| (a) Reimbursement ceiling determination. When the Texas
Health and Human Services Commission (HHSC) does not require a cost
report, HHSC may adjust the rate ceiling as appropriate, based on
cost data collected through the budget worksheets or other appropriate
cost data related to the program in accordance with §355.105(h)
of this title (relating to General Reporting and Documentation Requirements,
Methods, and Procedures). For the purposes of this section, HHSC means
the Texas Health and Human Services Commission or its designee.
(b) Reimbursement ceiling determination based on a
cost-reporting process. If HHSC deems it appropriate to require cost
reporting, cost reports will be governed by the information in this
subsection. HHSC applies the general principles of cost determination
as specified in §355.101 of this title (relating to Introduction).
The cost-reporting process is as follows:
(1) Documentation requirements. Provider agencies must
follow the cost-reporting guidelines specified in §355.105 of
this title.
(2) Excused from submission of cost reports. If required
by HHSC, a contracted provider agency must submit a cost report unless
the agency meets one or more of the conditions in §355.105(b)(4)(D)
of this title.
(3) Exclusion of cost reports.
(A) Provider agencies 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. HHSC excludes from reimbursement determination
any unallowable expenses included in the cost report and makes the
appropriate adjustments to expenses and other information reported
by provider agencies. The purpose is to ensure that the database reflects
costs and other information that are necessary for the provision of
services and 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
not verifiable.
(4) Allowable and unallowable costs. Provider agencies
must follow the guidelines in determining whether a cost is allowable
or unallowable as specified in §355.102 of this title (relating
to General Principles of Allowable and Unallowable Costs). Provider
agencies must follow the guidelines for allowable and unallowable
costs as specified in §355.103 of this title (relating to Specifications
for Allowable and Unallowable Costs).
(5) Revenue. Revenue must be reported on the cost report
according to §355.104 of this title (relating to Revenues).
(6) Review of cost reports. HHSC staff perform either
desk reviews or field audits on all contracted provider agencies.
The frequency and nature of the field audits are determined by HHSC
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 provider agencies 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).
Provider agencies may request an informal and, if necessary, an administrative
hearing to dispute an action taken by HHSC under §355.110 of
this title (relating to Informal Reviews and Formal Appeals).
(c) Reimbursement ceiling. This subsection applies
when a cost report is required. HHSC staff determine the recommended
reimbursement ceiling as follows.
(1) HHSC staff allocate payroll taxes and employee
benefits 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. The employee benefits for administrative
staff are allocated directly to the corresponding salaries for those
positions. The allocated payroll taxes are Federal Insurance Contributions
Act (FICA) or social security, Workers' Compensation Insurance (WCI),
Federal Unemployment Tax Act (FUTA), and Texas Unemployment Compensation
Act (TUCA).
(2) HHSC staff project allowable expenses, excluding
depreciation and mortgage interest, from each provider agency's reporting
period to the next ensuing reimbursement period. HHSC determines reasonable
and appropriate economic adjusters as described in §355.108 of
this title (relating to Determination of Inflation Indices) to calculate
the projected expenses. HHSC staff also adjust reimbursement if new
legislation, regulations, or economic factors affect costs as specified
in §355.109 of this title (relating to Adjusting Reimbursement
When New Legislation, Regulations, or Economic Factors Affect Costs).
(3) HHSC staff combine allowable reported costs into
four cost areas.
(A) The administrative cost area includes administrative
salaries, wages, and other administrative expenses.
(B) The facility cost area includes building and equipment
expenses, and operation and maintenance expenses.
(C) The food preparation cost area includes raw food
costs, salaries and wages of food service staff, and subcontracted
costs when food preparation is purchased.
(D) The meal delivery cost area includes meal delivery
expenses, including mileage paid; meal container expenses; and vehicle
rental, lease, use, and/or depreciation costs.
(4) A contracted provider agency's projected expenses
in each cost area are divided by its total units of service for the
reporting period to determine the projected cost per unit of service.
(5) The contracted provider agency's projected costs
per unit of service are ranked from low to high in each cost area.
(6) The 80th percentile cost is determined for each
cost area. The recommended reimbursement ceiling is the sum of the
80th percentile costs of the four cost areas.
(d) Reimbursement determination authority. The reimbursement
determination authority for this reimbursement ceiling is specified
in §355.101 of this title.
(e) Contract-specific reimbursement. DADS determines
the actual reimbursement for each contract through negotiations between
DADS staff and the provider agency. In no instance may the negotiated
unit reimbursement exceed the unit reimbursement ceiling.
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| Source Note: The provisions of this §355.511 adopted to be effective March 1, 2004, 29 TexReg 1672; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013; amended to be effective December 13, 2010, 35 TexReg 10944; amended to be effective November 25, 2012, 37 TexReg 9086 |
