(a) Introduction. This section describes the Texas Medicaid reimbursement methodology that the Texas Health and Human Services Commission (HHSC) uses to calculate payment for covered services provided by physicians and other practitioners.
  (1) There is no geographical or specialty reimbursement differential for individual services.
  (2) HHSC reviews the fees for individual services at least every two years based upon:
    (A) analysis of Medicare fees for the same or similar item or service;
    (B) analysis of Medicaid fees for the same or similar item or service in other states; or
    (C) analysis of commercial fees for the same or similar item or service.
  (3) HHSC may use data sources or methodologies other than those listed in paragraph (2) of this subsection to establish Medicaid fees for physicians and other practitioners when HHSC determines that those methodologies are unreasonable or insufficient.
  (4) Fees for these services are adjusted within available funding as described in §355.201 of this title (relating to Establishment and Adjustment of Reimbursement Rates by the Health and Human Services Commission).
(b) Eligible Providers. Eligible providers include:
  (1) Providers of Laboratory and X-ray Services;
  (2) Providers of Radiation Therapy;
  (3) Physical, Occupational, and Speech Therapists;
  (4) Physical, Occupational, and Speech Therapy Assistants;
  (5) Physicians;
  (6) Podiatrists;
  (7) Chiropractors;
  (8) Optometrists;
  (9) Dentists;
  (10) Psychologists;
  (11) Licensed Psychological Associates;
  (12) Provisionally Licensed Psychologists;
  (13) Licensed Psychological Interns and Fellows;
  (14) Maternity clinics;
  (15) State Supported Living Centers;
  (16) Tuberculosis clinics; and
  (17) Peer Specialists.
(c) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.
  (1) Access-based fees (ABF)--Fees for individual services, where HHSC deems necessary, to account for deficiencies relating to the adequacy of access to health care services.
  (2) Biological--A substance that is made from a living organism or its products and is used in the prevention, diagnosis, or treatment of cancer and other diseases.
  (3) Conversion factor--The dollar amount by which the sum of the three cost component relative value units (RVUs) is multiplied to obtain a reimbursement fee for each individual service.
  (4) Drug--Any substance that is used to prevent, diagnose, treat or relieve symptoms of a disease or abnormal condition.
  (5) HHSC--The Texas Health and Human Services Commission or its designee.
  (6) Relative value units (RVUs)--The relative value assigned to each of the three individual components that comprise the cost of providing individual Medicaid services. The three cost components of each reimbursement fee are intended to reflect the work, overhead, and professional liability expense required to provide each individual service.
  (7) Resource-based fees (RBF)--Fees for individual services based upon HHSC's determination of the resources that an economically efficient provider requires to provide individual services.
  (8) Vaccine--An immunogen, the administration of which is intended to stimulate the immune system to result in the prevention, amelioration or therapy of any disease or infection.
(d) Calculating the payment amounts. Subject to qualifications, limitations, and exclusions as provided in this chapter, payment to eligible providers must not exceed the lesser of the provider's billed amount or the amount derived from the methodology described in this section. The fee schedule that results from the reimbursement methodology may be composed of both access-based fees (ABFs) and resource-based fees (RBFs).
  (1) ABF methodology allows the state to:
    (A) reimburse for procedure codes not covered by Medicare;
    (B) account for inadequate reimbursement rates for particularly difficult procedures;
    (C) encourage participation in the Medicaid program by physicians and other practitioners; and
    (D) set reimbursement to allow eligible Medicaid population to receive adequate health care services in an appropriate setting.
  (2) An RBF is calculated using the following formula: RBF = (total RVU * CF), where RBF = Resource-Based Fee, total RVU = the sum of the three Relative Value Units that comprise the cost of providing individual Medicaid services, and CF = Conversion Factor.
    (A) Except as otherwise specified, HHSC bases the RVUs that are employed in the Texas Medicaid reimbursement methodology upon the RVUs of the individual services as specified in the Medicare Fee Schedule. HHSC reviews any changes to, or revisions of, the various Medicare RVUs and, if applicable, adopts the changes as part of the reimbursement methodology within available funding.
