Section. CPT only copyright 2005 American Medical Association. All rights reserved. 2Texas Medicaid Reimbursement

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1 Section 2Texas Medicaid Reimbursement Reimbursement Electronic Funds Transfer Using EFT Advantages of EFT Enrollment Procedures Reimbursement Methodology Fee Schedules Physician Services in Outpatient Hospital Setting Drugs/Biologicals Reasonable Cost/Interim Rates Hospitals Provider-Specific Visit Rates Reasonable Charge Payment Methodology Manual Pricing Professional Providers and Outpatient Facilities Reimbursement Reduction Additional Payments to High-Volume Providers Medicaid Service Provided Outside Texas Medicare Crossover Reimbursement Part A Part B Federal Financial Participation (FFP) Rate CPT only copyright 2005 American Medical Association. All rights reserved.

2 Section Reimbursement Texas Medicaid Program reimbursements are available to all enrolled providers by check or electronic funds transfer (EFT). With EFT, TMHP directly deposits reimbursement into a provider's bank account. Effective immediately, stale-dated checks (i.e., checks that are older than 180 days) that have not been cashed are voided and/or applied to any outstanding accounts receivable. If the balance on a stale-dated check after it has been applied to accounts receivable is over $5,000, written notification is sent to the provider 30 days before the void occurs Electronic Funds Transfer EFT is a method for directly depositing funds into a designated bank account. When providers enroll, TMHP deposits funds from their approved claims directly into their designated bank account. Transactions transmitted through EFT contain descriptive information to help providers reconcile their bank accounts Using EFT As a result of the 76th legislature, House Bill 2085 recommends that all Texas Medicaid service providers receive payment by EFT. All providers are strongly encouraged to participate in EFT. EFT does not require special software and providers can enroll immediately. Complete the EFT form, include a deposit slip or canceled check, and mail the items to: Texas Medicaid & Healthcare Partnership Attn: Provider Enrollment PO Box Austin, TX Refer to: Electronic Funds Transfer (EFT) Authorization Agreement on page B Advantages of EFT Stop payments are no longer necessary because no paper is involved in the transaction process. Payment theft is less likely to occur because the process is handled electronically rather than by paper. Deposited funds are available for withdrawal the Thursday morning following the completed financial cycle. Upon deposit, the bank considers the transaction immediately collected. No float is attached to EFT deposits for Texas Medicaid funds. TMHP includes provider and Remittance and Status (R&S) report numbers with each transaction submitted. If the bank s processing software captures and displays the information, both numbers would appear on the banking statement Enrollment Procedures The Electronic Funds Transfer (EFT) Authorization Agreement can be requested by contacting the Provider Enrollment department at Completed EFT forms can be faxed to Please include: EFT Enrollment Form Organization name Contact name Address Contact telephone number Contact fax number To enroll for EFT, providers must submit a completed Electronic Funds Transfer (EFT) Authorization Agreement to TMHP. A voided check or copy of a deposit slip must be attached to the enrollment form. One form should be filled out for each billing provider identifier, including an original signature of the provider. TMHP issues a prenotification transaction during the next cycle directly to the provider s bank account. This transaction serves as a checkpoint to verify EFT is working correctly. If the bank returns the prenotification without errors, the provider will begin receiving EFT transactions with the third cycle following the enrollment form processing. The provider will continue to receive paper checks until they begin to receive EFT transactions. If the provider changes bank accounts, the provider must submit a new Electronic Funds Transfer (EFT) Authorization Agreement to Provider Enrollment. The prenotification process is repeated and, once completed, the EFT transaction is deposited to the new bank account. Refer to: Electronic Funds Transfer (EFT) Authorization Agreement on page B Reimbursement Methodology Medicaid reimburses providers using several different reimbursement methodologies, including fee schedules, reasonable cost with interim rates, hospital reimbursement methodology, provider-specific encounter rates, reasonable charge payment methodology, and manual pricing. Each Texas Medicaid Program service describes the appropriate reimbursement for each service area. Note: Medicaid reimbursement through the State of Texas Access Reform (STAR), STAR+PLUS, and NorthSTAR Program health plans may differ according to the provider s contract with the health plan. 2 2 CPT only copyright 2005 American Medical Association. All rights reserved.

