Quality of Service Changes are in the Wind

16th Jan 2018

The Health and Human Services Commission is soliciting feedback on their quality strategy which is to be submitted to CMS in early March of this year.  Suggestions for change or comments on the revised proposal should be made to HHSC. (See below) In addition, the Senate Committee on Health and Human Services will be holding a hearing March 21st on the following two interim charges:

  • Review the Health and Human Services Commission’s efforts to improve quality and efficiency in the Medicaid program, including pay-for-quality initiatives in Medicaid managed care. Compare alternative payment models and value-based payment arrangements with providers in Medicaid managed care, the Employees Retirement System, and the Teacher Retirement System, and identify areas for cross-collaboration and coordination among these entities.
  • Evaluate the commission’s efforts to ensure Medicaid managed care organizations’ compliance with contractual obligations and the use of incentives and sanctions to enforce compliance. Assess the commission’s progress in implementing competitive bidding practices for Medicaid managed care contracts and other initiatives to ensure the best value for taxpayer dollars used in Medicaid managed care contracts.

Texas Insight will be covering these hearings for subscribers.

Since 1991, Texas Health and Human Services Commission (HHSC) has overseen and coordinated the planning and delivery of health and human service programs in Texas.  HHSC was established in accordance with Texas Government Code Chapter 531 and is responsible for the oversight of all Texas health and human service agencies.  With the past, and recent approval of the 1115 waiver, HHSC has been transitioning to a pay four quality (P4Q) system through a Quality Improvement Strategy.  It is the goal of HHSC to use its Quality Improvement Strategy to transition from volume-based purchasing models to a pay-for-performance model while improving member satisfaction.  The correlate to this would be to reduce payments for low quality care.  It is the intention of HHSC to achieve these goals through the following mechanisms:

  • Program integrity monitoring through both internal and external processes
  • Implementation of financial incentives for high performing managed care organizations and financial disincentives for poor performing managed care organizations
  • Developing and implementing targeted initiatives that encourage the adoption by managed care organizations of evidence-based clinical and administrative practices

According to leadership, the fundamental commitment of HHSC is to contract for results. A successful result is defined as the generation of defined, measurable, and beneficial outcomes that satisfy the contract requirements and support HHSC’s missions and objectives. This mission is to create a customer-centered, innovative, and adaptable managed care system that provides the highest quality of care to individuals served by the agency while at the same time ensures access to services.

The Texas Healthcare Transformation and Quality Improvement Program 1115 Waiver, known as the 1115 Transformation Waiver, allows the state to expand Medicaid managed care, including pharmacy and dental services, while preserving federal hospital funding historically received as Upper Payment Level payments. This waiver was recently extended for 4 years by the Centers for Medicare and Medicaid Services (CMS)

As outlined in the Code of Federal Regulations (CFR) Title 42, Chapter IV, Subchapter C, Part 438, Subpart E, Quality Measurement and Improvement, Texas is required to have a Texas Managed Care Quality Strategy approved by the Centers for Medicare & Medicaid Services (CMS with the strategy being updated every three years. The results of the review must be made available to the public, and the updated strategy must be submitted to the CMS.

External Quality Review Organization. The Balanced Budget Act of 1997 requires state Medicaid agencies to provide an annual external independent review of quality outcomes, timeliness of services, and access to services provided by Medicaid managed care organizations and prepaid ambulatory health plans.  To comply with this requirement, and to provide HHSC with data analysis and information to effectively manage its Medicaid managed care programs, HHSC contracts with an External Quality Review Organization (EQRO) for Medicaid managed care and CHIP.  In collaboration with the EQRO, HHSC evaluates, assesses, monitors, guides, and directs the Medicaid managed care programs and organizations for the State.  Since 2002, Texas has contracted with the University of Florida’s Institute for Child Health Policy (ICHP) to conduct EQRO activities.

