TITLE 40. SOCIAL SERVICES AND ASSISTANCE

PART 1. DEPARTMENT OF AGING AND DISABILITY SERVICES

CHAPTER 15. LICENSING STANDARDS FOR PRESCRIBED PEDIATRIC EXTENDED CARE CENTERS

The Texas Health and Human Services Commission (HHSC), on behalf of the Department of Aging and Disability Services (DADS), proposes amendments to §15.5, concerning Definitions; and §15.108, concerning Change of Ownership License Application Procedures and Issuance; and the repeal of §15.107, concerning Change of Ownership, in Chapter 15, Licensing Standards for Prescribed Pediatric Extended Care Centers.

BACKGROUND AND PURPOSE

The proposed amendments and repeal revise change of ownership requirements for a prescribed pediatric extended care center (PPECC) license holder. Under the proposed rules, a license holder will not be required to apply for a new license if the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal tax identification number. Changes in ownership structure must be reported to DADS under other existing rules. The proposed amendments also add definitions for terms related to a change of ownership and ownership interests.

The proposed amendments allow DADS to conduct a desk review instead of an on-site health survey if the applicant for a license resulting from a change of ownership meets certain requirements.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §15.5 adds definitions of "change of ownership," "direct ownership interest," "disclosable interest," "indirect ownership interest," and "license holder." These terms are used in proposed amended §15.108 related to requirements for a change of ownership, including criteria DADS uses to determine if a PPECC will receive a desk review or an on-site health inspection after the facility has a change of ownership. The proposed amendment also removes the term "person with a disclosable interest," because it is unnecessary if the term "disclosable interest" is defined. Additional editorial changes are proposed throughout the section for clarity and consistency.

The proposed repeal of §15.107 removes this rule regarding change of ownership. Change of ownership requirements are addressed in proposed amended §15.108.

The proposed amendment to §15.108 states that DADS conducts an on-site health inspection before issuing a license as a result of a change of ownership, except that DADS will conduct a desk review instead of an on-site health inspection if less than 50 percent of the direct or indirect ownership interest has changed, or every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder. The proposed amendment clarifies that DADS may also conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership.

FISCAL NOTE

David Cook, Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments and repeal are in effect, enforcing or administering the amendments and repeal does not have foreseeable implications relating to costs or revenues of state or local governments.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

DADS has determined that the proposed amendments and repeal will not have an adverse economic effect on small businesses or micro-businesses, because the proposal does not impose requirements that result in a cost to license holders.

PUBLIC BENEFIT AND COSTS

Mary T. Henderson, DADS Associate Commissioner for Regulatory Services, has determined that, for each year of the first five years the amendments and repeal are in effect, the public benefit expected as a result of enforcing the amendments and repeal is a reduction in paperwork and fewer on-site surveys associated with changes of ownership that are unlikely to affect services provided by a license holder.

Mr. Cook anticipates that there will not be an economic cost to persons who are required to comply with the amendments and repeal. The amendments and repeal will not affect a local economy.

TAKINGS IMPACT ASSESSMENT

DADS has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Barbara Blankenship at (512) 438-5502 in DADS Regulatory Services. Written comments on the proposal may be submitted to Barbie Blankenship at 701 West 51st Street, Austin, Texas, 78751, Mail Code E-370; or via email to barbara.blankenship@dads.state.tx.us. To be considered, comments must be submitted no later than 30 days after the date of this issue of the Texas Register. If the last day to submit comments falls on a Saturday or a Sunday, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to DADS before 5:00 p.m. on DADS last state working day of the comment period; or (3) faxed or emailed by midnight on the last day of the comment period. When faxing or emailing comments, please indicate "Comments on Proposed Rule 16R11" in the subject line.

SUBCHAPTER A. PURPOSE, SCOPE, LIMITATIONS, COMPLIANCE, AND DEFINITIONS

40 TAC §15.5

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Health and Safety Code, §248A.101, which authorizes the HHSC executive commissioner to adopt rules governing the licensure of prescribed pediatric extended care centers.

The amendment implements Texas Government Code, §531.0055, and Texas Health and Safety Code, §248A.101.

§15.5.Definitions.

The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise.

(1) - (6) (No change.)

(7) Applicant--A person who applies for a license to operate a center under THSC Chapter 248A and this chapter. The applicant is the person in whose name DADS issues the license.

(8) - (12) (No change.)

(13) Change of ownership--An event that occurs when a centers license holder has a different federal taxpayer identification number than a prospective license holders federal taxpayer identification number, except that the substitution of a personal representative for a deceased license holder is not a change of ownership.

(14) [(13)] Chemical restraint--The use of any chemical, including pharmaceuticals, through topical application, oral administration, injection, or other means, to restrict the free movement of all or a portion of a minor's body for the purpose of modifying or controlling the minor's behavior and which is not a standard treatment for a minor's medical or psychosocial condition.

(15) [(14)] Chief financial officer--An individual who is responsible for supervising and managing all financial activities for a center.

(16) [(15)] Clinical note--A notation of a contact with a minor or a minor's family member that is written and dated by any staff providing services on behalf of a center and that describes signs and symptoms of the minor, and treatments and medications administered to the minor, including the minor's reaction or response, and any changes in physical, emotional, psychosocial, or spiritual condition of the minor during a given period of time.

(17) [(16)] Commission--The Texas Health and Human Services Commission.

(18) [(17)] Commissioner--The commissioner of DADS [the Department of Aging and Disability Services (DADS)].

(19) [(18)] Community disaster resources--A local, statewide, or nationwide emergency system that provides information and resources during a disaster, including weather information, transportation, evacuation and shelter information, disaster assistance and recovery efforts, evacuee and disaster victim resources, and resources for locating evacuated friends and relatives.

(20) [(19)] Complaint--An allegation against a center or involving services provided at a center that involves a violation of this chapter or THSC Chapter 248A.

(21) [(20)] Continuous face-to-face observation--Maintaining an in-person line of sight of a minor that is uninterrupted and free from distraction.

(22) [(21)] Contractor--An individual providing services ordered by a prescribing physician on behalf of a center that the center would otherwise provide by its employees.

(23) [(22)] Controlling person--A person who has the ability, acting alone or in concert with others, to directly or indirectly influence, direct, or cause the direction of the management of, expenditure of money for, or policies of a center or other person.

(A) - (C) (No change.)

(24) [(23)] Conviction--An adjudication of guilt based on a finding of guilt, a plea of guilty, or a plea of nolo contendere.

(25) [(24)] DADS--Department of Aging and Disability Services or its successor agency.

(26) [(25)] Daily census--The number of minors served at a center during a center's hours of operation for a 24-hour period, starting at midnight.

(27) [(26)] Day--A calendar day, unless otherwise specified in the text. A calendar day includes Saturday, Sunday, and a holiday.

(28) [(27)] Dietitian--A person who has a valid license under the Licensed Dietitian Act, Texas Occupations Code, Chapter 701, as a licensed dietitian or provisional licensed dietitian, or who is registered as a dietitian by the Commission on Dietetic Registration of the American Dietetic Association.

(29) Direct ownership interest--Ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder.

(30) Disclosable interest--Five percent or more direct or indirect ownership interest in an applicant or license holder.

(31) [(28)] Emergency situation--An impending or actual situation that:

(A) - (D) (No change.)

(32) [(29)] Executive commissioner--The executive commissioner of the Texas Health and Human Services Commission.

(33) [(30)] Functional assessment--An evaluation of a minor's abilities, wants, interests, and needs related to self-care, communication skills, social skills, motor skills, play with toys or objects, growth, and development appropriate for age.

(34) [(31)] Health care provider--An individual or facility licensed, certified, or otherwise authorized to administer health care in the ordinary course of business or professional practice.

(35) [(32)] Health care setting--A location at which licensed, certified, or otherwise regulated health care is administered.

(36) [(33)] IDT--Interdisciplinary team. Individuals who work together to meet the medical, nursing, psychosocial, and developmental needs of a minor and a minor's parent's training needs.

(37) [(34)] Inactive medical record--A record for a minor who was admitted by a center to receive services and was subsequently discharged by the center.

(38) Indirect ownership interest--Any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder.

(39) [(35)] Inspection--An on-site examination or audit of a center by DADS to determine compliance with THSC Chapter 248A and this chapter.

(40) [(36)] Isolation--The involuntary confinement of a minor in a room of a center for the purposes of infection control, assessment, and observation away from other minors in a room at the center. When in isolation, a minor is physically prevented from contact with other minors.

(41) [(37)] Joint training--Training provided by DADS to service providers and DADS inspectors on subjects that address the 10 most commonly cited violations of state law governing centers, as published in DADS annual reports. DADS determines the frequency of joint training.

(42) [(38)] License--A license to operate a center issued by DADS under THSC Chapter 248A and this chapter. The term includes initial, renewal, and temporary licenses unless specifically stated otherwise.

(43) [(39)] Licensed assistant in speech-language pathology--A person who has a valid license under Texas Occupations Code, Chapter 401, as a licensed assistant in speech-language pathology and who provides speech language support services under the supervision of a licensed speech-language pathologist.

(44) License holder--A person that holds a license to operate a center under THSC Chapter 248A and this chapter.

(45) [(40)] Licensed vocational nurse--LVN. A person who has a valid license under Texas Occupations Code, Chapter 301, as a licensed vocational nurse.

(46) [(41)] Life Safety Code--A publication of the National Fire Protection Association (NFPA), also known as NFPA 101, 2000 edition.

(47) [(42)] Local emergency management agencies--The local emergency management coordinator, fire, police, and emergency medical services.

(48) [(43)] Local emergency management coordinator--The person identified as the emergency management coordinator by the mayor or county judge for the geographical area in which a center is located.

(49) [(44)] Mechanical restraint--The use of any mechanical device, material, or equipment to restrict the free movement of all or a portion of a minor's body for the purpose of modifying or controlling the minor's behavior.

(50) [(45)] Medical director--A physician who has the qualifications described in §15.307 of this chapter (relating to Medical Director Qualifications and Conditions) and has the responsibilities described in §15.308 of this chapter (relating to Medical Director Responsibilities).

(51) [(46)] Medical record--A record composed first-hand for a minor who has or is receiving services at a center.

(52) [(47)] Medically dependent or technologically dependent--The condition of an individual who, because of an acute, chronic, or intermittent medically complex or fragile condition or disability, requires ongoing, technology-based skilled nursing care prescribed by a physician to avert death or further disability, or the routine use of a medical device to compensate for a deficit in a life-sustaining body function. The term does not include a controlled or occasional medical condition that does not require continuous nursing care, including asthma or diabetes, or a condition that requires an epinephrine injection.

(53) [(48)] Medication administration record--A record used to document the administration of a minor's medications and pharmaceuticals.

(54) [(49)] Medication list--A list that includes all prescriptions, over-the-counter pharmaceuticals, and supplements that a minor is prescribed or taking, including the dosage, preparation, frequency, and the method of administration.

(55) [(50)] Minor--An individual younger than 21 years of age who is medically dependent or technologically dependent.

(56) [(51)] Mitigation--An action taken to eliminate or reduce the probability of an emergency or public health emergency, or reduce an emergency's severity or consequences.

(57) [(52)] Nursing director--The individual responsible for supervising skilled services provided at a center and who has the qualifications described in §15.309 of this chapter (relating to the Nursing Director and Alternate Nursing Director Qualifications and Conditions).

(58) [(53)] Nutritional counseling--Advising and assisting an adult minor or a minor's parent or family on appropriate nutritional intake by integrating information from a nutrition assessment with information on food and other sources of nutrients and meal preparation consistent with cultural background and socioeconomic status, with the goal being health promotion, disease prevention, and nutrition education. The term includes:

(A) - (E) (No change.)

(59) [(54)] Occupational therapist--A person who has a valid license under Texas Occupations Code, Chapter 454, as an occupational therapist.

(60) [(55)] Occupational therapy assistant--A person who has a valid license under Texas Occupations Code, Chapter 454, as an occupational therapy assistant who assists in the practice of occupational therapy under the general supervision of an occupational therapist.

(61) [(56)] Operating hours--The days of the week and the hours of day a center is open for services to a minor as identified in a center's written policy as required by §15.201 of this chapter (relating to Operating Hours).

(62) [(57)] Overnight--The hours between 9:00 p.m. and 5:00 a.m. during the days of the week a center operates.

(63) [(58)] Over-the-counter pharmaceuticals--A drug or formulary for which a physician's prescription is not needed for purchase or administration.

(64) [(59)] Parent--A person authorized by law to act on behalf of a minor with regard to a matter described in this chapter. The term includes:

(A) - (D) (No change.)

(65) [(60)] Parent company--A person, other than an individual, who has a direct 100 percent ownership interest in the owner of a center.

(66) [(61)] Person--An individual, firm, partnership, corporation, association, or joint stock association, and the legal successor thereof.

[(62) Person with a disclosable interest--A person who owns at least a five percent interest in any corporation, partnership, or other business entity that is required to be licensed under THSC Chapter 248A. A person with a disclosable interest does not include a bank, savings and loan, savings bank, trust company, building and loan association, credit union, individual loan and thrift company, investment banking firm, or insurance company, unless these entities participate in the management of the center.]

(67) [(63)] Personal care services--Services required by a minor, including:

(A) - (O) (No change.)

(68) [(64)] Pharmaceuticals--Of or pertaining to drugs, including over-the-counter drugs and those requiring a physician's prescription for purchase or administration.

(69) [(65)] Pharmacist--A person who is licensed to practice pharmacy under Texas Occupations Code, Chapter 558.

(70) [(66)] Pharmacy--A facility at which a prescription drug or medication order is received, processed, or dispensed as defined in Texas Occupations Code §551.003.

(71) [(67)] Physical restraint--The use of physical force, except for physical guidance or prompting of brief duration, that restricts the free movement of all or a portion of a minor's body for the purpose of modifying or controlling the minor's behavior.

(72) [(68)] Physical therapist--A person who has a valid license under Texas Occupations Code, Chapter 453, as a physical therapist.

(73) [(69)] Physical therapist assistant--A person who has a valid license under Texas Occupations Code, Chapter 453, as a physical therapist assistant and:

(A) - (B) (No change.)

(74) [(70)] Physician--A person who:

(A) - (C) (No change.)

(75) [(71)] Place of business--An office of a center where medical records are maintained and from which services are directed.

(76) [(72)] Plan of care--A protocol of care.

(77) [(73)] Positive intervention--An intervention that is based on or uses a minor's preferences as positive reinforcement, and focuses on positive outcomes and wellness for the minor.

(78) [(74)] Pre-licensing program training--Computer-based training, available on DADS website, designed to acquaint center staff with licensure standards.

(79) [(75)] Preparedness--Actions taken in anticipation of a disaster including a public health disaster.

(80) [(76)] Prescribing physician--A physician who is authorized to write and issue orders for services at a center.

(81) [(77)] Progress note--A dated and signed written notation summarizing facts about services provided to a minor and the minor's response during a given period of time.

(82) [(78)] Protective device--A mechanism or treatment, including sedation, that is:

(A) - (B) (No change.)

(83) [(79)] Protocol of care--A comprehensive, interdisciplinary plan of care that includes the medical physician's plan of care, nursing care plan and protocols, psychosocial needs, and therapeutic and developmental service needs required by a minor and family served.

(84) [(80)] Psychologist--A person who has a valid license under Texas Occupations Code, Chapter 501, as a psychologist.

(85) [(81)] Psychosocial treatment--The provision of skilled services to a minor under the direction of a physician that includes one or more of the following:

(A) - (D) (No change.)

(86) [(82)] Public health disaster declaration--A governor's announcement based on a determination by the Department of State Health Services that there exists an immediate threat from a communicable disease that:

(A) - (B) (No change.)

(87) [(83)] Quiet time--A behavior management technique used to provide a minor with an opportunity to regain self-control, where the minor enters and remains for a limited period of time in a designated area from which egress is not prevented.

(88) [(84)] Recovery--Activities implemented during and after a disaster response, including a public health disaster response, designed to return a center to its normal operations as quickly as possible.

(89) [(85)] Registered nurse--RN. A person who has a valid license under Texas Occupations Code, Chapter 301, to practice professional nursing.

(90) [(86)] Relocation--The closing of a center and the movement of its business operations to another location.

(91) [(87)] Respiratory therapist--A person who has a valid license under Texas Occupations Code, Chapter 604, as a respiratory care practitioner.

