TITLE 40.SOCIAL SERVICES AND ASSISTANCE

Part 1. TEXAS DEPARTMENT OF HUMAN SERVICES

Chapter 2. MEDICALLY NEEDY AND CHILDREN AND PREGNANT WOMEN PROGRAMS

The Texas Department of Human Services (DHS) proposes to repeal §§2.1002, 2.1004, 2.1006, 2.1008, 2.1010, 2.1012, 2.1014, and 2.1016, concerning the Medically Needy Program, in its Medically Needy Program chapter; and proposes new Subchapter A, concerning definitions, §2.1; new §§2.11-2.18 in new Subchapter B, concerning Medically Needy Program requirements; and new §§2.32-2.38 in new Subchapter C, concerning Children and Pregnant Women Program requirements, in its newly titled Medically Needy and Children and Pregnant Women Programs chapter.

The purpose of the repeals and new sections is to rewrite the rules regarding the Medically Needy (MN) and Children and Pregnant Women (CPW) programs in plain language, to locate the rules for the two programs in the same chapter, and to implement decisions made during the 78th Texas legislative session. The proposal deletes the current rules in Chapter 2 for the MN Program. Rules in DHS's Chapter 4, concerning the CPW Program, are being repealed elsewhere in this issue of the Texas Register . They have been rewritten in plain language and combined with the MN Program rules in this chapter.

The purpose of new §§2.11(1)(A), 2.14(2), and 2.34(2)(C) is to distinguish resource limits for the MN and CPW programs from those of the Temporary Assistance for Needy Families (TANF) Program. The three programs no longer have the same resource limits, since House Bill (HB) 2292 and Senate Bill (SB) 1862, 78th Texas Legislature, reduced the TANF asset limit to $1,000. The purpose of new §2.32 is to comply with the new provisions of the Human Resources Code, §32.025 and §32.026, amended by SB 1522, SB 1862, and HB 2292, 78th Texas Legislature, which permit DHS to require personal interviews for applications and recertifications of children's Medicaid when necessary to obtain information needed for eligibility verification.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the sections.

Judy Denton, Deputy Commissioner for Family Services, 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 to have rules that providers, agency staff, and the public can more easily navigate and understand. Rule clarity and consistency will help providers and agency staff ensure quality services for clients and make it easier for program applicants to locate information. In addition, the public will benefit by having rules available that reflect and implement the most recent legislative changes. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because the proposal deals with program requirements and client eligibility and does not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-219, Texas Department of Human Services E-205, P.O.Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

Subchapter A. DEFINITIONS

40 TAC §2.1

The new section is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new section affects the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§2.1.Definitions.

The words and terms used in this chapter have the following meanings, unless the context clearly indicates otherwise. The definitions apply to the Medically Needy (MN) and Children and Pregnant Women (CPW) programs.

(1) Applied income--A portion of a legal parent's income applied or counted to meet the needs of a minor applicant.

(2) Budget group--People living as a group at one address with needs, income, resources, and/or medical expenses in common. The Texas Department of Human Services (DHS) includes each group member in the Medicaid budget when determining eligibility, whether or not each group member is individually Medicaid eligible.

(3) CPW--The Children and Pregnant Women Program. A program DHS administers that provides Medicaid benefits to pregnant women and children.

(4) Caretaker--A person who supervises and cares for a dependent child. A caretaker must be related to the child, as required by Temporary Assistance for Needy Families (TANF) rules (detailed in Chapter 3 of this title (relating to Texas Works)).

(5) Clearinghouse--A site with staff that process medical bills submitted by MN applicants who must spend down income to qualify for Medicaid. Clearinghouse staff determine if the bills are acceptable and when spend down is met.

(6) Client--A person who is either an applicant for or a recipient of Medicaid.

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

(8) FPIL--Federal Poverty Income Limit. FPILs are income amounts, by family size, that represent the dividing line between families who live above or below the poverty level. The Office of Management and Budget, a federal agency, periodically calculates, updates, and publishes the FPIL.

(9) Good cause--An acceptable reason that exempts an applicant or recipient from a Medicaid requirement. For the purposes of this chapter, good cause refers to a reason for an applicant or recipient not to cooperate to obtain medical support from an absent parent or not to comply with third party resource requirements.

(10) Health and human services office--An agency other than DHS that is authorized to accept Medicaid applications.

(11) MN--The Medically Needy Program. A program DHS administers that provides Medicaid benefits to pregnant women, children, and parents or caretakers of children whose income is too high to qualify for other Medicaid programs and who have high medical expenses.

(12) Provider--A doctor, hospital, clinic, or other medical facility authorized to provide medical services and file claims for Medicaid payments.

(13) Spend down--The amount of income that an MN applicant must apply toward incurred medical bills before he can be certified for Medicaid.

(14) TANF--The Temporary Assistance for Needy Families Program.

(15) Third-party--A person or organization, other than DHS or a person living with the applicant, who may be liable as a source of payment of the applicant's medical expenses (for example, a health insurance company).

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 16, 2003.

TRD-200303636

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter B. MEDICALLY NEEDY PROGRAM REQUIREMENTS

40 TAC §2.11 - 2.18

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§2.11.Eligible Groups.

To qualify for Medically Needy Program benefits, applicants must be:

(1) children under age 19 or pregnant women with no child eligible for Temporary Assistance for Needy Families (TANF) who:

(A) are eligible under the resource rules described in §2.14(2) of this chapter (relating to Eligibility Requirements Other Than Income); and

(B) have countable income that is more than the Children and Pregnant Women Program income limits described in §2.31(1) and (2) of this chapter (relating to Eligible Groups); or

(2) adult caretakers of a dependent child who are eligible under TANF rules, as detailed in Chapter 3 of this title (relating to Texas Works), except that:

(A) their countable income exceeds TANF limits;

(B) their time-limited TANF benefits are exhausted;

(C) they choose Medicaid-only benefits; or

(D) they are disqualified from TANF for a reason that is not applicable to Medicaid.

§2.12.Application Procedures.

The Texas Department of Human Services (DHS) processes Medically Needy Program applications using the application rules of the Temporary Assistance for Needy Families Program, as detailed in Chapter 3 of this title (relating to Texas Works), with the following exceptions:

(1) For applicants under the age of 19, DHS:

(A) processes applications and reviews active cases by mail, telephone, or face-to-face interview;

(B) allows any office of a state health and human services agency to accept an initial application; and

(C) contracts with third parties to accept applications from hospital districts (including state- owned teaching hospitals), federally qualified health centers, and county health departments.

(2) For pregnant applicants who are potentially eligible but unable to provide proof of eligibility, DHS:

(A) postpones verifications and provides Medicaid coverage to ensure access to medical care within 30 days of application;

(B) continues the coverage of women who provide postponed verifications by the 30th day after the application date; and

(C) denies the coverage of those who fail to meet the 30-day deadline.

(3) There are no conditions limiting the designation of an authorized representative.

§2.13.Income Eligibility Requirements.

Except as noted in this section, Medically Needy Program applicants must meet the income eligibility rules for the Temporary Assistance for Needy Families Program (TANF), as detailed in Chapter 3 of this title (relating to Texas Works):

(1) TANF payments are counted as income to applicants.

