PART 4. OFFICE OF THE SECRETARY OF STATE
CHAPTER 107. REGISTRATION OF VISION SUPPORT ORGANIZATIONS
The Office of the Secretary of State (Office) adopts new Chapter 107, §§107.1 - 107.5, concerning registration of vision support organizations (VSOs). The Office adopts these rules to implement the new registration requirements for VSOs in Senate Bill 820, enacted by the 88th Legislature, Regular Session, codified at Chapter 74 of the Texas Business and Commerce Code (SB 820).
Sections 107.1 - 107.5 are adopted without changes to the proposed text as published in the June 21, 2024, issue of the Texas Register (49 TexReg 4533) and will not be republished.
BACKGROUND INFORMATION AND JUSTIFICATION
The adoption implements SB 820 (88th Legislature, Regular Session), which establishes a required occupational registration for VSOs in Chapter 74 of the Texas Business and Commerce Code. The bill took effect on September 1, 2023.
As enacted by SB 820, Texas Business and Commerce Code §74.002 requires a VSO (as defined in Texas Business and Commerce Code §74.001(3)) to register annually with the Office. Texas Business and Commerce Code §74.004(a) identifies the information that must be included in the VSO's registration filed with the Office. Texas Business and Commerce Code §74.005(c) directs a VSO to file a corrected registration semiannually as necessary. Texas Business and Commerce Code §74.004(b) specifies that a registration and each corrected registration must be accompanied by a fee in an amount set by the Office.
The purpose of these new rules under Chapter 107 (Registration of Vision Support Organizations) is to provide information regarding the procedures for VSO registration with the Office, in accordance with SB 820.
COMMENTS
The 30-day comment period ended on July 21, 2024. During this period, the Office received one comment regarding the proposed rules from the National Association of Retail Optical Companies. A summary of the comment relating to the proposed rules and the Office's response follows.
Comment: The commenter suggested revising proposed §107.4(a) to provide that a correction filing is not necessary for the second half of a calendar year if the VSO timely filed a renewal application under proposed §107.3(b). The commenter stated that the correction filing seemed unnecessarily duplicative in such a circumstance and would force the VSO to incur added work and cost.
Response: The Office declines to revise §107.4(a) as suggested. As reflected in Chapter 74 of the Texas Business and Commerce Code and the Office's proposed rules, a statement of correction and a renewal registration are two separate actions that serve different purposes. A registered VSO satisfies the requirement in Texas Business and Commerce Code §74.005(c) to file a corrected registration on a semiannual basis by timely submitting a statement of correction as provided by proposed §107.4. Proposed §107.4(c) sets at the end of each semiannual period (i.e., June 30 and December 31) a forty-five day window to submit a statement of correction that is intended to afford a VSO adequate time to provide a complete and accurate corrected registration. By timely filing a statement of correction, a VSO updates the contents of its immediately preceding registration, whether initial or previously renewed. Conversely, a renewal registration simply continues an existing registration with information current at that time and is typically due by January 31 of each year under Texas Business and Commerce Code §74.005. Changes to the information provided in a registration on file must be made with a statement of correction and cannot be effectuated through a renewal application. The timely filing of a renewal registration does not absolve a VSO of also correcting its registration in accordance with Chapter 74 of the Texas Business and Commerce Code and the Office's proposed rules, despite the potential for the correction to be filed after the renewal. Furthermore, the commenter's suggested revision presumes that the information is unchanged between the second half of a year and the time of filing the renewal application, which may not necessarily be the case in all circumstances.
SUBCHAPTER A. DEFINITIONS
STATUTORY AUTHORITY
The new rules are adopted as authorized by Texas Government Code §2001.004(1) and Texas Business and Commerce Code §74.004(b). Texas Government Code §2001.004(1) requires a state agency to adopt rules of practice stating the nature and requirements of formal and informal procedures. Texas Business and Commerce Code §74.004(b) directs the Office to set the applicable VSO filing fees.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 22, 2024.
TRD-202403874
Adam Bitter
General Counsel
Office of the Secretary of State
Effective date: September 11, 2024
Proposal publication date: June 21, 2024
For further information, please call: (512) 475-2813
STATUTORY AUTHORITY
The adopted new rules are authorized by Texas Government Code §2001.004(1) and Texas Business and Commerce Code §74.004(b). Texas Government Code §2001.004(1) requires a state agency to adopt rules of practice stating the nature and requirements of formal and informal procedures. Texas Business and Commerce Code §74.004(b) directs the Office to set the applicable VSO filing fees.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 22, 2024.
TRD-202403876
Adam Bitter
General Counsel
Office of the Secretary of State
Effective date: September 11, 2024
Proposal publication date: June 21, 2024
For further information, please call: (512) 475-2813
STATUTORY AUTHORITY
The adopted new rules are authorized by Texas Government Code §2001.004(1) and Texas Business and Commerce Code §74.004(b). Texas Government Code §2001.004(1) requires a state agency to adopt rules of practice stating the nature and requirements of formal and informal procedures. Texas Business and Commerce Code §74.004(b) directs the Office to set the applicable VSO filing fees.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 22, 2024.
TRD-202403878
Adam Bitter
General Counsel
Office of the Secretary of State
Effective date: September 11, 2024
Proposal publication date: June 21, 2024
For further information, please call: (512) 475-2813
STATUTORY AUTHORITY
The adopted new rules are authorized by Texas Government Code §2001.004(1) and Texas Business and Commerce Code §74.004(b). Texas Government Code §2001.004(1) requires a state agency to adopt rules of practice stating the nature and requirements of formal and informal procedures. Texas Business and Commerce Code §74.004(b) directs the Office to set the applicable VSO filing fees.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 22, 2024.
