590.001 DSHS Funds as Payment of Last Resort

Policy Number  590.001
Effective Date  September 1994
Revision Date  September 30, 2016
Subject Matter Expert HIV Services Consultants
Approval Authority  HIV/STD Prevention and Care Branch Manager
Signed by  Shelley Lucas, M.P.H.

1.0 Purpose

This policy establishes funding from the Texas Department of State Health Services (DSHS) for HIV-related medical and support services as payment of last resort (PoLR). It directs DSHS-funded Administrative Agencies (AA) and contracting service providers to establish and enact policies and procedures to assure that DSHS funds are used as PoLR.

2.0 Background

DSHS receives federal grants funds through the Ryan White HIV/AIDS Program (RWHAP) and state general revenue funds to provide HIV-related medical and support services to low-income residents of Texas; the state funding for this program is referred to as State Services funds (SS). Federal and state laws and policies require that RWHAP/SS funds be used as PoLR. These funds may not be used for any item or service for which payment has been made or can reasonably be expected to be made by any other payer. Other payers include at minimum public or private health insurance coverage including Medicaid, Medicare, CHIP, Marketplace and employer-based health insurance. Local AA may provide information about other resources that should be considered as payers.

3.0 Authority

Ryan White HIV/AIDS Treatment Extension Act of 2009 (Public Law 111-87, October 30, 2009); Texas Health and Safety Code §12.052, §85.003, §85.013, §85.014 - §85.03, and §85.032; HRSA HIV/AIDS Bureau (HAB) Policy Clarification Notices # 07- 07, 13-02, and 13-04.

4.0 Definitions

Administrative Agency (AA) – Entity responsible for ensuring a comprehensive continuum of care exists in their funded areas. This is accomplished through the management, distribution, and oversight of HIV care and treatment services funded by federal and state funds and under contractual agreement with DSHS.

CHIP – The Children’s Health Insurance Program (CHIP) is designed for low-income families who exceed the income limits for Medicaid.

Cost Sharing – An amount of money clients are expected to contribute to the cost of their medical care. Cost sharing includes co-payment or co-insurance payments and deductible costs for health insurance or client fees charged by providers. Cost sharing requirements may be established through provider policy or be specified by the client's health insurance plan. Fees associated with cost-sharing requirements are subject to the limits on client contributions in this policy.

Federal Poverty Level (FPL) – A measure of income level issued annually by the Department of Health and Human Services. Federal poverty levels are used to determine eligibility for certain programs and benefits.

HIV Services - Definitions of eligible services are found at HIV Medical and Support Service Categories.

Medicaid – A state and federal insurance cooperative program that provides medical coverage to eligible low-income persons.

Medicare – A federal insurance program providing coverage primarily to people who are aged 65 and over and to those who are permanently disabled.

Modified Adjusted Gross Income (MAGI) – A calculation required by DSHS used to determine eligibility for Medicaid, CHIP, and for reduced-cost insurance on the Health Insurance Marketplace. Generally, MAGI is adjusted gross income plus any tax-exempt Social Security, interest, or foreign income. Program eligibility considerations for DSHS-funded services should be based on household income (see Sliding Fee Discount Schedule below for determining a schedule of fees for services and the corresponding sliding fee discount schedule). Household is defined as the applicant, the applicant’s legal or common law spouse, and minor dependent children (under the age of 18, may be biological, adopted, or step children) living 51% of the time or more in the applicant’s home. MAGI forms and requirements can be found on the MAGI documents page.

Provider – A local organization, individual clinician, or group of clinicians contracted to provide HIV services supported with DSHS funds. The contractor is the responsible entity even if there is a subcontractor involved who actually provides the services.

Sliding Scale Discount Schedule – Sliding scale fees are based on the cost of services received and the HIV-positive client’s individual income only. Client charges are subject to the limits on client contribution specified in this policy.

Texas HIV Medication Program (THMP) – The THMP provides HIV treatment drugs directly to eligible uninsured or underinsured clients through the AIDS Drug Assistance Program (ADAP); assistance with payments associated with Medicare Part D prescription drug plan through the State Pharmaceutical Assistance Program (SPAP); and assistance with medication copayments, coinsurance, deductibles, and premiums for employer-sponsored commercial health insurance through the piloted Texas Insurance Assistance Program (TIAP).