(2) Applicants receive the TANF standard work-related expense deduction and dependent care deduction, but not the other TANF earned income deductions.

(3) Caretakers have the option to exclude a child's needs, income, and resources when determining eligibility of his siblings if they choose not to apply for Medicaid for that excluded child.

(4) When determining the eligibility of a pregnant Medicaid applicant or recipient, the Texas Department of Human Services includes the needs of her unborn child.

(5) The needs allowance standard for eligibility is 133-1/3% of the TANF Recognizable Needs Standard.

(6) Applicants for coverage whose net income exceeds the needs allowance standard detailed in paragraph (5) of this section may (as required by 42 Code of Federal Regulations §435.831) spend down the excess amount of income to pay unpaid medical bills and qualify for Medicaid.

§2.14.Eligibility Requirements Other Than Income.

To be eligible for the Medically Needy (MN) Program, applicants must meet the following eligibility criteria, in addition to the criteria detailed in §2.13 of this chapter (relating to Income Eligibility Requirements):

(1) Citizenship. Applicants must be citizens or aliens with approved Immigration and Naturalization Service status, as required by Temporary Assistance for Needy Families (TANF) Program rules detailed in Chapter 3, Subchapter F, of this title (relating to Citizenship). However, certain eligible aliens who were admitted to the United States on or after August 22, 1996, are eligible for Medicaid for a seven-year period following entry to the country as specified in 8 United States Code (U.S.C.) §1612(b)(2)(A)(i), instead of the five-year period of eligibility for TANF.

(2) Resources. The TANF rules for resources specified in Chapter 3 of this title (relating to Texas Works) apply, except that:

(A) applicants, if otherwise eligible, are not denied Medicaid because they transfer resources to qualify for assistance;

(B) the resource limit is $2,000, or $3,000 if the household has an aged or disabled member;

(C) for households with two certified parents, the Texas Department of Human Services (DHS) excludes up to $15,000 of the fair market value of one countable vehicle owned by the family; and

(D) DHS exempts the resources in determining eligibility for pregnant women.

(3) Age, relationship, and domicile. Applicants must meet TANF age, relationship, and domicile requirements, except:

(A) children under age 19 do not have to meet relationship and domicile requirements;

(B) pregnant women, whose only children are unborn, may be eligible;

(C) DHS includes a child in the budget group for purposes of determining eligibility for a pregnant woman only if the child is a natural or adopted child;

(D) newborn children, who remain with mothers who are Medicaid-eligible or would be eligible if pregnant, are eligible for Medicaid from the day of birth through the last day of the month they become one year old; and

(E) newborn children who are in the process of being adopted are eligible through the month their mothers give up parental rights.

(4) Child/medical support requirements. TANF rules in Chapter 3 of this title that require applicants to cooperate in obtaining child or medical support from absent parents apply to the MN Program as follows:

(A) Pregnant women must provide the names and last known addresses of the legal and/or biological fathers of unborn children.

(B) Households applying only for a child under age 19 are not required to cooperate to find absent parents to obtain child or medical support. However, caretakers of eligible children qualify for Medicaid coverage for themselves only if they:

(i) cooperate in obtaining medical support from the certified child's absent parent, if the child is deprived of parental support due to absence, as provided by the Social Security Act, §1912(a)(1) (42 U.S.C. §1396k(a)(1)); or

(ii) have good cause not to cooperate (as defined by TANF rules in Chapter 3 of this title).

(5) School attendance. Applicants are exempt from TANF school attendance requirements.

(6) Social Security Number (SSN). Applicants must provide or apply for an SSN (including children referred to the Children's Health Insurance Program (CHIP)), except that DHS:

(A) does not require an SSN for newborns until the earlier of six months after birth or when DHS reviews Medicaid eligibility;

(B) refers a Medicaid-eligible mother directly to the Social Security Office to obtain an SSN for her newborn, if her newborn was certified for Medicaid as a result of a notice from an authorized medical provider (for example, a hospital or clinic); and

(C) requests, but does not require, budget group members who are not eligible for Medicaid to provide or apply for an SSN.

(7) Newborn children. Except for the requirements detailed in paragraphs (1), (3)(D), (3)(E), and (6)(A) of this section, newborn applicants are exempt from all requirements of this section.

(8) Third-party resources. Applicants and recipients must comply with third-party resources requirements, as detailed in the Human Resources Code, §32.033.

§2.15.Medicaid Eligibility Dates.

The Texas Department of Human Services (DHS) determines Medicaid eligibility dates for Medically Needy Program applicants as provided in this section.

(1) Medicaid coverage begins on the earliest day of the application month on which the applicant met all eligibility criteria.

(2) Retroactive Medicaid coverage may begin as early as three months before the application month, except that:

(A) a pregnant woman's coverage begins no earlier than the first day of the month in which the pregnancy began (coverage ends the second month after the month in which the pregnancy terminates); and

(B) a newborn's coverage begins no earlier than the child's date of birth (coverage ends the month of the first birthday, the month his mother's Medicaid ends, or the month he is no longer living with his mother, whichever is earliest).

(3) The Medicaid coverage of applicants with a spend down amount, as specified in §2.13(6) of this title (relating to Income Eligibility Requirements), begins on the earliest day of the month of potential eligibility on which spend down requirements are met.

§2.16.Information from Other Agencies.

(a) Periodically, the Texas Department of Human Services (DHS) and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, DHS contacts the Medicaid recipient if the information does not match, so that DHS can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, DHS will not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, DHS takes appropriate action to adjust or deny Medicaid and sends a written notice of action taken to the client.

§2.17.Requirement to Report Changes.

(a) Medically Needy Program recipients must report changes as required by Temporary Assistance for Needy Families (TANF) Program rules, and within the time frames specified by TANF rules as outlined in Chapter 3 of this title (relating to Texas Works).

(b) In addition to the reporting required by the TANF Program rules, an MN recipient who is pregnant must report the termination of pregnancy.

§2.18.Right to Appeal.

(a) Medically Needy Program applicants and recipients have the right to appeal Texas Department of Human Services (DHS) decisions. Appeals are governed by DHS's fair hearing rules contained in Chapter 79 of this title (relating to Legal Services).

(b) DHS provides an action notice regarding a DHS decision to Medicaid applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

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 16, 2003.

TRD-200303640

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter C. CHILDREN AND PREGNANT WOMEN PROGRAM REQUIREMENTS

40 TAC §§2.32 - 2.38

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§2.32.Application Procedures.

(a) The Texas Department of Human Services (DHS) processes Children and Pregnant Women Program applications using the application rules of the Temporary Assistance for Needy Families (TANF) Program, as detailed in Chapter 3 of this title (relating to Texas Works), with the following exceptions:

(1) For applicants under the age of 19, DHS:

(A) processes applications and reviews active cases by mail, telephone, or face-to-face interview;

(B) may conduct a personal interview with an initial applicant if DHS has received conflicting information related to household membership, income, or assets that affect eligibility and the information cannot be verified through other means;

(C) conducts a personal interview for recertification of Medicaid eligibility when there is no associated case record for TANF or food stamps or adult Medicaid coverage, and DHS has received conflicting information related to household membership, income, or assets that affects eligibility and the information cannot be verified through other means;

(D) allows any office of a state health and human services agency to accept an initial application; and

(E) contracts with third parties to accept applications from hospital districts (including state- owned teaching hospitals), federally qualified health centers, and county health departments.