(92) [(88)] Response--Actions taken immediately before an impending disaster or during and after a disaster, including a public health disaster, to address the immediate and short-term effects of the disaster.

(93) [(89)] Restraint--Physical restraint, chemical restraint, or mechanical restraint.

(94) [(90)] RN delegation--Delegation of tasks by an RN in accordance with 22 TAC Chapter 224 (relating to Delegation of Nursing Tasks by Registered Professional Nurses to Unlicensed Personnel for Clients with Acute Conditions or in Acute Care Environments).

(95) [(91)] Sedation--The act of allaying nervous excitement by administering medication that commonly induces the nervous system to calm. Sedation is a protective device.

(96) [(92)] Social worker--A person who has a valid license under Texas Occupations Code, Chapter 505, as a social worker.

(97) [(93)] Speech-language pathologist--A person who has a valid license under Texas Occupations Code, Chapter 401, as a speech-language pathologist.

(98) [(94)] Substantial compliance--A finding in which a center receives no recommendation for enforcement action after an inspection.

(99) [(95)] Supervision--Authoritative procedural guidance by a qualified person that instructs another person and assists in accomplishing a function or activity. Supervision includes initial direction and periodic inspection of the actual act of accomplishing the function or activity.

(100) [(96)] Support services--Social, spiritual, and emotional care provided to a minor and a minor's parent by a center.

(101) [(97)] THSC--Texas Health and Safety Code.

(102) [(98)] Total census--The total number of minors with active plans of care at a center.

(103) [(99)] Transition support--Planning, coordination, and assistance to move the location of services provided to a minor from a center to the least restrictive setting appropriate.

(104) [(100)] Violation--A finding of noncompliance with this chapter or THSC Chapter 248A resulting from an inspection.

(105) [(101)] Volunteer--An individual who provides assistance to a center without compensation other than reimbursement for actual expenses.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701205

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


SUBCHAPTER B. LICENSING APPLICATION, MAINTENANCE, AND FEES

40 TAC §15.107

STATUTORY AUTHORITY

The repeal is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Health and Safety Code, §248A.101, which authorizes the HHSC executive commissioner to adopt rules governing the licensure of prescribed pediatric extended care centers.

The repeal implements Texas Government Code, §531.0055, and Texas Health and Safety Code, §248A.101.

§15.107.Change of Ownership.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701207

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


40 TAC §15.108

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Health and Safety Code, §248A.101, which authorizes the HHSC executive commissioner to adopt rules governing the licensure of prescribed pediatric extended care centers.

The amendment implements Texas Government Code, §531.0055, and Texas Health and Safety Code, §248A.101.

§15.108.Change of Ownership License Application Procedures and Issuance.

(a) A center license is not assignable or transferable. If a change of ownership occurs, the applicant [license holder's license becomes invalid on the date DADS acknowledges the change of ownership. The prospective new license holder] must obtain a license in accordance with subsection (c) of this section.

(b) An application for a center license when there is a change of ownership is an application for an initial license.

(c) An applicant [A prospective new license holder] must submit to DADS:

(1) - (2) (No change.)

(3) a letter of credit for $250,000 from a bank that is insured by the Federal Deposit Insurance Corporation, or other documentation acceptable to DADS, to demonstrate the [an] applicant's financial viability; and

(4) signed written notice from the [a] center's existing license holder of intent to transfer operation of the center to the [an] applicant beginning on a date specified by the [an] applicant, unless waived in accordance with subsection (f) of this section.

(d) DADS may deny issuance of a license if the [an] applicant, a controlling person, or any person required to submit background and qualification information fails to meet the criteria for a license established in §15.101 of this subchapter or for any reason specified in §15.115 of this subchapter (relating to Criteria for Denial of a License).

(e) To avoid a center operating without a license, an applicant [a prospective license holder] must submit all items in subsection (c) of this section at least 30 days before the anticipated date of the change of ownership in accordance with DADS application instructions.

(f) The 30-day notice required by subsection (e) of this section may be waived by DADS if:

(1) the applicant [prospective license holder] presents evidence to DADS demonstrating that an eviction of the center or a foreclosure of the property from which the center operates is imminent and that circumstance prevented the timely submission of the notice; or

(2) DADS, in its sole discretion, determines that circumstances are present that threaten a minor's health, safety, or welfare and [which] necessitate waiver of timely submission of the notice.

(g) DADS conducts an on-site health inspection to verify compliance with the licensure requirements before issuing a license as a result of a change of ownership. DADS may conduct a desk review instead of an on-site health inspection before issuing a license as a result of a change of ownership if:

(1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or

(2) every person with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

(h) DADS, in its sole discretion, may conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership.

(i) [(g)] If an applicant meets the requirements for a license [of Subchapter E of this chapter (relating to Building Requirements) and passes a health inspection], DADS issues a license. The effective date of the license is the same date as the effective date of the change of ownership and cannot precede the date the application was received by DADS Licensing and Credentialing Unit.

(j) [(h)] The initial license issued to the new license holder expires on the second anniversary of the effective date.

(k) [(i)] The previous license holder's license is invalid [void] on the effective date of the new license holder's initial license.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701206

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


CHAPTER 19. NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION

The Texas Health and Human Services Commission (HHSC), on behalf of the Department of Aging and Disability Services (DADS), proposes amendments to §19.101, concerning Definitions; and §19.210, concerning Change of Ownership License, in Chapter 19, Nursing Facility Requirements for Licensure and Medicaid Certification.

BACKGROUND AND PURPOSE

The purpose of the proposed amendments is to revise the definitions and rules regarding a change of ownership to simplify the process for determining when a nursing facility (NF) is required to obtain a new license as a result of change of ownership.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §19.101 adds new definitions for "change of ownership," "direct ownership interest," "disclosable interest," "indirect ownership," and "license holder." The proposed amendment also removes the term "person with a disclosable interest," because it is unnecessary if the term "disclosable interest" is defined. The proposed amendment also includes minor editorial changes for clarity and consistency.

The proposed amendment to §19.210 removes the description of when a change of ownership occurs, because a definition of "change of ownership" is proposed in §19.101. The proposed amendment also adds that DADS conducts an on-site health inspection after issuing a license as a result of a change of ownership, except that a desk review may be conducted instead if less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or if every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder. The proposed amendment clarifies that DADS may also conduct an on-site Life Safety Code inspection after issuing a license as a result of a change of ownership. The proposed amendment requires a license holder who does not undergo a change of ownership but adds an owner with a disclosable interest to notify DADS of that change no later than 30 days after the addition of the owner. The proposed amendment also includes minor editorial changes for clarity and consistency.

FISCAL NOTE

David Cook, Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments are in effect, enforcing or administering the amendments does not have foreseeable implications relating to costs or revenues of state or local governments.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

DADS has determined that the proposed amendments will not have an adverse economic effect on small businesses or micro-businesses, because the proposed amendments do not impose requirements that result in a cost to providers.

PUBLIC BENEFIT AND COSTS

Mary T. Henderson, Associate Commissioner for DADS Regulatory Services, has determined that, for each year of the first five years the amendments are in effect, the public benefit expected as a result of enforcing the amendments is a reduction in paperwork and fewer on-site surveys associated with changes of ownership that are unlikely to affect services provided by a license holder.

Mr. Cook anticipates that there will not be an economic cost to persons who are required to comply with the amendments. The amendments will not affect a local economy.

TAKINGS IMPACT ASSESSMENT

DADS has determined that this proposal does not restrict or limit an owners right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Barbara Blankenship at (512) 438-5502 in DADS Regulatory Services Division. Written comments on the proposal may be submitted to Barbie Blankenship at 701 West 51st Street, Austin, Texas, 78751, Mail Code E-370; or via email to barbara.blankenship@dads.state.tx.us. To be considered, comments must be submitted no later than 30 days after the date of this issue of the Texas Register. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to DADS before 5:00 p.m. on DADS last state working day of the comment period; or (3) faxed or emailed by midnight on the last day of the comment period. When faxing or emailing comments, please indicate "Comments on Proposed Rule 16R11" in the subject line.

SUBCHAPTER B. DEFINITIONS

40 TAC §19.101

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS; and Texas Health and Safety Code, Chapter 242, which authorized DADS to license nursing facilities.

The amendment implements Texas Government Code, §531.0055 and Texas Health and Safety Code, Chapter 242.

§19.101.Definitions.

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) - (18) (No change.)

(19) Change of ownership--An event that occurs when a facilitys license holder has a different federal taxpayer identification number than the prospective license holders federal taxpayer identification number, except that the substitution of a personal representative for a deceased license holder is not a change of ownership.

(20) [(19)] CFR--Code of Federal Regulations.

(21) [(20)] CMS--Centers for Medicare & Medicaid Services, formerly the Health Care Financing Administration (HCFA).

(22) [(21)] Complaint--Any allegation received by DADS other than an incident reported by the facility. Such allegations include, but are not limited to, abuse, neglect, exploitation, or violation of state or federal standards.

(23) [(22)] Completion date--The date an RN assessment coordinator signs an MDS assessment as complete.

(24) [(23)] Comprehensive assessment--An interdisciplinary description of a residents needs and capabilities including daily life functions and significant impairments of functional capacity, as described in §19.801(2) of this chapter (relating to Resident Assessment).

(25) [(24)] Comprehensive care plan--A plan of care prepared by an interdisciplinary team that includes measurable short-term and long-term objectives and timetables to meet the residents needs developed for each resident after admission. The plan addresses at least the following needs: medical, nursing, rehabilitative, psychosocial, dietary, activity, and residents rights. The plan includes strategies developed by the team, as described in §19.802(b)(2) of this chapter (relating to Comprehensive Care Plans), consistent with the physicians prescribed plan of care, to assist the resident in eliminating, managing, or alleviating health or psychosocial problems identified through assessment. Planning includes:

(A) - (D) (No change.)

(26) [(25)] Controlled substance--A drug, substance, or immediate precursor as defined in the Texas Controlled Substance Act, Texas Health and Safety Code, Chapter 481, or the Federal Controlled Substance Act of 1970, Public Law 91-513.

(27) [(26)] Controlling person--A person with the ability, acting alone or in concert with others, to directly or indirectly, influence, direct, or cause the direction of the management, expenditure of money, or policies of a nursing facility or other person. A controlling person does not include a person, such as an employee, lender, secured creditor, or landlord, who does not exercise any influence or control, whether formal or actual, over the operation of a facility. A controlling person includes:

(A) - (D) (No change.)

(28) [(27)] Covert electronic monitoring--The placement and use of an electronic monitoring device that is not open and obvious, and the facility and DADS have not been informed about the device by the resident, by a person who placed the device in the room, or by a person who uses the device.

(29) [(28)] DADS--The Department of Aging and Disability Services or its successor agency.

(30) [(29)] Dangerous drugs--Any drug as defined in the Texas Health and Safety Code, Chapter 483.

(31) [(30)] Dentist--A practitioner licensed by the Texas State Board of Dental Examiners.

(32) [(31)] Department--Department of Aging and Disability Services or its successor agency.

(33) [(32)] DHS--This term referred to the Texas Department of Human Services; it now refers to DADS, unless the context concerns an administrative hearing. Administrative hearings were formerly the responsibility of DHS; they now are the responsibility of the Texas Health and Human Services Commission (HHSC).

(34) [(33)] Dietitian--A qualified dietitian is one who is qualified based upon either:

(A) - (B) (No change.)

(35) [(34)] Direct care by licensed nurses--Direct care consonant with the physicians planned regimen of total resident care includes:

(A) - (E) (No change.)

(36) Direct ownership interest--Ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder.

(37) Disclosable interest--Five percent or more direct or indirect ownership interest in an applicant or license holder.

(38) [(35)] Distinct part--That portion of a facility certified to participate in the Medicaid Nursing Facility program.

(39) [(36)] Drug (also referred to as medication)--Any of the following:

(A) - (D) (No change.)

(40) [(37)] Electronic monitoring device--Video surveillance cameras and audio devices installed in a residents room, designed to acquire communications or other sounds that occur in the room. An electronic, mechanical, or other device used specifically for the nonconsensual interception of wire or electronic communication is excluded from this definition.

(41) [(38)] Emergency--A sudden change in a residents condition requiring immediate medical intervention.

(42) [(39)] Executive Commissioner--The executive commissioner of the Health and Human Services Commission.

(43) [(40)] Exploitation--The illegal or improper act or process of a caregiver, family member, or other individual who has an ongoing relationship with a resident using the resources of the resident for monetary or personal benefit, profit, or gain without the informed consent of the resident.

(44) [(41)] Exposure (infections)--The direct contact of blood or other potentially infectious materials of one person with the skin or mucous membranes of another person. Other potentially infectious materials include the following human body fluids: semen, vaginal secretions, cerebrospinal fluid, peritoneal fluid, amniotic fluid, saliva in dental procedures, and body fluid that is visibly contaminated with blood and all body fluids when it is difficult or impossible to differentiate between body fluids.

(45) [(42)] Facility--Unless otherwise indicated, a facility is an institution that provides organized and structured nursing care and service and is subject to licensure under Texas Health and Safety Code, Chapter 242.

(A) - (C) (No change.)

(46) [(43)] Family council--A group of family members, friends, or legal guardians of residents, who organize and meet privately or openly.

(47) [(44)] Family representative--An individual appointed by the resident to represent the resident and other family members, by formal or informal arrangement.

(48) [(45)] Fiduciary agent--An individual who holds in trust anothers monies.

(49) [(46)] Free choice--Unrestricted right to choose a qualified provider of services.

(50) [(47)] Goals--Long-term: general statements of desired outcomes. Short-term: measurable time-limited, expected results that provide the means to evaluate the residents progress toward achieving long-term goals.

(51) [(48)] Governmental unit--A state or a political subdivision of the state, including a county or municipality.

(52) [(49)] HCFA--Health Care Financing Administration, now the Centers for Medicare & Medicaid Services (CMS).

(53) [(50)] Health care provider--An individual, including a physician, or facility licensed, certified, or otherwise authorized to administer health care, in the ordinary course of business or professional practice.

(54) [(51)] Hearing--A contested case hearing held in accordance with the Administrative Procedure Act, Texas Government Code, Chapter 2001, and the formal hearing procedures in 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act) and Chapter 91 of this title (relating to Hearings Under the Administrative Procedure Act).

(55) [(52)] HIV--Human Immunodeficiency Virus.

(56) [(53)] Incident--An abnormal event, including accidents or injury to staff or residents, which is documented in facility reports. An occurrence in which a resident may have been subject to abuse, neglect, or exploitation must also be reported to DADS.

(57) Indirect ownership interest--Any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder.

(58) [(54)] Infection control--A program designed to prevent the transmission of disease and infection in order to provide a safe and sanitary environment.

(59) [(55)] Inspection--Any on-site visit to or survey of an institution by DADS for the purpose of licensing, monitoring, complaint investigation, architectural review, or similar purpose.

(60) [(56)] Interdisciplinary care plan--See the definition of "comprehensive care plan."

(61) [(57)] Involuntary seclusion--Separation of a resident from others or from the residents room or confinement to the residents room, against the residents will or the will of a person who is legally authorized to act on behalf of the resident. Monitored separation from other residents is not involuntary seclusion if the separation is a therapeutic intervention that uses the least restrictive approach for the minimum amount of time, not exceed to 24 hours, until professional staff can develop a plan of care to meet the residents needs.

(62) [(58)] IV--Intravenous.

(63) [(59)] Legend drug or prescription drug--Any drug that requires a written or telephonic order of a practitioner before it may be dispensed by a pharmacist, or that may be delivered to a particular resident by a practitioner in the course of the practitioners practice.

(64) License holder--A person that holds a license to operate a facility.

(65) [(60)] Licensed health professional--A physician; physician assistant; advanced practice registered nurse; physical, speech, or occupational therapist; pharmacist; physical or occupational therapy assistant; registered professional nurse; licensed vocational nurse; licensed dietitian; or licensed social worker.

(66) [(61)] Licensed nursing home (facility) administrator--A person currently licensed by DADS in accordance with Chapter 18 of this title (relating to Nursing Facility Administrators).

(67) [(62)] Licensed vocational nurse (LVN)--A nurse who is currently licensed by the Texas Board of Nursing as a licensed vocational nurse.

(68) [(63)] Life Safety Code (also referred to as the Code or NFPA 101)--The Code for Safety to Life from Fire in Buildings and Structures, Standard 101, of the National Fire Protection Association (NFPA).

