(a) Introduction. Payments are available under this
section for an eligible physician group practice described in subsection
(c) of this section. Waiver payments to an eligible physician group
practice must be in compliance with the Centers for Medicare and Medicaid
Services approved waiver Program Funding and Mechanics Protocol, HHSC
waiver instructions, and this section.
(b) Definitions.
  (1) Aggregate limit--The amount of funds approved by
the Centers for Medicare and Medicaid Services for uncompensated-care
payments for the demonstration year that is allocated to the physician
group practice uncompensated-care pool, as described in §355.8201
of this title (relating to Waiver Payments to Hospitals for Uncompensated
Care).
  (2) Centers for Medicare and Medicaid Services (CMS)--The
federal agency within the United States Department of Health and Human
Services responsible for overseeing and directing Medicare and Medicaid,
or its successor.
  (3) Demonstration year--The 12-month period beginning
October 1 for which the payments calculated under this section are
made. This period corresponds to the Disproportionate Share Hospital
program year.
  (4) Delivery System Reform Incentive Payments (DSRIP)--Payments
related to the development or implementation of a program of activity
that supports efforts to enhance access to health care, the quality
of care, and the health of patients and families it serves.
  (5) Governmental entity--A state agency or a political
subdivision of the state. A governmental entity includes a hospital
authority, hospital district, city, county, or state entity.
  (6) HHSC--The Texas Health and Human Services Commission
or its designee.
  (7) Intergovernmental transfer (IGT)--A transfer of
public funds from a governmental entity to HHSC.
  (8) Mid-Level Professional--Medical practitioners which
include only these professions: Certified Registered Nurse Anesthetists,
Nurse Practitioners, Physician Assistants, Dentists, Certified Nurse
Midwives, Clinical Social Workers, Clinical Psychologists, and Optometrists.

  (9) Public funds--Funds derived from taxes, assessments,
levies, investments, and other public revenues within the sole and
unrestricted control of a governmental entity. Public funds do not
include gifts, grants, trusts, or donations, the use of which is conditioned
on supplying a benefit solely to the donor or grantor of the funds.
  (10) Regional Healthcare Partnership (RHP)--A collaboration
of interested participants that work collectively to develop and submit
to the state a regional plan for health care delivery system reform.
Regional Healthcare Partnerships will support coordinated, efficient
delivery of quality care and a plan for investments in system transformation
that is driven by the needs of local hospitals, communities, and populations.

  (11) RHP plan--A multi-year plan within which participants
propose their portion of waiver funding and DSRIP projects.
  (12) Transition payment--Payments available only during
the first demonstration year.
  (13) Uncompensated-care physician application--A form
prescribed by HHSC to identify uncompensated costs for Medicaid-enrolled
providers.
  (14) Uncompensated-care payments--Payments available
after the first demonstration year and calculated as described in
subsection (g) of this section. Uncompensated-care payments are intended
to defray the uncompensated costs of services that meet the definition
of "medical assistance" contained in §1905(a) of the Social Security
Act that are provided by the physician group practice to Medicaid
eligible or uninsured individuals.
  (15) Uninsured patient--An individual who has no health
insurance or other source of third-party coverage for services, as
defined by CMS.
  (16) Waiver--The Texas Healthcare Transformation and
Quality Improvement Program Medicaid demonstration waiver under §1115
of the Social Security Act.
(c) Eligibility. A physician group practice is eligible
to receive payments under this section if:
  (1) it is enrolled as a Medicaid provider in the State
of Texas at the beginning of the demonstration year;
  (2) it has a source of IGT as the non-federal share
of the payments;
  (3) for a private physician group practice only, it
has met the submission requirements set forth in §355.8201(c)(1)(B)(iii)
of this title, only insofar as that clause relates to certifications,
and it files documents with HHSC by the date specified by HHSC, certifying
that:
    (A) all funds transferred to HHSC as the non-federal
share of the waiver payments are public funds; and
    (B) no part of any payment received by the physician
group practice under this section will be returned to the governmental
entity that transferred to HHSC the non-federal share of the waiver
payments;
  (4) it has submitted to HHSC an acceptable uncompensated-care
physician application for the demonstration year by the deadline specified
by HHSC; and
  (5) it has submitted, and is eligible to receive payment
for, a Medicaid fee-for-service or managed-care claim for payment
during the demonstration year and either:
    (A) it received a supplemental payment under the Texas
Medicaid State Plan for claims adjudicated in one or more months between
October 1, 2010, and September 30, 2011; or
    (B) it is the successor in a contract to a physician
group practice that received a supplemental payment under the Texas
Medicaid State Plan for claims adjudicated in one or more months between
October 1, 2010, and September 30, 2011.
  (6) A physician group practice that fails to submit
the required documentation in compliance with this subsection will
not receive a payment under this section.
(d) Source of funding.
  (1) The non-federal share of funding for payments under
this section is limited to and obtained through an IGT from the governmental
entity that owns or is affiliated with the physician group practice
receiving the payment.
  (2) An IGT that is not received by the date specified
by HHSC may not be accepted.
(e) Payment frequency. HHSC will distribute waiver
payments as follows and on a schedule to be determined by HHSC:
  (1) Uncompensated-care payments will be distributed
at least quarterly after the uncompensated-care physician application
is processed.