(2) For pregnant applicants who are potentially eligible but unable to provide proof of eligibility, DHS:

(A) postpones verifications and provides Medicaid coverage to ensure access to medical care within 30 days of application;

(B) continues the coverage of women who provide postponed verifications by the 30th day after the application date; and

(C) denies the coverage of those who fail to meet the 30-day deadline.

(3) There are no conditions limiting the designation of an authorized representative.

(b) Parents or guardians of Medicaid children under the age of 19 must:

(1) attend a DHS health care orientation;

(2) accompany the child on a visit to a health care provider; or

(3) meet with a DHS representative to discuss the child's eligibility and, as appropriate, receive counseling on the child's need for comprehensive health care.

(c) Parents or guardians of Medicaid children under the age of 19 who are eligible for the Texas Health Steps Program must:

(1) comply with the Texas Health Steps regimen of health care requirements, as required by the Texas Department of Health in 25 TAC Chapter 33, Subchapter J (relating to Texas Health Steps Medical Case Management); or

(2) meet with a DHS representative to discuss the child's eligibility and, as appropriate, receive counseling on the child's need for comprehensive health care.

(d) The services and policies in subsection (b) of this section and §2.35(3) and (4) of this chapter (relating to Medicaid Eligibility Dates) are administered according to the procedures in DHS's Medicaid simplification operating guidelines. The guidelines are published, available to the public, and are updated regularly to reflect procedural changes.

§2.33.Income Eligibility Requirements.

Children and Pregnant Women Program applicants must meet the income eligibility rules under the Temporary Assistance for Needy Families (TANF) Program, as detailed in Chapter 3 of this title (relating to Texas Works), except as follows:

(1) TANF payments are counted as income to applicants.

(2) Applicants receive the TANF standard work-related expense deduction and dependent care deduction, but not the other TANF earned income deductions.

(3) Caretakers have the option to exclude a child's needs, income, and resources when determining eligibility of his siblings if they choose not to apply for Medicaid for that excluded child.

(4) When determining the eligibility of a pregnant Medicaid applicant or recipient, DHS includes the needs of her unborn child.

(5) The income limits for pregnant women, children under age one, and children ages one through 18 are based on a percentage of the Federal Poverty Income Limit (FPIL), as required by §2.31(1) and (2) of this chapter (relating to Eligible Groups).

(6) DHS does not require newborn applicants, as defined in §2.31(3) of this chapter, to meet income eligibility requirements.

(7) Increased income does not cause the denial of ongoing Medicaid eligibility of a pregnant woman.

(8) DHS does not count the applied income of stepparents or grandparents with whom the child lives, as specified in 42 Code of Federal Regulations, §435.113.

§2.34.Eligibility Requirements Other Than Income.

To be eligible for the Children and Pregnant Women Program (CPW), applicants must meet the following eligibility criteria, in addition to the criteria detailed in §2.33 of this title (relating to Income Eligibility Requirements):

(1) Citizenship. Applicants must be citizens or aliens with approved Immigration and Naturalization Service status, as required by Temporary Assistance for Needy Families (TANF) rules in Chapter 3, Subchapter F, of this title (relating to Citizenship). However, certain eligible aliens who were admitted to the United States on or after August 22, 1996, are eligible for Medicaid for a seven-year period following entry to the country as specified in 8 United States Code §1612(b)(2)(A)(i), instead of the five-year period of eligibility for TANF.

(2) Resources. The TANF rules for resources specified in Chapter 3 of this title (relating to Texas Works) apply, except that:

(A) applicants, if otherwise eligible, are not denied Medicaid because they transfer resources to qualify for assistance;

(B) the Texas Department of Human Services (DHS) uses Food Stamp Program rules in Chapter 3, Subchapter G, of this title (relating to Resources) for vehicles, except that DHS exempts the value of a family's primary vehicle if the applicant is a child under age 19;

(C) the resource limit for children under age 19 is $2,000, or $3,000 if the household has an aged or disabled member; and

(D) DHS exempts resources in determining eligibility for pregnant women.

(3) Age, relationship, and domicile. Applicants must meet TANF age, relationship, and domicile requirements, except:

(A) Children under age 19 do not have to meet relationship and domicile requirements.

(B) Pregnant women, whose only children are unborn, may be eligible.

(C) DHS includes a child in the budget group for purposes of determining eligibility for a pregnant woman only if the child is a natural or adopted child.

(D) Newborn children, who remain with mothers who are Medicaid-eligible or would be if pregnant, are eligible for Medicaid from the day of birth through the last day of the month they become one year old.

(E) Newborn children who are in the process of being adopted are eligible through the month their mothers give up parental rights.

(4) Child/medical support requirements. TANF rules in Chapter 3 of this title that require applicants to cooperate in obtaining child or medical support from absent parents apply to the CPW Program as follows:

(A) Pregnant women must provide the names and last known addresses of the legal and/or biological fathers of unborn children.

(B) Households applying only for a child under age 19 are not required to cooperate to find absent parents to obtain child or medical support.

(5) School attendance. Applicants are exempt from TANF school attendance requirements.

(6) Social Security Number (SSN). Applicants must provide or apply for an SSN (including children referred to the Children's Health Insurance Program (CHIP)), except that DHS:

(A) does not require an SSN for newborns until the earlier of six months after birth or when DHS reviews Medicaid eligibility;

(B) refers a Medicaid-eligible mother directly to the Social Security Office to obtain an SSN for her newborn, if her newborn was certified for Medicaid as a result of a notice from an authorized medical provider (for example, a hospital or clinic); and

(C) requests, but does not require, budget group members who are not eligible for Medicaid to provide or apply for an SSN.

(7) Newborn children. Except for the requirements detailed in paragraphs (1), (3)(D), (3)(E), and (6)(A) of this section, newborn applicants are exempt from all requirements of this section.

(8) Third-party resources. Applicants and recipients must comply with third-party resources requirements, as detailed in the Human Resources Code, §32.033.

§2.35.Medicaid Eligibility Dates.

The Texas Department of Human Services (DHS) determines Medicaid eligibility dates for Children and Pregnant Women Program applicants as follows:

(1) Medicaid coverage begins on the earliest day of the application month on which the applicant met all eligibility criteria.

(2) Retroactive Medicaid coverage may begin as early as three months before the application month, except that:

(A) a pregnant woman's coverage begins no earlier than the first day of the month in which the pregnancy began (coverage ends the second month after the month in which the pregnancy terminates); and

(B) a newborn's coverage begins no earlier than the child's date of birth (coverage ends the month of the first birthday, the month his mother's Medicaid ends, or the month he is no longer living with his mother, whichever is earliest).

(3) Recipients who return complete review documents continue to receive ongoing Medicaid coverage.

(4) DHS does not review or change the Medicaid eligibility of a child under the age of 19 whose coverage began on or after January 1, 2002, regardless of changes in resources or income, until the earlier of:

(A) the first 180 days after the date he was certified; or

(B) his 19th birthday.