TRD-202403879
Adam Bitter
General Counsel
Office of the Secretary of State
Effective date: September 11, 2024
Proposal publication date: June 21, 2024
For further information, please call: (512) 475-2813
CHAPTER 355. REIMBURSEMENT RATES
The Texas Health and Human Services Commission (HHSC) adopts amendments to §355.304, concerning Direct Care Staff Spending Requirement on or after September 1, 2023; §355.306, concerning Cost Finding Methodology before September 1, 2025; §355.307, concerning Reimbursement Setting Methodology before September 1, 2025; and §355.308, concerning Direct Care Staff Rate Component before September 1, 2025; repeal of §355.309, concerning Performance-based Add-on Payment Methodology; and §355.314, concerning Supplemental Payments to Non-State Government-Owned Nursing Facilities; and adopts new §355.318, concerning Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025; and §355.320, concerning Nursing Care Staff Rate Enhancement Program for Nursing Facilities on or after September 1, 2025.
The amendments to §§355.304, 355.306, 355.307, 355.308; the repeal of §355.309 and §355.314; and the new §355.318 are adopted without changes to the proposed text as published in the May 3, 2024, issue of the Texas Register (49 TexReg 2859) These rules will not be republished.
New §355.320 is adopted with changes to the proposed text as published in the May 3, 2024, issue of the Texas Register (49 TexReg 2859). This rule will be republished.
BACKGROUND AND JUSTIFICATION
The amendments, new rules, and repeals are necessary to implement the 2024-25 General Appropriations Act (GAA), House Bill 1, 88th Legislature, Regular Session, 2023 (Article II, HHSC, Rider 25). Rider 25 provides appropriations for HHSC to "develop and implement a Texas version of the Patient Driven Payment Model (PDPM) methodology for the reimbursement of long-term stay nursing facility services in the Medicaid program to achieve improved care for long-term stay nursing facility services, excluding services provided by a pediatric care facility or any state-owned facilities."
The adoption amends §355.304, concerning Direct Care Staff Spending Requirement on or after September 1, 2023, to specify how the spending requirement will operate under PDPM Long-Term Care (LTC). The adoption amends the title of §355.306 to "Cost Finding Methodology before September 1, 2025," and revises the rule text to replace "Rate Analysis Department" with "Provider Finance Department." The title of §355.307 is amended to "Reimbursement Setting Methodology before September 1, 2025," and the title of §355.308 is amended to "Direct Care Staff Rate Component before September 1, 2025." The revised titles clarify that the rules are in effect until September 1, 2025, when the PDPM LTC methodology is implemented. The adoption repeals §355.309, concerning Performance-based Add-on Payment Methodology, and §355.314, concerning Supplemental Payments to Non-State Government-Owned Nursing Facilities, as these rules are no longer applicable to nursing facility reimbursement. Finally, the adoption adds new rules §355.318, concerning Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025, and §355.320, concerning Nursing Care Staff Rate Enhancement Program for Nursing Facilities on or after September 1, 2025. The new rules operationalize the rider requirements, enabling HHSC to implement PDPM LTC.
COMMENTS
The 31-day comment period ended June 3, 2024.
During this period, HHSC received comments regarding the proposed rules from 16 commenters, including the following organizations: Ambassadors Group, Centex Continuing Care Network, Creative Solutions Health Care, Focused Post Acute, Fundamental Administrative Services, Gulf Coast LTC Partners, Long Term Care Facilities Council, Nexion Health Management, Priority Management, Regency Integrated Health Services, Senior Living Properties, StoneGate Senior Living, Summit LTC Management, The Ensign Group, The Independent Coalition of Nursing Home Providers, and Texas Healthcare Association. A summary of comments relating to the rules and HHSC's responses follows.
Comment: Several commenters recommended a change to proposed §355.318(d)(1), suggesting that HHSC add minimum data set (MDS) coordinator and feeding assistant expenses to the nursing rate component, as these roles should be appropriately reflected in the reimbursement methodology.
Response: HHSC disagrees and declines to revise the rule. Compensation for MDS coordinators who are registered nurses or licensed vocational nurses is included in the nursing component; therefore, modification of the rule is not necessary. HHSC disagrees that compensation for feeding assistants should be included in the nursing component, because feeding assistants do not provide nursing care to residents. These costs are more relevant to the non-case mix component.
Comment: Several commenters requested that the proposed rates under PDPM LTC be proportional to the methodological rate components established under §355.318.
Response: HHSC appreciates the comment related to the proposed rates for nursing facilities under PDPM LTC. However, the rate adoption process for nursing facility rates proposed to be effective on September 1, 2025, is outside the scope of this rule proposal. No revisions were made to the rule.
Comment: Several commenters requested that HHSC update methodological rates on a biennial basis using the most recent cost reports to ensure that rates accurately reflect current costs and practices, thereby promoting financial stability and quality care. Commenters suggested that HHSC modify the PDPM LTC methodology to reflect any changes the Centers for Medicare & Medicaid Services (CMS) makes to the methodology for Medicare skilled nursing facility services.
