PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION
CHAPTER 355. REIMBURSEMENT RATES
SUBCHAPTER A. COST DETERMINATION PROCESS
The Texas Health and Human Services Commission (HHSC) adopts an amendment to §355.112, concerning Attendant Compensation Rate Enhancement. Section 355.112 is adopted with changes to the proposed text as published in the July 7, 2023, issue of the Texas Register (48 TexReg 3565). This rule will be republished.
BACKGROUND AND PURPOSE
Title 42, Code of Federal Regulations (CFR) §441.301(c)(4)(i) - (v) requires home and community-based settings in programs authorized by §1915(c) of the Social Security Act to have certain qualities, including being integrated into and supporting full access of individuals to the greater community. HHSC adopted rules to implement individualized skills and socialization in the December 23, 2022, issue of the Texas Register.
The 2022-2023 General Appropriations Act (GAA), Senate Bill (S.B.) 1, 87th Legislature, Regular Session, 2021 (Article II, Health and Human Services Commission, Rider 23) authorized funding for the provision of individualized skills and socialization in the Home and Community-based Services (HCS), Texas Home Living (TxHmL), and Deaf-Blind with Multiple Disabilities (DBMD) programs. HHSC adopted rates for individualized skills and socialization based on the available appropriations, effective January 1, 2023. The amendment replaces day habilitation with individualized skills and socialization services for the Attendant Compensation Rate Enhancement Program.
The amendment clarifies that providers contracted with a managed care organization to provide attendant care services may participate in the Attendant Compensation Rate Enhancement Program through their managed care organizations. The amendment removes references to Community Based Alternatives (CBA)--Assisted Living/Residential Care (AL/RC) and CBA--Home and Community Support Services (HCSS). These programs were carved into managed care in 2015, and HHSC neither enrolls these providers in the Attendant Compensation Rate Enhancement Program nor determines spending requirements associated with the program.
The amendment modifies several aspects of the Attendant Compensation Rate Enhancement Program. The amendment changes the requirements for participating providers to submit an attendant compensation report for determining spending requirements in the Attendant Compensation Rate Enhancement Program. The amendment clarifies that if providers are required to submit a cost report for a rate year, HHSC will use the cost report as an attendant compensation report. For rate years in which participating providers are not required to submit a cost report, HHSC will require a subset of participating providers to submit an accountability report to serve as an attendant compensation report. These providers will be selected at random from the total number of participating contracts that are not required to submit a cost report for a rate year. The number selected will represent a statistically valid sample of participating providers. The amendment modifies report submission requirements for contracts participating in the Attendant Compensation Rate Enhancement Program undergoing a change of ownership or a contract termination by relaxing the requirement that these providers must submit a report to HHSC. The amendment removes provisions allowing limited providers to submit the request for revision report or request for recalculation while modifying parameters regarding limitations.
The amendment implements some recommendations in HHSC's legislative report, Rates: Intermediate Care Facilities and Certain Waiver Providers,required by the 2022-2023 GAA, S.B. 1, 87th Legislature, Regular Session, 2021 (Article II, Health and Human Services Commission, Rider 30). The amendment repeals the requirement that an attendant must perform attendant functions at least 80 percent of his or her total time worked to be considered an attendant for determining spending requirements in the Attendant Compensation Rate Enhancement Program or for calculating the attendant compensation rate component. The amendment provides that any staff who performs attendant functions to prevent a break in service will be considered an attendant.
The amendment modifies the methodology HHSC uses to calculate the attendant compensation rate component for each attendant service. HHSC will calculate the attendant compensation rate component by calculating a median of attendant compensation cost center data weighted by each attendant service units of service from the most recent Medicaid cost report database. The attendant compensation cost component will be inflated using HHSC's inflation methodology from the cost reporting period to the prospective rate period and limited to available levels of state and federal appropriations.
COMMENTS
The 21-day comment period ended July 28, 2023.
During this period, HHSC received comments regarding the proposed rule from four commenters, including the following organizations: the Providers Alliance for Community Services of Texas (PACSTX), Private Providers Association of Texas (PPAT), Texas Association for Home Care & Hospice (TAHC&H), and the Texas Council of Community Centers (Texas Council).
A summary of comments relating to §355.112 and HHSC's responses follow:
Comment: Several commenters expressed support for the definition of attendant in §355.112(c).
Response: HHSC appreciates the supportive comment regarding this proposed change and will adopt this section without changes. No changes were made in response to this comment.
Comment: Several commenters expressed opposition to the amendment to §355.112(m) to limit the attendant compensation rate component to available levels of appropriated state and federal funds as specified in §355.201 of this chapter (relating to Establishment and Adjustment of Reimbursement Rates for Medicaid). Commenters are concerned that the amendment changes the rate methodology allowing HHSC to bypass the true costs in the most recent provider cost report to what is adopted by the Legislature. Commenters contend the amendment would give HHSC the ability to abdicate its responsibility as the state's Medicaid agency to inform the Legislature when appropriations fall short in supporting rates that ensure access to care.
Response: HHSC will revise §355.112(m)(4) as it was not the agency's intention to limit the methodological rate component to appropriated levels but rather to emphasize that adopted rates are limited to available appropriations as already specified in §355.201.
Comment: One commenter expressed concerns that the service support portion of the attendant rate has not been upwardly adjusted since 2007, over 16 years. The rate methodology as proposed will prevent adjustment beyond the appropriation allowing the continuation of insufficient funding of service supports and impacting every aspect of operations for community care.
Response: HHSC disagrees, as the methodology related to the service support or administration and operations rate components are outside the scope of the amendment to §355.112. No changes were made in response to this comment.
Comment: Several commenters expressed opposition to removing recoupment recalculations from §355.112(n).
Response: HHSC disagrees and declines to modify the rule because recalculations were a process affiliated with a retired cost report collection system and are no longer used under HHSC's current practices. A provider will still be able to request that HHSC reevaluate recoupment determinations if the provider believes there was an error in the original calculations. Furthermore, a provider can still seek an informal review and provide additional supporting information if the provider believes any revisions made during HHSC's financial examination process were made in error.
Comment: Several commenters expressed opposition to eliminating a limited provider's opportunity to submit a request for revision during the annual open enrollment period for the attendant compensation rate enhancement program.
Response: HHSC disagrees and declines to make any change in response to this comment. The request for revision process allows a provider to overturn the provider's limitation by using unverified data, which could include unallowable costs. The rate enhancement program relies on a limited funding pool. Therefore, the request for revision process may enable a provider who regularly misses the provider's spending requirements to remain in the program at a higher level and prevents a provider who meets program requirements from the opportunity to obtain a higher enhancement level.
Comment: Several commenters expressed support for new subsection (i)(2), which specifies HHSC will require a subset of participating contracted providers at random to submit an annual attendant compensation report on years a provider does not submit a cost report. It would be helpful for provider associations to know how HHSC plans to implement this provision, including the estimated number of providers HHSC plans to use to establish a statistically valid sample and how HHSC will define a statistically valid sample.
Response: HHSC appreciates the supportive comments. HHSC will engage with stakeholders, including provider associations, regarding how §355.112(i)(2) will be implemented. No changes were made in response to this comment.
Comment: Several commenters expressed support for new subsection (m)(3)(B), which clarifies which services in HCS are subject to the 1.07 inflator. Providers had expressed concerns about the application of a lower inflator for individualized skills and socialization while still maintaining a facility. The proposed subsection appears to remedy those concerns.
Response: HHSC appreciates the supportive comments. HHSC's intention with the amendment to §355.112(m)(3)(B) was to revise the rate methodology for individualized skills and socialization so that the 1.07 factor is applied to both on-site and off-site service rates. No changes were made in response to this comment.
Editorial revisions were made to correct spelling and grammar.
STATUTORY AUTHORITY
The amendment is adopted under Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies; Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code Chapter 32.
§355.112.Attendant Compensation Rate Enhancement.
(a) Eligible programs. Providers contracted in the following programs are eligible to participate in the attendant compensation rate enhancement:
(1) Community Living Assistance and Support Services (CLASS)--Direct Service Agency (DSA);
(2) Day Activity and Health Services (DAHS);
(3) Deaf-Blind with Multiple Disabilities Waiver (DBMD);
(4) Home and Community-based Services (HCS);
(5) Intermediate Care Facilities for Individuals with Intellectual Disability or Related Conditions (ICF/IID) ("Related Conditions" has the same meaning as in 26 TAC §261.203 (relating to Definitions));
(6) Primary Home Care (PHC);
(7) Residential Care (RC); and
(8) Texas Home Living (TxHmL).
(b) Managed Care Providers. A provider contracted with a managed care organization (MCO) to provide attendant care services may participate in any Attendant Compensation Rate Enhancement Program through the MCO with whom it is contracted, as provided by the MCO's managed care contract with HHSC. Each MCO is responsible for managing any Attendant Compensation Rate Enhancement Program for its contracted providers, including provider enrollment and compliance with the program's spending requirements or any spending requirements imposed under state or federal law.
(c) Definition of attendant. For the purposes of the Attendant Compensation Rate Enhancement Program under this section, an attendant is an unlicensed caregiver providing direct assistance to individuals with Activities of Daily Living (ADL) and Instrumental Activities of Daily Living (IADL).
(1) Attendants do not include the director, administrator, assistant director, assistant administrator, clerical and secretarial staff, professional staff, other administrative staff, licensed staff, attendant supervisors, cooks and kitchen staff, maintenance and groundskeeping staff, activity director, DBMD Interveners I, II or III, Qualified Intellectual Disability Professionals (QIDPs) or assistant QIDPs, direct care worker supervisors, direct care trainer supervisors, job coach supervisors, foster care providers, and laundry and housekeeping staff. Staff other than attendants may deliver attendant services and be considered an attendant if they must perform attendant services that cannot be delivered by another attendant to prevent a break in service.
(2) An attendant also includes the following:
(A) a driver who is transporting individuals in the DAHS, ICF/IID, and RC programs and the HCS SL/RSS and HCS and TxHmL individualized skills and socialization settings;
(B) a medication aide in the HCS SL/RSS setting, ICF/IID, and RC programs; and
(C) direct care workers, direct care trainers, job coaches, employment assistance direct care workers, and supported employment direct care workers.
(d) Attendant compensation cost center. This cost center will include employee compensation, contract labor costs, and personal vehicle mileage reimbursement for attendants as defined in subsection (c) of this section.
(1) Attendant compensation is the allowable compensation for attendants defined in §355.103(b)(1) of this title (relating to Specifications for Allowable and Unallowable Costs) and required to be reported as either salaries and/or wages, including payroll taxes and workers' compensation, or employee benefits. Benefits required by §355.103(b)(1)(A)(iii) of this title to be reported as costs applicable to specific cost report line items, except as noted in paragraph (3) of this subsection, are not to be included in this cost center. For ICF/IID, attendant compensation is also subject to the requirements detailed in §355.457 of this title (relating to Cost Finding Methodology). For HCS and TxHmL, attendant compensation is also subject to the requirements detailed in §355.722 of this title (relating to Reporting Costs by Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Providers).
(2) Contract labor refers to personnel for whom the contracted provider is not responsible for the payment of payroll taxes, such as FICA, Medicare, and federal and state unemployment insurance, and who perform tasks routinely performed by employees where allowed by program rules.
(3) Mileage reimbursement paid to the attendant for the use of his or her personal vehicle and which is not subject to payroll taxes is considered compensation for this cost center.
(e) Rate year. The rate year begins on the first day of September and ends on the last day of August of the following year.
(f) Open enrollment. Open enrollment begins on the first day of July and ends on the last day of that same July preceding the rate year for which payments are being determined. The Texas Health and Human Services Commission (HHSC) notifies providers of open enrollment via email sent to an authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. Requests to modify a provider's enrollment status during an open enrollment period must be received by HHSC by the last day of the open enrollment period through HHSC's enrollment portal or another method designated by HHSC. If the last day of open enrollment is on a weekend day, state holiday, or national holiday, the next business day will be considered the last day requests will be accepted. If open enrollment has been postponed or canceled, HHSC will notify providers by email before the first day of July. Should conditions warrant, HHSC may conduct additional enrollment periods during a rate year.
(g) Enrollment contract amendment.
(1) For CLASS--DSA, DBMD, DAHS, RC and PHC, an initial enrollment contract amendment is required from each provider choosing to participate in the attendant compensation rate enhancement. On the initial enrollment contract amendment, the provider must specify for each contract a desire to participate or not to participate and a preferred participation level.
(2) For ICF/IID, HCS and TxHmL, an initial enrollment contract amendment is required from each provider choosing to participate in the attendant compensation rate enhancement. On the initial enrollment contract amendment, the provider must specify for each component code a desire to participate or not to participate and a preferred participation level. All contracts of a component code within a specific program must either participate at the same level or not participate.
(A) For the ICF/IID program, the participating provider must also specify the services the provider wishes to participate in the attendant compensation rate enhancement. Eligible services are residential services and day habilitation services. The participating provider must specify whether the provider wishes to participate for residential services only, day habilitation services only or both residential services and day habilitation services.
(B) For the HCS and TxHmL programs, eligible services are divided into three categories. The three categories of services eligible for rate enhancement are the following:
(i) non-individualized skills and socialization services:
(I) SHL/CFC PAS HAB/CSS;
(II) in-home respite (IHR) and out-of-home respite (OHR);
(III) supported employment (SE); and
(IV) employment assistance (EA);
(ii) individualized skills and socialization services; and
(iii) residential services:
(I) SL; and
(II) RSS.
(C) The participating provider must specify which combination of the three categories of services the attendant compensation rate enhancement will apply to. For providers delivering services in both the HCS and TxHmL programs, the selected categories must be the same for their HCS and TxHmL programs, except for residential services which are only available in the HCS program.
(3) After initial enrollment, participating and nonparticipating providers may request to modify their enrollment status during any open enrollment period as follows:
(A) a nonparticipant can request to become a participant;
(B) a participant can request to become a nonparticipant; or
(C) a participant can request to change its participation level.
(4) Providers whose prior year enrollment was limited by subsection (v) of this section who request to increase their enrollment levels will be limited to increases of three or fewer enhancement levels during the first open enrollment period after the limitation. Providers that were subject to an enrollment limitation may request to participate at any level during open enrollment beginning two years after limitation.
(5) Requests to modify a provider's enrollment status during an open enrollment period must be received by HHSC by the last day of the open enrollment period as per subsection (f) of this section. If the last day of open enrollment is on a weekend day, state holiday, or national holiday, the next business day will be considered the last day requests will be accepted.
(6) For PHC, DAHS, RC, and CLASS--DSA providers from which HHSC has not received an acceptable request to modify their enrollment by the last day of the open enrollment period will continue at the level of participation in effect during the open enrollment period within available funds until the provider notifies HHSC in accordance with subsection (y) of this section that it no longer wishes to participate or until the provider's enrollment is limited in accordance with subsection (v) of this section.
(7) To be acceptable, an enrollment contract amendment must be completed according to instructions, signed by an authorized representative as per HHSC's signature authority designation form applicable to the provider's contract or ownership type, and legible.
(h) Enrollment of new contracts. For the purposes of this section, for each rate year a new contract is defined as a contract or component code whose effective date is on or after the first day of the open enrollment period, as defined in subsection (f) of this section, for that rate year. Contracts that underwent a contract assignment or change of ownership and new contracts that are part of an existing component code are not considered new contracts. For purposes of this subsection, an acceptable contract amendment is defined as a legible enrollment contract amendment that has been completed according to instructions, signed by an authorized representative as per HHSC's signature authority designation form applicable to the provider's contract or ownership type, and received by HHSC within 30 days of notification to the provider that such an enrollment contract amendment must be submitted. If the 30th day is on a weekend day, state holiday, or national holiday, the next business day will be considered the last day requests will be accepted. New contracts will receive the nonparticipant attendant compensation rate as specified in subsection (m) of this section with no enhancements. For new contracts specifying their desire to participate in the attendant compensation rate enhancement on an acceptable enrollment contract amendment, the attendant compensation rate is adjusted as specified in subsection (s) of this section, effective on the first day of the month following receipt by HHSC of an acceptable enrollment contract amendment. If the granting of newly requested enhancements was limited by subsection (q)(2)(B) of this section during the most recent enrollment, enrollment for new contracts will be subject to that same limitation. If the most recent enrollment was canceled by subsection (f) of this section, new contracts will not be permitted to be enrolled.
(i) Attendant Compensation Report.
(1) Definition of Attendant Compensation Report. An attendant compensation report is a report reflecting the provider's activities while delivering contracted services from the first day of the rate year through the last day of the rate year or provider's cost report year while participating in the attendant compensation rate enhancement program. This report is used as the basis for determining compliance with the spending requirements as described in subsection (t) of this section. Cost and accountability reports requested by HHSC are considered attendant compensation reports, and preparers must complete mandatory training requirements per §355.102(d) of this subchapter (relating to General Principles of Allowable and Unallowable Costs).