(69) [(64)] Life safety features--Fire safety components required by the Life Safety Code, including, but not limited to, building construction, fire alarm systems, smoke detection systems, interior finishes, sizes and thicknesses of doors, exits, emergency electrical systems, and sprinkler systems.

(70) [(65)] Life support--Use of any technique, therapy, or device to assist in sustaining life. (See §19.419 of this chapter (relating to Advance Directives)).

(71) [(66)] Local authorities--Persons, including, but not limited to, local health authority, fire marshal, and building inspector, who may be authorized by state law, county order, or municipal ordinance to perform certain inspections or certifications.

(72) [(67)] Local health authority--The physician appointed by the governing body of a municipality or the commissioners court of the county to administer state and local laws relating to public health in the municipalitys or countys jurisdiction as defined in Texas Health and Safety Code, §121.021.

(73) [(68)] Long-term care-regulatory--DADS Regulatory Services Division, which is responsible for surveying nursing facilities to determine compliance with regulations for licensure and certification for Title XIX participation.

(74) [(69)] Manager--A person, other than a licensed nursing home administrator, having a contractual relationship to provide management services to a facility.

(75) [(70)] Management services--Services provided under contract between the owner of a facility and a person to provide for the operation of a facility, including administration, staffing, maintenance, or delivery of resident services. Management services do not include contracts solely for maintenance, laundry, or food service.

(76) [(71)] MDS--Minimum data set. See Resident Assessment Instrument (RAI).

(77) [(72)] MDS nurse reviewer--A registered nurse employed by HHSC to monitor the accuracy of the MDS assessment submitted by a Medicaid-certified nursing facility.

(78) [(73)] Medicaid applicant--A person who requests the determination of eligibility to become a Medicaid recipient.

(79) [(74)] Medicaid nursing facility vendor payment system--Electronic billing and payment system for reimbursement to nursing facilities for services provided to eligible Medicaid recipients.

(80) [(75)] Medicaid recipient--A person who meets the eligibility requirements of the Title XIX Medicaid program, is eligible for nursing facility services, and resides in a Medicaid-participating facility.

(81) [(76)] Medical director--A physician licensed by the Texas Medical Board, who is engaged by the nursing home to assist in and advise regarding the provision of nursing and health care.

(82) [(77)] Medical necessity (MN)--The determination that a recipient requires the services of licensed nurses in an institutional setting to carry out the physicians planned regimen for total care. A recipients need for custodial care in a 24-hour institutional setting does not constitute a medical need. A group of health care professionals employed or contracted by the state Medicaid claims administrator contracted with HHSC makes individual determinations of medical necessity regarding nursing facility care. These health care professionals consist of physicians and registered nurses.

(83) [(78)] Medical power of attorney--The legal document that designates an agent to make treatment decisions if the individual designator becomes incapable.

(84) [(79)] Medical-social care plan--See Interdisciplinary Care Plan.

(85) [(80)] Medically related condition--An organic, debilitating disease or health disorder that requires services provided in a nursing facility, under the supervision of licensed nurses.

(86) [(81)] Medication aide--A person who holds a current permit issued under the Medication Aide Training Program as described in Chapter 95 of this title (relating to Medication Aides--Program Requirements) and acts under the authority of a person who holds a current license under state law which authorizes the licensee to administer medication.

(87) [(82)] Misappropriation of funds--The taking, secretion, misapplication, deprivation, transfer, or attempted transfer to any person not entitled to receive any property, real or personal, or anything of value belonging to or under the legal control of a resident without the effective consent of the resident or other appropriate legal authority, or the taking of any action contrary to any duty imposed by federal or state law prescribing conduct relating to the custody or disposition of property of a resident.

(88) [(83)] Neglect--The failure to provide goods or services, including medical services that are necessary to avoid physical or emotional harm, pain, or mental illness.

(89) [(84)] NHIC--This term referred to the National Heritage Insurance Corporation. It now refers to the state Medicaid claims administrator.

(90) [(85)] Nonnursing personnel--Persons not assigned to give direct personal care to residents; including administrators, secretaries, activities directors, bookkeepers, cooks, janitors, maids, laundry workers, and yard maintenance workers.

(91) [(86)] Nurse aide--An individual who provides nursing or nursing-related services to residents in a facility under the supervision of a licensed nurse. This definition does not include an individual who is a licensed health professional, a registered dietitian, or someone who volunteers such services without pay. A nurse aide is not authorized to provide nursing or nursing-related services for which a license or registration is required under state law. Nurse aides do not include those individuals who furnish services to residents only as paid feeding assistants.

(92) [(87)] Nurse aide trainee--An individual who is attending a program teaching nurse aide skills.

(93) [(88)] Nurse practitioner--An advanced practice registered nurse.

(94) [(89)] Nursing assessment--See definition of "comprehensive assessment" and "comprehensive care plan."

(95) [(90)] Nursing care--Services provided by nursing personnel which include, but are not limited to, observation; promotion and maintenance of health; prevention of illness and disability; management of health care during acute and chronic phases of illness; guidance and counseling of individuals and families; and referral to physicians, other health care providers, and community resources when appropriate.

(96) [(91)] Nursing facility/home--An institution that provides organized and structured nursing care and service, and is subject to licensure under Texas Health and Safety Code, Chapter 242. The nursing facility may also be certified to participate in the Medicaid Title XIX program. Depending on context, these terms are used to represent the management, administrator, or other persons or groups involved in the provision of care to the residents; or to represent the physical building, which may consist of one or more floors or one or more units, or which may be a distinct part of a licensed hospital.

(97) [(92)] Nursing facility/home administrator--See the definition of "licensed nursing home (facility) administrator."

(98) [(93)] Nursing personnel--Persons assigned to give direct personal and nursing services to residents, including registered nurses, licensed vocational nurses, nurse aides, and medication aides. Unlicensed personnel function under the authority of licensed personnel.

(99) [(94)] Objectives--See definition of "goals."

(100) [(95)] OBRA--Omnibus Budget Reconciliation Act of 1987, which includes provisions relating to nursing home reform, as amended.

(101) [(96)] Ombudsman--An advocate who is a certified representative, staff member, or volunteer of the DADS Office of the State Long Term Care Ombudsman.

(102) [(97)] Optometrist--An individual with the profession of examining the eyes for defects of refraction and prescribing lenses for correction who is licensed by the Texas Optometry Board.

(103) [(98)] Paid feeding assistant--An individual who meets the requirements of §19.1113 of this chapter (relating to Paid Feeding Assistants) and who is paid to feed residents by a facility or who is used under an arrangement with another agency or organization.

(104) [(99)] PASARR or PASRR--Preadmission Screening and Resident Review.

(105) [(100)] Palliative Plan of Care--Appropriate medical and nursing care for residents with advanced and progressive diseases for whom the focus of care is controlling pain and symptoms while maintaining optimum quality of life.

(106) [(101)] Patient care-related electrical appliance--An electrical appliance that is intended to be used for diagnostic, therapeutic, or monitoring purposes in a patient care area, as defined in Standard 99 of the National Fire Protection Association.

(107) [(102)] Person--An individual, firm, partnership, corporation, association, joint stock company, limited partnership, limited liability company, or any other legal entity, including a legal successor of those entities.

[(103) Person with a disclosable interest--A person with a disclosable interest is any person who owns at least a 5.0 percent interest in any corporation, partnership, or other business entity that is required to be licensed under Texas Health and Safety Code, Chapter 242. A person with a disclosable interest does not include a bank, savings and loan, savings bank, trust company, building and loan association, credit union, individual loan and thrift company, investment banking firm, or insurance company, unless these entities participate in the management of the facility.]

(108) [(104)] Pharmacist--An individual, licensed by the Texas State Board of Pharmacy to practice pharmacy, who prepares and dispenses medications prescribed by a practitioner.

(109) [(105)] Physical restraint--See Restraints (physical).

(110) [(106)] Physician--A doctor of medicine or osteopathy currently licensed by the Texas Medical Board.

(111) [(107)] Physician assistant (PA)--

(A) - (C) (No change.)

(112) [(108)] Podiatrist--A practitioner whose profession encompasses the care and treatment of feet who is licensed by the Texas State Board of Podiatric Medical Examiners.

(113) [(109)] Poison--Any substance that federal or state regulations require the manufacturer to label as a poison and is to be used externally by the consumer from the original manufacturers container. Drugs to be taken internally that contain the manufacturers poison label, but are dispensed by a pharmacist only by or on the prescription order of a practitioner, are not considered a poison, unless regulations specifically require poison labeling by the pharmacist.

(114) [(110)] Practitioner--A physician, podiatrist, dentist, or an advanced practice registered nurse or physician assistant to whom a physician has delegated authority to sign a prescription order, when relating to pharmacy services.

(115) [(111)] PRN (pro re nata)--As needed.

(116) [(112)] Provider--The individual or legal business entity that is contractually responsible for providing Medicaid services under an agreement with DADS.

(117) [(113)] Psychoactive drugs--Drugs prescribed to control mood, mental status, or behavior.

(118) [(114)] Qualified surveyor--An employee of DADS who has completed state and federal training on the survey process and passed a federal standardized exam.

(119) [(115)] Quality assessment and assurance committee--A group of health care professionals in a facility who develop and implement appropriate action to identify and rectify substandard care and deficient facility practice.

(120) [(116)] Quality-of-care monitor--A registered nurse, pharmacist, or dietitian employed by DADS who is trained and experienced in long-term care facility regulation, standards of practice in long-term care, and evaluation of resident care, and functions independently of DADS Regulatory Services Division.

(121) [(117)] Recipient--Any individual residing in a Medicaid certified facility or a Medicaid certified distinct part of a facility whose daily vendor rate is paid by Medicaid.

(122) [(118)] Registered nurse (RN)--An individual currently licensed by the Texas Board of Nursing as a Registered Nurse in the State of Texas.

(123) [(119)] Reimbursement methodology--The method by which HHSC determines nursing facility per diem rates.

(124) [(120)] Remodeling--The construction, removal, or relocation of walls and partitions, the construction of foundations, floors, or ceiling-roof assemblies, the expanding or altering of safety systems (including, but not limited to, sprinkler, fire alarm, and emergency systems) or the conversion of space in a facility to a different use.

(125) [(121)] Renovation--The restoration to a former better state by cleaning, repairing, or rebuilding, including, but not limited to, routine maintenance, repairs, equipment replacement, painting.

(126) [(122)] Representative payee--A person designated by the Social Security Administration to receive and disburse benefits, act in the best interest of the beneficiary, and ensure that benefits will be used according to the beneficiarys needs.

(127) [(123)] Resident--Any individual residing in a nursing facility.

(128) [(124)] Resident assessment instrument (RAI)--An assessment tool used to conduct comprehensive, accurate, standardized, and reproducible assessments of each residents functional capacity as specified by the Secretary of the U.S. Department of Health and Human Services. At a minimum, this instrument must consist of the Minimum Data Set (MDS) core elements as specified by the Centers for Medicare & Medicaid Services (CMS); utilization guidelines; and Care Area Assessment (CAA) process.

(129) [(125)] Resident group--A group or council of residents who meet regularly to:

(A) - (D) (No change.)

(130) [(126)] Responsible party--An individual authorized by the resident to act for him as an official delegate or agent. Responsible party is usually a family member or relative, but may be a legal guardian or other individual. Authorization may be in writing or may be given orally.

(131) [(127)] Restraint hold--

(A) - (B) (No change.)

(132) [(128)] Restraints (chemical)--Psychoactive drugs administered for the purposes of discipline, or convenience, and not required to treat the residents medical symptoms.

(133) [(129)] Restraints (physical)--Any manual method, or physical or mechanical device, material or equipment attached, or adjacent to the residents body, that the individual cannot remove easily which restricts freedom of movement or normal access to ones body. The term includes a restraint hold.

(134) [(130)] RN assessment coordinator--A registered nurse who signs and certifies a comprehensive assessment of a residents needs, using the RAI, including the MDS, as specified by DADS.

(135) [(131)] RUG--Resource Utilization Group. A categorization method, consisting of 34 categories based on the MDS, that is used to determine a recipients service and care requirements and to determine the daily rate DADS pays a nursing facility for services provided to the recipient.

(136) [(132)] Secretary--Secretary of the U.S. Department of Health and Human Services.

(137) [(133)] Services required on a regular basis--Services which are provided at fixed or recurring intervals and are needed so frequently that it would be impractical to provide the services in a home or family setting. Services required on a regular basis include continuous or periodic nursing observation, assessment, and intervention in all areas of resident care.

(138) [(134)] SNF--A skilled nursing facility or distinct part of a facility that participates in the Medicare program. SNF requirements apply when a certified facility is billing Medicare for a residents per diem rate.

(139) [(135)] Social Security Administration--Federal agency for administration of social security benefits. Local social security administration offices take applications for Medicare, assist beneficiaries file claims, and provide information about the Medicare program.

(140) [(136)] Social worker--A qualified social worker is an individual who is licensed, or provisionally licensed, by the Texas State Board of Social Work Examiners as prescribed by the Texas Occupations Code, Chapter 505, and who has at least:

(A) - (B) (No change.)

(141) [(137)] Standards--The minimum conditions, requirements, and criteria established in this chapter with which an institution must comply to be licensed under this chapter.

(142) [(138)] State Medicaid claims administrator--The entity under contract with HHSC to process Medicaid claims in Texas.

(143) [(139)] State plan--A formal plan for the medical assistance program, submitted to CMS, in which the State of Texas agrees to administer the program in accordance with the provisions of the State Plan, the requirements of Titles XVIII and XIX, and all applicable federal regulations and other official issuances of the U.S. Department of Health and Human Services.

(144) [(140)] State survey agency--DADS is the agency, which through contractual agreement with CMS is responsible for Title XIX (Medicaid) survey and certification of nursing facilities.

(145) [(141)] Supervising physician--A physician who assumes responsibility and legal liability for services rendered by a physician assistant (PA) and has been approved by the Texas Medical Board to supervise services rendered by specific PAs. A supervising physician may also be a physician who provides general supervision of an advanced practice registered nurse providing services in a nursing facility.

(146) [(142)] Supervision--General supervision, unless otherwise identified.

(147) [(143)] Supervision (direct)--Authoritative procedural guidance by a qualified person for the accomplishment of a function or activity within his sphere of competence. If the person being supervised does not meet assistant-level qualifications specified in this chapter and in federal regulations, the supervisor must be on the premises and directly supervising.

(148) [(144)] Supervision (general)--Authoritative procedural guidance by a qualified person for the accomplishment of a function or activity within his sphere of competence. The person being supervised must have access to the qualified person providing the supervision.

(149) [(145)] Supervision (intermittent)--Authoritative procedural guidance by a qualified person for the accomplishment of a function or activity within his sphere of competence, with initial direction and periodic inspection of the actual act of accomplishing the function or activity. The person being supervised must have access to the qualified person providing the supervision.

(150) [(146)] Texas Register--A publication of the Texas Register Publications Section of the Office of the Secretary of State that contains emergency, proposed, withdrawn, and adopted rules issued by Texas state agencies. The Texas Register was established by the Administrative Procedure and Texas Register Act of 1975.

(151) [(147)] Therapeutic diet--A diet ordered by a physician as part of treatment for a disease or clinical condition, in order to eliminate, decrease, or increase certain substances in the diet or to provide food which has been altered to make it easier for the resident to eat.

(152) [(148)] Therapy week--A seven-day period beginning the first day rehabilitation therapy or restorative nursing care is given. All subsequent therapy weeks for a particular individual will begin on that day of the week.

(153) [(149)] Threatened violation--A situation that, unless immediate steps are taken to correct, may cause injury or harm to a residents health and safety.

(154) [(150)] Title II--Federal Old-Age, Survivors, and Disability Insurance Benefits of the Social Security Act.

(155) [(151)] Title XVI--Supplemental Security Income (SSI) of the Social Security Act.

(156) [(152)] Title XVIII--Medicare provisions of the Social Security Act.

(157) [(153)] Title XIX--Medicaid provisions of the Social Security Act.

(158) [(154)] Total health status--Includes functional status, medical care, nursing care, nutritional status, rehabilitation and restorative potential, activities potential, cognitive status, oral health status, psychosocial status, and sensory and physical impairments.

(159) [(155)] UAR--HHSCs Utilization and Assessment Review Section.

(160) [(156)] Uniform data set--See Resident Assessment Instrument (RAI).

(161) [(157)] Universal precautions--The use of barrier and other precautions to prevent the spread of blood-borne diseases.

