1 Tex. Admin. Code § 355.105 - General Reporting and Documentation Requirements, Methods, and Procedures
(a) General
reporting. Except where otherwise specified under this title, the Texas Health
and Human Services Commission (HHSC) follows the requirements, methods, and
procedures set forth in this section to determine costs appropriate for use in
the reimbursement determination process.
(b) Cost report requirements. Unless
specifically stated in program rules or excused as described in paragraph
(4)(D) of this subsection, each provider must submit financial and statistical
information on cost report forms provided by HHSC, on facsimiles that are
formatted according to HHSC specifications and are pre-approved by HHSC staff,
or electronically in HHSC-prescribed format in programs where these systems are
operational. The cost reports must be submitted to HHSC in a manner prescribed
by HHSC. The cost reports must be prepared to reflect the activities of the
provider while delivering contracted services during the fiscal year specified
by the cost report. Cost reports or other special surveys or reports may be
required for other periods at the discretion of HHSC. Each provider is
responsible for accurately completing any cost report or other special survey
or report submitted to HHSC.
(1) Accounting
methods. All financial and statistical information submitted on cost reports
must be based upon the accrual method of accounting, except where otherwise
specified in §
355.102 and §
355.103 of this subchapter
(relating to General Principles of Allowable and Unallowable Costs and
Specifications for Allowable and Unallowable Costs) and in the case of
governmental entities operating on a cash or modified accrual basis. For
cost-reporting purposes, accrued expenses must be incurred during the
cost-reporting period and must be paid within 180 days after the end of that
cost-reporting period. In situations where a contracted provider, any of its
controlling entities, its parent company/sole member, or its related-party
management company has filed for bankruptcy protection, the contracted provider
may request an exception to the 180-day requirement for payment of accrued
allowable expenses by submitting a written request to the HHSC Provider Finance
Department. The written request must be submitted within 60 days of the date of
the bankruptcy filing or at least 60 days prior to the due date of the cost
report for which the exception is being requested, whichever is later. The
contracted provider will then be requested by the HHSC Provider Finance
Department to provide certain documentation, which must be provided by the
specified due date. Such exceptions due to bankruptcy may be granted for
reasonable, necessary, and documented accrued allowable expenses that were not
paid within the 180-day requirement. Accrued revenues must be for services
performed during the cost-reporting period and do not have to be received
within 180 days after the end of that cost reporting period in order to be
reported as revenues for cost-reporting purposes. Except as otherwise specified
by the cost determination process rules of this chapter, cost report
instructions, or policy clarifications, cost reports should be prepared
consistent with generally accepted accounting principles (GAAP), which are
those principles approved by the American Institute of Certified Public
Accountants (AICPA). Internal Revenue Service (IRS) laws and regulations do not
necessarily apply in the preparation of the cost report. In cases where
cost-reporting rules differ from GAAP, IRS, or other authorities, HHSC rules
take precedence for provider cost-reporting purposes.
(2) Recordkeeping and adequate documentation.
There is a distinction between noncompliance in recordkeeping, which equates
with unauditability of a cost report and constitutes an administrative contract
violation or, for the Nursing Facility program, may result in vendor hold, and
a provider's inability to provide adequate documentation, which results in
disallowance of relevant costs. Each is discussed in the following paragraphs.
(A) Recordkeeping. Providers must ensure that
records are accurate and sufficiently detailed to support the legal, financial,
and other statistical information contained in the cost report. Providers must
maintain all work papers and any other records that support the information
submitted on the cost report relating to all allocations, cost centers, cost or
statistical line items, surveys, and schedules. HHSC may require supporting
documentation other than that contained in the cost report to substantiate
reported information.
(i) For contracted
providers subject to 40 TAC Chapter 49, each provider must maintain records
according to the requirements stated in 40 TAC §
49.307 (relating to Record
Retention and Disposition) and according to the HHSC's prescribed chart of
accounts, when available.
(ii) If a
contractor is terminating business operations, the contractor must ensure that:
(I) records are stored and accessible;
and
(II) someone is responsible for
adequately maintaining the records.