(2) Providers must file Attendant Compensation Reports as follows. HHSC will require a subset of participating contracted providers to submit an annual Attendant Compensation Report to HHSC in a method specified by HHSC.
(A) Cost reports serving as Attendant Compensation Reports. If HHSC requires a participating provider to file a cost report for a rate year, HHSC will use that provider's cost report as an Attendant Compensation Report as the basis for determining compliance with the spending requirements as described in subsection (t) of this section.
(B) Accountability reports serving as Attendant Compensation Reports. HHSC will require a select number of participating providers who are not required to submit a cost report for a rate year to submit an accountability report, which will serve as an Attendant Compensation Report as the basis for determining compliance with the spending requirements as described in subsection (t) of this section. These providers will be selected at random from the total number of participating contracts that are not required to submit a cost report for a rate year. The number selected must represent a statistically valid sample of participating providers.
(C) The Attendant Compensation Report must be submitted for each participating contract if the provider requested participation individually for each contract; or, if the provider requested participation as a group, the report must be submitted as a single aggregate report covering all contracts participating at the end of the rate year within one program of the provider. A participating contract that has been terminated in accordance with subsection (w) of this section or that has undergone a contract assignment in accordance with subsection (x) of this section will be considered to have participated on an individual basis for compliance with reporting requirements for the owner prior to the termination or contract assignment.
(D) If required to submit a report by HHSC, contracted providers failing to submit an acceptable annual Attendant Compensation Report within 60 days of the end of the rate year will be placed on vendor hold until such time as an acceptable report is received and processed by HHSC.
(E) When a participating provider changes ownership through a contract assignment, the prior owner may be required to submit an Attendant Compensation Report covering the period from the beginning of the rate year to the effective date of the contract assignment as determined by HHSC, or its designee. If required, this report will be used as the basis for determining any recoupment amounts as described in subsection (t) of this section. The new owner may be required to submit an Attendant Compensation Report covering the period from the day after the date recognized by HHSC, or its designee, as the contract-assignment effective date to the end of the rate year.
(F) Participating providers whose contracts are terminated voluntarily or involuntarily may be required to submit an Attendant Compensation Report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the contract termination date. If required, this report will be used as the basis for determining recoupment as described in subsection (t) of this section.
(G) Participating providers who voluntarily withdraw from participation, as described in subsection (y) of this section, may be required to submit an Attendant Compensation Report within 60 days from the date of withdrawal as determined by HHSC. If required, this report must cover the period from the beginning of the rate year through the date of withdrawal as determined by HHSC and will be used as the basis for determining any recoupment amounts as described in subsection (t) of this section.
(H) Participating providers whose cost report year, as defined in §355.105(b)(5) of this subchapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures), coincides with the state of Texas fiscal year, are exempt from the requirement to submit a separate Attendant Compensation Report. For these contracts, their cost report will be considered their Attendant Compensation Report.
(3) Cost Reports. Cost reports as described in §355.105(b) - (c) of this subchapter will serve as the Attendant Compensation Report with the following exceptions.
(A) When a participating provider changes ownership through a contract assignment or change of ownership, the previous owner may be required to submit an Attendant Compensation Report covering the period from the beginning of the provider's cost reporting period to the date recognized by HHSC, or its designee, as the contract-assignment or ownership-change effective date. If required, this report will be used as the basis for determining any recoupment amounts as described in subsection (t) of this section. The new owner may be required to submit a cost report covering the period from the day after the date recognized by HHSC or its designee as the contract-assignment or ownership-change effective date to the end of the provider's fiscal year.
(B) When one or more contracts or, for the ICF/IID, HCS, and TxHmL programs, component codes of a participating provider are terminated, either voluntarily or involuntarily, the provider may be required to submit an Attendant Compensation Report for the terminated contract(s) or component code(s) covering the period from the beginning of the provider's cost reporting period to the date recognized by HHSC, or its designee, as the contract or component code termination date. This report will be used as the basis for determining any recoupment amounts as described in subsection (t) of this section.
(C) When one or more contracts or, for the ICF/IID, HCS and TxHmL programs, component codes of a participating provider are voluntarily withdrawn from participation as per subsection (y) of this section, the provider may be required to submit an Attendant Compensation Report within 60 days of the date of withdrawal as determined by HHSC, covering the period from the beginning of the provider's cost reporting period to the date of withdrawal as determined by HHSC. If required, this report will be used as the basis for determining any recoupment amounts as described in subsection (t) of this section. These providers may still be required to submit a cost report covering the entire cost reporting period. The cost report will be used for determining any recoupment amounts.
(D) For new contracts as defined in subsection (h) of this section, the cost reporting period will begin with the effective date of participation in the enhancement.
(E) Existing providers who become participants in the enhancement as a result of the open enrollment process described in subsection (f) of this section on any day other than the first day of their fiscal year may be required to submit an Attendant Compensation Report with a reporting period that begins on their first day of participation in the enhancement and ends on the last day of the provider's fiscal year. If required, this report will be used as the basis for determining any recoupment amounts as described in subsection (t) of this section. These providers may still be required to submit a cost report covering the entire cost reporting period. The cost report will be used for determining any recoupment amounts.
(F) A participating provider that is required to submit a cost report or Attendant Compensation Report under this paragraph will be excused from the requirement to submit a report if the provider did not provide any billable attendant services to HHSC recipients during the reporting period.
(4) Other reports. HHSC may require other reports from all contracts as needed.
(5) Vendor hold. HHSC, or its designee, will place on hold the vendor payments for any participating provider who does not submit a timely report as described in paragraph (2) of this subsection completed in accordance with all applicable rules and instructions. This vendor hold will remain in effect until HHSC receives an acceptable report.
(A) Participating contracts or, for the ICF/IID, HCS and TxHmL programs, component codes may be required to submit an Attendant and Compensation Report. Participating facilities required to submit an Attendant and Compensation Report that do not submit an acceptable report completed in accordance with all applicable rules and instructions within 60 days of the due dates described in this subsection or, for cost reports, the due dates described in §355.105(b) of this subchapter will become nonparticipants retroactive to the first day of the reporting period in question and will be subject to an immediate recoupment of funds related to participation paid to the contractor for services provided during the reporting period in question. These contracts or component codes will remain nonparticipants and recouped funds will not be restored until they submit an acceptable report and repay to HHSC, or its designee, funds identified for recoupment from subsection (t) of this section. If an acceptable report is not received within 365 days of the due date, the recoupment will become permanent and, if all funds associated with participation during the reporting period in question have been recouped by HHSC, or its designee, the vendor hold associated with the report will be released.
(B) Participating contracts or, for the ICF/IID, HCS, and TxHmL programs, component codes that have terminated or undergone a contract assignment or ownership-change from one legal entity to a different legal entity may be required to submit an Attendant and Compensation Report. Participating facilities required to submit an Attendant and Compensation Report that do not submit an acceptable report completed in accordance with all applicable rules and instructions within 60 days of the contract assignment, ownership-change, or termination effective date will become nonparticipants retroactive to the first day of the reporting period in question. These contracts or component codes will remain nonparticipants, and recouped funds will not be restored until they submit an acceptable report and repay to HHSC, or its designee, funds identified for recoupment under subsection (t) of this section. If an acceptable report is not received within 365 days of the contract assignment, ownership-change, or termination effective date, the recoupment will become permanent and, if all funds associated with participation during the reporting period in question have been recouped by HHSC, or its designee, the vendor hold associated with the report will be released.
(6) Provider-initiated amended Attendant Compensation Reports and cost reports functioning as Attendant Compensation Reports. Reports must be received before the date the provider is notified of compliance with spending requirements for the report in question in accordance with subsection (t) of this section.
(j) Report contents. Each Attendant Compensation Report and cost report functioning as an Attendant Compensation Report will include any information required by HHSC to implement this attendant compensation rate enhancement.
(k) Completion of compensation reports. All Attendant Compensation Reports and cost reports functioning as Attendant Compensation Reports must be completed in accordance with the provisions of §§355.102 - 355.105 of this subchapter (relating to General Principles of Allowable and Unallowable Costs; Specifications for Allowable and Unallowable Costs; Revenues; and General Reporting and Documentation Requirements, Methods, and Procedures) and may be reviewed or audited in accordance with §355.106 of this subchapter (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports). All Attendant Compensation Reports and cost reports functioning as Attendant Compensation Reports must be completed by preparers who have attended the required cost report training for the applicable program under §355.102(d) of this subchapter. For the ICF/IID program, cost reports functioning as Attendant Compensation Reports must also be completed in accordance with the provisions of §355.456 of this chapter (relating to Reimbursement Methodology). For the HCS and TxHmL programs, cost reports functioning as Attendant Compensation Reports must also be completed in accordance with the provisions of §355.722 of this chapter (relating to Reporting Costs by Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Providers).
(l) Enrollment. Providers choosing to participate in the attendant compensation rate enhancement must submit to HHSC a signed enrollment contract amendment as described in subsection (g) of this section. Participation is determined separately for each program specified in subsection (a) of this section, except that for providers delivering both HCS and TxHmL services, participation includes both the HCS and TxHmL programs. For PHC, participation is also determined separately for priority and nonpriority services. For ICF/IID, participation is also determined separately for residential services and day habilitation services. For HCS and TxHmL, participation is also determined separately for the non-individualized skills and socialization services, individualized skills and socialization services, and residential services categories as defined in subsection (g)(2)(B) of this section. Participation will remain in effect, subject to availability of funds, until the provider notifies HHSC, in accordance with subsection (y) of this section, that it no longer wishes to participate or until HHSC excludes the contract from participation for reasons outlined in subsection (v) of this section. Contracts or component codes voluntarily withdrawing from participation will have their participation end effective with the date of withdrawal as determined by HHSC. Contracts or components codes excluded from participation will have their participation end effective on the date determined by HHSC.
(m) Determination of attendant compensation rate component for nonparticipating contracts.
(1) For CLASS--DSA; DAHS; DBMD; PHC; RC; STAR+PLUS AL; STAR+PLUS HCBS and Non-HCBS programs, HHSC will calculate an attendant compensation rate component for nonparticipating contracts by calculating a median of attendant compensation cost center data as defined in subsection (d) of this section for each applicable attendant service, weighted by the applicable attendant service's units of service from the most recently examined cost report database for each program, and adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 (related to Determination of Inflation Indices).
(A) The weighted median cost component is multiplied by 1.044 for CLASS--DSA, DBMD, PHC, STAR+PLUS HCBS, and Non-HCBS; and by 1.07 for DAHS, RC and STAR+PLUS AL. The result is the attendant compensation rate component for nonparticipating contracts.
(B) If HHSC has insufficient cost data, the attendant compensation rate component will be established through a pro forma costing approach as defined in §355.105(h) of this subchapter.
(2) For ICF/IID DH, ICF/IID residential services, HHSC will calculate an attendant compensation rate component for nonparticipating contracts for each service by calculating a median of attendant compensation cost center data as defined in subsection (d) of this section for each DH and Residential services, weighted by ICF/IID units of service from the most recently examined ICF/IID cost report database, and adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 (related to Determination of Inflation Indices).
(A) The weighted median attendant cost component is adjusted by modeled direct care hours to unit ratios to determine attendant compensation rate components for each level of need (LON).
(B) The weighted median cost component is multiplied by 1.07 for both ICF/IID DH and residential services.
(C) If HHSC has insufficient cost data, the attendant compensation rate component will be established through a pro forma costing analysis as defined in §355.105(h) of this subchapter.
(3) For HCS and TxHmL programs, HHSC will calculate an attendant compensation rate component for nonparticipating contracts for each service by calculating a median of attendant compensation cost center data as defined in subsection (d) of this section for each applicable attendant service, weighted by the applicable attendant service's units of service from the most recently examined HCS/TxHmL cost report database, and adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 (related to Determination of Inflation Indices).
(A) The weighted median cost component is multiplied by 1.044 for the following services:
(i) EA;
(ii) IHR;
(iii) OHR in a camp;
(iv) OHR in a respite facility;
(v) OHR in a setting where host home / companion care (HH/CC) is provided;
(vi) OHR in a setting that is not listed; and
(vii) SE;
(B) The weighted median cost component is multiplied by 1.07 for the following services:
(i) individualized skills and socialization services;
(ii) OHR in an individualized skills and socialization facility;
(iii) OHR in a setting with SL or RSS is provided;
(vi) RSS; and
(v) SL.
(C) For services with rates that are variable by LON as specified in §355.723(b) of this chapter (relating to Reimbursement Methodology for Home and Community-based Services and Texas Home Living Programs), the weighted median attendant cost component is adjusted by modeled direct care hours to unit or direct care staff to individual ratios to determine attendant compensation rate components for each LON.
(D) If HHSC has insufficient cost data, the attendant compensation rate component will be established through a pro forma costing analysis as defined in §355.105(h) of this subchapter.
(4) The adopted attendant compensation rate component for nonparticipating contracts will be limited to available levels of appropriated state and federal funds as specified in §355.201 of this chapter (relating to Establishment and Adjustment of Reimbursement Rates for Medicaid).
(n) Determination of attendant compensation base rate for participating contracts. For each of the programs identified in subsection (a) of this section, the attendant compensation base rate is equal to the attendant compensation rate component for nonparticipating contracts from subsection (m) of this section.
(o) Determination of attendant compensation rate enhancements. HHSC will determine a per diem add-on payment for each enhanced attendant compensation level using data from sources such as cost reports, surveys, and/or other relevant sources and taking into consideration quality of care, labor market conditions, economic factors, and budget constraints. The attendant compensation rate enhancement add-ons will be determined on a per-unit-of-service basis applicable to each program or service. Add-on payments may vary by enhancement level.
(p) Enhanced attendant compensation. Contracts or component codes desiring to participate in the enhanced attendant compensation rate may request attendant compensation levels from an array of enhanced attendant compensation options and associated add-on payments determined in subsection (o) of this section during open enrollment.
(1) ICF/IID providers must select a single attendant compensation level for all contracts within a component code for the day habilitation and/or residential services they have selected for participation.
(2) HCS and TxHmL must select a single attendant compensation level for all contracts within a component code for the non-individualized skills and socialization services and/or individualized skills and socialization services and/or residential services they have selected for participation.
(q) Granting attendant compensation rate enhancements. Eligible programs are divided into two populations for purposes of granting attendant compensation rate enhancements. The first population includes the PHC; DAHS; RC; CLASS--DSA; and DBMD programs, and the second population includes the ICF/IID; HCS; and TxHmL programs. Enhancements for the two populations are funded separately; funds intended for enhancements for the first population of programs will never be used for enhancements for the second population, and funds intended for enhancements for the second population of programs will never be used for enhancements for the first population. For each population of programs, HHSC divides all requested enhancements, after applying any enrollment limitations from subsection (v) of this section, into two groups: pre-existing enhancements, which providers request to carry over from the prior year, and newly-requested enhancements. Newly-requested enhancements may be enhancements requested by providers who were nonparticipants in the prior year or by providers who were participants in the prior year who seek additional enhancements. Using the process described herein separately for each population of programs, HHSC first determines the distribution of carry-over enhancements. If funds are available after the distribution of carry-over enhancements, HHSC determines the distribution of newly-requested enhancements. HHSC may not distribute newly-requested enhancements to providers owing funds identified for recoupment under subsection (t) of this section.
(1) For all programs and levels, HHSC determines projected units of service for contracts and/or component codes requesting each enhancement level and multiplies this number by the enhancement rate add-on amount associated with that enhancement level as determined in subsection (o) of this section.
(2) HHSC compares the sum of the products from paragraph (1) of this subsection to available funds.
(A) If the sum of the products is less than or equal to available funds, all requested enhancements are granted.
(B) If the sum of the products is greater than available funds, enhancements are granted beginning with the lowest level of enhancement and granting each successive level of enhancement until requested enhancements are granted within available funds. Based upon an examination of existing compensation levels and compensation needs, HHSC may grant certain enhancement options priority for distribution.
(r) Notification of granting of enhancements. Participating contracts and component codes are notified, in a manner determined by HHSC, as to the disposition of their request for attendant compensation rate enhancements.
(s) Total attendant compensation rate for participating providers. Each participating provider's total attendant compensation rate will be equal to the attendant compensation base rate from subsection (n) of this section plus any add-on payments associated with enhanced attendant compensation levels selected by and awarded to the provider during open enrollment.
(t) Spending requirements for participating contracts and component codes. HHSC will determine from the Attendant Compensation Report or cost report functioning as an Attendant Compensation Report, as specified in subsection (i) of this section and other appropriate data sources, the amount of attendant compensation spending per unit of service delivered. The provider's compliance with the spending requirement is determined based on the total attendant compensation spending as reported on the Attendant Compensation Report or cost report functioning as an Attendant Compensation Report for each participating contract or component code. Compliance with the spending requirement is determined separately for each program specified in subsection (a) of this section, except for providers delivering services in both the HCS and TxHmL programs whose compliance is determined by combining both programs. HHSC will calculate recoupment, if any, as follows.
