The Texas Health and Human Services Commission (HHSC) proposes amendments to §355.102, concerning General Principles of Allowable and Unallowable Costs; §355.105, concerning General Reporting and Documentation Requirements, Methods, and Procedures; §355.112, concerning Attendant Compensation Rate Enhancement; §355.456, concerning Reimbursement Methodology; §355.722, concerning Reporting Costs by Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Providers; and §355.723, concerning Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs.

Background and purpose

Effective January 1, 2018, HHSC will implement a cost report reform initiative for HCS/TxHmL and intermediate care facilities for individuals with an intellectual disability or related conditions (ICF/IID) providers by requiring only even-year cost reports beginning with providers' 2018 fiscal year cost reports. These proposed amendments are at §355.105(c) for ICF/IID providers and at §355.722(a) for HCS/TxHmL providers.

As part of this initiative, HHSC is proposing amendments to §355.102(d) so that all providers attend state-sponsored cost report training every other year for the even-year cost report. Currently, providers attend cost report training for odd-year cost reports.

Section 355.112(h)(2)(B) is also being amended to require Attendant Compensation Reports for odd years beginning with the rate year that starts September 1, 2017. The report must reflect the activities of the provider while delivering contracted services from the first day of the rate year through the last day of the rate year, and it is due no later than 90 days following the end of the provider entity's fiscal year or 90 days from the transmittal date of the Attendant Compensation Report forms, whichever due date is later.

Finally, HHSC proposes to repeal the Total Medicaid Spending Requirement in the ICF/IID reimbursement methodology at §355.456(j)(8) and in the HCS/TxHmL reimbursement methodology at §355.723(f)(10) beginning September 1, 2017. Providers who chose to receive the Medicaid rates in effect on August 31, 2015, (i.e., providers who chose to "opt out" of the September 1, 2015, rate increases in order to be exempt from the Total Medicaid Spending Requirement) will receive the rates that were adopted effective September 1, 2015, effectively eliminating the rate differential between providers who "opted in" and providers who "opted out."

Section-by-Section Summary

The proposed amendment to §355.102(d) changes the cost report training requirement from every other year for the odd-year cost report to every other year for the even-year cost report beginning with providers' 2018 cost reports. If a new preparer wishes to complete an odd-year cost report and has not completed the previous even-year training, he/she must complete an odd-year training.

The proposed amendment to §355.102(g)(2) and (h)(2) update references to program names.

The proposed amendment to §355.105(c)(1) indicates that ICF/IID providers will submit even-year cost reports only, beginning with provider's 2018 cost report.

The proposed amendment to §355.112(h)(2) adds new subparagraph (B) to require submission of attendant compensation reports for odd years, beginning with the rate year that starts September 1, 2017. As amended, the remaining subparagraphs are (C) through (H).

The proposed amendment to §355.112(j) updates an internal citation related to completion of cost reports functioning as Attendant Compensation Reports in the ICF/IID program.

The proposed amendment to §355.112(t)(2) updates language regarding provider requests for recalculation of recoupment.

The proposed amendment to §355.456(j) adds an end date of August 31, 2017, for the Total Medicaid Spending Requirement and to the providers' option of choosing the Medicaid rates in effect on August 31, 2015, in paragraph (7). Proposed new paragraph (8) indicates that, for rate periods beginning on or after September 1, 2017, the Total Medicaid Spending Requirement will no longer apply, and providers who "opted out" of the September 1, 2015, rate increases will begin to receive those increases.

The proposed amendment to §355.722(a) indicates that HCS/TxHmL providers will submit even-year cost reports only, beginning with provider's 2018 cost reports.

The proposed amendment to §355.723(f) adds an end date of August 31, 2017, for the Total Medicaid Spending Requirement and to the providers' option of choosing the Medicaid rates in effect on August 31, 2015, in paragraph (9). Proposed new paragraph (10) indicates that, for rate periods beginning on or after September 1, 2017, the Total Medicaid Spending Requirement will no longer apply, and providers who "opted out" of the September 1, 2015, rate increases will begin to receive those increases.

