Section 355.457 - Cost Finding Methodology(a) General principles. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in § RSA 355.101 of this title (relating to Introduction).(b) Additional requirements. In addition to the requirements of § RSA 355.102 and § RSA 355.103 of this title (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs), the following apply to costs for the intermediate care facilities for persons with mental retardation (ICF/MR) program. (1) Attendant service costs. Attendant service costs are defined in § RSA 355.112 of this title (relating to Attendant Compensation Rate Enhancement).(2) Provider responsibilities. The provider is responsible for submission of the cost report to HHSC, and payment of amounts owed in accordance with subsection (c) of this section for services delivered on or before August 31, 2009, and payment of amounts owed in accordance with § RSA 355.112 of this title for services delivered on or after September 1, 2010, regardless of whether the provider contracts with another entity for the management or operation of the ICF/MR. (A) If the provider contracts with another entity for the management or operation of the ICF/MR, the provider must report the specific costs of that entity as required in the cost report instructions and not the amount for which the provider is contracting for the entity's services.(B) For staff whose duties include work other than the provision of attendant services for the provider, time spent providing attendant services and associated expenses may be reported as attendant service costs if properly documented in accordance with § RSA 355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).(C) Allowable compensation for owners and related parties and definitions of owners and related parties are specified in § RSA 355.102(i) and § RSA 355.103(b)(2) of this title. (i) Time sheet requirement. Owners and related parties who provide multiple types of attendant service (e.g., direct care workers, direct care trainers, and job coaches) or both attendant services and non-attendant services must maintain daily time sheets that record the time spent on activities in each area. The provider must maintain documentation relating to the compensation, bonuses, and benefits of each owner or related party in accordance with § RSA 355.105(b)(2)(B)(xi) of this title.(ii) Calculation of allowable hourly wage rate and benefits. Allowable hourly wage rate and benefits for attendant service work must be the lesser of the actual hourly wage rate paid and benefits paid or the hourly wage rate and benefits for a comparable attendant assumed in the fully-funded model. The fully-funded model is the model as calculated under § RSA 355.456(d) of this title (relating to Reimbursement Methodology) prior to any adjustments made in accordance with § RSA 355.101 of this title (relating to Introduction) and § RSA 355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations or Economic Factors Affect Costs) for the rate period.(iii) Calculation of allowable hours for attendants. Allowable hours per unit of service for an attendant when the reported hours include related-party hours, are determined as follows: (I) Step 1. Determine the hours per unit of service for a comparable attendant-service staff-type assumed in the fully-funded model as defined in clause (ii) of this subparagraph, adjusted for the provider's average Level of Need (LON) during the reporting period.(II) Step 2. Determine the hours per unit of service encompassed by the 90th percentile in the array of hours per unit of service for comparable attendant-service staff-types as reported by those contracted providers not reporting any related-party hours for that staff-type, adjusted for the provider's average LON during the reporting period.(III) Step 3. Determine the greater of Step 1 and Step 2.(IV) Step 4. Determine the actual hours worked by the staff-type per unit of service.(V) Step 5. Determine the lesser of Step 4 and Step 3. This value is the allowable hours per unit of service for the attendant-service staff-type.(iv) Exception to related party adjustment. If at least 40 percent of total labor hours in a specific related party's attendant-service staff-type were provided by non-related-parties, the related-party's hourly wage rate may be the higher of the model assumption for that attendant-service staff-type described in clause (ii) of this subparagraph or the non-related party average for that attendant-service staff-type, so long as the non-related party average does not exceed the related-party's actual hourly wage.(v) Maximum attendant-care hours. During any single fiscal year, the sum of all attendant-care hours reported on any cost report(s) for any individual owner or related party cannot exceed 2,600.(vi) Classification of hours over the limit. Hours, hourly wages and benefits above the limits described in clauses (ii) - (v) of this subparagraph are to be reported as administrative hours, hourly wages and benefits.