(1) The accrued attendant compensation revenue per unit of service is multiplied by 0.90 to determine the spending requirement per unit of service. The accrued attendant compensation spending per unit of service will be subtracted from the spending requirement per unit of service to determine the amount to be recouped. If the accrued attendant compensation spending per unit of service is greater than or equal to the spending requirement per unit of service, there is no recoupment.
(2) The amount paid for attendant compensation per unit of service after adjustments for recoupment must not be less than the amount determined for nonparticipating contracts or component codes in subsection (k) of this section.
(3) In cases where more than one enhancement level is in effect during the reporting period, the spending requirement will be based on the weighted average enhancement level in effect during the reporting period calculated as follows.
(A) Multiply the first enhancement level in effect during the reporting period by the most recently available, reliable Medicaid units of service utilization data for the time period the first enhancement level was in effect.
(B) Multiply the second enhancement level in effect during the reporting period by the most recently available, reliable Medicaid units of service utilization data for the time period the second enhancement level was in effect.
(C) Sum the products from subparagraphs (A) and (B) of this paragraph.
(D) Divide the sum from subparagraph (C) of this paragraph by the sum of the most recently available, reliable Medicaid units of service utilization data for the entire reporting period used in subparagraphs (A) and (B) of this paragraph.
(u) Notification of recoupment. The estimated amount to be recouped is indicated in the State of Texas Automated Information Reporting System (STAIRS), the online application for submitting cost reports and Attendant Compensation reports. STAIRS will generate an email to the entity contact, indicating that the provider's estimated recoupment is available for review. The entity contact is the provider's authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. If a subsequent review by HHSC or audit results in adjustments to the Attendant Compensation Report or cost reporting, as described in subsection (i) of this section, that change the amount to be repaid, the provider will be notified by email to the entity contact that the adjustments and the adjusted amount to be repaid are available in STAIRS for review. HHSC, or its designee, will recoup any amount owed from a provider's vendor payment(s) following the date of the initial or subsequent notification. For the HCS and TxHmL programs, if HHSC, or its designee, is unable to recoup owed funds in an automated fashion, the requirements detailed under subsection (dd) of this section apply.
(v) Enrollment limitations. A provider will not be enrolled in the attendant compensation rate enhancement at a level higher than the level it achieved on its most recently available audited Attendant Compensation Report or cost report functioning as an Attendant Compensation Report. HHSC will notify a provider of its enrollment limitations after HHSC has completed a financial examination of the report in accordance with §355.106 of this title (concerning Basic Objectives and Criteria for Audit and Desk Review of Cost Reports).
(1) Notification of enrollment limitations. The enrollment limitation level is indicated in STAIRS. STAIRS will generate an e-mail to the entity contact, indicating that the provider's enrollment limitation level is available for review.
(2) Informal reviews and formal appeals. The filing of a request for an informal review or formal appeal relating to a provider's most recently available audited Attendant Compensation Report or cost report functioning as an Attendant Compensation Report under §355.110 of this title (relating to Informal Reviews and Formal Appeals) does not stay or delay implementation of an enrollment limitation applied in accordance with the requirements of this subsection. If an informal review or formal appeal relating to a provider's most recently available audited Attendant Compensation Report or cost report functioning as an Attendant Compensation Report is pending at the time the enrollment limitation is applied, the result of the informal review or formal appeal shall be applied to the provider's enrollment retroactively to the beginning of the rate year to which the enrollment limitation was originally applied.
(3) New owners after a contract assignment or change of ownership that is an ownership change from one legal entity to a different legal entity. Enhancement levels for a new owner after a contract assignment or change of ownership that is an ownership change from one legal entity to a different legal entity will be determined in accordance with subsection (i) of this section. A new owner after a contract assignment or change of ownership that is an ownership-change from one legal entity to a different legal entity will not be subject to enrollment limitations based upon the prior owner's performance.
(4) New providers. A new provider's enrollment will be determined in accordance with subsection (h) of this section.
(w) Contract terminations. For contracted providers or component codes required to submit an Attendant Compensation Report due to a termination as described in subsection (i) of this section, HHSC, or its designee, will place a vendor hold on the payments of the contracted provider until HHSC receives an acceptable Attendant Compensation Report, as specified in subsection (i) of this section, and funds identified for recoupment from subsection (t) of this section are repaid to HHSC or its designee. Informal reviews and formal appeals relating to these reports are governed by §355.110 of this title. HHSC, or its designee, will recoup any amount owed from the provider's vendor payments that are being held. In cases where funds identified for recoupment cannot be repaid from the held vendor payments, the responsible entity from subsection (dd) of this section will be jointly and severally liable for any additional payment due to HHSC or its designee. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in the recoupment of the owed funds from other HHSC contracts controlled by the responsible entity, placement of a vendor hold on all HHSC contracts controlled by the responsible entity, and will bar the responsible entity from enacting new contracts with HHSC until repayment is made in full. The responsible entity for these contracts will be notified as described in subsection (u) of this section prior to the recoupment of owed funds, placement of vendor hold on additional contracts, and barring of new contracts.
(x) Contract assignments. The following applies to contract assignments.
(1) Definitions. The following words and terms have the following meanings when used in this subsection.
(A) Assignee--A legal entity that assumes a Community Care contract through a legal assignment of the contract from the contracting entity as provided in 40 TAC §49.210 (relating to Contractor Change of Ownership or Legal Entity).
(B) Assignor--A legal entity that assigns its Community Care contract to another legal entity as provided in 40 TAC §49.210.
(C) Contract assignment--The transfer of a contract by one legal entity to another legal entity as provided in 40 TAC §49.210.
(i) Type One Contract Assignment--A contract assignment by which the assignee is an existing Community Care contract.
(ii) Type Two Contract Assignment--A contract assignment by which the assignee is a new Community Care contract.
(2) Participation after a contract assignment. Participation after a contract assignment is determined as follows:
(A) Type One Contract Assignments. For Type One contract assignments, the assignee's level of participation remains the same while the assignor's level of participation changes to the assignee's.
(B) Type Two Contract Assignments. For Type Two contract assignments, the level of participation of the assignor contract(s) will continue unchanged under the assignee contract(s).
(3) Reporting requirements. The assignee is responsible for the reporting requirements in subsection (i) of this section for any reporting period days occurring after the contract assignment effective date. If the contract assignment occurs during an open enrollment period as defined in subsection (f) of this section, the owner recognized by HHSC, or its designee, on the last day of the enrollment period may request to modify the enrollment status of the contract in accordance with subsection (g) of this section.
(4) Vendor holds. For contracted providers required to submit an Attendant Compensation Report due to contract assignment, as described in subsection (i) of this section, HHSC, or its designee, will place a vendor hold on the payments of the existing contracted provider until HHSC receives an acceptable Attendant Compensation Report, as specified in subsection (i) of this section, and until funds identified for recoupment from subsection (t) of this section are repaid to HHSC or its designee. HHSC, or its designee, will recoup any amount owed from the provider's vendor payments that are being held. In cases where funds identified for recoupment cannot be repaid from the held vendor payments, the responsible entity from subsection (dd) of this section will be jointly and severally liable for any additional payment due to HHSC or its designee. Failure to repay the amount due within 60 days of notification will result in the recoupment of the owed funds from other HHSC contracts controlled by the responsible entity, placement of a vendor hold on all HHSC contracts controlled by the responsible entity, and will bar the responsible entity from enacting new contracts with HHSC until repayment is made in full. The responsible entity for these contracts will be notified, as described in subsection (u) of this section, prior to the recoupment of owed funds, placement of vendor hold on additional contracts, and barring of new contract.
(y) Voluntary withdrawal. Participating contracts or component codes wishing to withdraw from the attendant compensation rate enhancement must notify HHSC in writing by certified mail and the request must be signed by an authorized representative as designated per the HHSC signature authority designation form applicable to the provider's contract or ownership type. The requests will be effective the first of the month following the receipt of the request. Contracts or component codes voluntarily withdrawing must remain nonparticipants for the remainder of the rate year. Providers whose contracts are participating as part of a component code must request withdrawal of all the contracts in the component code.
(z) Adjusting attendant compensation requirements. Providers that determine that they will not be able to meet their attendant compensation requirements may request to reduce their attendant compensation requirements and associated enhancement payment to a lower participation level by submitting a written request to HHSC by certified mail, and the request must be signed by an authorized representative as designated per the HHSC signature authority designation form applicable to the provider's contract or ownership type. These requests will be effective the first of the month following the receipt of the request. Providers whose contracts are participating as part of a component code must request the same reduction for all of the contracts in the component code.
(aa) All other rate components. All other rate components will continue to be calculated as specified in the program-specific reimbursement methodology and will be uniform for all providers.
(bb) Failure to document spending. Undocumented attendant compensation expenses will be disallowed and will not be used in the determination of the attendant compensation spending per unit of service in subsection (t) of this section.
(cc) Appeals. Subject matter of informal reviews and formal appeals is limited as per §355.110 of this title.
(dd) Responsible entities. The contracted provider, owner, or legal entity which received the attendant compensation rate enhancement is responsible for the repayment of the recoupment amount.
(1) HCS and TxHmL providers required to repay enhancement funds will be jointly and severally liable for any repayment.
(2) Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in placement of a vendor hold on all HHSC contracts controlled by the responsible entity.
(ee) Manual Repayment. For the HCS and TxHmL programs, if HHSC, or its designee, is unable to recoup owed funds using an automated system, providers will be required to repay some or all of the enhancement funds to be recouped through a check, money order, or other non-automated method. Providers will be required to submit the required repayment amount within 60 days of notification.
(ff) Determination of compliance with spending requirements in the aggregate.
(1) Definitions. The following words and terms have the following meanings when used in this subsection.
(A) Commonly owned corporations--two or more corporations where five or fewer identical persons who are individuals, estates, or trusts own greater than 50 percent of the total voting power in each corporation.
(B) Entity--a parent company, sole member, individual, limited partnership, or group of limited partnerships controlled by the same general partner.
(C) Combined entity--one or more commonly owned corporations and one or more limited partnerships where the general partner is controlled by the same identical persons as the commonly owned corporation(s).
(D) Control--greater than 50 percent ownership by the entity.
(2) Aggregation. For an entity, for two or more commonly owned corporations, or for a combined entity that controls more than one participating contract or component code in a program (with HCS and TxHmL considered a single program), compliance with the spending requirements detailed in subsection (t) of this section can be determined in the aggregate for all participating contracts or component codes in the program controlled by the entity, commonly owned corporations, or combined entity at the end of the rate year, the effective date of the change of ownership of its last participating contract or component code in the program, or the effective date of the termination of its last participating contract or component code in the program rather than requiring each contract or component code to meet its spending requirement individually. Corporations that do not meet the definitions under paragraph (1)(A) - (C) of this subsection are not eligible for aggregation to meet spending requirements.
(A) Aggregation Request. To exercise aggregation, the entity, combined entity, or commonly owned corporations must submit an aggregation request in a manner prescribed by HHSC at the time each Attendant Compensation Report or cost report is submitted. In limited partnerships in which the same single general partner controls all the limited partnerships, the single general partner must make this request. Other such aggregation requests will be reviewed on a case-by-case basis.
(B) Frequency of Aggregation Requests. The entity, combined entity, or commonly owned corporations must submit a separate request for aggregation for each reporting period.
(C) Ownership changes or terminations. For the ICF/IID, HCS, TxHmL, DAHS, RC, and DBMD programs, contracts or component codes that change ownership or terminate effective after the end of the applicable reporting period, but prior to the determination of compliance with spending requirements as per subsection (t) of this section, are excluded from all aggregate spending calculations. These contracts' or component codes' compliance with spending requirements will be determined on an individual basis, and the costs and revenues will not be included in the aggregate spending calculation.
(gg) Conditions of participation for ICF/IID day habilitation and HCS/TxHmL individualized skills and socialization services. The following conditions of participation apply to each ICF/IID, HCS, and TxHmL provider specifying its wish to have day habilitation services or individualized skills and socialization services participate in the attendant compensation rate enhancement.
(1) A provider who provides day habilitation or individualized skills and socialization services in-house or who contracts with a related party to provide day habilitation or individualized skills and socialization services will report job trainer and job coach compensation and hours on the required cost report items (e.g., hours, salaries and wages, payroll taxes, employee benefits/insurance/workers' compensation, contract labor costs, and personal vehicle mileage reimbursement). Day habilitation costs cannot be combined and reported in one cost report item.
(2) A provider who contracts with a non-related party to provide day habilitation or individualized skills and socialization services will report its payments to the contractor in a single cost report item as directed in the instructions for the cost report or Attendant Compensation Report as described in subsection (i)(3) and (4) of this section. HHSC will allocate 50 percent of reported payments to the attendant compensation cost area for inclusion with other allowable day habilitation or individualized skills and socialization services attendant costs in order to determine the total attendant compensation spending for day habilitation or individualized skills and socialization services as described in subsection (t) of this section.
(3) The provider must ensure access to any and all records necessary to verify information submitted to HHSC on Attendant Compensation Reports and cost reports functioning as an Attendant Compensation Report.
(4) HHSC will require each ICF/IID, HCS, and TxHmL provider specifying their wish to have day habilitation or individualized skills and socialization services participate in the attendant compensation rate enhancement to certify during the enrollment process that it will comply with the requirements of paragraphs (1) - (3) of this subsection.
(hh) New contracts within existing component codes. For ICF/IID, HCS, and TxHmL, new contracts within existing component codes will be assigned a level of participation equal to the existing component code's level of participation effective on the start date of the contract as recognized by HHSC or its designee.
(ii) Disclaimer. Nothing in these rules should be construed as preventing providers from compensating attendants at a level above that funded by the enhanced attendant compensation rate.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 9, 2023.
TRD-202302910
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 1, 2023
Proposal publication date: July 7, 2023
For further information, please call: (512) 867-7817
The Texas Health and Human Services Commission (HHSC) adopts new rule §355.304, concerning Direct Care Staff Spending Requirement on or after September 1, 2023, and an amendment to §355.308, concerning Direct Care Staff Rate Component. Section 355.304 and §355.308 are adopted with changes to the proposed text as published in the July 7, 2023, issue of the Texas Register (48 TexReg 3577). These rules will be republished.
BACKGROUND AND JUSTIFICATION
The purpose of the adoption is to implement the 2024-25 General Appropriations Act (GAA), House Bill 1, 88th Legislature, Regular Session, 2023 (Article II, Health and Human Services Commission, Rider 24). Rider 24 provides appropriations for rate increases for nursing facilities. Nursing facilities must report to HHSC on their biennial cost report information regarding the use of these funds, including information related to efforts to improve or maintain client care and quality of services, and to demonstrate that at least 90 percent of the funds were expended for the purpose of direct care staff wages or benefits. This new rule operationalizes the rider requirements to enable nursing facilities to receive increased reimbursement rates. The adoption also amends §355.308, related to the Direct Care Staff Rate Component.
HHSC is modifying the adopted amendments to lower the benchmark for the base rate calculation as described in detail in the comments and response summary section below. HHSC is modifying the adopted rule to reflect a 70 percent threshold for the direct care base rate spending floor instead of the 90 percent in the original proposal. Furthermore, HHSC is lowering the spending requirement in the direct care staff enhancement program by changing the direct care spending floor to 70 percent of direct care revenues from the current 85 percent requirement. HHSC is making this change upon adoption to align spending requirements related to the direct care rate increases in new §355.304 and the direct care staff enhancement program in §355.308.
The amendment to §355.308 maintains the deleted provisions related to request for revision report, the request for recalculation, and references to reinvestment.
COMMENTS
The 21-day comment period ended July 28, 2023.