5.0 Persons Affected by Policy

  • DSHS HIV care services and THMP staff

  • Administrative Agencies

  • Service Providers

  • Clients

6.0 Responsibilities

6.1 DSHS HIV Care Services Staff

Ensures that RWHAP Part B and State Services funds distributed by DSHS are used as PoLR for eligible services and eligible clients. Staff reviews policies developed by AA regarding PoLR and assures that AA monitors provider implementation of these policies.

6.2 THMP Staff

Ensures that THMP funding is used as PoLR for eligible services and eligible clients.   Verifies client income, insurance status, and residency status before enrolling in the appropriate THMP program and then recertifies eligibility every six months.

6.3 Administrative Agency

Develops and assures compliance with local policies required by DSHS policies, and monitors provider billing of third party payers to determine compliance with PoLR requirements.

6.4 Providers

Develop and implement policies and procedures to ensure that DSHS funds are used as PoLR.

6.5 Client

A person who receives RWHAP Part B or State-funded services for HIV care, treatment or medications.

7.0 Screening for Other Payment Sources

DSHS Policy 220.001 (Eligibility to Receive HIV Services) requires AAs and providers to implement policies and procedures to certify client eligibility for DSHS-funded HIV services every six (6) months. Providers should be guided by the requirements of this policy and local policies to document client eligibility for services and requirements for referral of clients who may be eligible for public or private insurance or another medical benefit program.

As specified in policy 220.001, local areas may specify eligibility criteria in addition to those outlined in policy 220.001. Local eligibility determination and referral vary in terms of the processes used to determine eligibility, the titles of personnel who conduct eligibility screening, and the service categories under which eligibility determination and benefits coordination is completed. Regardless of these differences, AAs must assure that policies and procedures tailored to the local eligibility criteria and determination and recertification processes incorporate DSHS and local standards for comprehensive eligibility review; timely referral; vigorous follow up; and documentation for these tasks.

Vigorous efforts to enroll the client in any health plan or program for which the client appears to be eligible must be documented in client file utilizing DSHS Attestation of Client Eligibility for Marketplace Plans and process, or approved local forms and processes.

7.1 Affordability and Health Insurance Assistance

If clients are concerned about the affordability of job-related or Marketplace insurance, they should be counseled about the availability of health insurance assistance (HIA) services if such assistance is appropriate under local policies and guidelines  (see DSHS Policy 260.002). Clients who require assistance with Medicare Part D drug plans and eligible employer-based health insurance may be eligible for assistance through the piloted TIAP.

7.2 Special Considerations for Insurance Plans with Non-Continuous Enrollment

While enrollment periods for Medicaid and CHIP are continuous, other programs have limited enrollment periods. If clients appear eligible but are outside an enrollment period, they must receive counseling about opportunities for future enrollment and be referred to organizations or individuals that can further assist them. These efforts must be clearly documented in client file.

7.3 Special Considerations for Clients Eligible for Veterans Affairs Benefits

Clients eligible for benefits through the Department of Veterans Affairs (VA) should receive education on the services available through the VA and be referred to VA health centers if they so choose.  However, DSHS-funded services must be made available to VA-eligible clients who choose not to receive care through the VA systems. Such clients are dually eligible for RWHAP and VA services and therefore exempted from the PoLR requirement. As with all efforts of vigorous pursuit, a client’s refusal for referral to VA services must be clearly documented in client file.

8.0 Verification of Coverage

AA must maintain policies that require providers to verify third party payment coverage for eligible services at every visit.

9.0 Client Refusal to Enroll

Per HRSA HIV/AIDS Bureau (HAB) Policy Clarification Notice # 13-04, Eligible clients who refuse to enroll in programs or insurance plans must receive continued counseling on their eligibility at each recertification opportunity and may not be refused treatment services because of the refusal. Vigorous efforts of benefit counseling and enrollment must be documented in the client file.

10.0 Service Provider Enrollment in Health Insurance Plans

Health insurance plans cover some, but not all RWHAP/SS-eligible services. Eligible services typically covered by health plans include outpatient health services, outpatient mental health services, inpatient and outpatient substance abuse treatment, home health services, pharmaceuticals/drugs, home and community health services, home health services, and hospice services. Providers of these services who receive DSHS funds must make reasonable efforts to enroll as participating or approved providers in the health plans carried by their clients. No waivers are available. If an organization subcontracts the medical services listed above, the requirements below apply to their subcontractors.

