Texas Administrative Code Title 40

Social Services and Assistance: As effective August 6, 2010

Chapter 49

Subchapter A

§49.1: Definitions

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

(1) Advanced directives--An instruction made under the Health and Safety Code, §§166.032, 166.034, or 166.035, to administer, withhold, or withdraw life-sustaining treatment in the event of a terminal or irreversible condition.

(2) Adverse action--An adverse action includes any action taken by the Texas Department of Human Services (DHS) that:

(A) terminates or suspends a DHS contract before its stated expiration date;

(B) denies, terminates, or suspends payments, in whole or part, to a contractor;

(C) demands repayment for an overpayment;

(D) directs one of its contractors to terminate or suspend a subcontract or payments to any subcontractor or provider of medical services;

(E) reduces a contractor's block grant funds by 25% or more of the amount DHS reimburses if DHS plans to allocate the withheld funds to another contractor for similar services in the same geographic area, if the contractor alleges that the reduction was in violation of DHS rules, was discriminatory, or was without reasonable basis in law or fact; this does not apply to funding or contracts subject to DHS's competitive procurement rules;

(F) prevents a legal entity from contracting with DHS for a prescribed period; or

(G) imposes any adverse sanction or other action to which a provider agency has a statutory right to a formal hearing.

(3) Alternative language--Any reference to an alternative language of a document means putting the document in a language that can be clearly understood by the person reading it (for example, Spanish or Braille).

(4) Assignee--A legal entity that assumes a Community Care contract through a legal assignment of the contract from the contracting entity.

(5) Assignor--A legal entity that assigns its Community Care contract to another legal entity.

(6) Cause--A determination that the contractor failed to comply with the terms of the contract or applicable program rules.

(7) Client--A person who is eligible to receive services according to program specific eligibility requirements.

(8) Client hold--The suspension of client referrals by DHS to the provider agency.

(9) Compliance monitoring--The systematic review of client case records and interviews with clients, provider agency staff, and others, as appropriate, to determine compliance with service delivery requirements.

(10) Contract--The formal, written agreement between DHS and a provider agency to provide services to eligible DHS clients in exchange for reimbursement.

(11) Contract assignment--The transfer of a contract by one legal entity to another legal entity.

(12) Contract manager--A DHS employee who is responsible for the overall management of the contract with the provider agency.

(13) Contractor--A provider agency.

(14) Controlling party--An owner who is a sole-proprietor, a partner owning 5% or more of the partnership, or a corporate stockholder owning 5% or more of the outstanding stock of the contracted provider, or a member of the board of directors.

(15) Corrective action plan (CAP)--The plan of action the provider agency proposes and submits to DHS to correct contract deficiencies DHS has cited.

(16) Cost reimbursement method of payment--Payment directly related to the allowable reimbursable costs incurred by the provider agency.

(17) Days--Any reference to days means calendar days unless otherwise specified in the text. Calendar days include weekends and holidays.

(18) Debarment--When DHS chooses to prohibit a legal entity from conducting business with DHS, in any capacity, for a certain period.

(19) DHS--The Texas Department of Human Services.

(20) Expedited payments system (EPS)--An automated payment system, offered to qualifying Community Based Alternatives/Home and Community Support Services (CBA/HCSS) and Primary Home Care/Family Care (PHC/FC) providers for Personal Assistance Services (PAS) only, which allows the provider agency to receive a substantial portion of its payment at the beginning of the month based on services provided in the previous month.

(21) Extrapolation--To predict outcomes by projecting past experience or known data.

(22) Fiscal monitoring--DHS's review of the documentation that supports the provider agency's billing.

(23) Involuntary contract termination--When DHS terminates a provider agency's contract without the consent of the provider agency.

(24) Level II administrative penalty--A penalty DHS assesses for violations of Home and Community Support Services Agencies (HCSSA) licensing rules, as described in Chapter 97 of this title (relating to Licensing Standards for Home and Community Support Services Agencies).

(25) HCSSA monitoring agreement--An agreement between the provider agency and DHS Long Term Care Regulatory (LTCR) in which the provider agency agrees to hire a professional consultant to assist in correcting license problems uncovered during the HCSSA survey.

(26) Practitioner--A currently licensed Texas physician or physician assistant, or a registered nurse approved by the Texas State Board of Nurse Examiners to practice as an advanced practice nurse.

(27) Program specific documents/rules/requirements--Those documents/rules/requirements specifically identified and/or stated in the program rules.

(28) Provider agency--An agency that has a contract with DHS to provide Community Care services to DHS clients.

