TITLE 1. ADMINISTRATION

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 355. REIMBURSEMENT RATES

The Texas Health and Human Services Commission (HHSC) adopts an amendment to §355.112, concerning Attendant Compensation Rate Enhancement, with changes to the proposed text as published in the March 17, 2017, issue of the Texas Register (42 TexReg 1203). An amendment to §355.723, concerning Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs, is adopted without changes to the proposed text as published in the March 17, 2017, issue of the Texas Register (42 TexReg 1203).

Background and Justification

Methods of Communication between HHC and Contracted Providers

Section 355.112 outlines procedures for the Attendant Compensation Rate Enhancement program. The Rate Enhancement program is an optional program that offers contracted providers the option to receive increased payments if they meet certain spending requirements. HHSC offers providers the opportunity annually to enroll in the program. As amended, the rule requires HHSC to notify providers of open enrollment by electronic mail (e-mail) to an authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. Providers will also be notified by e-mail if open enrollment has been postponed or cancelled.

During the open enrollment period, providers who have never been participants in the enhancement program, or who are current or prior participants who have met the spending requirements outlined in §355.112(s) may request enrollment at any level. Providers who are current or prior participants who did not meet the spending requirements are limited to a certain level of participation in the next rate year and may be subject to recoupment.

Contracted providers who are subject to an enrollment limitation may request revision of their enrollment limitation, and the request may result in a change to or elimination of the enrollment limitation.

Likewise, contracted providers who are subject to recoupment are allowed to request that HHSC recalculate the recoupment by combining the cost data on multiple reports

Beginning with the cost reports collected for the 2015 cost report period, HHSC Rate Analysis implemented a new data collection system, the State of Texas Automated Information Reporting System (STAIRS). As amended, §355.112 allows HHSC to use STAIRS to notify contracted providers of any enrollment limitations and/or any estimated recoupments. It also allows contracted providers to submit requests for revisions of enrollment limitations or recalculations of recoupments by e-mail. As a result of these changes, costs and staff time will be reduced and contracted providers will have more options to request revisions of enrollment limitations and recalculations of recoupments.

Aligning Certain HCS and TxHmL Rates with Costs and Rates for Similar Services

Texas Home Living (TxHmL) is projected to be carved-in to Medicaid managed care under STAR+PLUS effective September 1, 2018, and Home and Community-Based Services (HCS) is projected to be carved-in effective September 1, 2021. Currently, STAR+PLUS covers attendant and habilitation services for individuals with disabilities through STAR+PLUS Community First Choice (CFC), including services for individuals with intellectual and developmental disabilities (IDD). When TxHmL and HCS are carved-in to Medicaid managed care, attendant care and habilitation services will be provided through STAR+PLUS CFC. There will be no difference between individuals receiving additional waiver benefits and those receiving only CFC services with respect to those services.

Currently, payment rates for TxHmL Community Support Services (CSS) and HCS Supported Home Living (SHL) services are higher than the STAR+PLUS CFC rate and the costs of providing these services. In preparation for the managed care carve-ins of these services, HHSC is amending the rules governing their rate determination to more closely align them with the STAR+PLUS CFC rate.

As outlined in §355.112(l), the attendant compensation rate component for nonparticipating contracts is frozen at the rates in effect August 31, 2010, for the HCS and TxHmL programs. Section 355.112(l) requires the attendant compensation rate component for nonparticipating contracts to remain constant over time, except in the case of increases mandated by Texas legislature or necessitated by an increase in the federal minimum wage. HHSC is amending this rule to indicate that the attendant compensation rate component for nonparticipating contracts for HCS SHL and TxHmL CSS is equal to $14.52 per hour which is the level currently justified by HCS and TxHmL provider cost reports.

Section 355.723 establishes the rate methodology for all other HCS SHL and TxHmL CSS cost components. HHSC is amending this rule to align its rate methodology for these cost components with rate methodologies for similar services. Specifically, HHSC is tying the HCS SHL and TxHmL indirect cost component (also known as the administration and facility cost component) to the administrative and facility cost component of the Community Living Assistance and Support Services (CLASS) waiver program residential habilitation service and deleting the other direct service staffing cost component. The CLASS residential habilitation service has similar requirements for these cost areas and was incorporated in the calculation of the STAR+PLUS CFC proxy rate as described in §355.9090, Reimbursement Methodology for Community First Choice. Specifically, §355.9090(b)(1) states that the STAR+PLUS CFC rate will be equal to a weighted average of rates established for CLASS habilitation services and proxy rates for attendant services under the Community Based Alternatives waiver prior to its termination.

Rate Methodology for HCS High Medical Needs Services and Correction to Rate Methodology for HCS Nursing Services

As indicated above, §355.723 establishes the reimbursement methodology for the HCS and TxHmL waiver programs. The rule as amended: (1) adds HCS High Medical Needs Support, High Medical Needs Registered Nurse (RN), and High Medical Needs Licensed Vocational Nurse (LVN) services to the list of non-variable rates; (2) adds the rate methodology for HCS High Medical Needs Support Services; and (3) corrects an error in the projected weighted units calculation for Nursing Services.

High Medical Needs Support, High Medical Needs RN, and High Medical Needs LVN services will provide additional support for eligible persons who have medical needs that exceed the service specification for existing HCS services and who need additional support in order to remain in a community setting. However, these services have not been added as reimbursable services by HHSC. While the rate methodology for High Medical Needs Support, High Medical Needs RN, and High Medical Needs LVN will be effective with the effective date of the rule, the associated rate cannot be paid until the services are reimbursable.

The indirect cost component per unit of service for each HCS service is determined by calculating the projected weighted units of service for each service type, then using the projected weighted units to allocate administration and operation costs to the specific service type. These weights are codified in the reimbursement methodology; however, the weighting factor for Nursing Services is incorrect in the rule and does not match the weighting factor used in the calculation of the rates. The rule as amended corrects this error.

Other Changes

The amendment to §355.112 also corrects an outdated rule reference to Title 40 of the Texas Administrative Code (TAC) §49.15 (relating to Contract Assignment) with the correct rule reference of 40 TAC §49.210 (relating to Contractor Change of Legal Entity).

COMMENTS

The 30-day comment period ended April 17, 2017. During this period, HHSC received comments regarding adoption of the amendments from 167 commenters, including the following organizations:

The Mary Lee Foundation, an HCS provider;

Disability Rights of Texas, a consumer advocacy group;

ARC of Texas, a consumer advocacy group;

Berry Family Services, an HCS provider;

The Providers Alliance for Community Services of Texas (PACSTX), a provider advocacy group;

Daybreak, an HCS provider;

Texas Council of Community Centers, a provider advocacy group;

Every Child, Inc., a provider advocacy group;

Star Care, an HCS provider;

Texas Panhandle Centers, an HCS provider;

Emergence Health Network, an HCS provider;

Coalition of Texans with Disabilities, a consumer advocacy group;

Coastal Plains Community Center, an HCS provider;

Volunteers of America Texas, an HCS provider;

Disability Rights of Texas, a consumer advocacy group;

Private Providers Association of Texas (PPAT), a provider advocacy group;

Texana Center, an HCS provider; and

Betty Hardwick Center, an HCS provider.

A summary of the comments and HHSC's responses follow.

Comment: Multiple commenters stated the amendments to §355.723 and §355.112 and resulting rate reduction will have a negative impact on attendant quality, and subsequently consumer health and safety. Many commenters who participate in the Consumer Directed Services (CDS) option stated they are using as much of the reimbursement rate as legally allowed to pay attendant salaries. They stated they have employed the same attendant for many years who has become familiar with the consumers' needs, which results in attendant stability and continuity of care. The commenters stressed the importance of attendant stability and continuity of care for this population as a major factor in consumer health and safety. The commenters stated that the salary reductions necessitated by the rate reduction resulting from adoption of the rule will increase the attendant turnover rate, and will result in attendants who are not as well trained or experienced in caring for consumers in the HCS program. Commenters also stated that reduced salaries will result in a smaller pool of potential attendants who have the appropriate skills necessary to provide services to HCS consumers.

Response: As pertains to non-Consumer Directed Services, HHSC respectfully disagrees with these comments. After an analysis of non-Consumer Directed Services cost data, HHSC believes the rate will be adequate. The data from the most recently audited cost report database shows that the actual attendant costs for these services, calculated as a weighted median and inflated to the 2018-19 biennium per the reimbursement methodology, are lower than the attendant costs currently included in the rate. As well, funds associated with the non-Consumer Directed Services part of the rate reduction are not included in HHSC's appropriations for the 2018-19 biennium. Therefore, HHSC will make no changes to the amendments as a result of these comments.

