| (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.
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