The Texas Health and Human Services Commission (HHSC) proposes to amend §355.105, concerning General Reporting and Documentation Requirements, Methods, and Procedures; §355.112, concerning Attendant Compensation Rate Enhancement; §355.308, concerning Direct Care Staff Rate Component; §355.503, concerning Reimbursement Methodology for the Community-Based Alternatives Waiver Program and the Integrated Care Management-Home and Community Support Services and Assisted Living/Residential Care Programs; §355.505, concerning Reimbursement Methodology for the Community Living Assistance and Support Services Waiver Program; and §355.5902, concerning Reimbursement Methodology for Primary Home Care.

Background and Justification

Sections 355.105, 355.112, 355.308, 355.503, 355.505, and 355.5902 establish cost reporting requirements and reimbursement methodologies for various long term services and supports programs administered by the Department of Aging and Disability Services (DADS). HHSC proposes to amend these rules to: 1) formalize certain existing practices; 2) clarify due dates for consolidated cost reports; 3) change how entities request that their cost reports be aggregated for purposes of determining compliance with Attendant Compensation Rate Enhancement (the Enhancement) spending requirements; 4) eliminate the requirement that all contracts in an aggregated group participate in the Enhancement at the same level; and 5) allow providers subject to a recoupment for failure to meet Enhancement spending requirements on a specific Attendant Compensation Report, and providers subject to recoupment for failure to meet Direct Care Staff Rate staffing and/or spending requirements on a specific Staffing and Compensation Report, to, in certain situations, request that HHSC recalculate their recoupment after combining that report with the provider's next cost report or Attendant Compensation or Staffing and Compensation Report, as appropriate.

Formalize certain existing practices

Section 355.105 details general reporting and documentation requirements, methods and procedures for provider cost reports. HHSC proposes to amend this section to formalize the requirement that providers who are required to submit a consolidated cost report submit it with the correct Consolidated Reporting Group number.

Clarify due dates for consolidated cost reports

Primary Home Care (PHC), Community Living Assistance and Support Services (CLASS)--Direct Service Agency (DSA), CLASS--Case Management Agency (CMA), and Community Based Alternatives (CBA)--Home and Community Support Services (HCSS) providers are required to submit consolidated cost reports if the provider's legal entity controls more than one contract within a single program. Cost report submission for these providers is a two-step process with the provider first submitting a Consolidated Cost Reporting Schedule (the Schedule), which HHSC uses to assign the provider Consolidated Reporting Group Number(s), and then submitting its consolidated cost report(s) using the Consolidated Reporting Group Number(s) provided to it by HHSC.

HHSC proposes to amend §355.105 to clarify that the Schedule must be submitted to HHSC no later than 30 days following the end of the provider entity's fiscal year or 30 days from the transmittal date of the Schedule to the provider, whichever is later, and that the actual cost report(s) must be submitted to HHSC no later than 120 days following the end of the provider entity's fiscal year or 120 days from the transmittal date of the Schedule to the provider, whichever is later.

HHSC also proposes to amend §355.105 to indicate that failure on the provider's part to submit the Schedule timely does not qualify as a good cause for failure to submit cost reports by the cost report due date.

Change how entities are to request that their cost reports be aggregated for purposes of determining compliance with Enhancement spending requirements

Section 355.112 details requirements pertaining to the Enhancement. Currently providers are required to specify on their enrollment contract amendment their desire to have all their contracts or component codes that are participating in the Enhancement be considered as a group for purposes related to the Enhancement. HHSC proposes to amend this section to indicate that providers are to make this request upon submission of their Enhancement accountability report at the end of the Enhancement compliance period rather than upon enrollment in the Enhancement. Benefits of this change include: 1) providers will be able to make their decisions pertaining to grouping at the point when they have the most data available to determine whether grouping will benefit their entity; 2) consistency between the Enhancement and the nursing facility Direct Care Staff Rate will be increased by having providers request grouping in the same manner for both programs; and 3) the administrative burden for providers and HHSC will be reduced because group membership will no longer have to be tracked between enrollment and report submission.

Eliminate the requirement that all contracts in an aggregated group participate in Enhancement at the same level

Section 355.112 currently requires that providers who request that compliance with spending requirements be determined in the aggregate for all of their participating contracts have all their contracts participate in the Enhancement at the same level. HHSC proposes to amend this section to eliminate this requirement, which should increase provider flexibility in terms of participation in the Enhancement.

Sections 355.503, 355.505 and 355.5902 require that entities that operate multiple PHC, CLASS and/or CBA contracts that are participating in the Enhancement must file two cost reports for each program: one for contracts participating in the Enhancement and one for contracts not participating in the Enhancement. In order to accommodate the proposed change to §355.112 described in the previous paragraph, HHSC is proposing to amend these sections to indicate that, for each program, entities that operate contracts that are participating in the Enhancement at different levels must file a separate cost report for the contracts that are participating at each specific level as well as a cost report for contracts not participating in the Enhancement.

Allow providers subject to a recoupment for failure to meet enhancement spending and/or staffing requirements on a specific report to, in certain situations, request that HHSC recalculate their recoupment after combining that cost report with the provider's next cost report or Attendant Compensation or Staffing and Compensation Report, as appropriate

Certain providers are required to submit Attendant Compensation Reports or Staffing and Compensation Reports that cover a time period shorter than the provider's fiscal year. In some situations, this can be to the provider's disadvantage because compensation and staffing levels can fluctuate over the course of a provider's fiscal year. To address these situations, HHSC proposes to allow providers notified of a recoupment based on a report that covers a time period shorter than the provider's fiscal year to, in certain situations, request that HHSC recalculate their recoupment after combining the report with the provider's next cost report or Attendant Compensation or Staffing and Compensation Report, as appropriate.

