivery system reforms that promote substantially affect the need for certain 5. Access Review Timeframe
more effective care and lower cost. We covered items and services, such as the
Comment: Several commenters
have issued several guidance letters on rise in HIV infection in the early 1980s.
addressed the timeframe of the on-going
reform models that can be supported The commenters concluded that any
reviews and offered alternatives to the
under the Medicaid program and, similar health-related changes should
timeframe in the May 6, 2011 proposed
within those letters, have cautioned that require review of provider payments
access to care should be considered as rates to ensure continued access to rule. One commenter suggested
part of a reform model. necessary items and services; this is not requiring that each state complete a full
Comment: Commenters suggested that reflected in the proposed 5-year review program access review by the end of the
the regulations be revised to address structure. second full calendar year following the
‘‘payment’’ as referring to both Response: Our intent is to define a effective date of the regulations, request
individual health care service rates, as process by which states can effectively that all services be reviewed every 3
well as payments for care and services and consistently measure beneficiary years, and that one-third of all services
on an aggregate basis such as total access to medical services in the be reviewed each year. Other
payments for all care and services or Medicaid program. To the extent that commenters suggested that rates be
total payments for all acute hospital care advances in technology and/or reviewed more frequently than every 5
and services. unforeseen challenges arise that have an years and suggested various alternative
Response: This rule only addresses impact on the delivery of care in the for more frequent review. While other
how states can demonstrate and monitor Medicaid program, we expect these commenters suggested that yearly
sufficient access to care as required by types of changes to be considered when reviews are excessive without a change
section 1902(a)(30)(A) of the Act, which reviewing access to care but only to the in payments and that it is more
describes payment rates for Medicaid extent that it increases or decreases appropriate to monitor access after
care and services. The requirements access to services as established in implementation of rate changes to
contained in this final rule with section 1902(a)(30)(A) of the Act. As determine the impact of the change.
comment period set forth a framework such, this final rule with comment Response: The timeframe outlined in
for states to use to demonstrate their period offers flexibility to states to the May 6, 2011 proposed rule was
payment rate methodologies are demonstrate access within the context designed to ensure a timely review of
sufficient to ensure access. We of each state’s local health care delivery access, while accommodating the time,
appreciate the comment but, as system. manpower, and data constraints of state
previously discussed, we are not Comment: We received some Medicaid agencies. After considering
requiring states to review access for comments indicating that establishing a the public comments, we have
each individual item, service, or standard equivalent to commercial determined that a full program review
procedure payment rate. insurance would need to be established over 5 years is too burdensome.
Comment: One commenter expressed by the Congress and doing so through Therefore, we have revised this
concern that the proposed requirement the proposed rule is an administrative requirement to include a review of:
in § 447.203(b)(3) is unreasonable and expansion of the Medicaid entitlement, Primary care services; physician
impedes the efficient operation of the one that may or may not be achievable specialist services; behavioral health
Medicaid program because all changes even if substantial increases in state and services (including mental health and
in payment policy can be considered federal program funding were possible. substance abuse disorder treatment);
‘‘significant’’. Response: We did not propose to pre- and post-natal obstetric services
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Response: Reviews of access to care establish a standard equivalent to including labor and delivery; and home
are necessary to ensure the state commercial insurance. Rather, this rule health services; services where either
Medicaid program is providing will require states to make comparisons payment rates have been reduced or
sufficient services to its beneficiaries. of Medicaid service rates to private or restructured; and services for which a
We discussed the reasons for issuing public health payer rates. We are aware higher than usual volume of
this regulation at length in the May 6, that a number of states already perform beneficiaries, providers, or stakeholders
2011 proposed rule. Although there is these types of calculations for varying have raised access to care issues. The
some burden associated with the administrative purposes. ongoing reviews will be conducted
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67594 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
every 3 years and intend to measure the methodology changes made through Response: We agree with the
current status of access to services SPAs, as well as ongoing feedback from commenters though the list of services
within the state. We chose to require beneficiaries, providers and other that commenters suggested that states
that states conduct the ongoing reviews stakeholders. prioritize would have required levels of
every 3 years based on comments Comment: Some commenters state effort similar to what we proposed.
indicating that the 5 year proposed suggested as an alternative to the For the reasons discussed in more detail
review periods were too infrequent to proposed timeline, that states should be above, we will require that the access
adequately capture changes in access to required to conduct a comprehensive monitoring review plan include a
care. In addition, SPAs reducing and public access review within 180 review of primary care services;
payment rates for the services other than days prior to submission of the physician specialist services; behavioral
those mentioned above must be proposed payment rate change. health services, including mental health
submitted with an analysis of access to Response: We believe that the changes and substance abuse disorder treatment;
care and then reviewed for a minimum in access to care that occur within 180 pre- and post-natal obstetric services
period of 3 years. States may also select days between a review and SPA including labor and delivery; home
additional services to review at their submission and a year between review health services, and for services where
discretion. and submission would be negligible. either payment rates have been reduced
Comment: Some commenters Furthermore, states are required to or restructured or where a significantly
requested that CMS require states to monitor access ongoing for 3 years once higher than usual level of beneficiary,
post their access review online by a rate reduction goes into effect so any provider or stakeholder access
January 15th each year since access access to care issues that arise between complaints have been received. States
reviews are to be completed by January the initial review and SPA submission may also select additional services to
1st. will be detected through state review at their discretion.
Response: We consider the monitoring procedures.
completion date to be synonymous with 6. Special Provisions for Proposed
Comment: We received some Provider Rate Reductions
the date the access monitoring review
comments suggesting that the regulation
plan should be published or readily Comment: We received many
carve out a separate effective date of comments on the requirement that
made available upon request. We have
January 1, 2013 for the first rate review access monitoring review plans
revised the final rule with comment
required under the regulation and the accompany SPAs that proposed rate
period to require that states issue the
subsequent rate reviews be conducted reductions. Many commenters suggested
access monitoring review plan by July 1
of each review year. This coincides with every 5 years thereafter. Other that we modify the access review
the beginning of most state fiscal years commenters stated that CMS should procedures to require baseline access
and allows states sufficient time after require states to begin the access analysis prior to taking action to reduce
the issuance of this final rule with reviews as soon as possible. Some provider rates, ongoing monitoring
comment period to conduct the first commenters stated that CMS could processes to detect problems, and
review for service categories subject to require states to begin reviews on the corrective action when problems are
ongoing review. sooner of the first day of the state fiscal detected. Some of the commenters
Comment: Many commenters year or the first day of the calendar year stated that CMS should suspend the rate
suggested revisions to the timeline for after the final rule with comment period reduction until corrective measures are
review that would require states to becomes effective. taken. Other commenters requested that
conduct access studies and monitor Response: We had proposed that CMS eliminate the requirement that
program changes on an annual basis. states make available the first access proposed rate changes be accompanied
For example, commenters suggested data reviews beginning January 1 of the by an analysis of access or face
CMS require states to conduct annual year beginning no sooner than 12 disapproval.
reviews and compare information from months after the effective date of the Response: In the May 6, 2011
year-to-year and analyze trends, final rule with comment period. Based proposed rule, we discussed the basis
averages, and notations of changes in on comments regarding the delay in and reasoning behind requiring access
access to care over time. access review information, we are information in making SPA decisions.
Response: We agree that revising the proposed timeframe and This final rule with comment period
comprehensive studies of access are will require states to publish the access requires that states conduct baseline
important. However, we have also monitoring review plans by July 1 after reviews and monitoring procedures
considered concerns from states over the effective date of this final rule with when implementing rate reductions or
the burden associated with the data comment period. The access monitoring restructuring rates in ways that may
requirements discussed in the May 6, review plans must be updated by July negatively affect access to care.
2011 proposed rule and the resources 1st every 3 years thereafter. As Consistent with commenters’
that states estimate would be required to discussed, this timeframe corresponds suggestions, this rule requires that states
collect and analyze access information with the start of state fiscal years for the conduct baseline reviews and ongoing
for all covered Medicaid services. majority of states and provides states monitoring of access data to ensure
Therefore, to comply with section with time to gather the necessary data compliance with section 1902(a)(30)(A)
1902(a)(30)(A) of the Act, we focus and resources to perform accurate and of the Act.
access review requirements on ongoing detailed access reviews. Based on feedback from states that
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reviews of primary care services, Comment: Several commenters ongoing 5-year access reviews for all
physician specialist services, mental suggested that priority be given to services would overly burden state
health services, pre- and post-natal certain services for which access agencies, we determined a process
obstetric services including labor and problems have been documented. The similar to the commenters’ to be the
delivery, and home health services and list of services included physician appropriate regulatory framework. Such
to focus state efforts on review and services, dental services, mental health a process will include a review of
monitoring access to care for all other services, and many specialty care primary care services, physician
Medicaid services specific to rate services. specialist services, behavioral health
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67595
services including mental health, pre- providers, and that the requirement be methodology restructuring or only those
and post-natal obstetric services comparability to the private sector. that result in rate reductions.
including labor and delivery, home Response: Section 1902(a)(30)(A) of Response: A state must develop
health services and for services where the Act requires that payments be procedures to monitor continued access
either payment rates have been reduced sufficient to enlist enough providers so to care after implementation of state
or restructured or for which a that care and services are available plan service rate reduction or payment
significantly higher than usual level of under the plan at least to the extent that restructuring that may reduce access to
beneficiary, provider or stakeholder such care and services are available to care. The procedures must define a
complaints have been received. While the general population in the geographic periodic review of state determined
the suspension of a rate reduction may area. We expect states to address access indices that will serve to demonstrate
be an appropriate corrective action, we issues, whether through a formal sustained service access, consistent with
will not require a specific approach to corrective action plan, or if more efficiency, economy, and quality of care.
addressing access issues within this appropriate, on a case by case basis. Comment: One commenter requested
rule, and we will work with states on Comment: Some commentators that CMS clarify how a state would
appropriate remedies given the facts and requested more specific requirements demonstrate sustained access after
nuances of particular situations. We for monitoring access after a rate implementation of a SPA that reduces or
intend to work with states to monitor reduction is implemented, including the restructures rates.
access data and determine an request that CMS set specific timeframes Response: The monitoring procedures
appropriate course of action should required in § 447.203(b)(6)(ii) require
for the required monitoring procedures.
access issues arise. that a state develop procedures to
Response: Section 447.203(b)(6)(ii)
monitor access after implementation of
7. Compliance With Access allows the state flexibility to develop
a SPA that results in rate reduction or
Requirements access monitoring strategies. While
payment restructuring. Such monitoring
monitoring procedures are required of
Comment: Some commenters should include enrollee needs,
states, each state may develop the
suggested that CMS approve an access availability of care and providers,
monitoring plan that best accommodates utilization of services, and service
review within 90 days of receipt and if its data and other resources, while still
the review is deemed unacceptable, that payment information. States must
adequately monitoring access to conduct reviews periodically over a
CMS disapprove a SPA submittal or take services. This final rule with comment
corrective action to address inadequate minimum 3-year period following
period incorporates a specified time implementation of a SPA that reduces or
access to care. period of 3 years for monitoring
Response: While we will not formally restructures rates.
following the implementation of a SPA Comment: Several commenters
approve or disapprove access reviews,
that reduces or restructures payment recommended changes to the review
all reviews must include the elements
rates. and monitoring requirements of the
described in the regulations and we will
review the plans using this standard. Comment: Some commenters proposed rule. Some commenters
We will not approve SPAs that are suggested that we provide clear and requested that CMS provide additional
unsupported by data and the processes broad discretion to states in managing flexibility to states in establishing
described in this final rule with rates, and a clear path toward expedient appropriate methods for measuring and
comment period, and will pursue approval of a rate reduction, provided monitoring beneficiary access to
compliance action should a state fail to that the states have mechanisms in services. Other commenters suggested
conduct the baseline access data place to monitor and correct adverse that states should periodically review
reviews. impacts to access. and monitor access and states determine
Response: This final rule with the measures of access and beneficiary
8. Monitoring Procedures comment period continues to offer information included in such reviews
Comment: Some commenters states broad discretion to manage rates allowing states to take a more balanced
suggested that we revise the access and includes procedures to ensure that approach to evaluating access.
demonstration to state that states must proposed changes in the program do not Response: This final rule with
‘‘consider’’ the access impact and violate section 1902(a)(30)(A) of the Act. comment period offers states significant
commit to ongoing monitoring when Comment: Some commenters flexibility in determining the measures
appropriate. suggested that CMS should define in the of access and beneficiary information
Response: We agree that states should regulation its role in post- included in the review as the
conduct ongoing monitoring efforts on implementation monitoring. commenter suggests. However, we
access to care and included oversight Response: We will review access to believe that a defined time period for
and monitoring procedures within this care data each time a state submits a rate completion of the access to care reviews
final rule with comment period. To the reduction or restructuring of payment allows the collected data to serve as an
extent that states find access to care SPA or any time the agency is made acceptable comparative analytical tool
issues as part of the access monitoring aware of access to care issues. The over a number of years whenever states
review plan processes that are ongoing monitoring procedures in the regulation proposes to restructure or reduce rates
or associated with specific rate actions, are intended to be used to inform the or when beneficiaries alert the agency to
we expect the state to take actions to state and federal government of the access to care issues. Timely reviews
remediate those issues. If a state does overall status of access to care in their also allow states to demonstrate ongoing
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not take remediation actions, the state program. In addition, CMS may use the compliance with the section
would not be in compliance with the access to care data to monitor the 1902(a)(30)(A) of the Act. Section
statute and would be at risk of losing adequacy of rates over time, and may 447.203(b)(6)(ii) will require states to
FFP. use it to address areas in which access develop ongoing monitoring procedures
Comment: Commenters requested that is insufficient. through which they periodically review
CMS define access issues and action Comment: One commenter requested indices to measure sustained access to
plans as system-wide rather than case- that CMS clarify if the monitoring care. Our goal is to provide a consistent
by-case as identified by beneficiaries or requirements apply to all payment path for all states to document access to
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67596 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
care consistent with the Act but to also the beneficiary and provider feedback Comment: Some commenters
allow states flexibility to measure and mechanisms must be available to Tribes suggested advocate groups should also
monitor access within state means. and Indian Health providers. In have an opportunity for ongoing input
Comment: Some commenters stated addition, consistent with Executive which should be differentiated from the
that states should be required to use the Order 13175, HHS Policy, and the CMS mechanism provided for public input.
same methodology to measure access Tribal Consultation Policy, states are Response: We understand that
once a rate reduction is put into place required to consult with tribes to receive advocate groups currently have many
so that a fair comparison of the impact their input. We also encourage states to opportunities to provide feedback to
of the rate reduction may be made. develop specialized mechanisms that states on Medicaid issues and offer
Response: We generally agree that would be responsive to input from important insights for state
consistency in a state’s methodology beneficiaries from other populations consideration. This final rule with
may allow for better comparisons of that have particular access concerns. comment period offers advocates and
access over a period of time; however, Comment: Several commenters other stakeholders an opportunity to
states may need to make adjustments requested that states or CMS establish provide feedback on specific state rate
and changes to the analysis based on advisory groups to help determine actions through the public process
modifications of service delivery whether state payment rates sufficiently procedures. In addition, we would
systems, payment rates or other program provide for access to care. Commenters expect that individuals advocating on
changes that may affect access to care. suggested that the groups be comprised behalf of a Medicaid beneficiary would
States and CMS may also determine that of a variety of stakeholders, such as have access to the mechanism for
an analysis is not feasible to conduct or beneficiaries, beneficiary advocacy ongoing beneficiary feedback described
does not accurately demonstrate access groups, clinicians, and provider trade in this rule.
after conducting a review For these organizations.
reasons, we are not restricting states 10. Addressing Access Questions and
Response: Current § 431.12 requires Remediation of Access Issues
from making modifications to their
that state Medicaid agencies establish Comment: We received several
methodology when the changes intend
Medical care advisory committees that comments regarding the subsequent
to improve the analysis or present
include provider and beneficiary actions if an access issue is identified.
reasonable alternative approaches to
participation. We are finalizing the Many commenters were in support of
reviewing access to care.
requirement that states have a the requirement for states to submit a
Comment: Some commenters
mechanism for ongoing provider corrective action plan, while many
suggested, as part of monitoring
feedback, similar to the process for commenters were opposed to such a
identified access issues, an annual
ongoing beneficiary feedback. This requirement. Commenters stated
review and public town hall meetings
could include the Medical care advisory opposition and expressed concern about
should be implemented.
Response: We considered requiring committee required at § 431.12. the lack of ‘‘threshold’’ for the scope or
that states conduct a public process for Comment: Commenters requested that severity of an access issue that would
monitoring activities similar to that we clarify the decision to require require the submission of a corrective
which is described for the submission of ongoing beneficiary feedback when action plan. While some commenters
SPA that reduce rate or restructure other requirements of the proposed rule, sought clarification from CMS, others
payment in circumstances when the such as the public process, involve implied that the state should be able to
changes could result in access issues. providers and other stakeholders. In define such threshold, especially in
This final rule with comment period addition, commenters requested that instances that are clearly compliant
requires states to have mechanisms for CMS clarify the standard against which with the statutory standard. Some
ongoing beneficiary, provider, and other we would require states to consider commenters suggested that CMS should
stakeholder feedback and those input from beneficiaries and other not approve a SPA or permit a payment
mechanisms should ensure that state stakeholders. A commenter noted that reduction to be imposed until corrective
monitoring activities are effective and the level of input and magnitude of action measures are taken. Other
were properly developed. proposed SPA changes are not always commenters suggested that CMS should
correlated. affirmatively require states to suspend
9. Mechanisms for Ongoing Input Response: After considering the or reverse a payment reduction if an
Comment: Many commenters comments received, we are including in access issue is identified. A few
supported the requirement that states this final rule with comment period the commenters urged CMS to impose
have ongoing mechanisms (hotlines, requirement that states consider sanctions on states that fail to remedy
surveys, ombudsman, etc.) for provider feedback similar to the access issues timely. Still other
beneficiary input on access to care. requirement for ongoing beneficiary commenters requested that CMS remove
Some of the commenters suggested that feedback. This could be accomplished any references to remedies for access
we add a specific mechanism for through state Medical care advisory issues that do not involve increasing
feedback from tribes, tribal committees, logging of issues raised by payment rates. Commenters also
organizations, and Indian Health providers, or other means. States must discussed the 90-day timeframe to
Providers. incorporate feedback from beneficiaries submit corrective action plan after
Response: We appreciate the support and providers are part of the access discovery. Some concerns were raised
for the requirement that states have an monitoring review plan procedures. that the 90-day timeframe was overly
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ongoing mechanism for beneficiary There is no threshold or standard that hasty, while others thought it
feedback. We have also considered we will apply to stakeholder feedback; appropriate.
comments from providers and provider rather, the requirements will assure that Response: After careful consideration
organizations and will require that states understand access to care of all of the comments received, we are
states have a similar mechanism for concerns from the community as they finalizing § 447.203(b)(8) requiring a
provider feedback. Tribes and Indian arise and consider that information as state to develop and submit a corrective
Health providers are an important part they make changes to their Medicaid action plan to CMS within 90 days of
of the Medicaid community and both program. discovery of an access deficiency. The
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submitted action plan must aim to Response: We are finalizing § 447.203 however, the term ‘‘modified’’ is not
remediate the access deficiency within that will require states to publish, or defined in the rule.
12 months. This requirement ensures promptly make available upon request, Response: We believe that in the
that the access deficiency is addressed the access monitoring review plan. context of the regulatory language and
in a timely manner while allowing the Within the access monitoring review we are confirming here that modified
state time to address underlying causes plan, a state must monitor continued means to reduce or restructure Medicaid
of the access issue, be it payment rates, access to care following rate reduction service payment rates in circumstances
provider participation, etc. Section or payment restructuring. when the changes could result in access
447.203(b)(8) clarifies that states have a Comment: A commenter suggested issues. To the extent that states are
number of options to address access to that CMS should implement a unsure whether a change could result in
care issues. These remediation efforts mechanism to fast-track any substantive access issues, we will work with states
can include but are not limited to: access concerns that are uncovered individually to make a determination.
increasing payment rates; improving during state-level review; states should Comment: One commenter suggested
outreach to providers; reducing barriers not be permitted to wait until the start that CMS outline the remedies that
to provider enrollment; providing of the next calendar year to fix a beneficiaries and providers will have if
additional transportation to services; or substantive problem. access issues are discovered and the
improving care coordination. This is an Response: Once access issues are state proceeds with implementing a SPA
acknowledgement that access to care is identified, the state will have 90 days to without regard to the issues.
not always about payment rates but submit to CMS for review a corrective Response: This final rule with
rather that when enough providers are action plan; the goal of this plan must comment period requires that states
enlisted in the program, states may need be to resolve the identified access issues monitor access to care after
to find ways to connect beneficiaries within 12 months. This timeframe has implementing Medicaid payment rate
with the care and services they need. been developed to minimize the length reductions and identify and remediate
Comment: Some commenters stated of time beneficiaries may experience issues that are found as a result of the
that states need more than 12 months to decreased access while realistically access review and monitoring efforts.
implement corrective action when accommodating a state’s resources, The rule also requires an ongoing
access issues are discovered, whereas allowing sufficient time to address the mechanism for beneficiaries, providers,
other commenters believed that underlying causes of identified access and other stakeholders to raise concerns
allowing states 12 months to resolve the issues. over access to care. States are required
issue was too long. Commenters stated Comment: Commenters raised to maintain a record of the volume and
concerns that that the 12-month time concerns that the remediation process nature of the response to those
frame attached to the corrective action could result in a SPA backlog because concerns. We expect that the monitoring
plan could encourage longer-term states would need to address access procedures and mechanisms for ongoing
measures, which may have an adverse issues before moving forward with state input will work together to raise
effect on provider participation. One plan changes. ongoing access concerns.
commenter stated the final rule should Response: State plan changes must
recognize the potential need for state C. Medicaid Provider Participation and
comply with statutory and regulatory
legislative action to address identified Public Process To Inform Access to Care
requirements. To the extent a state
access issues and the 12-month (§ 447.204)
identifies areas of inadequate access to
timeframe could potentially be too short Medicaid services, we could not We received several comments that
for a state to make these changes, approve any SPA that could potentially discussed concerns over the proposed
especially in states with biennial impede access further. We will work changes to the public process
legislative sessions. with states to address these issues on an requirements.