(iii) For nursing facilities, failure to
maintain all work papers and any other records that support the information
submitted on the cost report relating to all allocations, cost centers, cost or
statistical line items, surveys, and schedules may result in vendor hold as
specified in §
355.403 of this chapter (relating
to Vendor Hold).
(iv) For all other
programs, failure to maintain all work papers and any other records that
support the information submitted on the cost report relating to all
allocations, cost centers, cost or statistical line items, surveys, and
schedules 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 subchapter
(relating to Administrative Contract Violations).
(B) Adequate documentation. The relationship
between reported costs and contracted services must be clearly and adequately
documented to be allowable. Adequate documentation consists of all materials
necessary to demonstrate the relationship of personnel, supplies, and services
to the provision of contracted client care or the relationship of the central
office to the individual service delivery entity level. These materials may
include but are not limited to, accounting records, invoices, organizational
charts, functional job descriptions, other written statements, and direct
interviews with staff, as deemed necessary by HHSC auditors to perform required
tests of reasonableness, necessity, and allowability.
(i) The minimum allowable statistical
duration for a time study upon which to base salary allocations is four weeks
per year, with one week being randomly selected from each quarter so as to
assure that the time study is representative of the various cycles of business
operations. One week is defined as only those days the contracted provider is
in operation for seven continuous days. The time study can be performed for one
continuous week during a quarter, or it can be performed over five or seven
individual days, whichever is applicable, throughout a quarter. The time study
must be a 100% time study, accounting for 100% of the time paid to the
employee, including vacation and sick leave.
(ii) To support the existence of a loan, the
provider must have available a signed copy of the loan contract, which contains
the pertinent terms of the loan, such as amount, rate of interest, method of
payment, due date, and collateral. The documentation must include an
explanation for the purpose of the loan, and an audit trail must be provided
showing the use of the loan proceeds. Evidence of systematic interest and
principal payments must be available and supported by the payback schedule in
the note or amortization schedule supporting the note. Documentation must also
include substantiation of any costs associated with the securing of the loan,
such as broker's fees, due diligence fees, lender's fees, attorney's fees, etc.
To document allowable interest costs associated with related party loans, the
provider is required to maintain documentation verifying the prime interest
rate in accordance with §
355.103(b)(11)(C)
of this subchapter for a similar type of loan as of the effective date of the
related party loan.
(iii) For
ground transportation equipment, a mileage log is not required if the equipment
is used solely (100%) for the provision of contracted client services in
accordance with program requirements in delivering one type of contracted care.
However, the contracted provider must have a written policy that states that
the ground transportation equipment is restricted to that use, and that policy
must be followed. For ground transportation equipment that is used for several
purposes (including for personal use) or multiple programs or across various
business components, mileage logs must be maintained. Personal use includes,
among other things, driving to and from a personal residence. At a minimum,
mileage logs must include for each individual trip the date, the time of day
(beginning and ending), driver, persons in the vehicle, trip mileage
(beginning, ending, and total), purpose of the trip, and the allocation centers
(the departments, programs, and/or business entities to which the trip costs
should be allocated). Flight logs must include dates, mileage, passenger lists,
and destinations, along with any other information demonstrating the purpose of
the trips so that a relationship to contracted client care in Texas can be
determined. For the purpose of comparison to the cost of commercial
alternatives, documentation of the cost of operating and maintaining a private
aircraft includes allowable expenses relating to the lease or depreciation of
the aircraft; aircraft fuel and maintenance expenses; aircraft insurance,
taxes, and interest; pilot expenses; hangar and other related expenses;
mileage, vehicle rental or other ground transportation expense; and airport
parking fees. Documentation demonstrating the allowable cost of commercial
alternatives includes commercial airfare ticket costs at the lowest fare
offered (including all discounts) and associated expenses, including mileage,
vehicle rental or other ground transportation expenses; airport parking fees;
and any hotel or per diem due to necessary layovers (no scheduled flights at
the time of return trip).
(iv) To
substantiate the allowable cost of leasing a luxury vehicle as defined in
§
355.103(b)(10)(C)(i)
of this subchapter, the provider must obtain
at the time of the lease a separate quotation establishing the monthly lease
costs for the base amount allowable for cost-reporting purposes as specified in
§
355.103(b)(10)(C)(i)
of this subchapter. Without adequate
documentation to verify the allowable lease costs of the luxury vehicle, the
reported costs shall be disallowed.