ICHP performs the following three CMS-required functions: 

  • Validation of performance improvement projects
  • Validation of performance measures
  • A review to determine managed care organization compliance with certain federal Medicaid managed care regulations

ICHP also conducts focused quality of care studies, performs encounter data validation and certification, assesses member satisfaction, provides assistance with rate setting activities, and completes other reports and data analysis as requested by HHSC.  The EQRO develops studies, surveys, or other analytical approaches to assess enrollee’s quality and outcomes of care and to identify opportunities for managed care organization improvement.  To facilitate these activities, HHSC ensures that ICHP has access to enrollment, health care claims and encounter, and pharmacy data.  HHSC also ensures access to immunization registry data.  The managed care organizations collaborate with ICHP to ensure medical records are available for focused clinical reviews.  In addition to these activities, ICHP collects and analyzes data on potentially preventable events for the Delivery System Reform Incentive Payment (DSRIP) program projects.

Measurement Texas relies on a combination of established sets of measures and state-developed measures that are validated by the EQRO.  This approach allows the State to collect data comparable to nationally recognized benchmarks and ensure validity and reliability in collection and analysis of data that is of particular interest to Texas.  Resources used by Texas include:

  • National Committee for Quality Assurance Healthcare Effectiveness Data and Information Set (HEDIS®)
  • Agency for Healthcare Research and Quality Pediatric Quality Indicators /Prevention Quality Indicators
  • 3M Software for Potentially Preventable Events
  • Consumer Assessment of Healthcare Providers & Systems (CAHPS®) Surveys

In addition, the State obtains race, ethnicity, and primary language spoken by a member from the enrollment form completed by that member.  Applications are processed through the Texas Integrated Eligibility Redesign System (TIERS) and routed to a third-party enrollment broker.  The enrollment broker transmits a file containing the race/ethnicity and primary language of each enrollee to the managed care organizations monthly. Additionally, the EQRO has developed questions to obtain demographic and household information as part of the CAHPS member and caregiver surveys.

Management Information System Requirements.   Managed care organizations are required to maintain a Management Information System (MIS) that supports all functions of the MCO’s processes and procedures for the flow and use of MCO data.  They must have hardware, software, and a network and communications system with the capability and capacity to handle and operate all MIS subsystems for the following operational and administrative areas:

  • Enrollment/eligibility
  • Provider network
  • Encounter/claims processing
  • Financial system
  • Utilization/quality improvement
  • Reporting
  • Interfaces
  • Third party liability reporting

The analysis and dissemination of quality data is primarily conducted using managed care organization-generated data and reports and EQRO data analysis and summary reports. Quality data is disseminated to the public, including policymakers, through the Texas Healthcare Learning Collaborative Portal. Information about MCO performance on quality measures is disseminated to members through MCO report cards, which are included in enrollment packets and on the HHSC website

The Texas Health and Human Services Commission has published the most recent updates to the Texas Managed Care Quality Strategy on the agency’s website. HHSC is required to review and resubmit the Texas Managed Care Quality Strategy to the Centers for Medicare and Medicaid Services no less than every three years. HHSC plans to submit to CMS on March 2, 2018.

Significant changes made with these edits include:

  • Updating the programs to include the Medicaid for Breast and Cervical Cancer program, which transitioned to STAR+PLUS on Sept. 1, 2017.
  • Updating the programs to include the Adoption Assistance and Permanency Care Assistance program, which transitioned to managed care on Sept. 1, 2017.
  • Updating to include previously implemented managed care requirements as outlined in the Code of Federal Regulations (CFR) § 42 438.

Items in tracked changes represent the only changes being made to the Texas Managed Care Quality Strategy. Submit public comments by 2/12/2018 to: TX_Medicaid_Waivers@hhsc.state.tx.us.

Thomas Valentine


The information contained in this publication is the property of Texas Insight and is considered confidential and may contain proprietary information. It is meant solely for the intended recipient. Access to this published information by anyone else is unauthorized unless Texas Insight grants permission.  If you are not the intended recipient, any disclosure, copying, distribution or any action taken or omitted in reliance on this is prohibited.  The views expressed in this publication are, unless otherwise stated, those of the author and not those of Texas Insight or its management.