(3) Placement of vendor hold for change of ownership and contract termination. For services delivered on or before August 31, 2009, the Department of Aging and Disability Services (DADS) will place a vendor hold on a prior owner at a change of ownership which results in the execution of a new provider agreement or a contract termination. The prior owner must submit a cost report to HHSC for the current reporting period. Upon receipt of an acceptable cost report and resolution of any outstanding balances, the vendor hold will be released. For services delivered on or after September 1, 2010, placement of vendor hold for change of ownership and contract termination will be governed by the information in § RSA 355.112 of this title.(4) Ownership change or contract termination and failure to submit a cost report. For services delivered on or before August 31, 2009, providers with an ownership change from one legal entity to a different legal entity or a contract termination that do not submit a cost report for the fiscal year of the ownership change or contract termination within 60 days of the change of ownership or contract termination are subject to recoupment of funds related to fiscal accountability as described in subsection (c)(1)(D) of this section. The recouped funds will not be restored until the provider submits an acceptable cost report and has paid the actual amount due as specified in subsection (c)(1)(A) - (C) of this section. If an acceptable cost report is not received within 365 days of the change of ownership or contract termination date, the recoupment will become permanent. For services delivered on or after September 1, 2010, recoupment of funds related to failure to submit a cost report after an ownership change from one legal entity to a different legal entity or a contract termination will be governed by the information in § RSA 355.112 of this title.(5) Failure to submit a cost report. For services delivered on or before August 31, 2009, providers that do not submit a cost report completed in accordance with all applicable rules and instructions within 60 days of the placement of a vendor hold due to the failure to submit the cost report are subject to an immediate recoupment of funds related to fiscal accountability as described in subsection (c)(1)(D) of this section. The recouped funds will not be restored until the provider submits an acceptable cost report and has paid the actual amount due as specified in subsection (c)(1)(A) - (C) of this section. If an acceptable cost report is not received within 365 days of the due date, the recoupment will become permanent. For services delivered on or after September 1, 2010, recoupment of funds related to failure to submit a cost report within 60 days of the placement of a vendor hold due to failure to submit the cost report will be governed by the information in § RSA 355.112 of this title.(6) Other applicable rules. For cost reports pertaining to providers' fiscal years ending in calendar year 2004 and subsequent years the following applies: (A) Providers must follow the cost-reporting guidelines as specified in § RSA 355.105 of this title.(B) Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in § RSA 355.102 and § RSA 355.103 of this title.(C) Revenues must be reported on the cost report in accordance with § RSA 355.104 of this title (relating to Revenues).(7) Field audit and desk review. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with § RSA 355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with § RSA 355.107 of this title (relating to Notification of Exclusions and Adjustments).(8) Reviews of exclusions or adjustments. An ICF/MR provider who disagrees with HHSC's exclusion or adjustment of items in cost reports may request an informal review and, when appropriate, an administrative hearing as specified in § RSA 355.110 of this title (relating to Informal Reviews and Formal Appeals).(c) Fiscal accountability. For services delivered on or before August 31, 2009, HHSC will require providers to report all direct costs incurred in their annual fiscal year. HHSC will compare the reported direct service costs to the direct service cost component of the modeled rates. (1) Fiscal accountability calculation. The total direct service revenue of the modeled rates is the direct service portion of the rate multiplied by the number of allowable units paid for services provided during the reporting period. (A) Providers whose direct service costs are 90% or more of the direct service revenues will not be subject to repayment under this section.(B) Providers whose direct service costs are less than 85% of the direct service revenues will be required to pay to HHSC the difference between the direct service costs and 95% of the direct service revenues.(C) Providers whose direct service costs are less than 90% but greater than or equal to 85% of the direct service revenues will be required to pay to HHSC 75% of the difference between the direct service costs and 90% of the direct service revenues.(D) Providers who do not submit an acceptable cost report as described in subsection (b)(4) or (5) of this section will be assumed to have direct service costs equal to 65% of the direct services revenues and HHSC will recoup the difference between 65% of the direct services revenues and 95% of the direct service revenues, subject to the provisions of subsection (b)(4) or (5) of this section.