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Outpatient Ratio of Cost to Charge Will Be Increased for Rural Hospitals

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Note: Texas Medicaid managed care organizations (MCOs) must provide all medically necessary, Medicaid-covered services to eligible clients. Administrative procedures such as prior authorization, pre-certification, referrals, and claims/encounter data filing may differ from traditional Medicaid (fee-for-service) and from MCO to MCO. Providers should contact the client's specific MCO for details.

The Texas Legislature has allocated certain funds to increase outpatient reimbursement rates for rural hospitals (Senate Bill 1, Article II, Rider 8(f), 87th Legislature, Regular Session 2021).

The outpatient ratio of cost to charge (RCC) has been increased as follows:

  • The cap on the outpatient RCC established September 1, 2013, will be removed.
  • A 16 percent increase in the cost to charge ratio for the latest Initial Cost Report, not to exceed 100 percent, is in effect as of September 1, 2021.
  • The recoupment of funds due to cost settlement has been eliminated.
  • The policy of no payouts due to cost settlements continues.

Affected claims submitted with dates of service from September 1, 2021, through September 30, 2021, will be reprocessed, and payments may be deducted from future payments (i.e., recouped). Any deductions will be reflected on Remittance and Status (R&S) Reports.

For more information, call the TMHP Contact Center at 800-925-9126.