1. (a) Network adequacy. The Health and Human Services Commission (HHSC) is the state agency responsible for overseeing and monitoring the Medicaid managed care program. The managed care organizations (MCOs) participating in the Medicaid managed care program must offer a network of providers that is sufficient to meet the needs of the Medicaid population who are MCO members. HHSC will monitor MCO members' access to an adequate provider network through reports from the MCOs and complaints received from providers and members. The reporting requirements are discussed in paragraph (d) of this section.

2. (b) MCO requirements concerning treatment of members by out-of-network providers.

   1. (1) The MCO shall allow referral of its member(s) to an out-of-network provider, shall timely issue the proper authorization for such referral, and shall timely reimburse the out-of-network provider for authorized services provided when:

      1. (A) Medicaid covered services are medically necessary and these services are not available through an in-network provider;
      2. (B) A provider currently providing authorized services to the member requests authorization for such services to be provided to the member by an out-of-network provider; and
      3. (C) The authorized services are provided within the time period specified in the MCO's authorization. If the services are not provided within the required time period, a new request for referral from the requesting provider must be submitted to the MCO prior to the provision of services.
   2. (2) An MCO may not refuse to reimburse an out-of-network provider for emergency or post-stabilization services provided as a result of the MCO's failure to arrange for and authorize a timely transfer of a member.

   3. (3) MCO requirements concerning emergency services.

      1. (A) The MCO shall allow its members to be treated by any emergency services provider for emergency services and/or for services to determine if an emergency condition exists.
      2. (B) The MCO is prohibited from requiring an authorization for emergency services or for services to determine if an emergency condition exists.
   4. (4) MCOs may be required by contract with HHSC to allow members to obtain services from out-of-network providers in circumstances other than those described above.

3. (c) Reasonable Reimbursement Methodology

   1. (1) The MCO shall reimburse an out-of-network, in area service provider no less than the prevailing Medicaid Fee-For-Service (FFS) rate less 3 percent. The Medicaid Fee-For-Service rates are defined as those rates for providers of services in the Texas Medicaid Program for which reimbursement methodologies are specified in the Texas Administrative Code (TAC) at Title 1, Part 15, Chapter 355, exclusive of the rates and payment structures in Medicaid Managed Care.
   2. (2) The MCO shall reimburse an out-of-network, out-of-area service provider at no less than 100 percent of the Medicaid Fee-For-Service rate.
   3. (3) In accordance with Subsections 533.005 (a)(12) and (b) of the Government Code, all post stabilization services provided to a member by an out-of-network provider must be reimbursed by the MCO at the rates for providers of services in the Texas Medicaid Program for which reimbursement methodologies are specified in the Texas Administrative Code (TAC) at Title 1, Part 15, Chapter 355 until the MCO arranges for the timely transfer of the member, as determined by the member's attending physician, to a provider in the MCO's network.

4. (d) Reporting requirements

   1. (1) Each MCO that contracts with HHSC to provide health care services to members in a health care service region must submit quarterly information in its Out-of-Network quarterly report to HHSC.

   2. (2) Each report submitted by an MCO must contain information about members enrolled in each HHSC Medicaid managed care program provided by the MCO. The report shall include the following information:

      1. (A) The types of services provided by out-of-network providers for members of the MCO's Medicaid managed care plan.
      2. (B) The scope of services provided by out-of-network providers to members of the MCO's Medicaid managed care plan.
      3. (C) Total number of hospital admissions, as well as number of admissions that occur at each out-of-network hospital. Each out-of-network hospital must be identified.
      4. (D) Total number of emergency room visits, as well as total number of emergency room visits that occur at each out-of-network hospital. Each out-of-network hospital must be identified.
      5. (E) Total dollars billed for other outpatient services, as well as total dollars billed by out-of-network providers for other outpatient services.
      6. (F) Any additional information required by HHSC.
   3. (3) HHSC will determine the specific form of the report described above and will include the report form as part of the Medicaid managed care contract between HHSC and the MCOs.

5. (e) Utilization

   1. (1) Upon review of the reports described in paragraph (d) of this section that are submitted to HHSC by the MCOs, HHSC may determine that an MCO exceeded maximum Out-of-Network usage standards set by HHSC for out-of-network access to health care services during the reporting period.

   2. (2) Out-of-Network Usage Standards

      1. (A) Inpatient Admissions: No more than 25 percent of an MCO's total hospital admissions, by service delivery area, may occur in out-of-network facilities.
      2. (B) Emergency Room Visits: No more than 30 percent of an MCO's total emergency room visits, by service delivery area, may occur in out-of-network facilities.
      3. (C) Other Outpatient Services: No more than 30 percent of total dollars billed to an MCO for "other outpatient services" may be billed by out-of-network providers.

   3. (3) Special Considerations in Calculating MCO Out-of-Network Usage of Inpatient Admissions and Emergency Room Visits.

      1. (A) In the event that an MCO exceeds the maximum Out-of-Network usage standard set by HHSC for Inpatient Admissions or Emergency Room Visits, HHSC may modify the calculation of that MCO's Out-of-Network usage for that standard if:

         1. (i) The admissions or visits to a single out-of-network facility account for 25% or more of the MCO's admissions or visits in a reporting period; and
         2. (ii) HHSC determines that the MCO has made all reasonable efforts to contract with that out-of-network facility as a network provider without success.

