TITLE 1.ADMINISTRATION

Part 10. DEPARTMENT OF INFORMATION RESOURCES

Chapter 201. PLANNING AND MANAGEMENT OF INFORMATION RESOURCES TECHNOLOGIES

1 TAC §201.1

The Department of Information Resources (department) proposes an amendment to §201.1, concerning definitions applicable to department rules. The purpose of the amendment is to add new definitions relating to geographic information systems, to update the legal citations to the Professional Services Procurement Act and the Major Consulting Services Act in paragraph (17) and to the Texas Education Code in paragraph (26) and to amend the definition of geographic information system in proposed paragraph (7). New definitions are proposed for Albers equal area conic projection, datum, geospatial data(set), geospatial dataset enhancement, geospatial dataset maintenance, geospatial metadata, geoTIFF, GIS map project, JPEG, Lambert conformal conic projection, map projection, survey product, TIFF and world file.

Mr. Eddie Esquivel, Director of the Enterprise Operations Division, has determined that for each year of the first five years the amended rule will be in effect, there will be no fiscal implications for state government as a result of enforcing or administering the proposed amendment to §201.1. There will be no foreseeable fiscal implications for local government as a result of enforcing or administering the proposed amendment.

Mr. Esquivel has determined that for each year of the first five years the amended rule will be in effect, the benefit to the public will be increased rule clarity as a result of the definitions of certain terms used in the department's rules. There will be no effect on small businesses, and that there is no additional anticipated economic cost to persons who are required to comply with the amended rule.

Comments on the proposed amendment to §201.1 may be submitted to Renee Mauzy, General Counsel, Department of Information Resources, via mail to P.O. Box 13564, Austin, Texas 78711, or electronically to renee.mauzy@dir.state.tx.us no later than 5:00 p.m., within 30 days after publication.

The amendment is proposed under Texas Government Code §2054.052(a), which authorizes the department to adopt rules as necessary to carry out its responsibility under the Information Resources Management Act.

Texas Government Code chapter 2054 is affected by the proposed amendment.

§201.1.Definitions.

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

(1)

Albers equal area conic projection--A map projection developed by Albers in 1805 and commonly used in mapping of the United States by the U.S. Geological Survey. While some distortion is inherent in all map projections, a characteristic of the albers equal area conic projection is that scale distortion is minimized.

(2)

[ (1) ] Application--A separately identifiable and interrelated set of information resources technologies that allows a state agency to manipulate information resources to support specifically defined objectives.

(3)

[ (2) ] Board--The governing board of the Department of Information Resources.

(4)

[ (3) ] Data processing--Information technology equipment and related services designed for the automated storage, manipulation, and retrieval of data by electronic or mechanical means, or both. The term includes:

(A)

central processing units, front-end processing units, miniprocessors, microprocessors, and related peripheral equipment such as data storage devices, document scanners, data entry equipment, terminal controllers, data terminal equipment, computer-based word processing systems other than memory typewriters, and equipment and systems for computer networks;

(B)

all related services, including feasibility studies, systems design, software development, and time-sharing services, whether provided by state employees or by others; and

(C)

the programs and routines used to employ and control the capabilities of data processing hardware, including operating systems, compilers, assemblers, utilities, library routines, maintenance routines, applications, and computer networking programs.

(5)

Datum--A smooth mathematical surface that closely defines the mean sea-level surface of the earth throughout a certain geographic region of interest (such as North America). Accurate ground positional measurements must be made with reference to a specific datum appropriate to the region.

(6)

[ (4) ] Department--The Department of Information Resources.

(7)

[ (5) ] Geographic information system (GIS)--A system of computer hardware, software and procedures used to store, analyze and display geospatial data and related tabular data in a geographic context to solve complex planning and management problems in a wide variety of applications. [ A computer hardware and software system designed to collect, manage, manipulate, analyze, and display spatially referenced data; includes attribute data (usually in an associated data base), as well as graphic data which may be in vector (line) or raster (image) form; may include cartographic and geographic data such as earth science, natural resource, engineering, demographic, or socioeconomic data; and will include for purposes of these rules all types of automated mapping, facilities management, and mapping applications from a computer-aided design system. ]

(8)

Geospatial data(set)--Data which describes some aspect of the earth's surface (or near-surface regions), or which can be identified with a specific location on or near the earth's surface. A geospatial dataset employs a defined, earth-based coordinate system which allows its use in a geographic information system.