Article II of the 2018-19 General Appropriations Act, S.B. 1, 85th Legislature, Regular Session, 2017 (Health and Human Services, Rider 214) appropriated funds to exempt CDS from any rate reductions resulting from the adoption of the amendments to §355.112 (l)(2)(D), §355.723(c), and §355.723(d)(10). In order to comply with Rider 214, HHSC will not apply the rate reductions resulting from the adoption of these amendments to the CDS option. Article II has not appropriated any funds to exempt any other rates from the rate reduction resulting from the adoption of these amendments. No changes to the amendments regarding this exemption are needed because the sections within which the amendments appear do not refer to CDS.

Comment: Multiple commenters stated the amendments to §355.723 and §355.112 and resulting rate reduction will result in financial hardships for current attendants and can impact attendant quality and turnover. These commenters stated that attendants, who are currently paid up to $20 per hour, may no longer be able to afford to work as a paid attendant if their salaries are cut commensurate with the rate reduction. This would result in these attendants seeking other employment, which would result in less attendant stability, less continuity of care, and would replace an experienced workforce with one less experienced and without the same level of expertise in caring for HCS consumers.

Response: As pertains to non-Consumer Directed Services, HHSC respectfully disagrees with these comments. After an analysis of the non-Consumer Directed Services cost data, HHSC believes the rate will be adequate. The data from the most recently audited cost report database shows that actual attendant costs for these services, calculated as a weighted median, inflated to the 2018-19 biennium per the reimbursement methodology, and marked up by 4.4 percent are lower than the current attendant cost component of the rate. In addition, funds associated with the non-Consumer Directed Services part of the rate reduction are not included in HHSC's appropriations for the 2018-19 biennium. Therefore, HHSC will make no changes to the amendments as a result of these comments.

Article II of the 2018-19 General Appropriations Act, S.B. 1, 85th Legislature, Regular Session, 2017 (Health and Human Services, Rider 214) appropriated funds to exempt CDS from any rate reductions resulting from the adoption of these amendments to §355.112 (l)(2)(D), §355.723(c), and §355.723(d)(10). In order to comply with Rider 214, HHSC will not apply the rate reductions resulting from the adoption of these amendments to the CDS option. Article II has not appropriated any funds to exempt any other rates from the rate reduction resulting from the adoption of these amendments. No changes to the amendments regarding this exemption are needed because the sections within which the amendments appear do not refer to CDS.

Comment: Multiple commenters expressed concerns that the amendments to §355.723 and §355.112 and resulting rate reduction could result in increased institutionalization. The commenters stated that many of the HCS consumers require an attendant with very specific skills to remain safely in the community. They stated that without the support of an attendant with the appropriate skills to support them in the community, some consumers would have move to an institutional setting. They stated that finding an attendant with the appropriate skills may not be possible at salaries that can be paid within the rate resulting from the adoption of the rule amendment.

Response: As pertains to non-Consumer Directed Services, HHSC respectfully disagrees with these comments. After an analysis of the non-Consumer Directed Services cost data, HHSC believes the rate will be adequate. The data from the most recently audited cost report database shows that the attendant costs for these services, inflated to the 2018-19 biennium, are lower than the attendant costs currently included in the rate. Furthermore, funds associated with the non-Consumer Directed Services part of the rate reduction are not included in HHSC's appropriations for the 2018-19 biennium. Therefore, HHSC will make no changes to the amendments as a result of these comments.

Article II of the 2018-19 General Appropriations Act, S.B. 1, 85th Legislature, Regular Session, 2017 (Health and Human Services, Rider 214) appropriated funds to exempt CDS from any rate reductions resulting from the adoption of these amendments to §355.112 (l)(2)(D), §355.723(c), and §355.723(d)(10). In order to comply with Rider 214 HHSC will not apply the rate reductions resulting from the adoption of these amendments to the CDS option. Article II has not appropriated any funds to exempt any other rates from the rate reduction resulting from the adoption of these amendments. No changes to the amendments regarding this exemption are needed because the sections within which the amendments appear do not refer to CDS.

Comment: Multiple commenters stated that the amendments to §355.723 and §355.112 and resulting rate reduction will result in a smaller pool of potential attendants due to the reduced salaries necessitated by the rate reductions. They also stated how the smaller pool of potential attendants will be less likely to have the appropriate skills necessary to provide services to HCS consumers. Commenters stated that they must pay higher wages in order to be competitive with other local employers for staff. They also stated that the salary reductions necessitated by the rate reduction resulting from the adoption of the proposed rule will increase the attendant turnover rate due to the attendant's ability to find other employment with the same or increased salary that does not require the provision of personal care services.

Response: As pertains to non-Consumer Directed Services, HHSC respectfully disagrees with these comments. After an analysis of the non-Consumer Directed Services cost data, HHSC believes the rate will be adequate. The data from the most recently audited cost report database shows that the attendant costs for these services, inflated to the 2018-19 biennium, are lower than the attendant costs currently included in the rate. Additionally, funds associated with the non-Consumer Directed Services part of the rate reduction are not included in HHSC's appropriations for the 2018-19 biennium. Therefore, HHSC will make no changes to the amendments as a result of these comments.

Article II of the 2018-19 General Appropriations Act, S.B. 1, 85th Legislature, Regular Session, 2017 (Health and Human Services, Rider 214) appropriated funds to exempt CDS from any rate reductions resulting from the adoption of these amendments to §355.112 (l)(2)(D), §355.723(c), and §355.723(d)(10). In order to comply with Rider 214, HHSC will not apply the rate reductions resulting from the adoption of these amendments to the CDS option. Article II has not appropriated any funds to exempt any other rates from the rate reduction resulting from the adoption of these amendments. No changes to the amendments regarding this exemption are needed because the sections within which the amendments appear do not refer to CDS.

Comment: One commenter stated that HHSC's analysis for the amendments to §355.723 and §355.112 does not appear to take into consideration the reported turnover reported in the results of the recruitment and retention survey required by Article II of the 2016-17 General Appropriations Act, H.B. 1, 85th Legislature, Regular Session, 2017 (Health and Human Services, Rider 89) for CLASS Habilitation compared to the reported turnover in HCS Supported Home Living / TxHmL Community Support Services. The survey shows a higher turnover rate in CLASS Habilitation compared to HCS Supported Home Living / TxHmL Community Support Services. The commenter states the data from the Rider 89 survey supports that higher rates have a positive impact in keeping attendant turnover rates low.

Response: HHSC respectfully disagrees with this comment. The data used for the Rider 89 recruitment and retention report is from the 2015 unaudited cost reports which are subject to change post-audit. The audited data may produce different results for both attendant salaries and turnover rates. As well, funds associated with the non-Consumer Directed Services part of the rate reduction are not included in HHSC's appropriations for the 2018-19 biennium. Therefore, HHSC will make no changes to the amendments as a result of this comment.

Comment: One commenter stated that HHSC's analysis for the amendments to §355.723 and §355.112 does not appear to take into consideration the average wage rates paid for CLASS Habilitation services compared to the average wage rates paid in HCS Supported Home Living / TxHmL Community Support Services in the results of the recruitment and retention survey required by Article II of the 2016-17 General Appropriations Act, H.B. 1, 85th Legislature, Regular Session, 2017 (Health and Human Services, Rider 89). More importantly, neither the analysis nor the Rider 89 Survey include information about the HCS/TxHmL contract staff costs, which, as presented in testimony at the April 6, 2017, hearing on the proposed rules, revealed that many providers, families, and individuals pay significantly higher wages (some as high as $20.00/hour) to ensure stability in their attendants and continuity in their care. Though not all of these higher wage rates are paid only to contract staff (some pay 'employed' staff these higher wages too), combined with the turnover data, the information supports the potential for significant turnover and challenges in recruiting staff when providers, families, and individuals have to lower the wages they currently pay staff. Moreover, it shows there will be an adverse impact on local economies and employment and on the persons required to adhere to the rule if adopted.

Response: HHSC respectfully disagrees with this comment. The data used for the Rider 89 recruitment and retention report is from the 2015 unaudited cost reports while the rates were calculated using the 2014 audited cost reports. As indicated above, unaudited data is subject to change and audited 2015 data may produce different results for attendant salaries.