Fiscal Note

David Cook, Deputy Chief Financial Officer for HHSC, has determined that for each year of the first five years the amendments to §§355.102, 355.105, 355.112, and 355.722 will be in effect, there will be no fiscal implications to state or local governments as a result of enforcing or administering the amendments as proposed.

For each year of the first five years the amendments to §355.456 and §355.723 will be in effect, there will be fiscal implications to state government as a result of enforcing and administering the amendments as follows: $832,189 ($359,339 General Revenue (GR) and $472,850 Federal Funds (FF)) for fiscal year (FY) 2018; $1,011,370 ($431,653 GR and $579,717 FF) for FY 2019; $1,011,370 ($432,057 GR and $579,313 FF) for FY 2020; $1,011,370 ($432,057 GR and $579,313 FF) for FY 2021; and $1,011,370 ($432,057 GR and $579,313 FF) for FY 2022. There will be no effect on local governments as a result of enforcing or administering these amendments.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the first five years the amended rules will be in effect:

(1) the rules will not create or eliminate a government program;

(2) implementation of the rules will not require the creation or elimination of employee positions;

(3) implementation of the rules will not require an increase or decrease in future legislative appropriations to the agency;

(4) the rules will not require an increase or decrease in fees paid to the agency;

(5) the rules will not create a new rule;

(6) the rules will limit an existing rule; and

(7) the rules will not change the number of individuals subject to the rule.

HHSC has insufficient information to determine the rules' effect on the state's economy.

Small Business, Micro-Business, AND RURAL Community Impact Analysis

David Cook, Deputy Chief Financial Officer for HHSC, has also determined that there will be no adverse impact on small businesses, micro-businesses, or rural communities required to comply with the amendments as proposed. The amended rules do not require any additional cost to a contracted provider. Attendant Compensation Reports collect significantly less provider information than cost reports. Replacing cost reports in the odd years with Attendant Compensation Reports should result in lower costs for providers.

ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT

There are no anticipated economic costs to persons required to comply with the amendments as proposed.

There is no anticipated negative impact on local employment.

COSTS TO REGULATED PERSONS

Texas Government Code, §2001.0045 does not apply to this rule because the rule does not impose a cost on persons required to comply and is amended to reduce the burden imposed on persons required to comply with the rule.

Public Benefit

Selvadas Govind, Director of Rate Analysis, has determined that, for each year of the first five years the amended rules are in effect, the public will benefit from adoption of the proposed amendments in three ways. First, HHSC's costs will be reduced because staff will have 69% fewer reports to process from HCS/TxHmL and ICF/IID providers during alternate years. Second, the administrative burden on providers will be reduced because they will no longer submit odd-year cost reports; rather, providers will submit Attendant Compensation Reports, which collect significantly less provider information. Third, the administrative burden on HHSC and providers associated with Medicaid Spending Requirements will be eliminated.

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.

Public Comment

Questions about the content of this proposal may be directed to Victor Perez in the HHSC Rate Analysis Department by telephone at (512) 462-6223. Written comments on this proposal may be submitted to Mr. Perez by mail to the HHSC Rate Analysis Department, Mail Code H-400, P.O. Box 85200, Austin, TX 78705-5200; by fax to (512) 730-7475; or by e-mail to RAD LTSS@hhsc.state.tx.us within 30 days after publication of this proposal in the Texas Register.

To be considered, comments must be submitted no later than 30 days after the date of this issue of the Texas Register. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; or (2) faxed or e-mailed by midnight on the last day of the comment period. When faxing or e-mailing comments, please indicate "Comments on Proposed Rule 1R059" in the subject line.

Statutory Authority

The amended rules are proposed under Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; 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 (Medicaid) payments under Texas Human Resources Code Chapter 32.

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