§2.36.Information from Other Agencies.

(a) Periodically, the Texas Department of Human Services (DHS) and other state and federal agencies compare the information they have stored on computer files.

(b) After comparing information with another agency, DHS contacts the Medicaid recipient if the information does not match so that DHS can confirm the correct information.

(1) If the mismatch of information does not affect eligibility, DHS does not take action to adjust or deny Medicaid.

(2) If the mismatch of information affects eligibility, DHS takes appropriate action to adjust or deny Medicaid and will send a written notice of action taken to the client.

§2.37.Requirement to Report Changes.

(a) Children and Pregnant Women Program (CPW) recipients must report changes as required by Temporary Assistance for Needy Families (TANF) Program rules, and within the time frames specified by TANF rules as outlined in Chapter 3 of this title (relating to Texas Works).

(b) In addition to the reporting required by TANF Program rules, a recipient of the CPW Medicaid Program who is:

(1) pregnant must report the termination of pregnancy; and

(2) under age 19 must report changes, even though the child is continuously eligible, regardless of reported income and resource changes, until Medicaid eligibility is reviewed.

§2.38.Right to Appeal.

(a) Children and Pregnant Women Program applicants and recipients have the right to appeal Texas Department of Human Services (DHS) decisions. Appeals are governed by DHS's fair hearing rules contained in Chapter 79 of this title (relating to Legal Services).

(b) DHS provides an action notice regarding a DHS decision to Medicaid applicants and recipients. The action notice includes information about how to file an appeal and the availability of free legal representation.

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 16, 2003.

TRD-200303639

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 2. MEDICALLY NEEDY PROGRAM

Subchapter A. PROGRAM REQUIREMENTS

40 TAC §§2.1002, 2.1004, 2.1006, 2.1008, 2.1010, 2.1012, 2.1014, 2.1016

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

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001-22.038 and §§32.001- 32.053.

§2.1002.Application Procedures.

§2.1004.Eligible Groups.

§2.1006.Requirements for Application.

§2.1008.Definitions.

§2.1010.Determining Income Eligibility.

§2.1012.Medicaid Eligibility.

§2.1014.Right to Appeal.

§2.1016.Client Reporting Requirements.

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 16, 2003.

TRD-200303635

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 2. MEDICALLY NEEDY AND CHILDREN AND PREGNANT WOMEN PROGRAMS

Subchapter B. MEDICALLY NEEDY PROGRAM REQUIREMENTS

40 TAC §2.19

The Texas Department of Human Services (DHS) proposes new §2.19, concerning availability of funding, in its Medically Needy and Children and Pregnant Women Programs chapter.

The purpose of the new section is to implement decisions made by the 78th Texas Legislature. Although the legislature did not appropriate funds for the Medically Needy (MN) Program, it did authorize DHS to administer the MN Program contingent on the availability of appropriated funds. This provision was made in House Bill 2292 and Senate Bill 1862, which amended the Human Resources Code, §32.024(i). Therefore, §2.19 is proposed to make it clear that operation of the MN Program depends on funds being appropriated for the program and to allow DHS to administer the MN Program if appropriated funds become available.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the section.

Judy Denton, Deputy Commissioner for Family Services, 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 is that a rule will be in place to serve clients who are eligible for the Medically Needy Program in the event that appropriated funds become available. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because the proposal deals with a program requirement and does not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-219, Texas Department of Human Services E-205, P.O.Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

The new section is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new section affects the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§2.19.Availability of Funding.

The Medically Needy Program is subject to the availability of appropriated funds.

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 16, 2003.

TRD-200303637

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter C. CHILDREN AND PREGNANT WOMEN PROGRAM REQUIREMENTS

40 TAC §2.31, §2.39

The Texas Department of Human Services (DHS) proposes new §2.31, concerning eligible groups, and §2.39, concerning availability of funding, in its Medically Needy and Children and Pregnant Women Programs chapter.

The purpose of new §2.31 is to rewrite the rule regarding eligible groups in the Children and Pregnant Women (CPW) Program in plain language. The purpose of new §2.31(1) and §2.39 is to stay within the appropriated funding levels for the CPW Program in House Bill 1, which are based on lowering the income limit for pregnant women ages 19 and over to 158% of the Federal Poverty Income Limit.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are fiscal implications for state government as a result of enforcing or administering the sections. There are no fiscal implications for local government as a result of administering the sections.

The effect on state government for the first five-year period the sections are in effect is an estimated additional cost of $36,176 in fiscal year (FY) 2004; and an estimated reduction in cost of $21,391,369 in FY 2004; $22,508,631 in FY 2005; $23,707,488 in FY 2006; $24,987,363 in FY 2007; and $26,356,039 in FY 2008.

Judy Denton, Deputy Commissioner for Family Services, 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 to have rules that providers, agency staff, and the public can more easily navigate and understand. Rule clarity and consistency will help providers and agency staff ensure quality services for clients and make it easier for program applicants to locate information. In addition, the public will benefit by having rules available that reflect and implement the most recent legislative changes. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because the proposal deals with program requirements and client eligibility and does not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections, but persons who are ineligible for Medicaid as a result of this change may be adversely affected. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-219, Texas Department of Human Services E-205, P.O.Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§2.31.Eligible Groups.

To qualify for Children and Pregnant Women Program benefits, applicants must be:

(1) pregnant women age 19 and over with countable income less than 158% of the Federal Poverty Income Limit (FPIL);

(2) pregnant women under age 19 or children under age one with countable income less than 185% of the FPIL;

(3) children ages one to five with countable income less than 133% of the FPIL;

(4) children ages six to 18 with countable income less than 100% of the FPIL;

(5) newborn children who live with their legal mothers who were Medicaid recipients when the children were born. These children may receive Medicaid benefits through the month they are one year old as long as they live with their mother in Texas;

(6) newborn children born to mothers incarcerated in a Texas criminal justice facility. These children may be covered from the day of birth if they leave the facility and live with eligible caretaker relatives who file applications. If no caretaker relative applies for coverage for a newborn born to an incarcerated mother, funds to pay for the newborn's medical expenses from birth until the newborn leaves the facility may be available from the Texas Medical Assistance Program, as provided by the Human Resource Code, §80.003; or

(7) children who would be TANF-eligible except for the applied income of their stepparent or their grandparents with whom they live.

§2.39.Availability of Funding.

Pregnant women ages 19 and over may be eligible at an income level up to 185% of the Federal Poverty Income Limit if appropriated funds are available.

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 16, 2003.

TRD-200303638

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 3. TEXAS WORKS

The Texas Department of Human Services (DHS) proposes to amend §3.301, concerning responsibilities of clients and Texas Department of Human Services (DHS); §3.1104, concerning failure to comply with Title IV-A Employment Program; §3.1105, concerning reestablishing eligibility; §3.1801, concerning Temporary Assistance for Needy Families (TANF) child support requirements; and §3.7609, concerning failure to comply with CHOICES Program, in its Texas Works chapter.

The purpose of these rule amendments is to implement the changes in law made by sections 2.86-2.88 of House Bill (HB) 2292, passed by the 78th Legislature.