As well, the statement that contract staff costs were excluded from HHSC's calculations is not accurate. HHSC's calculation of the attendant wage incorporated in the amendment of §355.112 included data for both employee and contract labor attendants.

Finally, HHSC's conclusion that the proposed amendments will not have an impact on local economies and employment is based on the fact that the rate resulting from the amendments is based on actual median employee and contract attendant hourly wages plus a 4.4 percent mark-up. As a result, the new rate will cover the median hourly wage plus 4.4 percent.

Therefore, HHSC will make no changes to the amendments as a result of this comment.

Comment: One commenter stated that the amendments to §355.723 and §355.112 and the related rate reduction will disrupt the stability of these two programs, but, more importantly, the lives of the individuals who rely on these services. The commenter stated that the amendments to these rules are both premature and shortsighted given changes at the Federal level and that the transition to STAR+PLUS is not targeted until 2021 for HCS and, if HB 3295 becomes law, not until 2020 for TxHmL.

Response: HHSC respectfully disagrees that the adoption of a payment rate that covers the median hourly wage of both employee and contract attendants plus 4.4 percent will lead to a disruption of the stability of the impacted programs. As well, HHSC cannot base its rules and policies on potential changes to federal guidance or state statute. While HB 3295 has been approved by the Legislature, it has not yet become law. Finally, funds associated with the non-Consumer Directed Services part of the rate reduction are not included in HHSC's appropriations for the 2018-19 biennium. Therefore, HHSC will make no changes to the amendments as a result of this comment.

Comment: One commenter stated that HHSC's justification for the amendments to §355.723 and §355.112 and the resulting rate reduction do not appear to take into consideration how many current providers in the HSC and TxHmL waiver programs participate in the Attendant Compensation Rate Enhancement program and whether the levels awarded will help offset the staffing challenges as a result of the rate reduction.

Response: HHSC respectfully disagrees with this comment. The rate enhancements referred to by the commenter are enhancements above the base rate and will not be impacted by the rule amendments. Providers participating in the rate enhancement will be paid a rate that is equal to the median wage for employee and contract attendants plus 4.4 percent plus enhancement funds. Therefore, HHSC will make no changes as a result of this comment.

Comment: One commenter stated that the HCS and TxHmL rates were structured to enable providers to attract a qualified workforce, reduce turnover, support continuity of care, and promote the safety and well-being of individuals who rely on these services to remain in the community. The proposed methodology does not support these critical principles, placing individuals at risk of placement in more costly, restrictive settings away from family and friends.

Response: HHSC respectfully disagrees with this comment. Cost report data for 2014 inflated to the 2018-19 biennium shows the median hourly wage paid to employee and contract attendants is significantly below the attendant wage built into the HCS and TxHmL rates. This indicates that providers have not used the funding built into the rate for its stated purpose of supporting wage rates that will attract a qualified workforce, reduce turnover, etc. Therefore, HHSC will make no changes as a result of this comment.

Comment: One commenter stated that the rate reduction resulting from the amendments to §355.723 and §355.112 and the resulting rate reduction will reduce valuable resources in an already stressed system. The commenter stated that providers already experienced significant cuts to the HCS and TxHmL rates in 2011, and along with the underfunded services in these programs, the amendments to §355.723 and §355.112 and the resulting rate reduction will jeopardize the ability of providers to remain a viable service option for individuals either seeking services or currently receiving services through the least costly IDD waiver service option.

Response: HHSC respectfully disagrees with this comment. The rate component representing attendant wages will be equal to the median provider cost plus 4.4 percent and the rate component representing the indirect cost component (also known as the administration and facility cost component) will be equal to the CLASS waiver program rate for the same cost component. The requirements for the indirect cost component for HCS and TxHmL SHL and CSS are similar to the requirements for the same cost component in the CLASS waiver program. These facts indicate that an economic and efficient provider should be able to provide services of acceptable quality under the rate resulting from this rule amendment. Therefore, HHSC will make no changes to the amendments as a result of this comment.

Comment: One commenter supported the rule amendments related to the methods of communication between HHSC and contracted providers, the rate methodology for HCS High Medical Needs Services, the correction to the rate methodology for HCS Nursing Services, and other miscellaneous changes to these rules.

Response: HHSC appreciates this commenter's support of the indicated aspects of the rule amendments.

Changes from the proposed version that are not in response to comments

HHSC revised the amendment to §355.112(u)(2) to make minor technical changes.

SUBCHAPTER A. COST DETERMINATION PROCESS

1 TAC §355.112

STATUTORY AUTHORITY

These amendments are adopted under Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code, Chapter 32.

§355.112.Attendant Compensation Rate Enhancement.

(a) Eligible programs. Providers contracted in the Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions (ICF/IID) ("Related Conditions" has the same meaning as in 40 TAC §9.203 (relating to Definitions)), Home and Community-based Services (HCS), Texas Home Living (TxHmL), Primary Home Care (PHC); Day Activity and Health Services (DAHS); Residential Care (RC); Community Living Assistance and Support Services (CLASS)--Direct Service Agency (DSA); Community Based Alternatives (CBA)--Home and Community Support Services (HCSS); Integrated Care Management (ICM)-HCSS; Deaf-Blind Multiple Disabilities Waiver (DBMD); CBA--Assisted Living/Residential Care (AL/RC) programs; and ICM AL/RC are eligible to participate in the attendant compensation rate enhancement. References in this section to CBA program services also apply to the parallel services offered under the ICM program.

(b) Definition of attendant. An attendant is the unlicensed caregiver providing direct assistance to individuals with Activities of Daily Living (ADL) and Instrumental Activities of Daily Living (IADL).

(1) In the case of the ICF/IID, DAHS, RC, and CBA AL/RC programs and the HCS Supervised Living (SL)/Residential Support Services (RSS) and HCS and TxHmL Day Habilitation (DH) settings, the attendant may perform some nonattendant functions. In such cases, the attendant must perform attendant functions at least 80% of his or her total time worked. Staff in these settings not providing attendant services at least 80% of their total time worked are not considered attendants. Time studies must be performed in accordance with §355.105(b)(2)(B)(i) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures) for staff in the ICF/IID, DAHS, RC, and CBA AL/RC programs and the HCS SL/RSS and HCS and TxHmL DH settings that are not full-time attendants but perform attendant functions to determine if a staff member meets this 80% requirement. Failure to perform the time studies for these staff will result in the staff not being considered to be attendants. Staff performing attendant functions in both the HCS SL/RSS and HCS and TxHmL DH settings that combine to equal at least 80% of their total hours worked would be included in this designation.

(2) Attendants do not include the director, administrator, assistant director, assistant administrator, clerical and secretarial staff, professional staff, other administrative staff, licensed staff, attendant supervisors, cooks and kitchen staff, maintenance and groundskeeping staff, activity director, DBMD Interveners I, II or III, Qualified Intellectual Disability Professionals (QIDPs) or assistant QIDPs, (formerly known as Qualified Mental Retardation Professionals (QMRPs) or assistant QMRPs), direct care worker supervisors, direct care trainer supervisors, job coach supervisors, foster care providers, and laundry and housekeeping staff. In the case of HCS Supported Home Living, TxHmL Community Supports, PHC, CLASS, CBA--HCSS, and DBMD, staff other than attendants may deliver attendant services and be considered an attendant if they must perform attendant services that cannot be delivered by another attendant to prevent a break in service.

(3) An attendant also includes a driver who is transporting individuals in the ICF/IID, DAHS, RC, and CBA AL/RC programs and the HCS SL/RSS and HCS and TxHmL DH settings.

(4) An attendant also includes a medication aide in the HCS SL/RSS setting and the ICF/IID, RC and CBA AL/RC programs.

(5) An attendant also includes direct care workers, direct care trainers, job coaches, supported employment direct care workers, and employment assistance direct care workers.

(c) Attendant compensation cost center. This cost center will include employee compensation, contract labor costs, and personal vehicle mileage reimbursement for attendants as defined in subsection (b) of this section.

(1) Attendant compensation is the allowable compensation for attendants defined in §355.103(b)(1) of this title (relating to Specifications for Allowable and Unallowable Costs) and required to be reported as either salaries and/or wages, including payroll taxes and workers' compensation, or employee benefits. Benefits required by §355.103(b)(1)(A)(iii) of this title to be reported as costs applicable to specific cost report line items, except as noted in paragraph (3) of this subsection, are not to be included in this cost center. For ICF/IID, attendant compensation is also subject to the requirements detailed in §355.457 of this title (relating to Cost Finding Methodology). For HCS and TxHmL, attendant compensation is also subject to the requirements detailed in §355.722 of this title (relating to Reporting Costs by Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Providers).