    (B) HHSC may develop and apply multiple conversion factors for various classes of service, such as obstetrics, pediatrics, general surgeries, and/or primary care services.
(e) Reimbursement for physician-administered drugs, vaccines, and biologicals. In determining the reimbursement methodology for physician-administered drugs, vaccines, and biologicals, HHSC may consider information such as costs, utilization, data sufficiency, and public input. Reimbursement for physician-administered drugs, vaccines, and biologicals are based on the lesser of the billed amount, a percentage of the Medicare rate, or one of the following methodologies:
  (1) If the drug or biological is considered a new drug or biological (that is, approved for marketing by the Food and Drug Administration within 12 months of implementation as a benefit of Texas Medicaid), it may be reimbursed at an amount equal to 89.5 percent of average wholesale price (AWP).
  (2) If the drug or biological does not meet the definition of a new drug or biological, it may be reimbursed at an amount equal to 85 percent of AWP.
  (3) Vaccines may be reimbursed at an amount equal to 89.5 percent of AWP.
  (4) Infusion drugs furnished through an item of implanted Durable Medical Equipment may be reimbursed at an amount equal to 89.5 percent of AWP.
  (5) Drugs, other than vaccines and infusion drugs, may be reimbursed at an amount equal to 106 percent of the average sales price (ASP).
  (6) HHSC may use other data sources or methodologies to establish Medicaid fees for physician-administered drugs, vaccines, and biologicals when HHSC determines that the above methodologies are unreasonable or insufficient.
(f) Reimbursement for services provided under the supervision of a licensed psychologist. Reimbursement for services provided under the supervision of a licensed psychologist by a licensed psychological associate (LPA) or a provisionally licensed psychologist (PLP) is reimbursed to the licensed psychologist at 70 percent of the fee paid to the licensed psychologist for the same service. Reimbursement for services provided under the supervision of a licensed psychologist by a licensed psychology intern or fellow is reimbursed at 50 percent of the fee paid to a licensed psychologist for the same service.
(g) Reimbursement for certain other providers. The descriptions for reimbursement of certain other providers are described in sections of this chapter.
  (1) Reimbursement for physician assistants is described in §355.8093 of this title (relating to Reimbursement Methodology for Physician Assistants).
  (2) Reimbursement for nurse practitioners and clinical nurse specialists is described in §355.8281 of this title (relating to Reimbursement Methodology for Nurse Practitioners and Clinical Nurse Specialists).
  (3) Reimbursement for services provided under Early and Periodic Screening, Diagnosis and Treatment (EPSDT) is described in §355.8441 of this title (relating to Reimbursement Methodologies for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services).
  (4) Reimbursement for Licensed Professional Counselors, Licensed Clinical Social Workers, and Licensed Marriage and Family Therapists is described in §355.8091 of this title (relating to Reimbursement to Licensed Professional Counselors, Licensed Clinical Social Workers, and Licensed Marriage and Family Therapists).
  (5) Reimbursement for Physical, Occupational, and Speech Therapy Services is described in §355.8097 of this title (relating to Reimbursement for Physical, Occupational, and Speech Therapy Services).
(h) Fees for services provided by physicians or other practitioners are adjusted within available funding as described in §355.201 of this title (relating to Establishment and Adjustment of Reimbursement Rates by the Health and Human Services Commission).

Source Note: The provisions of this §355.8085 adopted to be effective April 1, 1992, 17 TexReg 1820; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; amended to be effective December 15, 1993, 18 TexReg 8915; amended to be effective December 7, 1995, 20 TexReg 9851; transferred effective September 1, 1997, as published in the Texas Register December 11, 1998, 23 TexReg 12660; amended to be effective October 24, 1999, 24 TexReg 8958; amended to be effective September 1, 2003, 28 TexReg 7335; amended to be effective April 30, 2013,38 TexReg 2615; amended to be effective June 29, 2014, 39 TexReg 4741; amended to be effective March 15, 2017, 42 TexReg 1120; amended to be effective December 1, 2017, 42 TexReg 5431; amended to be effective December 4, 2018, 43 TexReg 7761