In this chapter:
(1) “Alternative payment system” includes:
(A) a global payment system;
(B) an episode-based bundled payment system; and
(C) a blended payment system.
(2) “Blended payment system” means a system for compensating a physician or other health care provider that:
(A) includes at least one feature of a global payment system and an episode-based bundled payment system; and
(B) may include a system under which a portion of the compensation paid to a physician or other health care provider is based on a fee-for-service payment arrangement.
(3) “Enrollee” means an individual enrolled in the child health plan program.
(4) “Episode-based bundled payment system” means a system for compensating a physician or other health care provider for providing or arranging for health care services to an enrollee or recipient that is based on a flat payment for all services provided in connection with a single episode of medical care.
(5) “Exclusive provider benefit plan” means a managed care plan subject to 28 T.A.C. Part 1, Chapter 3, Subchapter KK.
(6) “Freestanding emergency medical care facility” means a facility licensed under Chapter 254, Health and Safety Code.
(7) “Global payment system” means a system for compensating a physician or other health care provider for providing or arranging for a defined set of covered health care services to an enrollee or recipient for a specified period that is based on a predetermined payment per enrollee or recipient for the specified period, without regard to the quantity of services actually provided.
(8) “Health care provider” means a person, facility, or institution licensed, certified, registered, or chartered by this state to provide health care. The term includes an employee, independent contractor, or agent of a health care provider acting in the course and scope of the employment or contractual relationship.
(9) “HIV” has the meaning assigned by § 81.101, Health and Safety Code.
(10) “Hospital” means an institution licensed under Chapter 241 or 577, Health and Safety Code, including a general or special hospital as defined by Section 241.003 of that code.
(11) “Managed care organization” means a person that is authorized or otherwise permitted by law to arrange for or provide a managed care plan. The term includes a health maintenance organization and an exclusive provider organization.
(12) “Managed care plan” means a plan, including an exclusive provider benefit plan, under which a person undertakes to provide, arrange or pay for, or reimburse any part of the cost of health care services. The plan must include arranging for or providing health care services as distinguished from indemnification against the cost of those services on a prepaid basis through insurance or otherwise. The term does not include a plan that indemnifies a person for the cost of health care services through insurance.
(13) “Physician” means an individual licensed to practice medicine in this state under Subtitle B, Title 3, Occupations Code.
(14) “Potentially preventable admission” means an individual’s admission to a hospital or long-term care facility that may have reasonably been prevented with adequate access to ambulatory care or health care coordination.
(15) “Potentially preventable ancillary service” means a health care service that:
(A) a physician or other health care provider provides or orders to supplement or support evaluating or treating a patient, including a diagnostic test, laboratory test, therapy service, or radiology service; and
(B) might not be reasonably necessary to provide quality health care or treatment.
(16) “Potentially preventable complication” means a harmful event or negative outcome with respect to an individual, including an infection or surgical complication, that:
(A) occurs after the individual’s admission to a hospital or long-term care facility; and
(B) may have resulted from the care, lack of care, or treatment provided during the hospital or long-term care facility stay rather than from a natural progression of an underlying disease.
(17) “Potentially preventable emergency room visit” means an individual’s treatment in a hospital emergency room or freestanding emergency medical care facility for a condition that might not require emergency medical attention because the condition could be treated, or could have been prevented, by a physician or other health care provider in a nonemergency setting.
(18) “Potentially preventable event” means a:
(A) potentially preventable admission;
(B) potentially preventable ancillary service;
(C) potentially preventable complication;
(D) potentially preventable emergency room visit;
(E) potentially preventable readmission; or
(F) combination of those events.
(19) “Potentially preventable readmission” means an individual’s return hospitalization within a period the commission specifies that may have resulted from deficiencies in the individual’s care or treatment provided during a previous hospital stay or from deficiencies in post-hospital discharge follow-up. The term does not include a hospital readmission necessitated by the occurrence of unrelated events after the individual’s discharge. The term includes an individual’s readmission to a hospital for:
(A) the same condition or procedure for which the individual was previously admitted;
(B) an infection or other complication resulting from care previously provided;
(C) a condition or procedure indicating that a surgical intervention performed during a previous admission was unsuccessful in achieving the anticipated outcome; or
(D) another condition or procedure of a similar nature that the executive commissioner determines.
(20) “Quality-based payment system” means a system, including an alternative payment system, for compensating a physician or other health care provider that:
(A) provides incentives to the physician or other health care provider to provide high-quality, cost-effective care; and
(B) bases some portion of the payment made to the physician or other health care provider on quality-of-care outcomes, which may include the extent to which the physician or other health care provider reduces potentially preventable events.
(21) “Recipient” means a Medicaid recipient.

Text of section effective on April 01, 2025