TITLE 25. HEALTH SERVICES

PART 1. DEPARTMENT OF STATE HEALTH SERVICES

CHAPTER 98. TEXAS HIV MEDICATION PROGRAM

SUBCHAPTER A. TEXAS HIV STATE PHARMACY ASSISTANCE PROGRAM

25 TAC §§98.2, 98.6, 98.10

The Executive Commissioner of the Health and Human Services Commission, on behalf of the Department of State Health Services (department), proposes amendments to §§98.2, 98.6, and 98.10, concerning the Texas HIV State Pharmacy Assistance Program (SPAP).

BACKGROUND AND PURPOSE

The SPAP is a part of the Texas HIV Medication Program (THMP), which provides medications for the treatment of HIV and its related complication for low-income Texans. SPAP provides medication copayments on behalf of eligible clients with Medicare Part D prescription drug coverage. The amendments are proposed to align the rules with new federal funding guidance. Rebates are available to the THMP as a result of changes in federal law in 2011 that allowed Ryan White Part B participants (states) to invoice drug manufacturers for rebates on medication copayments paid on behalf of clients with prescription drug coverage, either through Medicare Part D or an insurance plan. The proposed amendments will add language to allow the SPAP to pay prescription drug coverage insurance premiums in addition to copayments and coinsurance in order to be eligible to claim a rebate. The proposed amendments, if enacted, will have an added public health benefit by adding a new method to allow the THMP to assist HIV infected individuals with their prescription medications.

SECTION-BY-SECTION SUMMARY

Amendments to §98.2, Definitions, would add "premium" to the definition of "Out-of-Pocket Costs" to clarify that this expense would be allowed.

Amendments to §98.6, Denial, Non-Renewal, and Termination of Benefits, would delete paragraph "(7) failure to continue premium payments under Medicare" as a reason for terminating enrollment in the program. This language would no longer be needed if the program is paying premiums. As a result, the remaining paragraphs are renumbered.

Amendments to §98.10, Limitations and Benefits Provided, would add "Medicare Part D premium payments" as a benefit that the program is allowed to pay for those clients enrolled in the program.

FISCAL NOTE

Ms. Imelda Garcia, Director, Infectious Disease Prevention Section, has determined that for each year of the first five years that the sections will be in effect, there will be fiscal implications to state government as a result of enforcing and administering the sections as proposed. The SPAP program currently serves approximately 2,200 clients; with an average monthly premium cost of $18.80, expanding SPAP to cover the cost of premiums would cost the State approximately $500,000 per year. However, this cost will be recouped via the rebates garnered from medication copayments. Rebate projections for Fiscal Year 2017 are in excess of $30 million. This revenue would be from drug manufacturer rebates that have ranged in previous years from $19.1 to $34.6 million. Ms. Garcia, has determined that for each year of the first five years that the sections will be in effect, there will be no fiscal implications to local governments as a result of enforcing and administering the sections as proposed.

SMALL AND MICRO-BUSINESS IMPACT ANALYSIS

Ms. Garcia has also determined that there will be no adverse impact on small businesses or micro-businesses required to comply with the sections as proposed. This was determined by interpretation of the rules that small businesses and micro-businesses will not be required to alter their business practices in order to comply with the sections.

ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT

There are no anticipated economic costs to persons who are required to comply with the sections as proposed. There is no anticipated negative impact on local employment.

PUBLIC BENEFIT

In addition, Ms. Garcia has also determined that for each year of the first five years the sections are in effect, the public will benefit from adoption of the sections. The public benefit anticipated will be the improvement of public health programs for HIV infected individuals by adding a new method to allow the program to pay for prescription medications. In addition there will be improved efficiency that comes from improving the clarity and readability of these rules.

REGULATORY ANALYSIS

The department has determined that this proposal is not a "major environmental rule" as defined by Government Code, §2001.0225. "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risk to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment or the public health and safety of a state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure.

TAKINGS IMPACT ASSESSMENT

The department has determined that the 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 Government Code, §2007.043.