(162) [(158)] Unreasonable confinement--Involuntary seclusion.

(163) [(159)] Vaccine preventable diseases--The diseases included in the most current recommendations of the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention.

(164) [(160)] Vendor payment--Payment made by DADS on a daily-rate basis for services delivered to recipients in Medicaid-certified nursing facilities. Vendor payment is based on the nursing facilitys approved-to-pay claim processed by the state Medicaid claims administrator. The Nursing Facility Billing Statement, subject to adjustments and corrections, is prepared from information submitted by the nursing facility, which is currently on file in the computer system as of the billing date. Vendor payment is made at periodic intervals, but not less than once per month for services rendered during the previous billing cycle.

(165) [(161)] Working day--Any 24-hour period, Monday through Friday, excluding state and federal holidays.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701208

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


SUBCHAPTER C. NURSING FACILITY LICENSURE APPLICATION PROCESS

40 TAC §19.210

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS; and Texas Health and Safety Code, Chapter 242, which authorizes DADS to license nursing facilities.

The amendment implements Texas Government Code, §531.0055 and Texas Health and Safety Code, Chapter 242.

§19.210.Change of Ownership and Notice of Changes [License].

(a) A license holder may not transfer its [the] license [as part of a change of ownership]. If there is a change of ownership, the license holders license becomes invalid on the date of the change of ownership. The new owner must obtain a change of ownership license in accordance with subsection (b) of this section. The license holder and new license applicant must notify DADS before a change of ownership occurs.

[(1) Sole proprietor. A change of ownership occurs if:]

[(A) the sole proprietor who is licensed to operate the facility sells or otherwise transfers its business of operating the facility to an entity not licensed to operate the facility; or]

[(B) upon the death of the sole proprietor, the facility continues to operate.]

[(2) General Partnership (as defined in the Texas Business Organizations Code, §1.002). A change of ownership occurs if:]

[(A) a partner of a general partnership that is licensed to operate the facility is added or substituted;]

[(B) the partnership that is licensed to operate the facility is sold or otherwise transferred to an entity that is not licensed to operate the facility;]

[(C) the entity that is licensed to operate the facility sells or otherwise transfers its business of operating the facility to an entity that is not licensed to operate the facility;]

[(D) for any reason other than correction of an error, the federal taxpayer identification number changes; or]

[(E) the entity that is licensed to operate the facility is terminated and fails or is ineligible to be reinstated, and the facility continues to operate.]

[(3) Limited Partnership (as defined in the Texas Business Organizations Code, §1.002). A change of ownership occurs if:]

[(A) a general partner of a limited partnership that is licensed to operate the facility is added or substituted;]

[(B) ownership of the limited partnership that is licensed to operate the facility changes by 50% or more and one or more controlling person is added;]

[(C) the partnership that is licensed to operate the facility is sold or otherwise transferred to an entity that is not licensed to operate the facility;]

[(D) the entity that is licensed to operate the facility sells or otherwise transfers its business of operating the facility to an entity that is not licensed to operate the facility;]

[(E) for any reason other than correction of an error, the federal taxpayer identification number changes; or]

[(F) the entity that is licensed to operate the facility is terminated and fails or is ineligible to be reinstated, and the facility continues to operate.]

[(4) Nonprofit organization. A change of ownership occurs if:]

[(A) the nonprofit organization that is licensed to operate the facility is sold or otherwise transferred to an entity that is not licensed to operate the facility;]

[(B) the entity that is licensed to operate the facility sells or otherwise transfers its business of operating the facility to an entity that is not licensed to operate the facility;]

[(C) for any reason other than correction of an error, the federal taxpayer identification number changes; or]

[(D) the entity that is licensed to operate the facility is terminated and fails or is ineligible to be reinstated, and the facility continues to operate.]

[(5) For-profit corporation or limited liability company. A change of ownership occurs if:]

[(A) ownership of the business entity that is licensed to operate the facility changes by 50% or more and one or more controlling person is added;]

[(B) the business entity that is licensed to operate the facility is sold or otherwise transferred to an entity that is not licensed to operate the facility;]

[(C) the entity that is licensed to operate the facility sells or otherwise transfers its business of operating the facility to an entity that is not licensed to operate the facility;]

[(D) for any reason other than correction of an error, the federal taxpayer identification number changes; or]

[(E) the entity that is licensed to operate the facility is terminated and fails or is ineligible to be reinstated, and the facility continues to operate.]

[(6) City, county, state or federal government authority, hospital district, or hospital authority. A change of ownership occurs if:]

[(A) the governmental entity that is licensed to operate the facility sells or otherwise transfers its business of operating the facility to an entity that is not licensed to operate the facility; or]

[(B) the entity that is licensed to operate the facility is terminated and the facility continues to operate.]

[(7) Trust, living trust, estate or any other entity type not included in paragraphs (1) - (6) of this subsection. A change of ownership occurs if:]

[(A) the entity that is licensed to operate the facility is sold or otherwise transferred to an entity that is not licensed to operate the facility;]

[(B) the entity that is licensed to operate the facility sells or otherwise transfers its business of operating the facility to an entity that is not licensed to operate the facility;]

[(C) for any reason other than correction of an error, the federal taxpayer identification number changes; or]

[(D) the entity that is licensed to operate the facility is terminated and the facility continues to operate.]

[(8) For license holders that have multiple-level ownership structures, a change of ownership also occurs if any action described in paragraphs (1) - (7) of this subsection occurs at any level of the license holders entire ownership structure.]

[(9) For paragraphs (3)(B) and (5)(A) of this subsection, the substitution of the executor of a decedents estate for a decedent is not the addition of a controlling person.]

[(10) A conversion as described in Subchapter C of Chapter 10 of the Texas Business Organizations Code is not a change of ownership if no controlling person is added.]

(b) The applicant [prospective new owner] must submit to DADS:

(1) - (3) (No change.)

(c) To avoid a facility operating while unlicensed, an applicant must submit all items in subsection (b) of this section at least 30 days before the anticipated date of the change of ownership [sale or other transfer to the new owner]. DADS considers an application as submitted timely if the application is postmarked at least 30 days before the anticipated date of the change of ownership [sale or other transfer to the new owner] and received in DADS Licensing and Credentialing Section, Regulatory Services Division, within 15 days after the date of the postmark.

(d) The 30-day notification from the applicant or the 30-day notification from the existing license holder or both may be waived if DADS determines that the applicant presented evidence showing that circumstances prevented the submission of the 30-day notice and if DADS determines that not waiving the 30-day notification would create a threat to resident welfare or health and safety. If the applicant submits a timely and sufficient application for a change of ownership license and meets all requirements for a license, DADS issues a change of ownership license effective on the date requested by the applicant.

(e) A change of ownership license is a 90-day temporary license issued to an applicant who proposes to become the new operator of a nursing facility that exists on the date the application is submitted. Upon receipt of a complete application, fee, and signed, written notice from the facilitys existing license holder of the intent to transfer the operation of the facility to the applicant beginning on a date specified by the applicant, DADS issues a change of ownership license to the applicant [prospective new owner] if DADS finds that the applicant [prospective new owner] and any other persons listed in §19.201(e) of this subchapter meet the requirements in §19.201(d)(1) and (f) of this subchapter.

(1) - (5) (No change.)

(6) DADS conducts an on-site health inspection to verify compliance with the licensure requirements after issuing a change of ownership license. DADS may conduct a desk review instead of an on-site health inspection after issuing a change of ownership license if:

(A) less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or

(B) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

(7) DADS, in its sole discretion, may conduct an on-site Life Safety Code inspection after issuing a change of ownership license.

[(7) DADS may allow a desk review in lieu of an on-site inspection or survey if:]

[(A) the facility specifically requests a desk review and submits evidence during the application process that no new controlling person is added;]

[(B) DADS determines the change does not involve a new controlling person; and]

[(C) the facility meets the standards for operation based on the most recent on-site inspection.]

(f) A [nursing facility] license holder may be eligible to acquire, on an expedited basis, a license to operate another existing nursing facility. A license holder that appears on the expedited change of ownership list may be granted expedited approval in obtaining a change of ownership license to operate another existing nursing facility in Texas.

(1) DADS maintains and keeps current a list of nursing facility license holders that operate an institution in Texas and that have met the criteria to qualify for an expedited change of ownership according to the information available to DADS.

(2) In order to establish and maintain the expedited change of ownership list, DADS uses the criteria found in §19.2322(e) of this chapter (relating to Medicaid Bed Allocation Requirements). A [nursing facility] license holder meeting these criteria appears on the list and is eligible to be issued, on an expedited basis, a change of ownership license to operate another existing institution in Texas.

(3) A [nursing facility] license holder appearing on the list must submit an affidavit that demonstrates the license holder continues to meet the criteria established for being listed on the expedited change of ownership list, and continues to meet the requirements in §19.201(d)(1) and (f) of this subchapter.

(4) DADS processes a change of ownership license application on an expedited basis for a [nursing facility] license holder on the list if DADS finds that the license holder and any other persons listed in §19.201(e) of this subchapter meet the requirements in §19.201(d)(1) and (f) of this subchapter.

(5) If the [nursing facility] license holder requesting a change of ownership license on an expedited basis complies with subsections (b) - (e) of this section, DADS approves or denies the application for a change of ownership license not later than the 15th day after the date of receipt of the complete application, fee, and signed, written notice from the facilitys existing license holder of the intent to transfer the operation of the facility to the applicant beginning on a date requested in the application. The effective date of the license is the later of the date requested in the application or the 31st day after the date DADS receives the application fee, and signed, written notice from the existing license holder, unless waived in accordance with subsection (d) of this section. The effective date of the change of ownership license cannot precede the date the application is received in DADS Licensing and Credentialing Section, Regulatory Services Division.

(6) An applicant for a change of ownership license on an expedited basis must meet all applicable requirements that an applicant for renewal of a license must meet. Any requirement relating to inspections or to an accreditation review applies only to institutions operated by the license holder at the time the application is made for the change of ownership license.

(g) If a license holder changes its name, but does not undergo a change of ownership, the license holder must notify DADS and submit documentation evidencing a legal name change [a copy of a certificate of amendment from the Secretary of States office]. On receipt of the notice and documentation, DADS re-issues [certificate of amendment,] the current license [will be re-issued] in the license holders new name.

(h) If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify DADS no later than 30 days after the addition of the owner.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701209

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


CHAPTER 90. INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS

The Texas Health and Human Services Commission (HHSC), on behalf of the Department of Aging and Disability Services (DADS), proposes amendments to §90.3, concerning Definitions; and §90.16, concerning Change of Ownership, in Chapter 90, Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions.

BACKGROUND AND PURPOSE

The proposed amendments revise requirements related to a change of ownership of a license holder for an intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID). Under the proposed amended rules, a license holder will not be required to apply for a new license if the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal tax identification number. The proposed amendments add definitions for terms related to a change of ownership and ownership interests, allow DADS to conduct a desk review instead of an on-site health survey if the applicant for a license resulting from a change of ownership meets certain requirements, and require a license holder that does not undergo a change of ownership but adds an owner with a disclosable interest to notify DADS of the addition no later than 30 days after the addition of the owner.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §90.3 amends the definition of "change of ownership" to reflect that change of ownership occurs when a prospective license holder has a different tax identification number than the current license holder of the same ICF/IID, except that the substitution of a personal representative for a deceased license holder is not a change of ownership. The proposed amendment removes a person owning at least 5 percent interest in the license holder from the definition of a "controlling person of an applicant, license holder, or facility" and includes that information in the definition of "disclosable interest." The proposed amendment adds definitions of "direct ownership interest," "disclosable interest," and "indirect ownership interest." The amendment removes the definition of "qualified mental retardation professional (QMRP)" and replaces it with "QIDP" (qualified intellectual disability professional), to be consistent with federal regulations. The amendment also moves the definition of "Centers for Medicare and Medicaid Services (CMS)" to the correct alphabetical location according to the acronym. Additional editorial changes are proposed for clarity and consistency.

The proposed amendment to §90.16 removes outdated requirements regarding a change of ownership. The proposed amendment also states that DADS conducts an on-site health inspection before issuing a license as a result of a change of ownership, except DADS may conduct a desk review instead of an on-site health inspection if less than 50 percent of the direct or indirect ownership interest of the license holder has changed, or if every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder. The proposed amendment clarifies that DADS may also conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership. The proposed amendment also requires a license holder that does not undergo a change of ownership but adds an owner with a disclosable interest to notify DADS of the addition no later than 30 days after the addition of the owner.

FISCAL NOTE

David Cook, Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments are in effect, enforcing or administering the amendments does not have foreseeable implications relating to costs or revenues of state or local governments.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

DADS has determined that the proposed amendments will not have an adverse economic effect on small businesses or micro-businesses, because the proposal does not impose requirements that result in a cost to license holders.

PUBLIC BENEFIT AND COSTS

Mary T. Henderson, DADS Associate Commissioner for Regulatory Services, has determined that, for each year of the first five years the amendments are in effect, the public benefit expected as a result of enforcing the amendments is a reduction in paperwork and fewer on-site surveys associated with changes of ownership that are unlikely to affect services provided by the license holder.

Mr. Cook anticipates that there will not be an economic cost to persons who are required to comply with the amendments. The amendments will not affect a local economy.

TAKINGS IMPACT ASSESSMENT

DADS has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Barbara Blankenship at (512) 438-5502 in DADS Regulatory Services. Written comments on the proposal may be submitted to Barbie Blankenship at 701 West 51st Street, Austin, Texas, 78751, Mail Code E-370; or via email to barbara.blankenship@dads.state.tx.us. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to DADS before 5:00 p.m. on DADS last state working day of the comment period; or (3) faxed or emailed by midnight on the last day of the comment period. When faxing or emailing comments, please indicate "Comments on Proposed Rule 16R11" in the subject line.

SUBCHAPTER A. INTRODUCTION

40 TAC §90.3

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Health and Safety Code, §252.008, which authorizes the HHSC executive commissioner to adopt rules related to the licensure of an ICF/IID.

The amendment implements Texas Government Code, §531.0055, and Texas Health and Safety Code, §252.008.

§90.3.Definitions.

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise. Individual subchapters may have definitions that are specific to the subchapter.

(1) - (9) (No change.)

[(10) Centers for Medicare and Medicaid Services (CMS)--The federal agency that provides funding and oversight for the Medicare and Medicaid programs. CMS was formerly known as the Health Care Financing Administration (HCFA).]

(10) [(11)] Change of ownership--An event that occurs when a facility's license holder has a different federal taxpayer identification number than a prospective license holder's federal taxpayer identification number, except that the substitution of a personal representative for a deceased license holder is not a change of ownership. [A change of 50 percent or more in the ownership of the business organization that is licensed to operate the facility, or a change in the federal taxpayer identification number.]

(11) CMS--Centers for Medicare & Medicaid Services. The federal agency that provides funding and oversight for the Medicare and Medicaid programs. CMS was formerly known as the Health Care Financing Administration (HCFA).

(12) Controlled substance--A drug, substance, or immediate precursor as defined in the Texas Controlled Substance Act, Health and Safety Code, Chapter 481, as amended, or the Federal Controlled Substance Act of 1970, Public Law 91-513, as amended.

(13) Controlling person of an applicant, license holder, or facility--A person who, acting alone or with others, has the ability to directly or indirectly influence or direct the management, expenditure of money, or policies of an applicant or license holder or of a facility owned by an applicant or license holder.

(A) The term includes:

[(i) a person who owns at least 5 percent interest in the applicant or license holder;]

(i) [(ii)] a spouse of the applicant or license holder;

(ii) [(iii)] an officer or director, if the applicant or license holder is a corporation;

(iii) [(iv)] a partner, if the applicant or license holder is a partnership;

(iv) [(v)] a trustee or trust manager, if the applicant or license holder is a trust;

(v) [(vi)] a person that operates or contracts with others to operate the facility;

(vi) [(vii)] a person who, because of a personal, familial, or other relationship is in a position of actual control or authority over the facility, without regard to whether the person is formally named as an owner, manager, director, officer, provider, consultant, contractor, or employee of the facility; and

(vii) [(viii)] a person who would be a controlling person of an entity described in clauses (i) - (vi) [(i) - (vii)] of this subparagraph, if that entity were the applicant or license holder.

(B) The term does not include an employee, lender, secured creditor, or other person who does not exercise formal or actual influence or control over the operation of a facility.