3 Texas Medicaid Reimbursement Fee Schedules The Texas Medicaid Program reimburses certain providers based on rates published in fee schedules. These rates are uniform statewide and by provider type. According to this type of reimbursement methodology, the provider is paid the lower of its billed charges or the Medicaid rate published in the fee schedules available at The following provider types are reimbursed based on rates published in fee schedules, with the rates calculated in accordance with the referenced reimbursement methodology as published in the Texas Administrative Code, Part 1 Administration, Part 15 Texas Health and Human Services Commission, and Chapter 355 Reimbursement Rates. Ambulatory Surgical Center (ASC). The Medicaid rates for ASCs are calculated in accordance with Title 1 Texas Administrative Code (TAC) The current ASC/hospital-based ASC (HASC) fee schedule is available on the TMHP website. There is also an insert to the fee schedule available on the TMHP website. (See also Section 9 of this Birthing Center. The Medicaid rates for birthing centers are calculated in accordance with 1 TAC and are listed in Section 10 of this manual. Blind Children s Vocational Discovery and Development Program (BCVDDP). The Medicaid rate for this service is calculated in accordance with 1 TAC and is listed in Section 11 of this manual. Case Management for Children and Pregnant Women (CPW). The Medicaid rates for this service are calculated in accordance with 1 TAC and are listed in Section 12 of this manual. Case Management for Early Childhood Intervention (ECI). The Medicaid rate for this service is calculated in accordance with 1 TAC and and is listed in Section 13 of this manual. Certified Nurse-Midwife (CNM). The Medicaid rates for CNMs are calculated in accordance with 1 TAC The current CNM fee schedule is available on the TMHP website. (See also Section 14 of this Certified Registered Nurse Anesthetist (CRNA). According to 1 TAC , the Medicaid rate for CRNAs is 92 percent of the rate reimbursed to a physician anesthesiologist for the same service. The current CRNA fee schedule is available on the TMHP website. (See also Section 15 of this Certified Respiratory Care Practitioner (CRCP). The Medicaid rate for CRCP is calculated in accordance with 1 TAC and is $66.68 per daily visit for (See also Section 16 of this Chemical Dependency Treatment Facility (CDTF). The Medicaid rates for CDTF services are calculated in accordance with 1 TAC and are listed in Section 17 of this manual. Chiropractic Services. The Medicaid rates for chiropractic services are calculated in accordance with 1 TAC and 1 TAC and are listed in Section 18 of this manual. Dental. The Medicaid rates for dentists are calculated as access-based fees in accordance with 1 TAC The procedure codes covered for dentists and the applicable rates are listed in Section 19 of this manual. Durable Medical Equipment (DME). The current DME fee schedule is available on the TMHP website at A provider reimbursed according to the fee schedule is reimbursed the lower of the provider's billed charges or the published Medicaid fee. TMHP manually prices DME and expendable supplies other than nutritional products that have no established fee, based on the manufacturer's suggested retail price (MSRP) less 18 percent, with documentation of the MSRP submitted by the provider. If there is no MSRP available, reimbursement is at an established percentage of the provider's invoice cost. Nutritional products that require manual pricing are priced at 89.5 percent of the average wholesale price (AWP). Home Health Agencies (HHAs) are reimbursed for DME and expendable supplies in accordance with 1 TAC (b)-(c). Texas Health Steps (THSteps) is reimbursed for DME and expendable supplies in accordance with 1 TAC (4)-(5). Family Planning Services. The Medicaid rates for family planning services are calculated in accordance with 1 TAC and are listed in Section 20 of this manual. Genetic Services. The procedure codes and Medicaid rates for genetic services are listed in Section 22 of this manual. TMHP manually prices genetic laboratory services that have no established fee. Hearing Aid and Audiometric Evaluations. Newborn hearing screenings are provided at the birthing facility before hospital discharge and, as such, are reimbursed in accordance with the reimbursement methodology for the specific type of birthing facility. Outpatient hearing screening and diagnostic testing services for children are provided by physicians and are reimbursed in accordance with the reimbursement methodology for physician services. (See also Section 23 of this Texas Medicaid (Title XIX) Home Health Services. The reimbursement methodology for professional services delivered by home health agencies (HHAs) are statewide visit rates calculated in accordance with 1 TAC (a). Independent Laboratory. The Medicaid rates for independent laboratories are calculated in accordance with 1 TAC and , and the Deficit Reduction Act of 1984 (DEFRA). By federal law, Medicaid payments for a clinical laboratory service cannot exceed the Medicare payment for that service. Early Periodic Screening, Diagnosis, and Treatment (EPSDT)/THSteps medical and newborn screening 2 CPT only copyright 2005 American Medical Association. All rights reserved. 2 3