10.1 Enrollment in Texas Medicaid

A contracting provider who delivers Medicaid- eligible services must be enrolled as a Medicaid provider. AAs must maintain policies requiring contracting providers to furnish Texas Medicaid ID numbers as demonstration of enrollment, or other documentation that establishes that the provider has initiated the application process. If the provider's application is denied, AAs may use DSHS funds to contract with that provider only if no other Medicaid-enrolled providers are available. Contracting providers who have been denied enrollment must continue to make good faith efforts to enroll, and must make evidence of these efforts available to the AA or DSHS upon request.

10.2 Enrollment in Other Health Insurance Plans

AAs must maintain and enforce policies that direct contracting providers (including subcontractors) that deliver medical services typically covered by other public or private health plans to make good faith efforts to enroll as in-network providers on the plans carried by their clients. Providers may prioritize their efforts to enroll in the plans carried by the greatest number of clients. Providers must provide documentation of their efforts to enroll annually to AAs or DSHS. Providers must show due diligence in their efforts to enroll, including requesting inclusion on the list of Essential Community Providers (ECP) compiled by the Center for Consumer Information & Insurance Oversight, informing health plans of their ECP status as 'write ins' if they are not included on the CCIIO list, and making health plans in their area aware of the unique services they provide.

10.3 Referral to In-Network or Enrolled Providers

Providers who are not in-network or approved providers on a client's health insurance plan must refer clients to appropriate providers that are in-network on a client's plan. If no such provider is available, the provider may deliver the service but must show proof of attempted billing to the client's health plan.

AAs must make providers aware of any limitations on health insurance assistance to clients with out-of-network cost sharing obligations.

10.4 Use of DSHS funds for Charges Denied by Health Plans

DSHS funds may not be used to reimburse providers for denied claims that result from failure to follow plan requirements such as prior authorization or referral approval. DSHS funds may not be used to reimburse providers for rejected claims if the rejection is a result of provider error, including incomplete or late submission of claims. AAs must maintain and enforce policies to this effect.

11.0 Client Charges for Billable Services

DSHS-funded AAs must maintain policies requiring funded providers who deliver services typically billable to public and private health plans to maintain policies and procedures on client charges. For purposes of this policy, providers of Outpatient/Ambulatory Medical Care; Local Pharmacy Assistance Programs/AIDS Pharmacy Assistance Programs; Mental Health Services; Medical Nutrition Services; Home and Community-Based Health Services; Home Health; Hospice; Early Intervention Services (if such services are primarily associated with HIV testing and referral); and inpatient and outpatient Substance Abuse Treatment are considered to provide billable services.

To adhere to RWHAP legislation, all providers that deliver these services with DSHS funds must develop a sliding fee discount program that includes the following: (1) a schedule of fees for services; (2) a corresponding sliding fee discount schedule; (3) a system/policy to waive or reduce fees to assure receipt of care; (4) policies that prohibit refusal of services to clients who are unable to pay fees or refuse payment of fees; and (5) a limit on annual aggregate charges (cap on charges) based on the HIV-positive client's individual income. "Aggregate Charges" applies to annual charges imposed for all services regardless of terminology (i.e. enrollment fees, premiums, deductibles, cost-sharing, co-payments, coinsurance, etc.) and applies to all service providers from whom individuals receive services.

11.1 Fee Schedules/Charge Master

Providers must develop a fee schedule that is consistent with locally prevailing rates and is designed to cover reasonable costs. The fee schedule must be used as the basis for seeking payment from patients as well as third party payers.

The schedule may include a documented decision to impose only nominal charges. Such a charge may not be specific to RWHAP/SS clients, and must be similar to charges for non-RWHAP/SS clients. A nominal charge must be a fixed fee that does not reflect the true value of the service(s) provided and is considered nominal from the perspective of the patient. The nominal charge must be less than the fee paid by a patient in the first “sliding fee discount pay class” beginning above 100% of FPL.

11.2 Sliding Fee Discount Schedule (SFDS)

Affected providers must also develop a SFDS based on the client's ability to pay. Eligibility for the SFDS is based on a percentage of FPL using only the HIV-positive client’s annual individual income calculated from Mock MAGI or MAGI worksheets. The SFDS must be revised annually, at a minimum, to reflect updates to the federal poverty guidelines. The provider must establish policies and operating procedures to assure that the SDFS is applied uniformly to eligible patients.