(2) Notification of recoupment. Providers will be notified, by certified mail, within 90 days of the determination of their recoupment amount by HHSC of the amount to be repaid to HHSC. If a subsequent review by HHSC or audit results in adjustments to the Cost Report as described in subsection (b)(7) of this section that changes the amount to be repaid to HHSC, the provider will be notified in writing of the adjustments and the adjusted amount to be repaid. HHSC will recoup any amount owed from a provider's vendor payment(s) following the date of the notification letter.(3) Repayment. Repayment will be collected from the following: (A) the provider or legal entity submitting the report;(B) any other legal entity responsible for the debts or liabilities of the submitting entity; or(C) the legal entity on behalf of which a report is submitted.(4) Repayment when ownership change or contract termination occurs. For providers undergoing an ownership change or contract termination, HHSC will recoup any amount owed from the provider'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 from paragraph (3) of this subsection will be jointly and severally liable for any additional payment due to HHSC. 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 until repayment is made in full. The responsible entity for these contracts will be notified as described in paragraph (2) of this subsection prior to the recoupment of owed funds, placement of vendor hold and barring of new contracts.(5) Aggregation. (A) Definitions. The following words and terms have the following meanings when used in this paragraph. (i) Aggregation--For an entity defined in clause (iii) of this subparagraph that controls, as defined in clause (iv) of this subparagraph, more than one ICF/MR component code, the process of determining compliance with the spending requirements detailed in paragraph (1) of this subsection for all component codes controlled by the entity in the aggregate rather than requiring each component code to meet its spending requirement individually. For commonly owned corporations defined in clause (ii) of this subparagraph, the process of determining compliance with the spending requirements detailed in paragraph (1) of this subsection for all component codes in the controlled small group in the aggregate rather than requiring each component code to meet its spending requirement individually. Corporations that do not meet the definitions under clauses (ii) - (iii) of this subparagraph are not eligible for aggregation.(ii) Commonly owned corporations--two or more corporations where five or fewer identical persons who are individuals, estates, or trusts own greater than 50 percent of the total voting power in each corporation.(iii) Entity--a parent company, sole member, individual, limited partnership, or group of limited partnerships controlled by the same general partner.(iv) Control--greater than 50% ownership by the entity.(B) Component Codes Included in Aggregation. If an entity controlling more than one ICF/MR component code or commonly owned corporations requests aggregation, compliance with the spending requirements will be evaluated in the aggregate for all ICF/MR component codes that the entity or commonly owned corporations controlled at the end of its fiscal year or at the effective date of the change of ownership or termination of its last ICF/MR contract.(C) Aggregation Request. To exercise the aggregation option, the entity or commonly owned corporations must submit an aggregation request, in a manner prescribed by HHSC, at the time each cost report is submitted. In limited partnerships in which the same single general partner controls all the limited partnerships, that single general partner must make this request. Other such aggregation requests will be reviewed on a case-by-case basis.(D) Frequency of Aggregation Requests. The entity or commonly owned corporations must submit a separate request for aggregation for each reporting period.(E) Ownership Changes and Contract Terminations. ICF/MR contracts that change ownership or terminate effective after the end of the applicable reporting period, but prior to the determination of compliance with spending requirements as per paragraph (1) of this subsection, 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.1 Tex. Admin. Code § 355.457
The provisions of this §355.457 adopted to be effective March 25, 1997, 22 TexReg 2760; transferred effective September 1, 1997, as published in the Texas Register December 26, 1997, 22 TexReg 12748; Amended to be effective April 5, 1998, 23 TexReg 3251; Amended to be effective December 20, 1998, 23 TexReg 12652; Amended to be effective March 1, 2001, 26 TexReg 1696; Amended to be effective December 23, 2001, 26 TexReg 10277; Amended to be effective August 31, 2004, 29 TexReg 8116; Amended to be effective May 29, 2005, 30 TexReg 3089; Amended to be effective June25, 2008, 33 TexReg 4859; Amended to be effective September 1, 2009, 34 TexReg 5654; Amended to be effective September 1, 2010, 35 TexReg 5026; Amended to be effective October 2, 2011, 36 TexReg 6259