4 Section 2 laboratory services provided by the Department of State Health Services (DSHS) Laboratory are reimbursed based on actual costs in accordance with 1 TAC (See also Sections 26 and 43 of this Indian Health Services. The reimbursement methodology for outpatient services provided in Indian Health Services Facilities operating under the authority of Public Law is located at 1 TAC The procedure code for reimbursing these services is T1015, and the current encounter rate is $223. In-Home Total Parenteral Hyperalimentation Supplier. The Medicaid rates for these providers are calculated in accordance with 1 TAC The procedure codes reimbursable to these providers are listed in Section 26 of this manual and are reimbursed as a package of services or a global fee of $145 per day, with an annual maximum of $53,000. Licensed Marriage and Family Therapist (LMFT). According to 1 TAC , the Medicaid rate for LMFTs is 70 percent of the rate paid to a psychiatrist or psychologist for a similar service per 1 TAC (See also Section 29 of this Licensed Clinical Social Worker (LCSW). According to 1 TAC , the Medicaid rate for LCSWs is 70 percent of the rate paid to a psychiatrist or psychologist for a similar service per 1 TAC (See also Section 28 of this Licensed Professional Counselors (LPCs). According to 1 TAC , the Medicaid rate for LPCs is 70 percent of the rate paid to a psychiatrist or psychologist for a similar service per 1 TAC (See also Section 30 of this Maternity Service Clinic (MSC). The Medicaid rates for these providers are calculated in accordance with 1 TAC The procedure codes reimbursable to these providers are listed in Section 31 of this manual, and the Medicaid rates are listed in the current fee schedule, which is available on the TMHP website. Mental Health (MH) Mental Retardation (MR). The Medicaid rates for MH case management are calculated in accordance with 1 TAC and those for mental retardation (MR) service coordination are calculated in accordance with 1 TAC The Medicaid rates for MH rehabilitative services are calculated in accordance with 1 TAC The procedure codes covered by these services are listed in Section 32 of this manual. Nurse Practitioners (NPs), Clinical Nurse Specialists (CNSs). According to Title 1 TAC , the Medicaid rate for NPs and CNSs, is 92 percent of the rate paid to a physician (Doctor of Medicine [MD] or Doctor of Osteopathy [DO]) for the same service and 100 percent of the rate paid to physicians for laboratory services, X-ray services, and injections. The current fee schedule for NP and CNS is available on the TMHP website. (See also Section 34 of this Physical Therapists/Independent Practitioners. The Medicaid rates for these providers are calculated in accordance with 1 TAC and The procedure codes reimbursable to these providers are listed in Section 35 of this manual, and the Medicaid rates are listed in the current fee schedule, which is available on the TMHP website. Physician. The Medicaid rates for physicians and certain other practitioners are calculated in accordance with 1 TAC The current fee schedule is available on the TMHP website. See Section , Physician Services in Outpatient Hospital Setting on page 2-5. (See also Section 36 of this Physician Assistant (PA). According to 1 TAC , the Medicaid rate for PAs is 92 percent of the rate paid to a physician (MD or DO) for the same service and 100 percent of the rate paid to physicians for laboratory services, X-ray services, and injections. The current fee schedule for PAs is available on the TMHP website. (See also Section 34 of this Psychologist. The Medicaid rates for psychologists are calculated in accordance with 1 TAC and The procedure codes reimbursable to psychologists are listed in Section 38 of this manual, and the Medicaid rates are listed in the current fee schedule, which is available on the TMHP website. Radiological and Physiological Laboratory and Portable X-Ray Supplier. The Medicaid rates for these providers are calculated in accordance with 1 TAC and The procedure codes reimbursable to these providers are listed in Section 39 of this manual, and the Medicaid rates are listed in the current fee schedule, which is available on the TMHP website. Renal Dialysis Facility. The Medicaid rates for these providers are composite rates based on calculations specified by the Centers for Medicare & Medicaid