(14) DADS--The Department of Aging and Disability Services or its successor agency.

(15) Dangerous drug--Any drug as defined in the Texas Dangerous Drug Act, Health and Safety Code, Chapter 483.

(16) Department--DADS [The Department of Aging and Disability Services].

(17) Designee--A state agency or entity with which DADS contracts to perform specific, identified duties related to the fulfillment of a responsibility prescribed by this chapter.

(18) Direct ownership interest--Ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder.

(19) Disclosable interest--Five percent or more direct or indirect ownership interest in an applicant or license holder.

(20) [(18)] Drug (also referred to as medication)--A drug is:

(A) - (D) (No change.)

(21) [(19)] Establishment--A place of business or a place where business is conducted which includes staff, fixtures, and property.

(22) [(20)] Facility--A facility serving persons with an intellectual disability or related conditions licensed under this chapter as described in §90.2 of this chapter (relating to Scope) and required to be licensed under the Health and Safety Code, Chapter 252, or the entity that operates such a facility; or, in Subchapters C, D, and F of this chapter, a program provider that must comply with those subchapters in accordance with §9.212 of this title (relating to Non-licensed Providers Meeting Licensure Standards).

(23) [(21)] Governmental unit--A state or a political subdivision of the state, including a county or municipality.

(24) [(22)] Health care professional--A person licensed, certified, or otherwise authorized to administer health care, for profit or otherwise. The term includes a physician, licensed nurse, physician assistant, podiatrist, dentist, physical therapist, speech therapist, and occupational therapist.

(25) [(23)] Hearing--A contested case hearing held in accordance with the Administrative Procedure Act, Government Code, Chapter 2001, and the formal hearing procedures in 1 TAC Chapter 357, Subchapter I.

(26) [(24)] Immediate and serious threat--A situation in which there is a high probability that serious harm or injury to residents could occur at any time or has already occurred and may occur again if residents are not protected effectively from the harm or if the threat is not removed.

(27) [(25)] Immediate jeopardy to health and safety--A situation in which immediate corrective action is necessary because the facility's noncompliance with one or more requirements has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident receiving care in the facility.

(28) [(26)] Incident--An unusual or abnormal event or occurrence in, at, or affecting the facility or the residents of the facility.

(29) Indirect ownership interest--Any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder.

(30) [(27)] Inspection--Any on-site visit to or survey of a facility by DADS for the purpose of inspection of care, licensing, monitoring, complaint investigation, architectural review, or similar purpose.

(31) [(28)] IPP--Individual program plan. A plan developed by the interdisciplinary team of a facility resident that identifies the resident's training, treatment, and habilitation needs, and describes programs and services to meet those needs.

(32) [(29)] Large facility--Facilities with 17 or more resident beds.

(33) [(30)] Legal guardian--A person who is appointed guardian under §693 of the Probate Code.

(34) [(31)] Legally authorized representative--A person authorized by law to act on behalf of a person with regard to a matter described in this chapter, and may include a parent, guardian, or managing conservator of a minor, or the guardian of an adult.

(35) [(32)] License--Approval from DADS to establish or operate a facility.

(36) [(33)] License holder--A person that [who] holds a license to operate a facility.

(37) [(34)] Licensed nurse--A licensed vocational nurse, registered nurse, or advanced practice nurse.

(38) [(35)] Life Safety Code (also referred to as the Code or NFPA 101)--The Code for Safety to Life from Fire in Buildings and Structures, Standard 101, of the National Fire Protection Association (NFPA).

(39) [(36)] Life safety features--Fire safety components required by the Life Safety Code such as building construction, fire alarm systems, smoke detection systems, interior finishes, sizes and thicknesses of doors, exits, emergency electrical systems, sprinkler systems, etc.

(40) [(37)] Local authorities--A local health authority, fire marshal, building inspector, etc., who may be authorized by state law, county order, or municipal ordinance to perform certain inspections or certifications.

(41) [(38)] Local health authority--The physician having local jurisdiction to administer state and local laws or ordinances relating to public health, as described in the Texas Health and Safety Code, §§121.021 - 121.025.

(42) [(39)] LVN--Licensed vocational nurse. A person licensed to practice vocational nursing in accordance with Texas Occupations Code, Chapter 301.

(43) [(40)] Management services--Services provided under contract between the owner of a facility and a person to provide for the operation of a facility, including administration, staffing, maintenance, or delivery of resident services. Management services shall not include contracts solely for maintenance, laundry, or food services.

(44) [(41)] Metered dose inhaler--A device that delivers a measured amount of medication as a mist that can be inhaled.

(45) [(42)] Oral medication--Medication administered by way or through the mouth and does not include sublingual or buccal.

(46) [(43)] Person--An individual, firm, partnership, corporation, association, or joint stock company, and any legal successor of those entities.

(47) [(44)] Personal hold--

(A) - (B) (No change.)

[(45) Qualified mental retardation professional (QMRP)--A person with at least a bachelor's degree who has at least one year of experience working with persons with an intellectual disability or related conditions.]

(48) QIDP--Qualified intellectual disability professional. A person who has at least one year of experience working directly with persons with an intellectual disability or related conditions and is one of the following:

(A) a doctor of medicine or osteopathy;

(B) a registered nurse; or

(C) an individual who holds at least a bachelor's degree in one of the following areas:

(i) occupational therapy;

(ii) physical therapy;

(iii) social work;

(iv) speech-language pathology or audiology;

(v) recreation or a specialty area such as art, dance, music or physical education;

(vi) dietetics; or

(vii) human services, such as sociology, special education, rehabilitation counseling, or psychology (as specified in Title 42, Code of Federal Regulations, §483.430(b)(5)(x)(W180)).

(49) [(46)] Quality-of-care monitor--A registered nurse, pharmacist, or dietitian, employed by DADS, who is trained and experienced in long-term care regulations, standards of practice in long-term care, and evaluation of resident care and functions independently of DADS Regulatory Services Division.

(50) [(47)] Registered nurse--A person licensed to practice professional nursing in accordance with Texas Occupations Code, Chapter 301.

(51) [(48)] Remodeling--The construction, removal, or relocation of walls and partitions, or construction of foundations, floors, or ceiling-roof assemblies, including expanding of safety systems (i.e., sprinkler systems, fire alarm systems), that will change the existing plan and use areas of the facility.

(52) [(49)] Renovation--The restoration to a former better state by cleaning, repairing, or rebuilding, e.g., routine maintenance, repairs, equipment replacement, painting.

(53) [(50)] Restraint--A manual method, or a physical or mechanical device, material, or equipment attached or adjacent to the resident's body that the resident cannot remove easily, that restricts freedom of movement or normal access to the resident's body. This term includes a personal hold.

(54) [(51)] Seclusion--The involuntary separation of a resident away from other residents and the placement of the resident alone in an area from which the resident is prevented from leaving.

(55) [(52)] Small facilities--Facilities with 16 or fewer resident beds.

(56) [(53)] Specialized staff--Personnel with expertise in developmental disabilities.

(57) [(54)] Standards--The minimum conditions, requirements, and criteria with which a facility will have to comply to be licensed under this chapter.

(58) [(55)] Topical medication--Medication applied to the skin but does not include medication administered in the eyes.

(59) [(56)] Universal precautions--The use of barrier precautions by facility personnel to prevent direct contact with blood or other body fluids that are visibly contaminated with blood.

(60) [(57)] Vaccine preventable diseases--The diseases included in the most current recommendations of the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention.

(61) [(58)] Well-recognized church or religious denomination--An organization which has been granted a tax-exempt status as a religious association from the state or federal government.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701210

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


SUBCHAPTER B. APPLICATION PROCEDURES

40 TAC §90.16

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Health and Safety Code, §252.008, which authorizes the HHSC executive commissioner to adopt rules related to the licensure of an ICF/IID.

The amendment implements Texas Government Code, §531.0055, and Texas Health and Safety Code, §252.008.

§90.16.Change of Ownership and Notice of Changes.

[(a) A change of ownership occurs under the following circumstances:]

[(1) for a license holder who is a sole proprietor:]

[(A) the sole proprietor sells or otherwise transfers operation of the facility to another person; or]

[(B) the sole proprietor dies and another person operates the facility;]

[(2) for a license holder that is a general partnership (as defined in the Texas Business Organizations Code, §1.002):]

[(A) a partner is added to the general partnership;]

[(B) the general partnership is sold or otherwise transferred to another person;]

[(C) the general partnership sells or otherwise transfers operation of the facility to another person;]

[(D) for any reason other than correction of an error, the federal taxpayer identification number of the general partnership changes; or]

[(E) the general partnership is dissolved and another person operates the facility;]

[(3) for a limited partnership (as defined in the Texas Business Organizations Code, §1.002):]

[(A) a general partner is added to the limited partnership;]

[(B) ownership of 50 percent or more of the limited partnership changes and at least one controlling person is added;]

[(C) the limited partnership is sold or otherwise transferred to another person;]

[(D) the limited partnership sells or otherwise transfers operation of the facility to another person;]

[(E) for any reason other than correction of an error, the federal taxpayer identification number of the limited partnership changes; or]

[(F) the limited partnership is dissolved and another person operates the facility;]

[(4) for a nonprofit organization:]

[(A) the nonprofit organization is sold or otherwise transferred to another person;]

[(B) the nonprofit organization sells or otherwise transfers operation of the facility to another person;]

[(C) for any reason other than correction of an error, the federal taxpayer identification number of the nonprofit organization changes; or]

[(D) the nonprofit organization is dissolved and another person operates the facility;]

[(5) for a for-profit corporation or limited liability company:]

[(A) ownership of 50 percent or more of the corporation or limited liability company changes and at least one controlling person is added;]

[(B) the corporation or limited liability company is sold or otherwise transferred to another person;]

[(C) the corporation or limited liability company sells or otherwise transfers operation of the facility to another person;]

[(D) for any reason other than correction of an error, the federal taxpayer identification number of the corporation or limited liability corporation changes; or]

[(E) the corporation or limited liability company is dissolved and another person operates the facility;]

[(6) for a city, county, state, or federal government authority, hospital district, or hospital authority:]

[(A) the city, county, state, or federal government authority, hospital district, or hospital authority sells or otherwise transfers operation of the facility to another person; or]

[(B) the city, county, state, or federal government authority, hospital district, or hospital authority ceases to exist and another person operates the facility;]

[(7) for a trust, living trust, estate, or any other entity type not included in paragraphs (1) - (6) of this subsection:]

[(A) the trust, living trust, estate, or other person is sold or otherwise transferred to another person;]

[(B) the trust, living trust, estate, or any other entity type sells or otherwise transfers operation of the facility to another person;]

[(C) for any reason other than correction of an error, the federal taxpayer identification number of the trust, living trust, estate, or other person changes; or]

[(D) the trust, living trust, estate, or any other entity type ceases to exist and another person operates the facility;]

[(8) an action described in paragraphs (1) - (7) of this subsection occurs with respect to any person that has an ownership interest in the license holder.]

[(b) The substitution of the executor of a decedent's estate for a decedent is not the addition of a controlling person for purposes of subsection (a)(3)(B) and (a)(5)(A) of this section.]

[(c) A conversion, as described in Chapter 10, Subchapter C, of the Texas Business Organizations Code, is not a change of ownership if a controlling person is not added to the license holder.]

(a) [(d)] A license holder may not transfer its license. If a change of ownership occurs, the license holder's license becomes invalid on the date of the change of ownership. The prospective new license holder must obtain a license in accordance with subsection (b) [(e)] of this section.

(b) [(e)] A prospective new license holder must submit to DADS:

(1) a complete application for a license under §90.11 of this subchapter (relating to Criteria for Licensing) or an incomplete application with a letter explaining the circumstances that prevented the inclusion of the missing information;

(2) the application fee, in accordance with §90.19 of this subchapter (relating to License Fees); and

(3) signed, written notice from the facility's existing license holder of intent to transfer operation of the facility to the applicant beginning on a date specified by the applicant, unless waived in accordance with subsection (d) [(g)] of this section.

(c) [(f)] To avoid a facility operating without a license, a prospective license holder must submit all items in subsection (b) [(e)] of this section by U.S. mail postmarked at least 30 days before the anticipated date of the change of ownership and received in DADS Licensing and Credentialing Section, Regulatory Services Division, within 15 days after the date of the postmark.

(d) [(g)] The notice required by subsection (b)(3) [(e)(3)] of this section may be waived by DADS if DADS determines that the prospective license holder presented evidence showing that circumstances prevented the submission of the notice and that not waiving the notice would create a threat to resident welfare or health and safety.

(e) DADS conducts an on-site health inspection to verify compliance with the licensure requirements before issuing a license as a result of a change of ownership. DADS may conduct a desk review instead of an on-site health inspection before issuing a license as a result of a change of ownership if:

(1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or

(2) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

(f) DADS, in its sole discretion, may conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership.

(g) [(h)] [If the applicant meets the requirements of §90.11 of this subchapter and passes an on-site health inspection, DADS issues a license.] The effective date of the license is the same date as the effective date of the change of ownership and cannot precede the date the application was received by DADS Licensing and Credentialing Section, Regulatory Services Division.

(h) [(i)] If a license holder [that is not a sole proprietor] changes its name but does not undergo a change of ownership, the license holder must notify DADS and submit documentation evidencing a legal name change. On receipt of the notice and documentation, DADS reissues the current license [a copy of a certificate of amendment from the Office of the Secretary of State. After DADS receives the certificate of amendment, a license is issued] in the license holder's new name.

(i) If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify DADS of the addition no later than 30 days after the addition of the owner.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701211

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


CHAPTER 92. LICENSING STANDARDS FOR ASSISTED LIVING FACILITIES

The Texas Health and Human Services Commission (HHSC), on behalf of the Department of Aging and Disability Services (DADS), proposes amendments to §92.2, concerning Definitions; and §92.16, concerning Change of Ownership, in Chapter 92, Licensing Standards for Assisted Living Facilities.

BACKGROUND AND PURPOSE

The purpose of the proposal is to revise the definitions and rules regarding a change of ownership to simplify the process for determining when an assisted living facility (ALF) is required to obtain a new license as a result of a change of ownership.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §92.2 adds new definitions for "change of ownership," "direct ownership interest," "disclosable interest," "indirect ownership interest," and "license holder." The proposed amendment also removes the term "person with a disclosable interest," because it is unnecessary if the term "disclosable interest" is defined.

The proposed amendment to §92.16 adds that DADS conducts an on-site health inspection before issuing a license as a result of a change of ownership, except that DADS may conduct a desk review instead of an on-site health inspection if DADS determines that the facility was required to obtain a new tax identification number and: 1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed when compared to the new license holder; or 2) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder. The proposed amendment also clarifies that DADS may conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership. The proposed amendment requires a license holder that does not undergo a change of ownership but adds an owner with a disclosable interest to notify DADS of that change no later than 30 days after the addition of the owner. The proposed amendment also includes minor editorial changes for clarity and consistency.

FISCAL NOTE

David Cook, Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments are in effect, enforcing or administering the amendments does not have foreseeable implications relating to costs or revenues of state or local governments.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

DADS has determined that the proposed amendments will not have an adverse economic effect on small businesses or micro-businesses because the proposed amendments do not impose requirements that result in a cost to providers.

PUBLIC BENEFIT AND COSTS

Mary T. Henderson, DADS Associate Commissioner for Regulatory Services, has determined that, for each year of the first five years the proposed amendments are in effect, the public benefit expected as a result of enforcing the amendments is a reduction in paperwork and fewer on-site surveys associated with changes of ownership that are unlikely to affect services provided by a license holder.

Mr. Cook anticipates that there will not be an economic cost to persons who are required to comply with the proposed amendments. The proposed amendments will not affect a local economy.

TAKINGS IMPACT ASSESSMENT

DADS has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Barbara Blankenship at (512) 438-5502 in DADS Regulatory Services Division. Written comments on the proposal may be submitted to Barbie Blankenship at 701 West 51st Street, Austin, Texas, 78751, Mail Code E-370; or via email to barbara.blankenship@dads.state.tx.us. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to DADS before 5:00 p.m. on DADS last state working day of the comment period; or (3) faxed or emailed by midnight on the last day of the comment period. When faxing or emailing comments, please indicate "Comments on Proposed Rule 16R11" in the subject line.

SUBCHAPTER A. INTRODUCTION

40 TAC §92.2

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS; and Texas Health and Safety Code, §247.025, which authorizes the executive commissioner to adopt rules to regulate assisted living facilities.

