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

Background and Justification

HHSC, under its authority and responsibility to administer and implement rates, proposes to amend this rule to: 1) clarify limitations on reporting related-party compensation on Medicaid cost reports; 2) incorporate changes to reflect person first respectful language; and 3) clarify the references in subsection (a).

HHSC limits the reporting of compensation for owners and related-party administrators and assistant administrators to ensure that only reasonable and necessary costs are included in Texas Medicaid cost reports. In this context, a related party is generally defined as any person or organization related to the provider by blood, marriage, common ownership, or control. Language in §355.105(i) currently indicates that these limitations apply only to related-party salaries, wages, payroll taxes, and benefits. HHSC proposes to amend subsection (i) to clarify that it applies not just to salaries, wages, and benefits, but to all related-party compensation including related-party contracted labor. This change in the rule language will clarify that these limitations apply to related-party administrators and assistant administrators who work as contract labor, as well as those who are direct employees of the provider.

In addition, HHSC proposes amending §355.105 to incorporate person first respectful language in compliance with Texas Government Code §392.002.

Section-by-Section Summary

HHSC proposes amendments to §355.105 as follows:

Modify subsection (a) to clarify that HHSC determines the costs appropriate for use in calculating reimbursement using the requirements, methods, and procedures set forth in the entire section.

Modify subsection (i) to change references to the terms "salaries," "wages," and "benefits" to the term "compensation."

Make revisions throughout the section to replace the name of the predecessor to the Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions program and to replace words that are not considered person first respectful with more respectful wording.

Fiscal Note

James Jenkins, Chief Financial Officer for the Department of Aging and Disability Services, has determined that during the first five-year period the amendment is in effect there will be no fiscal impact to state government. The amendment 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 amendment.

Mr. Jenkins anticipates there will be no economic cost to persons who are required to comply with the proposed amendment during the first five years the rule will be in effect. The amendment should not affect local employment.

Small Business and Micro-business Impact Examination

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

Public Benefit

Pam McDonald, 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 the rule will clarify how limitations on the reporting of compensation for owners and related-party administrators and assistant administrators are determined and will incorporate person first respectful language.

Takings Impact Assessment

HHSC has determined that this proposal does not restrict or limit an owner's right to his or her private real 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 Brian King in the HHSC Rate Analysis Department by telephone at (512) 491-1369. Written comments on the proposal may be submitted to Mr. King by fax to (512) 491-1998; by e-mail to brian.king@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 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)(2), which provides HHSC with the authority to propose and adopt rules governing the determination of Medicaid reimbursements.

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.