Response: We are finalizing as needed basis. Comment: One commenter stated that
§ 447.203(b)(8) that requires a state to Comment: One commenter stated that the public process requirements are not
develop and submit a corrective action the final rule should remove the enforceable because they are not a
plan to CMS within 90 days of requirement for data gathering and focus specific requirement in statute.
discovery of an access issue. The on monitoring and corrective action. Response: The purpose of this final
submitted action plan must aim to The commenter further suggested that if, rule with comment period is to provide
remediate the access deficiency within and when, access issues are found, a states with standard processes that
12 months. This timeframe has been state should develop and implement a consider and document access to care in
developed to minimize the length of corrective action plan. These activities the Medicaid program consistent with
time beneficiaries may experience would be supplemented through section 1902(a)(30)(A) of the Act. We
decreased access while realistically ongoing mechanisms for obtaining respectfully disagree that the proposed
accommodating a state’s resources and beneficiary input, using hotlines, changes to the public process are not
allowing sufficient time to address the surveys and other tools. contemplated within the requirements
underlying causes of identified access Response: We have revised the of that section. The regulatory guidance
issues. Although longer-term measures requirements of this final rule with within this rule relies upon public
may be needed to fully address the comment period to have a greater focus interaction to, in part, gauge and
underlying causes of an access issue, it on monitoring and corrective action. document whether beneficiaries and
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is imperative that a corrective action Data gathering is essential to these stakeholders raise concerns that
plan aim to resolve the access issue activities and, as previously discussed, proposed rate changes will have a
within 12 months, in the interest of we are focusing the data review efforts meaningful effect on beneficiary needs
preserving adequate beneficiary access. in consideration of state burden. and the availability of care and
Comment: Commenters suggested that Comment: A commenter noted that providers. We maintain that such
we require states to publicly report and the May 6, 2011 proposed rule states information is necessary to understand
address any decline in access to services that CMS may disapprove a SPA if a rate state rate proposals and inform CMS
following rate reductions. is ‘‘modified’’ without an access review; approval actions.
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Comment: Commenters noted that the public process should include: the implement on an ongoing basis. To
May 6, 2011 proposed rule may create proposed SPA; material submitted by overcome these issues, commenters
a timing problem for states by requiring the state Medicaid agency in connection wrote that the final rule should clarify
the public process to occur prior to the with the proposed SPA; the information that states have flexibility in monitoring
submission of a SPA. Commenters that CMS reviews to approve a SPA; and access to care and recommend that we
anticipate that the public process does information on how interested parties remove the requirements of ongoing
not allow sufficient time for states to may promptly obtain such materials. ‘‘beneficiary input’’ since the public
prepare and submit SPAs. Commenters Commenters also requested that all state process and ongoing beneficiary
also stated that the public process plans and proposed SPAs should be feedback mechanisms are duplicative.
requirement increases the time it takes posted on state Web sites or the CMS Response: This final rule with
to submit a SPA by at least 30 days. As Web site. comment period does not require a
an alternative, some commenters Response: This final rule with particular mechanism for states to
suggested that the public process occur comment period does not address the receive feedback from beneficiaries and
prior to the effective date of the SPA public process under section other stakeholders that are affected by
consistent with the public notice 1902(a)(13)(A) of the Act that is required Medicaid rate-setting. The preamble to
requirement. for institutional rate setting. This rule the May 6, 2011 proposed rule
Response: Under the processes addresses only the procedures necessary specifically discussed state flexibilities
required by this final rule with to document compliance with section and the ability of states to rely on
comment period, to the extent that a 1902(a)(30)(A) of the Act to assure that current processes to demonstrate access
state wishes to change payment rates provider payment rates are sufficient for to care to the extent that states already
that may affect access, the state will beneficiary access to care. Those have such processes in place. In this
need to be up to date in following the procedures must include a public input rule, we are implementing a standard
access review procedures and public mechanism for comments on access to set of procedures, including feedback
input mechanisms. If the state does not care. This final rule with comment from stakeholders, that all states must
have the required access review data, or period provides states with considerable follow to document access to care
has not recently prepared an access flexibility to determine appropriate consistent with section 1902(a)(30)(A) of
analysis, there could be a delay in its public input mechanisms. We suggest the Act. States develop the particular
ability to submit an approvable SPA that interested parties work with states mechanisms to enact the procedures
submission. We note that this rule does to ensure that these mechanisms are either consistent with current practices
not affect the timing provisions for SPA effective. or in other ways that meet beneficiary
effective dates. States may make SPAs Comment: Commenters suggested that needs and address access concerns
effective as early as the first day within CMS be more prescriptive in how states within each state. The public process
the quarter in which the SPA is should conduct the public process requirements for institutional rates and
submitted so even a 30-day delay based upon a proven methodology. One the ongoing public input mechanisms
should rarely change the proposed commenter suggested a formal serve different purposes. The ongoing
effective date of a state’s SPA action. ‘‘Listserv’’ for comments similar to the public input mechanisms apply to all
Furthermore, we also note that states are federal proposed rule listserv for public services, are not limited to input
already subject to a similar process access to comments. A commenter regarding proposed changes in rates,
related to conducting notice prior to requested that families, caregivers, and and includes a clear opportunity for
SPA submissions through the Tribal providers be able to represent their beneficiary feedback on access. The
Notification processes established under concerns to the Medicaid agencies and beneficiary feedback mechanism allows
section 1916 of the Act. have processes in place that allow them states to understand any access to care
Comment: Commenters stated that the to represent the voice of Medicaid concerns in real time as they occur. We
proposed changes were overly beneficiaries where appropriate. respectfully disagree that those efforts
prescriptive and that CMS should allow Response: While we continue to allow are duplicative.
individual states to determine how to for states to determine exact procedures Comment: Several commenters
interact with stakeholders on changes to for soliciting input from beneficiaries recommended that CMS strengthen the
Medicaid payment methodologies. and stakeholders, we appreciate the regulation to state that any SPAs
Response: We provided states with suggestion that states could use a submitted without having completed
the flexibility to determine the listserv to reach its intended audience. the public process requirement would
appropriate mechanism to solicit input The mechanisms for ongoing beneficiary be disapproved. A commenter
from beneficiaries and affected feedback required in this final rule with specifically proposed that the regulatory
stakeholders. States that have these comment period will allow beneficiaries text be modified so that CMS ‘‘must’’
mechanisms in place are under no and stakeholders to voice concerns disapprove a SPA if submitted without
requirement to change their approach. related to access to care in multiple a state meeting the public process
This final rule with comment period forums, such as hotlines and requirements described at § 447.204(b).
requires that a state document ombudsman programs. We agree that Response: The regulations require that
beneficiary and stakeholder feedback beneficiary and stakeholder feedback is states provide a mechanism for public
and use that information to inform how vital to understanding access to care input when reducing or restructuring
they evaluate access to care to meet the both as it pertains to specific rate Medicaid payment rates in
statutory requirement. This information proposals and on an ongoing basis. circumstances that could result in
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will both inform CMS’s approval actions Comment: Some commenters offered access issues. We retain the authority to
and serve as the state’s public record for concerns that the specific requirements consider the circumstances of and
compliance with section 1902(a)(30)(A) of public input is an unclear process content of a SPA submittal to determine
of the Act. and that it is difficult for states to obtain its compliance with statutory and
Comment: We received many stakeholder input on all services. regulatory requirements before making
comments that requested states provide Commenters further stated that public approval decisions.
specific information as part of the process creates a substantial Comment: One commenter wrote that
public process. Commenters stated that administrative burden for the state to discretionary language in § 447.204(b)
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‘‘the agency may disapprove a proposed reduction of 10 percent or more, a CMS- and/or a change in the scope or
SPA using the authority . . . or may defined threshold; or any rate reduction definition of Medicaid benefits.
take a compliance action’’ could enjoin or alteration in reimbursement methods. Response: We did not propose an
a rate alteration or reduction based Many commenters also suggested that expansion of the public notice
solely on the fact that the SPA is not yet CMS should delete the term requirement to include changes in
CMS-approved. ‘‘significant’’ altogether. coverage policy and the public notice
Response: As we indicated above, we Response: The public notice regulation discusses notice of changes
do not intend in this rulemaking to requirement informs providers of in statewide methods and standards for
change the requirements relating to the changes in state plan methods and setting payment rates. Since this rule
effective date of approvable SPAs. How standards that have either a positive or addresses policies related to section
these requirements are applied and negative impact on rate-setting. As 1902(a)(30)(A) of the Act, which is
interpreted in judicial review in the discussed in the May 6, 2011 proposed specific to state plan service rates and
federal courts is an issue that is beyond rule, it is difficult to determine a access to care, we are not addressing
the scope of this rulemaking. threshold of a significant change in changes to coverage policies at this
Comment: Several commenters payment methods and standards since time.
suggested requiring states to implement the determination to participate or Comment: One commenter offered
an ongoing input process for every continue to participate in Medicaid is that the public notice requirement
change, regardless of the scope. Other provider specific. This final rule with should be amended to tie in with the
commenters noted the rule creates a comment period should reduce the public process requirement described in
significant administrative burden for administrative and financial burden of the May 6, 2011 proposed rule. The
states and stated it would be an issuing notice by allowing states to commenter offered that since the new
inefficient use of limited resources in publish on state agency Web site. In public process is required prior to a
situations where states are making consideration of this and comments state submitting a SPA, the process
minor changes. The commenters from providers requesting the removal should tie in with the requirements set
requested that CMS work with states to of the term ‘‘significant’’ and the past forth in § 447.205 as to how notice
define a threshold that would trigger the ambiguity in interpreting whether should be given.
need for beneficiary input. The Response: The public process and
notice is required, we are removing the
commenters also recommended that public notice requirements serve
term ‘‘significant’’ in this final rule with
CMS adopt language for such a process different purposes. The public notice
comment period. Aside from the applies to any changes in state plan
similar to that contained in the
specific exceptions described in the methods and standards, and is
proposed ‘‘Monitoring Access’’
regulation, notice will be required for all published 1 day prior to the effective
provisions whereby the state is able to
changes in state plan methods and date of a Medicaid SPA. The public
define the procedures and process.
Response: The requirements in this standards with the effective date of this notice informs the public of a proposed
final rule with comment period for final rule with comment period. change in Medicaid rate-setting or
public input allow states flexibility to Comment: A commenter suggested policy without necessarily considering
design public input mechanisms that that the public notice regulation public feedback as part of the
are appropriate for state-specific describe requirements specific to tribal policymaking process. The public
circumstances. Considering that there is consultation. process requirement provides
so much variability in the Medicaid Response: While the May 6, 2011 opportunity for the public to provide
program and the delivery of Medicaid proposed rule did not address tribal input into determining beneficiary
services, CMS is concerned that consultation, the CMS tribal access to care.
defining the significance of a rate consultation requirements were detailed Comment: A few commenters
reduction or payment restructuring in policy in the November 17, 2011 objected to the use of web-based
before a state institutes a beneficiary document entitled ‘‘CMS Tribal publications as an option to issue public
feedback mechanism would undermine Consultation Policy.’’ The policy notice. One commenter cited a number
the inclusion of the process in this incorporates provision in the American of reasons for the opposition, including:
regulation. Many states have indicated Recovery and Reinvestment Act of 2009 The benefit of printed notice over
to CMS through other venues that the (Recovery Act) and the Children’s Internet notice; the fact that state Web
feedback mechanism is a primary Health Insurance Program sites do not have strong readership
indicator of access to care. Reauthorization Act of 2009 (CHIPRA). when compared to newspapers; limited
Additional information regarding the access to the Internet in many poor and
D. Public Notice of Changes in CMS Tribal Consultation Policy is rural communities; potential problems
Statewide Methods and Standards for available at http://www.cms.gov/ that individuals with disabilities or
Setting Payment Rates (§ 447.205) Outreach-and-Education/American- illness may have with using the
Comment: We received comments Indian-Alaska-Native/AIAN/ Internet; lack of assurance that states
that suggested various thresholds for Consultation.html. CMS will continue will maintain Internet sites sufficiently;
significant changes and removal of the to consult with Tribal leaders on the and difficulty in archiving web-based
term significant from the public notice delivery of health care for American publications for courts, historians,
requirement. Some commenters Indians/Alaska Natives (AI/AN) served researchers and archivists. The
requested that states be allowed to by the Marketplace, Medicare, commenter stated that the proposal
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define the term ‘‘significant’’ in the Medicaid, Children’s Health Insurance would leave the public with large gaps
regulations, while others requested that Program (CHIP), or any other health care in public information.
CMS define both the terms ‘‘significant’’ program funded by CMS and make Response: We have addressed many
and ‘‘change’’ in the final rule. A updates to the policy as necessary. of the issues raised in the comment in
number of commenters suggested Comment: One commenter offered this final rule with comment period. For
thresholds for issuing public notice, that the public notice requirement instance, the rule provides that a state’s
including: any reduction in payment; a should be expanded so that a ‘‘change’’ electronic publication must be regular
reduction of 5 percent or more; a includes both a change in payment rates and known. This offers significant
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67600 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
advantages over paper-based that the regulation is intended to • Section 447.203(b)(3) changes the
publications that may appear on any establish a process by which states analysis of payments to compare
day in the calendar year and should monitor and measure access, rather than Medicaid payments as a percentage of
alleviate some concerns over access to just the requirement that data is due to other public and private health payment
the state Web sites. We agree that these CMS. rates within geographic areas of the
Web sites must meet national standard • Section 447.203(b) is revised to state. We proposed that states compare
to assure access to individuals with clarify that the states’ access monitoring Medicaid rates to provider charges and
disabilities, and we are including this review plans must be developed in Medicare payments rates, the average
requirement in the final rule with consultation with the state’s medical commercial payment rates or the
comment period. Such standards are care advisory committee and submitted applicable allowable cost of Medicaid
issued by the Architectural and to CMS, and will be reviewed by CMS. services. We also proposed that states
Transportation Barriers Compliance This section has been revised to also stratify this information based on
Board, and are referred to as ‘‘section indicate that the plans must be made provider ownership status. The final
508’’ standards. Alternatively, the available for public review and rule with comment period modified the
World Wide Web Consortium’s Web comment for a period of no less than 30 requirement to streamline the
Content Accessibility Guidelines days prior to the finalization of the plan information and allow states flexibility
(WCAG) 2.0 Level AA standards would and submission to CMS. This allows in demonstrating the comparative
also be considered as acceptable stakeholders time to comment on the analysis of the Medicaid payment rates
national standard for Web site appropriateness of the specific measures as now defined in § 447.203(b)(1)(C).
accessibility. For more information, see the state will use to determine that there The analysis required in the final rule
the WCAG Web site at http:// is adequate access to Medicaid services. with comment reduces administrative
www.w3.org/TR/WCAG20/. We also • Section 447.203(b)(1) is revised to burden associated with the proposed
note that states currently have the state that the access monitoring review requirements while continuing to
option to publish notice in a state plan must include the items specified provide a basis to understand how
register that is similar to the Federal under the access review procedures, as Medicaid service payments compared to
Register. Like the Federal Register, well as data sources, methodologies, other health payer payments. The
many state registers are web-based and assumptions, trends and factors, and statute discusses the sufficiency of rates
states already routinely use them to thresholds so that it is clear that in ensuring access to services; however,
publish notice as an alternative to measurable data and analysis are as we have stated, rates may not be the
paper-based publication. Therefore, we essential components of the access only or most important determinant of
do not view the proposed flexibility as monitoring review plans. access in the Medicaid program.
a significant departure from the current • Section 447.203(b)(1) is revised by • Section 447.203(b)(4) provides
available options. Furthermore, we replacing the term ‘‘access review’’ with details on the review plan standards and
believe that web-based publication will ‘‘access monitoring review plan’’ for the methodologies. To provide additional
be as accessible to poor and rural reasons described above. We made clarity on types of information that
communities as publication in a state clarifying changes to the monitoring states can use for these reviews, we have
register. plan framework, specifying that reviews described suggested data elements for
Comment: A commenter suggested must measure whether beneficiary state consideration including, but not
that CMS reconsider the statement in needs are fully met, that the providers limited to: time and distance standards,
§ 447.205(b) which allows states to analyzed as part of the review are providers participating in the Medicaid
change reimbursement as long as the enrolled in the program, and that the program, providers with open panels,
change is made to conform to Medicare access analysis must demonstrate access providers accepting new Medicaid
without public notice. The commenter to care within state specified geographic beneficiaries, service utilization
stated that Medicare serves a areas. This is consistent with the patterns, identified beneficiary needs,
significantly different population than statutory requirements. We also added a logs of beneficiary and provider
Medicaid, has different conditions of requirement that the analysis describe feedback and suggestions for
participation, and may be a relative low the characteristics of the beneficiary improvement, etc. While not
payer of professional services in some population (including considerations for specifically required, these data
locations. care, service, and payment variations for elements may be used by states to
Response: The May 6, 2011 proposed pediatric and adult populations and for address the framework described in the
rule did not contemplate modifying the individuals with disabilities). This is final rule with comment and represents
exception to public notice in instances important to understand specific access the scope of the analysis that states
where the change in Medicaid rates is needs within geographic areas. should conduct when reviewing access
consistent with Medicare. At this time • Section 447.203(b)(2) is revised to to care. This responds to state and
we are not adopting the commenter’s specify that beneficiary and provider provider concerns that the data reviews
suggestion. input must be considered within the in the May 6, 2011 proposed rule lacked
access monitoring review plans. We clear direction and standards for how
IV. Provisions of the Final Regulations have also indicated potential sources of CMS will evaluate the sufficiency of a
This final rule with comment period this information, such as the public rate- state’s access analysis.
incorporates many of the provisions of setting process, medical care advisory • Section 447.203(b)(5) regarding the
the May 6, 2011 proposed rule but also committees, and letters to state and ‘‘Access Review Timeline’’ has been
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makes substantial modifications based federal officials. In addition to the data modified to clarify that states will need
on responses to the public comments. the state will review, ongoing input to comply with the provision of this
Those provisions of this final rule with from beneficiaries and providers will final rule with comment period. We
comment period that differ from the help states understand access issues received many comments on the timing
proposed rule are as follows: (and suggestions to improve access) on associated with the access data reviews.
• The term ‘‘access review’’ is a real-time basis and potentially target In the final rule with comment, states
replaced throughout by the term ‘‘access access improvements and remediation will be required to conduct the first
monitoring review plan’’ to emphasize strategies. review for the specified subset of
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67601
ongoing services by July 1 after the state submits a SPA to reduce payment • In § 447.204(a), the term
effective date of the final rule with or restructure payment in circumstances ‘‘recipients’’ is changed to
comment period and update the when the changes could result in ‘‘beneficiaries.’’
analysis every 3 years by July 1 of each diminished access for the service or • Section 447.204(a)(1) is revised to
review year. This corresponds with the services affected by the SPA. We have incorporate the baseline data review
start of the fiscal year for most states further clarified in this paragraph that a requirement and as part of the
and provides sufficient time to develop state must update the access monitoring information that states consider prior to
the baseline monitoring plan. review plan within 12 months of the the submission of a SPA that proposes
• Section 447.203(b)(5)(ii) was effective date of the submitted SPA. to reduce or restructure Medicaid
revised to change the requirement that • Section 447.203(b)(6)(ii) which service payment rates. The results of the
states review all covered services within describes monitoring procedures, has baseline data should inform states on
a 5-year period to require that states been retitled ‘‘Monitoring procedures.’’ compliance with section 1902(a)(30)(A)
review a subset of service categories at The monitoring process has been of the Act and project the potential
least once every 3 years. Language has modified to require incorporation of impact of rate policies on access to care.
also been added to this section to clarify access monitoring review plans and • Section 447.204(a)(2) is revised to
that the states are required to ‘‘complete procedures, including period review indicate that prior to the submission of
a full review of the data collected protocols and clearly defined measures a SPA that proposes to reduce or
through the monitoring plan and thresholds, into the Medicaid state restructure Medicaid service payment
methodology.’’ Paragraphs (b)(5)(ii)A, plan reimbursement methodology and rates, states must consider input from
(ii)(B), (ii)(C), (ii)(D), and (ii)(E) were to require the first monitoring review to providers, as well as input from
added to define the specific categories occur within a year after the effective beneficiaries and other affected
of services that must be included in the date of a SPA rate change and continue stakeholders. This change was added
access monitoring review plan. periodically for a period of at least 3 based on public comments that
Paragraph (b)(5)(ii)(A) adds primary care years after the effective date of the SPA requested that feedback from providers
services which includes physician, be considered in addition to
authorizing the payment reduction or
FQHC, clinic, dental care, etc. Paragraph beneficiaries as part of the public
restructuring.
(b)(5)(ii)(B) adds physician specialist process.