The amendment implements Texas Government Code, §531.0055 and Texas Health and Safety Code, §247.025.

§92.2.Definitions.

The following words and terms, when used in this chapter, have the following meaning, unless the context clearly indicates otherwise.

(1) - (11) (No change.)

(12) Change of ownership--An event that occurs when a facility's license holder has a different federal taxpayer identification number than the prospective license holder's federal taxpayer identification number, except that the substitution of a personal representative for a deceased license holder is not a change of ownership.

[(12) Change of ownership--A change of ownership is:]

[(A) a change of sole proprietorship that is licensed to operate a facility;]

[(B) a change of 50 percent or more in the ownership of the business organization that is licensed to operate the facility;]

[(C) a change in the federal taxpayer identification number; or]

[(D) relinquishment by the license holder of the operation of the facility.]

(13) - (18) (No change.)

(19) Direct ownership interest--Ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder.

(20) Disclosable interest--Five percent or more direct or indirect ownership interest in an applicant or license holder.

(21) [(19)] Disclosure statement--A DADS form for prospective residents or their legally authorized representatives that a facility must complete. The form contains information regarding the preadmission, admission, and discharge process; resident assessment and service plans; staffing patterns; the physical environment of the facility; resident activities; and facility services.

(22) [(20)] Electronic monitoring device--Video surveillance cameras and audio devices installed in a resident's room, designed to acquire communications or other sounds that occur in the room. An electronic, mechanical, or other device used specifically for the nonconsensual interception of wire or electronic communication is excluded from this definition.

(23) [(21)] Exploitation--

(A) - (B) (No change.)

(24) [(22)] Facility--An entity required to be licensed under the Assisted Living Facility Licensing Act, Texas Health and Safety Code, Chapter 247.

(25) [(23)] Fire suppression authority--The paid or volunteer fire-fighting organization or tactical unit that is responsible for fire suppression operations and related duties once a fire incident occurs within its jurisdiction.

(26) [(24)] Flame spread--The rate of fire travel along the surface of a material. This is different than other requirements for time-rated "burn through" resistance ratings, such as one-hour rated. Flame spread ratings are Class A (0-25), Class B (26-75), and Class C (76-200).

(27) [(25)] Governmental unit--The state or any county, municipality, or other political subdivision, or any department, division, board, or other agency of any of the foregoing.

(28) [(26)] Health care professional--An individual licensed, certified, or otherwise authorized to administer health care, for profit or otherwise, in the ordinary course of business or professional practice. The term includes a physician, registered nurse, licensed vocational nurse, licensed dietitian, physical therapist, and occupational therapist.

(29) [(27)] Immediate threat--There is considered to be an immediate threat to the health or safety of a resident, or a situation is considered to put the health or safety of a resident in immediate jeopardy, if there is a situation in which an assisted living facility's noncompliance with one or more requirements of licensure has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident.

(30) [(28)] Immediately available--The capacity of facility staff to immediately respond to an emergency after being notified through a communication or alarm system. The staff are to be no more than 600 feet from the farthest resident and in the facility while on duty.

(31) Indirect ownership interest--Any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder.

(32) [(29)] Large facility--A facility licensed for 17 or more residents.

(33) [(30)] Legally authorized representative--A person authorized by law to act on behalf of a person with regard to a matter described in this chapter, and may include a parent, guardian, or managing conservator of a minor, or the guardian of an adult.

(34) License holder--A person that holds a license to operate a facility.

(35) [(31)] Listed--Equipment, materials, or services included in a list published by an organization concerned with evaluation of products or services, that maintains periodic inspection of production of listed equipment or materials or periodic evaluation of services, and whose listing states that either the equipment, material, or service meets appropriate designated standards or has been tested and found suitable for a specified purpose. The listing organization must be acceptable to the authority having jurisdiction, including DADS or any other state, federal or local authority.

(36) [(32)] Local code--A model building code adopted by the local building authority where the assisted living facility is constructed or located.

(37) [(33)] Management services--Services provided under contract between the owner of a facility and a person to provide for the operation of a facility, including administration, staffing, maintenance, or delivery of resident services. Management services do not include contracts solely for maintenance, laundry, transportation, or food services.

(38) [(34)] Manager--The individual in charge of the day-to-day operation of the facility.

(39) [(35)] Medication--

(A) - (C) (No change.)

(40) [(36)] Medication administration--The direct application of a medication or drug to the body of a resident by an individual legally allowed to administer medication in the state of Texas.

(41) [(37)] Medication assistance or supervision--The assistance or supervision of the medication regimen by facility staff. Refer to §92.41(j) of this chapter.

(42) [(38)] Medication (self-administration)--The capability of a resident to administer the resident's own medication or treatments without assistance from the facility staff.

(43) [(39)] Neglect--

(A) - (B) (No change.)

(44) [(40)] NFPA 101--The 2000 publication titled "NFPA 101 Life Safety Code" published by the National Fire Protection Association, Inc., 1 Batterymarch Park, Quincy, Massachusetts 02169.

(45) [(41)] Ombudsman--Has the meaning given in §85.2 of this title (relating to Definitions).

(46) [(42)] Person--Any individual, firm, partnership, corporation, association, or joint stock association, and the legal successor thereof.

[(43) Person with a disclosable interest--Any person who owns 5.0 percent interest in any corporation, partnership, or other business entity that is required to be licensed under Texas Health and Safety Code, Chapter 247. A person with a disclosable interest does not include a bank, savings and loan, savings bank, trust company, building and loan association, credit union, individual loan and thrift company, investment banking firm, or insurance company unless such entity participates in the management of the facility.]

(47) [(44)] Personal care services--Assistance with feeding, dressing, moving, bathing, or other personal needs or maintenance; or general supervision or oversight of the physical and mental well-being of a person who needs assistance to maintain a private and independent residence in the facility or who needs assistance to manage his or her personal life, regardless of whether a guardian has been appointed for the person.

(48) [(45)] Physician--A practitioner licensed by the Texas Medical Board.

(49) [(46)] Practitioner--An individual who is currently licensed in a state in which the individual practices as a physician, dentist, podiatrist, or a physician assistant; or a registered nurse approved by the Texas Board of Nursing to practice as an advanced practice registered nurse.

(50) [(47)] Qualified medical personnel--An individual who is licensed, certified, or otherwise authorized to administer health care. The term includes a physician, registered nurse, and licensed vocational nurse.

(51) [(48)] Resident--An individual accepted for care in a facility.

(52) [(49)] Respite--The provision by a facility of room, board, and care at the level ordinarily provided for permanent residents of the facility to a person for not more than 60 days for each stay in the facility.

(53) [(50)] Restraint hold--

(A) - (B) (No change.)

(54) [(51)] Restraints--Chemical restraints are psychoactive drugs administered for the purposes of discipline or convenience and are not required to treat the resident's medical symptoms. Physical restraints are any manual method, or physical or mechanical device, material, or equipment attached or adjacent to the resident that restricts freedom of movement. Physical restraints include restraint holds.

(55) [(52)] Safety--Protection from injury or loss of life due to such conditions as fire, electrical hazard, unsafe building or site conditions, and the hazardous presence of toxic fumes and materials.

(56) [(53)] Seclusion--The involuntary separation of a resident from other residents and the placement of the resident alone in an area from which the resident is prevented from leaving.

(57) [(54)] Service plan--A written description of the medical care, supervision, or nonmedical care needed by a resident.

(58) [(55)] Short-term acute episode--An illness of less than 30 days duration.

(59) [(56)] Small facility--A facility licensed for 16 or fewer residents.

(60) [(57)] Staff--Employees of an assisted living facility.

(61) [(58)] Standards--The minimum conditions, requirements, and criteria established in this chapter with which a facility must comply to be licensed under this chapter.

(62) [(59)] Terminal condition--A medical diagnosis, certified by a physician, of an illness that will result in death in six months or less.

(63) [(60)] Universal precautions--An approach to infection control in which blood, any body fluids visibly contaminated with blood, and all body fluids in situations where it is difficult or impossible to differentiate between body fluids are treated as if known to be infectious for HIV, hepatitis B, and other blood-borne pathogens.

(64) [(61)] Vaccine Preventable Diseases--The diseases included in the most current recommendations of the Advisory Committee on Immunization Practices of the CDC.

(65) [(62)] Working day--Any 24-hour period, Monday through Friday, excluding state and federal holidays.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701212

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


SUBCHAPTER B. APPLICATION PROCEDURES

40 TAC §92.16

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS; and Texas Health and Safety Code §247.025, which authorizes the executive commissioner to adopt rules regulating assisted living facilities.

The amendment implements Texas Government Code, §531.0055 and Texas Health and Safety Code, §247.025.

§92.16.Change of Ownership and Notice of Changes.

(a) A license holder may not transfer its license [is not transferable as part of a change of ownership as defined in §92.2 of this chapter (relating to Definitions)].

(b) At least 30 days before the anticipated date of a [the] change of ownership, the prospective license holder [owner] must notify DADS of the change of ownership by submitting an application for an initial license based on a change of ownership under §92.14 of this subchapter (relating to Initial Application Procedures and Requirements) and the fee required in §92.4 of this chapter (relating to License Fees).

(c) To avoid a facility operating while unlicensed, an applicant must submit an application for an initial license based on a change of ownership at least 30 days before the anticipated date of the change of ownership [sale or other transfer to the new owner]. The effective date of the change of ownership cannot precede the date the application is received by DADS [DADS'] Licensing and Credentialing Section, Regulatory Services Division.

(d) DADS may assess an administrative penalty in accordance with Subchapter H, Division 9 of this chapter (relating to Administrative Penalties) against a person who fails to notify DADS before the effective date of the change of ownership.

(e) Pending DADS [DADS'] review of the application for an initial license based on a change of ownership, the current license holder must continue to meet all requirements for operation of the facility.

(f) DADS conducts an on-site health inspection to verify compliance with the licensure requirements before issuing a license based on a change of ownership. DADS may conduct a desk review instead of an on-site health inspection if DADS determines that the facility was required to obtain a new tax identification number and:

(1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed when compared to the new license holder; or

(2) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

[(f) After reviewing the application for an initial license based on a change of ownership, DADS conducts an on-site health inspection to determine if the facility meets the standards for operation and resident care. If the facility is out of compliance with Life Safety Code licensure requirements in Subchapter D of this chapter (relating to Facility Construction), DADS also conducts an on-site Life Safety Code inspection of the facility.]

(g) DADS, in its sole discretion, may conduct an on-site Life Safety Code inspection of the facility before issuing a license based on a change of ownership.

(h) [(g)] DADS issues the license within 30 days after DADS determines that the applicant and the facility have met the licensure requirements of this section. The issuance of a license constitutes DADS [DADS'] official written notice to the facility of the approval of the application for a change of ownership.

(i) [(h)] DADS may deny an application for a change of ownership if the applicant, controlling person, or any person required to submit background and qualification information fails to meet the criteria for a license established in §92.11 of this subchapter (relating to Criteria for Licensing).

(j) [(i)] If DADS denies an application for an initial license based on a change of ownership, DADS sends the applicant a written notice of the denial and informs the applicant of the applicant's right to request an administrative hearing to appeal the denial. The administrative hearing is held in accordance with Texas Health and Human Services Commission rules at 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act).

(k) If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify DADS no later than 30 days after the addition of the owner.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701213

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


CHAPTER 97. LICENSING STANDARDS FOR HOME AND COMMUNITY SUPPORT SERVICES AGENCIES

The Texas Health and Human Services Commission (HHSC), on behalf of the Department of Aging and Disability Services (DADS), proposes amendments to §97.2, concerning Definitions; and §97.23, concerning Change of Ownership, in Chapter 97, Licensing Standards for Home and Community Support Services Agencies.

BACKGROUND AND PURPOSE

The proposed amendments revise requirements related to change of ownership of a license holder for a home and community support services agency (HCSSA). Under the proposed amended rules, a license holder will not be required to apply for a new license if the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal tax identification number. Changes in ownership structure must be reported to DADS under other existing rules. The proposed amendments add definitions for terms related to a change of ownership and ownership interests. The proposed amendments also allow for DADS to conduct a desk review instead of an on-site health survey if the applicant for a license resulting from a change of ownership meets certain requirements.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §97.2 adds definitions for "change of ownership," "direct ownership interest," "disclosable interest," "indirect ownership interest," and "license holder." These terms are used in the proposed amendments to §97.23, setting forth procedures for a change of ownership. The amendment also deletes the definition of "person with disclosable interest" because it is unnecessary if the term "disclosable interest" is defined. Additional editorial changes are proposed for clarity and consistency.

The proposed amendment to §97.23 states that a license may not be transferred; the former license holder's license becomes invalid on the date of the change of ownership, and the new license holder must obtain a license in accordance with §97.13. The proposed amendment states that DADS conducts an on-site health inspection before issuing a license as a result of a change of ownership, except DADS may conduct a desk review instead of an on-site health inspection if: less than 50 percent of the direct or indirect ownership interest has changed, or every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder. The proposed amendment also clarifies that DADS may conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership.

FISCAL NOTE

David Cook, Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments are in effect, enforcing or administering the amendments does not have foreseeable implications relating to costs or revenues of state or local governments.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

DADS has determined that the proposed amendments will not have an adverse economic effect on small businesses or micro-businesses, because the proposal does not impose requirements that result in a cost to HCSSAs.

PUBLIC BENEFIT AND COSTS

Mary T. Henderson, DADS Associate Commissioner for Regulatory Services, has determined that, for each year of the first five years the amendments are in effect, the public benefit expected as a result of enforcing the amendments is a reduction in paperwork and fewer on-site surveys associated with changes of ownership that are unlikely to affect services provided by a license holder.

Mr. Cook anticipates that there will not be an economic cost to persons who are required to comply with the amendments. The amendments will not affect a local economy.

TAKINGS IMPACT ASSESSMENT

DADS has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Barbara Blankenship at (512) 438-5502 in DADS Regulatory Services. Written comments on the proposal may be submitted to Barbie Blankenship at 701 West 51st Street, Austin, Texas, 78751, Mail Code E-370; or via email to barbara.blankenship@dads.state.tx.us. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to DADS before 5:00 p.m. on DADS last state working day of the comment period; or (3) faxed or emailed by midnight on the last day of the comment period. When faxing or emailing comments, please indicate "Comments on Proposed Rule 16R11" in the subject line.

SUBCHAPTER A. GENERAL PROVISIONS

40 TAC §97.2

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Health and Safety Code, Chapter 142, which authorizes the executive commissioner to adopt rules regarding the licensure of a home and community support services agency.

The amendment implements Texas Government Code, §531.0055, and Texas Health and Safety Code, Chapter 142.

§97.2.Definitions.

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) - (24) (No change.)

(25) Change of ownership--An event that occurs when an agency's license holder has a different federal taxpayer identification number than a prospective license holder's federal taxpayer identification number, except that the substitution of a personal representative for a deceased license holder is not a change of ownership.

(26) [(25)] CHAP--Community Health Accreditation Program, Inc. An independent, nonprofit accrediting body that publicly certifies that an organization has voluntarily met certain standards for home and community-based health care.

(27) [(26)] Chief financial officer--An individual who is responsible for supervising and managing all financial activities for a home and community support services agency.

(28) [(27)] Client--An individual receiving home health, hospice, or personal assistance services from a licensed home and community support services agency. This term includes each member of the primary client's family if the member is receiving ongoing services. This term does not include the spouse, significant other, or other family member living with the client who receives a one-time service (for example, vaccination) if the spouse, significant other, or other family member receives the service in connection with the care of a client.

(29) [(28)] Clinical note--A dated and signed written notation by agency personnel of a contact with a client containing a description of signs and symptoms; treatment and medication given; the client's reaction; other health services provided; and any changes in physical and emotional condition.

(30) [(29)] CMS--Centers for Medicare & [and] Medicaid Services. The federal agency that administers the Medicare program and works in partnership with the states to administer Medicaid.

(31) [(30)] Complaint--An allegation against an agency regulated by DADS or against an employee of an agency regulated by DADS that involves a violation of this chapter or the statute.

(32) [(31)] Community disaster resources--A local, statewide, or nationwide emergency system that provides information and resources during a disaster, including weather information, transportation, evacuation, and shelter information, disaster assistance and recovery efforts, evacuee and disaster victim resources, and resources for locating evacuated friends and relatives.

