The Texas Health and Human Services Commission (HHSC) proposes to amend §355.102, concerning General Principles of Allowable and Unallowable Costs; §355.103, concerning Specifications for Allowable and Unallowable Costs; §355.104, concerning Revenues; §355.105, concerning General Reporting and Documentation Requirements, Methods, and Procedures; §355.111, concerning Administrative Contract Violations; §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; §355.513, concerning Reimbursement Methodology for the Deaf-Blind with Multiple Disabilities Waiver Program; and §355.6907, concerning Reimbursement Methodology for Day Activity and Health Services.

Background and Justification

HHSC, under its authority and responsibility to administer and implement rates, proposes to amend these rules to 1) change the capitalization threshold for assets from $2,500 to $5,000 and adjust the useful life for wheelchair lifts from four years to five years, 2) correct numbering to provide greater clarity, 3) modify cost report training requirements, 4) require providers to use the most current version of the document that defines estimated useful lives of assets, 5) update dates in examples to the current period, 6) delete obsolete language, 7) change the required release date for material pertinent to proposed reimbursements from ten working days before the public hearing to ten calendar days before the public hearing, 8) delete language detailing the contents of material pertinent to proposed reimbursements, and 9) change the compliance period for correcting an administrative contract violation.

Section-by-Section Summary

HHSC proposes to amend §§355.102, 355.104, 355.105, 355.308, 355.503, 355.505, 355.513, and 355.6907 to update references.

HHSC proposes amendments to §355.102 as follows:

Revise subsections (d)(1) and (2) to remove the requirement that all cost report preparers, who have not previously attended cost report training or have not done so for a specific program, attend classroom-based training. With this proposed amendment, all cost report training will be provided as online training.

The proposed amendment to subsections (g)(2), (h)(2) and (j)(1)(D)(iii)(II) adds language to clarify that Intermediate Care Facilities for Individuals with Intellectual Disabilities were formerly known as Intermediate Care Facilities for Persons with Mental Retardation.

HHSC proposes amendments to §355.103 as follows:

Revise subsection (b)(1)(A)(i)(II) to remove date references that are no longer necessary.

Revise subsection (b)(2)(C)-(E) to renumber them as separate paragraphs (3)-(5) to clarify that they are not part of paragraph (2) and should be their own paragraphs. Subsequent paragraphs are renumbered.

Revise subsection (b)(7) to increase the capitalization threshold (the cost at which an asset is required to be depreciated rather than expensed on LTSS cost reports) from $2,500 to $5,000 effective for assets purchased September 1, 2014, or later, for all long-term care programs. This increase will bring the Texas cost reporting rules for long-term services and supports providers into alignment with federal and other state guidance on asset capitalization thresholds.

Revise subsection (b)(7)(B) to specify that providers are required to use the minimum schedules consistent with the most current version of "Estimated Useful Lives of Depreciable Hospital Assets," published by the American Hospital Association and to change their address given in the subsection.

Revise subsection (b)(7)(C)(ii) and (b)(20)(D)(ii) to update the years given in the examples to make them more current.

Revise subsection (b)(7)(C)(iii) to change the estimated useful life of a wheelchair lift from four years to five.

HHSC proposes amendments to §355.105 as follows:

Delete subsection (b)(4)(viii) as this clause refers to subsection (c)(3), which is being deleted.

Delete subsection (c)(3) to remove the requirement for certain providers to file a Consolidated Report as this language no longer reflects agency procedures and renumber subsequent paragraphs.

Revise subsection (g)(1) to change the required release date for material pertinent to proposed uniform reimbursements from ten working days before the public hearing to ten calendar days before the public hearing and to delete details as to the contents of this material to align the rule language with current practice.

Revise subsection (g)(2) to change the required release date for material pertinent to proposed contractor-specific reimbursements from ten working days before the public hearing to ten calendar days before the public hearing and to delete details as to the contents of this material to align the rule language with current practice.

HHSC proposes to amend §355.111(1)(B) to change the compliance period for a provider to correct an administrative contract violation from 30 days to 15 days.

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 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

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 amendments.

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

Public Benefit

Pam McDonald, Director of the HHSC Rate Analysis Department, has determined that for each of the first five years the amendments are in effect, the expected public benefit is that the amended rules will reduce the number of assets a provider is required to track and depreciate, clarify the relationship between certain items of cost, remove the requirement that cost report preparers attend classroom-based training, provide more up-to-date examples and remove obsolete language in the rules. The amended rules will also bring rule language into line with current practice regarding the release of materials pertinent to proposed reimbursements.

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 Judy Myers in the HHSC Rate Analysis Department by telephone at (512) 707-6085. Written comments on the proposal may be submitted to Ms. Myers by fax to (512) 730-7475; by e-mail to judy.myers@hhsc.state.tx.us; or by mail to HHSC Rate Analysis, Mail Code H400, P.O. Box 149030, Austin, Texas, 78714-9030, 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 provides HHSC with the authority to propose and adopt rules governing the determination of Medicaid reimbursements.

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.