Additional changes are proposed throughout the rules to update terms, remove obsolete or incorrect language, and clarify language.

Section-by-Section Summary

HHSC proposes amendments to §355.105 as follows:

Revise subsection (b)(4), requirements for cost report completion, to indicate that, if applicable, a completed cost report must be submitted with the correct Consolidated Reporting Group Number assigned by HHSC that is associated with the provider's current contract numbers.

Revise subsection (c) to describe the due dates for PHC, CLASS, and CBA Consolidated Reporting Schedules and cost reports and make conforming changes to the organizational structure of the subsection.

HHSC proposes amendments to §355.112 as follows:

Revise subsection (f), enrollment contract amendment, to: 1) require providers choosing to participate in the Enhancement to indicate a preferred participation level on their enrollment contract amendment; 2) delete a requirement that providers specify their desire to have all participating contracts or component codes be considered as a group for purposes related to the Enhancement on their enrollment contract amendment; and 3) indicate that all contracts of a component code within a specific program must either participate at the same level or not participate in the Enhancement.

Revise subsection (o), enhanced attendant compensation, to delete requirements that providers participating as a group in the Enhancement must request a single attendant compensation level for all contracts and component codes in their group.

Revise subsection (s), spending requirements for participating contracts and component codes, to delete rule language that made the decision of whether a provider wanted their participating contracts and component codes to participate as individuals or a group for purposes of determining compliance with spending requirements dependent upon a provider indicating on their enrollment contract amendment, and to delete references to "unadjusted" accrued attendant compensation spending per unit of service.

Modify subsection (t), notification of recoupment, to indicate that providers notified of a recoupment based on a report described in subsection (h)(2)(A) or (h)(2)(F) may request that HHSC recalculate their recoupment after combining the report with the provider's next cost report or Attendant Compensation or Staffing and Compensation Report, as appropriate.

Revise subsections (w), (x), and (y) to eliminate references to groups.

Revise subsection (ee) to:

1) indicate that, to request aggregation, providers must submit an aggregation request at the time each Attendant Compensation Report or cost report is submitted;

2) eliminate references to groups;

3) indicate which types of ownership structures may request aggregation;

4) indicate that requests for aggregation must be submitted separately for each reporting period; and

5) exclude the PHC, CLASS, and CBA programs from the requirement that contracts or component codes that change ownership or terminate after the end of the applicable reporting period, but prior to the determination of compliance with Enhancement spending requirements, be excluded from all aggregate spending calculations.

HHSC proposes amendments to §355.308 as follows:

Modify subsection (s), notification of recoupment, to indicate that providers notified of a recoupment based on a report described in subsection (f)(2)(A) or (f)(2)(F) may request that HHSC recalculate their recoupment after combining the report with the provider's next cost report or Attendant Compensation or Staffing and Compensation Report, as appropriate.

Update a rule cross-reference in subsection (w), appeals. HHSC proposes amendments to §355.503 as follows:

Modify subsection (e)(3) to indicate that entities that operate contracts that are participating in the Enhancement program at different levels must file a separate cost report for the contracts that are participating at each specific level as well as a cost report for contracts not participating in the Enhancement.

HHSC proposes amendments to §355.505 as follows:

Modify subsection (b)(2) to indicate that entities that operate contracts that are participating in the Enhancement program at different levels must file a separate cost report for the contracts that are participating at each specific level as well as a cost report for contracts not participating in the Enhancement.

HHSC proposes amendments to §355.5902 as follows:

Modify subsection (b)(1) to indicate that entities that operate contracts that are participating in the Enhancement program at different levels must file a separate cost report for the contracts that are participating at each specific level as well as a cost report for contracts not participating in the Enhancement.

Additional changes are proposed throughout the rule to update terms, remove obsolete or incorrect language, and clarify language.

Fiscal Note

Gordon Taylor, Chief Financial Officer for the Department of Aging and Disability Services, has determined that during the first five-year period the amendments are in effect there will be no fiscal impact to state government. The amendments 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 sections.

Small Business and Micro-business Impact Analysis

Pam McDonald, Director of Rate Analysis, has determined that there is no adverse economic effect on small businesses or micro-businesses as a result of enforcing or administering the amendments. The implementation of the proposed rule amendments does not require any significant changes in practice or any additional costs to the contracted provider.

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

Public Benefit

Pam McDonald has also determined that for each of the first five years the amendments are in effect, the expected public benefits are that the rule amendments will: 1) enable providers to make their decisions pertaining to aggregating at the point when they have the most data available to determine whether aggregating will benefit their entity; 2) increase consistency between the Enhancement and the nursing facility Direct Care Staff Rate by requiring providers in both programs to request aggregation in the same manner; 3) reduce administrative burdens for providers and HHSC by eliminating the need to track group membership between enrollment and actual aggregation; 4) increase provider flexibility by allowing contracts in groups to participate in the Enhancement at varying levels; and 5) take fluctuations in attendant compensation over the course of a provider's fiscal year into account when determining compliance with Enhancement spending requirements.

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 H400, P.O. Box 85200, Austin, Texas, 78708-5200, within 30 days of publication of this proposal in the Texas Register.

Statutory Authority

The amendments are 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 Texas Human Resources Code, Chapter 32.

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