During this period, HHSC received comments regarding the proposed rules from approximately 400 commenters from the following organizations: Amarillo Center for Skilled Care; Amistad Nursing & Rehabilitation Center; Arbor Hills Rehabilitation and Healthcare Center; Beaumont Nursing and Rehab; Beaumont Nursing and Rehabilitation; Belterra Health & Rehabilitation Center; Bertram Nursing Home & Rehabilitation Center; Big Spring Center For Skilled Care; Bluebonnet Nursing and Rehabilitation; Brazos Healthcare Center; Bremond Nursing & Rehab Center; Brenham Nursing & Rehabilitation Center; Brentwood Terrace Nursing and Rehabilitation Center; Briarcliff Skilled Nursing Facility; Bridgecrest Rehabilitation Suites; Broadmoor Medical Lodge; Brodie Ranch Nursing & Rehabilitation Center; Brownfield Rehabilitation and Care Center; Brownwood Nursing & Rehabilitation; Buena Vida Nursing and Rehabilitation Center; Canton Oaks; Caprock Healthcare; Care Inn of La Grange; Castle Pines Health and Rehabilitation; Cedar Creek Nursing and Rehabilitation Center; Cherokee Rose Nursing and Rehabilitation; Christian Care Center; Cityview Nursing & Rehabilitation Center; Coalition of Independent Nursing Home Providers; Concho Health & Rehabilitation Center; Country View Nursing and Rehabilitation; Crestview Healthcare Residence; Crimson Heights Health and Wellness; Cross Timbers Rehabilitation & Healthcare Center; Crossroads Nursing and Rehabilitation; De Leon Nursing and Rehabilitation Center; Decatur Medical Lodge; Devine Health and Rehabilitation; Diamond Care Health Services; Duncanville Healthcare and Rehabilitation Center; Eagle Pass Nursing & Rehabilitation; Emerald Hills Rehabilitation and Healthcare Center; Ensign Services, Inc.; Five Points Nursing and Rehabilitation; Five Points-DeSoto; Flatonia Healthcare Center; Fortress Nursing and Rehabilitation; Franklin Nursing Home; Georgia Manor Nursing and Rehabilitation; Graham Oaks Care Center; Granbury Care Center; Grapevine Medical Lodge; Greenbrier Healthcare Center; Greenbrier Nursing & Rehabilitation Center; Greenhill Villas; Groveton Nursing Home; Hays Nursing and Rehabilitation Center; Health Services Management; Heritage at Longview; Heritage at Turner Park Nursing & Rehab; Heritage House Nursing and Rehabilitation; Heritage Place; Hillside Heights Rehabilitation; HMG Healthcare, LLC; Holiday Nursing & Rehab; Homestead of Sherman Nursing & Rehab; Huebner Creek Health and Rehabilitation Center; Human Resource Coordinator; Human Resource of River City Care Center; Keeneland Nursing & Rehabilitation; Kemp Care Center; Kerens Care Center; Kingsland Hills Care Center; Leading Age of Texas, La Hacienda de Paz Rehab & Care Center; La Vida Serena Nursing & Rehabilitation; Labahia Nursing and Rehabilitation Center; Lake Hills Healthcare; Lake Lodge Nursing & Rehabilitation; Lakeview Rehab & Healthcare Center; Lampstand Nursing and Rehabilitation; Las Ventanas de Socorro; Leading Age of Texas; Longmeadow Healthcare Center; Lubbock Health Care Center; M Chest Pharmacies; Madisonville Care Center; Mansfield Medical Lodge; Marbridge Villa; Marine Creek Nursing & Rehabilitation; Matagorda Nursing and Rehabilitation Center; McLean Care Center; Memphis Convalescent Center; Mesa Vista Health; Mission Ridge Rehabilitation & Nursing Center; Mission Valley Nursing and Transitional Care; Mountain View Health and Rehabilitation; Navasota Nursing and Rehabilitation; Nexion Health; Normandy Terrace Healthcare & Rehabilitation; North Las Vegas Care Center; North Park Health and Rehabilitation Center; Northeast Rehabilitation and Healthcare Center; Northgate Health and Rehabilitation Center; NorthStar Ranch; Oakmont Healthcare & Rehabilitation; Oasis Nursing & Rehabilitation Center; Paradigm at Kountze; Paradigm at the Prairies; Paradigm Health Care Services; Park Highlands Nursing & Rehabilitation; Peach Tree Place; Pecan Creek Healthcare; Pecan Manor Nursing & Rehabilitation; Pine Tree Lodge; Pleasant Springs Healthcare; Port Lavaca Nursing & Rehabilitation Center; Priority Management Group; Providence Park Rehabilitation and Skilled Nursing; Regency Integrated Health Services; Regency Integrated Healthcare; Renaissance Rehabilitation and Healthcare Center; Reunion Plaza Skilled Nursing; Ridgmar Medical Lodge; River City Care Center; Robstown Nursing & Rehabilitation; Rock Creek Health and Rehabilitation; San Pedro Manor; San Saba Rehabilitation and Nursing; Sandy Lake Rehabilitation & Care Center; Seven Oaks; Shady Oak Nursing and Rehabilitation Center; Shiner Nursing and Rehabilitation Center; Sienna Nursing and Rehabilitation; Skilled Care of Mexia; Slaton Care Center; Solidago Health & Rehabilitation; South Place Rehabilitation & Skilled Nursing; Spanish Hills Wellness Suites; Sterling Oaks Rehabilitation; Stonegate Senior Living; Summit LTC Management; Summit Nursing & Rehab of San Augustine; Sunflower Park Healthcare; Sunrise Nursing & Rehab Center; Terra Bella Health and Wellness; Texas Healthcare Association; Texoma Healthcare Center; The Arbors Healthcare and Rehabilitation; The Atrium of Bellmead; The Brazos of Waco; The Courtyards at Pasadena; The Hills Nursing and Rehabilitation; The Meadows Health & Rehabilitation Center; The Park in Plano; The Pavilion at Creekwood; The Rehabilitation & Wellness Centre of Dallas, LLC; The Rio at Mission Trails; Touchstone Communities; Treemont Healthcare; Trinity Healthcare, LLC; Twilight Home Nursing & Rehabilitation; Twin Oaks Nursing & Rehabilitation Center; Twin Pines North Nursing and Rehabilitation; Vidor Health and Rehabilitation; Villa Haven Health and Rehabilitation; Villa Residential Care of Wolfforth; Village Creek Rehabilitation & Nursing Center; Walnut Springs Health & Rehabilitation; Weatherford Healthcare Center; Wellington Care Center; Westward Trails Nursing and Rehabilitation; Whispering Pines Lodge; Willow Springs Health & Rehabilitation; Windsor Arbor View; Windsor Calallen; Windsor Nursing and Rehabilitation Center.
A summary of comments relating to §355.304 and HHSC's responses follows:
Comment: Several commenters expressed opposition to the direct care staff base rate spending floor as proposed in the rule. Commenters expressed concerns about setting a spending threshold on the direct care component of the rate, as none exists today nor is required, but recognized the need for a benchmark to compare the rate increase to ensure that 90 percent is spent on wages. Commenters said this benchmark should be noted as only a measurement tool, and no higher than 70 percent. One commenter suggested a benchmark of 65 percent.
Response: HHSC agrees to modify the spending requirement such that the direct care staff base rate spending floor in §355.304(e)(1) will be calculated as 70 percent of the Medicaid fee-for-service and managed care revenues proportional to the direct care base rates in effect on August 31, 2023. HHSC made a clarifying modification to §355.304(e)(3) so that it clarifies a provider will be held to 90 percent of revenues proportional to the direct care rate increases effective on September 1, 2023.
Comment: Several commenters asked to modify the definition of responsible entity in §355.304(b)(4) to not include "new owner following a change of ownership."
Response: HHSC agrees and made the change. HHSC's current processes ensures the responsible entity (the contracted provider, owner, or legal entity that received the revenue) is required to submit a report to "demonstrate that at least 90 percent of the funds were expended for the purpose of direct care staff wages or benefits" and the funds will be recouped from the responsible entity who does not utilize the funds in accordance with Rider 24.
Comment: Multiple commenters expressed that the spending requirement in the proposed rule is beyond the scope of Rider 24 and has no legislative basis.
Response: HHSC disagrees and declines to make the change. Holding providers to a base rate spending floor is necessary to meet the Rider's intention that HHSC "shall only expend funds...to provider reimbursement rate increases in a manner that will increase the wages and benefits of direct care staff" and that "at least 90 percent of the funds are expended for the benefit of direct care staff wages." A base rate spending floor establishes a baseline comparison of direct care expenditures and revenue that allows HHSC to understand the proportion of expenditures spent on direct care using the revenue associated with the direct care rate component in effect on August 31, 2023. Calculation of the direct care spending floor allows HHSC to evaluate whether providers increased their direct spending using the revenue associated with the direct care rate increases implemented on September 1, 2023, relative to the expenditures already being spent on direct care using the revenue from the direct care rate component prior to the increase.
Comment: Multiple commenters stated the rule contemplates a recoupment process, but Rider 24 simply has a biennial reporting requirement for facilities. Commenters say the recoupment process described in §355.304(e) was not contemplated by the Legislature.
Response: Rider 24 directs HHSC to "implement the rate increases in a manner that will enable HHSC to ensure that at least 90 percent of the funds are expended for the benefit of direct care staff wages and benefits and shall return to the Comptroller of Public Accounts any amount recouped from a provider who does not utilize the funds in accordance with that purpose." The Rider also provides that the providers will submit biennial cost reports "to demonstrate that at least 90 percent of the funds were expended for the purpose of direct care staff wages or benefits." From these two sentences in the Rider, HHSC understands the legislature's intent to be that HHSC shall recoup funds from any provider who fails to meet spending to support direct care staff. No changes were made in response to this comment.
Comment: One commenter encourages HHSC to clarify requirements in §355.304(h) regarding the responsibilities of the prior and new owners when a facility undergoes a change of ownership.
Response: HHSC agrees and modified §355.304(h) to clarify the prior owner must submit a report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the ownership-change effective date to meet reporting requirements under subsection (f) of this section, and the new owner is responsible for the reporting requirements for any reporting period days after the change of ownership effective date to the end of the rate year.
Comment: One commenter appreciates the inclusion of an aggregation component under §355.304(j) but is concerned that the spending requirement does not take into account regional cost variation and will require providers to shift spending to direct care from non-direct care costs. The commenter encourages HHSC to provide facility-specific individual detail spending performance to providers to allow them to make adjustments at the facility level if requirements are not met.
Response: Each combined entity or corporation owning multiple facilities may choose to aggregate their spending across multiple facilities within an entity for the purpose of meeting spending requirements in §355.304. HHSC will provide worksheets that allow a provider to calculate anticipated expenditures and revenue so the provider can ensure compliance with the spending requirements in the rule. HHSC acknowledges that some providers may need to adjust their spending to meet the rule requirements but believes these requirements are necessary to ensure Rider 24 appropriations are spent for the benefit of direct care staff compensation. No changes were made in response to this comment.
Comment: One commenter reiterated concerns provided during the public rate hearing on July 11, 2023, regarding the allocation of the appropriations provided under Rider 24 to the direct care rate component for each RUG group will result in a loss of total base rate reimbursement for certain facilities compared to the total base rate for each RUG group in effect on August 31, 2023, plus the $19.63 add-on.
Response: HHSC appreciates the comment related to the proposed rate increase. However, the rate adoption process for nursing facility rates proposed to be effective on September 1, 2023, is outside the scope of this rule proposal. No changes were made in response to this comment.
Comment: One commenter encourages HHSC to amend the rule to clarify that there is no requirement to meet the direct care base rate spending floor in subsection §355.304(e)(2), and that there is no penalty for not meeting the direct care base rate spending floor. Rather, the comments contends the direct care base rate spending floor is only established to calculate the direct care spending floor as described in §355.304(e)(3).
Response: HHSC disagrees and declines to make the change. The language in §355.304(e)(2) specifies there will be no recoupment associated with failure to meet the direct care base rate spending floor. Moreover, §355.304(e)(5) reiterates that at no time will HHSC recoup more than the rate increases established under this section.
Comment: One commenter encouraged HHSC to mitigate administrative burden when developing new reporting requirements and expressed appreciation for using existing reports to evaluate compliance.
Response: HHSC will seek to mitigate the administrative burden on providers as much as feasible in the implementation of this rule. No changes were made in response to this comment.
Comment: One commenter indicated references in §355.304(g)(1) incorrectly reference subsection (d) and subsection (e) instead of subsection (e) and subsection (f).
Response: HHSC agrees and will make the change.
A summary of comments relating to §355.308 and HHSC's responses follows:
Comment: Several commenters expressed opposition to increasing the direct care staff spending requirements in §355.308(o) to 90 percent as proposed but are supportive of a threshold of no higher than 70 percent. One commenter encourages HHSC to maintain the requirement at 85 percent.
Response: HHSC agrees to reduce the spending requirement in the Direct Care Staff Enhancement Program as specified in 355.308(o) from 85 percent to 70 percent to align the spending requirements in both §355.304 and §355.308 and reduce provider confusion and enhance compliance.
Comment: Several commenters oppose calculating the direct care base rate for staff enhancement using the most recent cost reports. Commenters say calculating the direct care base rate for staff enhancement using the most recent cost reports, and inflating by 1.07, will create a misalignment with the direct care rate used for staff enhancement versus the direct care rate component to be paid. If this is used for each new cost report without increased appropriations, commenters say the spending required to qualify for staff enhancement will become more and more difficult to meet.
Response: HHSC disagrees and declines to make a change. Section 355.308(k) provides the methodology for the methodological base rate and does not impact current rates being paid or appropriation levels to support the program. The current methodology references an initial database from the 2000 cost report. The proposed language replaces the reference from the 2000 cost report to the most recently audited database to better reflect providers' current costs when rebasing the methodological rate.
Comment: Several commenters expressed opposition to eliminating a limited provider's opportunity to submit a request for revision during the annual open enrollment period for the direct care staff enhancement program.
Response: HHSC disagrees and declines to make the change. The request for revision process allows a provider to overturn the provider's limitations by using unverified data, which could include unallowable costs. Because the rate enhancement program relies on a limited funding pool, the request for revision process enables a provider who regularly misses the provider's spending requirements to remain in the program and prevents a provider who meets program requirements from the opportunity to obtain a higher enhancement level.
STATUTORY AUTHORITY
The amendment and new section are adopted under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC's duties; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code Chapter 32.
§355.304.Direct Care Staff Spending Requirement on or after September 1, 2023.
(a) Introduction. The Texas Health and Human Services Commission (HHSC) uses the methodology described in this section to establish rate increases to the direct care staff component base rate for nursing facility services while limiting the use of funds received by the provider through these increases. This section describes the spending requirements associated with receiving the rate increases and circumstances in which recoupments will be necessary for a provider's failure to meet those requirements.
(b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.
(1) Direct care staff base rate--The direct care staff base rate is calculated in accordance with §355.308(k) of this chapter (relating to Direct Care Staff Rate Component.
(2) Direct care staff cost center--This cost center will include compensation for employee and contract labor Registered Nurses (RNs), including Directors of Nursing (DONs) and Assistant Directors of Nursing (ADONs); Licensed Vocational Nurses (LVNs), including DONs and ADONs; medication aides; and nurse aides performing nursing-related duties for Medicaid contracted beds.
(3) Rate year--The standard rate year begins on the first day of September and ends on the last day of August of the following year.
(4) Responsible entity--The contracted provider, owner, or legal entity that received the revenue to be recouped is responsible for the repayment of any recoupment amount.
(c) Eligibility. To receive and retain rate increases under this section, the provider must be contracted with HHSC or a managed care organization (MCO) to provide nursing facility services through the Medicaid program.
(d) Direct Care Staff Base Rate Increase. Effective September 1, 2023, HHSC will increase the direct care staff base rate for nursing facility services for each Resource Utilization Group (RUG), Version III (RUG-III) case-mix group by an amount that is proportional to the level of the direct care staff base rate for each RUG-III case-mix group in effect on August 31, 2023. The direct care staff base rate increases will be limited to available state and federal appropriated amounts provided for the direct care base rate increase. The direct care rate increase will be applied proportionally to the level of each nursing component payer group under the Texas-specific patient driven payment methodology once that methodology is implemented.
(e) Spending Requirements for providers. Providers are subject to a direct care staff cost center spending requirement with recoupment calculated as follows.
(1) At the end of the rate year, HHSC will calculate a direct care staff base rate spending floor by multiplying accrued Medicaid fee-for-service and managed care direct care staff revenues proportional to the direct care base rates effective on August 31, 2023 by 0.70, for each provider.
(2) Accrued allowable Medicaid direct care staff expenses for the rate year will be compared to the base rate spending floor from paragraph (1) of this subsection. If the base rate spending floor is less than the accrued allowable Medicaid direct care staff expenses, HHSC or its designee will notify the provider as specified in subsection (g) of this section. There will be no recoupment associated with a provider's failure to meet the direct care base rate spending floor specified in this paragraph.
(3) At the end of the rate year, HHSC will calculate the direct care spending floor by multiplying accrued Medicaid fee-for-service and managed care direct care staff revenues proportional to the direct care staff rate increases specified under subsection (d) of this section by 0.90 and the direct care staff base rate spending floor as specified in paragraph (1) of this subsection.
(4) Accrued allowable Medicaid direct care staff expenses for the rate year will be compared to the total direct care staff spending floor from paragraph (3) of this subsection. If the direct care spending floor is less than the accrued allowable Medicaid direct care staff expenses, HHSC or its designee will recoup the difference between the direct care spending floor and the accrued allowable Medicaid direct care staff expenses from providers whose Medicaid direct care staff spending is less than their direct care spending floor.
(5) At no time will a provider's direct care rates after recoupment be less than the direct care base rates in effect prior to the direct care staff base rate increase established under this section.
(6) For participants in the direct care staff enhancement program. HHSC will calculate spending requirement as specified under §355.308 of this subchapter.
(f) Reporting Requirements. Providers receiving the direct care rate increases established under this section must report their direct care revenues and spending to HHSC or its designee in a manner and frequency prescribed by HHSC. HHSC will use cost reports or staffing and compensation reports (accountability reports) requested to comply with the direct care staff enhancement program as specified in §355.308 of this subchapter to meet the requirements of this section if applicable. Providers must also report information related to the use of funds, including information related to efforts to improve or maintain client care and quality of services on their biennial cost reports, as specified by HHSC. All reports must be completed in accordance with the provisions of §355.102 of this chapter (relating to General Principles of Allowable and Unallowable Costs), §355.103 of this chapter (relating to Specifications for Allowable and Unallowable Costs), §355.104 of this chapter (relating to Revenues), and §355.105 of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures) and may be reviewed or audited in accordance with §355.106 of this chapter (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports). All reports must be completed by preparers who have attended the required nursing facility cost report training, as per §355.102(d) of this chapter.