HB 2292, section 2.86, amended the Human Resources Code, §31.0031, to require that a TANF payee sign an agreement that defines the responsibilities of the state and the payee. This amendment defines a TANF payee as a person who resides in a household with a dependent child and who is within the degree of relationship with the child that is required of a caretaker, but whose needs are not included in DHS's determination of the amount of TANF benefits provided to the household. The amendment provides that DHS must require TANF payees to sign an agreement that contains the following five requirements:

(1) A parent of a dependent child must cooperate with DHS and the Title IV-D agency if necessary to establish the paternity of the dependent child and to establish or enforce child support.

(2) If adequate and accessible providers of the services are available in the geographic area and subject to the availability of funds, each dependent child, as appropriate, must complete early and periodic screening, diagnosis, and treatment checkups on schedule and receive the immunization series prescribed by Health and Safety Code, §161.004, unless the child is exempt under that section.

(3) Each caretaker relative or parent receiving assistance must not use, sell, or possess marijuana or a controlled substance in violation of Health and Safety Code, Chapter 481, or abuse alcohol.

(4) Each dependent child younger than 18 years of age or teen parent younger than 19 years of age must attend school regularly, unless the child has a high school diploma or high school equivalency certificate or is specifically exempted from school attendance under §25.086 of the Education Code.

(5) Each recipient must comply with DHS rules regarding proof of school attendance.

HB 2292, section 2.87, amended the Human Resources Code, §31.0031, to require DHS to adopt rules governing sanctions and penalties against the family of a person who fails to cooperate with a requirement in the Human Resources Code, §31.0031(d), that is contained in a responsibility agreement signed by the person.

HB 2292, section 2.88, amended the Human Resources Code, §§31.0032-31.0034, which changed the sanctions imposed for failure to cooperate with a requirement in the Human Resources Code, §31.0031(d), that is contained in a responsibility agreement. These amendments require DHS to immediately apply a sanction terminating the total amount of financial assistance provided to or for the person and person's family, as more fully set out in Human Resources Code, Chapter 31, as amended.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are fiscal implications for state government as a result of enforcing or administering the sections. There are no fiscal implications for local governments as a result of enforcing or administering the sections.

The effect on state government for the first five-year period the sections are in effect is an estimated additional cost of $556,303 in fiscal year (FY) 2004; and an estimated reduction in cost of $941,000 in FY 2004; $1.5 million in FY 2005; $662,552 in FY 2006; $713,345 in FY 2007; and $758,745 in FY 2008.

Judy Denton, Deputy Commissioner for Family Services, 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 is a cost savings to the state and that DHS rules will be in compliance with amendments made by the 78th Legislature to the Human Resources Code, Chapter 31. There is no adverse economic effect on small or micro businesses, or on businesses of any size, as a result of enforcing or administering the sections, because the sections concern client eligibility and the application process and do not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections. However, persons who do not comply with a responsibility agreement, and their families, may be adversely affected. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-260, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

Subchapter C. THE APPLICATION PROCESS

40 TAC §3.301

The amendment is proposed under the Human Resources Code, Chapter 31, which authorizes DHS to administer financial assistance programs.

The amendment affects the Human Resources Code, §§31.001-31.081.

§3.301.Responsibilities of Clients and the Texas Department of Human Services (DHS).

(a)-(c) (No change.)

(d) Additional state and client responsibilities are explained by eligibility staff to households as a condition of TANF eligibility in Texas as specified in paragraphs (1)-(5) of this subsection.

(1) Requirements.

(A) (No change.)

(B) Client requirements. DHS requires each adult TANF recipient, each minor parent applying as a caretaker or second parent, and each payee [ including minor parents applying as a caretaker/second parent ], as a condition of eligibility , to sign a [ personal ] responsibility agreement as specified in Human Resources Code, §31.0031[ (a) ]. [ Unless exempted by Human Resources Code, §31.0031(f), regarding unavailability of funding for support services, ] DHS requires household members to comply with any applicable requirements contained in the agreement and listed in Human Resources Code, §31.0031(d), after the agreement has been signed [ by an adult recipient, ] or the household is subject to a penalty as described in paragraph (4) of this subsection. [ Additionally, the requirements and penalties related to immunizations specified in Human Resources Code, §31.0031(d)(2), apply to cases in which the adult caretaker relative is not a certified recipient. ] For the parenting skills training specified in Human Resources Code, §31.0031(d)(8), DHS requires participation by certified caretakers and second parents of a certified child under age five and teen parents. Others may voluntarily participate.

(2) Establishing compliance. Compliance with a responsibility agreement that contains any one or more of the requirements listed in Human Resources Code, §31.0031(d), is established in the following manner:

(A) Recipients and payees must provide proof of compliance with provisions in Human Resources Code, §31.0031(d)(2), (6), and (7), at each periodic review. DHS accepts the following as proof of compliance:

(i)-(ii) (No change.)

(B) [ (iii) ] Human Resources Code, §31.0031(d)(8). DHS accepts written or verbal proof of training completion from the person or organization that provided training.

(C) [ (B) ] Recipients are considered to be in compliance related to the sections of the Human Resource Code described in clauses (i)- (ii) [ (iv) ] of this subparagraph, unless noncompliance is determined.

(i) Human Resources Code, §31.0031(d)(4), unless noncompliance is determined pursuant to §3.1104 of this title (relating to Failure to Comply with Title IV-A Employment Program); or

(ii) Human Resources Code, §31.0031(d)(3), unless DHS verifies the recipient voluntarily quit a job;

(D) Recipients and payees are considered to be in compliance related to the sections of the Human Resource Code described in clauses (i)-(ii) of this subparagraph, unless noncompliance is determined.

(i) [ (iii) ] Human Resources Code, §31.0031(d)(5), unless DHS determines the recipient or payee, as applicable, has, since signing the [ Personal Responsibility Agreement ] responsibility agreement , committed and either been convicted of [ , ] or received [ has ] a deferred adjudication for

(I) using, selling, or possessing marijuana or any other controlled substance in violation of Health and Safety Code, Chapter 481, or

(II) the abuse of alcohol; or

(ii) [ (iv) ] Human Resources Code, §31.0031(d)(1), unless noncompliance is determined pursuant to §3.1801 of this title (relating to Temporary Assistance for Needy Families (TANF) Child Support Requirements).

(3) Failure to sign the responsibility agreement. If a member of the household who is required to sign the responsibility agreement fails or refuses to sign, the application or case for the entire TANF household is denied.

(4) Penalties for noncooperation [ noncompliance ] with requirements of a responsibility agreement . Failure to cooperate [ comply ] results in the penalties specified in subparagraphs (A)-(D) of this paragraph.

(A) A recipient or payee who fails to cooperate loses eligibility for TANF cash assistance for the recipient or payee and their family for one month or until the person demonstrates cooperation with the requirement of the responsibility agreement for which the penalty was imposed, whichever is longer. [ Penalty amounts for noncompliance with Human Resources Code, §31.003(d), are referenced in §3.1801 of this title (relating to Temporary Assistance for Needy Families (TANF) Child Support Requirements). Penalty amounts for noncompliance with Human Resources Code, §31.0031(d)(4), result in a financial penalty of the grant amount equal to the recognizable needs figure of: ]

[ (i) a single parent if one adult fails to comply; or]

[ (ii) a caretaker and second parent if two adults are subject to a noncompliance penalty in the same month.]