(9)

Geospatial dataset enhancement--Substantial alteration of a geospatial dataset which increases its usefulness through the addition of attribute (tabular) data fields, improvements in spatial accuracy, or extension of geographic coverage.

(10)

Geospatial dataset maintenance--Addition to, or alteration of, a geospatial dataset as part of a routine business process.

(11)

Geospatial metadata--A description of the characteristics of a geospatial dataset, recorded in a standard format. Characteristics include data content, quality, purpose, condition, format, spatial coordinate system, availability, etc. The Federal Geographic Data Committee has defined a formal content standard for digital geospatial metadata for use by federal agencies.

(12)

GeoTIFF--A TIFF-based image format for geo-referenced raster imagery.

(13)

GIS map product--A geographic representation, in paper or electronic format, displaying features from one or more digital geospatial datasets. Small scale images that are clearly intended only for graphic illustration within a larger publication are not considered to be GIS map products.

(14)

JPEG--A standardized image compression mechanism. JPEG stands for Joint Photographic Experts Group, the original name of the committee that wrote the standard.

(15)

[ (6) ] Imaging systems--Information resources technologies with video, scanning, and computer graphics capabilities (including raster formats) which are used to capture, process, create, output, store, and/or archive images, excluding process-control systems for medical diagnostic applications.

(16)

[ (7) ] Information resources--The procedures, equipment, and software that are designed, built, operated, and maintained to collect, record, process, store, retrieve, display, and transmit information, and associated personnel including consultants and contractors.

(17)

[ (8) ] Information resources services--Services provided under contract to a state agency by an individual or firm, or by a consultant or professional engineer under Texas Government Code, Chapter 2254, the Professional Services Procurement Act, and Texas Government Code, Chapter 2254, Consulting Services, [ Civil Statutes Articles 664-4 and 6252-11c, ] which includes [ include ]: studying agency's existing information resources; advising on necessary changes or additions to the information resources environment; performing information resources feasibility studies; information resources training; or recommending, managing, converting, designing, procuring, developing, documenting, programming, testing, implementing, or installing new information resources, including systems development methodologies and disaster recovery capabilities.

(18)

[ (9) ] Information resources technologies--Data processing and telecommunications hardware, software, services, supplies, personnel, facility resources, maintenance, and training.

(19)

[ (10) ] Interagency application--An information resources project implemented or used by multiple agencies.

(20)

Lambert conformal conic projection-A map projection developed by Lambert in 1772 and commonly used in mapping of the United States by the U.S. Geological Survey. While some distortion is inherent in all map projections, a characteristic of the lambert conformal conic projection is that shape distortion is minimized.

(21)

Map projection-A systematic representation of all or part of a surface of a round body, especially Earth, on a plane.

(22)

[ (11) ] Project--A program to provide information resources technologies support to functions within or among elements of a state agency, which should be characterized by well-defined parameters, specific objectives, common benefits, planned activities, a scheduled completion date, and an established budget with a specified source of funding.

(23)

Raster--A data structure for representing spatial data. The raster data structure divides a region of space into a regular, two-dimensional grid. Each cell in the grid has an associated data value. A common use of the raster data structure is to represent imagery in a digital format. In this case, the data value for each cell represents the color exhibited by that part of the image.

(24)

[ (12) ] Risk--The possibility of an act or event occurring that would have an adverse effect on the state, an organization or an information system. Risk involves both the probability of failure and the possible consequences of a failure.

(25)

[ (13) ] Risk analysis--Risk analysis is the evaluation of planned project events and deliverables in regards to various factors to consider the possibility or probability of failure and the consequences of such a failure. Risk analysis will yield an identification of the areas of greater and lower risk.

(26)

[ (14) ] State agency--A department, commission, board, office, council, or other agency in the executive or judicial branch of government that is created by the constitution or a statute of this state, including a university system or institution of higher education as defined by the Texas Education Code, §61.003.

(27)

[ (15) ] Statewide application--An information resources project implemented or used throughout state government.

(28)

Survey product--A map, report, letter or other document produced by a registered professional land surveyor while engaged in the practice of land surveying.

