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(a)(No change.) (b)Cost report requirements. Unless specifically stated in program rules, each provider must submit financial and statistical information on cost report forms provided by DHS, or on facsimiles which are formatted according to DHS specifications and are pre-approved by DHS staff, or electronically in DHS- prescribed format in programs where these systems are operational. The cost reports must be submitted to DHS in a manner prescribed by DHS. The cost reports must be prepared to reflect the activities of the provider while delivering contracted services during the fiscal year specified by the cost report. Cost reports or other special surveys or reports may be required for other periods at the discretion of DHS. Each provider is responsible for accurately completing any cost report or other special survey or report submitted to DHS. (1)Accounting methods. All financial and statistical information submitted on cost reports must be based upon the accrual method of accounting, except where otherwise specified in §355.102 and §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs) and in the case of governmental entities operating on a cash or modified accrual basis. For cost-reporting purposes, accrued expenses must be incurred during the cost reporting period and must be paid within 180 days after the end of that cost reporting period. In situations where a contracted provider, any of its controlling entities, its parent company/sole member, or its related-party management company has filed for bankruptcy protection, the contracted provider may request an exception to the 180-day requirement for payment of accrued allowable expenses by submitting a written request to the Rate Analysis Department of DHS. The written request must be submitted within 60 days of the date of the bankruptcy filing or at least 60 days prior to the due date of the cost report for which the exception is being requested, whichever is later. The contracted provider will then be requested by the Rate Analysis Department to provide certain documentation, which must be provided by the specified due date. Such exceptions due to bankruptcy may be granted for reasonable, necessary and documented accrued allowable expenses that were not paid within the 180-day requirement. Accrued revenues must be for services performed during the cost reporting period and do not have to be received within 180 days after the end of that cost reporting period in order to be reported as revenues for cost-reporting purposes. Except as otherwise specified by the cost determination process rules of this chapter, cost report instructions, or policy clarifications, cost reports should be prepared consistent with generally accepted accounting principles (GAAP), which are those principles approved by the American Institute of Certified Public Accountants (AICPA). Internal Revenue Service (IRS) laws and regulations do not necessarily apply in the preparation of the cost report. In cases where cost reporting rules differ from GAAP, IRS, or other authorities, DHS rules take precedence for provider cost-reporting purposes. (2)-(6)(No change.) (c)-(e)(No change.) (f)Cost of out-of-state audits. As specified in §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), DHS conducts desk reviews of all cost reports not selected for field audit. DHS also conducts field audits of provider records and cost reports. Although the number of field audits performed each year may vary, DHS seeks to maximize the number of field audited cost reports available for use in its cost projections. Whenever possible, all the records necessary to verify information submitted to DHS on cost reports, including related party transactions and other business activities engaged in by the provider, must be accessible to DHS audit staff within the state of Texas within fifteen working days of field audit or desk review notification. When records are not available to DHS audit staff within the state of Texas, the provider must pay the actual costs for DHS staff to travel and review the records out-of-state. DHS must be reimbursed for these costs within 60 days of the request for payment. (1)-(2)(No change.) (g)-(h)(No change.)
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on July 6, 2000
TRD-200004702 Marina Henderson
Executive Deputy Commissioner
Texas Health and Human Services Commission
Earliest possible date of adoption: August 20, 2000
For further information, please call: (512) 438-3734
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