(33) [(32)] Controlling person--A person with the ability, acting alone or with others, to directly or indirectly influence, direct, or cause the direction of the management, expenditure of money, or policies of an agency or other person.

(A) - (B) (No change.)

(34) [(33)] Conviction--An adjudication of guilt based on a finding of guilt, a plea of guilty, or a plea of nolo contendere.

(35) [(34)] Counselor--An individual qualified under Medicare standards to provide counseling services, including bereavement, dietary, spiritual, and other counseling services to both the client and the family.

(36) [(35)] DADS--Department of Aging and Disability Services or its successor agency.

(37) [(36)] Day--Any reference to a day means a calendar day, unless otherwise specified in the text. A calendar day includes weekends and holidays.

(38) [(37)] Deficiency--A finding of noncompliance with federal requirements resulting from a survey.

(39) [(38)] Designated survey office--A DADS Home and Community Support Services Agencies Program office located in an agency's geographic region.

(40) [(39)] Dialysis treatment record--For home dialysis designation, a dated and signed written notation by the person providing dialysis treatment which contains a description of signs and symptoms, machine parameters and pressure settings, type of dialyzer and dialysate, actual pre- and post-treatment weight, medications administered as part of the treatment, and the client's response to treatment.

(41) [(40)] Dietitian--A person who is currently licensed under the laws of the State of Texas to use the title of licensed dietitian or provisional licensed dietitian, or who is a registered dietitian.

(42) Direct ownership interest--Ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder.

(43) [(41)] Disaster--The occurrence or imminent threat of widespread or severe damage, injury, or loss of life or property resulting from a natural or man-made cause, such as fire, flood, earthquake, wind, storm, wave action, oil spill or other water contamination, epidemic, air contamination, infestation, explosion, riot, hostile military or paramilitary action, or energy emergency. In a hospice inpatient unit, a disaster also includes failure of the heating or cooling system, power outage, explosion, and bomb threat.

(44) Disclosable interest--Five percent or more direct or indirect ownership interest in an applicant or license holder.

(45) [(42)] ESRD--End stage renal disease. For home dialysis designation, the stage of renal impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life.

(46) [(43)] Functional need--Needs of the individual that require services without regard to diagnosis or label.

(47) [(44)] Habilitation--Habilitation services, as defined by Texas Government Code §534.001, provided by an agency licensed under this chapter.

(48) [(45)] Health assessment--A determination of a client's physical and mental status through inventory of systems.

(49) [(46)] Home and community support services agency--A person who provides home health, hospice, or personal assistance services for pay or other consideration in a client's residence, an independent living environment, or another appropriate location.

(50) [(47)] Home health aide--An individual working for an agency who meets at least one of the requirements for home health aides as defined in §97.701 of this chapter (relating to Home Health Aides).

(51) [(48)] Home health medication aide--An unlicensed person issued a permit by DADS to administer medication to a client under the Texas Health and Safety Code, Chapter 142, Subchapter B.

(52) [(49)] Home health service--The provision of one or more of the following health services required by an individual in a residence or independent living environment:

(A) - (H) (No change.)

(53) [(50)] Hospice--A person licensed under this chapter to provide hospice services, including a person who owns or operates a residential unit or an inpatient unit.

(54) [(51)] Hospice aide--A person working for an agency licensed to provide hospice services who meets the qualifications for a hospice aide as described in §97.843 of this chapter (relating to Hospice Aide Qualifications).

(55) [(52)] Hospice homemaker--A person working for an agency licensed to provide hospice services who meets the qualifications described in §97.845 of this chapter (relating to Hospice Homemaker Qualifications).

(56) [(53)] Hospice services--Services, including services provided by unlicensed personnel under the delegation of a registered nurse or physical therapist, provided to a client or a client's family as part of a coordinated program consistent with the standards and rules adopted under this chapter. These services include palliative care for terminally ill clients and support services for clients and their families that:

(A) - (C) (No change.)

(57) [(54)] IDR--Informal dispute resolution. An informal process that allows an agency to refute a violation or condition-level deficiency cited during a survey.

(58) [(55)] Independent living environment--A client's residence, which may include a group home, foster home, or boarding home facility, or other settings where a client participates in activities, including school, work, or church.

(59) Indirect ownership interest--Any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder.

(60) [(56)] Individual and family choice and control--Individuals and families who express preferences and make choices about how their support service needs are met.

(61) [(57)] Individualized service plan--A written plan prepared by the appropriate health care personnel for a client of a home and community support services agency licensed to provide personal assistance services.

(62) [(58)] Inpatient unit--A facility, also referred to as a hospice freestanding inpatient facility, that provides a continuum of medical or nursing care and other hospice services to clients admitted into the unit and that is in compliance with:

(A) - (B) (No change.)

(63) [(59)] JCAHO--Joint Commission on Accreditation of Healthcare Organizations. An independent, nonprofit organization for standard-setting and accrediting in-home care and other areas of health care.

(64) [(60)] Joint training--Training provided by DADS at least semi-annually for home and community support services agencies and DADS surveyors on subjects that address the 10 most commonly cited violations of federal or state law by home and community support services agencies as published in DADS annual reports.

(65) [(61)] LAR--Legally authorized representative. A person authorized by law to act on behalf of a client with regard to a matter described in this chapter, and may include a parent of a minor, guardian of an adult or minor, managing conservator of a minor, agent under a medical power of attorney, or surrogate decision-maker under Texas Health and Safety Code, §313.004.

(66) License holder--A person that holds a license to operate an agency.

(67) [(62)] Licensed vocational nurse--A person who is currently licensed under Texas Occupations Code, Chapter 301, as a licensed vocational nurse.

(68) [(63)] Life Safety Code (also referred to as NFPA 101)--The Code for Safety to Life from Fire in Buildings and Structures, Standard 101, of the National Fire Protection Association (NFPA).

(69) [(64)] Local emergency management agencies--The local emergency management coordinator, fire, police, and emergency medical services.

(70) [(65)] Local emergency management coordinator-- The person identified as the emergency management coordinator by the mayor or county judge in an agency's service area.

(71) [(66)] Manager--An employee or independent contractor responsible for providing management services to a home and community support services agency for the overall operation of a home and community support services agency including administration, staffing, or delivery of services. Examples of contracts for services that will not be considered contracts for management services include contracts solely for maintenance, laundry, or food services.

(72) [(67)] Medication administration record--A record used to document the administration of a client's medications.

(73) [(68)] Medication list--A list that includes all prescription and over-the-counter medication that a client is currently taking, including the dosage, the frequency, and the method of administration.

(74) [(69)] Mitigation--An action taken to eliminate or reduce the probability of a disaster, or reduce a disaster's severity or consequences.

(75) [(70)] Multiple location--A Medicare-approved alternate delivery site that meets the definition in 42 CFR §418.3.

(76) [(71)] Notarized copy--A sworn affidavit stating that attached copies are true and correct copies of the original documents.

(77) [(72)] Nursing facility--An institution licensed as a nursing home under the Texas Health and Safety Code, Chapter 242.

(78) [(73)] Nutritional counseling--Advising and assisting individuals or families on appropriate nutritional intake by integrating information from the nutrition assessment with information on food and other sources of nutrients and meal preparation consistent with cultural background and socioeconomic status, with the goal being health promotion, disease prevention, and nutrition education. Nutritional counseling may include the following:

(A) - (E) (No change.)

(79) [(74)] Occupational therapist--A person who is currently licensed under the Occupational Therapy Practice Act, Texas Occupations Code, Chapter 454, as an occupational therapist.

(80) [(75)] Operating hours--The days of the week and the hours of day an agency's place of business is open as identified in an agency's written policy as required by §97.210 of this chapter (relating to Agency Operating Hours).

(81) [(76)] Original active client record--A record composed first-hand for a client currently receiving services.

(82) [(77)] Palliative care--Intervention services that focus primarily on the reduction or abatement of physical, psychosocial, and spiritual symptoms of a terminal illness. It is client and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and facilitating client autonomy, access to information, and choice.

(83) [(78)] Parent agency--An agency that develops and maintains administrative controls and provides supervision of branch offices and alternate delivery sites.

(84) [(79)] Parent company--A person, other than an individual, who has a direct 100 percent ownership interest in the owner of an agency.

(85) [(80)] Person--An individual, corporation, or association.

[(81) Person with a disclosable interest--Any person who owns at least a 5.0 percent interest in any corporation, partnership, or other business entity that is required to be licensed under Texas Health and Safety Code, Chapter 142. A person with a disclosable interest does not include a bank, savings and loan, savings bank, trust company, building and loan association, credit union, individual loan and thrift company, investment banking firm, or insurance company, unless these entities participate in the management of the agency.]

(86) [(82)] Personal assistance services--Routine ongoing care or services required by an individual in a residence or independent living environment that enable the individual to engage in the activities of daily living or to perform the physical functions required for independent living, including respite services. The term includes:

(A) - (C) (No change.)

(87) [(83)] Personal care--The provision of one or more of the following services required by an individual in a residence or independent living environment:

(A) - (J) (No change.)

(88) [(84)] Pharmacist--A person who is licensed to practice pharmacy under the Texas Pharmacy Act, Texas Occupations Code, Chapter 558.

(89) [(85)] Pharmacy--A facility defined in the Texas Occupations Code, §551.003(31), at which a prescription drug or medication order is received, processed, or dispensed.

(90) [(86)] Physical therapist--A person who is currently licensed under Texas Occupations Code, Chapter 453, as a physical therapist.

(91) [(87)] Physician--This term includes a person who is:

(A) - (C) (No change.)

(92) [(88)] Physician assistant--A person who is licensed under the Physician Assistant Licensing Act, Texas Occupations Code, Chapter 204, as a physician assistant.

(93) [(89)] Physician-delegated task--A task performed in accordance with the Texas Occupations Code, Chapter 157, including orders signed by a physician that specify the delegated task, the individual to whom the task is delegated, and the client's name.

(94) [(90)] Place of business--An office of a home and community support services agency that maintains client records or directs home health, hospice, or personal assistance services. This term includes a parent agency, a branch office, and an alternate delivery site. The term does not include an administrative support site.

(95) [(91)] Plan of care--The written orders of a practitioner for a client who requires skilled services.

(96) [(92)] Practitioner--A person who is currently licensed in a state in which the person practices as a physician, dentist, podiatrist, or a physician assistant, or a person who is a registered nurse registered with the Texas Board of Nursing as an advanced practice nurse.

(97) [(93)] Preparedness--Actions taken in anticipation of a disaster.

(98) [(94)] Presurvey conference--A conference held with DADS staff and the applicant or the applicant's representatives to review licensure standards and survey documents, and to provide consultation before the survey.

(99) [(95)] Progress note--A dated and signed written notation by agency personnel summarizing facts about care and the client's response during a given period of time.

(100) [(96)] Psychoactive treatment--The provision of a skilled nursing visit to a client with a psychiatric diagnosis under the direction of a physician that includes one or more of the following:

(A) - (D) (No change.)

(101) [(97)] Recovery--Activities implemented during and after a disaster response designed to return an agency to its normal operations as quickly as possible.

(102) [(98)] Registered nurse delegation--Delegation by a registered nurse in accordance with:

(A) - (B) (No change.)

(103) [(99)] Residence--A place where a person resides, including a home, a nursing facility, a convalescent home, or a residential unit.

(104) [(100)] Residential unit--A facility that provides living quarters and hospice services to clients admitted into the unit and that is in compliance with standards adopted under the Texas Health and Safety Code, Chapter 142.

(105) [(101)] Respiratory therapist--A person who is currently licensed under Texas Occupations Code, Chapter 604, as a respiratory care practitioner.

(106) [(102)] Respite services--Support options that are provided temporarily for the purpose of relief for a primary caregiver in providing care to individuals of all ages with disabilities or at risk of abuse or neglect.

(107) [(103)] Response--Actions taken immediately before an impending disaster or during and after a disaster to address the immediate and short-term effects of the disaster.

(108) [(104)] Restraint--A restraint is:

(A) - (B) (No change.)

(109) [(105)] RN--Registered nurse. A person who is currently licensed under the Nursing Practice Act, Texas Occupations Code, Chapter 301, as a registered nurse.

(110) [(106)] Seclusion--The involuntary confinement of a client alone in a room or an area in a hospice inpatient unit from which the client is physically prevented from leaving.

(111) [(107)] Section--A reference to a specific rule in this chapter.

(112) [(108)] Service area--A geographic area established by an agency in which all or some of the agency's services are available.

(113) [(109)] Skilled services--Services in accordance with a plan of care that require the skills of:

(A) - (I) (No change.)

(114) [(110)] Social worker--A person who is currently licensed as a social worker under Texas Occupations Code, Chapter 505.

(115) [(111)] Speech-language pathologist--A person who is currently licensed as a speech-language pathologist under Texas Occupations Code, Chapter 401.

(116) [(112)] Statute--The Texas Health and Safety Code, Chapter 142.

(117) [(113)] Substantial compliance--A finding in which an agency receives no recommendation for enforcement action after a survey.

(118) [(114)] Supervised practical training--Hospice aide training that is conducted in a laboratory or other setting in which the trainee demonstrates knowledge while performing tasks on an individual. The training is supervised by a registered nurse or by a licensed vocational nurse who works under the direction of a registered nurse.

(119) [(115)] Supervising nurse--The person responsible for supervising skilled services provided by an agency and who has the qualifications described in §97.244(c) of this chapter (relating to Administrator Qualifications and Conditions and Supervising Nurse Qualifications). This person may also be known as the director of nursing or similar title.

(120) [(116)] Supervision--Authoritative procedural guidance by a qualified person for the accomplishment of a function or activity with initial direction and periodic inspection of the actual act of accomplishing the function or activity.

(121) [(117)] Support services--Social, spiritual, and emotional care provided to a client and a client's family by a hospice.

(122) [(118)] Survey--An on-site inspection or complaint investigation conducted by a DADS representative to determine if an agency is in compliance with the statute and this chapter or in compliance with applicable federal requirements or both.

(123) [(119)] Terminal illness--An illness for which there is a limited prognosis if the illness runs its usual course.

(124) [(120)] Unlicensed person--A person not licensed as a health care provider. The term includes home health aides, hospice aides, hospice homemakers, medication aides permitted by DADS, and other unlicensed individuals providing personal care or assistance in health services.

(125) [(121)] Unsatisfied judgments--A failure to fully carry out the terms or meet the obligation of a court's final disposition on the matters before it in a suit regarding the operation of an agency.

(126) [(122)] Violation--A finding of noncompliance with this chapter or the statute resulting from a survey.

(127) [(123)] Volunteer--An individual who provides assistance to a home and community support services agency without compensation other than reimbursement for actual expenses.

(128) [(124)] Working day--Any day except Saturday, Sunday, a state holiday, or a federal holiday.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701214

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


SUBCHAPTER B. CRITERIA AND ELIGIBILITY, APPLICATION PROCEDURES, AND ISSUANCE OF A LICENSE

40 TAC §97.23

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Health and Safety Code, Chapter 142, which authorizes the executive commissioner to adopt rules regarding the licensure of a home and community support services agency.

The amendment implements Texas Government Code, §531.0055, and Texas Health and Safety Code, Chapter 142.

§97.23.Change of Ownership.

(a) A license holder may not transfer its license. If there is a change of ownership, the license holder's license becomes invalid on the date of the change of ownership. The prospective license holder must obtain a license in accordance with §97.13 of this subchapter (relating to Application Procedures for an Initial License) [issued under this chapter may not be sold or assigned to another person].

[(b) A change of ownership occurs when there is:]

[(1) a change of 50% or more in the ownership of the business organization or sole proprietorship that is licensed to operate the agency; or]

[(2) a change in the federal taxpayer identification number.]

(b) [(c)] A change of ownership for a parent agency is a change of ownership for the parent agency's branch office or alternate delivery site and requires the submittal of an initial application and license fee for the branch office or alternate delivery site.

(c) DADS conducts an on-site health inspection to verify compliance with the licensure requirements after issuing a license as a result of a change of ownership. DADS may conduct a desk review instead of an on-site health inspection after issuing a license as a result of a change of ownership if:

(1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed, when compared to the new license holder; or

(2) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

[(d) A change of ownership does not apply if an agency is a business entity and is simply amending its official documents to revise its name.]