Response: HHSC appreciates this comment but declines to revise the rule. HHSC has an ongoing biennial fee review process under which HHSC will review nursing facility daily rates on a biennial basis. The purpose of the biennial fee review is to evaluate the appropriateness of established methodologies and methodological rates.
Comment: Several commenters recommend that HHSC create a fourth subarea of the non-case mix component within §355.318(d) for environmental services costs, which would include operations costs of compensation and benefits for laundry, housekeeping, and maintenance staff, as well as related operations supply costs for laundry and housekeeping supplies, and building repair and maintenance costs.
Response: HHSC disagrees and declines to revise the rule. The purpose of the subareas in §355.318 is to clarify how the current rate components for general administration and operations, dietary and fixed capital assets under the Resource Utilization Groups, Version III (RUG-III) methodology are being transitioned into the non-case mix component under PDPM LTC. HHSC can provide information on how various costs factor into the PDPM LTC methodological rates upon request but does not believe an additional subarea is warranted.
Comment: Several commenters requested the elimination of the Nursing Care Staff Rate Enhancement Program in §355.320 because the spending requirement duplicates the requirement established in §355.304. Furthermore, commenters requested: 1) if the program is not eliminated, HHSC allow for a revised enrollment process so program funds to participating providers could be "level-set" at the time the changes to the program proposed in §355.320 become effective, and 2) the participation levels of all facilities in the state be set to zero so each facility has the opportunity to elect a new participation level, subject to funds allocated to this specific program.
Response: HHSC disagrees and declines to revise the rule. HHSC is preparing an evaluation prior to the 89th Texas Legislature regarding the Direct Care Staff Enhancement Program in accordance with Rider 30(d) of the 2024-25 GAA, House Bill 1, 88th Legislature, Regular Session, 2023 (Article II, HHSC, Rider 30). Rider 30(d) requires HHSC to evaluate the rate enhancement programs paid under Medicaid to providers to increase reimbursements for direct care and attendant care services. HHSC will report on "certain financial information regarding rate enhancement programs, including, but not limited to, the funding impact, by provider type and service, of the operation of the rate enhancement programs, the percentage of providers and services that participate in the programs, the efficacy of the programs in recruiting and retaining the workforce necessary to deliver services, and the cost of participation to providers for complying with the program requirements." HHSC will defer to legislative consideration regarding the continuation of the rate enhancement programs. Any change to open enrollment for the rate enhancement program is outside the scope of this rule proposal.
Comment: Several commenters pointed out that §355.320(d) discusses reporting requirements as they relate to participating families. It appears that (d)(2), (3), and (4) are repeated in paragraphs (d)(5), (6), and (7), respectively. They requested these paragraphs be evaluated to determine if all six paragraphs are necessary.
Response: HHSC agrees and deleted paragraphs (5), (6), and (7) in §355.320(d).
Comment: Several commenters pointed out that §355.320(b)(11) indicates facilities that do not submit a staffing and compensation report within 60 days of the end of the rate year will be placed on vendor hold. The rate year is defined in §355.320(b)(9) as the period from September 1 to August 31. However, §355.320(b)(11) also indicates that a staffing and compensation report would include the activities of the provider "from the first day through the last day of the rate year or provider's cost report year." Several commenters requested clarification on when a vendor hold would be placed on a provider for failure to submit a report and if that report would always be based on the "rate year" or if it would be based on either the rate year or the cost reporting year.
Response: HHSC declines to revise the rule. Providers must submit reports to HHSC to be held accountable for their spending requirements under the Direct Care Staff Enhancement Program. While the rate year for purposes of the program is the state fiscal year, HHSC has allowed providers to submit cost reports on the provider's fiscal year or the state fiscal year. For providers who choose to submit cost reports on a fiscal period that does not align with the program rate year, HHSC may end up holding providers accountable for a particular rate year using two different reports. HHSC does not place providers on vendor hold until at least 15 days after the report due date in accordance with 1 TAC §355.111.
Comment: Several commenters expressed concern that the 60-day requirement to submit a report is not feasible, because providers are often not given access to the cost reporting system used to submit reports for one year or longer after the end of a provider's cost reporting period. This issue is especially concerning under circumstances where a provider has undergone a change of ownership. Providers are subject to vendor hold for any payments that would otherwise occur after notice is given to the state for dates of service prior to the change of ownership. These vendor-hold payments are not released to the provider until all cost and/or accountability reports are submitted and examined by the state. Providers are often not given access to the cost reporting system to even begin their final cost report submission for six to nine months after the effective date of the change of ownership, which creates tremendous cash flow issues for the outgoing provider. Commenters requested the reporting rules described in §355.320 add a requirement that the state ensures cost/accountability report access in the case of a change of ownership within 30 days following the effective date of the change of ownership.
Response: HHSC revised §355.320(b)(11) and (e)(2) to clarify that the providers must submit required reports 60 days from notification of the deadline as determined by HHSC rather than the date of their change of ownership or contract termination.
Comment: Multiple commenters recommended that HHSC remove the proposed clause from 355.318(g)(3) "and to exclude entire cost reports from the reimbursement determination database if there is reason to doubt accuracy or allowability of a significant part of the information reported", and to entirely remove proposed §355.318(g)(3)(A)(i)(II).
Response: HHSC disagrees and declines to revise the rule. HHSC must ensure that the data used to calculate the methodological rates is valid.
Comment: Multiple commenters suggested that HHSC should remove all sections listed under §355.318(g)(3)(B) relating to occupancy adjustments and any other references to occupancy adjustments in the proposed rule, as these provisions are burdensome to rural facilities, and occupancy restrictions are not required by CMS.