(g) Notification of recoupment, appeals, and repayment requirements.
(1) The estimated amount to be recouped for a provider's failure to meet spending requirements as specified under subsection (e) of this section will be indicated in the State of Texas Automated Information and Reporting System (STAIRS) or successor system. STAIRS will generate an email to the entity contact, indicating that the facility's estimated recoupment is available for review. If a subsequent review by HHSC results in additional adjustments to the report, as described in subsection (f) of this section, that results in a revised recoupment amount, HHSC will notify the provider's entity contact via email of both the report adjustments and revised recoupment amount are available in STAIRS for review.
(2) Informal reviews and formal appeals relating to these reporting requirements in subsection (f) of this section are governed by §355.110 of this chapter (relating to Informal Reviews and Formal Appeals).
(3) HHSC or its designee will recoup any amount owed from the facility's vendor payments that are being held following the initial or subsequent notification date. In cases where funds identified for recoupment cannot be repaid from the held vendor payments, the responsible entity from subsection (b) of this section will be jointly and severally liable for any additional payment due to HHSC or its designee. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in the recoupment of the owed funds from other Medicaid contracts controlled by the responsible entity, placement of a vendor hold on all Medicaid contracts controlled by the responsible entity, and barring of new contracts. The vendor hold will bar the responsible entity from receiving any new contracts with HHSC or its designees until repayment is made in full. The responsible entity for these contracts will be notified as described in paragraph (1) of this subsection prior to the recoupment of owed funds, placement of vendor hold, and barring of new contracts.
(h) Change of ownership. When there is a change of ownership before the end of a rate year, the prior owner must submit a report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the ownership-change effective date to meet reporting requirements under subsection (f) of this section. The new owner may be responsible for the reporting requirements in subsection (f) of this section for any reporting period days after the change of ownership effective date to the end of the rate year as specified by HHSC or its designee.
(i) Vendor hold. HHSC or its designee will place on hold the vendor payments for any participating facility that does not submit a timely report as described in subsection (f) of this section in accordance with §355.403 of this subchapter (relating to Vendor Hold).
(j) Aggregation. For an entity, commonly owned corporation, or combined entity that controls more than one participating nursing facility contract, compliance with the spending requirements detailed in subsection (e) of this section can be determined in the aggregate for all nursing facility contracts controlled by the entity, commonly owned corporations, or combined entity in accordance with aggregation requirements specified in §355.308(aa) of this subchapter.
§355.308.Direct Care Staff Rate Component.
(a) Direct care staff cost center. This cost center will include compensation for employee and contract labor Registered Nurses (RNs), including Directors of Nursing (DONs) and Assistant Directors of Nursing (ADONs); Licensed Vocational Nurses (LVNs), including DONs and ADONs; medication aides; and nurse aides performing nursing-related duties for Medicaid contracted beds.
(1) Compensation to be included for these employee staff types is the allowable compensation defined in §355.103(b)(1) of this title (relating to Specifications for Allowable and Unallowable Costs) that is reported as either salaries and/or wages (including payroll taxes and workers' compensation) or employee benefits. Benefits required by §355.103(b)(1)(A)(iii) of this title to be reported as costs applicable to specific cost report line items are not to be included in this cost center.
(2) Direct care staff who also have administrative duties not related to nursing must properly direct charge their compensation to each type of function performed based upon daily time sheets maintained throughout the entire reporting period.
(3) Nurse aides must meet the qualifications enumerated under 26 TAC §556.3 (relating to Nurse Aide Training and Competency Evaluation Program (NATCEP) Requirements) to be included in this cost center. Nurse aides include certified nurse aides and nurse aides in training.
(4) Contract labor refers to personnel for whom the contracted provider is not responsible for the payment of payroll taxes (such as FICA, Medicare, and federal and state unemployment insurance) and who perform tasks routinely performed by employees. Allowable contract labor costs are defined in §355.103(b)(3) of this title.
(5) For facilities receiving supplemental reimbursement for children with tracheostomies requiring daily care as described in §355.307(b)(3)(F) of this title (relating to Reimbursement Setting Methodology), staff required by 26 TAC §554.901(15)(C)(iii) (relating to Quality of Care) performing nursing-related duties for Medicaid contracted beds are included in the direct care staff cost center.
(6) For facilities receiving supplemental reimbursement for qualifying ventilator-dependent residents as described in §355.307(b)(3)(E) of this title, Registered Respiratory Therapists and Certified Respiratory Therapy Technicians are included in the direct care staff cost center.
(7) Nursing facility administrators and assistant administrators are not included in the direct care staff cost center.
(8) Staff members performing more than one function in a facility without a differential in pay between functions are categorized at the highest level of licensure or certification they possess. If this highest level of licensure or certification is not that of an RN, LVN, medication aide, or certified nurse aide, the staff member is not to be included in the direct care staff cost center but rather in the cost center where staff members with that licensure or certification status are typically reported.
(9) Paid feeding assistants are not included in the direct care staff cost center and are not to be counted toward the staffing requirements described in subsection (j) of this section. Paid feeding assistants are intended to supplement certified nurse aides, not to be a substitute for certified or licensed nursing staff.
(b) Rate year. The standard rate year begins on the first day of September and ends on the last day of August of the following year.
(c) Open enrollment. Open enrollment for the enhanced direct care staff rates will begin on the first day of July and end on the last day of that same July preceding the rate year for which payments are being determined. HHSC notifies providers of open enrollment by electronic mail (e-mail) to an authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. If open enrollment has been postponed or cancelled, the Texas Health and Human Services Commission (HHSC) will notify providers by e-mail prior to the first day of July. Should conditions warrant, HHSC may conduct additional enrollment periods during a rate year.
(d) Enrollment contract amendment. An initial enrollment contract amendment is required from each facility choosing to participate in the enhanced direct care staff rate. Participating and nonparticipating facilities may request to modify their enrollment status (i.e., a nonparticipant can request to become a participant, a participant can request to become a nonparticipant, a participant can request to change its enhancement level) during any open enrollment period. Nonparticipants and participants requesting to increase their enrollment levels will be limited to requesting increases of three or fewer enhancement levels during any single open enrollment period unless such limits are waived by HHSC. Requests to modify a facility's enrollment status during an open enrollment period must be received by HHSC by the last day of the open enrollment period as per subsection (c) of this section. If the last day of the open enrollment period falls on a weekend, a national holiday, or a state holiday, then the first business day following the last day of the open enrollment period is the final day the receipt of the enrollment contract amendment will be accepted. An enrollment contract amendment that is not received by the stated deadline will not be accepted. A facility from which HHSC has not received an acceptable request to modify their enrollment by the last day of the open enrollment period will continue at the level of participation in effect during the open enrollment period within available funds until the facility notifies HHSC in accordance with subsection (r) of this section that it no longer wishes to participate or until the facility's enrollment is limited in accordance with subsection (i) of this section. If HHSC determines that funds are not available to continue participation at the level of participation in effect during the open enrollment period, facilities will be notified as per subsection (dd) of this section. To be acceptable, an enrollment contract amendment must be completed according to instructions, signed by an authorized representative as per the HHSC signature authority designation form applicable to the provider's contract or ownership type, and be legible.
(e) New facilities. For purposes of this section, for each rate year a new facility is defined as a facility delivering its first day of service to a Medicaid recipient after the first day of the open enrollment period, as defined in subsection (c) of this section, for that rate year. Facilities that underwent an ownership change are not considered new facilities. For purposes of this subsection, an acceptable enrollment contract amendment is defined as a legible enrollment contract amendment that has been completed according to instructions, signed by an authorized representative as per the HHSC signature authority designation form applicable to the provider's contract or ownership type, and received by HHSC within 30 days of the notification to the facility by HHSC that such an enrollment contract amendment must be submitted. New facilities will receive the direct care staff base rate as determined in subsection (k) of this section with no enhancements. For new facilities specifying their desire to participate on an acceptable enrollment contract amendment, the direct care staff rate is adjusted as specified in subsection (l) of this section, effective on the first day of the month following receipt by HHSC of the acceptable enrollment contract amendment. If the granting of newly requested enhancements was limited as per subsection (j)(3) of this section during the most recent enrollment, enrollment for new facilities will be subject to that same limitation.
(f) Staffing and Compensation Report submittal requirements.
(1) Annual Staffing and Compensation Report. For services delivered on or before August 31, 2009, providers must file Staffing and Compensation Reports as follows. All participating facilities will provide HHSC, in a method specified by HHSC, an Annual Staffing and Compensation Report reflecting the activities of the facility while delivering contracted services from the first day of the rate year through the last day of the rate year. This report will be used as the basis for determining compliance with the staffing requirements and recoupment amounts as described in subsection (n) of this section, and as the basis for determining the spending requirements and recoupment amounts as described in subsection (o) of this section. Participating facilities failing to submit an acceptable Annual Staffing and Compensation Report within 60 days of the end of the rate year will be placed on vendor hold until such time as an acceptable report is received and processed by HHSC.
(A) When a participating facility changes ownership, the prior owner must submit a Staffing and Compensation Report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the ownership-change effective date. This report will be used as the basis for determining any recoupment amounts as described in subsections (n) and (o) of this section. The new owner will be required to submit a Staffing and Compensation Report covering the period from the day after the date recognized by HHSC or its designee as the ownership-change effective date to the end of the rate year.
(B) Participating facilities whose contracts are terminated either voluntarily or involuntarily must submit a Staffing and Compensation Report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the contract termination date. This report will be used as the basis for determining any recoupment amounts as described in subsections (n) and (o) of this section.
(C) Participating facilities who voluntarily withdraw from participation as per subsection (r) of this section must submit a Staffing and Compensation Report within 60 days of the date of withdrawal as determined by HHSC, covering the period from the beginning of the rate year to the date of withdrawal as determined by HHSC. This report will be used as the basis for determining any recoupment amounts as described in subsections (n) and (o) of this section.
(D) Participating facilities whose cost report year coincides with the state of Texas fiscal year as per §355.105(b)(5) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures) are exempt from the requirement to submit a separate Annual Staffing and Compensation Report. For these facilities, their cost report will be considered their Annual Staffing and Compensation Report.
(2) For services delivered on September 1, 2009, and thereafter, cost reports as described in §355.105(b) of this title will replace the Staffing and Compensation Report with the following exceptions:
(A) For services delivered from September 1, 2009, to August 31, 2010, participating facilities may be required to submit Transition Staffing and Compensation Reports in addition to required cost reports. The Transition Staffing and Compensation Report reporting period will include those days in calendar years 2009 and 2010 not included in either the 2009 Staffing and Compensation report or the facility's 2010 cost report.
(B) When a participating facility changes ownership, the prior owner must submit a Staffing and Compensation Report covering the period from the beginning of the facility's cost reporting period to the date recognized by HHSC or its designee as the ownership-change effective date. This report will be used as the basis for determining any recoupment amounts as described in subsections (n) and (o) of this section. The new owner will be required to submit a cost report covering the period from the day after the date recognized by HHSC or its designee as the ownership-change effective date to the end of the facility's fiscal year.
(C) Participating facilities whose contracts are terminated either voluntarily or involuntarily must submit a Staffing and Compensation Report covering the period from the beginning of the facility's cost reporting period to the date recognized by HHSC or its designee as the contract termination date. This report will be used as the basis for determining any recoupment amounts as described in subsections (n) and (o) of this section.
(D) Participating facilities who voluntarily withdraw from participation as per subsection (r) of this section must submit a Staffing and Compensation Report within 60 days of the date of withdrawal as determined by HHSC, covering the period from the beginning of the facility's cost reporting period to the date of withdrawal as determined by HHSC. This report will be used as the basis for determining any recoupment amounts as described in subsections (n) and (o) of this section. These facilities must still submit a cost report covering the entire cost reporting period. The cost report will not be used for determining any recoupment amounts.
(E) For new facilities as defined in subsection (e) of this section, the cost reporting period will begin with the effective date of participation in enhancement.
(F) Existing facilities which become participants in the enhancement as a result of the open enrollment process described in subsection (c) of this section on any day other than the first day of their fiscal year are required to submit a Staffing and Compensation Report with a reporting period that begins on their first day of participation in the enhancement and ends on the last day of the facility's fiscal year. This report will be used as the basis for determining any recoupment amounts as described in subsections (n) and (o) of this section. These facilities must still submit a cost report covering the entire cost reporting period. The cost report will not be used for determining any recoupment amounts.
(G) A participating provider that is required to submit a cost report or Attendant Compensation Report under this paragraph will be excused from the requirement to submit a report if the provider did not provide any billable services to DADS recipients during the reporting period.
(3) Other reports. HHSC may require other Staffing and Compensation Reports from all facilities as needed.
(4) Vendor hold. HHSC or its designee will place on hold the vendor payments for any participating facility that does not submit a timely report as described in paragraph (1) of this subsection, or for services delivered on or after September 1, 2009, a timely report as described in paragraph (2) of this subsection completed in accordance with all applicable rules and instructions. This vendor hold will remain in effect until HHSC receives an acceptable report.
(A) Participating facilities that do not submit an acceptable report completed in accordance with all applicable rules and instructions within 60 days of the due dates described in this subsection or, for cost reports, the due dates described in §355.105(b) of this title, will become nonparticipants retroactive to the first day of the reporting period in question and will be subject to an immediate recoupment of funds related to participation paid to the facility for services provided during the reporting period in question. These facilities will remain nonparticipants and recouped funds will not be restored until they submit an acceptable report and repay to HHSC, or its designee, funds identified for recoupment from subsections (n) and/or (o) of this section. If an acceptable report is not received within 365 days of the due date, the recoupment will become permanent and, if all funds associated with participation during the reporting period in question have been recouped by HHSC or its designee, the vendor hold associated with the report will be released.
(B) Participating facilities with an ownership change or contract termination that do not submit an acceptable report completed in accordance with all applicable rules and instructions within 60 days of the change in ownership or contract termination will become nonparticipants retroactive to the first day of the reporting period in question and will be subject to an immediate recoupment of funds related to participation paid to the facility for services provided during the reporting period in question. These facilities will remain nonparticipants and recouped funds will not be restored until they submit an acceptable report and repay to HHSC or its designee funds identified for recoupment from subsections (n) and/or (o) of this section. If an acceptable report is not received within 365 days of the change of ownership or contract termination date, the recoupment will become permanent and if all funds associated with participation during the reporting period in question have been recouped by HHSC or its designee, the vendor hold associated with the report will be released.
(5) Provider-initiated amended accountability reports and cost reports functioning as Staffing and Compensation Reports. Reports must be received prior to the date the provider is notified of compliance with spending and/or staffing requirements for the report in question as per subsections (n) and/or (o) of this section.
(g) Report contents. Annual Staffing and Compensation Reports and cost reports functioning as Staffing and Compensation Reports will include any information required by HHSC to implement this enhanced direct care staff rate.
(h) Completion of Reports. All Staffing and Compensation Reports and cost reports functioning as Staffing and Compensation Reports must be completed in accordance with the provisions of §§355.102 - 355.105 of this title (relating to General Principles of Allowable and Unallowable Costs; Specifications for Allowable and Unallowable Costs; Revenues; and General Reporting and Documentation Requirements, Methods, and Procedures) and may be reviewed or audited in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports). Beginning with the state fiscal year 2002 report, all Staffing and Compensation Reports and cost reports functioning as Staffing and Compensation Reports must be completed by preparers who have attended the required nursing facility cost report training as per §355.102(d) of this title.
(i) Enrollment limitations. A facility will not be enrolled in the enhanced direct care staff rate at a level higher than the level it achieved on its most recently available, audited Staffing and Compensation Report or cost report functioning as its Staffing and Compensation Report. HHSC will notify a facility of its enrollment limitations (if any) prior to the first day of the open enrollment period.
(1) Notification of enrollment limitations. The enrollment limitation level is indicated in the State of Texas Automated Information Reporting System (STAIRS), the online application for submitting cost reports and accountability reports. STAIRS will generate an e-mail to the entity contact, indicating that the facility's enrollment limitation level is available for review. The entity contact is the provider's authorized representative per the signature authority designation form applicable to the provider's contract or ownership type.
(2) At no time will a facility be allowed to enroll in the enhancement program at a level higher than its current level of enrollment plus three additional levels unless otherwise instructed by HHSC.
(3) New owners after a change of ownership. Enhancement levels for a new owner after a change of ownership will be determined in accordance with subsection (y) of this section. A new owner will not be subject to enrollment limitations based upon the prior owner's performance. This exemption from enrollment limitations does not apply in cases where HHSC or its designee has approved a successor-liability-agreement that transfers responsibility from the former owner to the new owner.