(29)

[ (16) ] Telecommunications--Any transmission, emission, or reception of signs, signals, writings, images, and sounds of intelligence of any nature by wire, radio, optical, or other electromagnetic systems and includes all facilities and equipment performing those functions that are owned, leased, or used by state agencies and branches of state government.

(30)

[ (17) ] Telecommunications services--Intercity communications facilities or services. "Telecommunications services" does not include single agency point-to-point radio systems or facilities or services of criminal justice information systems.

(31)

TIFF--Tagged Image File Format. A public domain raster image file format.

(32)

[ (18) ] Wide area network--A network that interconnects geographical boundaries (such as buildings, campuses, cities, regions, and/or states) which has a total distance (first node to last node) of two or more miles and might be connected using common carrier services.

(33)

World file--A file that accompanies a specific raster image file and that contains georeferencing information that can be used by certain GIS software to correctly display the raster image in an earth-based coordinate system.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on June 5, 2001.

TRD-200103121

Renee Mauzy

General Counsel

Department of Information Resources

Earliest possible date of adoption: July 22, 2001

For further information, please call: (512) 475-2153


Part 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

Chapter 355. MEDICAID REIMBURSEMENT RATES

Subchapter C. REIMBURSEMENT METHODOLOGY FOR NURSING FACILITIES

1 TAC §355.307

The Texas Health and Human Services Commission (HHSC) proposes an amendment to §355.307, concerning reimbursement setting methodology, in its Medicaid Reimbursement Rates chapter. The purpose of the amendment is to create a special reimbursement class for nursing facilities that specialize in caring for high need children. To qualify as a pediatric care facility, the nursing facility must have an average daily census of 80% or more children. Payment rates for facilities in this pediatric care facility special reimbursement class will be determined on a facility-specific basis and will not be based on the Texas Index for Level of Effort (TILE) payment rates. This special reimbursement class will recognize the increased costs that exist in nursing facilities that predominately serve children.

Don Green, chief financial officer, has determined that for the first five-year period the sections are in effect there will be fiscal implications for state government as a result of enforcing or administering the sections. The effect on state government for the first five-year period the sections will be in effect is an estimated additional cost of $199,092 in fiscal year FY 2002; $206,140 in FY 2003; $206,140 in FY 2004; $206,140 in FY 2005; and $206,140 in FY 2006. There will be no fiscal implications for local government as a result of enforcing or administering the sections.

Commissioner Don Gilbert has determined that for each year of the first five years the sections are in effect the public benefit anticipated as a result of enforcing the sections will be that nursing facilities which predominantly serve children will receive payment rates that reflect the spending necessary to care for high need children. There will be no adverse economic effect on small or micro businesses, because the proposal creates a new reimbursement class for nursing facilities that serve predominantly high need children. No changes in practice are required of any business.

Questions about the content of this proposal may be directed to Carolyn Pratt (512) 438-4057 in DHS's Rate Analysis Department. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-146, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

The proposal is available for public review at local offices of DHS. For further information, contact Carolyn Pratt in DHS's Rate Analysis Department at (512) 438-4057.

Under §2007.003 of the Texas Government Code, HHSC has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, the department is not required to complete a takings impact assessment regarding these rules.

The amendment is proposed under the Government Code, §531.033, which authorizes the commissioner of the Health and Human Services Commission to adopt the rules necessary to carry out the commission's duties, and §531.021(b), which establishes the commission as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under Chapter 32, Human Resources Code.

The amendment implements the Government Code, §§531.033 and 531.021(b).

§355.307.Reimbursement Setting Methodology.

(a)-(b)

(No change.)

(c)

Special [ Experimental ] reimbursement class. DHS may define special reimbursement classes including experimental reimbursement classes of service to be used in research and demonstration projects on new reimbursement methods and reimbursement classes of service to address the cost differences of a select group of recipients . [ Demonstration or pilot projects based on experimental reimbursement ] Special classes may be implemented on a statewide basis or may be limited to a specific region of the state or to a selected group of providers.

(1)

Pediatric Care Facility. The purpose of this special class is to recognize, through the adoption of a facility-specific payment rate, the cost differences that exist in a nursing facility that serves predominantly children.

(2)

Definitions.