Response: HHSC disagrees and declines to revise the rule. The purpose of the occupancy adjustment is to ensure the state reimburses administrative and operations costs for empty Medicaid beds. As mentioned above, HHSC will continue to evaluate the appropriateness of the methodology, including impacts on providers, during the regular biennial fee review process.
Comment: Multiple commenters suggested HHSC should eliminate the requirement listed in §355.320(t)(2) and (3) that aggregation be requested unless the election is included in either the cost report or staff accountable report. They further suggested that aggregation should be automatic with the option for a provider to "opt out" rather than "opt in." Requiring providers to submit an aggregation request annually is administratively burdensome and unnecessary. Automating the aggregation process would reduce paperwork and administrative overhead, allowing providers to focus more on direct patient care.
Response: HHSC disagrees and declines to revise the rule. Aggregation occurs when the provider completes the cost or accountability report by selecting a check box in Step 2 of the report. HHSC allows aggregation as a benefit to providers who are unable to separate business components in their operations. However, aggregation may not be appropriate for all providers.
Comment: One commenter noted their comment was outside the scope of this rule proposal but requested that HHSC endeavor to minimize Long Term Care Medicaid Information (LTCMI) data collection to only the information not available on the MDS.
Response: HHSC agrees this comment is outside of the rule proposal. This comment was shared with agency colleagues who administer the LTCMI for their consideration.
Comment: One commenter suggested that similar spending requirements as outlined in §355.320(u) should apply to hospitals.
Response: This comment is outside the scope of this rule proposal.
HHSC made minor editorial revisions to §355.320 to correct grammar and punctuation.
SUBCHAPTER C. REIMBURSEMENT METHODOLOGY FOR NURSING FACILITIES
1 TAC §§355.304, 355.306 - 355.308, 355.318, 355.320
STATUTORY AUTHORITY
The amendments and new sections are adopted under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC'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-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code Chapter 32.
§355.320.Nursing Care Staff Rate Enhancement Program for Nursing Facilities on or after September 1, 2025.
(a) Introduction. The Texas Health and Human Services Commission (HHSC) establishes the Nursing Care Staff Rate Enhancement Program for Nursing Facilities on or after September 1, 2025. The Nursing Care Staff Rate Enhancement Program for Nursing Facilities established under this section will be implemented pending implementation of the Patient Driven Payment Model (PDPM) for Long-Term Care (LTC), as specified in §355.318 of this subchapter (relating to Reimbursement Setting Methodology for Nursing Facilities on or after September 1, 2025).
(b) Definitions. The following words and terms, when used in this section, have the following meanings unless the context clearly indicates otherwise.
(1) Combined entity--Combined entities consist of one or more commonly owned corporations and one or more limited partnerships, where the general partner is controlled by the same person as the commonly owned corporation.
(2) Commonly owned corporations--Commonly owned corporations are two or more corporations where five or fewer identical persons who are individuals, estates, or trusts control greater than 50 percent of the total voting power in each corporation.
(3) Control--The entity has greater than 50 percent ownership.
(4) Enrollment contract amendment--An acceptable enrollment contract amendment is defined as a legible document requesting a change in enrollment status that has been completed according to instructions, signed by an authorized representative per the HHSC signature authority designation form applicable to the provider's contract or ownership type, and received by HHSC within 30 days of HHSC's notification to the facility that an enrollment contract amendment must be submitted.
(A) An initial enrollment contract amendment is required from each facility choosing to participate in the Nursing Care Staff Rate Enhancement Program.
(B) Participating and nonparticipating facilities may request to modify their enrollment status (i.e., a nonparticipant can request to become a participant, a participant can request to become a nonparticipant, or a participant can request to change its enhancement level) during any open enrollment period.
(C) Nonparticipants and participants requesting to increase their enrollment levels will be limited to increases of three or fewer enhancement levels during any single open enrollment period unless HHSC waives such limits.
(D) Requests to modify a facility's enrollment status during an open enrollment period must be received by HHSC by the last day of the open enrollment period as per paragraph (8) of this subsection.
(i) If the last day of the open enrollment period falls on a weekend, national holiday, or state holiday, then the first business day following the last day of the open enrollment period is the final day the enrollment contract amendment will be accepted.
(ii) An enrollment contract amendment that is not received by the stated deadline will not be accepted.
(iii) A facility from which HHSC has not received an acceptable request to modify its enrollment by the last day of the open enrollment period will continue at the level of participation in effect during the open enrollment period, within available funds. The facility will continue at that level of enrollment until the facility notifies HHSC following subsection (n) of this section that it no longer wishes to participate, or until the facility's enrollment is limited according to subsection (g) of this section.
(E) If HHSC determines that funds are not available to continue participation at the level in effect during the open enrollment period, facilities will be notified as per subsection (v) of this section.
(5) Entity--An entity is a parent company, sole member, individual, limited partnership, or group of limited partnerships controlled by the same general partner.
(6) Nursing care staff base rate--The nursing care staff base rate is equal to the adopted nursing rate component as specified in §355.318 of this subchapter.
(7) Nursing care staff cost center--The nursing care staff cost center is equal to the PDPM LTC nursing rate component as specified in §355.318 of this subchapter.