(B) A recipient or payee who fails to cooperate for two consecutive months becomes ineligible for TANF cash assistance for the recipient or payee and family [ Penalty amounts for noncompliance with each of the remaining requirements specified in Human Resources Code, §31.0031(d). Noncompliance results in a monthly financial penalty of $25 for each separate determination of noncompliance until the penalty has ended, subject to the caps specified in subparagraph (C) of this paragraph ].

(C) A family denied for noncooperation may reapply for TANF cash assistance but must cooperate with any applicable requirements of a responsibility agreement for one month before receiving cash assistance. This month of cooperation does not count toward the 45-day time frame DHS allows for processing applications [ Penalty caps. The maximum penalty is $75 when three or more penalties as described in subparagraph (B) of this paragraph apply for the same month. If penalties pursuant to subparagraphs (A) and (B) of this paragraph are applicable for the same month, DHS applies only the penalty or penalties pursuant to subparagraph (A) of this paragraph].

(D) Penalty periods. DHS starts penalty periods beginning with the earliest month benefits can be adjusted. [ The penalty for noncompliance with Human Resources Code, §31.0031(d)(4), is imposed for the time period specified in §3.1104 and §3.1105 of this title (relating to Failure to Comply with Title IV-A Employment Program and Reestablishing Eligibility). The penalty for noncompliance with Human Resources Code, §31.0031(d)(3), is imposed for three consecutive months, or fewer than three months, if the recipient returns to that job or another comparable job, according to the regulations applicable to the Food Stamp Program, as specified in 7 Code of Federal Regulation §273.7(n)(5)(ii), relating to voluntary quit. The penalty for noncompliance with Human Resources Code, §31.0031(d)(5), is imposed for six consecutive months. The penalties for noncompliance with requirements specified in Human Resources Code, §31.0031(d)(1), (2), (6), (7), and (8), remain in effect until the month after the noncompliance ends. ] DHS considers noncompliance with these requirements to have ended as specified in:

(i) (No change.)

(ii) Human Resources Code, §31.0031(d)(2). Medical screening for the child is completed, treatments are completed, or the recipient or payee, as applicable, has shown good faith effort because treatments are initiated by the medical provider. Immunizations are current or the recipient has shown good faith effort because an immunization schedule is established by the medical provider.

(iii) Human Resources Code, §31.0031(d)(6) and (7). The recipient or payee, as applicable, has shown a good faith effort because he or she provides verification from the school that the required student has attended school without an unexcused absence (as determined by the school) for one calendar month.

(iv) Human Resources Code, §31.0031 (d) (8). For recipients participating in the Choices program, the case manager monitors and ensures the client participates and completes the parenting skills program. The case manager determines compliance. The DHS eligibility worker monitors participation and completion of parenting skills for non-Choices clients.

[ (E) Delayed penalties. If a particular penalty cannot be imposed initially due to the penalty cap explained in subparagraph (C) of this paragraph, it will be imposed later during the penalty period if the removal of another penalty makes it possible to do so without exceeding the penalty cap. For purposes of counting months of penalty pursuant to Human Resources Code, §31.0031(d)(3) and (5), a month in which a penalty is applicable counts even if the penalty cannot be imposed because of the penalty cap specified in subparagraph (C) of this paragraph.]

(5) Good cause. Good cause for noncompliance as specified in Human Resources Code, §31.0033, is established for the requirements listed in Human Resources Code, §31.0031(d), as explained in the following subparagraphs.

(A) (No change.)

(B) Human Resources Code, §31.0031(d)(2). Good cause regarding immunizations is established if the child is [ for recipients who are ] exempt under the provisions in Health and Safety Code, §161.004(d) [ , regarding immunizations ].

(C)-(I) (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 16, 2003.

TRD-200303631

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter K. EMPLOYMENT SERVICES

40 TAC §3.1104, §3.1105

The amendments are proposed under the Human Resources Code, Chapter 31, which authorizes DHS to administer financial assistance programs.

The amendments affect the Human Resources Code, §§31.001-31.081.

§3.1104.Failure to Cooperate [ Comply ] with Title IV-A Employment Program.

[ (a) A Temporary Assistance for Needy Families (TANF) client who is certified for TANF as the caretaker or second parent and who does not comply with the Title IV-A Employment Program requirements and cannot establish good cause is sanctioned using one or more of the circumstances specified in paragraphs (1)-(3) of this subsection:]

[ (1) for the first such failure to comply, at lease one month or until the failure to comply ceases, whichever is longer;]

[ (2) for the second such failure to comply, three months or until the failure to comply ceases, whichever is longer; and]

[ (3) for the third such failure to comply, six months or until the failure to comply ceases, whichever is longer.]

[ (b) During the sanction period, the individual will be sanctioned by not taking into account the needs of the individual (including a dependent child who noncomplies) in determining the family's need for assistance and the amount of the assistance payment.]

[ (c) If the individual is a parent or other caretaker relative, payments for the remaining members of the assistance unit will be in the form of protective or vendor payments. If the state is unable to locate an appropriate individual to whom the protective payments can be made, the state may continue to make payments on behalf of the remaining members of the assistance unit to the sanctioned caretaker relative.]

[ (d) ] Penalties for noncooperation [ other recipients ] are described in §3.301(d)(4) of this title (relating to Responsibilities of Clients and the Texas Department of Human Services (DHS)). [ The penalty periods are the same as those described in subsection (a) of this section. ]

§3.1105.Reestablishing Eligibility.

(a) A household denied for continuous failure to cooperate and who remains subject to the Temporary Assistance for Needy Families (TANF) work participation requirement can reestablish eligibility as explained in §3.301(d) of this title (relating to Responsibilities of Clients and the Texas Department of Human Services (DHS)). [ A client sanctioned for noncompliance as specified in 45 Code of Federal Regulations §250.34(a) may reestablish eligibility: ]

[ (1) as stipulated in 45 Code of Federal Regulations §250.34(b) without having to participate for a trial period, or]

[ (2) by making application, without agreeing to comply, if the client moves to a county in which the Texas Department of Human Services (DHS) does not operate a Job Opportunities and Basic Skills (JOBS) Program or otherwise becomes exempt from JOBS participation.]

(b) A household denied for noncooperation as explained in §3.301(d) of this title who does not remain subject to the TANF work participation requirement may reestablish eligibility by making application, signing the responsibility agreement, and meeting other eligibility requirements [ Under the circumstances specified in subsection (a) (2) of this section, a client under sanction for a second or subsequent noncompliance can apply to reestablish eligibility only after the minimum penalty period described in 45 Code of Federal Regulations §250.34(a) has ended ].

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 16, 2003.

TRD-200303632

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter R. CHILD SUPPORT

40 TAC §3.1801

The amendment is proposed under the Human Resources Code, Chapter 31, which authorizes DHS to administer financial assistance programs.

The amendment affects the Human Resources Code, §§31.001-31.081.

§3.1801.Temporary Assistance for Needy Families (TANF) Child Support Requirements.