(2) Contract labor refers to personnel for whom the contracted provider is not responsible for the payment of payroll taxes, such as FICA, Medicare, and federal and state unemployment insurance, and who perform tasks routinely performed by employees where allowed by program rules. Allowable contract labor costs are defined in §355.103(b)(2)(C) of this title.

(3) Mileage reimbursement paid to the attendant for the use of his or her personal vehicle and which is not subject to payroll taxes is considered compensation for this cost center.

(d) Rate year. The rate year begins on the first day of September and ends on the last day of August of the following year.

(e) Open enrollment. Open enrollment begins on the first day of July and ends on the last day of that same July preceding the rate year for which payments are being determined. HHSC notifies providers of open enrollment by electronic mail (e-mail) to an authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. If open enrollment has been postponed or cancelled, the Texas Health and Human Services Commission (HHSC) will notify providers by e-mail before the first day of July. Should conditions warrant, HHSC may conduct additional enrollment periods during a rate year.

(f) Enrollment contract amendment.

(1) For CBA--HCSS and AL/RC, CLASS--DSA, DBMD, DAHS, ICM--HCSS and AL/RC, RC and PHC, an initial enrollment contract amendment is required from each provider choosing to participate in the attendant compensation rate enhancement. On the initial enrollment contract amendment, the provider must specify for each contract a desire to participate or not to participate and a preferred participation level.

(A) For the PHC program, the participating provider must also specify if he wishes to have priority, nonpriority, or both priority and nonpriority services participate in the attendant compensation rate enhancement.

(B) For providers delivering both RC and CBA AL/RC services in the same facility, participation includes both the RC and CBA AL/RC programs.

(2) For ICF/IID, HCS and TxHmL, an initial enrollment contract amendment is required from each provider choosing to participate in the attendant compensation rate enhancement. On the initial enrollment contract amendment, the provider must specify for each component code a desire to participate or not to participate and a preferred participation level. All contracts of a component code within a specific program must either participate at the same level or not participate.

(A) For the ICF/IID program, the participating provider must also specify the services he wishes to have participate in the attendant compensation rate enhancement. Eligible services are residential services and day habilitation services. The participating provider must specify whether he wishes to participate for residential services only, day habilitation services only or both residential services and day habilitation services.

(B) For the HCS and TxHmL programs, eligible services are divided into two categories: non-day habilitation services and day habilitation services. The non-day habilitation services category includes SL/RSS, supported home living/community supports, respite, supported employment and employment assistance. The day habilitation services category includes day habilitation. The participating provider must specify whether he wishes to participate for non-day habilitation services only, day habilitation services only or both non-day habilitation services and day habilitation services. For providers delivering services in both the HCS and TxHmL programs, the categories selected for participation must be the same for their HCS and TxHmL programs.

(3) After initial enrollment, participating and nonparticipating providers may request to modify their enrollment status during any open enrollment period. A nonparticipant can request to become a participant; a participant can request to become a nonparticipant; a participant can request to change its participation level.

(4) Providers whose prior year enrollment was limited by subsection (u) of this section who request to increase their enrollment levels will be limited to increases of three or fewer enhancement levels during the first open enrollment period after the limitation. Providers that were subject to an enrollment limitation may request to participate at any level during open enrollment beginning two years after limitation.

(5) Requests to modify a provider's enrollment status during an open enrollment period must be received by HHSC Rate Analysis by the last day of the open enrollment period as per subsection (e) of this section. If the last day of open enrollment is on a weekend day, state holiday, or national holiday, the next business day will be considered the last day requests will be accepted. Providers from which HHSC Rate Analysis has not received an acceptable request to modify their enrollment by the last day of the open enrollment period will continue at the level of participation in effect during the open enrollment period within available funds until the provider notifies HHSC in accordance with subsection (x) of this section that it no longer wishes to participate or until the provider's enrollment is limited in accordance with subsection (u) of this section.

(6) To be acceptable, an enrollment contract amendment must be completed according to instructions, signed by an authorized representative as per the Texas Department of Aging and Disability Services' (DADS') signature authority designation form applicable to the provider's contract or ownership type, and legible.

(g) New contracts. For the purposes of this section, for each rate year a new contract is defined as a contract or component code whose effective date is on or after the first day of the open enrollment period, as defined in subsection (e) of this section, for that rate year. Contracts that underwent a contract assignment or change of ownership and new contracts that are part of an existing component code are not considered new contracts. For purposes of this subsection, an acceptable contract amendment is defined as a legible enrollment contract amendment that has been completed according to instructions, signed by an authorized representative as per the DADS' signature authority designation form applicable to the provider's contract or ownership type, and received by HHSC Rate Analysis within 30 days of notification to the provider that such an enrollment contract amendment must be submitted. If the 30th day is on a weekend day, state holiday, or national holiday, the next business day will be considered the last day requests will be accepted. New contracts will receive the nonparticipant attendant compensation rate as specified in subsection (l) of this section with no enhancements. For new contracts specifying their desire to participate in the attendant compensation rate enhancement on an acceptable enrollment contract amendment, the attendant compensation rate is adjusted as specified in subsection (r) of this section, effective on the first day of the month following receipt by HHSC of an acceptable enrollment contract amendment. If the granting of newly requested enhancements was limited by subsection (p)(2)(B) of this section during the most recent enrollment, enrollment for new contracts will be subject to that same limitation. If the most recent enrollment was cancelled by subsection (e) of this section, new contracts will not be permitted to be enrolled.

(h) Attendant Compensation Report submittal requirements.

(1) Annual Attendant Compensation Report. For services delivered on or before August 31, 2009, providers must file Attendant Compensation Reports as follows. All participating contracted providers will provide HHSC Rate Analysis, in a method specified by HHSC Rate Analysis, an annual Attendant Compensation Report reflecting the activities of the provider while delivering contracted services from the first day of the rate year through the last day of the rate year. This report must be submitted for each participating contract if the provider requested participation individually for each contract; or, if the provider requested participation as a group, the report must be submitted as a single aggregate report covering all contracts participating at the end of the rate year within one program of the provider. A participating contract that has been terminated in accordance with subsection (v) of this section or that has undergone a contract assignment in accordance with subsection (w) of this section will be considered to have participated on an individual basis for compliance with reporting requirements for the owner prior to the termination or contract assignment. This report will be used as the basis for determining compliance with the spending requirements and recoupment amounts as described in subsection (s) of this section. Contracted providers failing to submit an acceptable annual Attendant Compensation Report within 60 days of the end of the rate year will be placed on vendor hold until such time as an acceptable report is received and processed by HHSC Rate Analysis.

(A) When a participating provider changes ownership through a contract assignment, the prior owner must submit an Attendant Compensation Report covering the period from the beginning of the rate year to the effective date of the contract assignment as determined by HHSC, or its designee. This report will be used as the basis for determining any recoupment amounts as described in subsection (s) of this section. The new owner will be required to submit an Attendant Compensation Report covering the period from the day after the date recognized by HHSC, or its designee, as the contract-assignment effective date to the end of the rate year.

(B) Participating providers whose contracts are terminated voluntarily or involuntarily must submit an Attendant Compensation Report covering the period from the beginning of the rate year to the date recognized by HHSC or its designee as the contract termination date. This report will be used as the basis for determining recoupment as described in subsection (s) of this section.

(C) Participating providers who voluntarily withdraw from participation, as described in subsection (x) of this section, must submit an Attendant Compensation Report within 60 days from the date of withdrawal as determined by HHSC. This report must cover the period from the beginning of the rate year through the date of withdrawal as determined by HHSC and will be used as the basis for determining any recoupment amounts as described in subsection (s) of this section.

(D) Participating providers whose cost report year, as defined in §355.105(b)(5) of this title, coincides with the state of Texas fiscal year, are exempt from the requirement to submit a separate annual Attendant Compensation Report. For these contracts, their cost report will be considered their annual Attendant Compensation Report.