• Section 447.203(b)(7) describes that • Section 447.204(b) is modified to
services which includes services which
states must have mechanisms for more clearly state that with any
are provided via a referral from a
ongoing beneficiary input on access to proposed SPA affecting payment rates,
primary care provider, for example,
care (through hotlines, surveys, states must provide the most recent
cardiology, urology and radiology.
ombudsman, or another equivalent access monitoring review plan, if any,
Paragraph (b)(5)(ii)(C) adds behavioral
mechanism). In response to concerns together with an analysis of the effect of
health services which includes mental
over individual access issues, we the change in payment rates on access,
health, substance use disorder, etc.
revised the provision to require states to and a specific analysis of the
Paragraphs (b)(5)(ii)(D) adds pre- and
post-natal obstetric services including promptly respond to public input with information and concerns expressed in
labor and delivery. Paragraph an appropriate investigation, analysis, input from affected stakeholders. With
(b)(5)(ii)(E) adds home health services. and response. The state is also required this change, is more clearly delineated
These categories were added because to maintain records of the input and the that states must furnish the information
they are frequently used services in nature of the state’s responses. While gathered under the procedures of the
Medicaid, and access to these services CMS recognizes that services provided final rule with comment to CMS as part
indicates that an individual has primary through home and community-based of the SPA submission process. We will
sources of care, which may increase the waivers or 1115 demonstrations are not use this information to inform our SPA
likelihood of having their care needs bound by the procedural requirements approval decisions.
met. Paragraph (b)(5)(ii)(F) has been of this rule, states may understand • Section 447.204(c) and (d) were
added clarify that additional services through these feedback mechanisms edited to more clearly describe CMS’s
are to be added to the access monitoring access issues that may also arise for enforcement process if a state does not
review plan when states reduce or individuals receiving services through submit the supporting documentation
restructure rates. Paragraph (b)(5)(ii)(G) those delivery systems. described in the final rule with
was added to require states to review • Section 447.203(b)(8) is revised to comment period along with SPAs. If a
access for additional services based on clarify that states have a number of state does not submit the supporting
a significantly higher than usual level of options to address access to care issues documentation, then the SPA would be
beneficiary, provider, or stakeholder that are identified through the access disapproved. Likewise, if a state submits
access complaints. Paragraph monitoring review plans. These a SPA and the access analysis does not
(b)(5)(ii)(H) was added to allow remediation efforts can include but are demonstrate adequate access, the SPA
additional types of services selected by not limited to: modifying payment rates; would be disapproved. To address
the state. These modifications remove improving outreach to providers; access deficiencies, CMS may also take
some burden from the states, reducing barriers to provider a compliance action using the
particularly those that have enrollment; providing additional procedures described at § 430.35 of this
continuously monitored Medicaid transportation to services; improving chapter which is specified at 447.204(d).
access to care and do not have care coordination; or changing provider These edits were made for clarity and
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widespread access issues. We are licensing or scope of practice polices. did not alter the agency’s proposed
requesting comment on the revisions to This is an acknowledgement that access approach to enforcing the provisions of
paragraphs (b)(5)(ii)(A) through (ii)(E). to care is not determined by payment the final rule with comment period.
• Section 447.203(b)(6)(i) was revised rates alone but rather that when enough • Section 447.205(iv) was proposed to
to clarify that access monitoring review providers are enlisted in the program allow states to issue public notice on
plans shall be updated to incorporate an states may need to find ways to connect Web sites maintained by the single state
access review as described under beneficiaries with the care and services agency. We revised this section to
paragraph (b)(1) of this section when a that they need. provide some additional parameters
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67602 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
around notice publications, requiring day notice in the Federal Register and In the May 6, 2011, proposed rule (76
that publication Web site must be easily solicit public comment before a FR 26352–26359), we solicited public
reached from a hyperlink that provides collection of information requirement is comments on each of the section
general information to beneficiaries and submitted to the Office of Management 3506(c)(2)(A) required issues for the
providers and the state specific page on and Budget (OMB) for review and following information collection
the federal Medicaid Web site and that approval. To fairly evaluate whether an requirements (ICRs). PRA-related
the state ensures compliance with information collection should be comments were received as indicated
national standards to ensure access to approved by OMB, section 3506(c)(2)(A) below in section C under ‘‘Comments
individuals with disabilities (that is, of the Paperwork Reduction Act of 1995 Associated with the Collection of
section 508 standards). Further, we requires that we solicit comment on the Information Requirements.’’
clarified that the notice must be issued following issues:
as part of regular and known provider • The need for the information A. Wages
bulletin updates and maintained on the collection and its usefulness in carrying
state’s Web site for no less than 3 years. To derive average costs, we used data
out the proper functions of our agency. from the U.S. Bureau of Labor Statistics’
These changes are necessary to ensure
• The accuracy of our estimate of the May 2014 National Occupational
that notices are easily accessible to the
information collection burden. Employment and Wage Estimates for all
public (and CMS) and will remain
available for a sufficient period of time. • The quality, utility, and clarity of salary estimates (www.bls.gov/oes/
the information to be collected. current/oes_nat.htm). In this regard, the
V. Collection of Information • Recommendations to minimize the following table presents the mean
Requirements information collection burden on the hourly wage, the cost of fringe benefits
Under the Paperwork Reduction Act affected public, including automated (calculated at 100 percent of salary), and
of 1995, we are required to provide 60- collection techniques. the adjusted hourly wage.
NATIONAL OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES
Adjusted
Mean hourly wage Fringe benefit
Occupation title Occupation code hourly wage
($/hr) ($/hr) ($/hr)
Business Operations Specialist ............................................... 13–1000 33.69 33.69 67.38
Computer and Information Analyst .......................................... 15–1120 42.25 42.25 84.50
General and Operations Manager ........................................... 11–1021 56.35 56.35 112.70
Management Analyst ............................................................... 13–1111 43.68 43.68 87.36
Social Science Research Assistant ......................................... 19–4061 20.71 20.71 41.42
As indicated, we are adjusting our determine appropriate data sources that provided to the general population
employee hourly wage estimates by a will be used to conduct the review. We within a geographic area. Based on
factor of 100 percent. This is necessarily believe most of the data that will be public comments received we are
a rough adjustment, both because fringe used to inform access is available to revising the requirements of
benefits and overhead costs vary states and may already be collected by § 447.203(b) to limit the scope of
significantly from employer to states as part of Medicaid program Medicaid services that states must
employer, and because methods of reviews and payment rate-setting review on an ongoing basis. This final
estimating these costs vary widely from procedures. We also note that states rule with comment period stipulates
study to study. Nonetheless, there is no have flexibility to compare Medicaid that states must develop an access
practical alternative and we believe that rates to one or more of Medicare rates, monitoring review plan for the specified
doubling the hourly wage to estimate commercial rates, or Medicaid cost, as service categories and update the plan
total cost is a reasonably accurate may be appropriate to the service under every 3 years. States will also be
estimation method. review. The burden associated with required to develop an access
these requirements is the time and effort monitoring review plan when a state
B. ICRs Carried Over From the Proposed associated with analyzing this submits a SPA to reduce or restructure
Rule (May 6, 2011; 76 FR 26352–26359) information, making it available to the payment rates in circumstances where
1. ICRs Regarding Access Monitoring public, and periodically updating the the changes could result in access issues
Review Plans (§ 447.203(b)) information relative to activities states for the service or services affected by the
are already undertaking. We have SPA. In this way, states would consider
Section 447.203(b) requires that states attempted to mitigate any new burden the impact that such proposals may
develop and make public an access by identifying data that states are likely have on access to care and demonstrate
monitoring review plan that considers, to currently possess, identifying other compliance with section 1902(a)(30)(A)
at a minimum: Beneficiary needs, the data sources that might be informative of the Act. States may complete this
availability of care and providers, to state access reviews, and limiting the review within the prior 12 months of
utilization of services, characteristics of categories of services states will be the SPA submission.
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the beneficiary population, and provider required to review.
payment rates. States are also required b. Access Monitoring Review Plan
under this provision to monitor data a. Access Monitoring Review Plan Framework
and beneficiary and provider input on Timeline The data analysis activities described
an ongoing basis and address known Section 1902(a)(30)(A) of the Act in this final rule with comment period
access issues through corrective action. requires states to ensure that Medicaid are claimable as administrative claiming
This final rule with comment period beneficiaries have access to care and activities and are reimbursable at the
provides states with the discretion to services that is equivalent to care general 50 percent FFP rate for
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67603
administrative expenditures, insofar as and a description of the specific develop and make the access monitoring
they are necessary for the proper and measures the state will use to analyze review plans publically available under
efficient administration of the Medicaid access to care. We recommend that § 447.203(b)(1) through (4) will affect all
state plan as described at section states use existing provider feedback states. We have defined specific
1903(a)(7) of the Act. More specifically, mechanism such as medical care categories of services that states must
utilization review is identified as an advisory committees described in develop access monitoring review plans
allowable Medicaid administrative § 431.12 to ease burden on states rather for, while allowing states to include
activity in guidance that was issued in than create new requirements. additional service categories as
the form of a SMD letter dated Section 447.203(b)(3) requires that necessary. We assume states will
December 20, 1994 (www.medicaid.gov/ states include percentage comparisons conduct reviews in the context of rate
Federal-Policy-Guidance/downloads/ of Medicaid payment rates to other reductions or restructuring payment
SMD122094.pdf). We also believe that public (including, as practical, Medicaid rates and we consider the burden
states may be collecting some of this managed care rates) or private health associated with rate reduction or
information as part of current review coverage rates within geographic areas restructuring reviews as part of the
efforts for various purposes, including of the state. This requirement was ongoing estimated burden.
program administration and oversight, modified based on comments received The one-time burden associated with
quality activities, integrity and payment, to allow states maximum flexibility in the requirements under § 447.203(b)(1)
and as part of other performance comparing Medicaid payment rates to through (5) is the time and effort it
standards and measures required under the rates of other payers. would take, on average, each of the 50
the Affordable Care Act. Section 447.203(b)(4) describes the state Medicaid programs and the District
The provisions at § 447.203(b)(1) minimum content that must be in of Columbia (51 total respondents) to
through (3) require that states develop included in the monitoring plan. States develop and make publically available
and make publically available an access are required to describe: The measures an access monitoring review plan for the
monitoring review plan using data the state uses to analyze access to care specific categories of Medicaid services.
trends and factors that considers: issues, how the measures relate to the The uniform nature of the initial menu
Beneficiary needs, availability of care overarching framework, access issues of services required for the access
and providers, and changes in that are discovered as a result of the monitoring review plans are the reason
beneficiary utilization of covered review, and the state Medicaid agency’s we present average impacts.
services. Consistent with the statutory recommendations on the sufficiency of We estimate that it will take 5,100 hr
requirement, we have clarified that access to care based on the review. to develop the access monitoring review
states demonstrate access to care within Section 447.203(b)(5) describes the plan, 8,160 hr to collect and analyze the
specific geographic regions. After timeframe for states to develop and data, and 2,040 to publish the plan and
careful consideration of the comments complete its access monitoring review 510 hr for a manager to review and
received, we are finalizing the review plan the data review and make the approve the plan (15,810 total hours).
framework with some modifications in information available to the public We also estimate a cost of $22,631,80
an effort to minimize the administrative through accessible public records or per state and a total of $1,154,221.80.
burden associated with the requirement. Web sites on an on-going basis for the In deriving these figures we used the
Though we recognize that no following categories of services: Primary following hourly labor rates and time to
methodology to gauge access to care is care, physician specialist services, complete each task: 80 hr at $41.42/hr
flawless, we believe that the framework, behavioral health, pre- and post-natal for a research assistant staff to gather
as supported by state data sources, is obstetric services including labor and data, 80 hr at $84.50/hr for an
appropriate to inform whether the delivery, home health services and information analyst staff to analyze the
Medicaid access requirements are met. additional services as determined data, 100 hr at $87.36/hr for
Section 447.203(b)(1) and (2) necessary by the state or CMS. The management analyst staff to develop the
describes the minimum factors that initial access monitoring review plans content of the access monitoring review
states must considered when developing are to be completed by July 1 after the plan, 40 hr at $67.38/hr for business
an access monitoring review plan. effective date of this final rule with operations specialist staff to publish the
Specifically, we require the review to comment period. The plan must be access monitoring review plan, and 10
include feedback from both Medicaid updated at least every 3 years, but no hr at $112.70/hr for managerial staff to
beneficiaries and Medicaid providers, later than July 1 of the update year. We review and approve the access
an analysis of Medicaid payment data, estimate that the requirements to monitoring review plan.
TABLE 1—ACCESS MONITORING REVIEW PLAN—ONE-TIME BURDEN PER STATE
Cost per
Adjusted monitoring
Requirement Occupation title Burden hours hourly wage plan
($/hr) ($/State)
Gathering Data ............................................... Social Science Research Assistant .............. 80 41.42 3,313.60
Analyzing Data ............................................... Computer and Information Analyst ............... 80 84.50 6,760
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Developing Content of Access Monitoring Management Analyst .................................... 100 87.36 8,736
Review Plan.
Publishing Access Monitoring Review Plan .. Business Operations Specialist .................... 40 67.38 2,695.20
Reviewing and Approving Access Monitoring General and Operations Manager ................ 10 112.70 1,127.00
Review Plan.
Total Burden Per State ........................... ........................................................................ 310 ........................ 22,631.80
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67604 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
TABLE 2—ACCESS MONITORING REVIEW PLAN—ONE-TIME TOTAL BURDEN
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
51 15,810 22,631.80 1,154,221.80
The ongoing burden associated with data, determine whether to add or drop complete each task: 80 hr at $41.42/hr
the requirements under § 447.203(b)(1) measures, consider public feedback, and for a research assistant staff to gather
through (5) is the time and effort it write-up new conclusions based on the data, 80 hr at $84.50/hr for an
would take each of the 50 state information they review. In this regard, information analyst staff to analyze the
Medicaid programs and the District of we estimate it will take 5,100 hr to data, 100 hr at $87.36/hr for
Columbia (51 total respondents) to develop the access monitoring review management analyst staff to update the
develop and make publically available plan, 8,160 hr to collect and analyze the content of the access monitoring review
an access monitoring review plan for the data, and 2,040 to publish the plan, and plan, 40 hr at $67.38/hr for business
specific categories of Medicaid services. 510 hr for a manager to review and operations specialist staff to publish the
The access monitoring review plans approve the plan (15,810 total hours).
access monitoring review plan, and 10
must be updated at least every 3 years. We also estimate a cost of $22,631,80
We anticipate that the average initial hr at $112.70/hr for managerial staff to
per state and a total of $1,154,221.80.
and ongoing burden is likely to be the In deriving these figures we used the review and approve the access
same since states will need to re-run the following hourly labor rates and time to monitoring review plan.
TABLE 3—ACCESS MONITORING REVIEW PLAN–ONGOING BURDEN PER STATE (ANNUAL)
Cost per
Adjusted monitoring
Requirement Occupation title Burden hours hourly wage plan
($/hr) ($/State)
Gathering Data ............................................... Social Science Research Assistant .............. 80 41.42 3,313.60
Analyzing Data ............................................... Computer and Information Analyst ............... 80 84.50 6,760
Updating Content of Access Monitoring Re- Management Analyst .................................... 100 87.36 8,736
view Plan.
Publishing Access Monitoring Review Plan .. Business Operations Specialist .................... 40 67.38 2,695.20
Reviewing and Approving Access Monitoring General and Operations Manager ................ 10 112.70 1,127.00
Review Plan.
Total Burden Per State ........................... ........................................................................ 310 ........................ 22,631.80
TABLE 4—ACCESS MONITORING REVIEW PLAN—ONGOING TOTAL BURDEN (ANNUAL)
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
51 15,810 22,631.80 1,154,221.80
The requirements and burden will be § 447.203(b)(6)(ii) is the time and effort associated with this final rule with
submitted to OMB under control it would take each of the 50 state comment period.
number 0938–1134 (CMS–10391). Medicaid programs and the District of We estimate that it will take, on
Annualized over the three-year Columbia to monitor continued access average, 880 hr to develop the
reporting period, we estimate 17 following the implementation of a SPA monitoring procedures, 528 hr to
responses, 5,270 hr, $7,543.93 (per that reduces or restructures payment periodically review the monitoring
state), and $384,740.60 (aggregate). rates. The requirements will affect all results, and 66 hr for review and
2. ICRs Regarding Monitoring states that implement a rate reduction or approval of the monitoring procedures
Procedures (§ 447.203(b)(6)(ii)) restructure payment rates. We estimate (1,474 total hours). We also estimate an
Section 447.203(b)(6)(ii) requires that in each SPA submission cycle, 22 average cost of $5,929.14 per state and
states to have procedures within the states will implement these rate changes a total of $130,441.08.
access monitoring review plan to based on the number of states that In deriving these figures we used the
monitor continued access after proposed such reductions in FY 2010. following hourly labor rates and time to
implementation of a SPA that reduces or Please note that we are using FY 2010 complete each task: 40 hr at $87.36/hr
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restructures payment rates. The as the basis for our estimate because of for management analyst staff to develop
monitoring procedures must be in place the unusual high volume of rate the monitoring procedures, 24 hr at
for at least 3 years following the reduction SPAs that states submitted $87.36/hr for management analyst staff
effective date of a SPA that reduces or during this period. By basing our to periodically review the monitoring
restructures payment rates. estimate on FY 2010 data, we anticipate results, and 3 hr at $112.70/hr for
The ongoing burden associated with the highest potential for burden management staff to review and approve
the requirements under the monitoring procedures.
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TABLE 5—ACCESS MONITORING PROCEDURES FOLLOWING RATE REDUCTION SPA—BURDEN PER STATE (ANNUAL)
Adjusted Cost per data
Requirement Occupation title Burden hours hourly wage review
($/hr) ($/State)
Develop Monitoring Procedures .................... Management Analyst .................................... 40 87.36 3,494.40
Periodically Review Monitoring Results ......... Management Analyst .................................... 24 87.36 2,096.64
Approve Monitoring Procedures .................... General and Operations Manager ................ 3 112.70 338.10
Total Burden Per State ........................... ........................................................................ 67 ........................ 5,929.14
TABLE 6—ACCESS MONITORING PROCEDURES FOLLOWING RATE REDUCTION SPA—TOTAL BURDEN (ANNUAL)
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
22 1,474 5,929.14 130,441.08
The requirements and burden will be records of the beneficiary input and the develop and implement beneficiary
submitted to OMB under control nature of the state response. feedback mechanisms.
number 0938–1134 (CMS–10391). We estimate that the requirement will We estimate that it will take an
affect all states that do not currently average 5,100 hr to develop the feedback
3. ICRs Regarding Ongoing Input
have a means of beneficiary feedback. effort and 255 hr to approve the
(§ 447.203(b)(7))
Since we currently do not know which feedback effort (5,355 total hours). We
Section 447.203(b)(7) requires that states have implemented these also estimate an average cost of
states have a mechanism for obtaining mechanisms, we are assuming in our $9,299.50 per state and a total of
ongoing beneficiary, provider and estimate that all states will need to $474,274.50.
stakeholder input on access to care develop new mechanisms. The one-time In deriving these figures we used the
issues, such as hotlines, surveys, burden associated with the following hourly labor rates and time to
ombudsman, or other equivalent requirements under § 447.203(b)(7) is complete each task: 100 hr at $87.36/hr
mechanisms. States must promptly the time and effort it would take, on for management analyst staff to develop
respond to public input with an average, for each of the 50 state the feedback effort and 5 hr at $112.70/
appropriate investigation, analysis, and Medicaid programs and the District of hr for managerial staff to review and
response. They must also maintain Columbia (51 total respondents) to approve the feedback effort.
TABLE 7—BENEFICIARY FEEDBACK MECHANISM—ONE-TIME BURDEN PER STATE
Adjusted Cost per data
Requirement Occupation title Burden hours hourly wage review
($/hr) ($/State)
Developing Feedback Effort .......................... Management Analyst .................................... 100 87.36 8,736
Approve Feedback Effort ............................... General and Operations Manager ................ 5 112.70 563.50
Total Burden Per State ........................... ........................................................................ 105 ........................ 9,299.50
TABLE 8—BENEFICIARY FEEDBACK MECHANISM—ONE-TIME TOTAL BURDEN
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
51 5,355 9,299.50 474,274.50
The ongoing burden associated with review and make recommendations for estimate an average cost of $7,115.50
the requirements under § 447.203(b)(7) and conduct follow-up on the feedback. per state and a total of $362,890.50.
is the time and effort it would take each We do not estimate that the approval of In deriving these figures we used the
of the 50 state Medicaid programs and the recommendations will not require as following hourly labor rates and time to
the District of Columbia (51 total significant effort from managers. We complete each task: 75 hr at $87.36/hr
respondents) to monitor beneficiary estimate that it will take an average of for management analyst staff to monitor
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feedback mechanisms. 3,825 hr to monitor the feedback results,
The overall effort associated with feedback results and 5 hr at $112.70/hr
and 255 hr to approve the feedback for managerial staff to review and
monitoring the feedback will primarily
effort (4,080 total hours). We also approve the feedback effort.
be incurred by analysts who will gather,
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TABLE 9—BENEFICIARY FEEDBACK MECHANISM—ONGOING BURDEN PER STATE (ANNUAL)
Adjusted Cost per data
Requirement Occupation title Burden hours hourly wage review
($/hr) ($/State)
Monitoring Feedback Results ........................ Management Analyst .................................... 75 87.36 6,552.00
Oversee Feedback Effort ............................... General and Operations Manager ................ 5 112.70 563.50
Total Burden Per State ........................... ........................................................................ 80 ........................ 7,115.50
TABLE 10—BENEFICIARY FEEDBACK MECHANISM—ONGOING TOTAL BURDEN (ANNUAL)
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
51 4,080 7,115.50 362,890.50
The requirements and burden will be determine how many states will identify requiring corrective action, 400 hr to
submitted to OMB under control access issues as they conduct their data develop the corrective action plans, and
number 0938–1134 (CMS–10391). reviews and monitoring activities. We 30 hr to review and approve the
assume that many states currently have corrective action plans (630 total hours).