(29) Provisional contract--A time-limited contract that is limited to one year and meets the requirements in §49.12 of this chapter (relating to General Requirements for Participation).

(30) Recoupment--When DHS recovers an overissuance to a provider agency by reducing payments to that provider agency until the overissuance is recovered.

(31) Re-enrollment--DHS's requirement to complete and submit new contract application forms and enter into a new contract.

(32) Representative--The client's spouse, other responsible party, or legal representative.

(33) Restitution--When a provider agency reimburses DHS for an overissuance that the provider agency has received.

(34) Sanction--An adverse action that DHS may take against a provider agency.

(35) Solicitation--When a provider agency entices or lures an individual to receive services from the provider agency when that provider agency knows that the individual is the client of another provider agency.

(36) Suspension--A contract sanction wherein DHS temporarily suspends or halts a provider agency's right to conduct business with DHS.

(37) Unit rate method of payment--Payment according to each unit of service provided.

(38) Vendor hold--A contract sanction wherein DHS withholds the provider agency's contract payments.

(39) Working days--Days DHS is open for business.

Comments

Source Note: The provisions of this §49.1 adopted to be effective February 5, 2004, 29 TexReg 1016

Subchapter B

§49.11: Contracting Requirements

(a) The provider agency must meet all provisions described in this chapter, as well as in the program-specific rules.

(b) The provider agency is subject to provisions outlined in this chapter, in Chapter 69 of this title (relating to Contracted Services), and in Chapter 79, Subchapters Q and S, of this title (relating to Formal Appeals and Contracting Ethics).

(c) The provider agency must meet all local, state, and federal regulations that are applicable to the contract and program rules.

(d) The Texas Department of Human Services may require corrective action, impose a client hold, and/or impose a contract sanction against a provider agency for any failure to comply with the terms of the contract and/or subsections (a)-(c) of this section.

Comments

Source Note: The provisions of this §49.11 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.12: General Requirements for Participation

(a) To contract with the Texas Department of Human Services (DHS) to provide Community Care services, the provider agency must:

(1) meet eligibility requirements for contracting as described in §49.13 and §49.14 of this chapter (relating to General Contractual Requirements and Provisional Contracts) and Chapter 69 of this title (relating to Contracted Services);

(2) have and maintain the appropriate license(s);

(3) complete an application packet with all required documentation;

(4) meet all the program-specific requirements;

(5) complete a pre-contract orientation as specified by DHS; and

(6) if applicable, be authorized by the secretary of state to conduct business in the state of Texas.

(b) DHS will not enter into a contract with a legal entity when:

(1) there has been a validated report of abuse, neglect, or exploitation and the perpetrator is an employee, volunteer, or owner who has direct access to clients; or

(2) DHS determines that the entity has solicited clients from another provider agency.

(c) DHS may choose not to enter into a contract with a legal entity when, in DHS's opinion, the legal entity or a controlling party has a prior unsatisfactory history in contracting with DHS.

(d) DHS may require periodic re-enrollment of provider contracts.

(1) Provider agencies must complete contract re-enrollment within the time frames DHS specifies.

(2) Provider agencies that fail to re-enroll within the time frames DHS specifies lose their eligibility for a contract.

(e) Provider agencies must comply with:

(1) applicable licensure requirements; and

(2) any and all applicable DHS and Texas Health and Human Services Commission program rules.

(f) DHS reserves the right to refuse to contract with a provider agency if, in the opinion of DHS, the provider agency may not provide acceptable service under the contract.

Comments

Source Note: The provisions of this §49.12 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.13: General Contractual Requirements

(a) To be eligible to enter into a contract for Community Care programs, the provider agency must have:

(1) a minimum of two months operating funds available for conducting business on the effective date of the contract, and maintain two months operating funds to provide services for the duration of the contract; and

(2) adequate staff to provide services on the effective date of the contract and to maintain adequate staff to provide services for the duration of the contract.

(b) The provider agency must receive one service-specific orientation/training before the Texas Department of Human Services (DHS) makes any client referrals.

(c) The provider agency must report suspected violation of rules or laws to the appropriate investigative authority. This includes reporting abuse, neglect, and exploitation issues to the Texas Department of Protective and Regulatory Services or to the appropriate DHS licensing staff.

(d) The provider agency must comply with provisions of the Omnibus Budget Reconciliation Act of 1990 at 42 United States Code §1396a(w)(1), regarding advanced directives under state plans for medical assistance, when Medicaid services are being provided.