(v) For adequate documentation purposes, a
written description of each cost allocation method must be maintained that
includes, at a minimum, a clear and understandable explanation of the numerator
and denominator of the allocation ratio described in words and in numbers, as
well as a written explanation of how and to which specific business components
the remaining percentage of costs were allocated.
(vi) To substantiate the allowable cost for
staff training as defined in §
355.103(b)(15)(A)
of this subchapter, the provider must maintain a description of the training
verifying that the training pertained to contracted client care-related
services or quality assurance. At a minimum, a program brochure describing the
seminar or a conference program with a description of the workshop must be
maintained. The documentation must provide a description clearly demonstrating
that the seminar or workshop provided training for contracted client
care-related services or quality assurance.
(vii) Documentation regarding the allocation
of costs related to noncontracted services, as specified in §
355.102(j)(2) of
this subchapter, must be maintained by the provider. At a minimum, the provider
must maintain written records verifying the number of units of noncontracted
services provided during the provider's fiscal year, along with adequate
documentation supporting the direct and allocated costs associated with those
noncontracted services.
(viii)
Adequate documentation to substantiate legal, accounting, and auditing fees
must include, at a minimum, the amount of time spent on the activity, a written
description of the activity performed which clearly explains to which business
component the cost should be allocated, the person performing the activity, and
the hourly billing amount of the person performing the activity. Other legal,
accounting, and auditing costs, such as photocopy costs, telephone costs, court
costs, mailing costs, expert witness costs, travel costs, and court reporter
costs, must be itemized and clearly denote to which business component the cost
should be allocated.
(ix) Providers
who self-insure for all or part of their employee-related insurance costs, such
as health insurance and workers' compensation costs, must use one of the two
following methods for determining and documenting the provider's allowable
costs under the cost ceilings and any carry forward as described in §
355.103(b)(13)(E)
of this subchapter.
(I) Providers may obtain
and maintain each fiscal year's documentation to establish what their premium
costs would have been had they purchased commercial insurance for total
coverage. The documentation should include, at a minimum, bids from two
commercial carriers. Bids must be obtained no less frequently than every three
years.
(II) If providers choose not
to obtain and maintain commercial bids as described in subclause (I) of this
clause, providers may claim as an allowable cost the health insurance actual
paid claims incurred on behalf of the employees that do not exceed 10% of the
payroll for employees eligible for receipt of this benefit. In addition,
providers may claim as an allowable cost the workers' compensation actual paid
claims incurred on behalf of the employees, an amount each cost report period
not to exceed 10% of the payroll for employees eligible for receipt of this
benefit.
(III) Providers who
self-insure must also maintain documentation that supports the amount of claims
paid each year and any allowable costs to be carried forward to future
cost-reporting periods.
(x) Providers who self-insure for all or part
of their coverage for nonemployee-related insurance, such as malpractice
insurance, comprehensive general liability, and property insurance, must
maintain documentation for each cost-reporting period to establish what their
premium costs would have been had they purchased commercial insurance for total
coverage. The documentation should include, at a minimum, bids from two
commercial carriers. Bids must be obtained no less frequently than every three
years. Providers who self-insure must also maintain documentation that supports
the amount of claims paid each year and any allowable costs to be carried
forward to future cost-reporting periods. Governmental providers must document
the existence of their claims management and risk management
programs.
(xi) Regarding
compensation of owners and related parties, providers must maintain the
following documentation, at a minimum, for each owner or related party: a
detailed written description of actual duties, functions, and responsibilities;
documentation substantiating that the services performed are not duplicative of
services performed by other employees; time sheets or other documentation
verifying the hours and days worked; the amount of total compensation paid for
these duties, with a breakdown detailing regular salary, overtime, bonuses,
benefits, and other payments; documentation of regular, periodic payments
and/or accruals of the compensation, documentation that the compensation is
subject to payroll or self-employment taxes; and a detailed allocation
worksheet indicating how the total compensation was allocated across business
components receiving the benefit of these duties.
