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TITLE 1ADMINISTRATION
PART 15TEXAS HEALTH AND HUMAN SERVICES COMMISSION
CHAPTER 355REIMBURSEMENT RATES
SUBCHAPTER JPURCHASED HEALTH SERVICES
DIVISION 23EARLY AND PERIODIC SCREENING, DIAGNOSIS, AND TREATMENT (EPSDT)
RULE §355.8443Reimbursement Methodology for School Health and Related Services (SHARS)

(a) Introduction. Direct medical services and transportation are available to children age 20 and under who are enrolled in Medicaid and eligible to receive services under the Individuals with Disabilities Education Act (IDEA). The services must be included in the child's individualized education program (IEP) established under IDEA.

(b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.

  (1) Cost report--An annual report documenting the provider's Medicaid-allowable costs for all SHARS delivered during the previous federal fiscal year. The cost report is due on or before April 1 of the year following the reporting period and must be certified in a manner specified by the Texas Health and Human Services Commission (HHSC). The primary purposes of the cost report are to:

    (A) Document the provider's total Medicaid-allowable costs for delivering SHARS, including direct costs and indirect costs, based on federally mandated cost allocation methodologies; and

    (B) Reconcile interim payments to total Medicaid-allowable costs based on approved cost allocation methodology procedures.

  (2) Time study--A statistically valid random sampling method used to identify the percentage of time spent performing actual direct medical services irrespective of payer and administrative cost.

  (3) IEP ratio--A comparison of the total number of Medicaid students with IEPs requiring direct medical services to the total number of students with IEPs requiring direct medical services.

  (4) One-way trip ratio--A comparison of the total one-way trips for Medicaid students with IEPs requiring specialized transportation services to the total one-way trips for all students with IEPs requiring specialized transportation services.

(c) Reimbursement methodology. Providers are reimbursed for medical and transportation services provided under the SHARS Program on a cost basis.

  (1) Interim rates. The interim rate is developed based on a biennial review of actual cost data submitted by providers and is subject to change under §355.109 of this chapter (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs). Interim rates are set by extracting the settled cost report data from each district and determining the average cost to provide each unit of service provided under the SHARS Program.

    (A) Unit of service. The unit of service is a 15-minute interval for all covered services, except for:

      (i) medication administration (a nursing service), for which the unit of service is a visit;

      (ii) assessment services, for which the unit of service is a one-hour interval; and

      (iii) personal care services on the bus and specialized transportation services, for which the unit of service is based on a one-way trip.

    (B) Adjustment. The average cost for each unit of service is adjusted to 85% of cost to arrive at the interim rate.

  (2) Interim payment. Providers are reimbursed for SHARS direct medical services per unit of service at the lesser of:

    (A) the provider's billed charges; or

    (B) the interim rate.

  (3) Final reimbursement. The provider's final reimbursement amount is arrived at by a cost reconciliation and cost settlement process. The provider's total costs for both direct medical and transportation services as reported in the cost report are adjusted using the federally mandated allocation methodologies.

    (A) Medical services costs.

      (i) Direct costs. From the annual cost report, HHSC aggregates allowable costs for direct medical services, resulting in total direct costs. Direct costs for direct medical services include payroll costs and other costs that can be directly charged to direct medical services provided by contractors and school district staff (i.e., salaries, benefits, and contract compensation). Direct medical services costs do not include transportation personnel costs.

      (ii) Indirect costs. Indirect costs are determined by applying the school district's specific unrestricted indirect cost rate to its net direct costs. Texas public school districts use predetermined fixed rates for indirect costs. The Texas Education Agency (TEA) has, in cooperation with the United States Department of Education (USDE), developed an indirect cost plan to be used by school districts in Texas. As authorized in 34 CFR §75.561(b), TEA approves unrestricted indirect cost rates for school districts for the USDE, which is the cognizant agency for school districts.

      (iii) Net allowable cost. Direct and indirect costs are added together and adjusted by the direct medical time study percentage and the IEP ratio, resulting in a net Medicaid allowable cost for direct medical services.

    (B) Transportation services.