Services (CMS). The procedure codes reimbursable to these providers are listed in Section 40 of this manual, and the Medicaid rates are listed in the current fee schedule, which is available on the TMHP website. School Health and Related Services (SHARS). The Medicaid rates for these providers are calculated in accordance with 1 TAC The procedure codes reimbursable to these providers and the applicable rates are listed in Section 42 of this manual. Texas Health Steps (THSteps). THSteps reimburses by provider type in accordance with 1 TAC Approved providers enrolled in the Texas Medicaid Program are reimbursed for THSteps services in the same manner as they are reimbursed for other Medicaid services. Some of the procedure codes reimbursable under THSteps are listed in Section 43 of this manual. THSteps-Comprehensive Care Program (CCP) reimburses for DME and expendable supplies in accordance with 1 TAC (4)-(5). 2 4 CPT only copyright 2005 American Medical Association. All rights reserved.

5 Texas Medicaid Reimbursement Tuberculosis (TB) Clinics. The Medicaid rates for these providers are calculated in accordance with 1 TAC Procedure codes and applicable rates for these providers are listed in Section 44 of this manual. Vision Care (Optometrists, Opticians). The Medicaid rates for these providers are calculated in accordance with 1 TAC and The current fee schedule for optometrists is available on the TMHP website. (See also Section 45 of this Call the TMHP Contact Center at to request one of the referenced fee schedules Physician Services in Outpatient Hospital Setting Section 104 of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) requires that Medicare/Medicaid limit reimbursement for those physician services furnished in outpatient hospital settings (e.g., clinics and emergency situations) that are ordinarily furnished in physician offices. The limit is 60 percent of the Medicaid rate for the service furnished in physician offices. The following table identifies the services applicable to the 60 percent limitation when furnished in outpatient hospital settings: Procedure Codes These procedures are designated with note code 1 in the current fee schedule, which is available on the TMHP website. The following list shows the services excluded from the 60 percent limitation: Services furnished in rural health clinics (RHCs) Surgical services that are covered ASC/HASC services Anesthesiology and radiology services Emergency services provided in a hospital emergency room after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain), such that the absence of immediate medical attention could reasonably be expected to result in one of the following: Serious jeopardy to the client s health Serious impairment to bodily functions Serious dysfunction of any bodily organ or part Exception: Because of TEFRA, Medicaid reimbursement for a payable nonemergency office service performed in the outpatient department of a hospital is limited to 60 percent of the Medicaid rate for that service. If the condition qualifies as an emergency, the 60 percent professional service reimbursement limit does not apply Drugs/Biologicals Physician-administered drugs/biologicals are reimbursed under the Texas Medicaid Program as access-based fees under the physician fee schedule in accordance with 1 TAC Physicians and certain other practitioners are reimbursed for physician-administered drugs/ biologicals at the lesser of their usual and customary or billed charges and the Medicaid fee established by the HHSC. The Medicaid fee is an estimate of the provider's acquisition cost for the specific drug/biological. The following guidelines are effective for dates of service on and after October 1, 2006, with respect to fee decisions for physician-administered drugs/biologicals: Vaccines and infusion drugs furnished through an item of implanted durable medical equipment are based on the lesser of documented provider acquisition/invoice cost (if available) or 89.5 percent of the AWP. Certain, specific drugs studied by the Office of Inspector General (OIG)/General Accounting Office (GAO) are based on the lesser of documented provider acquisition/invoice cost (if available) or the recommended percentages of AWP resulting from those studies (Table 1 in 20 of Chapter 17 of the Medicare Claims Processing Manual, Pub ). The remaining drugs/biologicals not listed in two previous bullets above that are covered by Medicare are based on the lesser of documented provider acquisition/invoice cost (if available) or 106 percent of average sales price (ASP). Those remaining drugs/biologicals not listed in the first two bullets above that are not covered by Medicare are based on the lesser of documented provider acquisition/invoice cost or: 89.5 percent of AWP if the drug/biological is considered a new drug/biological (i.e., approved