Texas Medicaid FeeforService Reimbursement

Overview

Texas Medicaid offers a feeforservice (FFS) payment model that reimburses healthcare providers for each service rendered to an eligible enrollee. Unlike managedcare contracts, the FFS system pays a set amount for each billable procedure, test, or encounter based on statewide fee schedules and the providers classification.

Key objectives of the FFS model are to:

• Ensure timely payment for services actually delivered.
• Maintain transparency by using published rate tables.
• Allow flexibility for providers who do not participate in a managedcare organization (MCO).

Reimbursements are processed through the Texas Health and Human Services Commission (HHSC) and the Texas Medicaid & Healthcare Partnership (TMHP). Payments are generally issued on a quarterly basis, after electronic claim adjudication.

Provider Eligibility and Enrollment

All providers who wish to submit FFS claims must be enrolled in Texas Medicaid. The enrollment process includes:

1. Application submission through the Provider Enrollment System (PES).
2. Verification of credentials such as licenses, DEA numbers, and National Provider Identifiers (NPIs).
3. Background checks and compliance with Texas Medicaid provider policies.

Providers may be classified as:

• Primary Care Physicians (PCPs)
• Specialists (e.g., cardiology, orthopedics)
• Hospitals and Critical Access Hospitals
• Laboratories, Imaging Centers, and Durable Medical Equipment (DME) suppliers
• Behavioral health and mental health professionals

Once enrolled, providers receive a TMHP identification number, which must be included on every claim.

Payment Rates & Rate Tables

Texas Medicaid publishes fee schedules for each provider type. Rates are updated annually (typically in July) and are available in the TMHP "Rate Tables" PDF and on the TMHP website.

How Rates Are Determined

• Relative Value Units (RVUs): Most physician services are priced using RVUs multiplied by a conversion factor set by the state.
• HospitalSpecific Rates: Inpatient services use diagnosisrelated groups (DRGs) while outpatient services use a perservice schedule.
• Geographic Adjustments: Certain rural or highcost areas may receive an additional multiplier.
• Bundled Payments: Some services (e.g., obstetric care) are reimbursed as a bundled episode rather than individual line items.

Sample Rate Table (Physician Services)

Providers should reference the most current Texas Medicaid Fee Schedule for their specific discipline to ensure accurate billing.

Claim Submission Process

All FFS claims must be submitted electronically through the TMHP claim portal (or via a cleared clearinghouse). The typical workflow is:

1. Generate claim in the practice management system using the appropriate CPT/HCPCS codes, diagnosis codes (ICD10CM), and the providers TMHP ID.
2. Validate the claim for required fields, eligibility, and coverage limits.
3. Transmit the electronic claim (EDI 837) to TMHP.
4. Adjudication TMHP checks the claim against fee schedules, prior authorizations, and beneficiary eligibility.
5. Remittance Advice (RA) The provider receives an EDI 835 file indicating payment amounts, adjustments, and any denials.

Key timing rules:

• Claims must be filed within 12 months of the service date.
• Denial notices must be responded to within 30 days to preserve the right to appeal.
• Quarterly payment cycles close on the 15th of the month following the quarters end.

Denials, Appeals, and Audits

When a claim is denied, the RA will include a specific denial code. Common reasons include:

• Invalid or missing NPI.
• Procedure not covered for the beneficiarys eligibility category.
• Duplicate billing.
• Exceeded frequency limits.

Appeal Process

1. Submit a written request for reconsideration within 30 days of the denial.
2. Include supporting documentation (e.g., medical records, corrected claim).
3. TMHP will issue a final decision, typically within 3045 days.

Providers are also subject to periodic compliance audits. To minimize audit risk, maintain:

• Accurate documentation that matches billed services.
• Uptodate enrollment and credentialing files.
• Proper use of modifiers and placeofservice codes.

Helpful Resources

• Texas Medicaid Official Site
• Texas Medicaid & Healthcare Partnership (TMHP)
• Provider Resources & Manuals
• CMS Medicaid Rate Lists (for reference)
• Contact HHSC Provider Services at 1800XXXXXXX for enrollment or technical assistance.