PUBLIC COMMENT

Comments on the proposal may be submitted to Juanita Salinas, Department of State Health Services, TB/HIV/STD/VH Unit, Mail Code 7909, P.O. Box 149347, Austin, Texas 78714-9347, or by email to juanita.salinas@dshs.state.tx.us. Comments will be accepted for 30 days following publication of the proposal in the Texas Register.

LEGAL CERTIFICATION

The Department of State Health Services General Counsel, Lisa Hernandez, certifies that the proposed rules have been reviewed by legal counsel and found to be within the state agencies' authority to adopt.

STATUTORY AUTHORITY

The amendments are authorized by Texas Health and Safety Code, §85.003, which requires the department to act as lead agency and primary resource for AIDS and HIV policy; Health and Safety Code, §85.016, which allows for the adoption of rules; Health and Safety Code, §85.061, which establishes the Texas HIV Medication Program; Health and Safety Code, §85.063, which requires the department to establish procedures and eligibility guidelines for the HIV Medication Program; and Government Code, §531.0055, and Health and Safety Code, §1001.075, which authorize the Executive Commissioner of the Health and Human Services Commission to adopt rules and policies necessary for the operation and provision of health and human services by the department and for the administration of Health and Safety Code, Chapter 1001.

The amendments affect the Health and Safety Code, Chapters 85 and 1001; and Government Code, Chapter 531.

§98.2.Definitions.

The terms, when used in this subchapter, are defined as follows:

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

(10) Out-of-pocket costs--The premium, co-pay, coinsurance and deductible amounts that an individual would be expected to pay when enrolled in a Medicare prescription drug plan.

(11) - (12) (No change.)

§98.6.Denial, Non-Renewal, and Termination of Benefits.

A person may be denied enrollment in the program, be denied renewal in the program, and/or have enrollment in the program terminated for any of the following reasons:

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

[(7) failure to continue premium payments under Medicare;]

(7) [(8)] failure to enroll in Medicare prescription drug plan and apply for the Low Income Subsidy under the Medicare Prescription Drug Improvement and Modernization Act of 2003 (information on Medicare enrollment and applying for the Low Income Subsidy can be found at http://www.medicare.gov);

(8) [(9)] failure to notify the program of changes to permanent home address or insurance coverage;

(9) [(10)] the recipient notifies the program in writing that they no longer want to receive program benefits;

(10) [(11)] the recipient has not requested or used services during any period of six consecutive months; and/or

(11) [(12)] program funds are exhausted.

§98.10.Limitations and Benefits Provided.

(a) Benefits payable by the program to recipients are as follows:

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

(3) Medicare Part D premium payments.

(b) - (c) (No change.)

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 December 12, 2016.

TRD-201606536

Lisa Hernandez

General Counsel

Department of State Health Services

Earliest possible date of adoption: January 22, 2017

For further information, please call: (512) 776-6972


PART 11. CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS

CHAPTER 703. GRANTS FOR CANCER PREVENTION AND RESEARCH

25 TAC §703.13, §703.25

The Cancer Prevention and Research Institute of Texas (Institute) proposes an amendment to §703.13, regarding guidance for government auditing standards and to §703.25, regarding approval of a grantee's request to carry forward unspent project year funds into the following project year.

Background and Justification

The proposed amendment to §703.13(e)(4) replaces a reference to OMB Circular A-133 that has been superseded. The change clarifies guidance for government auditing standards. The proposed amendment to §703.25 clarifies that a request to carry forward unspent grant funds from one project year to the next requires Institute approval if the amount of the unexpended budget line item balance is 25% or more of the line item amount for the year. Section 703.25 already allows grantees to request a carry forward of unspent funds. This change aligns §703.25 with the Institute's current practice. All other requirements regarding carry forward requests remain the same in §703.25.