      2. (B) In determining whether the MCO has made all reasonable efforts to contract with the single out-of-network facility described above in Subparagraph (A) of this paragraph, HHSC will consider at least the following information:

         1. (i) How long the MCO has been trying to negotiate a contract with the out-of-network facility;
         2. (ii) The in-network payment rates the MCO has offered to the out-of-network facility;
         3. (iii) The other, non-financial contractual terms the MCO has offered to the out-of-network facility, particularly those relating to prior authorization and other utilization management policies and procedures;
         4. (iv) The MCO's history with respect to claims payment timeliness, overturned claims denials, and provider complaints;
         5. (v) The MCO's solvency status; and
         6. (vi) The out-of-network facility's reasons for not contracting with the MCO.
      3. (C) If the conditions described in subparagraph (A) of this paragraph are met, HHSC may modify the calculation of the MCO's Out-of-Network usage for the relevant reporting period and standard by excluding from the calculation the Inpatient Admissions or Emergency Room Visits to that single out-of-network facility.

6. (f) Provider Complaints.

   1. (1) HHSC will accept provider complaints regarding reimbursement for or overuse of out-of-network providers and will conduct investigations into any such complaints.
   2. (2) When a provider files a complaint regarding out-of-network payment, HHSC will require the relevant MCO to submit data to support its position on the adequacy of the payment to the provider. The data will include at a minimum a copy of the claim for services rendered and an explanation of the amount paid and of any amounts denied.

   3. (3) Not later than the 60th day after HHSC receives a provider complaint, HHSC shall notify the provider who initiated the complaint of the conclusions of HHSC's investigation regarding the complaint. The notification to the complaining provider will include:

      1. (A) A description of the corrective actions, if any, required of the MCO in order to resolve the complaint; and
      2. (B) If applicable, a conclusion regarding the amount of reimbursement owed to an out-of-network provider.
   4. (4) If HHSC determines through investigation that an MCO did not reimburse an out-of-network provider based on a reasonable reimbursement methodology as described within subsection (c) of this section, HHSC shall initiate a corrective action plan. Refer to subsection (g) of this section for information about the contents of the corrective action plan.

   5. (5) If, after an investigation, HHSC determines that additional reimbursement is owed to an out-of-network provider, the MCO must:

      1. (A) Pay the additional reimbursement owed to the out-of-network provider within 90 days from the date the complaint was received by HHSC or 30 days from the date the clean claim, or information required that makes the claim clean, is received by the MCO, whichever comes first; or,
      2. (B) Submit a reimbursement payment plan to the out-of-network provider within 90 days from the date the complaint was received by HHSC. The reimbursement payment plan provided by the MCO must provide for the entire amount of the additional reimbursement to be paid within 120 days from the date the complaint was received by HHSC.
   6. (6) If the MCO does not pay the entire amount of the additional reimbursement within 90 days from the date the complaint was received by HHSC, HHSC may require the MCO to pay interest on the unpaid amount. If required by HHSC, interest accrues at a rate of 18 percent simple interest per year on the unpaid amount from the 90th day after the date the complaint was received by HHSC, until the date the entire amount of the additional reimbursement is paid.
   7. (7) HHSC will pursue any appropriate remedy authorized in the contract between the MCO and HHSC if the MCO fails to comply with a corrective action plan under subsection (g) of this section.

7. (g) Corrective Action Plan.

   1. (1) A corrective action plan is required by HHSC in the following situations:

      1. (A) The MCO exceeds a maximum standard established by HHSC for out-of-network access to health care services described in subsection (e) of this section; or
      2. (B) The MCO does not reimburse an out-of-network provider based on a reasonable reimbursement methodology as described within subsection (c) of this section.

   2. (2) A corrective action plan imposed by HHSC will require one of the following:

      1. (A) Reimbursements by the MCO to out-of-network providers at rates that equal the allowable rates for the health care services as determined under Sections 32.028 and 32.0281, Human Resources Code, for all health care services provided during the period:

         1. (i) the MCO is not in compliance with a utilization standard established by HHSC; or
         2. (ii) the MCO is not reimbursing out-of-network providers based on a reasonable reimbursement methodology, as described in subsection (c) of this section.
      2. (B) Initiation of an immediate freeze by HHSC on the enrollment of additional recipients in the MCO's managed care plan until HHSC determines that the provider network under the managed care plan can adequately meet the needs of the additional recipients;
      3. (C) Education by the MCO of recipients enrolled in the managed care plan regarding the proper use of the provider network under the health care plan; or
      4. (D) Any other actions HHSC determines are necessary to ensure that Medicaid recipients enrolled in managed care plans provided by the MCO have access to appropriate health care services and that providers are properly reimbursed by the MCO for providing medically necessary health care services to those recipients.
8. (h) The requirements of this rule apply to an MCO contract that is in effect on or after September 1, 2006.

Source Note:The provisions of this §353.4 adopted to be effective January 22, 2006, 31 TexReg 281.