(8) Open enrollment--Open enrollment begins on the first day of July and ends on the thirty-first day of July, preceding the rate year for which payments are being determined. HHSC notifies providers of open enrollment via email sent to an authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. Requests to modify a provider's enrollment status during an open enrollment period must be received by HHSC by the last day of the open enrollment period through HHSC's enrollment portal or another method designated by HHSC. If the last day of open enrollment is on a weekend day, state holiday, or national holiday, the next business day will be considered the last day requests will be accepted. If open enrollment has been postponed or canceled, HHSC will notify providers by email before the first day of July. Should conditions warrant, HHSC may conduct additional enrollment periods during a rate year.
(9) Rate year--The standard rate year begins on the first day of September and ends on the last day of August of the following year.
(10) Responsible entity--The contracted provider, owner, or legal entity that received the recouped revenue is responsible for the repayment of any recoupment amount.
(11) Staffing and compensation report--A staffing and compensation report is a report reflecting the provider's activities while delivering contracted services from the first day through the last day of the rate year or provider's cost report year while participating in the Nursing Care Staff Rate Enhancement Program. Staffing and compensation reports and cost reports functioning as staffing and compensation reports will include any information required by HHSC to implement the Nursing Care Staff Rate Enhancement Program. Staffing and compensation reports must be submitted annually or as specified in subsection (d) of this section. Cost and accountability reports requested by HHSC are considered staffing and compensation reports, and preparers must complete mandatory training requirements per §355.102(d) of this subchapter (relating to General Principles of Allowable and Unallowable Costs). Staffing and compensation reports will be used as the basis for determining compliance with the spending requirements and recoupment amounts as described in subsection (k) of this section. Participating facilities failing to submit an acceptable annual staffing and compensation report within 60 days of notification of the due date for the report as determined by HHSC will be placed on vendor hold until an acceptable report is received and processed by HHSC.
(c) Enrollment for new facilities. For purposes of this section, for each rate year, a new facility is defined as a facility delivering its first day of service to a Medicaid recipient after the first day of the open enrollment period, as defined in subsection (b)(8) of this section. Facilities that underwent an ownership change are not considered new facilities. New facilities will receive the nursing rate component as determined in §355.318 of this subchapter with no enhancements. For new facilities specifying their desire to participate in an acceptable enrollment contract amendment, the nursing rate component is adjusted as specified in subsection (j) of this section, effective on the first day of the month following receipt by HHSC of the acceptable enrollment contract amendment. If the granting of newly requested enhancements was limited as per subsection (g) of this section during the most recent enrollment, enrollment for new facilities will be subject to that same limitation.
(d) Reporting requirements.
(1) All participating facilities will provide HHSC, in a method specified by HHSC, an annual staffing and compensation report reflecting the activities of the facility while delivering contracted services from the first day through the last day of the rate year.
(2) When a participating facility changes ownership, the prior owner must submit a staffing and compensation report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the ownership-change effective date. This report will be used as the basis for determining any recoupment amounts as described in subsection (k) of this section. The new owner will be required to submit a staffing and compensation report covering the period from the day after the date recognized by HHSC or its designee as the ownership change effective date to the end of the rate year.
(3) Participating facilities whose contracts are terminated either voluntarily or involuntarily must submit a staffing and compensation report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the contract termination date. This report will be used as the basis for determining any recoupment amounts as described in subsection (k) of this section.
(4) Participating facilities who voluntarily withdraw from participation as per subsection (n) of this section must submit a staffing and compensation report within 60 days of the due date of the report as determined by HHSC, covering the period from the beginning of the rate year to the date of withdrawal as determined by HHSC. This report will be used as the basis for determining any recoupment amounts as described in subsection (k) of this section.
(5) For new facilities, as defined in subsection (c) of this section, the reporting period will begin with the effective date of participation in enhancement.
(6) Existing facilities that become participants in the enhancement as a result of the open enrollment process described in subsection (b)(8) of this section on any day other than the first day of their fiscal year are required to submit a staffing and compensation report with a reporting period that begins on their first day of participation in the enhancement and ends on the last day of the facility's fiscal year. This report will be used as the basis for determining any recoupment amounts as described in subsection (k) of this section.
(7) A participating provider that is required to submit a staffing and compensation report under this paragraph will be excused from the requirement to submit a report if the provider did not provide any billable services to Medicaid recipients during the reporting period.
(8) Reports must be received before the date the provider is notified of compliance with spending requirements for the report in question as per subsection (k) of this section.
(9) HHSC may require other staffing and compensation reports from all facilities as needed.
(e) Vendor hold. HHSC or its designee will place on hold the vendor payments for any participating facility that does not submit a timely report as described in subsection (d) of this section. This vendor hold will remain in effect until HHSC receives an acceptable report.
(1) Participating facilities that do not submit an acceptable report completed in compliance with all applicable rules and instructions within 60 days of the due dates described in this subsection or, for cost reports, the due dates described in §355.105(b) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures), will become nonparticipants retroactive to the first day of the reporting period in question and will be subject to immediate recoupment of funds related to participation paid to the facility for services provided during the reporting period in question. These facilities will remain nonparticipants, and recouped funds will not be restored until they submit an acceptable report and repay to HHSC or its designee funds identified for recoupment from subsection (k) of this section. If an acceptable report is not received within 365 days of the due date, the recoupment will become permanent, and if all funds associated with participation during the reporting period in question have been recouped by HHSC or its designee, the vendor hold associated with the report will be released.