Fiscal Note

Kristen Pauling Doyle, General Counsel for the Cancer Prevention and Research Institute of Texas, has determined that for the first five-year period the rule changes are in effect there will be no foreseeable implications relating to costs or revenues for state or local government as a result of enforcing or administering the rules.

Public Benefit and Costs

Ms. Doyle has determined that for each year of the first five years the rule changes are in effect the public benefit anticipated as a result of enforcing the rules will be clarification of policies and procedures the Institute will follow to implement its statutory duties.

Small Business and Micro-business Impact Analysis

Ms. Doyle has determined that the rule changes shall not have an effect on small businesses or on micro businesses.

Written comments on the proposed rule changes may be submitted to Ms. Kristen Pauling Doyle, General Counsel, Cancer Prevention and Research Institute of Texas, P.O. Box 12097, Austin, Texas 78711 no later than January 23, 2017. Parties filing comments are asked to indicate whether or not they support the rule revisions proposed by the Institute and, if a change is requested, to provide specific text proposed to be included in the rule. Comments may be submitted electronically to kdoyle@cprit.texas.gov. Comments may be submitted by facsimile transmission to (512) 475-2563.

Statutory Authority

The amendments are proposed under the authority of the Texas Health and Safety Code Annotated, §102.108 and §102.251, which provide the Institute with broad rule-making authority to administer the chapter and to issue rules regarding the procedures for awarding grants. Kristen Pauling Doyle, the Institute's General Counsel, has reviewed the proposed amendments and certifies the proposal to be within the Institute's authority to adopt.

There is no other statute, article or code that is affected by these rules.

§703.13.Audits and Investigations.

(a) Upon request and with reasonable notice, an entity receiving Grant Award funds directly under the Grant Contract or indirectly through a subcontract under the Grant Contract shall allow, or shall cause the entity that is maintaining such items to allow the Institute, or auditors or investigators working on behalf of the Institute, including the State Auditor and/or the Comptroller of Public Accounts for the State of Texas, to review, inspect, audit, copy or abstract its records pertaining to the specific Grant Contract during the term of the Grant Contract and for the three year period following the end of the Grant Recipient's fiscal year during which the Grant Contract was terminated.

(b) Notwithstanding the foregoing, the Grant Recipient shall submit a single audit determination form within 60 days of the anniversary date of the Grant Contract effective date. The Grant Recipient shall report whether the Grant Recipient has expended $750,000 or more in state awards during the Grant Recipient's fiscal year. If the Grant Recipient has expended $750,000 or more in state awards in its fiscal year, the Grant Recipient shall obtain either an annual single independent audit, a program specific independent audit, or an agreed upon procedures engagement as defined by the American Institute of Certified Public Accountants and pursuant to guidance provided in subsection (e).

(1) The audited time period is the Grant Recipient's fiscal year.

(2) The audit must be submitted to the Institute within 30 days of receipt by the Grant Recipient but no later than 270 days following the close of the Grant Recipient's fiscal year and shall include a corrective action plan that addresses any weaknesses, deficiencies, wrongdoings, or other concerns raised by the audit report and a summary of the action taken by the Grant Recipient to address the concerns, if any, raised by the audit report.

(A) The Grant Recipient may seek additional time to submit the required audit and corrective action plan by providing a written explanation for its failure to timely comply and providing an expected time for the submission.

(B) The Grant Recipient's request for additional time must be submitted on or before the due date of the required audit and corrective action plan. For purposes of this rule, the "due date of the required audit" is no later than the 270th day following the close of the Grant Recipient's fiscal year.

(C) Approval of the Grant Recipient's request for additional time is at the discretion of the Institute. Such approval must be granted by the Chief Executive Officer.

(c) No reimbursements or advances of Grant Award funds shall be made to the Grant Recipient if the Grant Recipient is delinquent in filing the required audit and corrective action plan. A Grant Recipient that has received approval from the Institute for additional time to file the required audit and corrective action plan may receive reimbursements or advances of Grant Award funds during the pendency of the delinquency unless the Institute's approval declines to permit reimbursements or advances of Grant Award funds until the delinquency is addressed.

