Inpatient hospital services include medically necessary items and services ordinarily furnished by a Medicaid hospital provided under the direction of physician for the care and treatment of inpatient clients.
Prospective Payment Methodology
Inpatient hospital stays except in children's hospitals, state-owned teaching hospitals, Rider 40 hospitals, and psychiatric facilities (CCP) are reimbursed according to a prospective payment methodology based on diagnosis-related groups (DRGs). The reimbursement method itself does not affect inpatient benefits and limitations. Inpatient admissions must be medically necessary and are subject to Texas Medicaid's UR requirements.
TEFRA Payment Methodology
Medicaid providers that are cost-reimbursed according to the TEFRA reimbursement principles on a reasonable cost basis are subject to cost reporting, cost reconciliation, and cost settlement processes. This includes children's hospitals, state-owned teaching hospitals, and Rider 40 hospitals.
Additional information is available on the Texas Medicaid & Health Partnership (TMHP) website.
Note: Rate Analysis staff can assist you with questions concerning only payment rates for the specified services. They are not able to answer other types of questions, such as the status of payment for services rendered or questions involving eligibility for care services.
If you have questions regarding Hospitals - Inpatient and Outpatient Hospital Services payment rates, please call the Rate Analyst at (512) 491-1348.
If you have questions regarding Hospitals program/policy issues, please call the TMHP Contact Center at 1-800-925-9126.
Methodology / Rules
The Hospital Services program rules are located at Title 1 of the Texas Administrative Code, Part 15, Chapter 354, SubChapter A, Division 6, Rules 1071-1073, 1075, and 1077.
Reimbursement rules applicable to Hospitals are located at Title 1 of the Texas Administrative Code, Part 15, Chapter 355, SubChapter J, Division 4, Rules 8052, 8054, 8056, 8061, 8063, 8064, 8065, 8067, 8069, and 8071.
Hospital Inpatient Payments
- FY 2013 Hospital Prospective Standard Dollar Amount (SDA) with Add-on (.pdf)
- FY 2012 Hospital Prospective Standard Dollar Amount (SDA) with Add-on (.pdf)
- Current Hospital TEFRA Hospital listing (.pdf)
- Texas APR-DRG Grouper current version (.pdf)
- Inpatient Ratio of Cost to Charges (RCC Rates) - effective 06/01/13
Full Cost Standard Dollar Amount (SDA) - Rider 40
Rider 40 of the 2012-2013 General Appropriations Act (Article II, Health and Human Services Commission, Rider 40, H.B. 1, 82nd Legislature, Regular Session, 2011), provides, in part, that "hospitals that meet one of the following criteria: 1) located in a county with 50,000 or fewer persons according to the U.S. Census, or 2) is a Medicare-designated Rural Referral Center (RRC) or Sole Community Hospital (SCH), that is not located in a metropolitan statistical area (MSA) as defined by the U.S. Office of Management and Budget, or 3) is a Medicare-designated Critical Access Hospital (CAH), shall be reimbursed based on the cost-reimbursement methodology authorized by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) using the most recent data. Hospitals that meet the above criteria, based on the 2000 decennial census, will be eligible for TEFRA reimbursement without the imposition of the TEFRA cap for patients enrolled in FFS and PCCM."
HHSC has received requests related to rural hospitals' and HMOs' implementation
of Rider 40. Specifically, HHSC has been asked to provide data relating
to "the Medicaid reimbursement calculated using each hospital's
most recent [fee-for-service] rebased full cost Standard Dollar Amount"
that applies to services provided to patients enrolled in managed care.
In response the these requests, HHSC has prepare a schedule of each
hospital that is subject to the Rider and the Standard Dollar Amount
(SDA) that HHSC believes is consistent with the legislative intent expressed
in Rider 40. Following are links to HHSC's schedule and to the language
of Rider 40.
View the Rider 40 Language (.pdf)
Cost Report Requirements
Provider Cost and Reporting
The method of determining reasonable cost is similar to that used by Title XVII (Medicare). Hospitals must include inpatient and outpatient costs in the cost reports submitted annually. The provider must prepare one copy of the applicable CMS Cost Report Form. Additional information is available on the Texas Medicaid & Health Partnership (TMHP) website.
Contact Rate Analysis
Updated: June 5, 2013