The Health and Human Services Commission (HHSC) proposes amendments to §355.105, concerning General Reporting and Documentation Requirements, Methods, and Procedures.

Background and Justification

This rule establishes cost reporting and documentation requirements, methods and procedures for all Department of Aging and Disability Services (DADS) programs for which the Health and Human Services Commission (HHSC) administers rates. HHSC, under its authority and responsibility to administer and implement rates, is updating this rule by clarifying certain requirements relating to continuous daily timesheets and detailing the procedures for determining limits on related-party salaries, wages and benefits.

Continuous daily timesheets are required when a provider directly charges payroll costs of direct care employees who work across cost areas, service areas and/or job classifications. Existing rules do not detail the content requirements for these timesheets. This proposed rule will give providers clear guidance as to what information must be included in a timesheet to be acceptable for cost report documentation purposes.

Currently, HHSC applies salary caps to salary amounts reported on Medicaid cost reports by providers for related-party administrators, directors, assistant administrators, assistant directors, and owners, partners and stockholders. The salary caps are applied by HHSC under the authority of §355.102, which requires that, for cost reporting purposes, allowable costs must be reasonable and necessary, and, for nursing facilities (NFs), under the authority of §355.306, which describes the capping methodology in detail. The proposed rule creates a consolidated related-party salary capping rule for all DADS programs in a single Texas Administrative Code (TAC) section and codifies the methodology used to calculate these caps for all programs. This proposed amendment will ensure that the calculation of related-party compensation limitation for non-NF programs is described as clearly in the rules as is the calculation of such limitations for the NF program. The proposed rule does not change the current method used to cap related-party salaries on the cost report, the rule change only serves to clarify and consolidate current practice into the rule.

The proposed amendment also deletes obsolete language, deletes the requirement that legacy Texas Department of Mental Health and Mental Retardation providers maintain financial records for five years and instead requires these providers to comply with DADS record keeping requirements that financial records be maintained for three years and 30 days, updates agency references and updates references to other sections of the TAC. These changes will make the rule easier to understand and apply.

Section-by-Section Summary

The amendment revises §355.105 to:

Revise subsection (b)(2)(A)(i) to replace references to the legacy Texas Department of Human Services and DHS with references to the Texas Department of Aging and Disability Services and DADS. The paragraph is also revised to correct an erroneous reference to another section of the TAC.

Revise subsection (b)(2)(A)(ii) to delete references to the legacy Texas Department of Mental Health and Mental Retardation (MHMR) and specific records retention requirements for providers contracted with (MHMR).

Delete the language in subsection (b)(2)(A)(iv) as obsolete and renumber subsection (b)(2)(A)(v) as subsection (b)(2)(A)(iv).

Delete obsolete language in subsection (b)(2)(B)(iv) pertaining to luxury vehicles leased prior to January 1, 1997.

Add new subsection (b)(2)(B)(xii)(I) which details requirements for continuous daily timesheets for staff required to maintain such time sheets as per §355.102(j).

Add new subsection (b)(2)(B)(xii)(II) to describe which employees in the Intermediate Care Facilities for Persons with Mental Retardation, Home and Community-based Services and Texas Home Living programs are required to maintain continuous daily time sheets.

Delete obsolete language in subsection (b)(4)(vii) pertaining to cost reports from 1997 and 2004.

Delete the language in subsection (b)(4)(B)(ii) as obsolete renumber subsection (b)(4)(B)(iii) as subsection (b)(4)(B)(ii).

Delete the language in subsection (b)(4)(C)(ii) as obsolete and renumber subsection (b)(4)(C)(iii) as subsection (b)(4)(C)(ii).

Delete obsolete language in subsection (b)(5) pertaining to reporting periods beginning on September 1, 2001.

Delete the language in subsection (f)(2) as obsolete and renumber subsection (f)(3) as subsection (f)(2).

Add new subsection (i) which details procedures for determining limits on related-party salaries, wages and/or benefits.

Fiscal Note

Gordon E. Taylor, Chief Financial Officer for the Department of Aging and Disability Services, has determined that during the first five-year period the amended rule is in effect there will be no fiscal impact to state government. The proposed rule will not result in any fiscal implications for local health and human services agencies. There are no fiscal implications for local governments as a result of enforcing or administering the section.

Small Business and Micro-business Impact Analysis

HHSC has determined that there is no adverse economic effect on small businesses or micro-businesses as a result of enforcing or administering the amendment. The implementation of these proposed rule amendments does not require any changes in practice or any additional cost to the contracted provider.

HHSC does not anticipate that there will be any economic cost to persons who are required to comply with this amendment. The amendment will not affect local employment.

Public Benefit

Carolyn Pratt, Director of Rate Analysis, has determined that, for each of the first five years the amendment is in effect, the expected public benefit is that obsolete rule language will be eliminated and that the rule will provide clear guidance to agency staff and providers on time sheet documentation requirements and the calculation of related-party salary limitations.

Takings Impact Assessment

HHSC has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

Regulatory Analysis

HHSC has determined that this proposal is not a "major environmental rule" as defined by §2001.0225 of the Texas Government Code. "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risk to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment or the public health and safety of a state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure.

Public Comment

Questions about the content of this proposal may be directed to Pam McDonald in the HHSC Rate Analysis Department by telephone at (512) 491-1373. Written comments on the proposal may be submitted to Ms. McDonald by facsimile at (512) 491-1998, by e-mail to pam.mcdonald@hhsc.state.tx.us, or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200, Austin, Texas 78708-5200, within 30 days of publication of this proposal in the Texas Register.

Statutory Authority

The amendment is proposed under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out the commission's duties; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Human Resources Code, Chapter 32.

The amendment affects Texas Government Code Chapter 531 and Texas Human Resources Code Chapter 32. No other statutes, articles, or codes are affected by this proposal.