(2) For services delivered on September 1, 2009, and thereafter, cost reports as described in §355.105(b) of this title will replace the Attendant Compensation Report with the following exceptions:

(A) For services delivered from September 1, 2009, to August 31, 2010, participating providers may be required to submit Transition Attendant Compensation Reports in addition to required cost reports. The Transition Attendant Compensation Report reporting period will include those days in calendar years 2009 and 2010 not included in either the 2009 Attendant Compensation report or the provider's 2010 cost report. This report must be submitted for each participating contract if the provider requested participation individually for each contract; or, if the provider requested participation as a group, the report must be submitted as a single aggregate report covering all contracts participating at the end of the transition reporting period within one program of the provider. A participating contract that has been terminated in accordance with subsection (v) of this section or that has undergone a contract assignment in accordance with subsection (w) of this section will be considered to have participated on an individual basis for compliance with transition reporting requirements for the owner prior to the termination or contract assignment. This report will be used as the basis for determining any recoupment amounts as described in subsection (s) of this section for the transition reporting period. Participating providers failing to submit an acceptable Transition Attendant Compensation Report within 60 days of the date of the HHSC request for the report will be placed on vendor hold until such time as an acceptable report is received and processed by HHSC Rate Analysis.

(B) When a participating provider changes ownership through a contract assignment or change of ownership, the previous owner must submit an Attendant Compensation Report covering the period from the beginning of the provider's cost reporting period to the date recognized by HHSC, or its designee, as the contract-assignment or ownership-change effective date. This report will be used as the basis for determining any recoupment amounts as described in subsection (s) of this section. The new owner will be required to submit a cost report covering the period from the day after the date recognized by HHSC or its designee as the contract-assignment or ownership-change effective date to the end of the provider's fiscal year.

(C) When one or more contracts or, for the ICF/IID, HCS and TxHmL programs, component codes of a participating provider are terminated, either voluntarily or involuntarily, the provider must submit an Attendant Compensation Report for the terminated contract(s) or component code(s) covering the period from the beginning of the provider's cost reporting period to the date recognized by HHSC, or its designee, as the contract or component code termination date. This report will be used as the basis for determining any recoupment amounts as described in subsection (s) of this section.

(D) When one or more contracts or, for the ICF/IID, HCS and TxHmL programs, component codes of a participating provider are voluntarily withdrawn from participation as per subsection (x) of this section, the provider must submit an Attendant Compensation Report within 60 days of the date of withdrawal as determined by HHSC, covering the period from the beginning of the provider's cost reporting period to the date of withdrawal as determined by HHSC. This report will be used as the basis for determining any recoupment amounts as described in subsection (s) of this section. These providers must still submit a cost report covering the entire cost reporting period. The cost report will not be used for determining any recoupment amounts.

(E) For new contracts as defined in subsection (g) of this section, the cost reporting period will begin with the effective date of participation in the enhancement.

(F) Existing providers who become participants in the enhancement as a result of the open enrollment process described in subsection (e) of this section on any day other than the first day of their fiscal year are required to submit an Attendant Compensation Report with a reporting period that begins on their first day of participation in the enhancement and ends on the last day of the provider's fiscal year. This report will be used as the basis for determining any recoupment amounts as described in subsection (s) of this section. These providers must still submit a cost report covering the entire cost reporting period. The cost report will not be used for determining any recoupment amounts.

(G) A participating provider that is required to submit a cost report or Attendant Compensation Report under this paragraph will be excused from the requirement to submit a report if the provider did not provide any billable attendant services to DADS recipients during the reporting period.

(3) Other reports. HHSC may require other reports from all contracts as needed.

(4) Vendor hold. HHSC, or its designee, will place on hold the vendor payments for any participating provider who does not submit a timely report as described in paragraph (1) of this subsection, or for services delivered on or after September 1, 2009, a timely report as described in paragraph (2) of this subsection completed in accordance with all applicable rules and instructions. This vendor hold will remain in effect until HHSC Rate Analysis receives an acceptable report.

(A) Participating contracts or, for the ICF/IID, HCS and TxHmL programs, component codes that do not submit an acceptable report completed in accordance with all applicable rules and instructions within 60 days of the due dates described in this subsection or, for cost reports, the due dates described in §355.105(b) of this title will become nonparticipants retroactive to the first day of the reporting period in question and will be subject to an immediate recoupment of funds related to participation paid to the contractor for services provided during the reporting period in question. These contracts or component codes will remain nonparticipants and recouped funds will not be restored until they submit an acceptable report and repay to HHSC, or its designee, funds identified for recoupment from subsection (s) of this section. If an acceptable report is not received within 365 days of the due date, the recoupment will become permanent and, if all funds associated with participation during the reporting period in question have been recouped by HHSC, or its designee, the vendor hold associated with the report will be released.

(B) Participating contracts or, for the ICF/IID, HCS and TxHmL programs, component codes that have terminated or undergone a contract assignment or ownership-change from one legal entity to a different legal entity and do not submit an acceptable report completed in accordance with all applicable rules and instructions within 60 days of the contract assignment, ownership-change or termination effective date will become nonparticipants retroactive to the first day of the reporting period in question. These contracts or component codes will remain nonparticipants and recouped funds will not be restored until they submit an acceptable report and repay to HHSC, or its designee, funds identified for recoupment under subsection (s) of this section. If an acceptable report is not received within 365 days of the contract assignment, ownership-change or termination effective date, the recoupment will become permanent and, if all funds associated with participation during the reporting period in question have been recouped by HHSC, or its designee, the vendor hold associated with the report will be released.

(5) Provider-initiated amended Attendant Compensation Reports and cost reports functioning as Attendant Compensation Reports. Reports must be received prior to the date the provider is notified of compliance with spending requirements for the report in question in accordance with subsection (s) of this section.

(i) Report contents. Each Attendant Compensation Report and cost report functioning as an Attendant Compensation Report will include any information required by HHSC to implement this attendant compensation rate enhancement.

(j) Completion of compensation reports. All Attendant Compensation Reports and cost reports functioning as Attendant Compensation Reports must be completed in accordance with the provisions of §§355.102 - 355.105 of this title (relating to General Principles of Allowable and Unallowable Costs; Specifications for Allowable and Unallowable Costs; Revenues; and General Reporting and Documentation Requirements, Methods, and Procedures) and may be reviewed or audited in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports). Beginning with the rate year that starts September 1, 2002, all Attendant Compensation Reports and cost reports functioning as Attendant Compensation Reports must be completed by preparers who have attended the required cost report training for the applicable program under §355.102(d) of this title. For the ICF/IID program, cost reports functioning as Attendant Compensation Reports must also be completed in accordance with the provisions of §355.457 of this title. For the HCS and TxHmL programs, cost reports functioning as Attendant Compensation Reports must also be completed in accordance with the provisions of §355.722 of this title.

(k) Enrollment. Providers choosing to participate in the attendant compensation rate enhancement must submit to HHSC a signed enrollment contract amendment as described in subsection (f) of this section. Participation is determined separately for each program specified in subsection (a) of this section, except that for providers delivering both RC and CBA AL/RC services in the same facility, participation includes both the RC and CBA AL/RC programs and for providers delivering both HCS and TxHmL services, participation includes both the HCS and TxHmL programs. For PHC, participation is also determined separately for priority and nonpriority services. For ICF/IID, participation is also determined separately for residential services and day habilitation services. For HCS and TxHmL, participation is also determined separately for the non-day habilitation services category and the day habilitation services category as defined in subsection (f)(2)(B) of this section. Participation will remain in effect, subject to availability of funds, until the provider notifies HHSC, in accordance with subsection (x) of this section, that it no longer wishes to participate or until HHSC excludes the contract from participation for reasons outlined in subsection (u) of this section. Contracts or component codes voluntarily withdrawing from participation will have their participation end effective with the date of withdrawal as determined by HHSC. Contracts or components codes excluded from participation will have their participation end effective on the date determined by HHSC.

(l) Determination of attendant compensation rate component for nonparticipating contracts.

(1) For the PHC; DAHS; RC; CLASS--DSA; CBA--HCSS; ICM-HCSS; DBMD; CBA--AL/RC; and ICM AL/RC programs, HHSC will calculate an attendant compensation rate component for nonparticipating contracts as follows.

(A) Determine for each contract included in the cost report data base used in determination of rates in effect on September 1, 1999, the attendant compensation cost center from subsection (c) of this section.

(B) Adjust the cost center data from subparagraph (A) of this paragraph in order to account for inflation utilizing the inflation factors used in the determination of the September 1, 1999 rates.