(A)

Pediatric care facility - To qualify as a pediatric care facility, a facility must have had an average daily census of 80% of more children for the six month period prior to its entry into the pediatric care facility class. The census must be based on the entire licensed facility and not a distinct part. In addition, to remain a pediatric care facility, the facility must maintain an average daily census of 80% or more children.

(B)

Children - For the purposes of this pediatric care facility class, children are defined as being at or below 22 years of age.

(3)

Payment rate determination. Payment rates will be determined in the following manner:

(A)

Cost reports and payment rate determination for pediatric care facilities are governed by the requirements specified in Subchapter A of this chapter (relating to Cost Determination Process).

(B)

Payment rates for this class of service will be determined on a facility-specific basis. The total allowable costs from the most recent cost report deemed acceptable are adjusted for inflation from the cost report period to the rate period. The adjusted cost is divided by the greater of total patient days of service reported on the cost report or the days of service at 85 percent of contracted capacity. The resulting cost per day is multiplied by a factor of 1.03 to determine the final facility-specific rate. If no acceptable cost report is available, the provider will be required to submit a cost report covering the time period specified by DHS.

(C)

The facility-specific payment rate from paragraph (3)(B) of this subsection will be paid for all Medicaid eligible residents of a qualifying facility regardless of the TILE level of the resident.

(D)

Residents of the pediatric care facility will not be eligible to receive the ventilator-dependent or the children with tracheostomies supplemental reimbursements.

(E)

Facilities in the pediatric care facility class are not eligible to participate in §355.308 (relating to Enhanced Direct Care Staff Rate).

(d)-(e)

(No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on June 6, 2001.

TRD-200103185

Marina Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Earliest possible date of adoption: July 22, 2001

For further information, please call: (512) 438-3734


Chapter 355. MEDICAID REIMBURSEMENT RATES

The Texas Health and Human Services Commission (HHSC) proposes amendments to §355.503, concerning reimbursement methodology for the community-based alternatives waiver program--a 1915(c) Medicaid home and community-based waiver for aged and disabled adults who meet criteria for alternatives to nursing facility care; §355.505, reimbursement methodology for the community living assistance and support services waiver program--a 1915(c) Medicaid home and community-based waiver for persons with related conditions; and §355.9022, reimbursement methodology for community-based services provided to people who are deaf-blind with multiple disabilities, in its Medicaid Reimbursement Rates chapter. For the Community-Based Alternatives (CBA), Community Living Assistance and Support Services (CLASS), and Deaf-Blind Multiple Disabilities (DB-MD) programs, the purpose of the amendments is to more closely match payment rates to the cost of the services delivered. The payment rate for Registered Nurses (RNs) and Licensed Vocational Nurses (LVNs) will be separated into two distinct rates to more closely match the cost of the type of nursing service delivered to the payment rate. These two rates eliminate the current method of blending RN and LVN average costs into a single rate. For the CLASS and CBA programs, the amendment deletes a separate rate for the annual reassessment of clients that is conducted by an RN. Currently the reassessment fee is determined by estimating the average amount of nursing time required to complete a reassessment. The amendment would eliminate the separate rate for reassessment fees and require providers to bill the RN payment rate for reassessment services, based on the actual time spent by the RN.

Don Green, Chief Financial Officer, has determined that for the first five-year period the sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections, because any change in RN or LVN payment rates as compared to the currently used combined nursing payment rate would be the result of recalculating the rate components based on actual provider cost.

Commissioner Don Gilbert has determined that for each year of the first five years the sections are in effect the public benefit anticipated as a result of enforcing the sections will be that the cost of services delivered will be more closely matched to the corresponding payment rate. There is no anticipated economic cost to persons who are required to comply with the proposed sections. For the CBA and CLASS programs, the proposal will require the provider to bill for RN time performing assessments at the RN payment rate and eliminates the modeled reassessment fee. For the CBA, CLASS, and DB-MD programs, contracted providers will be required to separately track and bill nursing services delivered by RNs and LVNs.

Questions about the content of this proposal may be directed to Carolyn Pratt (512) 438-4057 in DHS's Rate Analysis Department. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-145, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003 of the Texas Government Code, HHSC has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, the department is not required to complete a takings impact assessment regarding these rules.

