Revision 23-1; Effective Jan. 5, 2023

HHSC-established Basic Health Care Services Payment Method

4210, Physician Services – Physician Fee Schedule 
4211, Annual Physical Examinations – Physician Fee Schedule 
4212, Immunizations – Physician Fee Schedule 
4213, Medical Screening Services – Physician Fee Schedule 
4214, Laboratory and X-Ray Services – Physician Fee Schedule 
4215, Family Planning Services – Physician Fee Schedule 
4216, Skilled Nursing Facility Services – Daily Rate 
4217, Prescription Drugs – Formula 
4218, Rural Health Clinic (RHC) Services – Rate per Visit 
4219, Inpatient Hospital Services – Diagnosis Related Group (DRG) or Inpatient Percent Rate 
4220, Outpatient Hospital Services – Outpatient Percent Rate or ASC Rate

Negotiate rates with providers for basic service procedure codes not listed in the Fee Schedules. For additional information on claim payment, see 4400, User’s Guide to Fee Schedules.

4210 Physician Services

Revision 23-1; Effective Jan. 5, 2023

Physician services include services ordered and performed by a physician that are within the scope of practice of their profession as defined by state law. Physician services must be provided in the doctor's office, patient’s home, a hospital, a skilled nursing facility or elsewhere.

Payment Standard for Physicians. Use the Fee Schedule for Texas Medicaid Physician at www.tmhp.com and proceed as follows:

1. Use the amount listed in the age-appropriate Facility or Non-Facility Adjusted Fee for Report Date Column.
2. If the Adjusted Fee for Report Date Column is blank and the Note Code is 5 or blank, HHSC does not have a payable amount; however, a payment amount may be negotiated with the provider.

Payment Standard for Anesthesia Services. Using the Fee Schedule for Texas Medicaid Physician at www.tmhp.com, use the number of Relative Value Units (RVUs) listed in the Total RVUs column, the conversion factor listed in the Conversion Factor column and the calculation instructions below.

1. Calculate the anesthesia units of time by using the following formula. 
   
   Total anesthesia time in minutes divided by 15 = Anesthesia units of time. 
    
2. Calculate the reimbursement for anesthesia services by using the following formula. 
   
   Anesthesia units of time plus RVUs multiplied by conversion factor = Reimbursement amount.

Payment Standard for Podiatrists. Use the Fee Schedule for Texas Medicaid Podiatrist at www.tmhp.com and proceed using the instructions for Payment Standard for Physicians.

Payment Standard for Injections. Use the Fee Schedule for Texas Medicaid Physician at www.tmhp.com.

For additional information on claim payment, see 4400, User’s Guide to Fee Schedules.

4211 Annual Physical Examinations

Revision 23-4; Effective Sept. 22, 2023

Annual physicals are examinations provided once per calendar year by a physician, physician assistant (PA) or an advance practice nurse (APN).

Associated testing, such as mammograms, can be covered with a physician’s referral.

These services may be provided by an APN if they are within the scope of practice of the APN in accordance with the standards established by the Board of Nursing and published in 22 Texas Administrative Code Rule 221.13.

Payment Standard for a Physician. Use the Fee Schedule for Texas Medicaid Physician at www.tmhp.com and proceed as follows:

1. Use the amount listed in the age-appropriate Facility or Non-Facility Adjusted Fee for Report Date Column.
2. If the Adjusted Fee for Report Date Column is blank and the Note Code is 5 or blank, HHSC does not have a payable amount; however, a payment amount may be negotiated with the provider.

For additional information on claim payment, see 4400, User’s Guide to Fee Schedules.

4212 Immunizations

Revision 23-1; Effective Jan. 5, 2023

Immunizations are given when appropriate.

Payment Standard. Use the Fee Schedule for Texas Medicaid Physician at www.tmhp.com and proceed as follows:

1. Use the amount listed in the age-appropriate Facility or Non-Facility Adjusted Fee for Report Date Column.
2. If the Adjusted Fee for Report Date Column is blank and the Note Code is 5 or blank, HHSC does not have a payable amount; however, a payment amount may be negotiated with the provider.

For additional information on claim payment, see 4400, User’s Guide to Fee Schedules.

4213 Medical Screenings

Revision 23-1; Effective Jan. 5, 2023

Medical screenings include blood pressure, blood sugar and cholesterol screening.

Payment Standard. Use the Fee Schedule for Texas Medicaid Physician at www.tmhp.com and proceed as follows:

1. Use the amount listed in the age-appropriate Facility or Non-Facility Adjusted Fee for Report Date Column.
2. If the Adjusted Fee for Report Date Column is blank and the Note Code is 5 or blank, HHSC does not have a payable amount; however, a payment amount may be negotiated with the provider.