(e) A provider agency is not eligible to enter into or maintain a contract for Community Care programs if the provider agency:

(1) has been excluded from participating under Title XVIII or Title XIX of the Social Security Act; and/or

(2) allows direct care staff with communicable diseases or open infectious wounds to come into direct contact with clients or with products clients may consume or handle.

(f) DHS may choose not to enter into or maintain a contract for Community Care programs if the provider agency:

(1) subcontracts any direct care services without specific authorization from DHS; and/or

(2) assigns or transfers the contract without the written prior approval of DHS.

(g) The provider agency must notify DHS in writing of changes to contract information according to the following timelines:

(1) 30 calendar days in advance of any address change, which includes the location of the agency's office, physical address, and/or mailing address;

(2) immediately of any change in administrator or director;

(3) immediately of any change in the provider agency's organizational structure;

(4) within seven working days of any change in telephone number; and

(5) within 10 working days of any change in the provider agency's comptroller vendor ID number, resulting from circumstances other than through a change in the legal entity responsible for the contract.

(h) DHS assigns the effective date of a contract. The effective date of the contract is no earlier than the first day of the month after DHS signs the contract. DHS may issue a contract with an earlier effective date if it is in the best interest of the program.

Comments

Source Note: The provisions of this §49.13 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.14: Provisional Contracts

(a) All new home and community support services agencies contracting to provide services in Primary Home Care/Family Care, Community Based Alternatives, and Consolidated Waiver Program are provisional contracts.

(b) Provisional contracts are limited to one year and are subject to the requirements specified in this section.

(c) Before applying for a provisional contract, the provider agency must:

(1) have held the appropriate Home and Community Support Services Agencies (HCSSA) license, used to qualify for the contract, for at least one year;

(2) have completed an on-site HCSSA health survey;

(3) be eligible to have the HCSSA license renewed; and

(4) have provided attendant or home health services:

(A) to at least 10 clients, with at least two of the clients having received ongoing services during a 60-day period; and

(B) for a total of at least 500 hours during the 12 months immediately preceding the provider agency's contract application in the region in which the provider agency is applying for a contract.

(d) The Texas Department of Human Services (DHS) does not enter into a provisional contract if the provider agency:

(1) has not completed a pre-contract orientation from DHS;

(2) is under a HCSSA monitoring agreement with DHS Long Term Care Regulatory (LTCR);

(3) has a Level II administrative penalty pending with DHS LTCR;

(4) has a license revocation action pending with DHS LTCR; or

(5) had any Community Care program contract involuntarily terminated in the 24 months preceding the provider agency's contract application.

(e) DHS may choose not to enter into a provisional contract if the provider agency was assessed any Level II administrative penalties in the 12 months preceding the provider agency's contract application and there is no pending administrative hearing on the administrative penalties.

(f) If the provider agency's provisional contract is allowed to expire due to noncompliance with program-specific rules, the provider agency cannot enter into another provisional contract for the same Community Care services until at least 24 months after the effective date of the expiration.

(g) If the provider agency chooses to voluntarily withdraw from a provisional contract, the provider agency cannot enter into another provisional contract for the same Community Care services for at least 12 months after the effective date of the withdrawal.

(h) DHS may terminate the provider agency's provisional contract at any time if DHS finds the provider agency does not meet the requirements for provisional contracting as outlined in subsection (c) of this section or if DHS finds that the provider agency does not meet other contracting requirements.

(i) DHS conducts at least one formal monitoring review of each provisional contract during the provisional period.

(j) The provider agency may request an administrative review of the formal monitoring by following the procedures described in §49.54 of this chapter (relating to Administrative Review).

Comments

Source Note: The provisions of this §49.14 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.15: Contract Assignment

(a) A provider agency must assign a contract if there will be a change in the legal entity responsible for the contract. Assignment is also required when there is a change in the contracting entity's:

(1) employer identification number; or

(2) tax status (for example, changing from a partnership to a corporation).

(b) No contract assignment is effective until the Texas Department of Human Services (DHS) approves it in writing.

(c) To assign a contract, the provider agency must inform DHS's Community Care Contracting (CCC) Section at least 60 days before the legal transfer of ownership. Failure to provide this information in a timely manner may delay the assignment of the contract. The notification to CCC must:

(1) be in writing; and

(2) include the legal name of the entity that is assuming the contract.