4. ICRs Regarding Corrective Action
mechanisms in place to monitor access We also estimate an average cost of
Plan (§ 447.203(b)(8))
to care and identify issues. While we are $5,579.70 per state and a total of
Section 447.203(b)(8) institutes a careful not to under-estimate the burden $55,797.00.
corrective action procedure that requires associated with this provision, we In deriving these figures we used the
states to submit to CMS a corrective believe that a maximum of 10 states may following hourly labor rates and time to
action plan should access issues be identify access issues per year. The on- complete each task: 20 hr at $87.36/hr
discovered through the access time burden associated with the for management analyst staff to identify
monitoring processes. The requirement requirements under § 447.203(b)(7) is issues requiring corrective action, 40 hr
is intended to ensure that states will the time and effort it would take 10 state at $87.36/hr for management analyst
oversee and address any future access Medicaid programs to develop and staff to develop the corrective action
concerns. implement corrective action plans. plans, and 3 hr at $112.70/hr for
This is a new requirement and thus We estimate that it will take an managerial staff to review and approve
we have no past data to use to average of 200 hr to identify issues the corrective action plans.
TABLE 11—CORRECTIVE ACTION PLAN—BURDEN PER STATE
Adjusted Cost per data
Requirement Occupation title Burden hours hourly wage review
($/hr) ($/State)
Identifying Issues for Action ............................ Management Analyst ..................................... 20 87.36 1,747.20
Developing the Corrective Plan ...................... Management Analyst ..................................... 40 87.36 3,494.40
Approve Corrective Plan ................................. General and Operations Manager ................. 3 112.70 338.10
Total Burden Per State ............................ ......................................................................... 63 ........................ 5,579.70
TABLE 12—CORRECTIVE ACTION PLAN—TOTAL BURDEN
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
10 630 5,579.70 55,797.00
The requirements and burden will be proposed reduction or restructuring of states will develop and implement these
submitted to OMB under control Medicaid service payment rates on rate changes that would require a public
number 0938–1134 (CMS–10391). beneficiary access to care. In process based on the number of states
§ 447.204(b), we have also clarified that that proposed such reductions in FY
5. ICRs Regarding Public Process to
we may disapprove a proposed rate 2010. Again, we are using FY 2010 as
Engage Stakeholders (§ 447.204)
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reduction or restructuring if the SPA the estimate due to the high number of
Sections 447.204(a)(1) and (a)(2) does not include or consider the data rate reduction proposals submitted by
require that states consider (when review and a public process. As an states in that year.
proposing to reduce or restructure alternative, or additionally, we may take We estimate that it will take an
Medicaid payment rates) the data a compliance action in accordance with average of 440 hr to develop the public
collected through § 447.203 and § 430.35. process and 66 hr for review and
undertake a public process that solicits We are estimating, annually, that for approval of the public process (506 total
input on the potential impact of the each SPA revision approximately 22 hours). We also estimate an average cost
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of $2,085.30 per state and a total of complete each task: 20 hr at $87.36/hr hr for managerial staff to review and
$45,876.60. for management analyst staff to develop approve the public process.
In deriving these figures we used the the public process and 3 hr at $112.70/
following hourly labor rates and time to
TABLE 13—PUBLIC PROCESS—ONE-TIME BURDEN PER STATE PER SPA
Adjusted Cost per SPA
Requirement Occupation title Burden hours hourly wage ($)
($/hr)
Develop the Public Process ............................ Management Analyst ..................................... 20 87.36 1,747.20
Approve Public Process .................................. General and Operations Manager ................. 3 112.70 338.10
Total Burden Per State ............................ ......................................................................... 23 ........................ 2,085.30
TABLE 14—PUBLIC PROCESS—ONE-TIME TOTAL BURDEN
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
22 506 2,085.30 45,876.60
The ongoing burden associated with activities. We do not estimate that cost of $3,832.50 per state and a total of
the requirements under § 447.204 is the efforts associated with review and $84,315.00
time and effort it would take 22 state approval of the activities will increase In deriving these figures we used the
Medicaid programs to oversee a public for overseeing managers. We estimate it following hourly labor rates and time to
process. will take an average of 880 hr to oversee complete each task: 40 hr at $87.36/hr
The overall effort associated with the public process and 66 hr for review for management analyst staff to oversee
developing the public process will and approval of the public process (946 the public process and 3 hr at $112.70/
primarily be incurred by analysts who total hours). We also estimate an average hr for managerial staff to review and
develop and initiate public process approve the public process.
TABLE 15—PUBLIC PROCESS—ONGOING BURDEN PER STATE
Adjusted Cost per SPA
Requirement Occupation title Burden hours hourly wage ($)
($/hr)
Oversee the Public Process ........................... Management Analyst ..................................... 40 87.36 3,494.40
Approve Public Process .................................. General and Operations Manager ................. 3 112.70 338.10
Total Burden Per State ............................ ......................................................................... 43 ........................ 3,832.50
TABLE 16—PUBLIC PROCESS—ONGOING TOTAL BURDEN (ANNUAL)
Anticipated number of Cost of review per state Total cost estimate
Total hours
state reviews ($) ($)
22 946 3,832.50 84,315.00
The requirements and burden will be public via the Internet. The burden documentation, including rate reduction
submitted to OMB under control associated with developing and issuing SPA documents ready to submit to
number 0938–1134 (CMS–10391). public notice at § 447.205 is not affected CMS. These commenters were
by this requirement since the revision concerned that the efforts would create
6. ICRs Regarding Public Notice of would simply address an additional (in a significant backlog of SPAs.
Changes in Statewide Methods and this case, electronic) means of
Standards for Setting Payment Rates Response: As previously discussed,
notification. Consequently, we do not we have considered concerns related to
(§ 447.205) include the electronic notice activity in the proposed burden and have modified
The provisions at § 447.205 clarify our burden analysis. the ongoing regulatory requirements to
asabaliauskas on DSK5VPTVN1PROD with RULES
when states must issue public notice to C. Comments Associated With the reduce the burden. We also note that the
providers and allow for the electronic Collection of Information Requirements challenges presented by initial access
publication of those notices. Section reviews, including time constraints,
447.205(d)(2)(iv)(A) through (D) allow Comment: Several commenters noted were considered in the finalizing this
those notices to be published on the that it could take a state up to 6 months rule. Though initial access reviews,
single state Medicaid agency or other and consume many resources to either triggered by the routine, rotating
state-developed and maintained Web conduct ongoing access reviews (in review process, or by submission of a
site that is accessible to the general conjunction with a SPA) and have the SPA, will require a significant time
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67608 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
investment, subsequent reviews are regulatory impact analysis as part of this this regulation to surpass the threshold
expected to be more manageable, due to final rule with comment period. We do for economic significance.
pre-established metrics and review not believe that there is potential for D. Summary of Annual Burden
mechanisms. We have conducted a Estimates
TABLE 17—ANNUAL RECORDKEEPING AND REPORTING REQUIREMENTS
Total
Hourly labor Total labor
OMB Burden per Total annual capital/
Number of Number of cost of cost of Total cost
Regulation section(s) Control response burden mainte-
respondents responses reporting reporting ($)
No. (hours) (hours) nance costs
($/hr) ($) ($)
447.203(b)(1)–(4) (one-time
requirement) .................... 0938–1134 51 17 80 1,360 41.42 56,331.20 0 56,331.20
80 1,360 84.50 114,920.00 0 114,920.00
100 1,700 87.36 148,512.00 0 148,512.00
40 680 67.38 45,818.40 0 45,818.40
10 170 112.70 19,159.00 0 19,159.00
Subtotal ........................ .................. 51 17 310 5,270 .................... 384,740.60 0 384,740.60
447.203(b)(1)–(4) (on-going
requirement) .................... 0938–1134 51 51 80 4,080 41.42 168,993.60 0 168,993.60
80 4,080 84.50 344,760.00 0 344,760.00
100 5,100 87.36 445,536.00 0 445,536.00
40 2,040 67.38 137,455.20 0 137,455.20
10 510 112.70 54,477.00 0 54,477.00
Subtotal ........................ .................. 51 51 310 15,810 .................... 1,154,221.80 0 1,154,221.80
447.203(b)(6)(ii) ................... 0938–1134 22 22 64 1,408 87.36 123,002.88 0 123,002.88
3 66 112.70 7,438.20 0 7,438.20
Subtotal ........................ .................. 22 22 67 1,474 .................... 130,441.08 0 130,441.08
447.203(b)(7) (one-time re-
quirement) ........................ 0938–1134 51 17 100 1,700 87.36 148,512.00 0
5 85 112.70 9,579.50 0
Subtotal ........................ .................. 51 17 105 1,785 .................... 158,091.50 0 158,091.50
447.203(b)(7) (on-going re-
quirement) ........................ 0938–1134 51 51 75 3,825 87.36 334,152.00 0 334,152.00
5 255 112.70 28,738.50 0 28,738.50
Subtotal ........................ .................. 51 51 80 4,080 .................... 362,890.50 0 362,890.50
447.203(b)(8) (one-time re-
quirement) ........................ 0938–1134 10 3.3 60 198 87.36 17,297.28 0 17,297.28
3 9.9 112.70 1,115.73 0 1,115.73
Subtotal ........................ .................. 10 3.3 63 207.9 .................... 18,413.01 0 18,413.01
447.204(a)(1) and (2) (one-
time requirement) ............ 0938–1134 22 7.3 20 146 87.36 12,754.56 0 12,754.56
3 21.9 112.70 2,468.13 0 2,468.13
Subtotal ........................ .................. 22 7.3 23 167.9 .................... 15,222.69 .................... 15,222.69
447.204(a)(1) and (2) (on-
going requirement) .......... 0938–1134 22 22 40 880 87.36 76,876.80 0 76,876.80
3 66 112.70 7,438.20 0 7,438.20
Subtotal ........................ .................. 22 22 43 946 .................... 84,315.00 0 84,315.00
SUB-TOTAL (One Time Re-
quirements) ...................... .................. .................... 44.6 568 8,905 .................... 706,908.88 0 706,908.88
SUB-TOTAL (On-Going
Requirements) .......... .................. .................... 146 433 20,836 .................... 1,601,427.30 0 1,601,427.30
TOTAL .................. .................. .................... 381.2 896 27,956 .................... 2,150,244.68 0 2,150,244.68
E. Submission of PRA-Related cms.hhs.gov, or call the Reports Email: OIRA_submission@
Comments Clearance Office at 410–786–1326. omb.eop.gov.
We submitted a copy of this final rule We invite public comments on these ICR-related comments are due
to OMB for its review of the rule’s potential information collection December 2, 2015.
information collection and requirements. If you wish to comment,
VI. Response to Comments
asabaliauskas on DSK5VPTVN1PROD with RULES
recordkeeping requirements. The please identify the rule (CMS–2328–FC)
requirements are not effective until they and submit your comments to the OMB Because of the large number of public
have been approved by the OMB. desk officer via one of the following comments we normally receive on
To obtain copies of the supporting transmissions: Federal Register documents, we are not
statement and any related forms for the Mail: OMB, Office of Information and able to acknowledge or respond to them
proposed collections discussed above, Regulatory Affairs, Attention: CMS Desk individually. We will consider all
please visit CMS’ Web site at Officer. comments we receive by the date and
www.cms.hhs.gov/Paperwork@ Fax Number: 202–395–5806, OR time specified in the DATES section of
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this preamble, and, when we proceed In fact, the guidance provided under for the RFA because we and the
with a subsequent document, we will this rule intends to focus disparate state Secretary have determined that this
respond to the comments in the efforts in monitoring and overseeing final rule with comment period will not
preamble to that document. data and beneficiary concerns, which have a significant economic impact on
offers a clear framework to comply with a substantial number of small entities.
VII. Regulatory Impact Statement section 1902(a)(30)(A) of the Act. In the In addition, section 1102(b) of the Act
A. Statement of Need absence of federal guidance, states have requires us to prepare a regulatory
This final rule with comment period likely misspent resources in efforts to impact analysis if a rule may have a
revises regulatory provisions in interpret and comply with section significant impact on the operations of
1902(a)(30)(A) of the Act. We will also a substantial number of small rural
§ 447.203 and § 447.204 to create a
make every effort, in collaboration with hospitals. This analysis must conform to
standardized, transparent process for
state and federal partners, to identify the provisions of section 604 of the
states to follow as part of their broader
resources and tools that states may use RFA. For purposes of section 1102(b) of
efforts to assure that payments are
to review and monitor access to care the Act, we define a small rural hospital
consistent with efficiency, economy,
within their state Medicaid programs. In as a hospital that is located outside of
and quality of care and are sufficient to
this final rule with comment period, we a Metropolitan Statistical Area for
enlist enough providers so that care and
are soliciting public comments to begin Medicare payment regulations and has
services are available to the general
identifying data sources and will fewer than 100 beds. We are not
population in the geographic area, as
continue to provide assistance as states preparing an analysis for section 1102(b)
required by section 1902(a)(30)(A) of the develop their reviews and monitoring
Act. This rule also clarifies and amends of the Act because we and the Secretary
procedures. have determined that this final rule with
§ 447.205, which require states to issue Based on our analysis above, we
public notice to their providers when comment period will not have a
estimate that even if these data significant impact on the operations of
changing Medicaid payment methods collection efforts were totally new to a
and standards. The changes to the a substantial number of small rural
state and each state were to either bid hospitals.
public notice requirement will alleviate a contract to gather and publish the data
confusion on when states must issue Section 202 of the Unfunded
collection effort and public process Mandates Reform Act of 1995 (UMRA)
notice to providers and recognize required under this rule or conduct the
electronic media as a means to issue the also requires that agencies assess
collection and public process with state anticipated costs and benefits before
notices. agency resources, the economic effects
issuing any rule whose mandates
B. Overall Impact would not surpass $100 million or more
require spending in any 1 year of $100
in any 1 year.
We have examined the impacts of this Further, we are not requiring states to million in 1995 dollars, updated
rule as required by Executive Order directly adjust payment rates as a result annually for inflation. In 2015, that
12866 on Regulatory Planning and of the provisions of this final rule with threshold is approximately $144
Review (September 30, 1993), Executive comment period, nor to take any steps million. This final rule with comment
Order 13563 on Improving Regulation that would not be consistent with period will not impose a mandate that
and Regulatory Review (January 18, efficiency, economy, and quality of care. will result in the expenditure by state,
2011), the Regulatory Flexibility Act Rather, these rules propose to clarify local, and tribal governments, in the
(RFA)) (September 19, 1980, Pub. L. 96– that beneficiary access must be aggregate, or by the private sector, of
354), section 1102(b) of the Social considered in setting and adjusting more than $144 million in any one year.
Security Act, section 202 of the payment methodology for Medicaid Executive Order 13132 establishes
Unfunded Mandates Reform Act of 1995 services. If a problem is identified, any certain requirements that an agency
(March 22, 1995; Pub. L. 104–4), number of steps might be appropriate, must meet when it promulgates a
Executive Order 13132 on Federalism such as redesigning service delivery proposed rule (and subsequent final
(August 4, 1999), and the Congressional strategies, or improving provider rule) that imposes substantial direct
Review Act (5 U.S.C. 804(2)). enrollment and retention efforts. It has requirement costs on state and local
Executive Order 12866 and 13563 historically been within our regulatory governments, preempts state law, or
direct agencies to assess all costs and authority to make SPA approval otherwise has federalism implications.
benefits of available regulatory decisions based on sufficiency of Since the estimated total cost associated
alternatives and, if regulation is beneficiary service access and this rule with the provisions in this final rule
necessary, to select regulatory merely provides a more consistent and with comment period is around $2.3
approaches that maximize net benefits transparent way to gather and analyze million annually, it will not impose
(including potential economic, the necessary information to support significant costs on state or local
environmental, public health and safety such reviews. governments, the requirements of E.O.
effects, distributive impacts, and The RFA requires agencies to analyze 13132 are not applicable. We also note
equity). A regulatory impact analysis options for regulatory relief for small that the costs associated with this final
(RIA) must be prepared for major rules entities, if a rule has a significant impact rule with comment are allocated across
with economically significant effects on a substantial number of small 51 state governments. To the extent that
($100 million or more in any 1 year). We entities. For purposes of the RFA, small costs are for the proper and efficient
do not believe that there is potential for entities include small businesses, administration of the Medicaid state
asabaliauskas on DSK5VPTVN1PROD with RULES
this provision to surpass the threshold nonprofit organizations, and small plan, many of the activities required
for economic significance because the government jurisdictions. For details, under this final rule are likely available
proposed data analysis effort is see the Small Business Administration’s at the Medicaid matching rate for
generally consistent with current state Web site at https://www.sba.gov/sites/ administrative expenditures.
oversight and review activities and default/files/files/Size_Standards_ In accordance with the provisions of
states have flexibility within the reviews Table.pdf. Individuals and states are not Executive Order 12866, this regulation
to use their existing data or build upon included in the definition of a small was reviewed by the Office of
that data when reviewing access to care. entity. We are not preparing an analysis Management and Budget.
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67610 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
C. Regulatory Alternatives Considered period, there are no standardized, services and requires additional review
This section provides an overview of transparent methodologies for and monitoring over three years for
regulatory alternatives that CMS demonstrating access to care that would services subject to rate reductions or
considered for this final rule with be appropriate to adopt at this time. restructuring of payments or when the
Rather than prescribe data measures Medicaid agency receives a significantly
comment period. In determining the
that may not align with all services or higher than usual level of complaints
appropriate approach to guide states in
set threshold standards, we have about access to care from beneficiaries,
their efforts to meet the requirements of
adopted a general framework, which providers, or other stakeholders. In this
section 1902(a)(30)(A) of the Act and
sets forth a three-part review that way, the final rule with comment period
demonstrate sufficient access to
applies across services and delivery ensures that access to care reviews for
Medicaid services, we consulted with
systems and will allow states the most services will be conducted as
SMDs, federal agency policy officials
flexibility to determine, through current potential issues arise or circumstances
and the MACPAC. Based, in part, on or new data sources, appropriate change. We believe that, absent rate
these discussions we arrived at the measures of access to care. As states reductions or restructuring of payments,
provisions discussed in this rule, which analyze their existing data sources and the 3-year review and monitoring
seek to balance state obligations to meet those that we identify through work periods combined with ongoing
the statutory requirement of section with MACPAC and our federal partners, solicitation of information about access
1902(a)(30)(A) of the Act and potential we believe that states may arrive at best from beneficiaries are sufficient to
new burden associated with the practices for determining sufficient identify access issues that may occur
proposal. To achieve this balance, we Medicaid access to care which could be over time.
have set forth a process that provides a replicated across state delivery systems This final rule with comment period
framework for states to demonstrate and will evolve with new approaches to will require states to develop
access to Medicaid services using delivering health care to Medicaid monitoring procedures after
available data resources and in beneficiaries. In addition, we are issuing implementing provider rate reductions
consideration of unique and evolving an RFI to solicit feedback from or restructuring rates in ways that may
health care delivery systems. We have stakeholders on whether data exists to negatively impact access to care. We
also emphasized the importance of develop core access measures and require these monitoring procedures
considering beneficiary input in thresholds would provide additional because the impact of rate changes on
determining and monitoring access to information or approaches that would access to care may not be apparent at
Medicaid services throughout the be useful to us and states in ensuring the time the changes are adopted. We
process as discussed in this final rule access to care to Medicaid beneficiaries. considered not requiring states to
with comment period. monitor access after implementing the
2. Access Review Timeframe and
1. Access Monitoring Review Plan changes and to continue to rely on the
Monitoring Procedures
5-year reviews to ensure that access is
The process for documenting access States will be required to develop maintained. However, we believe that it
to care and service payment rates access monitoring review plans for the is important for states to identify and
described at § 447.203 will require states following service categories: Primary address access issues that arise from
to develop and make publically care; physician specialist services; specific SPA actions, such as
available access monitoring review behavioral health; pre- and post-natal reimbursement rate reductions or
plans that address the extent to which obstetric services, including labor and restructuring.
beneficiary needs are met, the delivery; home health services and other
availability of care and providers, and service categories as determined 3. Beneficiary Input on Access to Care
changes in beneficiary utilization of necessary based on beneficiary, provider The requirements of § 447.203 and
covered services and other factors. The or stakeholder complaints; the access § 447.204 emphasize the importance of
access monitoring review plan would monitoring review plans must be involving beneficiaries in determining
also include percentage comparisons of reviewed and updated at least every 3 access issues and the impact that state
Medicaid payment rates to other public years. States must also submit an access rate changes will have on access to care.
or private health coverage rates within review, completed within the 12 months Specifically, we require that states
geographic areas of the state. The access prior, with any SPA that proposes to implement an ongoing mechanism for
monitoring review plans are to be reduce or restructure provider payments beneficiary input on access to care
developed for a subset of Medicaid for each of the impacted services. We (through hotlines, surveys, ombudsman,
service categories and updated at least have arrived at this subset of service or another equivalent mechanism) and
every 3 years or, in the context of a SPA categories because they are frequently receive input from beneficiaries (and
proposal to reduce provider rates or used services in Medicaid and they are affected stakeholders) on the impact that
restructure provider rates in considered gateway services, meaning if proposed rates changes will have
circumstance that may negatively a beneficiary has access to these through a public process. We believe
impact access to care, within 12 months services, it is likely that the majority of that beneficiaries’ experiences in
of implementing the SPA. the beneficiary’s needs are being met. accessing Medicaid services is the most
As an alternative to the proposed We considered requiring the review important indicator of whether access is
framework for reviewing access to care, for all services on an annual basis or a sufficient and beneficiary input will be
we considered requiring states to report review period that is more frequent than particularly informative in identifying
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standard data measures to demonstrate 5 years. After careful consideration of access issues.
sufficient access to care and section the burden associated with annual We also considered a requirement that
1902(a)(30)(A) of the Act. We also reviews, which were a foremost concern states consult with beneficiaries when
considered setting national access for some commenters, we determined 3 developing their corrective action plans
thresholds or requiring states to year ongoing reviews as an appropriate in instances when the access data
establish and demonstrate access frequency period. The final rule with reviews or monitoring procedures
thresholds. As we have highlighted comment period provides for more identify access issues. While we
throughout this final rule with comment frequent reviews for fewer high demand encourage states to solicit beneficiary
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Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations 67611
input on corrective action plans, we did (ii) The availability of care through this section, baseline and updated data
not make this a specific regulatory enrolled providers to beneficiaries in associated with the measures, any issues
requirement and we leave it to the each geographic area, by provider type with access that are discovered as a
states’ discretion to develop the and site of service; result of the review, and the state
corrective action plans as part of their (iii) Changes in beneficiary utilization agency’s recommendations on the
current policy development methods. of covered services in each geographic sufficiency of access to care based on
area. the review. In addition, the access
List of Subjects in 42 CFR Part 447 (iv) The characteristics of the monitoring review plan must include
Accounting, Administrative practice beneficiary population (including procedures to periodically monitor
and procedure, Drugs, Grant programs- considerations for care, service and access for at least 3 years after the
health, Health facilities, Health payment variations for pediatric and implementation of a provider rate
professions, Medicaid, Reporting and adult populations and for individuals reduction or restructuring, as discussed
recordkeeping requirements, and Rural with disabilities); and in paragraph (b)(6)(ii) of this section.
areas. (v) Actual or estimated levels of (5) Access monitoring review plan
For the reasons set forth in the provider payment available from other timeframe. Beginning July 1, 2016 the
preamble, the Centers for Medicare & payers, including other public and State agency must:
Medicaid Services amends 42 CFR private payers, by provider type and site (i) Develop its access monitoring
chapter IV as set forth below: of service. review plan by July 1 of the first review
(2) Access monitoring review plan year, and update this plan by July 1 of
PART 447—PAYMENTS FOR beneficiary and provider input. The each subsequent review period;
SERVICES access monitoring review plan must (ii) For all of the following, complete
include an analysis of data and the an analysis of the data collected using
■ 1. The authority citation for part 447 state’s conclusion of the sufficiency of the methodology specified in the access
continues to read as follows: access to care that will consider relevant monitoring review plan in paragraphs
provider and beneficiary information, (b)(1) through (4) of this section, with a
Authority: Sec. 1102 of the Social Security including information obtained through separate analysis for each provider type
Act (42 U.S.C. 1302). public rate-setting processes, the and site of service furnishing the type of
■ 2. Section 447.203 is amended by medical care advisory committees service at least once every 3 years:
revising the section heading and established under § 431.12 of this (A) Primary care services (including
paragraph (b) to read as follows: chapter, the processes described in those provided by a physician, FQHC,
paragraph (b)(7) of this section, and clinic, or dental care).
