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 state-owned teaching 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 state-owned teaching 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 appropriate person on the Contacts List.
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, 8056, 8058, 8060, 8061, 8065, and 8066.
Hospital Inpatient Payments
- FY 2016 Urban Hospital Prospective Standard Dollar Amount (SDA) with Add-on (.pdf)
- FY 2016 Rural Hospital Prospective Standard Dollar Amount (SDA) with Add-on (.pdf)
- FY 2016 Children's Hospital Prospective Standard Dollar Amount and Rate for Labor and Delivery Services provided to Adults (SDA) with Add-on (.pdf)
- Texas APR-DRG Grouper current version (.pdf)
- Inpatient Ratio of Cost to Charges (RCC Rates) - effective 03/01/16
- Previous Inpatient Ratio of Cost to Charges (RCC Rates)
and previous versions of all SDA rates and APR DRG Grouper information are available on the TMHP website.
Cost Report Requirements
Provider Cost and Reporting
The method of determining reasonable cost is similar to that used by Title XVIII (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: April 15, 2016