(d) Before a contract assignment is made, the contract assignee must:

(1) resolve, to DHS's satisfaction, all audits related to the contracted program;

(2) prepare a contract assignment agreement that includes the following statements:

(A) the reason(s) for the contract assignment;

(B) both the assignee and assignor are responsible for collecting and reporting financial and statistical data on DHS's cost reports that corresponds to its respective contract periods;

(C) DHS reserves the right to require restitution for any audit/contract exceptions from either provider agency;

(D) any adverse action pending or in place when the contract is assigned is the responsibility of both the assignee and the assignor;

(E) the assignee agrees to adhere to all DHS contract requirements, including appropriate statutes and rules;

(F) the assignee meets all program criteria for being a provider agency. Documentation of the assignee's eligibility must be provided before DHS will agree to a contract assignment;

(G) identity of both legal entities; and

(H) the current contract number(s) and service(s) to be assigned.

(e) The contract assignment agreement must:

(1) be signed by persons with signature authority for the assignee and the assignor;

(2) be notarized; and

(3) include a line for DHS's representative to sign, showing its approval.

(f) DHS reserves the right to refuse to approve any contract assignment if, in DHS's opinion, the proposed assignee may not be able to provide acceptable service under the contract.

(g) If the provider agency fails to complete the contract assignment application correctly, DHS returns the application to the provider agency for corrections.

(h) The effective date of the contract assignment is no earlier than the first day of the following month after DHS has fully processed and signed the contract. DHS may award a contract at an earlier date if it is in the best interest of the program.

Comments

Source Note: The provisions of this §49.15 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.16: Background Checks

The provider agency must comply with its licensure requirements regarding background searches for facility/provider agency staff.

Comments

Source Note: The provisions of this §49.16 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.17: Complaint Procedures

(a) The provider agency must document, investigate, and resolve all complaints that the client/client's representative and/or the Texas Department of Human Services (DHS) reports.

(b) Provider agencies with contracts that require a DHS license must investigate and resolve complaints in accordance with applicable licensure rules. If there are no such rules, the provider agency must adhere to the requirements outlined in subsections (c)-(e) of this section.

(c) Provider agencies with contracts that require licensure by an entity other than DHS must investigate and resolve complaints within five workdays from the receipt of the complaint report unless a different time frame is found in the service-specific program requirements.

(d) The provider agency must maintain a log of client complaints and must ensure that:

(1) all written complaints are stamped with the date of receipt;

(2) all verbal complaints are documented with the date of receipt and a narrative of the allegation(s); and

(3) the complaint log is accessible to DHS staff.

(e) All documentation of complaint investigations must contain the following information:

(1) who conducted the investigation;

(2) who was contacted during the investigation;

(3) the findings of the investigation; and

(4) any actions taken as a result of the investigation.

(f) When a client-initiated complaint is resolved, the provider agency must obtain:

(1) the client's/client's representative's initials; or

(2) a witness's signature if the client/client's representative refuses to sign.

Comments

Source Note: The provisions of this §49.17 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.18: Client Rights and Responsibilities

(a) The provider agency must provide each client/client's representative with the following information no later than the time services begin:

(1) a general orientation on tasks to be provided;

(2) consumer rights and responsibilities, as described in the Human Resources Code, Chapter 102;

(3) client conduct requirements;

(4) procedures for filing complaints;

(5) the name and/or title and telephone number of the person to call to make a verbal complaint; and

(6) the provider agency's responsibilities in providing the services.

(b) The provider agency must make an interpreter available to the client/client's representative upon request.

(c) The provider agency must make written material available to the client/client's representative in alternative languages upon request and maintain a copy of the material in the alternative languages provided.

(d) The provider agency must give the information in subsection (a) of this section to the client/client's representative both verbally and in writing, with no more than 12 months between each notification.

(e) The Texas Department of Human Services (DHS) must receive a copy of any changes before the provider agency amends its policies affecting the items specified in this section. In addition, each client/client's representative must receive written notification of the change before it becomes effective.

(f) The provider agency cannot enact any DHS-approved policy changes before providing written notification to each client/client's representative.

(g) The provider agency must not require clients to perform services for the provider agency or other clients.

Comments

Source Note: The provisions of this §49.18 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.19: Advertising and Solicitation of Clients

(a) The provider agency may advertise for clients as long as the provider agency does not:

(1) state or imply that the provider agency provides better services than other providers;

(2) solicit clients from other providers; or

(3) limit or influence a client's freedom of choice.

(b) The provider agency's advertisement may only be an announcement of available services and must not target specific clients.

(c) If the Texas Department of Human Services (DHS) determines that the provider agency has violated this section, DHS may deny the provider agency's application for a contract or impose a sanction against the provider agency's existing contract, up to and including contract termination.