(2) Participating facilities with an ownership change or contract termination that do not submit an acceptable report completed in accordance with all applicable rules and instructions within 60 days of notification of the due date for the report as determined by HHSC will become nonparticipants retroactive to the first day of the reporting period in question. These facilities will be subject to an immediate recoupment of funds related to participation paid to the facility for services provided during the reporting period in question. These facilities will remain nonparticipants, and recouped funds will not be restored until they submit an acceptable report and repay to HHSC or its designee funds identified for recoupment from subsection (k) of this section. If an acceptable report is not received within 365 days of the change of ownership or contract termination date, the recoupment will become permanent, and if all funds associated with participation during the reporting period in question have been recouped by HHSC or its designee, the vendor hold associated with the report will be released.
(f) Completion of Reports. All staffing and compensation reports must be completed in compliance with the provisions of §§355.102 - 355.105 of this chapter (relating to General Principles of Allowable and Unallowable Costs; Specifications for Allowable and Unallowable Costs; Revenues; and General Reporting and Documentation Requirements, Methods, and Procedures, respectively) and may be reviewed or audited in accordance with §355.106 of this chapter (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports). All staffing and compensation reports must be completed by preparers who have attended the required nursing facility cost report training as per §355.102(d) of this chapter.
(g) Enrollment limitations. A facility will not be enrolled in the Nursing Care Staff Rate Enhancement Program at a level higher than the level it achieved on its most recently available audited staffing and compensation report. HHSC will notify a facility of its enrollment limitations (if any) before the first day of the open enrollment period.
(1) Notification of enrollment limitations. The enrollment limitation level is indicated in the State of Texas Automated Information Reporting System (STAIRS), the online application for submitting cost and accountability reports. STAIRS will generate an email to the entity contact, indicating that the facility's enrollment limitation level is available for review. The entity contact is the provider's authorized representative per the signature authority designation form applicable to the provider's contract or ownership type.
(2) Enrollment after a limitation. At no time will a facility be allowed to enroll in the enhancement program at a level higher than its current level of enrollment plus three additional levels unless otherwise instructed by HHSC.
(3) New owners after a change of ownership. Enhancement levels for a new owner after a change of ownership will be determined according to subsection (s) of this section. A new owner will not be subject to enrollment limitations based on the prior owner's performance. This exemption from enrollment limitations does not apply in cases where HHSC or its designee has approved a successor-liability-agreement that transfers responsibility from the former owner to the new owner.
(4) New facilities. A new facility's enrollment will be determined according to subsection (c) of this section.
(h) Determination of nursing care staff component enhancements. HHSC will determine a per diem add-on payment for each nursing rate component enhancement level using data from sources such as cost reports, surveys, or other relevant sources and considering the quality of care, labor market conditions, economic factors, and budget constraints. The nursing rate component enhancement add-ons will be determined on a per-unit-of-service basis. Add-on payments may vary by enhancement level.
(i) Granting of nursing staff rate enhancements. HHSC divides all requested enhancements, after applying any enrollment limitations from subsection (g) of this section, into two groups: pre-existing enhancements that facilities request to carry over from the prior year and newly requested enhancements. Newly requested enhancements may be enhancements requested by facilities that were nonparticipants in the prior year or by facilities that were participants in the prior year, desiring to be granted additional enhancements. Using the process described herein, HHSC first determines the distribution of carry-over enhancements. If HHSC determines that funds are not available to carry over some or all pre-existing enhancements, facilities will be notified as per subsection (v) of this section. If funds are available after the distribution of carry-over enhancements, HHSC then determines the distribution of newly requested enhancements. HHSC may not distribute newly requested enhancements to facilities owing funds identified for recoupment from subsection (k) of this section.
(1) HHSC determines projected Medicaid units of service for facilities requesting each enhancement option and multiplies this number by the rate add-on associated with that enhancement option as determined in subsection (h) of this section.
(2) HHSC compares the sum of the products from paragraph (1) of this subsection to available funds:
(A) if the product is less than or equal to available funds, all requested enhancements are granted; or
(B) if the product is greater than available funds, enhancements are granted beginning with the lowest level of enhancement and granting each successive level of enhancement until requested enhancements are granted within available funds. Based on an examination of existing staffing levels and staffing needs, HHSC may grant certain enhancement options priority for distribution.
(3) Notification of granting of enhancements. Participating facilities are notified of the status of their request for rate enhancements in a manner determined by HHSC.
(4) In cases where more than one enhanced rate level is in effect during the reporting period, the spending requirement will be based on the weighted average enhanced rate level in effect during the reporting period calculated as follows.
(A) Multiply the first enhanced rate level in effect during the reporting period by the most recently available reliable Medicaid days of service utilization data for the time period the first enhanced rate level was in effect.
(B) Multiply the second enhanced rate level in effect during the reporting period by the most recently available reliable Medicaid days of service utilization data for the time period the second enhanced rate level was in effect.
(C) Sum the products from subparagraphs (A) and (B) of this paragraph.
(D) Divide the sum from subparagraph (C) of this paragraph by the sum of the most recently available reliable Medicaid days of service utilization data for the entire reporting period used in subparagraphs (A) and (B) of this paragraph.
(j) Determine each participating facility's total nursing rate component. Each participating facility's total nursing rate component will be equal to the nursing care staff base rate as defined in subsection (b)(6) of this section, plus any add-on payments associated with staffing enhancements selected by and awarded to the facility during open enrollment. HHSC will determine a per diem add-on payment for each enhanced staffing level informed by analysis of the most recently available reliable data relating to staff compensation levels and available appropriations for the program as specified in subsection (h) of this section.