§ 447.203 Documentation of access to care other mechanisms (such as letters from (B) Physician specialist services (for
and service payment rates. providers and beneficiaries to State or example, cardiology, urology,
* * * * * Federal officials), which describe access radiology).
(b) In consultation with the medical to care concerns or suggestions for (C) Behavioral health services
care advisory committee under § 431.12 improvement in access to care. (including mental health and substance
of this chapter, the agency must develop (3) Access monitoring review plan use disorder).
a medical assistance access monitoring comparative payment rate review. For (D) Pre- and post-natal obstetric
review plan and update it, in each of the services reviewed, by the services including labor and delivery.
accordance with the timeline provider types and sites of service (e.g. (E) Home health services.
established in paragraph (b)(5) of this primary care physicians in office (F) Any additional types of services
section. The plan must be published settings) described within the access for which a review is required under
and made available to the public for monitoring analysis, the access paragraph (b)(6) of this section;
review and comment for a period of no monitoring review plan must include an (G) Additional types of services for
less than 30 days, prior to being analysis of the percentage comparison of which the state or CMS has received a
finalized and submitted to CMS for Medicaid payment rates to other public significantly higher than usual volume
review. (including, as practical, Medicaid of beneficiary, provider or other
(1) Access monitoring review plan managed care rates) and private health stakeholder access complaints for a
data requirements. The access insurer payment rates within geographic geographic area, including complaints
monitoring review plan must include an areas of the state. received through the mechanisms for
access monitoring analysis that (4) Access monitoring review plan beneficiary input consistent with
includes: Data sources, methodologies, standards and methodologies. The paragraph (b)(7) of this section; and
baselines, assumptions, trends and access monitoring review plan and (H) Additional types of services
factors, and thresholds that analyze and analysis must, at a minimum, include: selected by the state.
inform determinations of the sufficiency The specific measures that the state uses (6) Special provisions for proposed
of access to care which may vary by to analyze access to care (such as, but provider rate reductions or
geographic location within the state and not limited to: Time and distance restructuring—(i) Compliance with
will be used to inform state policies standards, providers participating in the access requirements. The State shall
affecting access to Medicaid services Medicaid program, providers with open submit with any State plan amendment
such as provider payment rates, as well panels, providers accepting new that proposes to reduce provider
as the items specified in this section. Medicaid beneficiaries, service payment rates or restructure provider
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The access monitoring review plan must utilization patterns, identified payments in circumstances when the
specify data elements that will support beneficiary needs, data on beneficiary changes could result in diminished
the state’s analysis of whether and provider feedback and suggestions access, an access review, in accordance
beneficiaries have sufficient access to for improvement, the availability of with the access monitoring review plan,
care. The plan and monitoring analysis telemedicine and telehealth, and other for each service affected by the State
will consider: similar measures), how the measures plan amendments as described under
(i) The extent to which beneficiary relate to the access monitoring review paragraph (b)(1) of this section
needs are fully met; plan described in paragraph (b)(1) of completed within the prior 12 months.
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67612 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Rules and Regulations
That access review must demonstrate timelines to address those issues. While submission the supporting
sufficient access for any service for the corrective action plan may include documentation described in paragraph
which the state agency proposes to longer-term objectives, remediation of (b) of this section, for failure to
reduce payment rates or restructure the access deficiency should take place document compliance with statutory
provider payments to demonstrate within 12 months. access requirements. Any such
compliance with the access (i) The state’s corrective actions may disapproval would follow the
requirements at section 1902(a)(30)(A) address the access deficiencies through procedures described at part 430
of the Act. a variety of approaches, including, but Subpart B of this title.
(ii) Monitoring procedures. In not limited to: Increasing payment rates, (d) To remedy an access deficiency,
addition to the analysis conducted improving outreach to providers, CMS may take a compliance action
through paragraphs (b)(1) through (4) of reducing barriers to provider using the procedures described at
this section that demonstrates access to enrollment, proving additional § 430.35 of this chapter.
care is sufficient as of the effective date transportation to services, providing for ■ 4. Section 447.205 is amended by
of the State plan amendment, a state telemedicine delivery and telehealth, or adding paragraph (d)(2)(iv) to read as
must establish procedures in its access improving care coordination. follows:
monitoring review plan to monitor (ii) The resulting improvements in
continued access to care after access must be measured and § 447.205 Public notice of changes in
implementation of state plan service sustainable. Statewide methods and standards for
rate reduction or payment restructuring. ■ 3. Section 447.204 is revised to read setting payment rates.
The frequency of monitoring should be as follows: * * * * *
informed by the public review described (d) * * *
in paragraph (b) of this section and § 447.204 Medicaid provider participation
(2) * * *
should be conducted no less frequently and public process to inform access to
care. (iv) A Web site developed and
than annually. maintained by the single State agency or
(A) The procedures must provide for (a) The agency’s payments must be
consistent with efficiency, economy, other responsible State agency that is
a periodic review of state determined accessible to the general public,
and clearly defined measures, baseline and quality of care and sufficient to
enlist enough providers so that services provided that the Web site:
data, and thresholds that will serve to
under the plan are available to (A) Is clearly titled and can be easily
demonstrate continued sustained
beneficiaries at least to the extent that reached from a hyperlink included on
service access, consistent with
those services are available to the Web sites that provide general
efficiency, economy, and quality of care.
(B) The monitoring procedures must general population. In reviewing information to beneficiaries and
be in place for a period of at least 3 payment sufficiency, states are required providers, and included on the State-
years after the effective date of the state to consider, prior to the submission of specific page on the Federal Medicaid
plan amendment that authorizes the any state plan amendment that proposes Web site.
payment reductions or restructuring. to reduce or restructure Medicaid (B) Is updated for bulletins on a
(7) Mechanisms for ongoing service payment rates: regular and known basis (for example,
beneficiary and provider input. (i) States (1) The data collected, and the the first day of each month), and the
must have ongoing mechanisms for analysis performed, under § 447.203. public notice is issued as part of the
beneficiary and provider input on (2) Input from beneficiaries, providers regular update;
access to care (through hotlines, and other affected stakeholders on (C) Includes the actual date it was
surveys, ombudsman, review of beneficiary access to the affected released to the public on the Web site;
grievance and appeals data, or another services and the impact that the or
equivalent mechanisms), consistent proposed rate change will have, if any, (D) Complies with national standards
with the access requirements and public on continued service access. The state to ensure access to individuals with
process described in § 447.204. should maintain a record of the public disabilities; and
(ii) States should promptly respond to input and how it responded to such (E) Includes protections to ensure that
public input through these mechanisms input. the content of the issued notice is not
citing specific access problems, with an (b) The state must submit to CMS modified after the initial publication
appropriate investigation, analysis, and with any such proposed state plan and is maintained on the Web site for
response. amendment affecting payment rates: no less than a 3-year period.
(iii) States must maintain a record of (1) Its most recent access monitoring Dated: September 17, 2015.
data on public input and how the state review plan performed under
Andrew M. Slavitt,
responded to this input. This record § 447.203(b)(6) for the services at issue;
will be made available to CMS upon (2) An analysis of the effect of the Acting Administrator, Centers for Medicare
& Medicaid Services.
request. change in payment rates on access; and
(8) Addressing access questions and (3) A specific analysis of the Dated: October 22. 2015.
remediation of inadequate access to information and concerns expressed in Sylvia M. Burwell,
care. When access deficiencies are input from affected stakeholders. Secretary, Department of Health and Human
identified, the state must, within 90 (c) CMS may disapprove a proposed Services.
days after discovery, submit a corrective state plan amendment affecting payment [FR Doc. 2015–27697 Filed 10–29–15; 11:15 am]
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action plan with specific steps and rates if the state does not include in its BILLING CODE 4120–01–P
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D
CONFERENCE
COMMITTEE REPORT
3RD Printing
H.B. NO. 1
GENERAL APPROPRIATIONS
BILL
HEALTH AND HUMAN SERVICES COMMISSION
(Continued)
(HHSC) in Goal B, Medicaid, and Goal C, Children's Health Insurance Program, HHSC may
implement the following quality-based reforms in the Medicaid and CHIP programs:
a. develop quality-based outcome and process measures that promote the provision of efficient,
quality health care and that can be used to implement quality-based payments for acute and
long-term care services across delivery models and payment systems;
b. implement quality-based payment systems for compensating a health care provider or facility
participating in the Medicaid and CHIP programs;
c. implement quality-based payment initiatives to reduce potentially preventable readmissions
and potentially preventable complications; and
d. implement a bundled payment initiative in the Medicaid program, including a shared savings
component for providers that meet quality-based outcomes. The executive commissioner
may select high-cost and/or high-volume services to bundle and may consider the
experiences of other payers and other state of Texas programs that purchase healthcare
services in making the selection.
e. Under the Health and Human Services Commission's authority in 1 T.A.C. Sec. 355.307(c),
the commission may implement a Special Reimbursement Class for long term care
commonly referred to as "small house facilities." Such a class may include a rate
reimbursement model that is cost neutral and that adequately addresses the cost differences
that exist in a nursing facility constructed and operated as a small house facility, as well as
the potential for off-setting cost savings through decreased utilization of higher cost
institutional and ancillary services. The payment increment may be based upon a provider
incentive payment rate.
Required Reporting: The commission shall provide annual reports to the Governor's Office of
Budget, Planning, and Policy and Legislative Budget Board on December 1, 2015 and December
1, 2016 that include (1) the quality-based outcome and process measures developed; (2) the
progress of the implementation of quality-based payment systems and other related initiatives; (3)
outcome and process measures by health service region; and (4) cost-effectiveness of quality-
based payment systems and other related initiatives.
47. Texas Office for the Prevention of Developmental Disabilities. Out of General Revenue Funds
appropriated above in Strategy A.1.1, Enterprise Oversight and Policy, the Health and Human
Services Commission shall expend an amount not to exceed $200,000 each fiscal year for salaries,
travel expenses, and other costs in order to support the Office for Prevention of Developmental
Disabilities. Grants and donations for the Texas Office for Prevention of Developmental
Disabilities received through the authority provided by Article IX, Sec. 8.01, Acceptance of Gifts
of Money, are not subject to this limit and shall be expended as they are received as a first source,
and General Revenue shall be used as a second source to support the office.
48. Supplemental Payments. It is the intent of the Legislature that when the Health and Human
Services Commission calculates supplemental payments, data be collected to provide transparency
regarding claims associated with the supplemental payment program. An independent audit of the
program, including a review of regional affiliations, uncompensated care claims for both
uninsured and insured individuals, and contractual agreements, and a report with findings should
be completed and distributed annually on March 1 to the Governor, the Lieutenant Governor, the
Speaker of the House of Representatives, the Senate Finance Committee members, the House
Appropriations Committee members, and the Legislative Budget Board.
49. Prevent Eligibility Determination Fraud. It is the intent of the Legislature that to prevent fraud
and to maximize efficiencies, the Health and Human Services Commission shall use technology to
identify the risk for fraud associated with applications for benefits. Within the parameters of state
and federal law, the commission shall set appropriate verification and documentation requirements
based on the application's risk to ensure agency resources are targeted to maximize fraud reduction
and case accuracy.
50. Medicaid Funding Reduction and Cost Containment.
a. Included in appropriations above in Goal B, Medicaid, is a reduction of $186,500,000 in
General Revenue Funds and $249,349,498 in Federal Funds in fiscal year 2016 and
$186,500,000 in General Revenue Funds and $247,220,930 in Federal Funds in fiscal year
A529-Conf-2-B II-96 May 25, 2015
HEALTH AND HUMAN SERVICES COMMISSION
(Continued)
2017, a biennial total of $373,000,000 in General Revenue Funds and $496,570,428 in
Federal Funds. The Health and Human Services Commission (HHSC) is authorized to
transfer these reductions between fiscal years and to allocate these reductions among health
and human services agencies as listed in Article II of this Act, pursuant to the requirement to
submit a plan included in Subsection (d) of this rider.
b. This reduction shall be achieved through the implementation of the plan described under
subsection (d) which may include any or all of the following initiatives:
(1) Continue strengthening and expanding prior authorization and utilization reviews,
(2) Incentivize appropriate neonatal intensive care unit utilization and coding,
(3) Fully implement dually eligible Medicare/Medicaid integrated care model and long-
term services and supports quality payment initiative,
(4) Maximize co-payments in Medicaid programs,
(5) Increase fraud, waste, and abuse prevention and detection,
(6) Explore changes to premium structure for managed care organizations and contracting
tools to reduce costs and increase efficiency,
(7) Renegotiate more efficient contracts, including reducing the administrative contract
profit margin and establish rebate provisions where possible,
(8) Develop a dynamic premium development process for managed care organizations that
has an ongoing methodology for reducing inappropriate utilization, improving
outcomes, reducing unnecessary spending, and increasing efficiency,
(9) Implement fee-for-service payment changes and managed care premium adjustments
that incentivize the most appropriate and effective use of services,
(10) Improve birth outcomes, including improving access to information and payment
reform,
(11) Increase efficiencies in the vendor drug program,
(12) Increase third party recoupments,
(13) Create a pilot program on motor vehicle subrogation,
(14) Assess options to reduce costs for retroactive Medicaid claims,
(15) Review the cost effectiveness of including children with disabilities in dental managed
care,
(16) Review and determine the benefits of providing the managed care-organizations with
the ability to create a pharmacy lock-in program, and
(17) Implement additional initiatives identified by HHSC.
c. HHSC shall reform reimbursement methodology to be in line with industry standards,
policies, and utilization for acute care therapy services (including physical, occupational, and
speech therapies) while considering stakeholder input and access to care. Out of the amount
in subsection (a), in each fiscal year at least $50,000,000 in General Revenue Funds savings
should be achieved through rate reductions and $25,000,000 in General Revenue Funds
savings may be achieved through various medical policy initiatives listed in items (1)-(10),
below. If $25,000,000 in savings is not achieved through various medical policy initiatives in
fiscal year 2016, the amount of unrealized savings (the difference between $25,000,000 in
General Revenue Funds and savings actually achieved in fiscal year 2016) should be
achieved through additional rate reductions in fiscal year 2017 while continuing any
A529-Conf-2-B II-97 May 25, 2015
HEALTH AND HUMAN SERVICES COMMISSION
(Continued)
initiatives implemented in fiscal year 2016 that have been found to produce savings. HHSC
may achieve savings through various medical policy initiatives, taking into consideration the
following:
(1) Clarifying policy language regarding co-therapy definition, documentation, and billing
requirements,
(2) Clarifying who can participate in therapy sessions in policy that interns, aides,
students, orderlies and technicians can participate in therapy sessions when they are
directly and appropriately supervised according to provider licensure requirements,
but they are not eligible to enroll as providers and bill Texas Medicaid for services,
(3) Consolidate Traditional, Comprehensive Care Program and Home Health Agency
therapy policies into one policy,
(4) Require a primary care or treating physician to initiate a signed order or referral prior
to an initial therapy evaluation. The initial evaluation may require prior authorization
and the signed order or referral must be dated prior to the evaluation,
(5) Require a primary care or treating physician to order the therapy services based on the
outcomes of the evaluation,
(6) Clarify medical necessity for therapy services to ensure prior authorization staff who
are reviewing requests are using guidelines based on the nationally recognized
standards of care,
(7) Require licensed Medicaid enrolled therapists to document and support decisions for
continued therapy based on professional assessment of a client's progress relative to
their individual treatment plan and in concert with the client's primary care physician
and the individual and/or family,
(8) Ensure appropriate duration of services by aligning authorization periods with national
standards,
(9) Streamline prior authorization processes, and
(10) Implement policies that ensure services are provided in the most cost-efficient and
medically appropriate setting, and implementation of other medical or billing policy
changes.
d. HHSC shall develop a plan to allocate the reductions required by Subsection (a) of this rider
by taking actions such as those suggested under Subsection (b) and (c) of this rider to the
budgets of the health and human services agencies as listed in Chapter 531, Government
Code. The plan shall include reduction amounts by strategy and fiscal year and shall be
submitted in writing before December 1, 2015 to the Legislative Budget Board, the
Governor, and the Comptroller of Public Accounts.
51. Improve Efficiencies in Benefit Applications. Out of funds appropriated above, in order to
improve efficiencies, the Health and Human Services Commission shall promote online
submissions of applications for benefits administered by the agency. HHSC shall develop
standards and technical requirements to allow organizations to electronically submit applications.
It is the intent of the Legislature that HHSC only expend funds or utilize agency resources to
partner with entities whose role in submitting benefit applications has been statutorily established,
or with entities that provide in-person assistance using the agency's website for clients.
52. Dental and Orthodontia Providers in the Texas Medicaid Program. It is the intent of the
Legislature that the Health and Human Services Commission (HHSC) use funds appropriated
above in Strategy G.1.1, Office of Inspector General, to strengthen the capacity of the HHSC
Inspector General to detect, investigate, and prosecute abuse by dentists and orthodontists who
participate in the Texas Medicaid program. Further, it is the intent of the Legislature that HHSC
conduct more extensive reviews of medical necessity for orthodontia services in the Medicaid
program.
A529-Conf-2-B II-98 May 25, 2015
E
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
TEXAS HEALTH AND HUMAN SERVICES COMMISSION
RATE ANALYSIS DEPARTMENT
Notice of Proposed Adjustments to Fees, Rates or Charges
for Physical, Occupational, and Speech Therapy provided by
Comprehensive Outpatient Rehabilitation
Facilities/Outpatient Rehabilitation Facilities {CORF/ORF),
Home Health Agencies {HHA), and Independent Therapists
Adjustments are proposed to be effective
October 1, 2015
Public Rate Hearing September 18, 2015 Page 1
351
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
SUMMARY OF PROPOSED ADJUSTMENTS
To Be Effective October 1, 2015
Included in this document is information relating to the proposed adjustments to
Medicaid payment rates for Physical, Occupational, and Speech Therapy provided by
Comprehensive Outpatient Rehabilitation Facilities/Outpatient Rehabilitation Facilities
(CORF/ORF), Home Health Agencies (HHA), and Independent Therapists. The rates
are proposed to be effective October 1, 2015.
Hearing
The Health and Human Services Commission (HHSC) will conduct a public hearing to
receive comments regarding the proposed adjustments to Medicaid rates detailed in this
document on September 18, 2015, at 9:00 a.m. in the Public Hearing Room of the John
H. Winters Building at 701 West 51 st Street, Austin, Texas. Entry is through security at
the main entrance of the building facing West 51 st Street. HHSC will consider concerns
expressed at the hearing prior to final rate approval. This public hearing is held in
compliance with the provisions of Human Resources Code §32.0282 and the Texas
Administrative Code, Title 1 (1 TAC), §355.201, which require a public hearing on
proposed payment rate adjustments. Should you have any questions regarding the
information in this document, please contact:
Megan Wolfe, Rate Analysis for Acute Care Services
Texas Health and Human Services Commission
(512) 730-7456; FAX: (512) 730-7475
E-mail: megan .wolfe@hhsc.state.tx.us
Background
HHSC is responsible for the reimbursement determination functions for the Texas
Medicaid Program. The proposed rate adjustments presented in this document are
based on direction provided by the 2016-2017 General Appropriations Act, 34th
Legislature, Regular Session, Article II, Rider 50, at pages 11-96 through 11-98 (Health
and Human Services Section, Health and Human Services Commission).
Methodology
The specific administrative rules that govern the establishment of the fees in this
proposal include these rules in 1 TAC:
• §355.201 (d)(1 )(A) and (D), which authorize HHSC to adjust rates for medical
assistance if state law is enacted requiring a rate reduction or restricting the
availability of appropriated funds.
