Frequently Asked Questions

Q: Has HHSC/CMS determined the audit rules governing the 1115 Medicaid Transformation Waiver, particularly related to the flow of funds? If not, when does the state anticipate releasing that information and the waiver-specific guidelines IGT entities, performing providers, anchors, and subcontractors will be subject to adhere to? Counties and cities have some concern in this regard as previous rules and guidelines under the former UPL system were changed by CMS and caused them issues.

A: The auditing of UC will be similar to the audits under UPL. Auditing of DSRIP is still being discussed but HHSC currently anticipates an audit procedure of some kind. HHSC does not intend, at this time, to create rules concerning audits of the financial relationships between an IGT entity and a Performer. HHSC does intend (and CMS expects) an audit of some kind of actual performance in DSRIP. HHSC is working with CMS to determine such audit requirements.

Q: Has a determination been made on whether counties will be permitted to use their 8 percent indigent healthcare funds for IGT transfers to support programs under the 1115 waiver? If the issue is the ability to certify whether they have met their mandate for indigent care, we have some recommendations how to do that.

A: Guidance on this question is forthcoming.

Q: Are IGT entities and performing providers that are state entities required to utilize the standard State procurement requirements and obtain bids for services on DSRIP Projects? Or is the service performance and selection method approved by the State at the time the certified Regional Plan is approved?

A: HHSC does not believe that the 1115 waiver obviates a state entity’s responsibilities to utilize any required state procurement standards. Please discuss your responsibilities under such processes with your attorneys.

Q: When will the determination of regional caps be made public?

A: This information is forthcoming. HHSC hopes to have this in July.

Q: Given that previous IGT is being considered in determination of the regional caps, will the caps be adjusted annually?

A: The caps will not be adjusted annually. IGT is one of many factors being considered in the determination of regional caps.

Q: When will the mechanism for anchor funding be determined? Particularly for activities that happened in FY12?

A: In progress. The mechanism to be paid through DSRIP will be included in the Program Funding and Mechanics Protocol. The Administrative Cost Claiming Protocol is being written.

Q: What types of non-federal funds within an academic health science center are allowable as IGT? Can local dollars be used? Patient revenue? At one point, we were told that any non-federal dollars, but we've since discovered that there are many more restrictions.

A: [We're] not sure [we] can answer this question. The standards for what non-federal funds may be used as IGT have been pretty consistent as far as [we] know.

Q: In the DSRIP menu, it lists “Expand psychiatric residency” as one of the potential projects. Would the creation of a new psychiatric residency fall within that or is the intent purely to expand on existing residency programs?

A: We are seeking flexibility from CMS to allow for such a project.

Q: Is there any consideration for DSRIP programming in the MR/persons with disabilities portion of MHMR Authorities?

A: A project can focus on any population as long as the need is demonstrated in the community assessment and the project fits within the parameters of the DSRIP menu.

Q: Can DSRIP projects include the construction of new facilities?
For example, under Category 1, Project Area 1D: "Collaborate with community partners to explore and develop a long-term Crisis Stabilization Unit", would the construction of such a facility be considered appropriate for DSRIP?
For this project area, who would be considered a performing provider for "collaborating and exploring" before a facility is actually developed? Is the assumption that LMHAs would fulfill this role and provide IGT?

A: HHSC understands that CMS will approve using DSRIP for the construction of new facilities (e.g. clinics) if the community needs assessment clearly demonstrates that they are needed to meet the goals of the waiver. We do not believe hospital capital improvements will be approved. For the project above, LMHAs would be one logical IGT entity/performing provider for such a project. The IGT entity and performing provider listed in the RHP plan would be eligible for a portion of DY1 DSRIP for this project before the facility is actually developed. For DY2 forward, only the performing provider may receive DSRIP payments for the project.

Q: Is there a mandatory 30-day public review and comment period for the RHP plan, or can the public comment period be less than 30 days? What work can continue and what changes, if any, are allowed on the plan once it has been posted for public comment?

A: If you’re referring to the public comment period for RHP Plans, this period can be defined by the individual RHPs. HHSC has not set minimum days. Similarly, HHSC has not provided guidelines on allowing continued work during the RHP Plan comment period at this time.

Q: If the only DSRIP activity in the current demonstration year is the completion and submission of the RHP plan, can we assume that HHSC and CMS feel that the “valuation” of such planning is worth $500 million?

A: Yes, the submittal of the RHP plans will be valued at $500 million statewide. Each RHP will know its portion of that $500 million.

Q: Will the DSRIP payment for the completion and submission of the RHP plan go to anchors? Since it is a DSRIP payment, should we assume that it will not be calculated as an administrative cost?

A: The key entities involved in the planning for DSRIP are anchors, IGT entities and Performing Providers. HHSC understands that CMS will allow these three types of entities to get some of the $500 million, and the Program Funding and Mechanics Protocol will include additional parameters for how DY1 DSRIP may be allocated within an RHP. This payment will not be calculated as an administrative cost.

Q: Is HHSC expecting that anchors, then, will put up $183 million in IGT for the completion and submission of the plan to draw down the entire amount?

A: The anchor would put up the IGT for the portion of DY1 DSRIP it is receiving as anchor. Since funds also will be going to the IGT entities/Performing Providers who propose to do DSRIP in the plan, for each project, the IGT entity will put up the IGT for that project's portion of the DY1 DSRIP funds. (The anchor also may play either or both of these roles for certain projects.)

Q: If a county provides funding to a local MHMR Authority and would like to contribute those funds as IGT, would the transfer be made by the county or by the MHMRA once they have received the county funds?

A: The key IGT guidelines are that:

• IGTs must consist of public funds that are not federal funds;
• public funds are those in the control of a governmental entity;
• a governmental entity that is not a provider cannot get payments;
• a provider that receives payments cannot return any portion of those payments to the governmental entity that puts up the IGT.