(C) For each contract included in the cost report database used to determine rates in effect on September 1, 1999, divide the result from subparagraph (B) of this paragraph by the corresponding units of service. Provider projected costs per unit of service are rank-ordered from low to high, along with the provider's corresponding units of service. For DAHS, the median cost per unit of service is selected. For all other programs, the units of service are summed until the median unit of service is reached. The corresponding projected cost per unit of service is the weighted median cost component. The result is multiplied by 1.044 for PHC; DAHS; CLASS--DSA; CBA--HCSS; ICM-HCSS; DBMD and by 1.07 for RC; CBA--AL/RC; and ICM AL/RC. The result is the attendant compensation rate component for nonparticipating contracts.

(D) The attendant compensation rate component for nonparticipating contracts will remain constant over time, except in the case of increases to the attendant compensation rate component for nonparticipating contracts explicitly mandated by the Texas legislature and for adjustments necessitated by increases in the minimum wage. Adjustments necessitated by increases in the minimum wage are limited to ensuring that these rates are adequate to cover mandated minimum wage levels.

(2) For ICF/IID DH, ICF/IID residential services, HCS SL/RSS, HCS DH, HCS supported home living, HCS respite, HCS supported employment, HCS employment assistance, TxHmL DH, TxHmL community supports, TxHmL respite, TxHmL supported employment, and TxHmL employment assistance, for each level of need, HHSC will calculate an attendant compensation rate component for nonparticipating contracts for each service as follows:

(A) For each service, for each level of need, determine the percent of the fully-funded model rate in effect on August 31, 2010 for that service accruing from attendants. For ICF/IID, the fully-funded model is the model as calculated under §355.456(d) of this title (relating to Reimbursement Methodology) prior to any adjustments made in accordance with §355.101 of this title (relating to Introduction) and §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs). For HCS and TxHmL, the fully-funded model is the model as calculated under §355.723(d) of this title (relating to Reimbursement Methodology for Home and Community-based Services and Texas Home Living Programs) prior to any adjustments made in accordance with §355.101 of this title and §355.109 of this title for the rate period.

(B) For each service, for each level of need, multiply the percent of the fully-funded model rate in effect on August 31, 2010 for that service accruing from attendants from subparagraph (A) of this paragraph by the total adopted reimbursement rate for that service in effect on August 31, 2010. The result is the attendant compensation rate component for that service for nonparticipating contracts.

(C) The attendant compensation rate component for nonparticipating contracts will remain constant over time, except in the case of increases to the attendant compensation rate component for nonparticipating contracts explicitly mandated by the Texas legislature; and for adjustments necessitated by increases in the minimum wage. Adjustments necessitated by increases in the minimum wage are limited to ensuring that these rates are adequate to cover mandated minimum wage levels.

(D) The attendant compensation rate component for nonparticipating contracts for HCS supported home living and TxHmL community supports is equal to $14.52 per hour.

(m) Determination of attendant compensation base rate for participating contracts.

(1) For each of the programs identified in subsection (a) of this section except for CBA AL/RC, the attendant compensation base rate is equal to the attendant compensation rate component for nonparticipating contracts from subsection (l) of this section.

(2) For CBA AL/RC, the attendant compensation base rate will be determined by taking into consideration quality of care, labor market conditions, economic factors, and budget constraints.

(n) Determination of attendant compensation rate enhancements. HHSC will determine a per diem add-on payment for each enhanced attendant compensation level using data from sources such as cost reports, surveys, and/or other relevant sources and taking into consideration quality of care, labor market conditions, economic factors, and budget constraints. The attendant compensation rate enhancement add-ons will be determined on a per-unit-of-service basis applicable to each program or service. Add-on payments may vary by enhancement level.

(o) Enhanced attendant compensation. Contracts or component codes desiring to participate in the enhanced attendant compensation rate may request attendant compensation levels from an array of enhanced attendant compensation options and associated add-on payments determined in subsection (n) of this section during open enrollment.

(1) ICF/IID providers must select a single attendant compensation level for all contracts within a component code for the day habilitation and/or residential services they have selected for participation.

(2) HCS and TxHmL must select a single attendant compensation level for all contracts within a component code for the non-day habilitation and/or day habilitation services they have selected for participation.

(p) Granting attendant compensation rate enhancements. Eligible programs are divided into two populations for purposes of granting attendant compensation rate enhancements. The first population includes the PHC; DAHS; RC; CLASS--DSA; CBA--HCSS; ICM-HCSS; DBMD; CBA--AL/RC; and ICM AL/RC programs and the second population includes the ICF/IID; HCS; and TxHmL programs. Enhancements for the two populations are funded separately; funds intended for enhancements for the first population of programs will never be used for enhancements for the second population and funds intended for enhancements for the second population of programs will never be used for enhancements for the first population. For each population of programs, HHSC divides all requested enhancements, after applying any enrollment limitations from subsection (u) of this section, into two groups: pre-existing enhancements, which providers request to carry over from the prior year, and newly-requested enhancements. Newly-requested enhancements may be enhancements requested by providers who were nonparticipants in the prior year or by providers who were participants in the prior year who seek additional enhancements. Using the process described herein separately for each population of programs, HHSC first determines the distribution of carry-over enhancements. If funds are available after the distribution of carry-over enhancements, HHSC determines the distribution of newly-requested enhancements. HHSC may not distribute newly-requested enhancements to providers owing funds identified for recoupment under subsection (s) of this section.

(1) For all programs and levels except for CBA AL/RC Level 1, HHSC determines projected units of service for contracts and/or component codes requesting each enhancement level and multiplies this number by the enhancement rate add-on amount associated with that enhancement level as determined in subsection (n) of this section. For CBA AL/RC Level 1, HHSC determines projected units of service for CBA AL/RC contracts requesting Level 1 and multiplies this number by the sum of the difference between the base rate and the nonparticipant rate and the enhancement add-on amount associated with enhancement Level 1 as follows: (Base Rate - Nonparticipant Rate) + Level 1 add-on amount.

(2) HHSC compares the sum of the products from paragraph (1) of this subsection to available funds.

(A) If the sum of the products is less than or equal to available funds, all requested enhancements are granted.

(B) If the sum of the products is greater than available funds, enhancements are granted beginning with the lowest level of enhancement and granting each successive level of enhancement until requested enhancements are granted within available funds. Based upon an examination of existing compensation levels and compensation needs, HHSC may grant certain enhancement options priority for distribution.

(q) Notification of granting of enhancements. Participating contracts and component codes are notified, in a manner determined by HHSC, as to the disposition of their request for attendant compensation rate enhancements.

(r) Total attendant compensation rate for participating providers. Each participating provider's total attendant compensation rate will be equal to the attendant compensation base rate from subsection (m) of this section plus any add-on payments associated with enhanced attendant compensation levels selected by and awarded to the provider during open enrollment.

(s) Spending requirements for participating contracts and component codes. HHSC will determine from the Attendant Compensation Report or cost report functioning as an Attendant Compensation Report, as specified in subsection (h) of this section and other appropriate data sources, the amount of attendant compensation spending per unit of service delivered. The provider's compliance with the spending requirement is determined based on the total attendant compensation spending as reported on the Attendant Compensation Report or cost report functioning as an Attendant Compensation Report for each participating contract or component code. Compliance with the spending requirement is determined separately for each program specified in subsection (a) of this section, except for providers delivering both RC and CBA AL/RC services in the same facility whose compliance is determined by combining both programs and providers delivering services in both the HCS and TxHmL programs whose compliance is determined by combining both programs. HHSC will calculate recoupment, if any, as follows.

(1) The accrued attendant compensation revenue per unit of service is multiplied by 0.90 to determine the spending requirement per unit of service. The accrued attendant compensation spending per unit of service will be subtracted from the spending requirement per unit of service to determine the amount to be recouped. If the accrued attendant compensation spending per unit of service is greater than or equal to the spending requirement per unit of service, there is no recoupment.

(2) The amount paid for attendant compensation per unit of service after adjustments for recoupment must not be less than the amount determined for nonparticipating contracts or component codes in subsection (l) of this section.

(3) In cases where more than one enhancement level is in effect during the reporting period, the spending requirement will be based on the weighted average enhancement level in effect during the reporting period calculated as follows:

(A) Multiply the first enhancement level in effect during the reporting period by the most recently available, reliable Medicaid units of service utilization data for the time period the first enhancement level was in effect.