Public Rate Hearing September 18, 2015 Page 2
352
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
• §355.8021, which addresses the reimbursement methodology for home health
services and durable medical equipment, prosthetics, orthotics, and supplies;
• §355.8085, which addresses the reimbursement methodology for physicians and
other practitioners;
• §355.8441, which addresses the reimbursement methodology for Early and
Periodic Screening, Diagnosis, and Treatment (EPSDT) services (known in
Texas as Texas Health Steps).
Proposed Rate Adjustments
As indicated above, the proposed rate adjustments are based on direction provided by
the 2016-2017 General Appropriations Act, 84th Legislature, Regular Session, Article II,
Rider 50, at pages 11-96 through 11-98.
Proposed rate adjustments were calculated based on an analysis of Medicaid fees paid
by other states and previous Texas Medicaid payments for Medicaid-reimbursable
therapy services. Where current Texas Medicaid rates exceed 150 percent of the
median of other states' rates for the same service, a percentage reduction is applied.
An alternative percentage reduction is applied to Texas Medicaid rates that do not
exceed 150 percent of the median of other states' rates for the same service and in
cases where information on other states' rates is not available.
Specific proposed payment rate adjustments are listed in the attachments outlined
below:
Att 1 - CORFORF Therapies
Att 2 - HHA Therapies
Att 3 - Independent Therapists
Written Comments
Written comments regarding the proposed payment rate adjustments may be submitted
in lieu of, or in addition to, oral testimony until 5 p.m. the day of the hearing. Written
comments may be sent by U.S. mail to the Texas Health and Human Services
Commission, Attention: Rate Analysis, Mail Code H-400, P.O. Box 149030, Austin,
Texas 78714-9030; by fax to Rate Analysis at (512) 730-7475; or by e-mail to
RADAcuteCare@hhsc.state.tx.us. In addition, written comments may be sent by
overnight mail or hand delivered to Texas Health and Human Services Commission,
Attention: Rate Analysis, Mail Code H-400, Brown-Heatly Building, 4900 North Lamar,
Austin, Texas 78751.
Persons with disabilities who wish to attend the hearing and require auxiliary aids or
services should contact Rate Analysis at (512) 730-7401 at least 72 hours in advance,
Public Rate Hearing September 18, 2015 Page 3
353
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
so appropriate arrangements can be made.
Public Rate Hearing September 18, 2015 Page 4
354
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 1- COMPREHENSIVE OUTPATIENT REHABILITATION FACILITY/OUTPATIENT REHABILITATION
FACILITY (CORF/ORF) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
current l'roposea
Age Current Adjusted Proposed Adjusted
TOS* Procedure Code Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 92507 ** 0-20 $39.78 $39.78 $28.67 $28.67
1 92507 ** 21-999 $39.78 $39.78 $28.67 $28.67
1 92508 ** 0-20 $19.90 $19.90 $14.93 $14.93
1 92508 ** 21-999 $19.90 $19.90 $14.93 $14.93
1 92521 ** 0-20 $140.62 $140.62 $105.47 $105.47
1 92521 ** 21-999 $140.62 $140.62 $105.47 $105.47
1 92522 ** 0-20 $175.77 $175.77 $131.83 $131.83
1 92522 ** 21-999 $175.77 $175.77 $131.83 $131.83
1 92523 ** 0-20 $234.36 $234.36 $175.77 $175.77
1 92523 ** 21-999 $234.36 $234.36 $175.77 $175.77
1 92524 ** 0-20 $117.18 $117.18 $87.89 $87.89
1 92524 ** 21-999 $117.18 $117.18 $87.89 $87.89
1 92526 ** 0-999 $39.78 $39.78 $38.41 $38.41
1 92610 ** 0-999 $234.36 $234.36 $226.27 $226.27
1 97001 ** 0-20 $167.40 $167.40 $125.55 $125.55
1 97001 ** 21-999 $167.40 $167.40 $125.55 $125.55
1 97002 ** 0-20 $150.66 $150.66 $113.00 $113.00
1 97002 ** 21-999 $150.66 $150.66 $113.00 $113.00
1 97003 ** 0-20 $167.40 $167.40 $125.55 $125.55
1 97003 ** 21-999 $167.40 $167.40 $125.55 $125.55
1 97004 ** 0-20 $150.66 $150.66 $113.00 $113.00
1 97004 ** 21-999 $150.66 $150.66 $113.00 $113.00
1 97012 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97012 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97014 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97014 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97016 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97016 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97018 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97018 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97022 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97022 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97024 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97024 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97026 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97026 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97028 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97028 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97032 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97032 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97033 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97033 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97034 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97034 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97035 ** 0-20 $39.78 $39.78 $38.41 $38.41
355
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 1- COMPREHENSIVE OUTPATIENT REHABILITATION FACILITY/OUTPATIENT REHABILITATION
FACILITY (CORF/ORF) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
current l'roposea
Age Current Adjusted Proposed Adjusted
TOS* Procedure Code Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97035 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97036 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97036 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97039 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97039 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97110 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97110 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97112 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97112 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97113 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97113 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97116 ** 0-20 $39.78 $39.78 $30.08 $30.08
1 97116 ** 21-999 $39.78 $39.78 $30.08 $30.08
1 97124 ** 0-20 $39.78 $39.78 $29.84 $29.84
1 97124 ** 21-999 $39.78 $39.78 $29.84 $29.84
1 97139 ** 0-20 $39.78 $39.78 $39.00 $39.00
1 97139 ** 21-999 $39.78 $39.78 $39.00 $39.00
1 97140 ** 0-20 $39.78 $39.78 $30.84 $30.84
1 97140 ** 21-999 $39.78 $39.78 $30.84 $30.84
1 97150 ** 0-20 $19.90 $19.90 $19.21 $19.21
1 97150 ** 21-999 $19.90 $19.90 $19.21 $19.21
1 97530 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97530 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97535 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97537 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97542 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97750 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97750 ** 21-999 $39.78 $39.78 $38.41 $38.41
1 97760 ** 0-20 $39.78 $39.78 $38.87 $38.87
1 97761 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97762 ** 0-20 $40.36 $40.36 $35.09 $35.09
1 97799 ** 0-20 $39.78 $39.78 $38.41 $38.41
1 97799 ** 21-999 $39.78 $39.78 $38.41 $38.41
Physical or manipulative
therapy performed for
maintenance rather than
1 S8990 restoration 0-999 $52.33 $52.33 $39.00 $39.00
1 S9152 Speech therapy, re-evaluation 0-999 $210.92 $210.92 $203.64 $203.64
*Type of Service (TOS)
1 Medical Services
**Required Notice: The five-character code included in this notice is obtained from the Current Procedural Terminology (CPT®),
356
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 1- COMPREHENSIVE OUTPATIENT REHABILITATION FACILITY/OUTPATIENT REHABILITATION
FACILITY (CORF/ORF) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
current l'roposea
Age Current Adjusted Proposed Adjusted
TOS* Procedure Code Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
copyright 2015 by the American Medical Association (AMA). CPT is developed by the AMA as a listing of descriptive terms and five
character identifying codes and modifiers for reporting medical services and procedures performed by physicians. The responsibility for
the content of this notice is with HHSC and no endorsement by the AMA is intended or should be implied. The AMA disclaims
responsibility for any consequences or liability attributable or related to any use, nonuse or interpretation of information contained in this
notice. Fee schedules, relative value units, conversion factors and/or related components are not assigned by the AMA, are not part ofCPT,
and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical services. The
AMA assumes no liability for data contained or not contained.
357
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 92507 ** 0-20 $135.14 $135.14 $100.34 $100.34
1 92507 ** 21-999 $115.46 $115.46 $100.34 $100.34
1 92508 ** 0-20 $67.57 $67.57 $50.68 $50.68
1 92508 ** 21-999 $67.57 $67.57 $50.68 $50.68
1 92521 ** 0-20 $120.00 $120.00 $90.00 $90.00
1 92521 ** 21-999 $70.33 $70.33 $67.90 $67.90
1 92522 ** 0-20 $150.00 $150.00 $112.50 $112.50
1 92522 ** 21-999 $87.92 $87.92 $84.89 $84.89
1 92523 ** 0-20 $200.00 $200.00 $150.00 $150.00
1 92523 ** 21-999 $117.22 $117.22 $113.18 $113.18
1 92524 ** 0-20 $100.00 $100.00 $75.00 $75.00
1 92524 ** 21-999 $58.61 $58.61 $56.59 $56.59
1 92526 ** 0-20 $135.14 $135.14 $130.48 $130.48
1 92526 ** 21-999 $115.46 $115.46 $111.48 $111.48
1 92610 ** 0-20 $200.00 $200.00 $193.10 $193.10
1 92610 ** 21-999 $117.22 $117.22 $113.18 $113.18
1 97001 ** 0-20 $137.20 $137.20 $102.90 $102.90
1 97001 ** 21-999 $114.03 $114.03 $85.52 $85.52
1 97001 AT ** 0-20 $114.03 $114.03 $85.52 $85.52
1 97001 AT ** 21-999 $114.03 $114.03 $85.52 $85.52
c 97001 ** 0-20 $114.03 $114.03 $85.52 $85.52
c 97001 ** 21-999 $114.03 $114.03 $85.52 $85.52
1 97002 ** 0-20 $123.48 $123.48 $92.61 $92.61
1 97002 ** 21-999 $102.63 $102.63 $76.97 $76.97
1 97002 AT ** 0-20 $102.63 $102.63 $76.97 $76.97
1 97002 AT ** 21-999 $102.63 $102.63 $76.97 $76.97
c 97002 ** 0-20 $102.63 $102.63 $76.97 $76.97
c 97002 ** 21-999 $102.63 $102.63 $76.97 $76.97
1 97003 ** 0-20 $137.20 $137.20 $102.90 $102.90
1 97003 ** 21-999 $116.25 $116.25 $89.21 $89.21
1 97003 AT ** 0-20 $116.25 $116.25 $89.21 $89.21
1 97003 AT ** 21-999 $116.25 $116.25 $89.21 $89.21
c 97003 ** 0-20 $116.25 $116.25 $89.21 $89.21
c 97003 ** 21-999 $116.25 $116.25 $89.21 $89.21
1 97004 ** 0-20 $123.48 $123.48 $92.61 $92.61
1 97004 ** 21-999 $104.63 $104.63 $78.47 $78.47
1 97004 AT ** 0-20 $104.63 $104.63 $78.47 $78.47
1 97004 AT ** 21-999 $104.63 $104.63 $78.47 $78.47
c 97004 ** 0-20 $104.63 $104.63 $78.47 $78.47
c 97004 ** 21-999 $104.63 $104.63 $78.47 $78.47
1 97012 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97012 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97012 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97012 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97012 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97012 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
358
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97012 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97012 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97012 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97012 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97012 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97012 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97012 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97012 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97012 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97012 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97012 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97014 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97014 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97014 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97014 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97014 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97014 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97014 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97014 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97014 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97014 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97014 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97014 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97014 ** 21-999 $113.05 $113.05 $84.79 $84.79
c 97014 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97014 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97014 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97014 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97016 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97016 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97016 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97016 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97016 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97016 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97016 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97016 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97016 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97016 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97016 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97016 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97016 ** 21-999 $113.05 $113.05 $84.79 $84.79
c 97016 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97016 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97016 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97016 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97018 ** 21-999 $113.05 $113.05 $91.08 $91.08
359
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97018 AT ** 0-20 $113.05 $113.05 $91.08 $91.08
1 97018 AT ** 21-999 $113.05 $113.05 $91.08 $91.08
1 97018 AT GO ** 0-20 $114.51 $114.51 $91.08 $91.08
1 97018 AT GO ** 21-999 $114.51 $114.51 $91.08 $91.08
1 97018 AT GP ** 0-20 $112.32 $112.32 $91.08 $91.08
1 97018 AT GP ** 21-999 $112.32 $112.32 $91.08 $91.08
1 97018 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97018 GO ** 21-999 $114.51 $114.51 $91.08 $91.08
1 97018 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97018 GP ** 21-999 $112.32 $112.32 $91.08 $91.08
c 97018 ** 0-20 $113.05 $113.05 $91.08 $91.08
c 97018 ** 21-999 $113.05 $113.05 $91.08 $91.08
c 97018 GO ** 0-20 $114.51 $114.51 $91.08 $91.08
c 97018 GO ** 21-999 $114.51 $114.51 $91.08 $91.08
c 97018 GP ** 0-20 $112.32 $112.32 $91.08 $91.08
c 97018 GP ** 21-999 $112.32 $112.32 $91.08 $91.08
1 97022 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97022 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97022 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97022 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97022 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97022 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97022 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97022 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97022 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97022 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97022 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97022 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97022 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97022 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97022 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97022 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97022 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97024 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97024 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97024 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97024 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97024 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97024 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97024 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97024 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97024 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97024 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97024 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97024 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97024 ** 21-999 $113.05 $113.05 $84.79 $84.79
360
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
c 97024 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97024 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97024 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97024 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97026 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97026 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97026 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97026 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97026 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97026 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97026 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97026 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97026 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97026 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97026 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97026 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97026 ** 21-999 $113.05 $113.05 $84.79 $84.79
c 97026 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97026 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97026 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97026 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97028 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97028 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97028 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97028 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97028 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97028 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97028 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97028 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97028 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97028 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97028 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97028 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97028 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97028 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97028 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97028 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97028 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97032 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97032 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97032 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97032 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97032 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97032 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97032 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97032 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
361
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97032 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97032 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97032 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97032 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97032 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97032 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97032 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97032 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97032 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97033 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97033 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97033 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97033 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97033 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97033 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97033 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97033 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97033 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97033 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97033 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97033 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97033 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97033 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97033 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97033 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97033 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97034 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97034 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97034 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97034 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97035 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97035 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97035 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97035 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97035 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97035 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97035 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97035 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97035 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97035 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97035 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97035 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97035 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97035 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97035 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97035 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
362
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
c 97035 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97036 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97036 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97036 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97036 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97039 ** 21-999 $112.32 $112.32 $90.00 $90.00
1 97039 AT ** 0-20 $112.32 $112.32 $90.00 $90.00
1 97039 AT ** 21-999 $112.32 $112.32 $90.00 $90.00
1 97039 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97039 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
c 97039 ** 0-20 $112.32 $112.32 $90.00 $90.00
c 97039 ** 21-999 $112.32 $112.32 $90.00 $90.00
1 97110 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97110 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97110 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97110 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97110 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97110 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97110 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97110 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97110 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97110 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97110 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97110 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97110 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97110 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97110 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97110 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97110 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97112 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97112 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97112 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97112 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97112 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97112 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97112 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97112 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97112 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97112 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97112 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97112 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97112 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97112 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97112 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97112 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97112 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
363
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97116 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97116 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97116 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97116 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97116 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97116 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97116 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97116 GO ** 0-20 $135.14 $135.14 $120.30 $120.30
1 97116 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97116 GP ** 0-20 $135.14 $135.14 $120.30 $120.30
1 97116 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97116 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97116 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97116 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97116 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97116 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97116 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97124 ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97124 AT ** 0-20 $113.05 $113.05 $84.79 $84.79
1 97124 AT ** 21-999 $113.05 $113.05 $84.79 $84.79
1 97124 AT GO ** 0-20 $114.51 $114.51 $85.88 $85.88
1 97124 AT GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97124 AT GP ** 0-20 $112.32 $112.32 $84.24 $84.24
1 97124 AT GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97124 GO ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97124 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
1 97124 GP ** 0-20 $135.14 $135.14 $101.36 $101.36
1 97124 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
c 97124 ** 0-20 $113.05 $113.05 $84.79 $84.79
c 97124 ** 21-999 $113.05 $113.05 $84.79 $84.79
c 97124 GO ** 0-20 $114.51 $114.51 $85.88 $85.88
c 97124 GO ** 21-999 $114.51 $114.51 $85.88 $85.88
c 97124 GP ** 0-20 $112.32 $112.32 $84.24 $84.24
c 97124 GP ** 21-999 $112.32 $112.32 $84.24 $84.24
1 97139 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97139 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97139 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97139 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97139 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97139 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97139 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97139 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97139 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97139 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97139 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97139 ** 0-20 $113.05 $113.05 $109.15 $109.15
364
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
c 97139 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97139 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97139 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97139 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97139 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97140 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97140 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97140 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97140 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97140 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97140 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97140 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97140 GO ** 0-20 $135.14 $135.14 $123.36 $123.36
1 97140 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97140 GP ** 0-20 $135.14 $135.14 $123.36 $123.36
1 97140 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97140 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97140 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97140 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97140 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97140 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97140 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97150 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97150 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97150 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97150 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97150 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97150 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97150 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97150 GO ** 0-20 $67.57 $67.57 $65.24 $65.24
1 97150 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97150 GP ** 0-20 $67.57 $67.57 $65.24 $65.24
1 97150 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97150 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97150 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97150 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97150 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97150 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97150 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97530 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97530 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97530 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97530 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97530 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97530 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97530 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
365
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97530 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97530 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97530 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97530 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97530 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97530 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97530 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97530 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97530 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97530 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97535 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97535 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97535 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97535 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97535 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97535 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97535 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97535 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97535 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97535 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97535 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97535 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97535 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97535 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97535 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97535 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97535 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97537 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97537 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97537 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97537 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97537 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97537 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97537 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97537 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97537 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97537 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97537 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97537 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97537 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97537 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97537 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97537 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97537 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97542 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97542 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
366
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97542 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97542 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97542 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97542 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97542 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97542 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97542 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97542 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97542 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97542 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97542 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97542 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97542 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97542 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97542 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97542 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97750 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97750 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97750 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97750 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97760 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97760 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97761 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97761 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97762 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97762 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97799 ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97799 AT ** 0-20 $113.05 $113.05 $109.15 $109.15
1 97799 AT ** 21-999 $113.05 $113.05 $109.15 $109.15
1 97799 AT GO ** 0-20 $114.51 $114.51 $110.56 $110.56
1 97799 AT GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97799 AT GP ** 0-20 $112.32 $112.32 $108.44 $108.44
1 97799 AT GP ** 21-999 $112.32 $112.32 $108.44 $108.44
1 97799 GO ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97799 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
1 97799 GP ** 0-20 $135.14 $135.14 $130.48 $130.48
1 97799 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
c 97799 ** 0-20 $113.05 $113.05 $109.15 $109.15
c 97799 ** 21-999 $113.05 $113.05 $109.15 $109.15
c 97799 GO ** 0-20 $114.51 $114.51 $110.56 $110.56
c 97799 GO ** 21-999 $114.51 $114.51 $110.56 $110.56
c 97799 GP ** 0-20 $112.32 $112.32 $108.44 $108.44
c 97799 GP ** 21-999 $112.32 $112.32 $108.44 $108.44
367
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 2 - HOME HEALTH AGENCY (HHA) (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Modifier Modifier Age Current Adjusted Proposed Adjusted
* Code 1 2 Long Description ** Range Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
Physical or manipulative
therapy performed for
maintenance rather than
1 S8990 restoration 0-999 $57.14 $57.14 $55.17 $55.17
Speech therapy, re-
1 S9152 evaluation 0-20 $180.00 $180.00 $173.79 $173.79
Speech therapy, re-
1 S9152 evaluation 21-999 $105.50 $105.50 $101.86 $101.86
*Type of Service (TOS)
1 Medical Services
c Home Health Agency
Modifiers
AT Acute Treatment
GO Occupational Therapy
GP Physical Therapy
**Required Notice: The five-character code included in this notice is obtained from the Current Procedural Terminology (CPT®), copyright
2015 by the American Medical Association (AMA). CPT is developed by the AMA as a listing of descriptive terms and five character
identitying codes and modifiers for reporting medical services and procedures performed by physicians. The responsibility for the content of
this notice is with HHSC and no endorsement by the AMA is intended or should be implied. The AMA disclaims responsibility for any
consequences or liability attributable or related to any use, nonuse or interpretation of information contained in this notice. Fee schedules,
relative value units, conversion factors and/or related components are not assigned by the AMA, are not part of CPT, and the AMA is not
recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical services. The AMA assumes no
liability for data contained or not contained.