(4) New facilities. A new facility's enrollment will be determined in accordance with subsection (e) of this section.
(j) Determination of staffing requirements for participants. Facilities choosing to participate in the enhanced direct care staff rate agree to maintain certain direct care staffing levels above the minimum staffing levels described in paragraph (1) of this subsection. In order to permit facilities the flexibility to substitute RN, LVN and aide (Medication Aide and nurse aide) staff resources and, at the same time, comply with an overall nursing staff requirement, total nursing staff requirements are expressed in terms of LVN equivalent minutes. Conversion factors to convert RN and aide minutes into LVN equivalent minutes are based upon most recently available, reliable relative compensation levels for the different staff types.
(1) Minimum staffing levels. HHSC determines, for each participating facility, minimum LVN equivalent staffing levels as follows.
(A) Determine minimum required LVN equivalent minutes per resident day of service for various types of residents using time study data, cost report information, and other appropriate data sources.
(i) Determine LVN equivalent minutes associated with Medicare residents based on the data sources from this subparagraph adjusted for estimated acuity differences between Medicare and Medicaid residents.
(ii) Determine minimum required LVN equivalent minutes per resident day of service associated with each Resource Utilization Group (RUG-III) case mix group and additional minimum required minutes for Medicaid residents reimbursed under the RUG-III system who also qualify for supplemental reimbursement for ventilator care or pediatric tracheostomy care as described in §355.307 of this title (relating to Reimbursement Setting Methodology) based on the data sources from this subparagraph adjusted for acuity differences between Medicare and Medicaid residents and other factors.
(B) Based on most recently available, reliable utilization data, determine for each facility the total days of service by RUG-III group, days of service provided to Medicaid residents qualifying for Medicaid supplemental reimbursement for ventilator or tracheostomy care, total days of service for Medicare Part A residents in Medicaid-contracted beds, and total days of service for all other residents in Medicaid-contracted beds.
(C) Multiply the minimum required LVN equivalent minutes for each RUG-III group and supplemental reimbursement group from subparagraph (A) of this paragraph by the facility's Medicaid days of service in each RUG-III group and supplemental reimbursement group from subparagraph (B) of this paragraph and sum the products.
(D) Multiply the minimum required LVN equivalent minutes for Medicare residents by the facility's Medicare Part A days of service in Medicaid-contracted beds.
(E) Divide the sum from subparagraph (C) of this paragraph by the facility's total Medicaid days of service, with a day of service for a Medicaid RUG-III recipient who also qualifies for a supplemental reimbursement counted as one day of service, compare this result to the minimum required LVN-equivalent minutes for a RUG-III PD1 and multiply the lower of the two figures by the facility's other resident days of service in Medicaid-contracted beds.
(F) Sum the results of subparagraphs (C), (D) and (E) of this paragraph, divide the sum by the facility's total days of service in Medicaid-contracted beds, with a day of service for a Medicaid recipient who also qualifies for a supplemental reimbursement counted as one day of service. The results of these calculations are the minimum LVN equivalent minutes per resident day a participating facility must provide.
(G) In cases where the minimum required LVN-equivalent minutes per resident day of service associated with a RUG-III case mix group or supplemental reimbursement group change during the reporting period, the minimum required LVN-equivalent minutes for the RUG-III case mix group or supplemental reimbursement group for the reporting period will be equal to the weighted average LVN-equivalent minutes in effect during the reporting period for that group calculated as follows:
(i) Multiply the first minimum required LVN equivalent minutes per resident day of service associated with the RUG-III case mix group or supplemental reimbursement group in effect during the reporting period by the most recently available, reliable Medicaid days of service utilization data for the time period the first minimum required LVN equivalent minutes were in effect.
(ii) Multiply the second minimum required LVN equivalent minutes per resident day of service associated with the RUG-III case mix group or supplemental reimbursement group in effect during the reporting period by the most recently available, reliable Medicaid days of service utilization data for the time period the second minimum required LVN equivalent minutes were in effect.
(iii) Sum the products from clauses (i) and (ii) of this subparagraph.
(iv) Divide the sum from clause (iii) of this subparagraph by the sum of the most recently available, reliable Medicaid days of service utilization data for the entire reporting period used in clauses (i) and (ii) of this subparagraph.
(2) Enhanced staffing levels. Facilities desiring to participate in the enhanced direct care staff rate are required to staff above the minimum requirements from paragraph (1) of this subsection. These facilities may request LVN-equivalent staffing enhancements from an array of LVN-equivalent enhanced staffing options and associated add-on payments during open enrollment under subsection (d) of this section.
(3) Granting of staffing enhancements. HHSC divides all requested enhancements, after applying any enrollment limitations from subsection (i) of this section, into two groups: pre-existing enhancements that facilities request to carry over from the prior year and newly-requested enhancements. Newly-requested enhancements may be enhancements requested by facilities that were nonparticipants in the prior year or by facilities that were participants in the prior year desiring to be granted additional enhancements. Using the process described herein, HHSC first determines the distribution of carry-over enhancements. If HHSC determines that funds are not available to carry over some or all pre-existing enhancements, facilities will be notified as per subsection (dd) of this section. If funds are available after the distribution of carry-over enhancements, HHSC then determines the distribution of newly requested enhancements. HHSC may not distribute newly requested enhancements to facilities owing funds identified for recoupment from subsections (n) and/or (o) of this section.
(A) HHSC determines projected Medicaid units of service for facilities requesting each enhancement option and multiplies this number by the rate add-on associated with that enhancement option as determined in subsection (l) of this section.
(B) HHSC compares the sum of the products from subparagraph (A) of this paragraph to available funds.
(i) If the product is less than or equal to available funds, all requested enhancements are granted.
(ii) If the product is greater than available funds, enhancements are granted beginning with the lowest level of enhancement and granting each successive level of enhancement until requested enhancements are granted within available funds. Based upon an examination of existing staffing levels and staffing needs, HHSC may grant certain enhancement options priority for distribution.
(4) Notification of granting of enhancements. Participating facilities are notified, in a manner determined by HHSC, as to the disposition of their request for staffing enhancements.
(5) In cases where more than one enhanced staffing level is in effect during the reporting period, the staffing requirement will be based on the weighted average enhanced staffing level in effect during the reporting period calculated as follows:
(A) Multiply the first enhanced staffing level in effect during the reporting period by the most recently available, reliable Medicaid days of service utilization data for the time period the first enhanced staffing level was in effect.
(B) Multiply the second enhanced staffing level in effect during the reporting period by the most recently available, reliable Medicaid days of service utilization data for the time period the second enhanced staffing level was in effect.
(C) Sum the products from subparagraphs (A) and (B) of this paragraph.
(D) Divide the sum from subparagraph (C) of this paragraph by the sum of the most recently available, reliable Medicaid days of service utilization data for the entire reporting period used in subparagraphs (A) and (B) of this paragraph.
(k) Determination of direct care staff base rate.
(1) Determine the sum of recipient care costs from the direct care staff cost center in subsection (a) of this section in all nursing facilities included in the most recently available Texas Nursing Facility Cost Report database (hereinafter referred to as the initial database).
(2) Adjust the sum from paragraph (1) of this subsection as specified in §355.108 of this title (relating to Determination of Inflation Indices) to inflate the costs to the prospective rate year.
(3) Divide the result from paragraph (2) of this subsection by the sum of recipient days of service in all facilities in the initial database and multiply the result by 1.07. The result is the average direct care staff base rate component for all facilities.
(4) For rates effective September 1, 2009 and thereafter, to calculate the direct care staff per diem base rate component for all facilities for each of the RUG-III case mix groups and for the default groups, divide each RUG-III index from §355.307(b)(3)(C) of this title (relating to Reimbursement Setting Methodology) by 0.9908, which is the weighted average Texas Index for Level of Effort (TILE) case mix index associated with the initial database, and then multiply each of the resulting quotients by the average direct care staff base rate component from paragraph (3) of this subsection.
(5) The direct care staff per diem base rates will be limited to available levels of appropriated state and federal funds as specified in §355.201 of this chapter. HHSC may also recommend adjustments to the rates in accordance with §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).
(l) Determine each participating facility's total direct care staff rate. Each participating facility's total direct care staff rate will be equal to the direct care staff base rate from subsection (k) of this section plus any add-on payments associated with enhanced staffing levels selected by and awarded to the facility during open enrollment. HHSC will determine a per diem add-on payment for each enhanced staffing level taking into consideration the most recently available, reliable data relating to LVN equivalent compensation levels.
(m) Staffing requirements for participating facilities. Each participating facility will be required to maintain adjusted LVN-equivalent minutes equal to those determined in subsection (j) of this section. Each participating facility's adjusted LVN-equivalent minutes maintained during the reporting period will be determined as follows.
(1) Determine unadjusted LVN-equivalent minutes maintained. Upon receipt of the staffing and spending information described in subsection (f) of this section, HHSC will determine the unadjusted LVN-equivalent minutes maintained by each facility during the reporting period.
(2) Determine adjusted LVN-equivalent minutes maintained. Compare the unadjusted LVN-equivalent minutes maintained by the facility during the reporting period from paragraph (1) of this subsection to the LVN-equivalent minutes required of the facility as determined in subsection (j) of this section. The adjusted LVN-equivalent minutes are determined as follows:
(A) If the number of unadjusted LVN-equivalent minutes maintained by the facility during the reporting period is greater than or equal to the number of LVN-equivalent minutes required for the facility or less than the minimum LVN-equivalent minutes required for participation as determined in subsection (j)(1) of this section; the facility's adjusted LVN-equivalent minutes maintained is equal to its unadjusted LVN-equivalent minutes; or
(B) If the number of unadjusted LVN-equivalent minutes maintained by the facility during the reporting period is less than the number of LVN-equivalent minutes required of the facility, but greater than or equal to the minimum LVN-equivalent minutes required for participation as determined in subsection (j)(1) of this section, the following steps are performed.
(i) Determine what the facility's accrued Medicaid fee-for-service direct care revenue for the reporting period would have been if their staffing requirement had been set at a level consistent with the highest LVN-equivalent minutes that the facility actually maintained, as defined in subsection (j) of this section.
(ii) Determine the facility's adjusted accrued direct care revenue by multiplying the accrued direct care revenue from clause (i) of this subparagraph by 0.85.
(iii) Determine the facility's accrued allowable Medicaid fee-for-service direct care staff expenses for the rate year.
(iv) Determine the facility's direct care spending surplus for the reporting period by subtracting the facility's adjusted accrued direct care revenue from clause (ii) of this subparagraph from the facility's accrued allowable direct care expenses from clause (iii) of this subparagraph.
(v) If the facility's direct care spending surplus from clause (iv) of this subparagraph is less than or equal to zero, the facility's adjusted LVN-equivalent minutes maintained is equal to the unadjusted LVN-equivalent minutes maintained as calculated in paragraph (1) of this subsection.
(vi) If the facility's direct care spending surplus from clause (iv) of this subparagraph is greater than zero, the adjusted LVN-equivalent minutes maintained by the facility during the reporting period is set equal to the facility's direct care spending surplus from clause (iv) of this subparagraph divided by the per diem enhancement add-on as determined in subsection (l) of this section plus the unadjusted LVN-equivalent minutes maintained by the facility during the reporting period from paragraph (1) of this subsection according to the following formula: (Direct Care Spending Surplus/Per Diem Enhancement Add-on for One LVN-equivalent Minute) + Unadjusted LVN-equivalent Minutes.
(C) For adjusted LVN-equivalent minutes calculated on or after March 1, 2004, requirements relating to the minimum LVN-equivalent minutes required for participation in subparagraphs (A) and (B) of this paragraph do not apply.
(n) Staffing accountability. Participating facilities will be responsible for maintaining the staffing levels determined in subsection (j) of this section. HHSC will determine the adjusted LVN-equivalent minutes maintained by each facility during the reporting period by the method described in subsection (m) of this section. HHSC or its designee will recoup all direct care staff revenues associated with unmet staffing goals from participating facilities that fail to meet their staffing requirements during the reporting period.
(o) Spending requirements for participants. Participating facilities are subject to a direct care staff spending requirement with recoupment calculated as follows.
(1) Effective September 1, 2023, HHSC will complete calculations associated with the direct care rate increases and spending requirements in accordance with §355.304 of this subchapter (relating to Direct Care Staff Spending Requirement on or after September 1, 2023).
(2) At the end of the rate year, a spending floor will be calculated by multiplying accrued Medicaid fee-for-service and managed care direct care staff revenues by 0.70.
(3) Accrued allowable Medicaid direct care staff fee-for-service expenses for the rate year will be compared to the spending floor from paragraph (2) of this subsection. HHSC or its designee will recoup the difference between the spending floor and accrued allowable Medicaid direct care staff fee-for-service expenses from facilities whose Medicaid direct care staff spending is less than their spending floor.
(4) At no time will a participating facility's direct care rates after spending recoupment be less than the direct care base rates.
(p) Dietary and Fixed Capital Mitigation. Recoupment of funds described in subsection (o) of this section may be mitigated by high dietary and/or fixed capital expenses as follows.
(1) Calculate dietary cost deficit. At the end of the facility's rate year, accrued Medicaid dietary per diem revenues will be compared to accrued, allowable Medicaid dietary per diem costs. If costs are greater than revenues, the dietary per diem cost deficit will be equal to the difference between accrued, allowable Medicaid dietary per diem costs and accrued Medicaid dietary per diem revenues. If costs are less than revenues, the dietary cost deficit will be equal to zero.
(2) Calculate dietary revenue surplus. At the end of the facility's rate, accrued Medicaid dietary per diem revenues will be compared to accrued, allowable Medicaid dietary per diem costs. If revenues are greater than costs, the dietary per diem revenue surplus will be equal to the difference between accrued Medicaid dietary per diem revenues and accrued, allowable Medicaid dietary per diem costs. If revenues are less than costs, the dietary revenue surplus will be equal to zero.
(3) Calculate fixed capital cost deficit. At the end of the facility's rate year, accrued Medicaid fixed capital per diem revenues will be compared to accrued, allowable Medicaid fixed capital per diem costs as defined in §355.306(b)(2)(A) of this title (relating to Cost Finding Methodology). If costs are greater than revenues, the fixed capital cost per diem deficit will be equal to the difference between accrued, allowable Medicaid fixed capital per diem costs and accrued Medicaid fixed capital per diem revenues. If costs are less than revenues, the fixed capital cost deficit will be equal to zero. For purposes of this paragraph, fixed capital per diem costs of facilities with occupancy rates below 85% are adjusted to the cost per diem the facility would have accrued had it maintained an 85% occupancy rate throughout the rate year.
(4) Calculate fixed capital revenue surplus. At the end of the facility's rate year, accrued Medicaid fixed capital per diem revenues will be compared to accrued, allowable Medicaid fixed capital per diem costs as defined in §355.306(b)(2)(A) of this title. If revenues are greater than costs, the fixed capital revenue per diem surplus will be equal to the difference between accrued Medicaid fixed capital per diem revenues and accrued, allowable Medicaid fixed capital per diem costs. If revenues are less than costs, the fixed capital revenue surplus will be equal to zero. For purposes of this paragraph, fixed capital per diem costs of facilities with occupancy rates below 85% are adjusted to the cost per diem the facility would have accrued had it maintained an 85% occupancy rate throughout the rate year.
(5) Facilities with a dietary per diem cost deficit will have their dietary per diem cost deficit reduced by their fixed capital per diem revenue surplus, if any. Any remaining dietary per diem cost deficit will be capped at $2.00 per diem.
(6) Facilities with a fixed capital cost per diem deficit will have their fixed capital cost per diem deficit reduced by their dietary revenue per diem surplus, if any. Any remaining fixed capital per diem cost deficit will be capped at $2.00 per diem.
(7) Each facility's recoupment, as calculated in subsection (o) of this section, will be reduced by the sum of that facility's dietary per diem cost deficit as calculated in paragraph (5) of this subsection and its fixed capital per diem cost deficit as calculated in paragraph (6) of this subsection.
(q) Adjusting staffing requirements. Facilities that determine that they will not be able to meet their staffing requirements from subsection (m) of this section may request a reduction in their staffing requirements and associated rate add-on. These requests will be effective on the first day of the month following approval of the request.
(r) Voluntary withdrawal. Facilities wishing to withdraw from participation must notify HHSC in writing by certified mail and the request must be signed by an authorized representative as designated per the HHSC signature authority designation form applicable to the provider's contract or ownership type. Facilities voluntarily withdrawing must remain nonparticipants for the remainder of the rate year. Facilities that voluntarily withdraw from participation will have their participation end effective on the date of the withdrawal, as determined by HHSC.
(s) Notification of recoupment based on Annual Staffing and Compensation Report or cost report. The estimated amount to be recouped is indicated in STAIRS. STAIRS will generate an e-mail to the entity contact, indicating that the facility's estimated recoupment is available for review. If a subsequent review by HHSC or audit results in adjustments to the Annual Staffing and Compensation Report or cost report as described in subsection (f) of this section that changes the amount to be repaid to HHSC or its designee, the facility will be notified by e-mail to the entity contact that the adjustments and the adjusted amount to be repaid are available in STAIRS for review. HHSC or its designee will recoup any amount owed from a facility's vendor payment(s) following the date of the initial or subsequent notification.