(I) Regarding bonuses paid to owners and
related parties, the provider must maintain clearly defined bonus policies in
its written agreements with employees or in its overall employment policy. At a
minimum, the bonus policy must include the basis for distributing the bonuses,
including qualifications for receiving the bonus and how the amount of each
bonus is calculated. Other documentation must specify who received bonuses,
whether the persons receiving bonuses are owners, related parties, or
arm's-length employees, and the bonus amount received by each
individual.
(II) Regarding benefits
provided to owners and related parties, the provider must maintain clearly
defined benefit policies in its written agreements with employees or in its
overall employment policy. At a minimum, the documentation must include the
basis for eligibility for each type of benefit available, who is eligible to
receive each type of benefit, who actually receives each type of benefit,
whether the persons receiving each type of benefit are owners, related parties,
or arm's-length employees, and the amount of each benefit received by each
individual.
(xii)
Regarding all forms of compensation, providers must maintain documentation for
each employee which clearly identifies each compensation component, including
regular pay, overtime pay, incentive pay, mileage reimbursements, bonuses, sick
leave, vacation, other paid leave, deferred compensation, retirement
contributions, provider-paid instructional courses, health insurance,
disability insurance, life insurance, and any other form of compensation. Types
of documentation would include insurance policies; provider benefit policies;
records showing paid leave accrued and taken; documentation to support hours
(regular and overtime) worked and wages paid; and mileage logs or other
documentation to support mileage reimbursements and travel allowances. For
accrued benefits, the documentation must clearly identify the period of the
accrual. For example, if an employee accrues two weeks of vacation during 20x1
and receives the corresponding vacation pay during 20x3, that 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 subchapter 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 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 a 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 subchapter, 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 to be 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 the 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 chapter (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 chapter (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
subchapter.
(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 chapter.
(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 chapter.
(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
subchapter.
(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 subchapter
(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 chapter (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 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 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) On or after September 1, 2023, for the
Department of Family and Protective Services (DFPS) 24-Hour Residential
Child-Care program, if:
(I) the provider has
no current contract(s) within the state for 24-Hour Residential Child-Care
program;
(II) the total number of
DFPS-placed days and Single Source Continuum Contractor (SSCC)-placed days was
10 percent or less of the total days of service provided during the
cost-reporting period;
(III) for
facilities that provide Emergency Care Services only, the occupancy rate was
less than 30 percent during the cost-reporting period; or
(IV) 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, except for
SSCC providers in the DFPS 24-Hour Residential Child Care program whose cost
report year must coincide with the state fiscal year.
(A) Providers whose cost report year
coincides with their IRS fiscal year are responsible for reporting to HHSC
Provider Finance Department any change in their IRS fiscal year and subsequent
cost report year by submitting written notification of the change to HHSC
Provider Finance Department along with supportive IRS documentation. HHSC
Provider Finance Department 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 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 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 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 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.
Requests for extensions must be received by HHSC Provider Finance Department
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 upon request by the date specified by HHSC Provider Finance
Department 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.
(3) For all other programs, 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 §
355.111 of this title.
(g) Public hearings.
(1) Uniform reimbursements. For programs
where reimbursements are uniform by class of service and/or provider type, HHSC
will hold a public hearing on proposed reimbursements before HHSC approves
reimbursements. The purpose of the hearing is to give interested parties an
opportunity to comment on the proposed reimbursements. Notice of the hearing
will be provided to the public. The notice of the public hearing will identify
the name, address, and telephone number to contact for the materials pertinent
to the proposed reimbursements. At least ten calendar days before the public
hearing takes place, material pertinent to the proposed statewide uniform
reimbursements will be made available to the public. This material will include
the proposed reimbursements, the inflation adjustments used to determine them,
and the impact on reimbursements of the major cost limits. This material will
be furnished to anyone who requests it. After the public hearing, if negative
comments are received, a summary of the comments made during the public hearing
will be presented to HHSC.
(A) Preliminary
Rates. To ensure access to care and prompt provider reimbursement, HHSC will
establish preliminary reimbursement rates prior to a public hearing for
non-discretionary items or services, including but not limited to, new Health
Care Common Procedure Coding System updates, federally mandated reimbursement
rates (e.g., Indian Health Services or Medical Transportation Program), or
physician-administered drugs or biological products.
