employee's compensation documentation
for 20x3 should clearly indicate that the vacation pay received had
been accrued during 20x1.
(I)For staff required to maintain continuous daily
time sheets as per §355.102(j) of this title and subclause (II)
of this clause, the daily timesheet must document, for each day, the
staff member's start time, stop time, total hours worked, and the
actual time worked (in increments of 30 minutes or less) providing
direct services for the provider, the actual time worked performing
other functions, and paid time off. The employee must sign each timesheet.
The employee's supervisor must sign the timesheets each payroll period
or at least monthly. Work schedules are unacceptable documentation
for staff whose duties include multiple direct service types, both
direct and indirect service component types, and both direct hands-on
support and first level supervision of direct care workers.
(II)For the Intermediate Care Facilities for Individuals
with an Intellectual Disability or Related Conditions (ICF/IID), Home
and Community-based Services (HCS) and Texas Home Living (TxHmL) programs,
staff required to maintain continuous daily timesheets include staff
whose duties include multiple direct service types, both direct and
indirect service component types and/or both direct hands-on support
and first-level supervision of direct care workers.
(xiii)Management fees paid to related parties must
be documented as to the actual costs of the related party for materials,
supplies, and services provided to the individual provider, and upon
which the management fees were based. If the cost to the related party
includes owner compensation or compensation to related parties, documentation
guidelines for those costs are specified in clause (xi) of this subparagraph.
Documentation must be maintained that indicates stated objectives,
periodic assessment of those objectives, and evaluation of the progress
toward those objectives.
(xiv)For central office and/or home office costs,
documentation must be maintained that indicates the organization of
the business entity, including position, titles, functions, and compensation.
For multi-state organizations, documentation must be maintained that
clearly defines the relationship of costs associated with any level
of management above the individual Texas contracted entity which are
allocated to the individual Texas contracted entity.
(xv)Documentation regarding depreciable assets includes,
at a minimum, historical cost, date of purchase, depreciable basis,
estimated useful life, accumulated depreciation, and the calculation
of gains and losses upon disposal.
(xvi)Providers must maintain documentation clearly
itemizing their employee relations expenditures. For employee entertainment
expenses, documentation must show the names of all persons participating,
along with classification of the person attending, such as employee,
nonemployee, owner, family of employee, client, or vendor.
(xvii)Adequate documentation substantiating the offsetting
of grants and contracts from federal, state, or local governments
prior to reporting either the net expenses or net revenue must be
maintained by the provider. As specified in §355.103(b)(18) of
this title, such offsetting is required prior to reporting on the
cost report. The provider must maintain written documentation as to
the purpose for which the restricted revenue was received and the
offsetting of the restricted revenue against the allowable and unallowable
costs for which the restricted revenue was used.
(xviii)During the course of an audit or an audit desk
review, the provider must furnish any reasonable documentation requested
by HHSC auditors within ten working days of the request or a later
date as specified by the auditors. If the provider does not present
the requested material within the specified time, the audit or audit
desk review is closed, and HHSC automatically disallows the costs
in question.
(xix)Any expense that cannot be adequately documented
or substantiated is disallowed. HHSC is not responsible for the contracted
provider's failure to adequately document and substantiate reported
costs.
(xx)Any cost report that is determined unauditable
through a field audit or that cannot have its costs verified through
a desk review will not be used in the reimbursement determination
process.
(3)Cost report and methodology certification. Providers
must certify the accuracy of cost reports submitted to HHSC in the
format specified by HHSC. Providers may be liable for civil and/or
criminal penalties if the cost report is not completed according to
HHSC requirements or is determined to contain misrepresented or falsified
information. Cost report preparers must certify that they read the
cost determination process rules, the reimbursement methodology rules,
the cost report cover letter and cost report instructions, and that
they understand that the cost report must be prepared in accordance
with the cost determination process rules, the reimbursement methodology
rules and cost report instructions. Not all persons who contributed
to the completion of the cost report must sign the certification page.
However, the certification page must be signed by a responsible party
with direct knowledge of the preparation of the cost report. A person
with supervisory authority over the preparation of the cost report
who reviewed the completed cost report may sign a certification page
in addition to the actual preparer.
(4)Requirements for cost report completion.
(A)A completed cost report must:
(i)be completed according to the cost determination
rules of this chapter, program-specific allowable and unallowable
rules, cost report instructions, and policy clarifications;
(ii)contain a signed, notarized, original certification
page or an electronic equivalent where such equivalents are specifically
allowed under HHSC policies and procedures;
(iii)be legible with entries in sufficiently dark
print to be photocopied;
(iv)contain all pages and schedules;
(v)be submitted on the proper cost report form;
(vi)be completed using the correct cost reporting
period; and
(vii)contain a copy of the state-issued cost report
training certificate except for cost reports submitted through the
State of Texas Automated Information and Reporting System (STAIRS).
