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5.1.1.1 Fiscal Agent
TMHP acts as the state's Medicaid fiscal agent. A fiscal agent arrangement is one of two methods allowed under federal law and is used by all other states that contract with outside entities for Medicaid claims payment. Under the fiscal agent arrangement, TMHP is responsible for paying claims, and the state is responsible for covering the cost of claims.
Note: The fiscal agent arrangement does not affect Long Term Care (LTC) and Family Planning (Titles V, X, XX) providers, since these providers are not reimbursed through the Compass21 (C21) system.
Provider Designations
The fiscal agent arrangement requires that providers be designated as either public or nonpublic. By definition, public providers are those that are owned or operated by a city, state, county, or other government agency or instrumentality, according to the Code of Federal Regulations. In addition, any provider or agency that can do intergovernmental transfers to the state would be considered a public provider. This includes those agencies that can certify and provide state matching funds, (i.e., other state agencies). New providers self-designate (public or private) on the provider enrollment application. Providers who are already enrolled do not need to take any action regarding their designation at this time.
The fiscal agent:
• Rejects all claims not payable under Texas Medicaid Program rules and regulations.
•Suspends payments to providers according to procedures approved by HHSC.
•Notifies providers of reduction in claim amount or rejection of claim and the reason for doing so.
•Collects payments made in error, affects a current record credit to the department, and provides the department with required data relating to such error corrections.
•Prepares checks or drafts to providers, except for cases in which the department agrees that a basis exists for further review, suspension, or other irregularity within a period not to exceed 30 days of receipt and determination of proper evidence establishing the validity of claims, invoices, and statements.
•Makes provisions for payments to providers who have furnished eligible client benefits.
•Withholds payment of claim when the eligible client has another source of payment.
•Employs and assigns a physician, or physicians, and other professionals as necessary, to establish suitable standards for the audit of claims for services delivered and payment to eligible providers.
•Requires eligible providers to submit information on claim forms.
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