      (i) Direct costs. From the annual cost report, HHSC aggregates allowable direct costs for transportation, resulting in total direct costs. Direct costs for covered transportation services include payroll costs and other costs that can be directly charged to covered transportation services. Direct payroll costs include total compensation (i.e., salaries, benefits, and contract compensation) of bus drivers and mechanics. Other direct costs include costs directly related to the delivery of covered transportation services, such as professional and contracted services, contracted transportation costs, gasoline and other fuels, other maintenance and repair costs, vehicle insurance, interest, rentals, and vehicle depreciation

      (ii) Indirect costs. Indirect costs are determined by applying the school district's specific unrestricted indirect cost rate to its net direct costs. Texas public school districts use predetermined fixed rates for indirect costs. TEA has, in cooperation with the USDE, developed an indirect cost plan to be used by school districts in Texas. As authorized in 34 CFR §75.561(b), TEA approves unrestricted indirect cost rates for school districts for the USDE, which is the cognizant agency for school districts.

      (iii) Net allowable cost. Net direct costs and indirect costs are added together and adjusted by the one-way trip ratio, resulting in a net Medicaid allowable cost for transportation services.

(d) Cost reporting requirements. HHSC excludes from reimbursement determinations any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers.

  (1) Certification. Each provider certifies through the cost report process its total actual federal and non-federal costs and expenditures.

  (2) Reimbursement determinations and allowable costs. 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 reimbursement. All costs relating to Shared Service Arrangements and Co-operatives must be allocated to each respective school district provider.

(e) Cost reconciliation. The Medicaid-allowable costs for direct medical and transportation services are added together and adjusted by the federal Medicaid assistance percentage (FMAP) to arrive at the federal share owed to the provider. This amount is then reconciled with interim payments already made to the provider.

(f) Cost settlement. HHSC uses a cost settlement process as follows:

  (1) HHSC retains one percent of the federal share of the total certified Medicaid allowable cost as an administrative fee to be used for Health and Human Services administrative activities, including compliance monitoring, technical assistance, and to establish and maintain an audit reserve fund.

  (2) If a provider's interim payments exceed 99 percent of the provider's federal portion of the total certified Medicaid allowable costs, HHSC recoups the overpayment using one of these two methods:

    (A) HHSC offsets all future claims payments from the provider until the amount is recovered; or

    (B) The provider returns an amount equal to the amount owed.

  (3) If 99 percent of the provider's federal portion of the total certified Medicaid allowable costs exceeds the interim Medicaid payments, HHSC pays the difference to the provider in accordance with the final actual certification agreement.

  (4) HHSC issues a notice of settlement within 24 months of the end of the reporting period.

(g) General information. In addition to the requirements of this section, the cost reporting guidelines will be governed by the information in: §355.101 of this chapter (relating to Introduction); §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); §355.105 of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures); §355.106 of this chapter (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports); §355.107 of this chapter (relating to Notification of Exclusions and Adjustments); §355.108 of this chapter (relating to Determination of Inflation Indices); §355.109 of this chapter (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs); and §355.110 of this chapter (relating to Informal Reviews and Formal Appeals).

(h) Administrative contract violations. HHSC may take the following actions against a provider for administrative contract violations:

  (1) Time study. For failure to participate in or meet all time study requirements, HHSC will recoup all interim payments made during the cost reporting period.

  (2) Billing. For failure to bill for services covered by Medicaid or failure to bill in the manner and format prescribed by HHSC or its designee, the provider is ineligible to submit a cost report.

  (3) Cost reports. For failure to submit a cost report by the due date, HHSC will recoup all interim payments made during the cost reporting period.

  (4) Other administrative contract violations. For all other administrative contract violations, HHSC will recoup all interim payments made during the cost reporting period.

  (5) Appeals. A provider may request a hearing to appeal HHSC's action concerning an administrative contract violation. Formal appeals are conducted in accordance with the provisions of Chapter 357, Subchapter I of this title (relating to Hearings under the Administrative Procedure Act). If there is a conflict between an applicable section of Chapter 357 of this title (relating to Hearings) and the provisions of this chapter, the provisions of this chapter will prevail.


Source Note: The provisions of this §355.8443 adopted to be effective October 1, 2011, 36 TexReg 4656; amended to be effective May 17, 2015, 40 TexReg 2527; amended to be effective November 27, 2017, 42 TexReg 6615

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