(k) Spending requirements for participants. Participating facilities are subject to a nursing care staff spending requirement with recoupment calculated as follows.
(1) Effective September 1, 2023, HHSC will complete calculations associated with nursing care rate increases and spending requirements in compliance with §355.304 of this subchapter (relating to Direct Care Staff Spending Requirement on or after September 1, 2023).
(2) At the end of the rate year, a spending floor will be calculated by multiplying accrued Medicaid fee-for-service and managed care nursing care staff revenues by 0.70.
(3) Accrued allowable Medicaid nursing care staff fee-for-service expenses for the rate year will be compared to the spending floor from paragraph (2) of this subsection. HHSC or its designee will recoup the difference between the spending floor and accrued allowable Medicaid nursing care staff fee-for-service expenses from facilities whose Medicaid nursing care staff spending is less than their spending floor.
(4) At no time will a participating facility's nursing care rates after spending recoupment be less than the nursing care staff base rates.
(l) Dietary and Fixed Capital Mitigation. Recoupment of funds described in subsection (k) of this section may be mitigated by high dietary and fixed capital expenses as follows.
(1) Calculate dietary cost deficit. At the end of the facility's rate year, accrued Medicaid dietary per diem revenues will be compared to accrued, allowable Medicaid dietary per diem costs. If costs are greater than revenues, the dietary per diem cost deficit will be equal to the difference between accrued, allowable Medicaid dietary per diem costs and accrued Medicaid dietary per diem revenues. If costs are less than revenues, the dietary cost deficit will be equal to zero.
(2) Calculate dietary revenue surplus. At the end of the facility's rate, accrued Medicaid dietary per diem revenues will be compared to accrued, allowable Medicaid dietary per diem costs. If revenues are greater than costs, the dietary per diem revenue surplus will be equal to the difference between accrued Medicaid dietary per diem revenues and accrued, allowable Medicaid dietary per diem costs. If revenues are less than costs, the dietary revenue surplus will be equal to zero.
(3) Calculate fixed capital cost deficit. At the end of the facility's rate year, accrued Medicaid fixed capital asset per diem revenues will be compared to accrued, allowable Medicaid fixed capital asset per diem costs. Allowable fixed capital asset costs are defined in §355.318(d)(4)(C) of this subchapter. If costs are greater than revenues, the fixed capital cost per diem deficit will be equal to the difference between accrued, allowable Medicaid fixed capital per diem costs and accrued Medicaid fixed capital per diem revenues. If costs are less than revenues, the fixed capital cost deficit will be equal to zero. For purposes of this paragraph, fixed capital per diem costs of facilities with occupancy rates below 85 percent are adjusted to the cost per diem the facility would have accrued had it maintained an 85 percent occupancy rate throughout the rate year.
(4) Calculate fixed capital revenue surplus. At the end of the facility's rate year, accrued Medicaid fixed capital asset per diem revenues will be compared to accrued, allowable Medicaid fixed capital asset per diem costs. Allowable fixed capital asset costs are defined in §355.318(d)(4)(C) of this subchapter. If revenues are greater than costs, the fixed capital revenue per diem surplus will be equal to the difference between accrued Medicaid fixed capital per diem revenues and accrued, allowable Medicaid fixed capital per diem costs. If revenues are less than costs, the fixed capital revenue surplus will be equal to zero. For purposes of this paragraph, fixed capital per diem costs of facilities with occupancy rates below 85 percent are adjusted to the cost per diem the facility would have accrued had it maintained an 85 percent occupancy rate throughout the rate year.
(5) Mitigation of a dietary per diem cost deficit. Facilities with a dietary per diem cost deficit will have their dietary per diem cost deficit reduced by their fixed capital per diem revenue surplus, if any. Any remaining dietary per diem cost deficit will be capped at $2.00 per diem.
(6) Mitigation of a fixed capital cost per diem deficit. Facilities with a fixed capital cost per diem deficit will have their fixed capital cost per diem deficit reduced by their dietary revenue per diem surplus, if any. Any remaining fixed capital per diem cost deficit will be capped at $2.00 per diem.
(7) Recoupment calculation. Each facility's recoupment, as calculated in subsection (k) of this section, will be reduced by the sum of that facility's dietary per diem cost deficit, as calculated in paragraph (5) of this subsection, and its fixed capital per diem cost deficit as calculated in paragraph (6) of this subsection.
(m) Adjusting spending requirements. Facilities that determine that they will not be able to meet their spending requirements from subsection (k) of this section may request a reduction in their spending requirements and associated rate add-on. These requests will be effective on the first day of the month following approval of the request.
(n) Voluntary withdrawal. Facilities wishing to withdraw from participation must notify HHSC in writing by certified mail, and the request must be signed by an authorized representative as designated per the HHSC signature authority designation form applicable to the provider's contract or ownership type. Facilities voluntarily withdrawing must remain nonparticipants for the remainder of the rate year. The participation end date for facilities voluntarily withdrawing from the program will be effective on the date of the withdrawal, as determined by HHSC.
(o) Notification of recoupment based on annual staffing and compensation report or cost report. The estimated amount to be recouped is indicated in STAIRS. STAIRS will generate an email to the entity contact, indicating that the facility's estimated recoupment is available for review. If HHSC's subsequent review of the staffing and compensation report results in report adjustments that change the amount to be repaid to HHSC or its designee, the facility's entity contact will be notified by email that the adjustments and the adjusted amount to be repaid are available in STAIRS for review. HHSC or its designee will recoup any amount owed from a facility's vendor payments following the date of the initial or subsequent notification.
