Sec. 32.028.  FEES, CHARGES, AND RATES.  (a)  The executive commissioner shall adopt reasonable rules and standards governing the determination of fees, charges, and rates for medical assistance payments.
(b)  The fee, charge, or rate for a professional service is the usual and customary fee, charge, or rate that prevails in the community.
(c)  The fee, charge, or rate for other medical assistance is the usual and customary fee, charge, or rate that prevails in the community unless the payment is limited by state or federal law.
(d)  The executive commissioner in the adoption of reasonable rules and standards governing the determination of rates paid for inpatient hospital services on a prospective payment basis shall:
(1)  assure that the payment rates are reasonable and adequate to meet the costs incurred by the hospital in rendering services to Medicaid recipients;
(2)  assure that the prospective payment methodology for hospital services sets the hospital-specific standardized amount at a minimum level of $1,600; and
(3)  assure that the adjustment in payment rates for hospital services furnished by disproportionate share hospitals takes into account the essential role of rural hospitals in providing access to hospital services to medically indigent persons in rural areas of the state.
(e)  The executive commissioner in the adoption of reasonable rules and standards governing the determination of rates paid for services provided by a federally qualified health center, as defined by 42 U.S.C. Section 1396d(l)(2)(B), shall assure that a center is reimbursed for 100 percent of reasonable costs incurred by the center in rendering services to Medicaid recipients.
(f)  The executive commissioner in the adoption of reasonable rules and standards governing the determination of rates paid for services provided by a rural health clinic, as defined by 42 U.S.C. Section 1396d(l)(1), shall assure that a clinic is reimbursed for 100 percent of reasonable costs incurred by the clinic in rendering services to Medicaid recipients.
(g)  Subject to Subsection (i), the executive commissioner shall ensure that the rules governing the determination of rates paid for nursing facility services improve the quality of care by:
(1)  providing a program offering incentives for increasing direct care staff and direct care wages and benefits, but only to the extent that appropriated funds are available after money is allocated to base rate reimbursements as determined by the commission's nursing facility rate setting methodologies; and
(2)  if appropriated funds are available after money is allocated for payment of incentive-based rates under Subdivision (1), providing incentives that incorporate the use of a quality of care index, a customer satisfaction index, and a resolved complaints index developed by the commission.
(h)  The executive commissioner shall ensure that the rules governing the determination of rates paid for nursing facility services provide for the rate component derived from reported liability insurance costs to be paid only to those facilities that purchase liability insurance acceptable to the commission.
(i)  The executive commissioner shall ensure that rules governing the incentives program described by Subsection (g)(1):
(1)  provide that participation in the program by a nursing facility is voluntary;
(2)  do not impose on a nursing facility not participating in the program a minimum spending requirement for direct care staff wages and benefits;
(3)  do not set a base rate for a nursing facility participating in the program that is more than the base rate for a nursing facility not participating in the program; and
(4)  establish a funding process to provide incentives for increasing direct care staff and direct care wages and benefits in accordance with appropriations provided.
(j)  The executive commissioner shall adopt rules governing the determination of the amount of reimbursement or credit for restocking drugs under Section 562.1085, Occupations Code, that recognize the costs of processing the drugs, including the cost of:
(1)  reporting the drug's prescription number and date of original issue;
(2)  verifying whether the drug's expiration date or the drug's recommended shelf life exceeds 120 days;
(3)  determining the source of payment; and
(4)  preparing credit records.
(k)  The commission shall provide an electronic system for the issuance of credit for returned drugs that complies with the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191, as amended.  To ensure a cost-effective system, only drugs for which the credit exceeds the cost of the restocking fee by at least 100 percent are eligible for credit.
(l)  The executive commissioner shall establish a task force to develop the rules necessary to implement Subsections (j) and (k).  The task force must include representatives of nursing facilities and pharmacists.
(m)  The commission may not fund an incentive program under Subsection (g)(1) using money appropriated for base rate reimbursements for nursing facilities.
(n)  The executive commissioner shall ensure that rules governing the determination of rates paid for nursing facility services provide for the reporting of all revenue and costs, without regard to whether a cost is an allowable cost for reimbursement under the medical assistance program, except:
(1)  as provided by Subsection (h); and
(2)  a penalty imposed under this chapter or Chapter 242, Health and Safety Code.
Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, Sec. 1, eff. Sept. 1, 1979.  Amended by Acts 1989, 71st Leg., ch. 1219, Sec. 2, eff. Sept. 1, 1989;  Acts 1999, 76th Leg., ch. 1411, Sec. 1.16, eff. Sept. 1, 1999;  Acts 2001, 77th Leg., ch. 974, Sec. 31, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 1284, Sec. 10.01, eff. June 15, 2001;  Acts 2003, 78th Leg., ch. 198, Sec. 2.102(a), eff. Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 321, Sec. 3, eff. June 18, 2003.
Amended by: 
Acts 2005, 79th Leg., Ch. 667 (S.B. 48), Sec. 2, eff. September 1, 2005.
Acts 2015, 84th Leg., R.S., Ch. 1 (S.B. 219), Sec. 4.096, eff. April 2, 2015.