(B)Providers are required to report amounts on the
appropriate line items of the cost report pursuant to guidelines established
in the methodology rules, cost report instructions, or policy clarifications.
Refer to program-specific reimbursement methodology rules, cost report
instructions, or policy clarifications for guidelines used to determine
placement of amounts on cost report line items.
(i)For nursing facilities, placement on the cost report
of an amount, which was determined to be inaccurately placed, may
result in vendor hold as specified in §355.403 of this title
(relating to Vendor Hold).
(ii)For School Health and Related Services (SHARS),
placement on the cost report of an amount, which was determined to
be inaccurately placed, may result in an administrative contract violation
as specified in §355.8443 of this title (relating to Reimbursement
Methodology for School Health and Related Services (SHARS)).
(iii)For all other programs, placement on the cost
report of an amount, which was determined to be inaccurately placed,
constitutes an administrative contract violation. In the case of an
administrative contract violation, procedural guidelines and informal
reconsideration and/or appeal processes are specified in §355.111
of this title.
(C)A completed cost report must be filed by the cost
report due date.
(i)For nursing facilities, failure to file a completed
cost report by the cost report due date may result in vendor hold
as specified in §355.403 of this title.
(ii)For SHARS, failure to file a completed cost report
by the cost report due date constitutes an administrative contract
violation. In the case of an administrative contract violation, procedural
guidelines and informal reconsideration and/or appeal processes are
specified in §355.8443 of this title.
(iii)For all other programs, failure to file a completed
cost report by the cost report due date constitutes an administrative
contract violation. In the case of an administrative contract violation,
procedural guidelines and informal reconsideration and/or appeal processes
are specified in §355.111 of this title.
(D)HHSC may excuse providers from the requirement
to submit a cost report. A provider that is not enrolled in Attendant
Compensation Rate Enhancement as described in §355.112 of this
title (relating to Attendant Compensation Rate Enhancement) for a
specific program or the Nursing Facility Direct Care Staff Rate enhancement
as described in §355.308 of this title (relating to Direct Care
Staff Rate Component) during the reporting period for the cost report
in question, is excused from the requirement to submit a cost report
for such program if the provider meets one or more of the following
conditions:
(i)For all programs, if the provider performed no
billable services during the provider's cost-reporting period.
(ii)For all programs, if the cost-reporting period
would be less than or equal to 30 calendar days or one entire calendar
month.
(iii)For all programs, if circumstances beyond the
provider's control, such as the loss of records due to natural disasters
or removal of records from the provider's custody by a regulatory
agency, make cost-report completion impossible.
(iv)For all programs, if all of the contracts that
the provider is required to include in the cost report have been terminated
before the cost-report due date.
(v)For the Nursing Facility, ICF/IID, Assisted Living/Residential
Care (AL/RC), and Residential Care (RC) programs, if the total number
of days that the provider performed service for [HHSC or DADS]
recipients during the cost-reporting period is less than the total
number of calendar days included in the cost-reporting period.
(vi)For the Day Activity and Health Services (DAHS)
program, if the provider's total units of service provided to [HHSC
or DADS] recipients during the cost-reporting period is less
than the total number of calendar days included in the cost-reporting
period times 1.5.
(vii)For the Home-Delivered Meals program, if a provider
agency served an average of fewer than 500 meals a month for the designated
cost report period.
(viii)For the Department of Family and Protective
Services (DFPS) 24-Hour Residential Child-Care program, if:
(I)the contract was not renewed;
(II)only Basic Level services were provided;
(III)the total number of state-placed days (DFPS days
and other state agency days) was 10 percent or less of the total days
of service provided during the cost-reporting period;
(IV)the total number of DFPS-placed days was 10 percent
or less of the total days of service provided during the cost-reporting
period;
(V)for facilities that provide Emergency Care Services
only, the occupancy rate was less than 30 percent during the cost-reporting
period; or
(VI)for all other facility types except child-placing
agencies and those providing Emergency Care Services, the occupancy
rate was less than 50 percent during the cost-reporting period.
(5)Cost report year. A provider's cost report year
must coincide with the provider's fiscal year as used by the provider
for reports to the Internal Revenue Service (IRS) or with the state
of Texas' fiscal year, which begins September 1 and ends August 31.