(B) Duration of Preliminary Rates.
Preliminary rates will be in place until HHSC conducts a public hearing on
proposed reimbursement rates. Rate hearing procedures for preliminary rates
will follow guidelines as outlined in paragraph (1) of this
subsection.
(2)
Contractor-specific reimbursements. For programs in which reimbursements are
contractor-specific, HHSC will hold a public hearing on the reimbursement
determination parameter dollar amounts (e.g., ceilings, floors, or program
reimbursement formula limits) before HHSC approves parameter dollar amounts.
The purpose of the hearing is to give interested parties an opportunity to
comment on the proposed reimbursement parameter dollar amounts. Notice of the
hearing will be provided to the public. The notice of the public hearing will
identify the name, address, and telephone number to contact for the materials
pertinent to the proposed reimbursement parameter dollar amounts. At least ten
calendar days before the public hearing takes place, material pertinent to the
proposed reimbursement parameter dollar amounts will be made available to the
public. This material will include the proposed reimbursement parameter dollar
amounts, the inflation adjustments used to determine them, and the impact on
the reimbursement parameter dollar amounts of the major cost limits. This
material will be furnished to anyone who requests it. After the public hearing,
if negative comments are received, a summary of the comments made during the
public hearing will be presented to HHSC.
(h) Insufficient cost data. If an
insufficient number of accurate, full-year cost reports is submitted, as would
occur with a new program, or if there are insufficient available data, as would
occur in changes in program design, changes in the definition of units of
service or changes in regulations or program requirements, reimbursements may
be based on a pro-forma analysis by HHSC staff. A pro-forma analysis is defined
as an item-by-item, or classes-of-items, calculation of the reasonable and
necessary expenses for a provider to operate. The analysis may involve
assumptions about the salary of an administrator or program director, staff
salaries, employee benefits and payroll taxes, building depreciation, mortgage
interest, contracted client care expenses, and other building or administration
expenses. To determine the cost per unit of service, HHSC adds all the
pro-forma expenses and divides the total by the estimated number of units of
service that a fully operational provider is likely to provide. The pro-forma
analysis is based on available information that is determined to be sufficient,
accurate, and reliable by HHSC, including valid cost report data and survey
data. The pro-forma analysis is conducted in a way that ensures that the
resultant reimbursements are sufficient to support the requirements of the
contracted program. When HHSC staff determine that sufficient and reliable cost
report data have become available, the pro-forma reimbursement determination
may be replaced with a process based on cost reports.
(i) Limits on related-party compensation.
HHSC may place upper limits or caps on related-party compensation as follows:
(1) For related-party administrators and
directors, the upper limit for compensation is equal to the 90th percentile in
the array of all non-related-party annualized compensation as reported by all
contracted providers within a program. In addition, the hourly compensation for
related-party administrators and directors is limited to the annualized upper
limit for related-party administrators and directors divided by
2,080.
(2) For related-party
assistant administrators and assistant directors, the upper limit for
compensation is equal to the 90th percentile in the array of all non-related
party annualized compensation as reported by all contracted providers within a
program. In addition, the hourly compensation for related-party assistant
administrators and assistant directors is limited to the annualized upper limit
for related-party assistant administrators and assistant directors divided by
2,080.
(3) For owners, partners,
and stockholders (when the owner, partner, or stockholder is performing
contract level administrative functions but is not the administrator, director,
assistant administrator or assistant director), the upper limits for
compensation are equal to the upper limits for related-party administrators and
directors.
(4) For all other staff
types:
(A) For the Intermediate Care
Facilities for Individuals with an Intellectual Disability or Related
Conditions, Home and Community-based Services and Texas Home Living programs,
related-party limitations are specified in §
355.457 of this title (relating to
Cost Finding Methodology), and §
355.722 of this title (relating to
Reporting Costs by Home and Community-based Services (HCS) and Texas Home
Living (TxHmL) Providers).
(B) For
all other programs, related-party compensation is limited to reasonable and
necessary costs as described in §
355.102 of this title.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.