For additional information on claim payment, see 4400, User’s Guide to Fee Schedules.

4214 Laboratory and X-ray Services

Revision 23-1; Effective Jan. 5, 2023

Laboratory and X-ray services are professional and technical services ordered by a physician and provided under the personal supervision of a physician in a setting other than a hospital (inpatient or outpatient).

Payment Standard. Use the Fee Schedule for Texas Medicaid Physician at www.tmhp.com and proceed as follows:

1. Use the amount listed in the age-appropriate Facility or Non-Facility Adjusted Fee for Report Date Column.
2. If the Adjusted Fee for Report Date Column is blank and the Note Code is 5 or blank, HHSC does not have a payable amount; however, a payment amount may be negotiated with the provider.

For additional information on claim payment, see 4400, User’s Guide to Fee Schedules.

4215 Family Planning Services

Revision 23-1; Effective Jan. 5, 2023

Family planning services are preventive health care services that assist an individual in controlling fertility and achieving optimal reproductive and general health.

Payment Standard. Use the Fee Schedule for Texas Medicaid Physician Fee Schedule at www.tmhp.com and proceed as follows:

1. Use the amount listed in the age-appropriate Facility or Non-Facility Adjusted Fee for Report Date Column.
2. If the Adjusted Fee for Report Date Column is blank and the Note Code is 5 or blank, HHSC does not have a payable amount; however, a payment amount may be negotiated with the provider.

For additional information on claim payment, see 4400, User’s Guide to Fee Schedules.

4216 Skilled Nursing Facility Services

Revision 23-4; Effective Sept. 22, 2023

Skilled nursing facility services must be:

• medically necessary;
• ordered by a physician; and
• provided in a skilled nursing facility that provides daily services on an inpatient basis.

Payment Standard

1. Payment Standard with a Resource Utilization Grouping (RUG)-III System

The skilled nursing facility rate should be reimbursed at Medicaid rate when appropriate.

The RUG-III system groups skilled nursing facility residents into 36 rates for a day of service, based on an assessment at admission and every 90 days. The most recent Base Rate for a day of service can be found here:  Texas Nursing Facility (NF) Medicaid Rate Sets Effective (PDF)

Rates are also listed below for convenience.

Base Rate – No Liability Insurance

2. Payment Standard Without a RUG-III System

The base rate is $118.35 per day.

This $118.35 daily rate does not include physician services or three prescription drugs per month. These additional services must be billed separately.

4217 Prescription Drugs

Revision 23-1; Effective Jan. 5, 2023

This service includes up to three prescription drugs per month. New and refilled prescriptions count equally toward the three prescription drugs per month total. Drugs must be prescribed by a physician or other practitioner within the scope of practice under law.

The quantity of each prescription depends on the prescribing practice of the physician and the needs of the patient.

Payment Standard. Use the following information and formula.

Payment standards align with HHSC Vendor Drug Program (VDP) guidelines. The most up to date Vendor Drug Program Formulary guidance is on HHSC webpage at https://www.txvendordrug.com. 

To search the formulary for pricing, follow the steps below:

1. Go to https://www.txvendordrug.com/ and go to the pull-down menu, select Formulary, and Formulary Search.
2. Under Formulary Search, Drug search, type in the information of a drug and click on Search.
3. From the Search Results: Formulary Drugs screen, select the correct Brand Name/Generic Name/Package Size.
4. From the Drug Details screen, obtain the package size and the retail pharmacy cost. (The package size can be found from the line named Package size under the section General. The retail pharmacy cost can be found from the line named Retail Pharmacy Cost under the section Drug Pricing.
5. Go to webpage Professional Dispensing Fees by clicking the link: https://www.txvendordrug.com/about/manuals/pharmacy-provider-procedure-manual/p-12-pricing-and-reimbursement/professional-dispensing-fees
6. Follow the instructions under Professional Dispensing Fees to calculate the reimbursed amount. At the bottom of this webpage, there is an example on how to calculate the total reimbursement amount.

4218 Rural Health Clinic (RHC) Services

Revision 23-1; Effective Sept. 22, 2023

RHC services must be provided in a freestanding or hospital based RHC and provided by a physician, physician assistant, advanced practice nurse (including a nurse practitioner, clinical nurse specialist and certified nurse midwife) or visiting nurse.

Payment Standard: Use the Rate per Visit at Rural Health Clinics.

4219 Inpatient Hospital Services

Revision 23-1; Effective Jan. 5, 2023

Inpatient hospital services must be medically necessary and provided:

• in an acute care hospital;
• to hospital inpatients;
• by or under the direction of a physician; and
• for the care and treatment of patients.