Subchapter E. COMMUNITY CARE FOR AGED AND DISABLED

1 TAC §355.503, §355.505

The amendments are proposed under the Government Code, §531.033, which authorizes the commissioner of the Health and Human Services Commission to adopt the rules necessary to carry out the commission's duties, and §531.021(b), which establishes the commission as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under Chapter 32, Human Resources Code.

The amendments implement the Government Code, §531.033 and §531.021(b).

§355.503.Reimbursement Methodology for the Community-based Alternatives Waiver Program--a 1915(c) Medicaid Home and Community-based Waiver for Aged and Disabled Adults Who Meet Criteria for Alternatives to Nursing Facility Care.

(a)-(c)

(No change.)

(d)

Waiver reimbursement determination. Recommended reimbursements are determined in the following manner.

(1)

Unit of service reimbursement. Reimbursement for personal assistance services, nursing services provided by an RN, nursing services provided by and LVN , physical therapy, occupational therapy, speech pathology, and in-home respite care services will be determined on a fee-for-service basis in the following manner.

(A)

(No change.)

(B)

Total allowable costs are reduced by the amount of the pre-enrollment expense fee and [ , ] requisition fee[ , and reassessment fee ] revenues accrued for the reporting period.

(C)-(G)

(No change.)

(2)-(4)

(No change.)

[(5)

Reassessment fees. Reassessment fees are reimbursements paid to CBA home and community support services contracted providers for performing annual reassessments. Reimbursements are determined using a method based on modeled projected expenses which are developed by using data from surveys; cost report data from similar programs; consultation with other service providers and/or professionals experienced in delivering contracted services; and/or other sources.]

(5)

[ (6) ] Pre-enrollment expense fee. Reimbursement for pre-enrollment assessment is determined using a method based on modeled projected expenses which are developed by using data from surveys; cost report data from other similar programs, consultation with other service providers and/or professionals experienced in delivering contracted services; and other sources.

(6)

[ (7) ] Exceptions to the reimbursement determination methodology. DHS may adjust reimbursement if new legislation, regulations, or economic factors affect costs, according to §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

(e)-(h)

(No change.)

§355.505.Reimbursement Methodology for the Community Living Assistance and Support Services Waiver Program--a 1915(c) Medicaid Home and Community-based Waiver for Persons with Related Conditions.

(a)-(c)

(No change.)

(d)

Waiver reimbursement determination methodology.

(1)

Unit of service reimbursement or reimbursement ceiling by unit of service. Reimbursement or reimbursement ceilings for related-conditions waiver services, habilitation, nursing services provided by an RN, nursing services provided by an LVN , physical therapy, occupational therapy, speech pathology, and psychological and respite care services will be determined on a fee-for-service basis. These services are provided under the §1915(c) of the Social Security Act Medicaid waiver for persons with related conditions.

(2)-(3)

(No change.)

(4)

Reimbursement determination. Recommended unit of service reimbursements are determined in the following manner.

(A)

Unit of service reimbursement for habilitation, nursing services provided by an RN, nursing services provided by an LVN , physical therapy, occupational therapy, speech pathology, and psychological services are determined in the following manner:

(i)

(No change.)

(ii)

Total allowable costs are reduced by the amount of the administrative expense fee, and requisition fee[ , and reassessment fee ] revenues accrued for the reporting period.

(iii)-(v)

(No change.)

(vi)

For nursing services provided by and RN, nursing services provided by and LVN , physical therapy, occupational therapy, speech pathology, and psychological services:

(I)-(II)

(No change.)

(vii)

(No change.)

(B)-(D)

(No change.)

(e)-(f)

(No change.)

[(g)

Reassessment fees. Reassessment fees are reimbursements paid to CLASS direct service agency contracted providers for performing annual reassessments. Reimbursements are determined using a method based on modeled projected expenses which are developed by using data from surveys; cost report data from similar programs, consultation with other service providers and/or professionals experienced in delivering contracted services; and/or other sources.]

(g)

[ (h) ] Allowable and unallowable costs.

(1)

Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 and §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs) as well as the following provisions.

(2)

Participant room and board expenses are not allowable, except for those related to respite care.

