The 2018-19 General Appropriations Act, Senate Bill 1, 85th Legislature, Regular Session, 2017 (Article II, Health and Human Services Commission (HHSC), Rider 52), Evaluation of Rural Hospital Funding Initiatives, requires HHSC to provide a progress report on its evaluation of Medicaid funding initiatives for rural inpatient and outpatient hospital services, including determining the percentage of estimated allowable hospital cost reimbursed by payments for services provided to managed care clients, the percentage of wrongful denials, the average wait time for final payment, and any remedies taken to improve compliance of vendors.

In April 2018, HHSC met with the managed care organizations (MCOs) to discuss the provider-related issues identified during this project, as well as next steps. In an effort to improve rural inpatient hospital data and all other data, HHSC began enhancing provider-related inputs to TMHP’s system to strengthen the validation and validity of encounter data. These technology changes are scheduled for implementation September 1, 2018. HHSC is currently working with MCOs to correct and resubmit encounter data for fiscal year 2016 and fiscal year 2017 by October 31, 2018.

Once all data are collected, HHSC will analyze the data and determine if trends exist across MCOs and the programs that they administer, and, if possible, draw conclusions about the data. Finally, HHSC initiated an internal audit as part of its annual audit plan related to the timeliness of payments by MCOs to rural hospitals. Six MCOs were selected for the audit based on a risk assessment of the number of rural hospital that processed claims during the first quarter in fiscal year 2018 and the number of rural hospitals in each of their provider networks. The claims and number of rural hospitals are being reviewed as part of their procedures. HHSC internal audit has completed their field work and analysis for the audit of the six MCOs, and is currently drafting their report. The report is expected to be released in early fall and may inform the final evaluation required by Rider 52.


HHSC will submit a report on the evaluation findings to the LBB and the OOG by August 1, 2019.