With these basic rules, the county and MHMR should be able to evaluate the legality of any proposed funding relationships. Currently, the State is only allowing Local Mental Health Authorities from the 39 approved that provide their own IGT to be able to participate directly in DSRIP.

Q: Will hospitals need to have affiliation agreements with IGT entities to participate in the UC program? Will they need affiliation agreements with IGT entities to participate in the DSRIP program?

A: Hospitals must have affiliation agreements with IGT entities to participate in both the UC and DSRIP programs. See 1 TAC §355.8201. (Published 4/20/12 in the Texas Register.)

Q: Will the first opportunity for DSRIP drawdown occur at the 6-month reporting period? What about for DSRIP activities that were completed during the current demonstration year?

A: The first opportunity for DSRIP drawdown is currently the point at which HHSC submits the RHP plan to CMS for its approval. This is a presumptive payment. b) Aside from the completion and submission of the RHP plan, there are no other DSRIP activities in the current demonstration year (DY1).

Q: Today, Maureen briefly talked about DSRIP Category 4 and said that all the hospitals would need to report on all the project areas within it. She stated in her presentation that it’s a reporting function, and then the incentive payment is made. Who is expected to put up IGT to incentivize this if everyone is mandated to do it? We have similar questions regarding the mandatory Category 3 project.

A: The IGT entity for each project must put up the IGT for Cats 3 & 4. HHSC has no expectations as to who that IGT entity should be. HHSC is proposing to CMS that the value of these projects be low relative to Cats 1 & 2 to make it less burdensome for IGT entities to fund hospital DSRIP.

Q: Will hospitals need to have affiliation agreements with IGT entities to participate in the UC program? Will they need affiliation agreements with IGT entities to participate in the DSRIP program?

A: Hospitals must have affiliation agreements with IGT entities to participate in both the UC and DSRIP programs. See 1 TAC §355.8201. (Published 4/20/12 in the Texas Register.)

Q: Will UC draw down happen quarterly or semi-annually like DSRIP?

A: Quarterly.

Q: Can a school district be an IGT provider since they are their own taxing authority similar to the way MHMR Authorities are now able to participate? If so, are they eligible to participate in the 1115 Waiver if they already participate in the “Medicaid Certified School Match Fee for Service Program for Medicaid/DEA Eligible Students” – which appears to target the same population?

A: Only Medicaid providers may participate in DSRIP. The State is not currently considering school districts to be eligible for DSRIP payments directly. A participating hospital may choose to subcontract with a school district to complete an eligible DSRIP project from the CMS approved list of projects.

Please refer to the IGT guidelines mentioned in the previous response with an emphasis that the DSRIP provider must keep all funds including the IGT and incentive payment and cannot return any portion of those payments to the governmental entity due to issues with provider related donations.

Q: If a school district operates a school-based clinic that is Medicaid licensed, are they an eligible performing provider?

A: No.

Q: Can school districts put up IGT as long as it falls within the guidelines of eligible funding?

A: Yes.

Q: Can subcontractors performing non-clinical services participate and/or receive funds without having a Medicaid license?

A: An entity may only receive a waiver payment if is a licensed Medicaid provider. Performing providers can subcontract parts of a DSRIP project provided, however, that the contracts are made at arm’s length and for fair market value. No portion of the waiver payment may be paid to a subcontractor and the performing provider must be the actual performer of the DSRIP project.

Q: Are Public Health Departments eligible to participate in the 1115 Waiver as an IGT entity? Are Public Health Departments eligible to participate in the 1115 waiver as a performing provider?

A: Yes and yes (assuming, of course, all other restrictions on their participation are observed).

Q: If a county runs a health care program (i.e., county operated clinic or EMS) that is Medicaid licensed, can they put up IGT and draw down DSRIP funds as the performing provider?

A: A county may not draw down DSRIP funds as a performing provider. **We had originally been told by HHSC that county-run EMS would be eligible to draw down funds directly, but now in writing have said that they cannot. We believe that HHSC has included county-run EMS in a request for recognition of additional performing providers from CMS. Also, in the DSRIP Menu revision, there are supposedly changes to what is in there for EMS that may affect this; until the menu is disseminated, we will not know.**

F/U Q: How can a community that has county-operated EMS participate in improvement / expansion of EMS? A hospital or other performing provider can't contract back with the county, right? Or is it the same as the other subcontracts—it's at arm's length for the fair market value of the service so that the county is not getting incentive payments, but simply being subcontracted to provide a service to the hospital, who is ultimately responsible for meeting the metrics?

F/U A: Please speak with your legal counsel regarding this issue. However, I think a performer can subcontract with any other entity to perform a project related service provided the contract is at arm's length and for fair market value. Additionally, CMS has repeatedly stated that the entity listed as the performer of the DSRIP project must be the entity actually performing.

Q: Are FQHCs eligible performing providers?

A: No.

Q: If FQHCs are not eligible performing providers, can they be subcontracted for portions of DSRIP projects?

A: Yes. An entity may only receive a waiver payment if is a licensed Medicaid provider. Performing providers can subcontract parts of a DSRIP project provided, however, that the contracts are made at arm's length and for fair market value. No portion of the waiver payment may be paid to a subcontractor and the performing provider must be the actual performer of the DSRIP project.

Q: Currently, hospitals are not allowed to provide free or low-cost transportation to their facilities because of inducement issues. Since transportation is one of the target areas for increasing access to services, particularly in rural areas, who would be an appropriate performing provider to deliver transportation since counties and cities cannot receive DSRIP payments?

A: This is not a question HHSC is in a position to answer. Determining the “appropriate performing provider” is a decision that should be left to the region.