(3)

The cost of adaptive aids and home modifications is not allowable. Allowable labor costs associated with acquiring adaptive aids and home modifications should be reported in the cost report. Any item purchased for participants in this program and reimbursed through a voucher payment system is unallowable. Refer to §355.103(b)(17)(K) of this title (relating to Specifications for Allowable and Unallowable Costs).

(h)

[ (i) ] Authority to determine reimbursement. The authority to determine reimbursement is specified in §355.101 of this title (relating to Introduction).

(i)

[ (j) ] Reporting revenue. Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).

(j)

[ (k) ] Reviews and field audits of cost reports. DHS staff perform desk reviews or field audits on all contracted providers. The frequency and nature of the field audit are determined by DHS to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken by DHS under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

(k)

[ (l) ] Reporting requirements. The program director's full salary is to be reported on the line item of the cost report designated for the director.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on June 11, 2001.

TRD-200103275

Marina Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Earliest possible date of adoption: July 22, 2001

For further information, please call: (512) 438-3734


Subchapter M. MISCELLANEOUS MEDICAID PROGRAMS

2. MEDICAID WAIVER PROGRAM FOR PEOPLE WITH DEAF-BLINDNESS AND MULTIPLE DISABILITIES

1 TAC §355.9022

The amendment is proposed under the Government Code, §531.033, which authorizes the commissioner of the Health and Human Services Commission to adopt the rules necessary to carry out the commission's duties, and §531.021(b), which establishes the commission as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under Chapter 32, Human Resources Code.

The amendment implements the Government Code, §531.033 and §531.021(b).

§355.9022.Reimbursement Methodology for Community-based Services Provided to People Who Are Deaf-Blind with Multiple Disabilities.

(a)-(c)

(No change.)

(d)

Waiver rate determination methodology. Recommended reimbursements for waiver services will be determined on a fee-for-service basis in the following manner for each of the services provided:

(1)-(4)

(No change.)

(5)

For physical therapy, occupational therapy, speech/hearing/language, case management, [ skilled ] nursing services provided by an RN, nursing services provided by an LVN , and behavior communication specialist services, an allowable cost per unit of service is calculated for each contracted provider for each service. The allowable costs per unit of service for each contracted provider are arrayed. The units of service for each contracted provider in the array are summed until the median unit of service is reached. The corresponding expense to the median unit of service is determined and is multiplied by 1.044. The allowable costs per unit of service may be combined into an array with the allowable costs per unit of service of similar services provided by other programs in determining the median cost per unit of service.

(6)-(9)

(No change.)

(e)-(h)

(No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on June 11, 2001.

TRD-200103274

Marina Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Earliest possible date of adoption: July 22, 2001

For further information, please call: (512) 438-3734


Subchapter J. PURCHASED HEALTH SERVICES

28. PHARMACY SERVICES: REIMBURSEMENT

The Health and Human Services Commission (HHSC) proposes the repeal of current §355.8541 and new §355.8541 concerning reimbursement of product cost in the Vendor Drug Program (VDP). Currently, the rule describes the industry sources used to estimate the cost of product acquisition for providers of Medicaid outpatient pharmacy services, and how these sources are used to arrive at the HHSC's best estimate of the provider's acquisition costs. The current rule specifies mark-ups and discounts from published pricing data that result from the methodology that is used to price products.

The proposed new section will eliminate the specific percentages. Additional market resources that may be used when determining prices for outpatient drugs will be added.

Don Green, Chief Financial Officer, has determined that for each year of the first five years the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section.

Steve Lorenzen, Director of Medicaid Rate Setting, has determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of enforcing the section will be to allow the HHSC to use percentages that more accurately reflect current market practices in determining product cost reimbursement for the VDP, to allow more timely response to market fluctuations in the product cost area, and to use all appropriate market sources in determining these costs in the future. Use of these resources will allow more accurate estimates of the actual cost of the products dispensed in the VDP and better meet the requirements contained in federal regulations (42 CFR, §447.331), concerning estimating drug product acquisition costs. There will be no costs to small business or micro-businesses to comply with this section as proposed. These businesses will not be required to alter their business practices in order to comply with the rules as proposed. There are no costs to persons who are required to comply with the section. There will be no impact on local employment.

