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TITLE 26HEALTH AND HUMAN SERVICES
PART 1HEALTH AND HUMAN SERVICES COMMISSION
CHAPTER 554NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION
SUBCHAPTER XREQUIREMENTS FOR MEDICAID-CERTIFIED FACILITIES
RULE §554.2322Medicaid Bed Allocation Requirements

    (F) Facilities with multiple residents in spend-down beds must assign permanent Medicaid beds to those residents in the same order the residents were admitted to spend-down beds.

    (G) The assignment of residents in spend-down beds to permanent Medicaid beds must precede the admission of new residents to permanent beds.

    (H) The nursing facility must notify HHSC immediately upon the death or permanent discharge of the resident or transfer of the resident to a permanent Medicaid bed. Failure of the nursing facility to notify HHSC of these occurrences in a timely manner is basis for denying applications for spend-down Medicaid beds.

    (I) The nursing facility is not required to comply with level of acceptable care requirements in subsection (e) of this section.

(g) Waivers. The executive commissioner or the executive commissioner's designee may grant a waiver of the requirements stated in subsection (d) of this section under certain conditions.

  (1) Applicants must meet the following conditions to be eligible for the specific waivers in subsection (h) of this section.

    (A) The applicant must meet the level of acceptable care requirement in subsection (e) of this section.

    (B) The applicant must submit a complete HHSC waiver application.

    (C) At the time of licensure and Medicaid certification of the allocated beds, the licensee must comply with the requirements in §19.201 of this chapter.

    (D) A waiver recipient or a subsequent waiver assignee must, at the time of licensure and Medicaid certification, be the property owner or the licensee of the facility where Medicaid beds allocated through the waiver process are certified.

  (2) A waiver recipient may request that HHSC approve the assignment of an approved waiver to another entity in accordance with this paragraph. A waiver recipient may request HHSC approval of only one assignment. A waiver assignment is not valid unless and until it is approved by HHSC.

    (A) The waiver recipient or the owner of the waiver recipient must maintain majority ownership and management control of the assignee.

    (B) The assignee must not have an owner or controlling person who was not an owner or controlling person of the waiver recipient.

    (C) The assignee must own the physical plant of the waiver facility at the time of licensure and certification (as landlord) or be the licensee at the time of licensure and certification (as the licensed operator). Under either circumstance, the allocated beds are subject to subsection (c) of this section.

    (D) The assignee must meet the requirements in subsection (e) of this section regarding level of acceptable care.

  (3) A waiver recipient entity may remove a controlling person from ownership of the entity, but the waiver recipient entity must not add an owner after the waiver is approved by HHSC. A change to the ownership of the waiver recipient entity or the waiver assignment entity must be reported to HHSC.

  (4) HHSC may in its sole discretion determine that a waiver applicant that submits false or fraudulent information is not eligible for a waiver. HHSC may, in its sole discretion, revoke a waiver issued and decertify Medicaid beds issued based on false or fraudulent information provided by the applicant.

  (5) Except as provided in paragraphs (6) - (9) of this subsection, HHSC considers waiver applications in the order in which they are received. A waiver applicant may request that review of its application be deferred until one or more applications submitted after its application has been reviewed. This request must be in writing.

  (6) HHSC gives priority to a small house waiver application submitted in accordance with subsection (h)(9) of this section over a pending community needs waiver application submitted in accordance with subsection (h)(2) of this section for the same county. If approved, HHSC includes the small house facility beds when determining the need for a community needs waiver.

  (7) During any period in which HHSC is processing a waiver application in accordance with subsection (h)(2), (4), (5), or (9) of this section, HHSC may suspend processing the waiver application for up to six months if HHSC determines the county or precinct occupancy rate of the county or precinct in which the site of the proposed waiver is located is at least 85 percent during at least six of the previous nine months. HHSC calculates the occupancy rate based on the monthly Medicaid occupancy reports submitted to HHSC by Medicaid-certified nursing facilities and includes the occupancy rate of certified Medicaid beds and allocated Medicaid beds that are encumbered for future certification as a result of approval of a waiver or exemption in the subject county or precinct.

  (8) HHSC initiates the high occupancy county or precinct waiver process referenced in subsection (h)(1) of this section if HHSC determines requirements for the open solicitation process for a high occupancy county or precinct waiver are met during the temporary suspension period referenced in paragraph (7) of this subsection. HHSC does not process any pending waiver applications in the affected county or precinct until the open solicitation process referenced in subsection (h)(1) of this section is complete.

  (9) HHSC continues to process a suspended waiver application in the affected county or precinct if HHSC determines requirements for the open solicitation process of the high occupancy county or precinct waiver are not met during the suspension period referenced in paragraph (7) of this subsection.

(h) Specific waiver types. HHSC may grant a waiver if it determines that Medicaid beds are necessary for the following circumstances.

  (1) High occupancy waiver. A high occupancy waiver is designed to meet the needs of counties and certain precincts that have a high county or precinct occupancy rate for multiple months.

    (A) HHSC monitors monthly county or precinct occupancy rates. If HHSC determines that a county or precinct occupancy rate equals or exceeds 85 percent for at least nine of the previous twelve months, HHSC may initiate a waiver process by placing a public notice in the Texas Register and the Electronic State Business Daily (ESBD) to announce an open solicitation period.

    (B) The public notice announces that HHSC may allocate 90 additional Medicaid beds in the county or precinct.

    (C) The notice identifies the county or precinct and the beginning and end dates of the solicitation period. The notice also includes the HHSC address to which the application for additional Medicaid beds must be submitted and specifies that the application must be received by HHSC before the close of business on the end date of the solicitation period.

    (D) An applicant for additional Medicaid beds must comply with the level of acceptable care requirements in subsection (e) of this section.

    (E) An applicant must submit a complete HHSC waiver application.

    (F) At the end of the solicitation period, HHSC determines if an applicant is eligible for additional Medicaid beds. If multiple applicants are eligible, the applicant who will receive the allocation of beds will be chosen by a lottery selection.

    (G) If no application for the waiver process is received or if no applicant meets the requirements in this section, HHSC conducts no further solicitation. HHSC closes the process without allocating Medicaid beds.

    (H) An applicant that is granted a high occupancy waiver must provide to HHSC a performance bond, surety bond, or an irrevocable letter of credit in the amount of $500,000 payable to HHSC to ensure that the Medicaid beds granted to the applicant under the waiver are certified within the time periods required by subsection (i)(4)(G) of this section, including any extensions granted under subsection (i)(6) of this section. HHSC will revoke a waiver if the performance bond, surety bond, or irrevocable letter of credit is not provided within 90 days after HHSC approves the waiver application.

    (I) If an applicant chooses to provide a performance bond or surety bond instead of an irrevocable letter of credit, the performance bond or surety bond provided under this subchapter must:

      (i) be executed by a corporate entity in accordance with Texas Insurance Code, Chapter 3503, Subchapter A;

      (ii) be in a form approved by HHSC; and

      (iii) clearly and prominently display on the face of the bond:

        (I) the name, mailing address, physical address, and telephone number of the surety company or financial institution to which any notice of claim should be sent; or

Cont'd...

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