(t) Change of ownership and contract terminations. Facilities required to submit a Staffing and Compensation Report due to a change of ownership or contract termination as described in subsection (f) of this section will have funds held as per 26 TAC §554.210 (relating to Change of Ownership and Notice of Changes) until an acceptable Staffing and Compensation Report is received by HHSC and funds identified for recoupment from subsections (n) and/or (o) of this section are repaid to HHSC or its designee. Informal reviews and formal appeals relating to these reports are governed by §355.110 of this title (relating to Informal Reviews and Formal Appeals). HHSC or its designee will recoup any amount owed from the facility's vendor payments that are being held. In cases where funds identified for recoupment cannot be repaid from the held vendor payments, the responsible entity from subsection (x) of this section will be jointly and severally liable for any additional payment due to HHSC or its designee. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in the recoupment of the owed funds from other Medicaid contracts controlled by the responsible entity, placement of a vendor hold on all Medicaid contracts controlled by the responsible entity and will bar the responsible entity from receiving any new contracts with HHSC or its designees until repayment is made in full. The responsible entity for these contracts will be notified as described in subsection (s) of this section prior to the recoupment of owed funds, placement of vendor hold and barring of new contracts.
(u) Failure to document staff time and spending. Undocumented direct care staff and contract labor time and compensation costs will be disallowed and will not be used in the determination of direct care staff time and costs per unit of service.
(v) All other rate components. All other rate components will be calculated as specified in §355.307 of this title (relating to Reimbursement Setting Methodology) and will be uniform for all providers.
(w) Appeals. Subject matter of informal reviews and formal appeals is limited as per §355.110(a)(3) of this title (relating to Informal Reviews and Formal Appeals).
(x) Responsible entities. The contracted provider, owner, or legal entity that received the revenue to be recouped upon is responsible for the repayment of any recoupment amount.
(y) Change of ownership. Participation in the enhanced direct care staff rate confers to the new owner as defined in 26 TAC §554.210 (relating to Change of Ownership and Notice of Changes) when there is a change of ownership. The new owner is responsible for the reporting requirements in subsection (f) of this section for any reporting period days occurring after the change. If the change of ownership occurs during an open enrollment period as defined in subsection (c) of this section, then the owner recognized by HHSC or its designee on the last day of the enrollment period may request to modify the enrollment status of the facility in accordance with subsection (d) of this section.
(z) Contract cancellations. If a facility's Medicaid contract is cancelled before the first day of an open enrollment period as defined in subsection (c) of this section and the facility is not granted a new contract until after the last day of the open enrollment period, participation in the enhanced direct care staff rate as it existed prior to the date when the facility's contract was cancelled will be reinstated when the facility is granted a new contract, if it remains under the same ownership, subject to the availability of funding. Any enrollment limitations from subsection (i) of this section that would have applied to the cancelled contract will apply to the new contract.
(aa) Determination of compliance with spending requirements in the aggregate.
(1) Definitions. The following words and terms have the following meanings when used in this subsection.
(A) Commonly owned corporations--two or more corporations where five or fewer identical persons who are individuals, estates, or trusts control greater than 50 percent of the total voting power in each corporation.
(B) Entity--a parent company, sole member, individual, limited partnership, or group of limited partnerships controlled by the same general partner.
(C) Combined entity--one or more commonly owned corporations and one or more limited partnerships where the general partner is controlled by the same person(s) as the commonly owned corporation(s).
(D) Control--greater than 50 percent ownership by the entity.
(2) Aggregation. For an entity, commonly owned corporation, or combined entity that controls more than one participating nursing facility contract, compliance with the spending requirements detailed in subsection (o) of this section can be determined in the aggregate for all participating nursing facility contracts controlled by the entity, commonly owned corporations, or combined entity at the end of the rate year, the effective date of the change of ownership of its last participating NF contract, or the effective date of the termination of its last participating NF contract rather than requiring each contract to meet its spending requirement individually. Corporations that do not meet the definitions under paragraph (1)(A) - (C) of this subsection are not eligible for aggregation to meet spending requirements.
(A) Aggregation Request. To exercise aggregation, the entity, combined entity, or commonly owned corporations must submit an aggregation request, in a manner prescribed by HHSC, at the time each Staffing and Compensation Report or cost report is submitted. In limited partnerships in which the same single general partner controls all the limited partnerships, the single general partner must make this request. Other such aggregation requests will be reviewed on a case-by-case basis.
(B) Frequency of Aggregation Requests. The entity, combined entity, or commonly owned corporations must submit a separate request for aggregation for each reporting period.
(C) Ownership changes or terminations. Nursing facility contracts that change ownership or terminate effective after the end of the applicable reporting period, but prior to the determination of compliance with spending requirements as per subsection (o) of this section, are excluded from all aggregate spending calculations. These contracts' compliance with spending requirements will be determined on an individual basis and the costs and revenues will not be included in the aggregate spending calculation.
(bb) Medicaid Swing Bed Program for Rural Hospitals. When a rural hospital participating in the Medicaid swing bed program furnishes NF nursing care to a Medicaid recipient under 26 TAC §554.2326 (relating to Medicaid Swing Bed Program for Rural Hospitals), HHSC or its designee makes payment to the hospital using the same procedures, the same case-mix methodology, and the same RUG-III rates that HHSC authorizes for reimbursing NFs receiving the direct care staff base rate with no enhancement levels. These hospitals are not subject to the staffing and spending requirements detailed in this section.
(cc) Disclaimer. Nothing in these rules should be construed as preventing facilities from adding direct care staff in addition to those funded by the enhanced direct care staff rate.
(dd) Notification of lack of available funds. If HHSC determines that funds are not available to continue participation for facilities from which it has not received an acceptable request to modify their enrollment by the last day of an enrollment period as per subsection (d) of this section or to fund carry-over enhancements as per subsection (j)(3) of this section, HHSC will notify providers in a manner determined by HHSC that such funds are not available.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 11, 2023.
TRD-202302937
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 1, 2023
Proposal publication date: July 7, 2023
For further information, please call: (512) 867-7817
The Texas Health and Human Services Commission (HHSC) adopts an amendment to §355.513, concerning Reimbursement Methodology for the Deaf-Blind with Multiple Disabilities Waiver Program. Section 355.513 is adopted without changes to the proposed text as published in the July 7, 2023, issue of the Texas Register (48 TexReg 3588). This rule will not be republished.
BACKGROUND AND JUSTIFICATION
Title 42 Code of Federal Regulations §441.301(c)(4)(i) - (v), requires home and community-based settings in programs authorized by §1915(c) of the Social Security Act to have certain qualities, including being integrated into and supporting full access of individuals to the greater community. HHSC adopted rules in Title 26 Texas Administrative Code (TAC) Chapter 260 to implement individualized skills and socialization effective January 1, 2023.
The 2022-2023 General Appropriations Act (GAA), Senate Bill 1, 87th Legislature, Regular Session, 2021 (Article II, HHSC, Rider 23) authorized funding for the provision of individualized skills and socialization in the Home and Community-based Services (HCS), Texas Home Living (TxHmL), and Deaf-Blind with Multiple Disabilities (DBMD) programs. HHSC adopted rates for individualized skills and socialization based on the available appropriations, effective January 1, 2023.
The purpose of the adoption is to amend the reimbursement methodology for the DBMD Program to remove day habilitation services and establish rate methodologies for individualized skills and socialization services. The adopted amendment also clarifies the rate methodology for residential habilitation transportation, chore, and intervener services by replacing the "other direct care" cost area with an administration and facility cost area to align waiver rate methodology with other similar services.
COMMENTS
The 21-day comment period ended July 28, 2023.
During this period, HHSC received comments regarding the proposed rule from one commenter. A summary of comments relating to §355.513 and HHSC's responses follow:
Comment: One commenter asked HHSC to only consider amendments that will support and enhance the method by which these affected citizens receive reimbursement and not add to the difficulties this population faces.
Response: HHSC appreciates the comment received. HHSC believes these amendments ensure that an appropriate reimbursement rate methodology is used in the DBMD waiver program by establishing rate methodologies for individualized skills and socialization services and aligning the waiver rate methodology with other similar services.
STATUTORY AUTHORITY
The amendment is adopted under Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies; Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code Chapter 32.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 8, 2023.
TRD-202302820
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 1, 2023
Proposal publication date: July 7, 2023
For further information, please call: (512) 867-7817
The Texas Health and Human Services Commission (HHSC) adopts an amendment to §355.723, concerning Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs. Section 355.723 is adopted with changes to the proposed text as published in the July 7, 2023, issue of the Texas Register (48 TexReg 3591). This rule will be republished.
BACKGROUND AND PURPOSE
Title 42, Code of Federal Regulations, §441.301(c)(4)(i) - (v), requires home and community-based settings in programs authorized by §1915(c) of the Social Security Act to have certain qualities, including being integrated into and supporting full access of individuals to the greater community. HHSC adopted rules in Title 26 Texas Administrative Code (TAC) Chapters 262 and 263 to implement individualized skills and socialization effective January 1, 2023.
The 2022 - 2023 General Appropriations Act (GAA), Senate Bill (S.B.) 1, 87th Legislature, Regular Session, 2021 (Article II, Health and Human Services Commission, Rider 23) authorized funding for the provision of individualized skills and socialization in the Home and Community-Based Services (HCS), Texas Home Living (TxHmL), and Deaf-Blind with Multiple Disabilities Programs. HHSC adopted rates for individualized skills and socialization based on the available appropriations, effective January 1, 2023.
The purpose of the adoption is to amend the reimbursement methodology for the HCS and TxHmL Programs to remove day habilitation and establish rate methodologies for individualized skills and socialization. The adopted amendment also clarifies the rate methodology for each HCS and TxHmL waiver service and implements some recommendations in HHSC's legislative report, Rates: Intermediate Care Facilities and Certain Waiver Providers, required by the 2022 - 2023 GAA, S.B. 1, 87th Legislature, Regular Session, 2021 (Article II, Health and Human Services Commission, Rider 30).
COMMENTS
The 21-day comment period ended July 28, 2023.
During this period, HHSC received comments regarding the proposed rule from three commenters: Providers Alliance for Community Services of Texas (PACSTX), Private Providers Association of Texas (PPAT), and Texas Council of Community Centers (Texas Council).
A summary of comments relating to §355.723 and HHSC's responses follow.
Comment: Multiple commenters expressed support for using a pro forma costing analysis when HHSC has insufficient cost data to establish the attendant compensation rate component. Due to current economic drivers, the commenters asked HHSC to use a pro forma costing analysis for HCS/TxHmL attendant compensation.
Response: The methodology for the attendant compensation rate component is outside the scope of this rule packet, as that component is established under §355.112. However, HHSC can rely on pro forma costing if it deems that available cost data is insufficient under §355.101(g); therefore no changes were made in response to these comments.
Comment: Multiple commenters shared concerns with modifications to subsection (f), Refinement and adjustment. The commenters said HHSC should not refine or adjust rates without consideration of the actual costs to deliver services. The commenters also said HHSC should not recategorize costs into other rate components simply because there is insufficient funding for certain components. Otherwise, the collection of data from cost reports will have no relationship to the rates and paint an inaccurate picture of the actual costs to deliver services.
Response: HHSC disagrees and declines to make a change in response to these comments. The amendment to §355.723(f) allows HHSC to modify and adjust modeled assumptions if new data or more accurate assumptions become available, particularly during HHSC's regular biennial fee review process. HHSC seeks to ensure that cost reports accurately reflect the provider's costs to deliver waiver services and that the rate methodology, modeled assumptions, and associated calculations accurately capture an economic and efficient provider's allowable costs. No changes were made in response to these comments.
A minor editorial change was made to §355.723(d)(3) replacing "subparagraph" with "subsection" to correctly reference subsection (c)(5)(A) of the section.
STATUTORY AUTHORITY
The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies; Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code Chapter 32.
§355.723.Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs.
(a) Prospective payment rates. The Texas Health and Human Services Commission (HHSC) sets payment rates to be paid prospectively to Home and Community-based Services (HCS) and Texas Home Living (TxHmL) providers.
(b) Levels of need.
(1) Variable rates. Rates vary by level of need (LON) for the following services:
(A) host home/companion care (HH/CC);
(B) individualized skills and socialization;
(C) residential support services (RSS); and
(D) supervised living (SL).
(2) Non-variable rates. Rates do not vary by LON for the following services:
(A) audiology;
(B) behavioral support;
(C) cognitive rehabilitative therapy (CRT);
(D) community first choice personal assistance services/habilitation (CFC PAS/HAB);
(E) community support services transportation (CSS);
(F) dietary;
(G) employment assistance (EA);
(H) in-home respite;
(I) licensed vocational nurse (LVN);
(J) occupational therapy (OT);
(K) out-of-home respite (OHR);
(L) physical therapy (PT);
(M) registered nurse (RN);
(N) social work;
(O) speech therapy;
(P) supported employment (SE); and
(Q) supported home living transportation (SHL).
(c) Recommended rates. The recommended payment rates are determined for each HCS and TxHmL service listed in subsections (b)(1) and (2) of this section by type and, for services listed in subsection (b)(1) of this section, by LON to include the following cost areas.
(1) Attendant compensation cost area. The determination of the attendant compensation cost area is calculated as specified in §355.112 of this chapter (relating to Attendant Compensation Rate Enhancement). The attendant compensation cost area includes personal attendant staffing costs (wages, benefits, modeled staffing ratios for attendant staff, direct care trainers, and job coaches).
(2) Other direct care cost area. The other direct care cost area includes other direct service staffing costs (wages and benefits for direct care and attendant supervisors). The other direct care cost area is determined by calculating a median from allowable other direct care costs for each service, weighed by units of service for the applicable service from the most recently examined HCS/TxHmL cost report adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter (relating to Determination of Inflation Indices).
(A) For the following services, multiply the other direct care cost area as specified in this paragraph by 1.044:
(i) EA;
(ii) in-home respite;
(iii) OHR in a camp;
(iv) OHR in a respite facility;
(v) OHR in a setting where HH/CC is provided;
(vi) OHR in a setting that is not listed; and
(vii) SE.
(B) For the following services, multiply the other direct care cost area as specified in this paragraph by 1.07:
(i) individualized skills and socialization;
(ii) in-home and out-of-home individualized skills and socialization;
(iii) OHR in an individualized skills and socialization facility;
(iv) OHR in a setting with SL or RSS is provided;
(v) RSS; and
(vi) SL.
(3) Administration and operations cost area. The administration and operation cost area includes:
(A) administration and operation costs; and
(B) professional consultation and program support costs, including:
(i) allowable costs for required case management and service coordination activities; and
(ii) service-specific transportation costs.
(4) Projected costs. Projected costs are determined by allowable administrative and operations costs from the most recently audited cost report adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108 of this chapter. The steps to determine projected costs are as follows.
(A) Step 1. Determine total projected administration and operation costs and projected units of service by service type using cost reports submitted by HCS and TxHmL providers in accordance with §355.722 of this subchapter (relating to Reporting Costs by Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Providers).
(B) Step 2. Determine the HH/CC coordinator component of the HH/CC rate as follows: This component is determined by summing total reported HH/CC coordinator wages and allocated payroll taxes and benefits from the most recently available audited HCS cost report, inflating those costs to the rate period, and dividing the resulting product by the total number of host home units of service reported on that cost report.
(C) Step 3. Determine total HH/CC coordinator dollars as follows. Multiply the HH/CC coordinator component of the HH/CC rate from subparagraph (B) of this paragraph by the total number of HH/CC units of service reported on the most recently available, reliable audited HCS cost report database.
(D) Step 4. Determine total projected administration and operation costs after offsetting total HH/CC coordinator dollars as follows. Subtract the total HH/CC coordinator dollars from subparagraph (C) of this paragraph from the total projected administration and operation costs from subparagraph (A) of this paragraph.
(E) Step 5. Determine projected weighted units of service for each HCS and TxHmL service type as follows.
(i) SL and RSS in HCS. Projected weighted units of service for SL and RSS equal projected SL and RSS units of service times a weight of 1.00.
(ii) Individualized skills and socialization in HCS and TxHmL. Projected weighted units of service for individualized skills and socialization equal projected individualized skills and socialization units of service times a weight of 0.25.
(iii) HH/CC in HCS. Projected weighted units of service for HH/CC equal projected HH/CC units of service times a weight of 0.50.
(iv) SHL in HCS, high medical needs support in HCS, and CSS in TxHmL. For each service, projected weighted units of service equal projected units of service times a weight of 0.30.
(v) Respite in HCS and TxHmL. Projected weighted units of service for respite equal projected respite units of service times a weight of 0.20.
(vi) SE in HCS and TxHmL. Projected weighted units of service for SE equal projected units of service times a weight of 0.25.