(d) A Grant Recipient that is delinquent in submitting to the Institute the audit and corrective action plan required by this section is not eligible to be awarded a new Grant Award or a continuation Grant Award until the required audit and corrective action plan are submitted. A Grant Recipient that has received approval from the Institute for additional time to file the required audit and corrective action plan may remain eligible to be awarded a new Grant Award or a continuation Grant Award unless the Institute's approval declines to continue eligibility during the pendency of the delinquency.

(e) For purposes of this rule, an agreed upon procedures engagement is one in which an independent certified public accountant is hired by the Grant Recipient to issue a report of findings based on specific procedures to be performed on a subject matter.

(1) The option to perform an agreed upon procedures engagement is intended for a non-profit or for-profit Grant Recipient that is not subject to Generally Accepted Government Audit Standards (also known as the Yellow Book) published by the U.S. Government Accountability Office.

(2) The agreed upon procedures engagement will be conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants.

(3) The certified public accountant is to perform procedures prescribed by the Institute and to report his or her findings attesting to whether the Grant Recipient records is in agreement with stated criteria.

(4) The agreed upon procedures apply to all current year expenditures for Grant Awards received by the Grant Recipient. Nothing herein prohibits the use of a statistical sample consistent with the American Institute of Certified Public Accountants' guidance regarding government auditing standards and 2 CFR Part 200, Subpart F, "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards." [Circular A-133 audits]

(5) At a minimum, the agreed upon procedures report should address:

(A) Processes and controls;

(B) The Grant Contract;

(C) Indirect Costs;

(D) Matching Funds, if appropriate;

(E) Grant Award expenditures (payroll and non-payroll related transactions);

(F) Equipment;

(G) Revenue Sharing and Program Income;

(H) Reporting; and

(I) Grant Award closeout.

(6) The certified public accountant should consider the specific Grant Mechanism and update or modify the procedures accordingly to meet the requirements of each Grant Award and the Grant Contract reviewed.

§703.25.Grant Award Budget.

(a) The Grant Contract shall include an Approved Budget that reflects the amount of the Grant Award funds to be spent for each Project Year.

(b) All expenses charged to a Grant Award must be budgeted and reported in the appropriate budget category.

(c) Actual expenditures under each category should not exceed budgeted amounts authorized by the Grant Contract as reflected on the Approved Budget for each Grant Award.

(d) Recipients may make transfers between or among lines within budget categories listed on the Approved Budget so long as the transfer fits within the scope of the Grant Contract and the total Approved Budget; is beneficial to the achievement of project objectives; and is an efficient, effective use of Grant Award funds.

(e) All budget changes or transfers require Institute approval, except that the Grant Recipient may make budget changes or transfers without prior approval from the Institute for expenses not specified in the equipment category if:

(1) The total dollar amount of all changes of any single line item (individually and in the aggregate) within budget categories other than equipment is not more than 10% of the amount in that line item;

(2) The transfer will not increase or decrease the total grant budget; and

(3) The transfer will not materially change the nature, performance level, or scope of the project.

(f) A Grant Recipient awarded a Grant Award for a multiyear project that fails to expend the total Project Year budget may carry forward the unexpended budget balance to the next Project Year.

(1) If the amount of the unexpended [budget] balance for a budget line item in a Project Year exceeds twenty-five [ten] percent (25%) or more [(10%)] of the total budget line item [Grant Award] amount for that year, [the] Institute approval is required before the Grant Recipient may [must approve the] carry forward the unexpended balance to the next Project Year.

(2) For a budget carry forward requiring Institute approval, the Grant Recipient must provide justification for why the total Grant Award amount should not be reduced by the unexpended balance.

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 December 8, 2016.

TRD-201606407

Heidi McConnell

Chief Operating Officer

Cancer Prevention and Research Institute of Texas

Earliest possible date of adoption: January 22, 2017

For further information, please call: (512) 463-3190