A public hearing will be held at 9:00 a.m., Central Standard Time, on Thursday, July 12, 2001, in the Public Hearing Room, Building 3, first floor of the Riata Crossing Facility, 12555 Riata Vista Circle, Austin, Texas 78727-6404, to accept comments on the proposal.

Comments on the proposal may be submitted to Jeff Phelps, Program Administrator, Medicaid Reimbursement Division, Texas Health and Human Services Commission, P.O. Box 13247, Austin Texas 78711-3247 or at (512) 424-6657, within 30 days of publication of this proposal in the Texas Register . To comply with federal regulations, a copy of the proposal is being sent to each Texas Department of Human Services (DHS) Office, where it will be available for public review upon request.

1 TAC §355.8541

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Health and Human Services Commission in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under the Human Resources Code, §32.021 and the Texas Government Code, §531.021, which provide the Health and Human Services Commission with the authority to adopt rules to administer the State's medical assistance program.

The repeal affects the Human Resources Code, Chapter 32, and the Texas Government Code, Chapter 531.

§355.8541.Legend and Nonlegend Medications.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on June 6, 2001.

TRD-200103156

Marina Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Earliest possible date of adoption: July 22, 2001

For further information, please call: (512) 458-7236


1 TAC §355.8541

The new section is proposed under the Human Resources Code, §32.021 and the Texas Government Code, §531.021, which provide the Health and Human Services Commission with the authority to adopt rules to administer the State's medical assistance program.

The new section affects the Human Resources Code, Chapter 32, and the Texas Government Code, Chapter 531.

§355.8541.Legend and Nonlegend Medications.

For all medication, legend and non-legend, covered by the Vendor Drug Program and appearing in the Texas Drug Code Index (TDCI) and updates, the following requirements must be met.

(1)

Reimbursement. A pharmaceutical provider is reimbursed based on the lesser of:

(A)

the HHSC's best estimate of acquisition cost (EAC) plus the HHSC's currently established dispensing fee per prescription; or

(B)

the usual and customary price charged the general public.

(2)

Estimated acquisition cost (EAC).

(A)

EAC is defined as:

(i)

wholesale estimated acquisition cost (WEAC);

(ii)

direct estimated acquisition cost (DEAC), according to the pharmacist's usual purchasing source and the pharmacist's usual purchasing quantity; or

(iii)

maximum allowable cost (MAC) for multi-source drugs.

(B)

EAC is verifiable by invoice audit conducted by the HHSC to include necessary supporting documentation that will verify the final cost to the provider.

(C)

All drug purchases through a central purchasing agreement or from a central purchasing entity must be billed to the HHSC as warehouse purchases.

(D)

The WEAC is established by the HHSC using market sources which include, but are not limited to:

(i)

the current Redbook;

(ii)

Redbook Update;

(iii)

First Databank;

(iv)

First Alert; or

(v)

reported manufacturer pricing.

(E)

The WEAC may not exceed wholesaler cost, as supplied by the drug manufacturers plus an amount representing wholesaler operating costs under current market conditions. Market conditions will be examined at least every two years. Market conditions will be determined from information supplied to the department by reliable sources which include, but are not limited to the manufacturer, the wholesaler, and contracted providers. Exceptions to general pricing determinations may be made on certain drugs and/or drug categories based on information from these same market sources.

(F)

The DEAC is established by the HHSC using direct price information supplied by drug manufacturers. Providers are reimbursed only at the DEAC on all drug products that are available from select manufacturers/distributors who actively seek and encourage direct purchasing. The TDCI is used as the reference from drugs included in the scope of benefits and for allowable package sizes. No acquisition cost is billed to the HHSC for samples dispensed.

(3)

Nonlegend drugs.

(A)

Reimbursement for nonlegend drugs is based on the lesser of:

(i)

the usual and customary price charged to the general public; or

(ii)

EAC, plus 50% of the EAC.

(B)

No dispensing fee is added to the price of nonlegend drugs, and 50% of the EAC may not exceed the assigned dispensing fee.

(4)

Public Hearing. Notice of a public hearing to receive comments on proposed changes to general pricing determinations derived under these rules shall be published in the Texas Register .

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on June 6, 2001.

TRD-200103157

Marina Henderson

Executive Deputy Commissioner

Texas Health and Human Services Commission

Earliest possible date of adoption: July 22, 2001

For further information, please call: (512) 458-7236