Payment Standard. For the hospital in which the inpatient services were provided, use the Hospital Inpatient Payment lists that are located at https://pfd.hhs.texas.gov/hospitals-clinic/hospital-services/inpatient-services. These lists will be used to calculate the payment rate using either the Percent Standard or the Diagnosis Related Group (DRG) Standard.

Note: If you are unable to locate payment information for a facility, complete Form 3079, Facility Payment Rate Request.

• Inpatient RCC Rates List – Hospitals on this list are paid using the Percent Standard. The percent listed in the Inpatient Rate column reflects all applicable rate reductions.
• Hospital Prospective Standard Dollar Amount (SDA) List – Hospitals on this list are paid using the DRG Standard. The SDA listed in the Final Add-on SDA column reflects all applicable rate reductions.
• Texas APR-DRG Grouper List – This list provides the DRG Code, All Patient Refined (APR)- DRG Title, Relative Weights, Mean Length of Stay (LOS), and Day Threshold needed when using the DRG Standard.

Percent Standard. This standard reimburses hospitals based on a percent of the hospital’s total billed amount.

• From the total billed amount, subtract the cost of services that are not a CIHCP benefit.
• Use the Inpatient Rate listed on the Inpatient RCC Rates List.
• Multiply the remaining billed amount by the Inpatient Rate listed.

DRG Standard. This standard reimburses hospitals at a predetermined rate for services based on the patient’s diagnosis. In some cases, the reimbursement will be more than the actual cost of providing services for that stay. In other cases, the reimbursement will be less than the hospital’s actual cost. In either case, use the calculated DRG payment.

The DRG Standard incorporates the DRG code that is assigned to the hospital stay, the Relative Weight (Rel. Wt.) and the Mean Length of Stay that are assigned to the DRG code, and the SDA, which is the blended average dollar amount a hospital recovers for any given patient account.

To calculate a full or partial DRG payment, use the APR-DRG Version 29 of the Core Grouping Software along with the DRG Code, Relative Weight, Mean Length of Stay, and the SDA, which are located at Inpatient Services. 

Determine the type of DRG Payment based on the following information:

• When one hospital provided the patient care, or one hospital provided most of the days of care, calculate a full DRG payment.
• When one hospital provided fewer days of care, or when two hospitals provided equal days of care, calculate a partial DRG payment.
• If the patient was CIHCP-eligible for any part of the hospital stay, calculate the full DRG payment.
• If the patient was Medicaid-eligible for any part of the hospital stay, there is no CIHCP payment.

Full DRG Payment. To calculate, proceed as follows:

• Assign the DRG code using Core Grouping Software.
• Refer to the assigned DRG code’s Relative Weight.
• Refer to the hospital’s SDA.
• Multiply the SDA by the Relative Weight.

Partial DRG Payment. To calculate, proceed as follows:

• Calculate the full DRG payment.
• Refer to the assigned DRG code’s Mean Length of Stay.
• Divide the full DRG payment by the Mean Length of Stay.
• Multiply the result by the CIHCP-allowed number of days of care.

DRG Software. 3M Health Information Systems Division is the supplier of the APR-DRG Version 29 Core Grouping Software, which is used to assign a three-digit group or code based on the diagnosis code(s). For more information, contact: www.3mhis.com.

Gerry Tracy, Sales, 3M Health Information Systems Telephone: 800-367-2447 
Email: gwtracy@mmm.com

Gregg Perfetto, Manager, 3M Health Information Systems Telephone: 800-367-2447 
Email: gmperfetto@mmm.com

4220 Outpatient Hospital Services

Revision 23-4; Effective Sept. 22, 2023

Outpatient hospital services must be medically necessary and be:

• provided in an acute care hospital or hospital-based ambulatory surgical center (HASC);
• provided to hospital outpatients;
• provided by or under the direction of a physician; and
• diagnostic, therapeutic or rehabilitative.

Payment Standard. For the hospital in which the outpatient services were provided, use the Outpatient RCC Rates list that is located on the Texas Health and Human Services website at Outpatient Services. This list will be used to calculate the payment rate using the Percent Standard.

Outpatient RCC Rates List – Hospitals on this list are paid using the Percent Standard. The percentage listed in the Outpatient Rate column reflects all applicable rate reductions.

• Use the Outpatient Rate listed on the Outpatient RCC Rates List.
• Multiply the billed amount by the Outpatient Rate listed.

Exception: If the outpatient service is for a scheduled surgery, the program may use the Fee Schedule for Texas Medicaid HASC Group Rate Amounts and HASC Group number at www.tmhp.com.

A hospital-based ambulatory surgical center (ASC) service should be billed as one inclusive charge on a UB-04.