Texas Department of Human Services

Eric M. Bost

May 8, 2000


David Herndon
Chair, Austin
Elizabeth D. Seale
Vice Chair, San Antonio
John A. Cuellar
Bill Jones
Terry Durkin Wilkinson
Carole Woodard
To: Medicaid Hospice and Nursing Facility Providers
Re: Hospice Provider Letter 00-04 -- 
Hospice nursing facility (NF) rates under the NF Enhanced Direct Care Staff Rate

As you are aware, Hospice Room and Board rates for recipients in a NF must be at least equal to 95% of the rate that would have been paid by the State for NF services in that NF for that individual. In the past, Hospice Room and Board rates have been equal to 95% of the NF Texas Index for Level of Effort (TILE) rates.

Effective May 1, 2000, NFs will be reimbursed under a modified reimbursement system. Under this system, providers may obtain additional funds for increased staffing for registered nurses (RNs), licensed vocational nurses (LVNs), medication aides and nurse aides. Providers receiving the additional funds must demonstrate compliance with enhanced staffing requirements (required direct care staffing levels are not inclusive of the hospice staff). Providers who choose not to receive additional funds will have their direct care staff rate increase each year limited to routine inflation. In addition, all providers must spend 85% of the revenues received for direct care staff compensation for RNs, LVNs, Medication Aides, and nurse aides or funds intended for those purposes are recouped by DHS.

In order to accommodate this change and maintain compliance with federal requirements in relation to Hospice Room and Board rates for a recipient in a NF, the department will modify the Claims Management System (CMS). In the interim, effective May 1, 2000, Medicaid hospice providers which contract with nursing facilities to provide Medicaid hospice services will receive an add-on to the TILE rate equal to $1.35 per diem. This add-on rate will be reconciled at a later date to account for variation in NF add-on rates and the recoupment of funds from NFs failing to meet their staffing and/or spending requirements.

If you have questions about Hospice payments under the Enhanced Direct Care Staff Rate, please call Maxcine Tomlinson at (512) 438-3169.


Signature -on- file

Marc Gold
Long Term Care Policy


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