(B) Multiply the second enhancement level in effect during the reporting period by the most recently available, reliable Medicaid units of service utilization data for the time period the second enhancement level was in effect.

(C) Sum the products from subparagraphs (A) and (B) of this paragraph.

(D) Divide the sum from subparagraph (C) of this paragraph by the sum of the most recently available, reliable Medicaid units of service utilization data for the entire reporting period used in subparagraphs (A) and (B) of this paragraph.

(t) Notification of recoupment and request for recalculation.

(1) Notification of recoupment. The estimated amount to be recouped is indicated in the State of Texas Automated Information Reporting System (STAIRS), the online application for submitting cost reports and accountability reports. STAIRS will generate an e-mail to the entity contact, indicating that the provider's estimated recoupment is available for review. The entity contact is the provider's authorized representative per the signature authority designation form applicable to the provider's contract or ownership type. If a subsequent review by HHSC or audit results in adjustments to the annual Attendant Compensation Report or cost reporting, as described in subsection (h) of this section, that change the amount to be repaid, the provider will be notified by e-mail to the entity contact that the adjustments and the adjusted amount to be repaid are available in STAIRS for review. HHSC, or its designee, will recoup any amount owed from a provider's vendor payment(s) following the date of the initial or subsequent notification. For the HCS and TxHmL programs, if HHSC, or its designee, is unable to recoup owed funds in an automated fashion, the requirements detailed under subsection (dd) of this section apply.

(2) Request for recalculation. Providers notified of a recoupment based on an Attendant Compensation Report described in subsection (h)(2)(A) or (h)(2)(F) of this section may request that HHSC recalculate their recoupment after combining the Attendant Compensation Report with the provider's next full-year cost report. The request must be received by HHSC Rate Analysis no later than 30 days after the date on the e-mail notification of recoupment. If the 30th calendar day is a weekend day, national holiday, or state holiday, then the first business day following the 30th calendar day is the final day the receipt of the request will be accepted.

(A) The request must be made by e-mail to the e-mail address specified in STAIRS, hand delivery, United States (U.S.) mail, or special mail delivery. An e-mail request must be typed on the provider's letterhead, signed by a person indicated in subparagraph (B) of this paragraph, then scanned and sent by e-mail to HHSC.

(B) The request must be signed by an individual legally responsible for the conduct of the provider, such as the sole proprietor, a partner, a corporate officer, an association officer, a governmental official, a limited liability company member, a person authorized by the applicable signature authority designation form for the provider at the time of the request, or a legal representative for the provider. The administrator or director of a facility or program is not authorized to sign the request unless the administrator or director holds one of these positions. HHSC will not accept a request that is not signed by an individual responsible for the conduct of the provider.

(u) Enrollment limitations. A provider will not be enrolled in the attendant compensation rate enhancement at a level higher than the level it achieved on its most recently available, audited Attendant Compensation Report or cost report functioning as an Attendant Compensation Report. HHSC will notify a provider of its enrollment limitations (if any) prior to the first day of the open enrollment period.

(1) Notification of enrollment limitations. The enrollment limitation level is indicated in STAIRS. STAIRS will generate an e-mail to the entity contact, indicating that the provider's enrollment limitation level is available for review.

(2) Requests for revision. A provider may request a revision of its enrollment limitation if the provider's most recently available audited Attendant Compensation Report or cost report functioning as an Attendant Compensation Report does not represent its current attendant compensation levels.

(A) A request for revision of enrollment limitation must include the documentation specified in subparagraph (B) of this paragraph and must be received by HHSC Rate Analysis no later than the deadline indicated in the notification of open enrollment specified in subsection (e). A request for revision that is not received by the stated deadline will not be accepted, and the enrollment limitation specified in STAIRS will apply.

(B) A provider that requests a revision of its enrollment limitation must submit documentation that shows that, for the period beginning September 1 of the current rate year and ending April 30 of the current rate year, the provider met a higher attendant compensation level than STAIRS indicates. In such cases, the provider's enrollment limitation will be established at the level supported by its request for revision documentation. It is the responsibility of the provider to render all required documentation at the time of its request for revision. Requests that fail to support an attendant compensation level different from what is indicated STAIRS will result in a rejection of the request, and the enrollment limitation specified in STAIRS will apply.

(C) A request for revision must be signed by an individual legally responsible for the conduct of the provider or legally authorized to bind the provider, such as the sole proprietor, a partner, a corporate officer, an association officer, a governmental official, a limited liability company member, a person authorized by the applicable DADS signature authority designation form for the interested party on file at the time of the request, or a legal representative for the interested party. A request for revision that is not signed by an individual legally responsible for the conduct of the interested party will not be accepted, and the enrollment limitation specified in STAIRS will apply.

(D) If the provider's Attendant Compensation Report or cost report functioning as an Attendant Compensation Report for the rate year that included the open enrollment period described in subsection (e) of this section shows the provider compensated attendants below the level it presented in its request for revision, HHSC will immediately recoup all enhancement payments associated with the request for revision documents, and the provider will be limited to the level supported by the report for the remainder of the rate year.

(3) Informal reviews and formal appeals. The filing of a request for an informal review or formal appeal relating to a provider's most recently available, audited Attendant Compensation Report or cost report functioning as an Attendant Compensation Report under §355.110 of this title (relating to Informal Reviews and Formal Appeals) does not stay or delay implementation of an enrollment limitation applied in accordance with the requirements of this subsection. If an informal review or formal appeal relating to a provider's most recently available, audited Attendant Compensation Report or cost report functioning as an Attendant Compensation Report is pending at the time the enrollment limitation is applied, the result of the informal review or formal appeal shall be applied to the provider's enrollment retroactively to the beginning of the rate year to which the enrollment limitation was originally applied.

(4) New owners after a contract assignment or change of ownership that is an ownership change from one legal entity to a different legal entity. Enhancement levels for a new owner after a contract assignment or change of ownership that is an ownership change from one legal entity to a different legal entity will be determined in accordance with subsection (w) of this section. A new owner after a contract assignment or change of ownership that is an ownership-change from one legal entity to a different legal entity will not be subject to enrollment limitations based upon the prior owner's performance.

(5) New providers. A new provider's enrollment will be determined in accordance with subsection (g) of this section.

(v) Contract terminations. For contracted providers or component codes required to submit an Attendant Compensation Report due to a termination as described in subsection (h) of this section, HHSC, or its designee, will place a vendor hold on the payments of the contracted provider until HHSC receives an acceptable Attendant Compensation Report, as specified in subsection (h) of this section, and funds identified for recoupment from subsection (s) of this section are repaid to HHSC, or its designee. Informal reviews and formal appeals relating to these reports are governed by §355.110 of this title. HHSC, or its designee, will recoup any amount owed from the provider's vendor payments that are being held. In cases where funds identified for recoupment cannot be repaid from the held vendor payments, the responsible entity from subsection (cc) of this section will be jointly and severally liable for any additional payment due to HHSC, or its designee. Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in the recoupment of the owed funds from other HHSC and/or DADS contracts controlled by the responsible entity, placement of a vendor hold on all HHSC and/or DADS contracts controlled by the responsible entity, and will bar the responsible entity from enacting new contracts with HHSC and/or DADS until repayment is made in full. The responsible entity for these contracts will be notified as described in subsection (t) of this section prior to the recoupment of owed funds, placement of vendor hold on additional contracts, and barring of new contracts.

(w) Contract assignments. The following applies to contract assignments.

(1) Definitions. The following words and terms have the following meanings when used in this subsection.

(A) Assignee--A legal entity that assumes a Community Care contract through a legal assignment of the contract from the contracting entity as provided in 40 TAC §49.210 (relating to Contractor Change of Legal Entity).

(B) Assignor--A legal entity that assigns its Community Care contract to another legal entity as provided in 40 TAC §49.210.

(C) Contract assignment--The transfer of a contract by one legal entity to another legal entity as provided in 40 TAC §49.210.

(i) Type One Contract Assignment--A contract assignment by which the assignee is an existing Community Care contract.

(ii) Type Two Contract Assignment--A contract assignment by which the assignee is a new Community Care contract.

(2) Participation after a contract assignment. Participation after a contract assignment is determined as follows:

(A) Type One Contract Assignments. For Type One contract assignments, the assignee's level of participation remains the same while the assignor's level of participation changes to the assignee's.

(B) Type Two Contract Assignments. For Type Two contract assignments, the level of participation of the assignor contract(s) will continue unchanged under the assignee contract(s).