for marketing by the Food and Drug Administration within 12 months of implementation as a benefit of the Texas Medicaid Program); or 85.0 percent of AWP if the drug/biological does not meet the definition of a new drug (above). HHSC reserves the option to use other data sources to determine Medicaid fees for drugs/biologicals when AWP or ASP calculations are determined to be unreasonable or insufficient. Payments for drugs/biologicals are excluded from the 2.5 percent Medicaid payment reduction. Prescriptions are covered under the Texas Medicaid Vendor Drug Program (VDP). The reimbursement methodology for pharmacy services is located at 1 TAC Effective October 13, 2003, the dispensing fee was reduced by 2.5 percent (1 TAC ). 2 CPT only copyright 2005 American Medical Association. All rights reserved. 2 5

6 Section Reasonable Cost/Interim Rates Outpatient hospital services are reimbursed in accordance with 1 TAC The reimbursement methodology is based on reasonable costs, and providers are reimbursed at an interim rate based on the provider s most recent Medicaid cost report settlement. This interim rate is applied to the provider s allowed amount (per claim detail) to determine the provider s payable amount Hospitals Inpatient hospital services are reimbursed in accordance with 1 TAC Reimbursement for in-state children s hospitals is made in accordance with 1 TAC (o). Guidelines for additional reimbursement to disproportionate share hospitals are located at 1 TAC , while the reimbursement methodology for disproportionate share hospitals is located at 1 TAC Supplemental payment guidelines to certain rural public hospitals are located at 1 TAC Provider-Specific Visit Rates Medicaid provider-specific prospective payment system (PPS) visit rates for RHCs are calculated in accordance with 1 TAC , and those for federally qualified health centers (FQHCs) are calculated in accordance with 1 TAC (See also Section 21 for more information regarding FQHCs and Section 41 for RHCs.) Reasonable Charge Payment Methodology Ambulance services are reimbursed according to a reasonable charge payment methodology in accordance with 1 TAC (See also Section 8 of this Manual Pricing When services or products do not have an established reimbursement amount, the detail or claim is manually reviewed to determine an appropriate reimbursement. The manual pricing methodology for DME and expendable supplies is included with the reimbursement methodology for these products. 2.3 Professional Providers and Outpatient Facilities Reimbursement Reduction As per Article II of House Bill 1 and Section 2.03 of House Bill 2292, 78th Texas Legislature, Regular Session 2003, Medicaid payments for professional and outpatient services were reduced by 2.5 percent during the claims process. These payment reductions apply to Medicaid fee-forservice, Medicaid Primary Care Case Management (PCCM), Medicaid Managed Care, Family Planning, and the Children with Special Health Care Needs (CSHCN) Services Programs, with the exceptions noted below. The following services are excluded from the 2.5 percent Medicaid payment reduction: Services provided by FQHCs and RHCs Services provided by public providers that certify the state portion of their payments Family Planning (Title X) services Targeted Case Management for ECI services DME and expendable supplies, including nutritional products Children's hospitals CSHCN outpatient and inpatient claims CSHCN hemophilia claims, drug co-payments, and transportation of remains Drugs/biologicals and supplies for physician/practitioner services Medicare crossover claims Indian Health Services Providers should continue to bill their usual and customary charges and not make changes to their billed charges based on any Medicaid payment reduction. For those providers whose usual and customary charges exceed Medicaid fees but use Medicaid fees as their billed charges in order to lessen their accounting adjustments, the billed charges should not change because the Medicaid fees have not changed. Payments for Medicaid and Medicaid Managed Care inpatient claims are not reduced during the claims payment process, rather the actual calculations of the standard dollar amount (SDA) and TEFRA cost reimbursement for inpatient hospitals are reduced. A notification letter was mailed later to each hospital stating its SDA amount, effective for services delivered on or after September 1, Payments to pharmacies for prescriptions are not reduced during the claims process, rather the actual amount of the estimated dispensing expense and inventory management factor were reduced. 2.4 Additional Payments to High- Volume Providers Primary care providers include the following medical professionals: Medical doctors Doctors of osteopathy 2 6 CPT only copyright 2005 American Medical Association. All rights reserved.