Comments

Source Note: The provisions of this §49.19 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.20: Religious and Charitable Organizations

(a) A religious or charitable organization is eligible to become a contractor on the same basis as any other private organization.

(b) A religious or charitable organization retains its independence from all state and local governments, including its control over the definition, development, practice, and expression of its charitable or religious beliefs.

(c) A religious or charitable organization is not required to change its method of governance or remove any of its organizational symbols unless it is required to do so under applicable federal law.

(d) Funds provided under the contract:

(1) must be kept separate from other organizational funds; and

(2) are subject to Texas Department of Human Services audit.

(e) Any contract with a religious or charitable organization is not an endorsement of that organization, its practices, or what it symbolizes.

Comments

Source Note: The provisions of this §49.20 adopted to be effective February 5, 2004, 29 TexReg 1016

Subchapter C

§49.31: Record Requirements

(a) The provider agency must maintain all financial and contract-related records:

(1) according to recognized fiscal and accounting practices; and

(2) in accordance with Texas Department of Human Services (DHS) contract requirements.

(b) The provider agency must maintain DHS client documentation, including:

(1) the service plan;

(2) service delivery records;

(3) significant incidents regarding progress, illnesses, and accidents that may be used to maintain or revise the service plans;

(4) suspension and termination records, discharge plans, client referrals, and placements;

(5) client rights and responsibilities provided to the client/client's representative;

(6) complaint procedures provided to the client/client's representative;

(7) orientations completed;

(8) abuse, neglect, or exploitation incidents referred to the appropriate investigative authority;

(9) records of client conduct that may affect service delivery as outlined in program-specific rules;

(10) provider agency responsibilities provided to the client/client's representative; and

(11) additional program-specific requirements.

(c) The provider agency must maintain personnel records on every employee and volunteer, and must also maintain records on subcontractors.

(d) The provider agency must complete all service delivery records in ink when using paper service delivery records.

(e) The provider agency must use the official DHS form to document services delivered or to document all of the required elements of the services delivered, as provided in program-specific rules.

(f) The provider agency must not preprint or pre-enter any record of time on any form used to document services delivered.

Comments

Source Note: The provisions of this §49.31 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.32: Record Retention

(a) The provider agency must maintain all records pertaining to the services provided to individuals in the Medicaid program for at least five years from the date the services were provided. If any litigation or claim involving these records is still ongoing at the conclusion of five years, the provider agency must maintain the records until all litigation or claims are resolved.

(b) The provider agency must maintain all work papers and records supporting information reported on cost reports, budgets, or other cost surveys for at least three years and 90 days after the end of the fiscal year in which the services were provided. If any litigation or claim involving these records is still ongoing at the conclusion of three years and 90 days, the provider agency must maintain the records until all litigation or claims are resolved.

Comments

Source Note: The provisions of this §49.32 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.33: Access to Contractor's Records

(a) The provider agency must allow the Texas Department of Human Services (DHS) and all appropriate federal and state agencies and their representatives to examine and copy client records and supporting documents pertaining to services provided. The provider agency must make the records available at reasonable times and for reasonable periods.

(b) The provider agency must provide DHS with client records and supporting documents upon request. If the provider agency fails to provide records upon request, DHS may take adverse action against the provider agency's contract.

Comments

Source Note: The provisions of this §49.33 adopted to be effective February 5, 2004, 29 TexReg 1016

Subchapter D

§49.41: Billings and Claims Payment

(a) A provider agency must not charge and cannot take any action against or require any supplemental payment from a client/client's representative, family member, or persons acting on the client's behalf for any claim(s) the Texas Department of Human Services (DHS) denies or reduces because of the provider agency's failure to comply with any DHS or federal rule or procedure.

(b) A provider agency is responsible for the accuracy of the claims submitted for payment.

(c) A provider agency is entitled to payment if:

(1) the services are:

(A) authorized by DHS in writing;

(B) submitted on a verbally approved form or as a facility-initiated referral to DHS within the required time frames, if applicable; or

(C) submitted by way of a prior verbally approved form or facility-initiated referral form that is supportive of the verbal approval, if applicable;

(2) the reimbursement corresponds to the provider agency's service authorization and service delivery record;

(3) services, when allowed to be ordered by a practitioner, are allowed under Title XVIII and Title XIX of the Social Security Act;

(4) services were ordered by a practitioner whose license has not been suspended or who has not been excluded from participation in either Title XVIII or XIX of the Social Security Act;

(5) practitioner orders are available, when required;

(6) appropriate billing forms are used and approved billing procedures are followed;

(7) services are provided to a client on or before the date services are terminated;

(8) services are provided by an individual whose license or certification, if applicable to the services provided, has not been suspended or who has not been excluded from participation in either Title XVIII or XIX of the Social Security Act;

(9) the provider agency submits correct and appropriate billings after services have been provided and all other contract requirements are met;

(10) the DHS claims processor receives a complete and accurate claim for services for which the provider agency is entitled to payment within 12 months after the date of services.

