Inpatient Services

Overview

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.

Inpatient Reimbursement

According to the Texas Administrative Code, §355.8052  related to Inpatient Hospital Reimbursement, hospitals may receive an annual SDA adjustment based upon their trauma designation.

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.

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.

To comply with the 2020-21 General Appropriations Act (Article II, H.B. 1, 86th Legislature, Regular Session, 2019, Riders 11 and 28) relating to rural hospital reimbursement, HHSC will implement the following:

Rider 11 subsection (d) directs HHSC to provide increases to inpatient Standard Dollar Amounts (SDA) for rural hospitals by trending forward to 2020 using an inflationary factor. Rural rates effective September 1, 2019 will include a 17.68% increase in the SDA for each hospital. Additionally, subsection (e) of the same rider directs HHSC to provide increases to inpatient SDA rates in addition to those identified in subsection (d), using a specific amount of appropriated funding. This additional funding will increase rural rates by another 6.25%. The combination of these two increases will result in new Final SDAs for rural hospitals. The new Final SDAs will apply to all rural hospital inpatient services.

Rider 28 directs HHSC to provide an additional add-on payment for labor and delivery services provided by rural hospitals. This change will be implemented by using an alternate SDA for inpatient stays related to labor and delivery in rural hospitals. The alternate SDA will be equal to the new Final SDA plus an SDA add-on sufficient to increase the actual payment for each claim by no less than $500. Only payments for APR-DRGs that involve an actual delivery will be increased by using the alternate SDA. These APR-DRG are listed below.

539-1

CESAREAN SECTION W STERILIZATION

539-2

CESAREAN SECTION W STERILIZATION

539-3

CESAREAN SECTION W STERILIZATION

539-4

CESAREAN SECTION W STERILIZATION

540-1

CESAREAN DELIVERY

540-2

CESAREAN DELIVERY

540-3

CESAREAN DELIVERY

540-4

CESAREAN DELIVERY

541-1

VAGINAL DELIVERY W STERILIZATION &/OR D&C

541-2

VAGINAL DELIVERY W STERILIZATION &/OR D&C

541-3

VAGINAL DELIVERY W STERILIZATION &/OR D&C

541-4

VAGINAL DELIVERY W STERILIZATION &/OR D&C

542-1

VAGINAL DELIVERY W COMPLICATING PROCEDURES EXC STERILIZATION &/OR D&C

542-2

VAGINAL DELIVERY W COMPLICATING PROCEDURES EXC STERILIZATION &/OR D&C

542-3

VAGINAL DELIVERY W COMPLICATING PROCEDURES EXC STERILIZATION &/OR D&C

542-4

VAGINAL DELIVERY W COMPLICATING PROCEDURES EXC STERILIZATION &/OR D&C

560-1

VAGINAL DELIVERY

560-2

VAGINAL DELIVERY

560-3

VAGINAL DELIVERY

560-4

VAGINAL DELIVERY

See FY 2020 Rural Hospital Prospective Standard Dollar Amount for the modified rural hospital rates.

In addition, Senate Bill 500 appropriated $50 million in general revenue funds for increased Medicaid reimbursement to children’s hospitals. HHSC will implement a new SDA add-on, called the Children’s Hospital Supplemental Add-on, for children’s hospitals for inpatient hospital discharges occurring after August 31, 2019 and before September 1, 2020. The add-on amount will be $1128.18.

Rural and Children’s hospitals are encouraged to reach out to contracted MCOs to ensure that they receive this additional reimbursement for inpatient services.

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.

Payment Information

Hospital Inpatient Payments

FY 2020 Urban Hospital Prospective Standard Dollar Amount (SDA) with Add-on (.pdf)

FY 2020 Rural Hospital Prospective Standard Dollar Amount (SDA) (.pdf)

FY 2020 Children's Hospital Prospective Standard Dollar Amount and Rate for Labor and Delivery Services provided to Adults (SDA) (.pdf)

Texas APR-DRG Grouper current version (.pdf)

Texas APR-DRG Grouper 2018 version-revised (.pdf)

Current and previous versions of all SDA rates and APR DRG Grouper information are available on the TMHP website.

Inpatient Ratio of Cost to Charges (RCC Rates) - effective 11/01/19

Previous Inpatient Ratio of Cost to Charges (RCC Rates)

FY 2019 Psychiatric Hospital (Per Diem Rates) (.pdf)

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.