11.2.1 Determining Eligibility for Sliding Fee Discounts

Providers of billable services must have supporting processes/operating procedures in place for assessing MAGI for all clients, or must have a documented procedure for using the MAGI calculated during certification/re-certification for DSHS-funded services. If a client has had no changes in income, household composition, residence, immigration status, or insurance coverage since the previous full MAGI-based eligibility screening a self-attestation of ‘no changes’ may be used to satisfy eligibility determination requirements. If a client attests there have been no changes, the MAGI calculation from the previous eligibility screening should be used. Eligibility determination should be conducted in an efficient, respectful, and culturally appropriate manner to ensure that administrative operating procedures for such determinations do not themselves present a barrier to care. Patient privacy and confidentiality must be protected throughout the process. Once assessed, a patient who meets the income guidelines would receive a sliding fee discount based on the SFDS. As required by RWHAP, clients with an individual annual income at or below 100% FPL must receive a full discount, meaning no charges may be assessed. Nominal fees may not be applied to this group. Regardless of client income, services cannot be refused based on the client's ability to pay, and this must be reflected in SFDS polices and operating procedures.

11.2.2 Clients with Third Party Coverage Who are Also Eligible for SFDS

Clients with health insurance coverage have incomes that would make them eligible for the SFDS established by the provider. Such clients must use their insurance, but may be eligible to have the co-payment or co-insurance required by their insurance plan reduced based on the SFDS, subject to potential legal and contractual limitations. If this is allowed, the charge to these clients is the maximum amount an eligible patient in that pay class is required to pay for a certain service regardless of insurance status. If the client receives HIA services, the reduced charge may be paid through these funds if the service is HIV-related and otherwise qualifies for payment by HIA. Providers may not seek reimbursement from RWHAP/SS for the difference between the insurance charge and the reduced charge collected from the payment. However, the terms of contracts that providers hold with health insurance plans may not allow discounting of client co-pays and co-insurance and discounting client cost sharing obligations may also be inappropriate for Medicare clients. Providers may wish to consult with their third party payers or legal counsel and/or private legal counsel regarding the permissibility of discounting patients’ out-of-pocket costs. How a provider will approach the issues of cost sharing requirements and SFDS must be documented in policies on SFDS.

11.3 Posting of Fee Schedule

The SFDS must be publicly posted and must contain language that assures clients that services are available regardless of ability to pay.

11.4 Collecting and Waiving Client Fees

Service providers must make reasonable attempts to collect fees. The provider must establish policies on waiving client fees. The policy must include criteria for waiving charges, and should specify the staff with the authority to approve fee waivers. This policy must be consistently applied.

11.5 Caps on Client Charges

RWHAP legislation requires that clients be charged no more than a maximum amount (cap) in a calendar year. The cap is based on the HIV-positive client's individual MAGI as follows:

  • 5% for patients with incomes between 100% and 200% of FPL;
  • 7% for patients with incomes between 200% and 300% of FPL;
  • 10% for patients with incomes greater than 300% of FPL.

Provider policies must specify that once a client's annual aggregate charges reach the cap, no additional client charges may be made.

11.5.1 Tracking Client Charges and Out of Pocket Expenditures

Providers must track client charges to assure that they do not exceed the aggregate caps specified in section 11.5. Providers are not responsible for tracking charges from other providers, but if clients produce reasonable documentation for these charges they should be included in the tracked total. Examples of client out of pocket charges include client fees for services, drug co-payments or co-insurance payments, premiums, and enrollment fees.

12.0 Program Income

Income resulting from payments for HIV services by clients or from insurance companies is considered program income. Service providers must retain program income derived from DSHS-funded services and must follow DSHS rules on reporting and use of such income. Providers must also follow any additional requirements of DSHS-funded AAs specified in contract or policy.

13.0 Additional Resources

DSHS response to comments during the public comment period for Policy 590.001 DSHS Funds as Payment of Last Resort


14.0 Revision History

Date Action Section
9/30/2016 Client charges must be calculated using individual income. Revised client charges and SFDS language. 11.2 
3/15/2016 Due to extensive revision, treated as new policy. All
9/22/2014 Converted format (Word to HTML) -
6/20/2007 Due to extensive revision, treated as new policy. All