7 Texas Medicaid Reimbursement Independently practicing advanced practice nurses (APNs) defined as family/general practice, internal medicine, obstetrics/gynecology, pediatrics, certified registered nurse midwives, and family and pediatric APNs Note: PAs are not eligible for high-volume provider status for dates of service prior to July 1, 2006, because PAs were not eligible to enroll as Medicaid providers during the qualification period, which was State Fiscal Year However, PAs will be eligible for high-volume provider status for any future qualification period that includes dates of service on or after July 1, To receive high-volume add-on payments, high-volume primary care providers are those providers who were paid a minimum of 3,600 Medicaid units of service for the qualification period. High-volume primary care providers get a 1.9 percent add-on payment for all Medicaid services performed. High-volume specialty care providers are medical professionals enrolled with a provider specialty from the following list: Allergy Anesthesiology Cardiovascular disease CRNA Dermatology Ear, nose and throat Gastroenterology General surgery Geriatrics Hand surgery Nephrology Neurosurgery Nuclear medicine Ophthalmology Orthopedic surgery Pathology Physical medicine and rehabilitation Plastic surgery Proctology Psychiatry Pulmonary disease Radiology Thoracic surgery Urology To receive high-volume add-on payments, high-volume specialists are those specialty care providers who provided units of service in the top 50 percent of total services paid within the specialty during the qualification period. High-volume specialists get a 6.1 percent add-on payment for all Medicaid services performed. To receive high-volume dentist payments, high-volume dentists are those dental providers who were paid a minimum of 3,600 units of service during the qualification period. High-volume dental providers get a 3.7 percent add-on payment for all Medicaid services performed. Outpatient hospital services are those services provided by outpatient hospitals and ASCs/HASCs. The definition of a high-volume outpatient hospital provider is one that was paid a minimum of $200,000 during the qualifying period. This criterion captured about 95 percent of total outpatient hospital spending. Similar criteria were developed for ASCs/HASCs, such that providers accounting for 95 percent of total payments were designated as high-volume providers. Payments to high-volume outpatient hospitals were increased by 5.2 percent. The new payment amount was implemented by increasing the discount factor for designated high-volume providers of outpatient hospital services from 80.3 percent to percent. ASCs/HASCs that qualify as high-volume providers also receive a 5.2 percent increase in payment rates. Medicaid payments for services provided by physicians, dentists, and other professionals and outpatient services provided in hospitals and ASCs/HASCs are reduced by 2.5 percent at the end of the claims payment process. Therefore, any applicable high-volume add-on payments are first added to the payment amount before being reduced by 2.5 percent. 2.5 Medicaid Service Provided Outside Texas Any eligible provider in a state other than Texas who provides services to Texans eligible for Medicaid is entitled to bill the Texas Medicaid Program. The provider must contact TMHP Provider Enrollment to obtain the appropriate forms, requirements, and guidelines for claims filing; complete the forms; and return them to TMHP. The Texas Medicaid Program covers medical assistance services provided to eligible Texas recipients while absent from Texas, as long as they do not leave Texas to receive out-of-state medical care that can be received in Texas. Services provided outside the state are covered to the same extent medical assistance is furnished and covered in Texas when the provider meets one or more of the following requirements of 1 TAC : The medical services are needed because of a medical emergency documented by the attending physician or other provider. Note: Providers enrolled for this criteria will be enrolled for a period of 90 days from the enrollment date. The services are medically necessary and, in the opinion of the attending physician or other provider, the recipient's health is endangered if he is required to travel to Texas. Note: Providers enrolled for this criteria will be enrolled for a period of 90 days from the enrollment date. 2 CPT only copyright 2005 American Medical Association. All rights reserved. 2 7