(3) The assignee is responsible for the reporting requirements in subsection (h) of this section for any reporting period days occurring after the contract assignment effective date. If the contract assignment occurs during an open enrollment period as defined in subsection (e) of this section, the owner recognized by HHSC, or its designee, on the last day of the enrollment period may request to modify the enrollment status of the contract in accordance with subsection (f) of this section.

(4) For contracted providers required to submit an Attendant Compensation Report due to contract assignment, as described in subsection (h) of this section, HHSC, or its designee, will place a vendor hold on the payments of the existing contracted provider until HHSC receives an acceptable Attendant Compensation Report, as specified in subsection (h) of this section, and until funds identified for recoupment from subsection (s) of this section are repaid to HHSC, or its designee. HHSC, or its designee, will recoup any amount owed from the provider's vendor payments that are being held. In cases where funds identified for recoupment cannot be repaid from the held vendor payments, the responsible entity from subsection (cc) of this section will be jointly and severally liable for any additional payment due to HHSC, or its designee. Failure to repay the amount due within 60 days of notification will result in the recoupment of the owed funds from other HHSC and/or DADS contracts controlled by the responsible entity, placement of a vendor hold on all HHSC and/or DADS contracts controlled by the responsible entity, and will bar the responsible entity from enacting new contracts with HHSC and/or DADS until repayment is made in full. The responsible entity for these contracts will be notified, as described in subsection (t) of this section, prior to the recoupment of owed funds, placement of vendor hold on additional contracts, and barring of new contract.

(x) Voluntary withdrawal. Participating contracts or component codes wishing to withdraw from the attendant compensation rate enhancement must notify HHSC Rate Analysis in writing by certified mail and the request must be signed by an authorized representative as designated per the DADS signature authority designation form applicable to the provider's contract or ownership type. The requests will be effective the first of the month following the receipt of the request. Contracts or component codes voluntarily withdrawing must remain nonparticipants for the remainder of the rate year. Providers whose contracts are participating as part of a component code must request withdrawal of all the contracts in the component code.

(y) Adjusting attendant compensation requirements. Providers that determine that they will not be able to meet their attendant compensation requirements may request to reduce their attendant compensation requirements and associated enhancement payment to a lower participation level by submitting a written request to HHSC Rate Analysis by certified mail and the request must be signed by an authorized representative as designated per the DADS signature authority designation form applicable to the provider's contract or ownership type. These requests will be effective the first of the month following the receipt of the request. Providers whose contracts are participating as part of a component code must request the same reduction for all of the contracts in the component code.

(z) All other rate components. All other rate components will continue to be calculated as specified in the program-specific reimbursement methodology and will be uniform for all providers.

(aa) Failure to document spending. Undocumented attendant compensation expenses will be disallowed and will not be used in the determination of the attendant compensation spending per unit of service in subsection (s) of this section.

(bb) Appeals. Subject matter of informal reviews and formal appeals is limited as per §355.110 of this title.

(cc) Responsible entities. The contracted provider, owner, or legal entity which received the attendant compensation rate enhancement is responsible for the repayment of the recoupment amount.

(1) HCS and TxHmL providers required to repay enhancement funds will be jointly and severally liable for any repayment.

(2) Failure to repay the amount due or submit an acceptable payment plan within 60 days of notification will result in placement of a vendor hold on all HHSC or DADS contracts controlled by the responsible entity.

(dd) Manual Repayment. For the HCS and TxHmL programs, if HHSC, or its designee, is unable to recoup owed funds using an automated system, providers will be required to repay some or all of the enhancement funds to be recouped through a check, money order or other non-automated method. Providers will be required to submit the required repayment amount within 60 days of notification.

(ee) Determination of compliance with spending requirements in the aggregate.

(1) Definitions. The following words and terms have the following meanings when used in this subsection.

(A) Commonly owned corporations--two or more corporations where five or fewer identical persons who are individuals, estates, or trusts own greater than 50 percent of the total voting power in each corporation.

(B) Entity--a parent company, sole member, individual, limited partnership, or group of limited partnerships controlled by the same general partner.

(C) Combined entity--one or more commonly owned corporations and one or more limited partnerships where the general partner is controlled by the same identical persons as the commonly owned corporation(s).

(D) Control--greater than 50 percent ownership by the entity.

(2) Aggregation. For an entity, for two or more commonly owned corporations, or for a combined entity that controls more than one participating contract or component code in a program (with RC and CBA AL/RC considered a single program, and HCS and TxHmL considered a single program), compliance with the spending requirements detailed in subsection (s) of this section can be determined in the aggregate for all participating contracts or component codes in the program controlled by the entity, commonly owned corporations, or combined entity at the end of the rate year, the effective date of the change of ownership of its last participating contract or component code in the program, or the effective date of the termination of its last participating contract or component code in the program rather than requiring each contract or component code to meet its spending requirement individually. Corporations that do not meet the definitions under paragraph (1)(A) - (C) of this subsection are not eligible for aggregation to meet spending requirements.

(A) Aggregation Request. To exercise aggregation, the entity, combined entity, or commonly owned corporations must submit an aggregation request, in a manner prescribed by HHSC, at the time each Attendant Compensation Report or cost report is submitted. In limited partnerships in which the same single general partner controls all the limited partnerships, the single general partner must make this request. Other such aggregation requests will be reviewed on a case-by-case basis.

(B) Frequency of Aggregation Requests. The entity, combined entity, or commonly owned corporations must submit a separate request for aggregation for each reporting period.

(C) Ownership changes or terminations. For the ICF/IID, HCS, TxHmL, DAHS, RC, DBMD, CBA--AL/RC and ICM AL/RC programs, contracts or component codes that change ownership or terminate effective after the end of the applicable reporting period, but prior to the determination of compliance with spending requirements as per subsection (s) of this section, are excluded from all aggregate spending calculations. These contracts' or component codes' compliance with spending requirements will be determined on an individual basis and the costs and revenues will not be included in the aggregate spending calculation.

(ff) Conditions of participation for day habilitation. The following conditions of participation apply to each ICF/IID, HCS and TxHmL provider specifying its wish to have day habilitation services participate in the attendant compensation rate enhancement.

(1) A provider who provides day habilitation in-house or who contracts with a related party to provide day habilitation will report job trainer and job coach compensation and hours on the required cost report items (e.g., hours, salaries and wages, payroll taxes, employee benefits/insurance/workers' compensation, contract labor costs, and personal vehicle mileage reimbursement). Day habilitation costs cannot be combined and reported in one cost report item.

(2) A provider who contracts with a non-related party to provide day habilitation will report its payments to the contractor in a single cost report item as directed in the instructions for the cost report or Attendant Compensation Report as described in subsection (h)(2) and (3) of this section. HHSC will allocate 50 percent of reported payments to the attendant compensation cost area for inclusion with other allowable day habilitation attendant costs in order to determine the total attendant compensation spending for day habilitation services as described in subsection (s) of this section.

(3) The provider must ensure access to any and all records necessary to verify information submitted to HHSC on Attendant Compensation Reports and cost reports functioning as an Attendant Compensation Report.

(4) HHSC will require each ICF/IID, HCS and TxHmL provider specifying their wish to have day habilitation services participate in the attendant compensation rate enhancement to certify during the enrollment process that it will comply with the requirements of paragraphs (1) - (3) of this subsection.

(gg) New contracts within existing component codes. For ICF/IID, HCS and TxHmL, new contracts within existing component codes will be assigned a level of participation equal to the existing component code's level of participation effective on the start date of the contract as recognized by HHSC or its designee.

(hh) Disclaimer. Nothing in these rules should be construed as preventing providers from compensating attendants at a level above that funded by the enhanced attendant compensation rate.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 14, 2017.

TRD-201702325

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: August 1, 2017

Proposal publication date: March 17, 2017

For further information, please call: (512) 707-6066


SUBCHAPTER F. REIMBURSEMENT METHODOLOGY FOR PROGRAMS SERVING PERSONS WITH MENTAL ILLNESS OR INTELLECTUAL OR DEVELOPMENTAL DISABILITY

1 TAC §355.723

STATUTORY AUTHORITY

These amendments are adopted under Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for Medicaid payments under Texas Human Resources Code, Chapter 32.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 14, 2017.

TRD-201702326

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: August 1, 2017

Proposal publication date: March 17, 2017

For further information, please call: (512) 707-6066