Summary of Texas Parity Findings

The adult Medicaid, children’s Medicaid and CHIP benefit packages do not have aggregate lifetime limits or annual dollar limits; and, neither the adult Medicaid nor the children’s Medicaid benefit packages have financial requirements for beneficiaries. CHIP has co-pays ranging from $5-$35, depending on income, and an annual dollar limit based on the family’s income. CHIP financial requirements do not accumulate separately for mental health and substance use disorder (MHSUD), and medical and surgical benefits in a classification. Effective July 1, 2022, co-pays for CHIP MHSUD outpatient office visits and residential treatment services are prohibited.

Quantitative Treatment Limitations

Adult Medicaid Benefit Package

HHS identified QTLs in two SUD benefits: residential treatment and counseling. In the adult Medicaid program, Texas limited residential treatment services to two episodes per six-month period and four episodes per 12-month rolling period, with each episode of care not to exceed 45 days. The adult Medicaid program also limits counseling services to 26 hours per year of individual counseling and 135 hours per year of group counseling, as documented in the Texas Administrative Code and Texas Medicaid Provider Procedure Manual. Effective Jan. 1, 2019, HHS modified its Medicaid SUD treatment policy and rules to remove strict limits and allow additional individual and group SUD counseling and additional episodes of SUD residential treatment with documentation supporting medical necessity for continued treatment services.

Children’s Medicaid Benefit Package

There are no QTLs in the Children’s Medicaid benefit package because all Medicaid beneficiaries younger than 21 have access to all medically necessary services.

CHIP Benefit Package

There are no QTLs in the CHIP program. In 2010, Texas removed all treatment limitations for mental health and SUD in its CHIP program in each of the four classifications.

Pharmacy Classification across the Benefit Packages

There are no QTLs in pharmacy benefits in any of the three benefit packages. All pharmacy limitations may be exceeded as medically necessary using a structured prior authorization process.

Non-Quantitative Treatment Limitations

In 2017, Texas Medicaid’s 20 MCOs used a state-developed NQTL assessment tool and a state-developed pharmacy NQTL tool to assess each benefit package it offers. The NQTL assessment tool addressed the inpatient, outpatient and emergency services classifications, and the pharmacy NQTL tool addressed the pharmacy classification.
For the inpatient, outpatient and emergency services classifications, MCOs addressed:

• Prior authorizations
• Concurrent review
• Medical necessity criteria development
• Fail-first policies and low-cost alternatives
• Level of engagement
• Probability of improvement
• Network participation and reimbursement

Each MCO analyzed its NQTLs by classification for each benefit package they provide. HHS received and evaluated more than 1,000 pages of responses. The evaluation included reviewing the processes, strategies, evidentiary standards and other factors for comparability and stringency. HHS held multiple one-on-one technical assistance meetings with each MCO to set expectations and discuss the submissions in greater detail. 

• Prior Authorization (PDF): The process of obtaining approval for a service before the member receives services. The MCO may review the member’s eligibility, benefit coverage, medical necessity, place of service and appropriateness of services.
• Concurrent Review (PDF): The process of conducting ongoing review for continued access or coverage to a benefit.
• Medical Necessity (PDF):  To determine if the managed care organization has developed its own medical necessity criteria that exceed those that may be imposed by the Texas Medicaid Provider Procedure Manual or by an evidence-based clinical decision-making tool.
• Fail-First or Low-Cost Alternatives: Requiring a beneficiary to try one type of benefit before gaining access to another.
• Level of Engagement or Degree of Progress: Assessing access to a benefit by gauging a beneficiary’s level of engagement in the treatment or the beneficiary’s progress while accessing a particular benefit.
• Probability of Improvement: Assessing if the beneficiary is likely to benefit from the treatment before allowing access to the benefit.
• Network Participation and Reimbursement: The processes and criteria MCOs use to determine whether or not to admit a provider into its network.

Table Key:

• IP: Inpatient
• OP: Outpatient
• ES: Emergency Services

Table Key:

• IP: Inpatient
• OP: Outpatient
• ES: Emergency Services

The tables above indicates the percentage of MCOs that reported the listed NQTLs in any of the benefits in a classification. A 100% indicates that all MCOs reported using the NQTL in at least one benefit in the classification.
For the pharmacy classification and for prescription drugs furnished in a pharmacy setting, MCOs addressed:

• Pharmacy Prior Authorizations: In Texas, pharmacy prior authorizations include clinical prior authorizations and preferred drug list prior authorizations.
  • MCOs may adopt recommended clinical prior authorizations or, in certain cases, are required to adopt clinical prior authorizations as mandated by the state. MCOs may adopt recommended clinical prior authorizations in a manner that is less restrictive than the PA may be implemented by that for the fee-for-service population. All clinical prior authorizations must be considered by the state Drug Utilization Review Board as required under Section 1927 of the Social Security Act.
  • MCOs must adopt all PDL PA requirements are determined by the state.
• Pharmacy Utilization Management Edits: MCOs were required to identify Utilization Management NQTLs applied by the plans, which generally include limits on days’ supplies for prescriptions, quantity limits and concurrent reviews.
• Pharmacy Reimbursement: MCOs may negotiation their own financial terms with pharmacy providers. Maximum allowable cost (MAC) pricing must be adopted within the terms provided for under contract.
• Pharmacy Network Adequacy: MCOs have specific access requirements applied under the provisions of the contract and in accordance with federal and state law.
• Pharmacy Medical Necessity: All prescription drugs covered under Texas Medicaid must be medically necessary. MCOs identified how medical necessity is operationalized under the terms of their contracts and applicable state and federal law.

The MCOs and Pharmacy Benefit Managers must adhere to the state formulary, Clinical and PDL Prior Authorizations and federal Drug Utilization Review requirements.  In addition, all drugs dispensed must be medically necessary in accordance with federal law and network adequacy requirements are applied at the federal level and by the state.  CHIP does not use a preferred drug list but adheres to clinical prior authorizations.  For these reasons, all of the above NQTLs are in place for each MCO.