(A) In the event that Medicaid eligibility for benefits is established after the provision of services, the 12-month period for the submission of claims will start on the date of eligibility.

(B) DHS's claims processor must receive adjustments to claims during the applicable 12-month period. Claims and adjustments rejected or denied during the 12-month period through no fault of the provider agency may be paid upon approval by DHS.

(C) The requirement to submit claims within 12 months of the date of service does not prohibit a provider agency from re-billing in the case of state-generated retroactive adjustments;

(11) the client is eligible for Medicaid benefits (if services are provided through Medicaid); and

(12) the client is not an inpatient of a hospital (unless otherwise specified in contract terms or program rules), intermediate care facility, skilled nursing facility, state hospital, state school, or intermediate care facility for persons with mental retardation or related conditions (except when a provider agency is authorized to receive payment for an assessment used to determine eligibility and/or transition/relocation activities as allowed by DHS program rules).

Comments

Source Note: The provisions of this §49.41 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.42: Method of Payment

(a) The Texas Department of Human Services (DHS) uses either the cost reimbursement or the unit rate method of payment to purchase Community Care services.

(b) The cost reimbursement method of payment is payment directly related to the allowable reimbursable costs incurred by the provider agency.

(c) The unit rate method of payment is payment according to each unit of service provided. The Texas Health and Human Services Commission sets either a fixed unit rate or a unit rate ceiling for the unit rate method of payment. For unit rates with a ceiling, DHS and provider agency staff negotiate a unit rate up to the established ceiling. The unit rate is negotiated according to policies DHS establishes. The negotiated rate then becomes the unit rate for that particular contract. The unit rate may not be increased during a contract period unless DHS determines that circumstances dictate a need for change.

Comments

Source Note: The provisions of this §49.42 adopted to be effective February 5, 2004, 29 TexReg 1016

Subchapter E

§49.51: Audits

(a) The Texas Department of Human Services (DHS) Internal Audit Department may conduct an audit/compliance review to:

(1) test the provider agency's existing system of internal controls; and/or

(2) review or examine the provider agency's service delivery and financial records to verify that payments DHS made to the provider agency were appropriate.

(b) The DHS Internal Audit Department may perform desk and on-site audits/compliance reviews associated with claims the provider agency submits under a contract. DHS recovers improper payments when DHS verifies that the provider agency has been overpaid because of improper billing or accounting practices or failure to comply with the contract terms.

(c) The provider agency must provide the detailed information DHS requests that supports the claims information the provider agency reported. If the provider agency fails to provide the requested information, DHS may take adverse action against the provider agency's contract.

(d) The DHS Internal Audit Department may identify the following types of errors during the audit/compliance review that may cause the provider agency's claims to be rejected or identified for recoupment:

(1) Administrative errors. Administrative errors result from discrepancies in the provider agency's service delivery documentation. Administrative errors may result in different outcomes depending on the exact nature of the error.

(A) An administrative error is applied to the administrative portion of the unit of services.

(B) If the provider agency fails to comply with the corrective action plan or fails to correct the identified problems and errors, then the error is applied to the total amount paid for the unit(s) of service.

(2) Financial errors. Financial errors result when the provider agency does not have documentation to support reimbursements from DHS. The error is applied to the total amount paid for the unit(s) of service.

(3) Both administrative and financial errors. The error is applied to the total amount paid for the unit(s) of service.

(e) Administrative and financial errors are determined using the same formula. DHS takes the total number of administrative errors found in the audit and develops a statistical projection to determine the total amount of claims paid to the provider agency during the audit period. DHS then repeats this procedure using the total number of financial errors.

(f) DHS may pay the provider agency for underpayments identified by the audit/compliance review once the provider agency submits a proper and correct claim, provided the claim can be submitted in accordance with requirements as described in §49.41 of this chapter (relating to Billings and Claims Payment). If the provider agency fails to submit a proper and correct claim within the time limits set by DHS, DHS cannot pay the underpayment.

