The Texas Health and Human Services Commission (HHSC) adopts an amendment to §355.105, concerning General Reporting and Documentation Requirements, Methods, and Procedures. Section 355.105 is adopted without changes to the proposed text as published in the July 21, 2023, issue of the Texas Register (48 TexReg 3958). This rule will not be republished.

BACKGROUND AND JUSTIFICATION

Texas Human Resources Code §40.058 requires the Texas Department of Family and Protective Services (DFPS) and HHSC to "enter into contracts for the provision of shared administrative services, including...rate setting." As part of these rate-setting activities, HHSC collects annual cost reports from program providers in the 24-Hour Residential Child Care (24RCC) program and uses the data to calculate and recommend payment rates to DFPS. DFPS currently reimburses providers through two payment models: the legacy system and Community-Based Care (CBC). Under the legacy system, DFPS pays 24RCC providers a payment rate for each day of care provided. Under CBC, DFPS contracts with a Single Source Continuum Contractor (SSCC), which is responsible for finding foster homes or other living arrangements for children in state care and providing them with a full continuum of services. SSCCs subcontract with residential childcare providers to provide residential foster care in their catchment areas.

The Texas Legislature directed DFPS to implement foster care rate modernization within the Issue Docket Decisions of the 2024-2025 General Appropriations Bill, House Bill 1, 88th Legislature, Regular Session, 2023 (Article II - Health and Human Services). Cost Report modifications have been outlined in HHSC's legislative reports pertaining to the Foster Care Rate Modernization project. For example, HHSC's Pro Forma Modeled Rate and Fiscal Impact Report, as required by the 2022-2023 General Appropriations Act, Senate Bill 1, 87th Legislature, Regular Session, 2021 (Article II Special Provisions Relating to All Health and Human Services Agencies, Section 26), stated: "HHSC and DFPS must evaluate if calculating a statewide case management rate using actual SSCC cost data in lieu of resource transfer is appropriate. Using SSCC costs to calculate the CBC rate may improve the state's ability to align rates more closely to provider costs. HHSC and DFPS would have to evaluate if a cost-based approach is appropriate for CBC. A cost-based approach could result in DFPS paying provider-specific, per-catchment rates or a uniform statewide rate." The cost-based approach was also outlined in HHSC's Implementation Plan.

The amendments update the excusal criteria to account for providers who have subcontracted with an SSCC under CBC by adding SSCC referrals into the calculation of state-placed days. The amendments also require all SSCCs to submit cost reports on the state fiscal year rather than the provider's current fiscal year. The amendments also provide clarifying edits throughout the rule.

COMMENTS

The 21-day comment period ended August 11, 2023.

During this period, HHSC did not receive any comments regarding the proposed rule.

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services agencies, and Texas Human Resources Code §40.058, which provides for HHSC to provide administrative, rate setting, and contracting services on behalf of DFPS. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.