(d) [(e)] For agencies licensed to provide licensed and certified home health services and licensed and certified hospice services, applicable federal laws and regulations relating to change of ownership or control apply in addition to the requirements of this section.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701215

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


CHAPTER 98. DAY ACTIVITY AND HEALTH SERVICES REQUIREMENTS

The Texas Health and Human Services Commission (HHSC), on behalf of the Department of Aging and Disability Services (DADS), proposes amendments to §98.2, concerning Definitions; and §98.16, concerning Change of Ownership, in Chapter 98, Day Activity and Health Services Requirements.

BACKGROUND AND PURPOSE

The proposed amendments revise requirements related to change of ownership of a license holder of a day activity and health services facility (DAHS facility). Under the proposed amended rules, a license holder will not be required to apply for a new license if the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal tax identification number. The proposed amendment requires a license holder that adds an owner with a disclosable interest, but does not undergo a change of ownership, to notify DADS of the addition no later than 30 days after the addition of the owner. The proposed amendments allow DADS to conduct a desk review instead of an on-site health survey if the applicant for a license resulting from a change of ownership meets certain requirements.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §98.2 adds definitions of "change of ownership," "direct ownership interest," "disclosable interest," "indirect ownership interest," and "license holder." These terms are used in the proposed amendments to §98.16, setting forth procedures for a change of ownership. The amendment also deletes the definition of "person with disclosable interest," because it is unnecessary if the term "disclosable interest" is defined.

The proposed amendment to §98.16 removes the description of a "change of ownership," because a definition of the phrase has been added to §98.2. The proposed amendment states that DADS conducts an on-site health inspection before issuing a license as a result of a change of ownership, except DADS may conduct a desk review instead of an on-site health inspection if less than 50 percent of the direct or indirect ownership interest has changed, or every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder. The proposed amendment also clarifies that DADS may also conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership. The proposed amendment requires a license holder that adds an owner with a disclosable interest, but does not undergo a change of ownership, to notify DADS of the addition no later than 30 days after the addition of the owner. The proposed amendment makes minor editorial and organizational changes for clarity and consistency.

FISCAL NOTE

David Cook, Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments are in effect, enforcing or administering the amendments does not have foreseeable implications relating to costs or revenues of state or local governments.

SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALYSIS

DADS has determined that the proposed amendments will not have an adverse economic effect on small businesses or micro-businesses because the proposed amendments do not impose requirements that result in a cost to DAHS facilities.

PUBLIC BENEFIT AND COSTS

Mary T. Henderson, DADS Associate Commissioner for Regulatory Services, has determined that, for each year of the first five years the proposed amendments are in effect, the public benefit expected as a result of enforcing the amendments is a reduction in paperwork and fewer on-site surveys associated with changes of ownership that are unlikely to affect services provided by a license holder.

Mr. Cook anticipates that there will not be an economic cost to persons who are required to comply with the proposed amendments. The proposed amendments will not affect a local economy.

TAKINGS IMPACT ASSESSMENT

DADS has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, §2007.043.

PUBLIC COMMENT

Questions about the content of this proposal may be directed to Barbara Blankenship at (512) 438-5502 in DADS Regulatory Services. Written comments on the proposal may be submitted to Barbie Blankenship at 701 West 51st Street, Austin, Texas 78751, Mail Code E-370; or via email to barbara.blankenship@dads.state.tx.us. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to DADS before 5:00 p.m. on DADS last state working day of the comment period; or (3) faxed or emailed by midnight on the last day of the comment period. When faxing or emailing comments, please indicate "Comments on Proposed Rule 16R11" in the subject line.

SUBCHAPTER A. INTRODUCTION

40 TAC §98.2

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Human Resources Code, §103.005, which requires the HHSC executive commissioner to adopt rules governing licensure of a day activity and health services facility.

The amendment implements Texas Government Code, §531.0055 and Texas Human Resources Code, §103.005.

§98.2.Definitions.

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) - (8) (No change.)

(9) Change of ownership--An event that occurs when a facilitys license holder has a different federal taxpayer identification number than a prospective license holder's federal taxpayer identification number, except that the substitution of a personal representative for a deceased license holder is not a change of ownership.

(10) [(9)] Client--Individual.

(11) [(10)] Construction, existing--See definition of existing building.

(12) [(11)] Construction, new--Construction begun after April 1, 2007.

(13) [(12)] Construction, permanent--A building or structure that meets a nationally recognized building code's details for foundations, floors, walls, columns, and roofs.

(14) [(13)] DADS--The Department of Aging and Disability Services or its successor agency.

(15) [(14)] DAHS--Day activity and health services. Health, social, and related support services.

(16) [(15)] DAHS facility--A facility that provides services under a day activity and health services program on a daily or regular basis, but not overnight, to four or more elderly persons or persons with disabilities who are not related by blood, marriage or adoption to the owner of the facility.

(17) [(16)] DAHS program--A structured, comprehensive program offered by a DAHS facility that is designed to meet the needs of adults with functional impairments by providing DAHS in accordance with individual plans of care in a protective setting.

(18) [(17)] Days--Calendar days, unless otherwise specified.

(19) [(18)] Department--Department of Aging and Disability Services or its successor agency.

(20) [(19)] Dietitian consultant--A registered dietitian; a person licensed by the Texas State Board of Examiners of Dietitians; or a person with a bachelors degree with major studies in food and nutrition, dietetics, or food service management.

(21) [(20)] Direct service staff--An employee or contractor of a facility who directly provides services to individuals, including the director, a licensed nurse, the activities director, and an attendant. An attendant includes a driver, food service worker, aide, janitor, porter, maid, and laundry worker. A dietitian consultant is not a member of the direct service staff.

(22) [(21)] Director--The person responsible for the overall operation of a facility.

(23) Direct ownership interest--Ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder.

(24) Disclosable interest--Five percent or more direct or indirect ownership interest in an applicant or license holder.

(25) [(22)] Elderly person--A person 65 years of age or older.

(26) [(23)] Existing building--A building or portion thereof that, at the time of initial inspection by DADS, is used as an adult day care occupancy, as defined by Life Safety Code, NFPA 101, 2000 edition, Chapter 17 for existing adult day care occupancies; or has been converted from another occupancy or use to an adult day care occupancy, as defined by Chapter 16 for new adult day care occupancies.

(27) [(24)] Exploitation--An illegal or improper act or process of a caretaker, family member, or other individual, who has an ongoing relationship with the elderly person or person with a disability, using the resources of an elderly person or person with a disability for monetary or personal benefit, profit, or gain without the informed consent of the elderly person or person with a disability.

(28) [(25)] Facility--A licensed DAHS facility.

(29) [(26)] Fence--A barrier to prevent elopement of an individual or intrusion by an unauthorized person, consisting of posts, columns, or other support members, and vertical or horizontal members of wood, masonry, or metal.

(30) [(27)] FM--FM Global (formerly known as Factory Mutual). A corporation whose approval of a product indicates a level of testing and certification that is acceptable to DADS.

(31) [(28)] Fraud--A deliberate misrepresentation or intentional concealment of information to receive or to be reimbursed for service delivery to which an individual is not entitled.

(32) [(29)] Functional impairment--A condition that requires assistance with one or more personal care services.

(33) [(30)] Health assessment--An assessment of an individual by a facility used to develop the individual's plan of care.

(34) [(31)] Health services--Services that include personal care, nursing, and therapy services.

(A) - (C) (No change.)

(35) [(32)] Human services--Include the following services:

(A) - (F) (No change.)

(36) [(33)] Human service program--An intentional, organized, ongoing effort designed to provide good to others. The characteristics of a human service program are:

(A) - (C) (No change.)

(37) Indirect ownership interest--Any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder.

(38) [(34)] Individual--A person who applies for or is receiving services at a facility.

(39) License holder--A person that holds a license to operate a facility.

(40) [(35)] Licensed vocational nurse (LVN)--A person licensed by the Texas Board of Nursing who works under the supervision of a registered nurse (RN) or a physician.

(41) [(36)] Life Safety Code, NFPA 101--The Code for Safety to Life from Fire in Buildings and Structures, NFPA 101, a publication of the National Fire Protection Association, Inc. that:

(A) - (B) (No change.)

(42) [(37)] Long-term care facility--A facility that provides care and treatment or personal care services to four or more unrelated persons, including:

(A) - (C) (No change.)

(43) [(38)] Management services--Services provided under contract between the owner of a facility and a person to provide for the operation of a facility, including administration, staffing, maintenance, and delivery of services. Management services do not include contracts solely for maintenance, laundry, or food services.

(44) [(39)] Manager--A person having a contractual relationship to provide management services to a facility.

(45) [(40)] Medicaid-eligible--An individual who is eligible for Medicaid.

(46) [(41)] Medically related program--A human services program under the human services-health services category in the definition of human services in this section.

(47) [(42)] Neglect--The failure to provide for ones self the goods or services, including medical services, that are necessary to avoid physical harm, mental anguish, or mental illness; or the failure of a caregiver to provide these goods or services.

(48) [(43)] NFPA--The National Fire Protection Association. NFPA is an organization that develops codes, standards, recommended practices, and guides through a consensus standards development process approved by the American National Standards Institute.

(49) [(44)] NFPA 10--Standard for Portable Fire Extinguishers. A standard developed by NFPA for the selection, installation, inspection, maintenance, and testing of portable fire extinguishing equipment.

(50) [(45)] NFPA 13--Standard for the Installation of Sprinkler Systems. A standard developed by NFPA for the minimum requirements for the design and installation of automatic fire sprinkler systems, including the character and adequacy of water supplies and the selection of sprinklers, fittings, pipes, valves, and all maintenance and accessories.

(51) [(46)] NFPA 70--National Electrical Code. A code developed by NFPA for the installation of electric conductors and equipment.

(52) [(47)] NFPA 72--National Fire Alarm Code. A code developed by NFPA for the application, installation, performance, and maintenance of fire alarm systems and their components.

(53) [(48)] NFPA 90A--Standard for the Installation of Air Conditioning and Ventilating Systems. A standard developed by NFPA for systems for the movement of environmental air in structures that serve spaces over 25,000 cubic feet or buildings of certain heights and construction types, or both.

(54) [(49)] NFPA 90B--Standard for the Installation of Warm Air Heating and Air-Conditioning Systems. A standard developed by the NFPA for systems for the movement of environmental air in one- or two-family dwellings and structures that serve spaces not exceeding 25,000 cubic feet.

(55) [(50)] NFPA 96--Standard for Ventilation Control and Fire Protection of Commercial Cooking Operations. A standard developed by NFPA that provides the minimum fire safety requirements related to the design, installation, operation, inspection, and maintenance of all public and private cooking operations, except for single-family residential usage.

(56) [(51)] Nurse--A registered nurse (RN) or a licensed vocational nurse (LVN) licensed in the state of Texas.

(57) [(52)] Nursing services--Services provided by a nurse, including:

(A) - (F) (No change.)

(58) [(53)] Person--An individual, corporation, or association.

[(54) Person with a disclosable interest-- A person who owns five percent interest in any corporation, partnership, or other business entity that is required to be licensed under Texas Human Resources Code, Chapter 103. A person with a disclosable interest does not include a bank, savings and loan, savings bank, trust company, building and loan association, credit union, individual loan and thrift company, investment banking firm, or insurance company unless such entity participates in the management of the facility.]

(59) [(55)] Person with a disability--A person whose functioning is sufficiently impaired to require frequent medical attention, counseling, physical therapy, therapeutic or corrective equipment, or another person's attendance and supervision.

(60) [(56)] Physician's orders--An order that is signed and dated by a medical doctor (MD) or doctor of osteopathy (DO) who is licensed to practice medicine in the state of Texas. The DADS physician's order form used by a DAHS facility that contracts with DADS must include the MDs or DOs license number.

(61) [(57)] Plan of care-- A written plan, based on a health assessment and developed jointly by a facility and an individual or the individuals responsible party, that documents the functional impairment of the individual and the DAHS needed by the individual.

(62) [(58)] Protective setting--A setting in which an individual's safety is ensured by the physical environment by staff.

(63) [(59)] Registered nurse (RN)--A person licensed by the Texas Board of Nursing to practice professional nursing.

(64) [(60)] Related support services--Services to an individual, family member, or caregiver that may improve the persons ability to assist with an individual's independence and functioning. Services include:

(A) - (G) (No change.)

(65) [(61)] Responsible party--A person designated by an individual as the individuals representative.

(66) [(62)] Safety--Protection from injury or loss of life due to conditions such as fire, electrical hazard, unsafe building or site conditions, and the presence of hazardous materials.

(67) [(63)] Sanitation--Protection from illness, the transmission of disease, or loss of life due to unclean surroundings, the presence of disease transmitting insects or rodents, unhealthful conditions or practices in the preparation of food and beverage, or the care of personal belongings.

(68) [(64)] Semi-ambulatory--Mobility relying on a walker, crutch, cane, other physical object, or independent use of wheelchair.

(69) [(65)] Serious injury--An injury requiring emergency medical intervention or treatment by medical personnel, either at a facility or at an emergency room or medical office.

(70) [(66)] Social activities--Therapeutic, educational, cultural enrichment, recreational, and other activities in a facility or in the community provided as part of a planned program to meet the social needs and interests of an individual.

(71) [(67)] UL--Underwriters Laboratories, Inc. A corporation whose approval of a product indicates a level of testing and certification that is acceptable to DADS.

(72) [(68)] Working with people--Responsible for the delivery of services to individuals either directly or indirectly. Experience as a manager would meet this definition; however, an administrative support position such as a bookkeeper does not. Experience does not have to be in a paid capacity.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701216

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502


SUBCHAPTER B. APPLICATION PROCEDURES

40 TAC §98.16

STATUTORY AUTHORITY

The amendment is proposed under Texas Government Code, §531.0055, which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including DADS, and Texas Human Resources Code, §103.005, which requires the HHSC executive commissioner to adopt rules governing licensure of a day activity and health services facility.

The amendment implements Texas Government Code, §531.0055, and Texas Human Resources Code, §103.005.

§98.16.Change of Ownership and Notice of Changes.

(a) A [During the license term, a] license holder may not transfer its [the] license. [as a part of the sale of the facility. Before the sale of the facility, the license holder must notify DADS that a change of ownership will be occurring. A change of ownership is a change:]

[(1) of 50% or more in the ownership of the business organization or sole proprietorship that is licensed to operate the facility; or]

[(2) in the federal taxpayer identification number.]

(b) To avoid a gap in the license because of a change in ownership of the facility, a [the] prospective license holder [purchaser] must submit to DADS a complete application for a license under §98.11 of this title (relating to Criteria for Licensing) at least 30 days before the anticipated date of a change of ownership [sale]. The applicant must meet all requirements for a license. If the applicant has filed a timely and sufficient application for a license and otherwise meets all requirements for a license, DADS will issue the applicant a license effective on the date of the change [transfer] of ownership. DADS considers an applicant [individual] has filed a timely and sufficient application for a license if the applicant [individual]:

(1) submits a complete application to DADS, and DADS receives that complete application at least 30 days before the anticipated date of change of ownership [sale];

(2) submits an incomplete application to DADS with a letter explaining the circumstances that prevented the inclusion of the missing information, and DADS receives the incomplete application and letter at least 30 days before the anticipated date of change of ownership [sale]; or

(3) submits an application to DADS, and DADS receives the application by the date of change of ownership [sale], and the applicant [individual] proves to DADS [DADS'] satisfaction that the health and safety of the facility clients required an emergency change of ownership.

(c) If the application is postmarked by the filing deadline, the application will be considered to be timely filed if received in DADS [DADS' Regulatory Services] Licensing and Credentialing Section, Regulatory Services Division, within 15 days after the postmark.

(d) DADS conducts an on-site health inspection to verify compliance with the licensure requirements before issuing a license as a result of a change of ownership. DADS may conduct a desk review instead of an on-site health inspection before issuing a license as a result of a change of ownership if:

(1) less than 50 percent of the direct or indirect ownership interest of the former license holder changed, when compared to the new license holder; or

(2) every person with a disclosable interest in the new license holder had a disclosable interest in the former license holder.

(e) DADS, in its sole discretion, may conduct an on-site Life Safety Code inspection before issuing a license as a result of a change of ownership.

(f) If a license holder adds an owner with a disclosable interest, but the license holder does not undergo a change of ownership, the license holder must notify DADS of the addition no later than 30 days after the addition of the owner.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 21, 2017.

TRD-201701217

Lawrence Hornsby

General Counsel

Department of Aging and Disability Services

Earliest possible date of adoption: May 7, 2017

For further information, please call: (512) 438-5502