(g) DHS may withhold the provider agency's payments and apply them to the audit/review exception for any payments the provider agency owes DHS.

(h) DHS may require corrective action for any finding of the DHS Internal Audit Department.

Comments

Source Note: The provisions of this §49.51 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.52: Fiscal Monitoring

(a) Fiscal monitoring is the review of documentation that supports the provider agency's billing, as it exists at the time Texas Department of Human Services' (DHS) staff arrive to conduct the review. DHS may recoup payment if the service delivery documentation does not support the provider agency's billing.

(b) DHS may conduct a fiscal monitoring review:

(1) in conjunction with a compliance monitoring review;

(2) independently of a compliance monitoring review;

(3) when a contract is terminated; or

(4) as a result of conducting a complaint investigation.

(c) When DHS identifies fiscal monitoring errors, DHS recovers the funds without extrapolation.

Comments

Source Note: The provisions of this §49.52 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.53: Compliance Monitoring

(a) Texas Department of Human Services (DHS) conducts monitoring reviews of the provider agency's services to determine if the provider agency is in compliance with the contract and with program rules and requirements. These reviews are conducted at the location where the provider agency is providing the services unless DHS specifies a different location. DHS offers the provider agency an orientation and/or training on the use of the monitoring form(s) at least once before the provider agency is subject to a compliance monitoring review. This orientation/training is optional, as the provider agency may accept it or reject it.

(b) At the conclusion of the review, DHS scores the provider agency's cumulative level of compliance and the provider agency's compliance level on each standard reviewed. If the provider agency's overall compliance score is 90% or above, DHS considers the provider agency in substantial compliance with the contract and with program rules and requirements. If the provider agency's overall compliance score is less than 90%, DHS considers the provider agency out of substantial compliance with the contract and with program rules and requirements, and the provider agency is subject to corrective action and may be subject to sanctions. Even if the provider agency's overall compliance score is 90% or above, the provider agency is subject to corrective action for each individual standard that falls below 90% compliance.

(c) During the monitoring review, the provider agency must provide:

(1) adequate working space for reviewing the records;

(2) every record DHS requests for review; and

(3) copies or access for DHS staff to make needed copies of documents during the course of the review.

(d) During the monitoring review, DHS may:

(1) review a sample of client records to determine the provider agency's compliance with contract requirements;

(2) review consumer satisfaction surveys the provider agency conducted;

(3) interview clients and staff;

(4) observe clients and staff;

(5) consult with others, as appropriate; and

(6) conduct other activities, as appropriate.

(e) DHS may conduct follow-up compliance monitoring reviews to determine if the provider agency has corrected the deficiencies identified at the preceding formal monitoring review(s). These reviews may:

(1) be focused reviews using targeted samples; and

(2) focus only on those standards that DHS determined to be out of compliance at the immediately preceding formal monitoring review(s);

(f) DHS may expand a compliance monitoring review period or the review sample at any time.

Comments

Source Note: The provisions of this §49.53 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.54: Administrative Review

(a) The provider agency may request an administrative review of the review team's methodology when the provider agency suspects a formal compliance monitoring or an audit/compliance review may not have been conducted according to established rules and procedures.

(b) The provider agency's request for an administrative review must:

(1) be in writing;

(2) identify the rules and procedures the provider agency believes the Texas Department of Human Services (DHS) failed to follow;

(3) state the basis for believing the review was not conducted according to established rules and procedures; and

(4) be received by DHS within 10 calendar days of the provider agency's receipt of the written review findings.

(c) DHS gives the provider agency written notice of the results of the administrative review via certified mail.

Comments

Source Note: The provisions of this §49.54 adopted to be effective February 5, 2004, 29 TexReg 1016

Subchapter F

§49.61: Sanctions

(a) The Texas Department of Human Services (DHS) may impose a sanction when the provider agency fails to follow the terms of the provider agency's contract and/or the provider agency fails to comply with program rules, policies, and procedures. DHS may impose sanctions for reasons including:

(1) DHS's determination that client health and safety are jeopardized;

(2) the provider agency's failure to comply with its corrective action plan;

(3) the provider agency's failure to follow an agreed-upon audit resolution payment plan;

(4) the provider agency's failure to submit an acceptable cost report;

(5) the provider agency's failure to provide services according to the contract and/or program requirements;

(6) the provider agency's failure to maintain a current required license or the provider agency allowing the expiration of any required license;

(7) the provider agency's relocation to a new facility address that does not have the appropriate license;

(8) the provider agency's exclusion from contracting with DHS or with a contracted program;

(9) validated report(s) of abuse, neglect, or exploitation when the perpetrator is an owner, employee, or volunteer who has direct access to clients;

(10) the provider agency's solicitation of clients from another provider agency; or

(11) the provider agency's failure to deliver Community Care services for six consecutive months.