(a)-(b) (No change.)

(c) Penalties and procedures related to noncooperation are explained [ In regard to recipients subject to the requirements specified ] in §3.301(d) of this title (relating to Responsibilities of Clients and the Texas Department of Human Services (DHS)) [ , DHS applies noncompliance penalties pursuant to 45 Code of Federal Regulations §264.30(c)(1) ].

[ (1) For households of five or less, noncompliance results in a financial penalty of the grant amount equal to the recognizable needs figure of:]

[ (A) a single parent if one adult fails to comply; or]

[ (B) a caretaker and second parent if two adults are subject to a noncompliance penalty in the same month.]

[ (2) For households with six to ten members, noncompliance results in a penalty of $125.]

[ (3) For households greater than ten, noncompliance results in a penalty of $165.]

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 16, 2003.

TRD-200303633

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter WW. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES-STATE PROGRAM

40 TAC §3.7609

The amendment is proposed under the Human Resources Code, Chapter 31, which authorizes DHS to administer financial assistance programs.

The amendment affects the Human Resources Code, §§31.001-31.081.

§3.7609.Failure to Comply with Choices [ CHOICES ] Program.

[ (a) Clients who do not comply with a CHOICES requirement and cannot establish good cause are sanctioned. ]

[ (1) TANF-SP clients who are members of the State Welfare Reform Control Group as described in 3.6001 of this title (relating to Applicability of Aid to Families with Dependent Children (AFDC) Policies Resulting from Human Resources Code 31.0031, Relating to the Personal Responsibility Agreement) and who do not comply with a CHOICES requirement, and who cannot establish good cause are sanctioned as stated in 45 Code of Federal Regulations, §250.34(a)(1) and §250.34(c)(2). ]

(a) [ (2) All other ] TANF-SP clients who do not cooperate [ comply ] with a Choices [ CHOICES ] requirement and cannot establish good cause are penalized [ sanctioned ] as explained [ specified ] in §3.301(d)(4) [ 3.301(d)(5) ] of this title (relating to Responsibility of Clients and the Texas Department of Human Services (DHS)).

(b) (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 16, 2003.

TRD-200303634

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter G. RESOURCES

40 TAC §3.703

The Texas Department of Human Services (DHS) proposes to amend §3.703, concerning limits, in its Texas Works chapter. The purpose of the amendment is to implement Senate Bill 1862, section 5, and House Bill 2292, section 2.201, each passed by the 78th Texas Legislature, and both of which amended the Human Resources Code, §31.032(d), requiring DHS to reduce the current Temporary Assistance for Needy Families (TANF) resource limit of $2,000, or $3,000 if the household contains an elderly or disabled member, to $1,000. The rule is amended to refer only to that portion of the Human Resources Code that reflects the lower resource limit.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are fiscal implications for state government as a result of enforcing or administering the section. There are no fiscal implications for local government as a result of enforcing or administering the section.

The effect on state government for the first five-year period the section is in effect is an estimated additional cost of $24,087 in fiscal year (FY) 2004; $0 in FY 2005; $0 in FY 2006; $0 in FY 2007; and $0 in FY 2008.

In addition, the effect on state government for the first five-year period the section is in effect is an estimated reduction in cost of $648,829 in fiscal year (FY) 2004; $1,333,279 in FY 2005; $1,452,913 in FY 2006; $1,584,653 in FY 2007; and $1,729,888 in FY 2008.

Judy Denton, Deputy Commissioner for Family Services, 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 is that the TANF Program will be able to continue to serve eligible clients while conforming to the resource limits set by the 78th Texas Legislature. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because the proposal does not impose any additional requirements for medical providers. There is no anticipated economic cost to persons who are required to comply with the proposed section, but persons who are ineligible for TANF benefits as a result of this change may be adversely affected. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-253, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapter 31, which authorizes DHS to administer financial assistance programs.

The amendment implements the Human Resources Code, §§31.001-31.081.

§3.703.Limits.

(a) Temporary Assistance for Needy Families (TANF). The resource limits are those specified by Human Resources Code, §31.032(d)(1)[ and §31.032(e) ].

(b) (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 13, 2003.

TRD-200303595

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


40 TAC §3.704

The Texas Department of Human Services (DHS) proposes to amend §3.704, concerning types of resources, in its Texas Works chapter. The purpose of the amendment is to implement Rider 34 to the 78th Texas Legislature's appropriations to DHS, contained in House Bill 1, which instructs DHS to determine a vehicle value limit amount in determining eligibility for services that is within available appropriations and that will provide adequate, dependable transportation for clients. This proposal does not modify the current eligibility determination for Temporary Assistance for Needy Families (TANF) clients, because it does not change the current resource limit amount for vehicles of such clients. However, this proposal does modify the current eligibility determination for TANF-State Program clients, because it reduces the resource limit for the first countable vehicle of such clients from $15,000 to $4,650.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are fiscal implications for state government as a result of enforcing or administering the section. There are no fiscal implications for local government as a result of enforcing or administering the section.

The effect on state government for the first five-year period the section is in effect is an estimated additional cost of $24,560 in fiscal year (FY) 2004; $0 in FY 2005; $0 in FY 2006; $0 in FY 2007; and $0 in FY 2008.

In addition, the effect on state government for the first five-year period the section is in effect is an estimated reduction in cost of $1,326,476 in fiscal year (FY) 2004; $1,832,393 in FY 2005; $1,938,933 in FY 2006; $2,043,229 in FY 2007; and $2,155,065 in FY 2008.

Judy Denton, Deputy Commissioner for Family Services, 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 is the TANF-SP Program will be able to continue to serve eligible clients while conforming with the budget limits set by the 78th Texas Legislature in House Bill 1. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because the proposal concerns client eligibility and does not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed section, but persons who are ineligible for TANF-SP benefits as a result of this change may be adversely affected. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-252, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapter 31, which authorizes DHS to administer financial assistance programs.

The amendment implements the Human Resources Code, §§31.001-31.081.

§3.704.Types of Resources.

(a) (No change.)

(b) Temporary Assistance for Needy Families (TANF). Exclusions from resources in TANF are:

(1)-(15) (No change.)

(16) Vehicles used for transportation. [ For TANF State Program (TANF-SP) families, DHS exempts up to $15,000 of the fair market value of one countable vehicle owned by an applicant family. ] For [ all other ] TANF cash assistance [ clients ], DHS exempts up to $4,650 of the fair market value of each vehicle [ licensed vehicles as specified in Human Resources Code §31.032(d)(2) ].

(17) (No change.)

(c)-(d) (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 13, 2003.

TRD-200303596

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter V. MEDICAID ELIGIBILITY

40 TAC §§3.2201 - 3.2207

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

The Texas Department of Human Services (DHS) proposes to repeal §§3.2201-3.2207, concerning Medicaid eligibility for households that are eligible for Temporary Assistance for Needy Families (TANF), in its Texas Works chapter. The purpose of the repeals is to remove the rules from Chapter 3 so that they can be updated and proposed as new rules, written in plain language format, in their own chapter, DHS's newly titled Chapter 4. The new rules are proposed elsewhere in this issue of the Texas Register .