368
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 3 - INDEPENDENT THERAPIST (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Age Place of Current Adjusted Proposed Adjusted
* Code Long Description ** Range Service Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 92507 ** 0-20 $31.25 $31.25 $28.67 $28.67
1 92507 ** 0-20 P2 $33.79 $33.79 $28.67 $28.67
1 92507 ** 21-999 $31.25 $31.25 $28.67 $28.67
1 92507 ** 21-999 P2 $33.79 $33.79 $28.67 $28.67
1 92508 ** 0-20 $15.63 $15.63 $11.72 $11.72
1 92508 ** 0-20 P2 $15.63 $15.63 $11.72 $11.72
1 92508 ** 21-999 $15.63 $15.63 $11.72 $11.72
1 92508 ** 21-999 P2 $15.63 $15.63 $11.72 $11.72
1 92521 ** 0-20 $117.18 $117.18 $87.89 $87.89
1 92521 ** 0-20 P2 $120.00 $120.00 $90.00 $90.00
1 92521 ** 21-999 $117.18 $117.18 $87.89 $87.89
1 92521 ** 21-999 P2 $120.00 $120.00 $90.00 $90.00
1 92522 ** 0-20 $146.48 $146.48 $109.86 $109.86
1 92522 ** 0-20 P2 $150.00 $150.00 $112.50 $112.50
1 92522 ** 21-999 $146.48 $146.48 $109.86 $109.86
1 92522 ** 21-999 P2 $150.00 $150.00 $112.50 $112.50
1 92523 ** 0-20 $195.30 $195.30 $146.48 $146.48
1 92523 ** 0-20 P2 $200.00 $200.00 $150.00 $150.00
1 92523 ** 21-999 $195.30 $195.30 $146.48 $146.48
1 92523 ** 21-999 P2 $200.00 $200.00 $150.00 $150.00
1 92524 ** 0-20 $97.65 $97.65 $73.24 $73.24
1 92524 ** 0-20 P2 $100.00 $100.00 $75.00 $75.00
1 92524 ** 21-999 $97.65 $97.65 $73.24 $73.24
1 92524 ** 21-999 P2 $100.00 $100.00 $75.00 $75.00
1 92526 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 92526 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 92526 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 92526 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 92610 ** 0-999 $195.30 $195.30 $188.56 $188.56
1 92610 ** 0-999 P2 $200.00 $200.00 $193.10 $193.10
1 97001 ** 0-20 $130.20 $130.20 $97.65 $97.65
1 97001 ** 0-20 P2 $137.20 $137.20 $102.90 $102.90
1 97001 ** 21-999 $130.20 $130.20 $97.65 $97.65
1 97001 ** 21-999 P2 $137.20 $137.20 $102.90 $102.90
1 97002 ** 0-20 $117.18 $117.18 $87.89 $87.89
1 97002 ** 0-20 P2 $123.48 $123.48 $92.61 $92.61
1 97002 ** 21-999 $117.18 $117.18 $87.89 $87.89
1 97002 ** 21-999 P2 $123.48 $123.48 $92.61 $92.61
1 97003 ** 0-20 $130.20 $130.20 $97.65 $97.65
1 97003 ** 0-20 P2 $137.20 $137.20 $102.90 $102.90
1 97003 ** 21-999 $130.20 $130.20 $97.65 $97.65
1 97003 ** 21-999 P2 $137.20 $137.20 $102.90 $102.90
1 97004 ** 0-20 $117.18 $117.18 $87.89 $87.89
1 97004 ** 0-20 P2 $123.48 $123.48 $92.61 $92.61
369
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 3 - INDEPENDENT THERAPIST (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Age Place of Current Adjusted Proposed Adjusted
* Code Long Description ** Range Service Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97004 ** 21-999 $117.18 $117.18 $87.89 $87.89
1 97004 ** 21-999 P2 $123.48 $123.48 $92.61 $92.61
1 97012 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97012 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97012 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97012 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97014 ** 0-20 $31.25 $31.25 $23.44 $23.44
1 97014 ** 0-20 P2 $33.79 $33.79 $25.34 $25.34
1 97014 ** 21-999 $31.25 $31.25 $23.44 $23.44
1 97014 ** 21-999 P2 $33.79 $33.79 $25.34 $25.34
1 97016 ** 0-20 $31.25 $31.25 $23.44 $23.44
1 97016 ** 0-20 P2 $33.79 $33.79 $25.34 $25.34
1 97016 ** 21-999 $31.25 $31.25 $23.44 $23.44
1 97016 ** 21-999 P2 $33.79 $33.79 $25.34 $25.34
1 97018 ** 0-20 $31.25 $31.25 $23.44 $23.44
1 97018 ** 0-20 P2 $33.79 $33.79 $25.34 $25.34
1 97018 ** 21-999 $31.25 $31.25 $23.44 $23.44
1 97018 ** 21-999 P2 $33.79 $33.79 $25.34 $25.34
1 97022 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97022 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97022 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97022 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97024 ** 0-20 $31.25 $31.25 $23.44 $23.44
1 97024 ** 0-20 P2 $33.79 $33.79 $25.34 $25.34
1 97024 ** 21-999 $31.25 $31.25 $23.44 $23.44
1 97024 ** 21-999 P2 $33.79 $33.79 $25.34 $25.34
1 97026 ** 0-20 $31.25 $31.25 $23.44 $23.44
1 97026 ** 0-20 P2 $33.79 $33.79 $25.34 $25.34
1 97026 ** 21-999 $31.25 $31.25 $23.44 $23.44
1 97026 ** 21-999 P2 $33.79 $33.79 $25.34 $25.34
1 97028 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97028 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97028 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97028 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97032 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97032 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97032 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97032 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97033 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97033 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97033 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97033 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97034 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97034 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
370
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 3 - INDEPENDENT THERAPIST (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Age Place of Current Adjusted Proposed Adjusted
* Code Long Description ** Range Service Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97034 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97034 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97035 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97035 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97035 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97035 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97036 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97036 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97036 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97036 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97039 ** 0-20 $31.25 $31.25 $23.44 $23.44
1 97039 ** 0-20 P2 $33.79 $33.79 $25.34 $25.34
1 97039 ** 21-999 $31.25 $31.25 $23.44 $23.44
1 97039 ** 21-999 P2 $33.79 $33.79 $25.34 $25.34
1 97110 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97110 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97110 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97110 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97112 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97112 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97112 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97112 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97113 ** 0-20 $36.70 $36.70 $35.43 $35.43
1 97113 ** 0-20 P2 $39.69 $39.69 $38.32 $38.32
1 97113 ** 21-999 $36.70 $36.70 $35.43 $35.43
1 97113 ** 21-999 P2 $39.69 $39.69 $38.32 $38.32
1 97116 ** 0-20 $31.25 $31.25 $30.08 $30.08
1 97116 ** 0-20 P2 $33.79 $33.79 $30.08 $30.08
1 97116 ** 21-999 $31.25 $31.25 $30.08 $30.08
1 97116 ** 21-999 P2 $33.79 $33.79 $30.08 $30.08
1 97124 ** 0-20 $31.25 $31.25 $23.44 $23.44
1 97124 ** 0-20 P2 $33.79 $33.79 $25.34 $25.34
1 97124 ** 21-999 $31.25 $31.25 $23.44 $23.44
1 97124 ** 21-999 P2 $33.79 $33.79 $25.34 $25.34
1 97139 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97139 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97139 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97139 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97140 ** 0-20 $31.25 $31.25 $30.84 $30.84
1 97140 ** 0-20 P2 $33.79 $33.79 $30.84 $30.84
1 97140 ** 21-999 $31.25 $31.25 $30.84 $30.84
1 97140 ** 21-999 P2 $33.79 $33.79 $30.84 $30.84
1 97150 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97150 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
371
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 3 - INDEPENDENT THERAPIST (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Age Place of Current Adjusted Proposed Adjusted
* Code Long Description ** Range Service Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
1 97150 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97150 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97530 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97530 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97530 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97530 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97535 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97535 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97537 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97537 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97542 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97542 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97750 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97750 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97750 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97750 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
1 97760 ** 0-20 $32.76 $32.76 $31.63 $31.63
1 97760 ** 0-20 P2 $35.42 $35.42 $34.20 $34.20
1 97761 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97761 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97762 ** 0-20 $39.73 $39.73 $35.09 $35.09
1 97762 ** 0-20 P2 $42.97 $42.97 $35.09 $35.09
1 97799 ** 0-20 $31.25 $31.25 $30.17 $30.17
1 97799 ** 0-20 P2 $33.79 $33.79 $32.62 $32.62
1 97799 ** 21-999 $31.25 $31.25 $30.17 $30.17
1 97799 ** 21-999 P2 $33.79 $33.79 $32.62 $32.62
Physical or manipulative therapy
performed for maintenance
1 S8990 rather than restoration 0-999 $31.25 $31.25 $30.17 $30.17
Physical or manipulative therapy
performed for maintenance
1 S8990 rather than restoration 0-999 P2 $33.79 $33.79 $32.62 $32.62
1 S9152 Speech therapy, re-evaluation 0-20 $180.00 $180.00 $173.79 $173.79
1 S9152 Speech therapy, re-evaluation 0-20 P2 $180.00 $180.00 $173.79 $173.79
1 S9152 Speech therapy, re-evaluation 21-999 $175.77 $175.77 $169.71 $169.71
*Type of Service (TOS)
1 !Medical Services
Place of Service
P2 !Home
372
Exhibit A
to Plaintiffs' Second Amended Original Petition and Application for Injunctive Relief
ATTACHMENT 3 - INDEPENDENT THERAPIST (proposed to be effective October 1, 2015)
CURRENT PROPOSED
Current Proposed
TOS Procedure Age Place of Current Adjusted Proposed Adjusted
* Code Long Description ** Range Service Medicaid Fee Medicaid Fee Medicaid Fee Medicaid Fee
**Required Notice: The five-character code included in this notice is obtained from the Current Procedural Terminology (CPT®),
copyright 2015 by the American Medical Association (AMA). CPT is developed by the AMA as a listing of descriptive terms and five
character identifying codes and modifiers for reporting medical services and procedures performed by physicians. The responsibility for
the content of this notice is with HHSC and no endorsement by the AMA is intended or should be implied. The AMA disclaims
responsibility for any consequences or liability attributable or related to any use, nonuse or interpretation of information contained in this
notice. Fee schedules, relative value units, conversion factors and/or related components are not assigned by the AMA, are not part of
CPT, and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical
services. The AMA assumes no liability for data contained or not contained.
373
F
9/8/2015 2:49:47 PM
Velva L. Price
District Clerk
Travis County
CAUSE NO. D-1-GN-15-003263 D-1-GN-15-003263
Shaun Glasson
DIANA D., as next of friend of KD, a child, § IN THE DISTRICT COURT
KAREN G., as next friend of TG and ZM, §
children, GUADALUPE P., as next of friend §
of LP, a child, SALLY L., as next of friend of §
CH, DENA D., as next friend of BD, a child, §
OCI ACQUISITION, LLC d/b/a §
CARE OPTIONS FOR KIDS, §
CONNECTCARE SOLUTIONS, LLC §
d/b/a CONNECTCARE THERAPY FOR §
KIDS, ATLAS PEDIATRIC THERAPY §
CONSULTANTS LLC, and PATHFINDER §
PEDIATRIC HOME CARE, INC., §
§ 200TH JUDICIAL DISTRICT OF
Plaintiffs, §
§
v. §
§
CHRIS TRAYLOR, as EXECUTIVE §
COMMISSIONER of TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, and TEXAS §
HEALTH AND HUMAN SERVICES §
COMMISSION, §
§
Defendants. § TRAVIS COUNTY, TEXAS
PLAINTIFFS' SECOND AMENDED ORIGINAL PETITION AND
APPLICATION FOR INJUNCTIVE RELIEF
TO THE HONORABLE JUDGE OF SAID COURT:
Although entrusted with the responsibility of operating the Texas Medicaid system in
accordance with applicable Texas and federal law, Defendants Chris Traylor, as Executive
Commissioner of the Texas Health and Human Services Commission, and the Texas Health and
Human Services Commission promulgated and then abruptly withdrew, in the face of a
temporary injunction hearing requested by Plaintiffs, two illegal sets of cuts to the
reimbursement rates for providers of physical, occupational, and speech therapy services to
1826.002
435836 " g (' 11
336
Texas Medicaid beneficiaries. Nine days after withdrawing the first two sets of illegal rate cuts,
Defendants continued their inexplicable rush to implement destructive cuts to critical Medicaid
rates by publishing a third set of illegal cuts, to be effective October 1, 2015. As with the first
two sets of rates proposed by Defendants, this newest set of rates violates Article I, § 19 of the
Texas Constitution and numerous Texas statutes and regulations. If implemented, the newest cuts
will force Texas Medicaid providers to cease providing services critical to the health and
development of Texas' most vulnerable residents, its children. Plaintiffs Diana D., Karen G.,
Guadalupe P., Sally L., and Dena D. are the mothers and next friends of children receiving
speech, occupational, and therapy services from home health agencies under the Texas Medicaid
program. Plaintiffs OCI Acquisition, LLC d/b/a Care Options for Kids, ConnectCare Solutions,
LLC d/b/a ConnectCare Therapy for Kids, Atlas Pediatric Therapy Consultants LLC, and
Pathfinder Pediatric Home Care, Inc. are duly licensed home health agencies providing pediatric
speech, occupational, and physical therapy services under the Texas Medicaid program. Because
Defendants' actions are unlawful and will cause immediate and irreparable injury to the children
whose mothers are bringing this suit, to thousands of other Texas children receiving services
under the Texas Medicaid program, and to Texas Medicaid providers, Plaintiffs are requesting
that the Court grant a declaratory judgment that the proposed rates are void and injunctive relief
preventing the implementation of those rates.
I. DISCOVERY CONTROL PLAN
1. Plaintiffs intend to conduct discovery under Level 3 of Texas Rule of Civil
Procedure 190 .4 and will seek a Court Order in accordance with the requirements of such Rule.
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337
II. PARTIES
2. Plaintiff Diana D. is the mother and next friend of KD, who is nine years old.
Both are residents of Travis County, Texas.
3. Plaintiff Karen G. is the mother and next friend of TG, who is fifteen years old,
and ZM, who is thirteen years old. All are residents of Williamson County, Texas.
4. Plaintiff Guadalupe P. is the mother and next friend of LP, who is two years old.
Both are residents of Travis County, Texas.
5. Plaintiff Sally L. is the mother and next friend of CH, who is four years old. Both
are residents of Travis County, Texas.
6. Plaintiff Dena D. is the mother and next friend of BD, who is eight years old.
Both are residents of Hays County, Texas.
7. Plaintiffs OCI Acquisition, LLC d/b/a Care Options for Kids and ConnectCare
Solutions LLC d/b/a ConnectCare Therapy for Kids (collectively "Care Options for Kids" or
"COFK"), are affiliated entities and duly licensed Texas pediatric home health agencies that
provide speech, occupational, and physical therapy services to children across the State of Texas,
including in Travis County, Texas. COFK's headquarters and principal place of business is in
Dallas, Dallas County, Texas.
8. Plaintiff Atlas Pediatric Therapy Consultants LLC ("Atlas") is a duly licensed
Texas pediatric home health agency that provides speech, occupational, and physical therapy
services to children in North Texas. Its headquarters and principal place of business is in
Arlington, Tarrant County, Texas.
9. Plaintiff Pathfinder Pediatric Home Care, Inc. ("Pathfinder") is a duly licensed,
family-owned Texas pediatric home health agency that provides speech, occupational, and
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338
physical therapy services to children in 115 Texas counties, primarily in East Texas. Pathfinder's
headquarters and principal place of business in The Woodlands, Montgomery County, Texas.
10. Care Options for Kids, Atlas, and Pathfinder are referred to collectively as
"Provider Plaintiffs".
11. Defendant Chris Traylor, as Executive Commissioner of the Texas Health and
Human Services Commission ("Commissioner Traylor") has appeared and answered.
12. Defendant Texas Health and Human Services Commission ("HHSC") 1s an
agency of the State of Texas, and has appeared and answered.
III. JURISDICTION AND VENUE
13. Jurisdiction and venue are appropriate in this Court under TEX. Crv. PRAC. &
REM. CODE §37.002(b) and TEX. Gov'T CODE §2001.038(b).
IV. FACTUALBACKGROUND
14. Medicaid is a health insurance program, jointly operated and funded by the
federal and state governments, for the medical care of low-income and other eligible persons.
While federal law establishes Medicaid's basic parameters, each state, including Texas, decides
the types and ranges of services, payment levels for services, and administrative services it will
provide. Specifically, each state, including Texas, prepares a written plan ("State Plan")
describing the nature and scope of its Medicaid program. Once the State Plan is approved by the
U.S. Secretary of Health and Human Services, the state is responsible for operating the program
to conform to that plan.
15. Although recently described by the governor of Texas as "riddled with
operational, managerial, structural and procedural problems," HHSC is the agency responsible
for the Texas Medicaid program. HHSC arranges for the delivery of most Medicaid services
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339
through contracts with managed care organizations ("MCOs") licensed by the Texas Department
of Insurance. MCOs contract directly with doctors and other health care providers to create
provider networks for Medicaid beneficiaries. HHSC pays each MCO a monthly amount to
coordinate and deliver health services for the Medicaid members enrolled in the MCO's health
plan. The MCOs are required to provide to their members all medically necessary services
mandated by the Texas State Plan, including pediatric occupational, speech, and physical therapy
services ("Pediatric Services").
16. Diana D. is the mother and next friend of a child currently receiving Pediatric
Services from Care Options for Kids. KD, her nine year old daughter, suffers from Rett
syndrome, delayed development, and a seizure disorder. KD is nonverbal, non-ambulatory,
suffers from swallowing seizures, and has difficulty using her hands and feet. Due to her
condition, KD is unable to receive therapy outside her home. Because Diana D. is unable to
afford the rates of a commercial provider, the Texas Medicaid program is the only source of the
Pediatric Services her daughter requires.
17. Karen G. is the mother and next friend of two children currently rece1vmg
Pediatric Services from Care Options for Kids. TG, her fifteen year old son, was born with a
brain injury and suffers from autism and speech developmental delay. ZM, her thirteen year old
son, suffers from multiple issues, including seizure disorder, mesial temporal sclerosis disorder,
and autism. Due to their conditions, TG and ZM are unable to receive therapy outside their
home. Because Karen G. is unable to afford the rates of a commercial provider, the Texas
Medicaid program is the only source of the Pediatric Services her sons require.
18. Guadalupe P. is the mother and next friend of a child currently receiving Pediatric
Services from Care Options for Kids. LP, her two year old daughter, is diagnosed with Williams
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syndrome and subglottic stenosis, and as a result, has developmental delays, aortic stenosis, and
a heart murmur. Due to these conditions, LP is unable to receive therapy outside her home.
Because Guadalupe P. is unable to afford the rates of a commercial provider, the Texas Medicaid
program is the only source of the Pediatric Services her daughter requires.
19. Sally L. is the mother and next friend of a child currently receiving Pediatric
Services from Care Options for Kids. CH, her four year old son, is diagnosed with moderate
autism and, as a result, has challenges with speech, applied behavior, outbursts, transitions, and
following directions. Due to these conditions, CH is unable to receive therapy outside his home.
Because Sally L. is unable to afford the rates of a commercial provider, the Texas Medicaid
program is the only source of the Pediatric Services her son requires.
20. Dena D. is the mother and next friend of a child currently receiving Pediatric
Services. BD, her eight year old daughter, is diagnosed with Cerebral Palsy and post-traumatic
epilepsy. Due to these conditions, BD is unable to receive therapy outside her home. Because
Dena D. is unable to afford the rates of a commercial provider, the Texas Medicaid program is
the only source of the Pediatric Services her daughter requires.
21. Care Options for Kids is a duly-licensed Texas pediatric home health agency that
provides Pediatric Services to Texas children from birth through twenty-one years of age in the
children's homes. It is the largest pediatric home health organization in the state of Texas; of all
children who receive therapy services in a home environment, approximately nine percent of
them receive their services from Care Options for Kids. COFK has over 400 employees, and all
of its revenues are generated from services provided to children under the Medicaid program.
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22. Atlas and Pathfinder are also duly-licensed Texas pediatric home health agencies
providing Pediatric Services to Texas children. Pathfinder is a family-owned business. Atlas is a
small business under the definition in Tex. Govt. Code 2006.001.
23. Provider Plaintiffs deliver a wide range of critical services to the children served
by the Texas Medicaid program, including required Pediatric Services. The Provider Plaintiffs'
pediatric physical therapists assist children with mild to severe defects in gross motor skills,
specializing in the treatment and management of a variety of congenital, developmental,
neuromuscular, skeletal, and acquired disorders and diseases. The therapists' goals are to
promote overall wellness and independence for the children and their families. The Provider
Plaintiffs' speech language pathologists focus on helping their patients with language
development, articulation skills, and oral/motor feeding challenges, working to remediate
communication disorders that interfere with or impede the child's effective communication. The
goals of those professionals are to increase the child's communication skills to an age-
appropriate or functional ability level. The Provider Plaintiffs' pediatric occupational therapists
are trained to assist children with their individual physical and development issues, and work
with the children to teach them how to perform daily activities, interact socially, and become
functional and independent adults.
24. Defendants have promulgated new proposed reimbursement rates to be
implemented October 1, 2015 for physical, occupational, and speech therapy services, including
Pediatric Services, under the Texas Medicaid program ("the Rates"). A copy of the Rates is
attached as Exhibit A. The Rates, which are the third set of rates that Defendants have
promulgated in less than sixty days, will impose severe cuts to the current Medicaid
reimbursement rates for speech, occupational, and physical therapy services. If the Rates are
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342
allowed to take effect, numerous Medicaid providers, including the Provider Plaintiffs, will be
unable to continue providing Medicaid services. Many providers will be forced to cease
operations entirely. The forced closure of multiple Medicaid providers, particularly those
providing services to children, will make it impossible for Texas to comply with state-mandated
access standards. Such closures will deny needed services to children, including KD, TG, ZM,
LP, CH, and BD, who are now served by the Texas Medicaid program. Accordingly, the Rates, if
implemented, will cause imminent and irreparable harm to the children of Texas, the most
vulnerable of Medicaid beneficiaries.
25. Defendants have promulgated the Rates without complying with, and in direct
violation of, multiple Texas statutes and regulations. First, Defendants have promulgated the
Rates in violation of 1 TAC §§355.8021, 355.8441, and 355.8085. Second, Defendants have
promulgated the Rates without conducting the economic impact analysis or regulatory flexibility
analysis required by TEX. Gov'T CODE §2006.002. Third, Defendants have not prepared the local
employment impact statement required by TEX. Gov'T CODE §2001.022(a). Fourth, Defendants
have not published the notice required by 1 TAC §355.201(e) and (f). In addition, Defendants
have not complied with TEX. Gov'T CODE §2001.023(a), which requires that a state agency
promulgating a new rule must provide information about the costs and benefits of the new rule,
as well as all other statements required by law.