(b) Types of sanctions include:

(1) Recoupment. DHS collects money the provider agency owes as the result of overpayments and/or other billing irregularities.

(2) Vendor hold. DHS withholds the provider agency's contract payments. DHS may put one or all of the provider agency's contracts on vendor hold. The vendor hold is released when DHS determines the provider agency has resolved the reason(s) for the hold. In addition to the reasons listed in subsection (a) of this section, DHS may place a vendor hold on provider agency's contract(s):

(A) for failure to comply with program requirements;

(B) to recoup overpayments made to the provider agency; or

(C) to recover any audit exceptions assessed against the provider agency.

(3) Involuntary contract termination. DHS may terminate the provider agency's contract for cause by citing the provider agency's failure to comply with the terms of the contract or with DHS program rules, policies, and procedures.

(4) Suspension. DHS may temporarily suspend the provider agency's right to conduct business with DHS. The causes for and conditions of suspension are described in §69.277 of this title (relating to Causes for and Conditions of Suspension). A suspension is in effect until an investigation, hearing, or trial is concluded and DHS can make a determination about the provider agency's future right to contract. DHS may impute the conduct of an individual, corporation, partnership, or other association to the contractor.

(5) Debarment. DHS may choose to not allow a provider agency to conduct business with DHS, in any capacity, for a certain period of time. The causes for and conditions of debarment are described in §69.276 of this title (relating to Causes for and Conditions of Debarment). DHS debars a provider agency for a specific period of time, with the maximum period of debarment being six years. DHS may impute the conduct of an individual, corporation, partnership, or other association to the contractor.

(c) The provider agency may appeal any adverse action DHS takes against its contract. To appeal an action:

(1) the provider agency must request the appeal in writing in accordance with Chapter 79 of this title (relating to Legal Services); and

(2) the DHS Hearings Division must receive the provider agency's request for an appeal within 15 calendar days after the provider agency receives the adverse action notice letter from DHS.

(d) An appeal does not delay any adverse action except contract termination. If the provider agency appeals the termination of a contract, DHS reinstates the provider agency's contract. However, DHS may continue to transfer the provider agency's clients. In addition, DHS may place a vendor hold on the contract under appeal, and DHS does not refer any new clients to the provider agency while the appeal is pending. If the provider agency prevails on appeal, DHS allows:

(1) the provider agency's contract to remain in effect;

(2) client referrals to resume; and

(3) the provider agency's former clients an opportunity to return to the provider agency.

(e) If DHS prevails on the appeal, the original date of termination is re-imposed.

Comments

Source Note: The provisions of this §49.61 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.62: Contract Termination Without Cause

The Texas Department of Human Services may terminate the provider agency's contract without stating cause by giving the provider agency written notice, as stated in the contract, of the impending termination.

Comments

Source Note: The provisions of this §49.62 adopted to be effective February 5, 2004, 29 TexReg 1016

§49.63: Recontracting

(a) If the Texas Department of Human Services (DHS) involuntarily terminates the provider agency's provisional Primary Home Care/Family Care, Community Based Alternatives/Home and Community Support Services, or Consolidated Waiver Program contract, the provider agency, except as provided under subsection (b)(1) of this section, may not recontract for any Community Care program for at least 24 months after the effective date of termination.

(b) The provider agency may not recontract with DHS for at least six months after the effective date of termination when:

(1) DHS involuntarily terminates the provider agency's contract(s) because the provider agency failed to provide services to any DHS clients for a period of six consecutive months; or

(2) DHS involuntarily terminates any non-provisional Community Care contract.

(c) If DHS does not renew the provider agency's provisional contract due to the provider agency's noncompliance with program-specific rules, the provider agency cannot enter into another contract for the same Community Care program for at least 24 months after the effective date of expiration.

(d) If the provider agency chooses to voluntarily withdraw from a provisional contract, the provider agency cannot enter into another contract for the same Community Care services for at least 12 months after the effective date of voluntary termination.

(e) DHS does not recontract with a provider agency if, in DHS's opinion, the provider agency may not provide acceptable services under the contract.

Comments

Source Note: The provisions of this §49.63 adopted to be effective February 5, 2004, 29 TexReg 1016