  (2) The payment schedule or frequency may be modified
as specified by CMS or HHSC.
(f) Funding limitations.
  (1) Payments made under this section are limited by
the maximum aggregate amount of funds allocated to the physician group
practice uncompensated-care pool for the demonstration year as described
in §355.8201 of this title. If payments for uncompensated care
for the physician group practice uncompensated-care pool attributable
to a demonstration year are expected to exceed the aggregate amount
of funds allocated to that pool by HHSC for that demonstration year,
HHSC will reduce payments to providers in the pool as described in
subsection (g)(4) of this section.
  (2) Payments made under this section are limited by
the availability of funds identified in subsection (d) of this section.
If sufficient funds are not available for all payments for which a
physician group practice is eligible, HHSC will reduce payments as
described in subsection (h)(2) of this section.
(g) Uncompensated-care payment amount.
  (1) Uncompensated-care physician application. Payments
to eligible physician group practices are based on cost and payment
data reported by the physician group practice on an application form
prescribed by HHSC.
    (A) Cost and payment data reported by the physician
group practice in the uncompensated-care physician application is
used to:
      (i) calculate the annual maximum uncompensated-care
payment amount for the applicable demonstration year, as described
in paragraph (2) of this subsection; and
      (ii) reconcile the actual uncompensated-care costs
reported by the physician group practice for a prior period with uncompensated-care
waiver payments, if any, made to the practice for the same period.
The reconciliation process is more fully described in subsection (j)
of this section.
    (B) Unless otherwise instructed in the uncompensated-care
physician application:
      (i) the cost and payment data reported in the uncompensated-care
physician application must be consistent with Medicare cost-reporting
principles and must comply with the application instructions or other
guidance issued by HHSC, and the physician group practice must maintain
sufficient documentation to support the reported data or information;
and
      (ii) the costs associated with an episode of care where
a physician group practice is paid under contract must be reduced
by any revenues associated with that episode of care prior to inclusion
in the uncompensated-care physician application.
    (C) If a physician group practice withdraws from participation
in the waiver, the practice must submit an uncompensated-care application
reporting its actual costs and payments for any period during which
the practice received uncompensated-care payments. The uncompensated-care
physician application will be used for the purpose described in subparagraph
(A)(ii) of this paragraph. If a practice fails to submit the application
reporting its actual costs, HHSC will recoup the full amount of uncompensated-care
payments to the practice for the period at issue.
  (2) Calculation. A physician group practice's annual
maximum uncompensated-care payment amount is the sum of the following
components:
    (A) Its unreimbursed uninsured costs and Medicaid shortfall,
as reported on the uncompensated-care physician application; and
    (B) Cost and payment adjustments, if any, as described
in paragraph (3) of this subsection.
  (3) Adjustments. When submitting the uncompensated-care
physician application, physician group practices may request that
cost and payment data from the reporting period be adjusted to reflect
increases or decreases in costs resulting from changes in operations
or circumstances.
    (A) A physician group practice may request that:
      (i) Costs not reflected on the financial documents
supporting the application, but which would be incurred for the demonstration
year, be included when calculating payment amounts; or
      (ii) Costs reflected on the financial documents supporting
the application, but which would not be incurred for the demonstration
year, be excluded when calculating payment amounts.
    (B) Documentation supporting the request must accompany
the application. HHSC will deny a request if it cannot verify that
costs not reflected on the financial documents supporting the application
will be incurred for the demonstration year.
  (4) Reduction to stay within physician group practice
uncompensated-care pool aggregate limits. Prior to processing uncompensated-care
payments for any payment period within a waiver demonstration year
for the physician group practice uncompensated-care pool described
in §355.8201 of this title, HHSC will determine if such a payment
would cause total uncompensated-care payments for the demonstration
year for the pool to exceed the aggregate limit for the pool and will
reduce the maximum uncompensated-care payment amounts providers in
the pool are eligible to receive for that period as required to remain
within the pool aggregate limit.
    (A) Calculations in this paragraph are limited to the
physician group practice uncompensated-care pool.
    (B) HHSC will calculate the following data points:
      (i) For each provider, prior period payments to equal
prior period uncompensated-care for the demonstration year.
      (ii) For each provider, a maximum uncompensated-care
payment for the payment period to equal the sum of:
        (I) the portion of the annual maximum uncompensated-care
payment amount calculated for that provider (as described in this
section) that is attributable to the payment period; and
        (II) the difference, if any, between the portions of
the annual maximum uncompensated-care payment amounts attributable
to prior periods and the prior period payments calculated in clause
(i) of this subparagraph.
      (iii) The cumulative maximum payment amount to equal
the sum of prior period payments from clause (i) of this subparagraph
and the maximum uncompensated-care payment for the payment period
from clause (ii) of this subparagraph for all members of the pool
combined.
      (iv) A pool-wide total maximum uncompensated-care payment
for the demonstration year to equal the sum of all pool member's annual
maximum uncompensated-care payment amounts for the demonstration year
from paragraph (2) of this subsection.
      (v) A pool-wide ratio calculated as the pool aggregate
limit from §355.8201 of this title divided by the pool-wide total
maximum uncompensated-care payment amount for the demonstration year
from clause (iv) of this subparagraph.
Cont'd...