|(a) General requirements. The Texas Health and Human
Services Commission (HHSC), or its designee, applies the general principles
of cost determination as specified in §355.101 of this title
(relating to Introduction).
(b) Cost reporting.
(1) Providers must follow the cost-reporting guidelines
as specified in §355.105 of this title (relating to General Reporting
and Documentation Requirements, Methods, and Procedures).
(2) Excused from submission of cost reports. If required
by HHSC, a contracted provider must submit a cost report unless the
provider meets one or more of the conditions in §355.105(b)(4)(D)
of this title.
(c) Reimbursement determination.
(1) Reporting and verification of allowable costs.
(A) Providers are responsible for reporting only allowable
costs on the cost report, except where cost report instructions indicate
that other costs are to be reported in specific lines or sections.
Only allowable cost information is used to determine recommended reimbursements.
HHSC or its designee excludes from reimbursement determination any
unallowable expenses included in the cost report and makes the appropriate
adjustments to expenses and other information reported by providers.
The purpose is to ensure that the database reflects costs and other
information that are necessary for the provision of services and that
are consistent with federal and state regulations.
(B) Individual cost reports may not be included in
the database used for reimbursement determination if:
(i) there is reasonable doubt as to the accuracy or
allowability of a significant part of the information reported; or
(ii) an auditor determines that reported costs are
(2) Residential care reimbursement. Recommended per
diem reimbursement for residential care is determined as follows.
(A) Reported allowable expenses are combined into four
(ii) other direct care;
(iii) facility; and
(iv) administration and transportation.
(B) Facility, transportation (vehicle), and administration
expenses are lowered to reflect expenses for a provider at the lower
(i) 85% occupancy rate; or
(ii) the overall average occupancy rate for licensed
beds in facilities included in the database during the cost-reporting
periods included in the base. The occupancy adjustment is applied
if the provider's occupancy rate is below 85% or the overall average,
whichever is lower. The occupancy adjustment is determined by the
individual provider occupancy rate being divided by .85 or the average
occupancy rate of all providers in the database.
(C) Payroll taxes and employee benefits are allocated
to each salary line item on the cost report on a pro rata basis based
on the portion of that salary line item to the amount of total salary
expense for the appropriate group of staff. Employee benefits will
be charged to a specific salary line item if the benefits are reported
separately. The allocated payroll taxes and employee benefits are
Federal Insurance Contributions Act or Social Security, Medicare contributions,
Workers' Compensation Insurance, the Federal Unemployment Tax Act,
and the Texas Unemployment Compensation Act.
(D) The attendant cost area from subparagraph (A)(i)
of this paragraph will be calculated as specified in §355.112
of this title (relating to Attendant Compensation Rate Enhancement).
(E) The following applies to the cost areas from subparagraph
(A)(ii) - (iv) of this paragraph:
(i) Each provider's total reported allowable costs,
excluding depreciation and mortgage interest, are projected from the
historical cost-reporting period to the prospective reimbursement
period as described in §355.108 of this title (relating to Determination
of Inflation Indices). The prospective reimbursement period is the
period of time that the reimbursement is expected to be in effect.
(ii) Cost area per diem expenses are calculated by
dividing total reported allowable costs for each cost area by the
total days of service. Cost area per diem expenses are rank ordered
from low to high to produce projected per diem expense arrays.
(iii) Reimbursement is determined by selecting from
each cost area the median day of service and the corresponding per
diem expense times 1.07. The resulting cost area amounts are totaled
to determine the per diem reimbursement.
(iv) The client is required to pay for their room and
board portion of the per diem reimbursement. DADS will pay the services
portion of the per diem reimbursement. The room and board payments
will be paid to providers by the client from the client's Supplemental
Security Income (SSI). When SSI is increased or decreased by the Federal
Social Security Administration, the per diem reimbursement will be
adjusted in amounts equal to the increase or decrease in SSI received
(3) Exceptions to the reimbursement determination methodology.
Reimbursement may be adjusted in accordance with §355.109 of
this title (relating to Adjusting Reimbursement When New Legislation,
Regulations, or Economic Factors Affect Costs) when new legislation,
regulations, or economic factors affect costs.
(d) Authority to determine reimbursement. The authority
to determine reimbursement is specified in §355.101 of this title.
(e) Allowable and unallowable costs. In determining
whether a cost is allowable or unallowable, providers must follow
the guidelines as specified in §355.102 of this title (relating
to General Principles of Allowable and Unallowable Costs) and §355.103
of this title (relating to Specifications for Allowable and Unallowable
Costs). In addition to these sections, the following allowable and
unallowable costs are applicable in the Community Care for Aged and
Disabled Residential Care program.
(1) Allowable costs. Medical supplies required to provide
residential care services are allowable. Allowable medical costs include
supply costs associated with the administration of medications, such
as medication cups, syringes for insulin injections, stethoscopes,
blood pressure cuffs, and thermometers.
(2) Unallowable costs. Unallowable costs include prescription
drugs; non-legend drugs; medical records costs; and compensation for
physicians, pharmacists, and medical directors.
(f) Reporting revenue. Revenues must be reported on
the cost report in accordance with §355.104 of this title (relating
(g) Reviews and field audits of cost reports. Desk
reviews or field audits are performed on cost reports of all contracted
providers. The frequency and nature of the field audit are determined
by HHSC or its designee to ensure the fiscal integrity of the program.
Desk reviews and field audits will be conducted in accordance with §355.106
of this title (relating to Basic Objectives and Criteria for Audit
and Desk Review of Cost Reports), and providers will be notified of
the results of a desk review or a field audit in accordance with §355.107
of this title (relating to Notification of Exclusions and Adjustments).
Providers may request an informal review and, if necessary, an administrative
hearing to dispute an action taken under §355.110 of this title
(relating to Informal reviews and Formal Appeals).
|Source Note: The provisions of this §355.509 adopted to be effective September 1, 2003, 28 TexReg 6941; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective January 19, 2006, 31 TexReg 286; amended to be effective January 25, 2009, 34 TexReg 336; amended to be effective November 25, 2012, 37 TexReg 9086