The Texas Health and Human Services Commission (HSSC) proposes amendments to §355.102, concerning general principles of allowable and unallowable costs; §355.105, concerning general reporting and documentation requirements, methods, and procedures; and §355.108, concerning determination of inflation indices, in its Cost Determination Process chapter. The purpose of the amendments is to change the cost report training cycle to require training every odd-numbered year, so that training will be required on the cost report that will be used to determine payment rates for the state's biennium. A process will be established for providers filing for bankruptcy to obtain a waiver of the requirement that accrued expenses must be paid within 180 days after the end of the cost reporting period. The references from the Implicit Price Deflator - Personal Consumption Expenditures inflation index will be revised to references to the Personal Consumption Expenditures chain-type price index that was developed as a more accurate overall inflation index. Providers with records outside of the state of Texas would be required to make the necessary records available to auditors within Texas within 15 working days of notification; otherwise, the provider must pay for the actual travel costs of the auditor to conduct the on-site audit out-of state.

Don Green, chief financial officer, has determined that for the first five-year period the sections are in effect there will be no fiscal implications for state government as a result of enforcing or administering the sections.

Commissioner Don Gilbert has determined that for each year of the first five years the sections are in effect the public benefit anticipated as a result of enforcing the sections will be to provide guidance to contracted providers regarding cost determination procedures and guidelines. The changes will make the cost report training cycle the same cycle for all providers, will allow providers that have filed for bankruptcy to include their allowable costs in rate determination when the bankruptcy process may have delayed some payments of expenses past the 180 days currently required to be considered allowable for rate determination, will use the revised inflation index that is a more accurate overall inflation index, and will provide a definite deadline to providers with out-of-state records as to when those records must be brought to Texas to be audited on- site. There will be no effect on large, small, or micro businesses, because no changes in practice are required of any business.

Questions about the content of this proposal may be directed to Carolyn Pratt at (512) 438-4057 in DHS's Rate Analysis Department. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-253, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Texas Government Code, the department has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, the department is not required to complete a takings impact assessment regarding these rules.

The amendments are proposed under the Government Code, §531.033, which authorizes the commissioner of the Health and Human Services Commission to adopt rules necessary to carry out the commission's duties, and §531.021(b), which establishes the commission as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under Chapter 32, Human Resources Code.

The amendments implement the Government Code, §§531.033 and 531.021(b).