(A)Providers whose cost report year coincides with
their IRS fiscal year are responsible for reporting to HHSC Provider
Finance Department [Rate Analysis] any change in
their IRS fiscal year and subsequent cost report year by submitting
written notification of the change to HHSC Provider Finance Department
[Rate Analysis] along with supportive IRS documentation.
HHSC Provider Finance Department [Rate Analysis]
must be notified of the provider's change in IRS fiscal year no later
than 30 days following the provider's receipt of approval of the change
from the IRS.
(B)Providers who chose to change their cost report
year from their IRS fiscal year to the state fiscal year or from the
state fiscal year to their IRS fiscal year must submit a written request
to HHSC Provider Finance Department [Rate Analysis]
by August 1 of state fiscal year in question.
(6)Failure to report allowable costs. HHSC is not
responsible for the contracted provider's failure to report allowable
costs, however any omitted costs which are identified during the desk
review or audit process will be included in the cost report or brought
to the attention of the provider to correct by submitting an amended
cost report.
(c)Cost report due dates.
(1)Providers must submit cost reports to HHSC Provider
Finance Department [Rate Analysis] no later than
90 days following the end of the provider entity's fiscal year or
90 days from the transmittal date of the cost report forms, whichever
due date is later. Beginning with the 2018 cost reports, due dates
per program are determined by HHSC and are published on the HHSC website.
(2)For SHARS, providers must submit cost reports to
HHSC Provider Finance Department [Rate Analysis]
as specified in §355.8443 of this title.
(3)HHSC may grant extensions of due dates for good
cause. A good cause is defined as a circumstance which the provider
could not reasonably be expected to control and for which adequate
advance planning and organization would not have been of any assistance.
Providers must submit requests for extensions in writing to HHSC Provider
Finance Department [Rate Analysis]. Requests for
extensions must be received by HHSC Provider Finance Department [
Rate Analysis] prior to the cost report due date. HHSC staff
will respond in writing to requests within 15 days of receipt.
(4)HHSC may require additional financial and other
statistical information, in the form of special surveys or reports,
to ensure the fiscal integrity of the program. Providers must submit
such additional information and/or special surveys or reports to HHSC
Provider Finance Department [Rate Analysis] upon
request by the date specified by HHSC Provider Finance Department [
Rate Analysis] in its transmittal or cover letter to the special
survey, report, or request for additional information.
(d)Amended cost report due dates. HHSC accepts submittal
of provider-initiated or HHSC-requested amended cost reports as follows.
(1)Provider-initiated amended cost reports must be
received no later than the date in subparagraph (A) or (B) of this
paragraph, whichever occurs first. Amended cost reports received after
the required date have no effect on the reimbursement determination.
Amended cost report information that cannot be verified will not be
used in reimbursement determinations. Provider-initiated amended cost
reports must be received no later than the earlier of:
(A)60 days after the original due date of the cost
report; or
(B)30 days prior to the public hearing on proposed
reimbursement or reimbursement parameter amounts.
(2)HHSC-required amendments to the cost reports must
be received on or before the date specified by HHSC in its request
for the amended cost report. Failure to submit the requested amendment
to the cost report by the due date is considered a failure to complete
a cost report as specified in subsection (b)(4)(C) of this section.
(e)Field audit standards. HHSC performs cost report
field audits in a manner consistent with Government Auditing Standards
issued by the Comptroller General of the United States.
(f)Cost of out-of-state audits. As specified in §355.106
of this title (relating to Basic Objectives and Criteria for Audit
and Desk Review of Cost Reports), HHSC conducts desk reviews of all
cost reports not selected for field audit. HHSC also conducts field
audits of provider records and cost reports. Although the number of
field audits performed each year may vary, HHSC seeks to maximize
the number of field audited cost reports available for use in its
cost projections. Whenever possible, all the records necessary to
verify information submitted to HHSC on cost reports, including related
party transactions and other business activities engaged in by the
provider, must be accessible to HHSC audit staff within the state
of Texas within fifteen working days of field audit or desk review
notification. When records are not available to HHSC audit staff within
the state of Texas, the provider must pay the actual costs for HHSC
staff to travel and review the records out-of-state. HHSC must be
reimbursed for these costs within 60 days of the request for payment.
(1)For nursing facilities, failure to reimburse HHSC
for these costs within 60 days of the request for payment may result
in vendor hold as specified in §355.403 of this title.
(2)For SHARS, failure to reimburse HHSC for these
costs within 60 days of the request for payment constitutes an administrative
contract violation. In the case of an administrative contract violation,
procedural guidelines and informal reconsideration and/or appeal processes
are specified in §355.8443 of this title.
Cont'd...
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