(vii) Behavioral support in HCS and TxHmL. Projected weighted units of service for behavioral support equal projected behavioral support units of service times a weight of 0.18.
(viii) Audiology, CRT, OT, PT, and speech therapy in HCS and TxHmL. Projected weighted units of service for audiology, CRT, OT, PT, and speech therapy equal projected audiology, CRT, OT, PT, and speech therapy units of service times a weight of 0.18.
(ix) Social work in HCS. Projected weighted units of service for social work equal projected social work units of service times a weight of 0.18.
(x) Nursing in HCS and TxHmL and high medical needs nursing in HCS. Projected weighted units of service for nursing and high medical needs nursing equal projected nursing and high medical needs nursing units of service times a weight of 0.25.
(xi) EA in HCS and TxHmL. Projected weighted units of service for EA equal projected EA units of service times a weight of 0.25.
(xii) Dietary in HCS and TxHmL. Projected weighted units of service for dietary equal projected dietary units of service times a weight of 0.18.
(F) Step 6. Calculate the total projected weighted units of service by summing the projected weighted units of service from subparagraph (E) of this paragraph.
(G) Step 7. Calculate the percent of total administration and operation costs to be allocated to the service type by dividing the projected weighted units for the service type from subparagraph (E) of this paragraph by the total projected weighted units of service from subparagraph (F) of this paragraph.
(H) Step 8. Calculate the total administration and operation cost to be allocated to the service type by multiplying the percent of total administration and operation costs allocated to the service type from subparagraph (G) of this paragraph by the total administration and operation costs after offsetting total HH/CC coordinator dollars from subparagraph (D) of this paragraph.
(I) Step 9. Calculate the administration and operation cost component per unit of service for each HCS and TxHmL service type by dividing the total administration and operation cost to be allocated to that service type from subparagraph (H) of this paragraph by the projected units of service for that service type from subparagraph (A) of this paragraph.
(J) Step 10. The final recommended administration and operation cost area per unit of service for each HCS and TxHmL service type is calculated as follows.
(i) For the following services, multiply the administration and operation cost area from this subparagraph by 1.044:
(I) CFC PAS/HAB;
(II) CSS;
(III) EA;
(IV) in-home individualized skills and socialization;
(V) in-home respite;
(VI) OHR in a camp;
(VII) OHR in a respite facility;
(VIII) OHR in a setting where HH/CC is provided;
(IX) OHR in a setting that is not listed;
(X) SE; and
(XI) SHL.
(ii) For the following services, multiply the administration and operation cost area from this subparagraph by 1.07:
(I) individualized skills and socialization;
(II) in-home and out-of-home individualized skills and socialization;
(III) OHR in an individualized skills and socialization facility;
(IV) RSS; and
(V) SL.
(5) The facility cost area. The facility cost area includes the following:
(A) room and board costs, including rent, mortgage interest, depreciation expenses, property taxes, property insurance, and food costs as defined in §355.103 of this chapter (relating to Specifications for Allowable and Unallowable Costs), unless excluded if unallowable under Federal Medicaid rules; and
(B) non-room and board costs not already reimbursed through the monthly amount collected from the individual receiving services as defined in 26 TAC §565.27(a).
(6) The facility cost area is determined by calculating a median cost for each service using allowable facility costs, weighted by units of service for the applicable service from the most recently audited cost report, adjusted for inflation from the cost reporting period to the prospective rate period as specified in §355.108.
(A) For the following services, multiply the facility cost component by 1.044:
(i) HH/CC;
(ii) OHR in a camp;
(iii) OHR in a respite facility; and
(iv) OHR in a setting where HH/CC is provided.
(B) For the following services, multiply the facility cost component by 1.07:
(i) individualized skills and socialization;
(ii) in-home and out-of-home DH;
(iii) OHR in a DH or individualized skills and socialization facility;
(iv) OHR in a setting where SL or RSS are provided;
(v) RSS; and
(vi) SL.
(d) Recommended payment rates are determined for each service by the following.
(1) CFC PAS/HAB. The recommended payment rate is calculated by summing the attendant compensation cost area and the administration and operations cost area as defined in subsection (c) of this section. The recommended rate for CFC PAS/HAB does not include a cost component for other direct care staffing costs.
(2) CRT. The recommended payment rate is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures).
(3) HH/CC. The recommended payment rate is determined by summing the direct care worker component, HH/CC coordinator cost area, administration and operations component, and facility cost area. The direct care worker component is calculated using the median of allowable direct care worker costs, weighted by HH/CC units of service from the most recently examined cost report database. The result is adjusted for each LON. The HH/CC coordinator cost area and administration and operations components are calculated as determined in subsection (c) of this section. The facility cost area is calculated as determined in subsection (c) of this section but does not include room and board costs as defined in subsection (c)(5)(A) of this section. If HHSC lacks reliable cost report data, the rate is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter.
(4) In-home respite. The recommended payment rate is calculated by summing the attendant compensation cost area and the administration and operations component as defined in subsection (c) of this section.
(5) Individualized skills and socialization. The recommended payment cost areas are adjusted using modeled staffing ratios to establish recommended rates for on-site and off-site rates by LON. The recommended rates are calculated by summing the attendant compensation cost area, other direct care cost area, the administration and operations component, and the facility cost component as defined in subsection (c) of this section. Transportation costs are calculated as a standalone component separate from the administration and operations component for off-site services. The enhanced staffing level one rate is equal to the LON 8 individualized skills and socialization off-site recommended rate. The enhanced staffing level two rate is modeled and assumes a one-staff-to-one-individual staffing ratio.
(6) Nursing services provided by an RN, nursing services provided by an LVN, physical therapy, occupational therapy, speech/language therapy, behavioral support services, audiology services, dietary services, EA, SE, and transition assistance services are determined based on §355.725 of this subchapter (relating to Reimbursement Methodology for Common Waiver Services in Home and Community-based Services (HCS) and Texas Home Living (TxHmL)).
(7) OHR. The recommended payment cost areas may be adjusted using modeled direct care worker hour-per-unit ratios for similar services to calculate OHR rates that vary by setting where the service is provided. The recommended payment rates are calculated by summing the attendant compensation cost area, other direct care cost area, the administration and operations component, and the facility cost component as defined in subsection (c) of this section.
(8) SHL and CSS. The recommended payment rates for SHL and CSS are calculated by summing the attendant compensation cost area and the administration and operations cost area as defined in subsection (c) of this section.
(9) SL and RSS. The recommended payment cost areas are adjusted using modeled direct care worker hour-per-unit ratios updated by actual hours reported on the most recently audited cost report to calculate variable rates by LON. The recommended rates are calculated by summing the attendant compensation cost area, other direct care cost area, and the administration and operations component as defined in subsection (c) of this section. The facility cost area is calculated as determined in subsection (c) of this section but does not include room and board costs defined in subsection (c)(5)(A) of this section.
(10) Social work. The recommended payment rate is calculated using the weighted median social worker hourly cost from the most recently audited cost report, and the administration and operations cost component as determined in subsection (c) of this section. If HHSC lacks reliable cost report data, the rate is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter.
(e) Other sources of cost information. If HHSC has determined that there is not sufficient reliable cost report data from which to set reimbursements and reimbursement ceilings for waiver services, reimbursements and reimbursement ceilings will be developed by using rates for similar services from other Medicaid programs, data from surveys, cost report data from other similar programs, consultation with other service providers or professionals experienced in delivering contracted services, and similar sources. If HHSC has insufficient cost data, the recommended payment rate for each service is developed based on payment rates determined for other programs that provide similar services. If payment rates are not available from other programs that provide similar services, payment rates are determined using a pro forma analysis in accordance with §355.105(h) of this chapter.
(f) Refinement and adjustment. Refinement and adjustment of the rate components and model assumptions will be considered, as appropriate, by HHSC. All adopted rates are limited to available levels of appropriated state and federal funds as defined in §355.201 of this chapter (relating to Establishment and Adjustment of Reimbursement Rates for Medicaid).
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 9, 2023.
TRD-202302912
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 1, 2023
Proposal publication date: July 7, 2023
For further information, please call: (512) 867-7817
The Texas Health and Human Services Commission (HHSC) adopts an amendment to §355.7051, concerning Base Wage for a Personal Attendant. Section 355.7051 is adopted with changes to the proposed text as published in the July 7, 2023, issue of the Texas Register (48 TexReg 3598). This rule will be republished.
BACKGROUND AND JUSTIFICATION
The amendment implements Rider 30(a) of the 2024-25 General Appropriations Act, House Bill 1, 88th Legislature, Regular Session, 2023 (Article II, HHSC, Rider 30(a)). Rider 30(a) appropriates funds to HHSC to increase the minimum base wage paid to "personal attendants" from $8.11 to $10.60 per hour.
In response to Rider 30(a), HHSC must update its program requirements to require service providers to pay this updated minimum base wage. To ensure consistency and clarity, the amendment also adds additional services to the definition of "personal attendant," including assisted living and in-home respite, in the Home and Community-based Services - Adult Mental Health program. In addition, the amendment replaces day habilitation with individualized skills and socialization services.
COMMENTS
The 21-day comment period ended July 28, 2023.
During this period, HHSC received two comments regarding the proposed rule from three commenters. HHSC received comments from the following organizations: the Providers Alliance for Community Services of Texas (PACSTX), Private Providers Association of Texas (PPAT), and the Texas Council of Community Centers.
A summary of comments relating to §355.7051 and HHSC's responses follows:
Comment: Multiple commenters expressed opposition to including supervised living and residential support services to the definition of a personal attendant subject to the $10.60 per hour base wage in §355.7051(a) because a direct care worker's pay includes room and board for live-in staff.
Response: HHSC agrees and revised the rule to exclude supervised living and residential support services (SL/RSS). HHSC acknowledges that reimbursement of attendants within a residential setting may combine payment for their room and board and wages; therefore, holding providers to a base wage for personal attendants would not be appropriate. HHSC assumes that attendants' reimbursement in these residential settings is equivalent to $10.60 per hour, as supported with the intention of Rider 30(a) and adopted rate increases.
Comment: Multiple commenters expressed opposition to including individualized skills and socialization in the definition of personal attendant in 355.7051(a)(3)(A)(vii)(VI), (viii)(IV), and (ix)(IV) as the individualized skills and socialization services were not previously subject to the attendant base wage nor was there an appropriation for this service.
Response: HHSC disagrees and declines to exclude individualized skills and socialization from a personal attendant definition because attendants providing individualized skills and socialization are reimbursed based on an hourly wage. Rate actions were not proposed at this time since current reimbursement rates for the individualized skills and socialization services assume that attendants' base wages exceed $10.60 per hour.
STATUTORY AUTHORITY
The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies; Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code Chapter 32.
§355.7051.Base Wage for a Personal Attendant.
(a) The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise.
(1) HHSC contractor--A person who has a written agreement with the Texas Health and Human Services Commission (HHSC) to provide a service to an individual in exchange for payment from HHSC.
(2) Managed care organization or MCO--Has the meaning assigned in §353.2 of this title (relating to Definitions).
(3) Personal attendant--
(A) An employee or subcontractor of an HHSC contractor, or an employee of an employer in the consumer directed services (CDS) option, who provides the following services, as described in 40 TAC §49.101 (relating to Application):
(i) services in the Community Attendant Services program;
(ii) services in the Family Care program;
(iii) services in the Primary Home Care program;
(iv) day activity and health services;
(v) residential care;
(vi) in the Community Living Assistance and Support Services Program:
(I) community first choice personal assistance services/habilitation (CFC PAS/HAB);
(II) habilitation (transportation); or
(III) in-home respite;
(vii) in the Deaf-Blind Multiple Disabilities Program:
(I) CFC PAS/HAB;
(II) residential habilitation (transportation);
(III) in-home respite;
(IV) licensed assisted living;
(V) licensed home health assisted living; or
(VI) individualized skills and socialization services;
(viii) in the Home and Community-based Services Program:
(I) CFC PAS/HAB;
(II) supported home living (transportation);
(III) in-home respite; and
(IV) individualized skills and socialization services;
(ix) in the Texas Home Living Program:
(I) CFC PAS/HAB;
(II) community support services (transportation);
(III) in-home respite; or
(IV) individualized skills and socialization services.
(B) An employee or subcontractor of an HHSC contractor who provides the following services in the Home and Community-Based Services--Adult Mental Health program, as described in 26 TAC §307.51 (relating to Purpose and Application):
(i) assisted living services;
(ii) in-home respite; and
(iii) supported home living services.
(C) An employee or subcontractor of an HHSC contractor or an employee of an employer in the CDS option who provides:
(i) personal care services, as described in Chapter 363, Subchapter F of this title (relating to Personal Care Services); or
(ii) CFC habilitation (CFC HAB) or CFC personal assistance services (CFC PAS), as described in Chapter 354, Subchapter A, Division 27 (relating to Community First Choice).
(D) An employee or subcontractor of an HHSC contractor, or an employee of an employer in the CDS option or in the block grant option, who provides consumer managed personal attendant services as described in 26 TAC Chapter 275 (relating to Consumer Managed Personal Attendant Services (CMPAS) Program).
(E) A provider or an employee of an employer in the CDS option who provides:
(i) in the STAR+PLUS program and STAR+PLUS Home and Community-based Services (HCBS) program:
(I) assisted living;
(II) CFC PAS;
(III) CFC HAB;
(IV) day activity and health services;
(V) in-home respite care;
(VI) personal assistance services; or
(VII) protective supervision;
(ii) in the STAR Health program and Medically Dependent Children Program (MDCP):
(I) day activity and health services;
(II) CFC PAS;
(III) CFC HAB;
(IV) flexible family support;
(V) in-home respite; or
(VI) personal care services; or
(iii) in the STAR Kids program and MDCP:
(I) CFC PAS;
(II) CFC HAB;
(III) personal care services;
(IV) day activity and health services;
(V) flexible family support services; or
(VI) in-home respite.
(4) Provider--Has the meaning assigned in §353.2 of this title.
(b) An HHSC contractor, other than an HHSC contractor described in subsection (c) or (d) of this section, must pay a personal attendant a base wage of at least $10.60 per hour.
(c) An HHSC contractor that has a contract for financial management services (FMS) must ensure that an employer in the CDS option, or designated representative, pays a personal attendant a base wage of at least $10.60 per hour.
(d) An HHSC contractor that has a CMPAS contract must:
(1) pay a personal attendant who is an employee or subcontractor of the contractor in the traditional service option or block grant option a base wage of at least $10.60 per hour; and
(2) ensure that an individual employer of a personal attendant under the block grant option or CDS option, or the individual's representative, pays a personal attendant a base wage of at least $10.60 per hour.
(e) An MCO must require an MCO contractor, other than an MCO contractor described in subsection (f) of this section, to pay a personal attendant a base wage of at least $10.60 per hour.
(f) An MCO must require that an MCO contractor that has a contract for FMS ensures that an employer in the CDS option or designated representative pays a personal attendant a base wage of at least $10.60 per hour.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 11, 2023.
TRD-202302938
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 1, 2023
Proposal publication date: July 7, 2023
For further information, please call: (512) 867-7817
DIVISION 4. MEDICAID HOSPITAL SERVICES
The Texas Health and Human Services Commission (HHSC) adopts amendments to §355.8052, concerning Inpatient Hospital Reimbursement. The amendment is adopted without changes to the proposed text as published in the July 7, 2023, issue of the Texas Register (48 TexReg 3601). The rule will not be republished.
BACKGROUND AND JUSTIFICATION
This amendment complies with the 2024-2025 General Appropriations Act, House Bill (H.B.) 1, 88th Legislature, Regular Session, 2023 (Article II, Health and Human Services Commission, Rider 8 and Rider 16). HHSC is required by H.B. 1, to the extent allowed by law, to increase Medicaid inpatient rural hospital labor and delivery rates. Additionally, the rural hospital definition is modified to reflect the population updates in the 2020 U.S. Census. In compliance with Senate Bill 170 (S.B. 170), 86th Legislature, Regular Session 2019, to the extent allowed by law, HHSC will calculate Medicaid rural hospital inpatient rates using a cost-based prospective reimbursement methodology. HHSC must calculate rates for rural hospitals once every two years using the most recent cost information available. HHSC previously published proposed rates to be effective September 1, 2023, and, with this legislative direction, will account for the updates in this rule and republish rates.
COMMENTS
The 21-day comment period ended July 28, 2023.
During this period, HHSC received comments regarding the proposed rule from one commenter.
A summary of comments relating to §355.8052 and HHSC's responses follow:
Comment: The Texas Hospital Association (THA) was strongly in support of the rule as proposed.
Response: HHSC appreciates the support for the proposed amendment.
STATUTORY AUTHORITY
The amendment is adopted under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC's duties; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code Chapter 32; and Texas Government Code §531.02194, which requires adoption of a prospective reimbursement methodology for the payment of rural hospitals.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 9, 2023.
TRD-202302911
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 1, 2023
Proposal publication date: July 7, 2023
For further information, please call: (512) 867-7817