8 Section 2 The department or its designee determines that the medically necessary services are more readily available in the state where the recipient is located. The customary or general practice for recipients in a particular locality is to use medical resources in the other state. The department makes Title IV-E adoption assistance or Title IV-E foster care maintenance payments for a child who is also eligible for Texas medical assistance benefits. Other out-of-state medical care may be considered when prior authorized by the department or its designee. Note: Providers enrolled for this criteria will be enrolled for a period of 90 days from the enrollment date. Providers located in a state other than Texas, but within 200 miles of the Texas border, are not considered out-of-state providers and therefore do not need to meet one of the six TAC criteria. Enrollment applications for these providers will be processed as an in-state Medicaid provider. Payments to out-of-state providers enrolled in the Medicaid program are made according to the usual, customary, and reasonable charges or the stipulated fee for services as appropriate for the provided care. Payment of practitioners, providers, or suppliers who are reimbursed on a reasonable charge basis may not exceed the lesser of: The Medicaid reasonable charge or fee determined for the same services in the state of Texas or When mutually agreed on by the contractor and state agency, 100 percent of the Medicare reasonable charge determination for the same service in the state where the service was provided Inpatient hospital stays are reimbursed according to the Texas prospective payment methodology (diagnostic related group [DRG]). Payments made on a reasonable cost basis are mutually determined by the state agency and the contractor. TMHP must receive claims from out-of-state providers within 365 days from the date of service. Refer to: Procedure Codes Requiring Prior Authorization on page If the Medicare payment amount is less than the Medicaid payment rate, Medicaid pays the Medicare Part A coinsurance/deductible, but the amount of the payment is limited to the lesser of the coinsurance/ deductible or the amount remaining after the Medicare payment amount is subtracted from the Medicaid payment rate Part B The payment of the Medicare Part B coinsurance and deductibles for Medicaid clients who are Medicare beneficiaries is based on the following: If the Medicaid client is eligible for Medicaid only as a qualified Medicare beneficiary, Medicaid pays the Medicare Part B coinsurance/deductible on valid Medicare claims. If the Medicaid client is not a qualified Medicare beneficiary, Medicaid pays the client s Part B: Deductible liability on valid, assigned Medicare claims. Coinsurance liability on valid, assigned Medicare claims that are within the amount, duration, and scope of the Medicaid program, and would be covered by Medicaid when the services are provided, if Medicare did not exist. Medicaid payment of a client s coinsurance/deductible liabilities satisfies the Medicaid obligation to provide coverage for services that Medicaid would have paid in the absence of Medicare coverage. 2.7 Federal Financial Participation (FFP) Rate The FFP rate for providers who receive the federal matching share portion of Medicaid reimbursement or the enhanced federal matching share portion of Medicaid reimbursement for services provided to Children s Health Insurance Program (CHIP) clients are effective for dates of service on or after October 1, 2006, at an FFP rate of percent and an enhanced FFP rate of percent The FFP is subject to change on October 1 of each year or as otherwise directed by CMS. 2.6 Medicare Crossover Reimbursement Part A The payment of the Medicare Part A coinsurance and deductibles for Medicaid clients who are Medicare beneficiaries is based on the following: If the Medicare payment amount equals or exceeds the Medicaid payment rate, Medicaid does not pay the Medicare Part A coinsurance/deductible on a crossover claim. 2 8 CPT only copyright 2005 American Medical Association. All rights reserved.