(p) Change of ownership and contract terminations.
(1) Facilities required to submit a staffing and compensation report due to a change of ownership or contract termination as described in subsection (d) of this section will have funds held as per 26 TAC §554.210 (relating to Change of Ownership and Notice of Changes) until HHSC receives an acceptable staffing and compensation report and funds identified for recoupment from subsection (k) of this section are repaid to HHSC or its designee. Informal reviews and formal appeals relating to these reports are governed by §355.110 of this chapter(relating to Informal Reviews and Formal Appeals). HHSC or its designee will recoup any amount owed from the facility's vendor payments that are being held. In cases where funds identified for recoupment cannot be repaid from the held vendor payments, the responsible entity, as defined in subsection (b)(10) of this section, will be jointly and severally liable for any additional payment due to HHSC or its designee. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in the recoupment of the owed funds from other Medicaid contracts controlled by the responsible entity, placement of a vendor hold on all Medicaid contracts controlled by the responsible entity and will bar the responsible entity from receiving any new contracts with HHSC or its designees until repayment is made in full. The responsible entity for these contracts will be notified as described in subsection (o) of this section before the recoupment of owed funds, placement of vendor hold, and barring of new contracts.
(2) Participation in the Nursing Care Staff Rate Enhancement Program transfers to the new owner as defined in 26 TAC §554.210 when there is a change of ownership. The new owner is responsible for the reporting requirements in subsection (d) of this section for any reporting period days occurring after the change. If the change of ownership occurs during an open enrollment period as defined in subsection (b)(8) of this section, then the owner recognized by HHSC or its designee on the last day of the enrollment period may request to modify the enrollment status of the facility.
(q) Failure to document staff spending. Undocumented nursing care staff and contract labor compensation costs will be disallowed and will not be used in the determination of nursing care staff costs per unit of service.
(r) Appeals. The subject matter of informal reviews and formal appeals is limited as per §355.110(a)(3) of this chapter.
(s) Contract cancellations. If a facility's Medicaid contract is canceled before the first day of an open enrollment period as defined in subsection (b)(8) of this section, and the facility is not granted a new contract until after the last day of the open enrollment period, participation in the Nursing Care Staff Rate Enhancement Program as it existed before the cancellation date of the facility's contract will be reinstated when the facility is granted a new contract. The contract must be under the same ownership, and reinstatement is subject to the availability of funding. Any enrollment limitations from subsection (g) of this section that would have applied to the canceled contract will apply to the new contract.
(t) Determination of compliance with spending requirements in the aggregate.
(1) Aggregation. For an entity, commonly owned corporation, or combined entity that controls more than one participating nursing facility contract, compliance with the spending requirements detailed in subsection (k) of this section can be determined in the aggregate for all participating nursing facility contracts controlled by the entity, commonly owned corporations, or combined entity at the end of the rate year, the effective date of the change of ownership of its last participating contract, or the effective date of the termination of its last participating contract rather than requiring each contract to meet its spending requirement individually. Corporations that do not meet the definitions under subsection (b) of this section are not eligible for aggregation to meet spending requirements.
(2) Aggregation Request. To exercise aggregation, the entity, combined entity, or commonly owned corporations must submit an aggregation request in a manner prescribed by HHSC when each staffing and compensation report is submitted. In limited partnerships in which the same single general partner controls all the limited partnerships, the single general partner must make this request. Other such aggregation requests will be reviewed on a case-by-case basis.
(3) Frequency of Aggregation Requests. The entity, combined entity, or commonly owned corporation must submit a separate request for aggregation for each reporting period.
(4) Ownership changes or terminations. Nursing facility contracts that change ownership or terminate, effective after the end of the applicable reporting period but before the determination of compliance with spending requirements as per subsection (k) of this section, are excluded from all aggregate spending calculations. These contracts' compliance with spending requirements will be determined on an individual basis, and the costs and revenues will not be included in the aggregate spending calculation.
(u) Medicaid Swing Bed Program for Rural Hospitals. When a rural hospital participating in the Medicaid swing bed program furnishes nursing care to a Medicaid recipient under 26 TAC §554.2326 (relating to Medicaid Swing Bed Program for Rural Hospitals), HHSC or its designee pays the hospital using the same procedures, the same case-mix methodology, and the same PDPM LTC rates that HHSC authorizes for reimbursing nursing facilities receiving the nursing rate component with no enhancement levels. These hospitals are not subject to the staffing and spending requirements detailed in this section.
(v) Notification of lack of available funds. If HHSC determines that funds are not available to continue participation for facilities from which it has not received an acceptable request to modify their enrollment by the last day of an enrollment period as per subsection (b)(8) of this section or to fund carry-over enhancements as per subsection (i) of this section, HHSC will notify providers in a manner determined by HHSC that such funds are not available.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 23, 2024
TRD-202403906
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 12, 2024
Proposal publication date: May 3, 2024
For further information, please call: (737) 867-7817
STATUTORY AUTHORITY
The repeals are adopted under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC'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-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code Chapter 32.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 23, 2024.
TRD-202403907
Karen Ray
Chief Counsel
Texas Health and Human Services Commission
Effective date: September 12, 2024
Proposal publication date: May 3, 2024
For further information, please call: (737) 867-7817