26. Defendants' actions also violate their statutory duty to maximize the Medicaid
finance system. TEX. Gov'T CODE §531.02113 requires Defendants to maximize the Medicaid
finance system by, among other things: a) creating incentives for providers to use preventive
care; b) increasing and retaining providers to maintain an adequate provider network; c)
encouraging the improvement of the quality of care; and d) insuring that the system accurately
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reflects the costs borne by the providers. If implemented, the Rates will have exactly the opposite
impact on the Texas Medicaid system because they will create disincentives for preventive care,
dramatically decrease the number of providers, impair the quality of care, and fail to accurately
reflect the costs borne by the providers. If allowed to go into effect, the promulgated Rates, or
other Pediatric Services rates implemented in violation of applicable law, will cause immediate
and irreparable damage to each of the Plaintiffs, other children receiving Pediatric Services under
the Texas Medicaid program, and other Texas Medicaid providers.
27. Defendants' actions additionally deny KD, TG, ZM, LP, CH, BD, and other
Texas Medicaid beneficiaries the access to providers and services required by applicable Texas
statutes and regulations. HHSC's regulations require that each MCO must "ensure the
reasonable availability of specialists for all covered services requiring specialty care." 1 TAC
§353.411(a)(5). Furthermore, each contract between an MCO and the state must provide for a
"sufficient number of. .. specialty pediatric providers of home and community-based services"
and provide that "health care services will be accessible to recipients through the [MCO's]
provider network to a comparable extent that health care services would be available to
recipients under a fee-for-service or primary care case management model of Medicaid managed
care." TEX. Gov'T CODE §533.005(a)(21). The Rates will eliminate the sole provider of
Medicaid Pediatric Services available to KD, TG, ZM, LP, CH, and BD, as well as numerous
other Medicaid providers, thus denying those children and thousands of other children access to
critical Medicaid services mandated by state law. Accordingly, the proposed Rates will prevent
the access to services and providers required by Texas law.
28. Finally, Defendants' efforts to implement the Rates violate the due course of law
provision of the Texas Constitution Art. I, §19. If implemented, the Rates will deprive KD, TG,
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ZM, LP, CH, and BD of mandated and necessary services and destroy the economic viability of
the Provider Plaintiffs. The Rates are arbitrary, capricious, and not based on fact. The Rates
cannot arguably be rationally related to a legitimate governmental interest. When considered as a
whole, the actual, real-world effect of the Rates as applied to Plaintiffs cannot arguably be
rationally related to a government interest. Finally, the Rates are so burdensome as to be
oppressive in light of any governmental interest. The Rates therefore deny Plaintiffs, citizens of
Texas, the right not to be deprived "of life, liberty, property, privileges or immunities ... except by
the due course of the law of the land." Tex. Const. art. I, § 19.
V. CLAIMS AGAINST DEFENDANTS
A. Declaratory Relief
29. Plaintiffs reallege and incorporate herein by reference paragraphs 1-28 above.
30. Plaintiffs' legal rights, status, and legal relations are affected by the Rates and
Defendants' actions in promulgating the Rates. Pursuant to Chapter 37 of the Texas Civil
Practice & Remedies Code, Plaintiffs seek a judgment declaring that the Rates are invalid, void,
and of no force or effect because (1) Defendants have promulgated the Rates in violation of
applicable Texas law, (2) Commissioner Traylor's actions in promulgating the rates are ultra
vires, and (3) the Rates violate the due course oflaw provision of the Texas Constitution.
31. In addition, the Rates and their threatened application interfere with or impair, or
threaten to interfere with or impair, Plaintiffs' legal rights or privileges. Plaintiffs therefore seek
a declaratory judgment pursuant to TEX. Gov'T CODE §2001.038 declaring that the Rates are
invalid, void, and of no force or effect because (1) Defendants have promulgated the Rates in
violation of applicable Texas law, (2) Commissioner Traylor's actions in promulgating the Rates
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are ultra vires, and (3) the Rates violate the due course of law prov1s10n of the Texas
Constitution.
32. Plaintiffs request that the Court award them their reasonable and necessary
attorneys' fees and costs incurred herein as allowed by TEX. Crv. PRAC. & REM. CODE §37.009
and other applicable law.
B. Request for Temporary and Permanent Injunctive Relief
33. Plaintiffs reallege and incorporate herein by reference paragraphs 1-32 above.
34. As set forth above, the actions of Commissioner Traylor are ultra vires in that his
actions taken in promulgating the Rates are outside his statutory and legal authority, and HHSC's
actions are in violation of applicable Texas law. Because Defendants have acted and are acting
without legal authority, this Court can and must enjoin Commissioner Traylor and HHSC from
taking any further actions to implement the Rates. Plaintiffs believe, moreover, that Defendants,
if they are prevented from implementing the Rates, intend to implement new reimbursement
rates for Pediatric Services and other physical, occupational, and speech therapy services under
the Texas Medicaid program without complying with the requirements of applicable statutes and
regulations, including without limitation, TEX. Gov'T CODE §§ 531.02113, 533.005(a)(21),
2001.022(a), 2001.023(a), and 2006.002, and 1 TAC§§ 353.41 l(a)(5), 355.201(e), (f), 355.8021,
355.8085, and 355.8441.
35. Plaintiffs will suffer imminent, irreparable harm without court intervention and
have no adequate remedy at law if Defendants are not immediately enjoined from (1) taking any
action to implement the Rates and (2) taking any action to implement any other new
reimbursement rates for physical, occupational, or speech therapy services under the Texas
Medicaid program without complying with the requirements of applicable Texas statutes and
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regulations, including without limitation TEX. Gov'T CODE §§ 531.02113, 533.005(a)(21),
2001.022(a), 2001.023(a), and 2006.002, and 1 TAC§§ 353.411(a)(5), 355.201(e), (f), 355.8021,
355.8085, and 355.8441.
36. If not so enjoined, Commissioner Traylor will continue to take actions outside his
legal authority, and HHSC will continue to take actions in violation of applicable Texas law. If
Defendants are not enjoined as requested, KD, TG, ZM, LP, CH, BD, and thousands of other
Texas children receiving Pediatric Services under the Texas Medicaid program will be deprived
of those critical services. Defendants' actions will cause multiple Texas Medicaid providers to
go out of business and/or stop providing Medicaid services. Those actions will, in addition,
create disincentives for Medicaid providers to use preventive care, decrease the quality of care
provided to Medicaid recipients in Texas, and prevent Texas Medicaid beneficiaries from
receiving critical services. If allowed to go into effect, the Rates, or other reimbursement rates
for physical, occupational, or speech therapy services under the Texas Medicaid program
implemented without complying with Texas law, will cause immediate and irreparable damage
to each of the Plaintiffs, other children receiving Pediatric Services under the Texas Medicaid
program, and other Texas Medicaid providers.
37. Plaintiffs are willing to post the necessary reasonable bond to facilitate the
injunctive relief requested. Plaintiffs believe that a bond in a nominal amount would be
appropriate.
38. The only adequate, effective and complete relief for Plaintiffs is for the Court to
grant injunctive relief immediately restraining and prohibiting Commissioner Traylor and HHSC
and their agents, servants, employees, independent contractors, attorneys, representatives, and
those persons or entities in active concert or participation with them from (1) taking any action to
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implement the Rates and (2) taking any action to implement any other reimbursement rates for
physical, occupational, and speech therapy services under the Texas Medicaid program without
complying with the requirements of applicable statutes and regulations, including without
limitation TEX. Gov'T CODE §§ 531.02113, 533.005(a)(21), 2001.022(a), 2001.023(a), and
2006.002, and 1 TAC §§ 353.411(a)(5), 355.201(e), (f), 355.8021, 355.8085, and 355.8441 (the
"Injunctive Relief).
39. Pursuant to Texas Rules of Civil Procedure 680 et. seq., and Texas Civil Practice
and Remedies Code §65.001 et. seq., and in order to preserve the status quo during the pendency
of this action, Plaintiffs request (1) a temporary restraining order granting the requested
Injunctive Relief, (2) alternatively, a temporary injunction hearing and an order requiring
Defendants to appear at such hearing and show cause why a temporary injunction should not be
issued, (3) upon hearing, a temporary injunction granting the requested Injunctive Relief, and (4)
upon final hearing, a permanent injunction granting the requested Injunctive Relief.
40. Plaintiffs are willing to post the necessary reasonable bond to facilitate the
injunctive relief requested. Plaintiffs believe that a bond in a nominal amount would be
appropriate.
41. Plaintiffs incorporate herein by reference the affidavits of Diana D., Karen G.,
Guadalupe P., and Sally L. attached as Exhibits B through E, respectively to Plaintiffs' Original
Petition and Application for Injunctive Relief previously filed herein, 1 and the affidavits of
Michael Reiswig on behalf of Care Options for Kids, Joshua Adams on behalf of Atlas, and J.
1
To protect the privacy of the children named as Plaintiffs, the original affidavits of their next friends attached to
such petition and filed in the records of the Court were redacted to eliminate identifying information, such as the
next friends' last names and addresses. Non-redacted copies of such affidavits are available and will be provided to
the Court and Defendants if deemed appropriate by the Court.
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Adam Wilcox on behalf of Pathfinder, attached as Exhibits A-1 through A-3, respectively, to this
Petition.
VI. CONCLUSION & PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully request that they be
granted:
(a) the declaratory relief as set forth above;
(b) the injunctive relief as set forth above;
(c) their reasonable and necessary attorneys' fees and expenses; and
(d) all other relief to which they may be justly entitled.
Respectfully submitted,
By:
ATTORNEYS FOR PLAINTIFFS
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CERTIFICATE OF SERVICE
I hereby certify that the foregoing document has been delivered to the following counsel
ofrecords on this, the 81h day of September 2015 by fax and e-mail:
Eugene A. Clayborn
Andrew Lutostanski
Assistant Attorney General
Office of the Attorney General of Texas
P.O. Box 12548, Capitol Station
Austin, Texas 78711-2548
Facsimile: (512) 457-4614
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G
Texas Government Code
§ 531.021. Administration of Medicaid
(a) The commission is the state agency designated to administer federal
Medicaid funds.
(b) The commission shall:
(1) plan and direct Medicaid in each agency that operates a portion of
Medicaid , including the management of the Medicaid managed care
system and the development, procurement, management, and
monitoring of contracts necessary to implement the Medicaid
managed care system; and
(2) establish requirements for and define the scope of the ongoing
evaluation of the Medicaid managed care system conducted in
conjunction with the Department of State Health Services under
Section 108.0065, Health and Safety Code.
(b-1) The executive commissioner shall adopt reasonable rules and standards
governing the determination of fees, charges, and rates for Medicaid
payments.
(c) The executive commissioner in the adoption of reasonable rules and
standards under Subsection (b-1) shall include financial performance
standards that, in the event of a proposed rate reduction, provide private
ICF-IID facilities and home and community-based services providers with
flexibility in determining how to use Medicaid payments to provide services
in the most cost-effective manner while continuing to meet the state and
federal requirements of Medicaid.
(d) In adopting rules and standards required by Subsection (b-1), the executive
commissioner may provide for payment of fees, charges, and rates in accordance
with:
(1) formulas, procedures, or methodologies prescribed by the
commission's rules;
(2) applicable state or federal law, policies, rules, regulations, or
guidelines;
(3) economic conditions that substantially and materially affect provider
participation in Medicaid , as determined by the executive
commissioner; or
(4) available levels of appropriated state and federal funds.
(e) Notwithstanding any other provision of Chapter 32, Human Resources Code,
Chapter 533, or this chapter, the commission may adjust the fees, charges, and
rates paid to Medicaid providers as necessary to achieve the objectives of
Medicaid in a manner consistent with the considerations described by
Subsection (d).
(f) In adopting rates for Medicaid payments under Subsection (b-1), the executive
commissioner may adopt reimbursement rates for appropriate nursing
services provided to recipients with certain health conditions if those services
are determined to provide a cost-effective alternative to hospitalization. A
physician must certify that the nursing services are medically appropriate for
the recipient for those services to qualify for reimbursement under this
subsection.
(g) In adopting rates for Medicaid payments under Subsection (b-1), the executive
commissioner may adopt cost-effective reimbursement rates for group
appointments with Medicaid providers for certain diseases and medical
conditions specified by rules of the executive commissioner.
§ 531.02113. Optimization of Medicaid Funding
The commission shall ensure that the Medicaid finance system is optimized to:
(1) maximize the state's receipt of federal funds;
(2) create incentives for providers to use preventive care;
(3) increase and retain providers in the system to maintain an adequate
provider network;
(4) more accurately reflect the costs borne by providers; and
(5) encourage the improvement of the quality of care.
§ 2001.038. Declaratory Judgment
(a) The validity or applicability of a rule, including an emergency rule adopted under
Section 2001.034, may be determined in an action for declaratory judgment if it is
alleged that the rule or its threatened application interferes with or impairs, or
threatens to interfere with or impair, a legal right or privilege of the plaintiff.
* * *
Texas Human Resources Code
§ 32.021. Administration of the Program
(a) The commission is the single state agency designated to administer the
medical assistance program provided in this chapter in accordance with 42 U.S.C.
Section 1396a(a)(5). Subject to applicable federal law, the commission may delegate
the operation of a part of the medical assistance program to another state agency.
Notwithstanding any delegation, the commission retains ultimate authority over the
medical assistance program.
(a-1) To the extent the commission delegates the operation of a part of the medical
assistance program to another state agency, or to the extent that state law assigns a
function of the medical assistance program to another health and human services
agency operating under the commission’s oversight, a reference in this chapter to
the commission with respect to that part of the medical assistance program means
the state agency to which the operation of that part is delegated or assigned.
(b) The commission shall enter into agreements with any federal agency
designated by federal law to administer medical assistance when the commission
determines the agreements to be compatible with the state's participation in the
medical assistance program and within the limits of appropriated funds. The
commission shall cooperate with federal agencies designated by federal law to
administer medical assistance in any reasonable manner necessary to qualify for
federal funds.
(c) The executive commissioner shall establish methods of administration and
adopt necessary rules for the proper and efficient operation of the medical assistance
program.
* * *
§ 32.028. Fees, Charges, and Rates
(a) The executive commissioner shall adopt reasonable rules and standards
governing the determination of fees, charges, and rates for medical assistance
payments.
(b) The fee, charge, or rate for a professional service is the usual and customary
fee, charge, or rate that prevails in the community.
(c) The fee, charge, or rate for other medical assistance is the usual and customary
fee, charge, or rate that prevails in the community unless the payment is limited by
state or federal law.
* * *
§ 32.0281. Rules and Notice Relating to Payment Rates
(a) The executive commissioner shall by rule describe the process used to
determine payment rates for medical assistance and shall notify providers,
consumers, the Legislative Budget Board, and the Governor's Office of Budget,
Planning, and Policy of that process.
(b) The executive commissioner shall adopt rules relating to payment rates that
include:
(1) a description of the process used to determine payment rates;
(2) a description of each cost of living index used in calculating inflation rates
and the procedure for determining the level of inflation used in the executive
commissioner's calculations;
(3) the criteria for desk audits;
(4) the procedure for notifying providers of exclusions and adjustments to
reported expenses, if notification is requested; and
(5) a method of adjusting rates if new legislation, regulations, or economic
factors affect costs.
(c) The commission shall include in the Title XIX State Medicaid Plan submitted
to the federal government for approval the procedures for making available to the
public the data and methodology used in establishing payment rates.
(d) The procedures for adopting rules under this section shall be governed by
Chapter 2001, Government Code.
(e) An interested party may appeal an action taken by the commission under this
section, and an appeal of such action shall be governed by the procedures for a
contested case hearing under Chapter 2001, Government Code. The filing of an
appeal under this section shall not stay the implementation of payment rates adopted
by the executive commissioner in accordance with commission rules.
§ 32.0282. Public Hearing on Rates
(a) The commission shall hold a public hearing to allow interested persons to
present comments relating to proposed payment rates for medical assistance.
(b) The commission shall provide notice of each hearing to the public.
1 TEXAS ADMINISTRATIVE CODE
§ 355.201 Establishment and Adjustment of Reimbursement Rates by the
Health and Human Services Commission
* * *
(b) Purpose. This section implements the provisions of §531.021(d) and (e),
Government Code and applies to all programs that provide medical assistance and
to all reimbursement methodologies prescribed under this chapter.
(c) Establishment of fees, rates, and charges. The Commission establishes fees, rates,
and charges to be paid for medical assistance in accordance with:
(1) the formulas, procedures, or methodologies prescribed in this chapter;
(2) the requirements of applicable state and federal law, policies, rules,
regulations, or guidelines, including:
(A) legislative or Congressional enactments that change state or federal
laws in a manner that affects such fees, rates, and charges;
(B) changes in federal regulations, and policies that affect such fees, rates,
and charges; and
(C) judicial orders, opinions, or interpretations regarding state or federal
law that affect such fees, rates, and charges;
(3) the consideration of economic factors that, in the Commission's
determination:
(A) have or may have a significant and measurable effect on provider
participation; or
(B) have or may have a significant and measurable effect on providers'
ability to deliver services in accordance with state and federal law; and
(4) levels of appropriated state and federal funds or state or federal laws or
enactments that limit, restrict, or condition the availability of appropriated
funds for medical assistance.
(d) Adjustment of fees, rates, and charges. Notwithstanding any other provision of
this chapter, the Commission may adjust fees, rates, and charges paid for medical
assistance if:
(1) state or federal law is enacted, amended, judicially interpreted, or
implemented to:
(A) require the Commission to increase or reduce a fee, rate, or charge
paid to a provider for medical assistance;
(B) change the amount, scope, or type of allowable or unallowable costs
for providers of medical assistance that are required to report costs to
the Commission or a health and human services agency for purposes
of establishing a reimbursement rate for medical assistance;
(C) require all providers within a program or category of providers to
incur additional costs to provide medical assistance, other than unallowable
costs, that are not currently recognized in the reimbursement
methodology established by the Commission for the program; or
(D) restrict, limit, or condition the availability of appropriated funds to the
Commission for payment or reimbursement of medical assistance;
(2) economic conditions that prevail among all providers within a specific
program or category of providers and:
(A) result in a demonstrable increase in the cost of providing services
beyond amounts recognized in the Commission's established
reimbursement methodology; or
(B) require providers within a program or category of providers to incur
costs, other than unallowable costs, that are not currently recognized
in the reimbursement methodology established by the Commission for
the program.
(e) Notice of adjustment of fees, rates, and charges. If the Commission adjusts fees,
rates, or charges under this section, the Commission or its designee will publish
notice of the proposed adjustment at the earliest feasible date but not later than 10
state working days before the effective date of the adjustment. If the adjustment is
required by the enactment or amendment of state or federal law, such notice may
be published before the effective date of such enactment or amendment, but the
adjustment to fees, rates, or charges will not take effect before the effective date of
the enactment or amendment. The notice must be published either by publication
on the Commission's Internet web site or in the Texas Register. In addition, the
Commission may issue written or electronic communication to providers, if
economically feasible.
(f) Contents of notice. The notice required under subsection (e) of this section will
include the following:
(1) a description of the specific increase or reduction of fees, rates, and charges;
(2) the date on which such adjustment will take effect;
(3) a description of the legal and factual bases for the adjustment;
(4) a description of the specific requirements of the rate setting methodology
established under this chapter that cannot effectively be implemented as a
result of the adjustment;
(5) instructions for interested parties to submit written comments to the
Commission regarding the proposed adjustment; and
(6) the date, time, and location of a public hearing in accordance with §32.0282,
Human Resources Code.
§ 355.8021 Reimbursement Methodology for Home Health Services and
Durable Medical Equipment, Prosthetics, Orthotics and Supplies
(a) Reimbursement methodology for services provided by a home health agency.
(1) Except for durable medical equipment, prosthetics, orthotics and supplies
(DMEPOS), authorized home health services provided for eligible Medicaid
recipients are reimbursed the lesser of:
(A) the amount billed to Medicaid by the agency; or
(B) the fee established for the specific authorized home health service and
published in the Medicaid fee schedules.
(2) HHSC will update the fee schedules for Medicaid-reimbursable therapy,
nursing, and aide services provided by a home health agency as needed.
(A) HHSC bases the fee schedules on: an analysis of the Centers for
Medicare and Medicaid Services fees for similar services; Medicaid
fees paid by other states; a survey of costs reported by Medicaid home
health agencies; the Medicare Low Utilization Payment
Adjustment (LUPA) fees; previous Medicaid payments for Medicaid-
reimbursable therapy, nursing, and aide services; or some combination
thereof. Reimbursement information for therapy, nursing and aide
services provided through the Early and Periodic Screening,
Diagnosis and Treatment (EPSDT) program, known in Texas as
Texas Health Steps, is defined in §355.8441 of this subchapter
(relating to Reimbursement Methodologies for Early and
Periodic Screening, Diagnosis and Treatment (EPSDT)
Services).
(B) HHSC may conduct periodic rate reviews that will include, but not be
limited to, payments for as well as the costs associated with providing
these Medicaid-reimbursable therapy, nursing, and aide services.
HHSC may seek input from contracted home health services
providers and other interested parties in performing this review.
* * *
H
42 U.S.C. § 1396a
(30)(A) provide such methods and procedures relating to the utilization of, and the
payment for, care and services available under the plan (including but not limited to
utilization review plans as provided for in section 1396b(i)(4) of this title) as may be
necessary to safeguard against unnecessary utilization of such care and services and to
assure that payments are consistent with efficiency, economy, and quality of care and are
sufficient to enlist enough providers so that care and services are available under the plan
at least to the extent that such care and services are available to the general population in
the geographic area;
42 U.S.C. § 1396c
If the Secretary, after reasonable notice and opportunity for hearing to the State agency
administering or supervising the administration of the State plan approved under this
subchapter, finds--
(1) that the plan has been so changed that it no longer complies with the provisions of
section 1396a of this title; or
(2) that in the administration of the plan there is a failure to comply substantially with any
such provision;
the Secretary shall notify such State agency that further payments will not be made to the
State (or, in his discretion, that payments will be limited to categories under or parts of the
State plan not affected by such failure), until the Secretary is satisfied that there will no
longer be any such failure to comply. Until he is so satisfied he shall make no further
payments to such State (or shall limit payments to categories under or parts of the State
plan not affected by such failure).