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed repeals are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the repeals.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the repeals are in effect, the public benefit anticipated as a result of repealing the sections is that rules on medical assistance for families that are eligible for TANF will be located in their own chapter and will be easier to understand. There is no adverse economic effect on small or micro businesses, or businesses of any size, as a result of repealing the sections; the rules concern client eligibility and requirements and do not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed repeals. There is no anticipated effect on local employment in geographic areas affected by these repeals.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-162, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001-22.038 and §§32.001- 32.053.

§3.2201.Eligibility Requirement.

§3.2202.Three Months Prior.

§3.2203.Four Months Post-Medicaid Eligibility.

§3.2204.Type Program 07 Medicaid.

§3.2205.Type Program 37 Medicaid.

§3.2206.Third-Party Resources.

§3.2207.Failure to Comply.

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 16, 2003.

TRD-200303641

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 4. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)-LEVEL MEDICAL ASSISTANCE

The Texas Department of Human Services (DHS) proposes to repeal the rules in Chapter 4, Medicaid Programs--Children and Pregnant Women, consisting of §§4.1002, 4.1004, 4.1006, 4.1008, 4.1010, 4.1012, 4.1014, and 4.1016; and proposes new §§4.1-4.11, concerning Temporary Assistance for Needy Families (TANF)-level medical assistance, in its newly titled Chapter 4. The repeals delete the current rules in Chapter 4 so that those rules concerning Medicaid programs for children and pregnant women can be rewritten in plain language and moved to DHS's Chapter 2. The purpose of the new sections is to rewrite the rules governing TANF-level medical assistance that currently are in DHS's Chapter 3, Subchapter V (§§3.2201-3.2207), in plain language format and move them into their own chapter. Putting the rules for TANF-level Medicaid in their own chapter more clearly separates the requirements for TANF-level Medicaid under the Social Security Act, §1931 (42 U.S.C. §1396u-1) from the requirements for TANF benefits in DHS's Chapter 3. The new rules also update program references, correct several citations, and implement decisions made during the 78th Texas legislative session.

New §4.2 provides the resource limits applicable to TANF-level Medicaid eligibility. These resource limits now differ from the TANF resource limits that were changed by the passage of House Bill (HB) 2292 and Senate Bill 1862, 78th Texas Legislature. New §4.8 and §4.9 clarify the current requirement that medical support and compliance with the medical support requirement are applicable to recipients of TANF-level medical assistance. New §4.10 and §4.11 are proposed to implement HB 2292, 78th Texas Legislature, which allows the Texas Health and Human Services Commission, or any human services agency as defined by the Government Code, §531.001, to deny medical assistance to a person who is eligible for financial assistance but for whom financial assistance is not paid because of the person's failure to comply with the work requirement. Implementation of this provision was assumed in the funding levels authorized by the 78th Texas Legislature.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are fiscal implications for state government as a result of enforcing or administering the sections. There are no fiscal implications for local government as a result of enforcing or administering the sections.

The effect on state government for the first five-year period the sections are in effect is an estimated additional cost of $67,681 in fiscal year (FY) 2004; and an estimated reduction in cost of $16,182,014 in FY 2004; $11,086,560 in FY 2005; $10,663,717 in FY 2006; $10,316,612 in FY 2007; and $10,010,484 in FY 2008.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the new sections are in effect, the public benefit anticipated as a result of enforcing the sections is that rules on medical assistance for families who are eligible for TANF will be located in their own chapter, will be easier for the public to understand, and will be in compliance with changes made by the 78th Texas Legislature. There is no adverse economic effect on small or micro businesses, or businesses of any size, as a result of enforcing or administering the sections; the rules concern the eligibility and requirements of households for TANF-level medical assistance and do not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections, but persons who do not comply with TANF work requirements may be adversely affected. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-162, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m., in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

Subchapter A. PROGRAM REQUIREMENTS

40 TAC §§4.1 - 4.11

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§4.1.Eligibility Requirement.

Households eligible for Temporary Assistance for Needy Families benefits also qualify for medical assistance under Medicaid, as provided by the Social Security Act, §1931 (42 U.S.C. §1396u-1).

§4.2.Resources.

The Temporary Assistance for Needy Families (TANF) rules for resources specified in Chapter 3 of this title (relating to Texas Works) apply, except that:

(1) applicants, if otherwise eligible, are not denied Medicaid because they transfer resources to qualify for assistance;

(2) for households with two certified parents, the Texas Department of Human Services excludes up to $15,000 of the fair market value of one countable vehicle a TANF family owns; and

(3) the resource limit is $2,000, or $3,000 if the household has an aged or disabled member.

§4.3.Three Months Prior Medicaid Coverage.

(a) Three months prior Medicaid coverage refers to retroactive coverage of applicants and recipients with unpaid medical expenses during one or more of the three months before the application month.

(b) To qualify for three months prior Medicaid coverage, Temporary Assistance for Needy Families Program applicants and recipients must meet the requirements of the Social Security Act, §1902(a)(34) (42 U.S.C. §1396a(a)(34)).

§4.4.Four Months Post-Medicaid Eligibility.

Households are eligible for four months post-Medicaid coverage, as provided by the Social Security Act, §1931 (42 U.S.C. §1396u- 1), if they:

(1) received Temporary Assistance for Needy Families or Medicaid only under the Social Security Act, §1931; and

(2) then were denied cash assistance or Medicaid because of receipt of child support.

§4.5.Twelve-Month Transitional Medicaid.

(a) Temporary Assistance for Needy Families or Medicaid only recipients, certified as required by the Social Security Act, §1931 (42 U.S.C. §1396u-1), and the Human Resources Code, §32.0255, who are denied because of new or increased earnings or loss of earned income deductions, may be eligible for 12 months post-Medicaid coverage, as provided by the Social Security Act, §1925 (42 U.S.C. §1396r-6).

(b) To remain eligible during the 12 months post-Medicaid coverage, recipients must report changes in the fourth, seventh, and tenth months.

(c) Recipients who report changes are denied only for one or more of the following reasons:

(1) no eligible child is in the home;

(2) on the seventh or tenth month report, the caretaker relative had no earnings in one of the previous three months; or

(3) the average monthly income, minus child-care costs, exceeds 185% of the federal poverty level on the seventh or tenth month report.

§4.6.Third-Party Resources.

Temporary Assistance for Needy Families (TANF)-level medical assistance recipients must comply with third-party resources requirements, as provided by the Human Resources Code, §32.033 (relating to Subrogation).

§4.7.Failure to Comply with Third-Party Resources.

A Temporary Assistance for Needy Families (TANF)-level medical assistance recipient who fails to comply with the third- party resources requirements in Human Resources Code, §32.033, without good cause is ineligible for Medicaid.

§4.8.Medical Support.

Temporary Assistance for Needy Families (TANF)-level medical assistance recipients must comply with medical support requirements, as provided by the Social Security Act, §1912(a)(1) (42 U.S.C. §1396k(a)(1)).

§4.9.Failure to Comply with Medical Support.

A Temporary Assistance for Needy Families (TANF)-level medical assistance recipient who fails to comply with medical support without good cause is ineligible for Medicaid, as provided by the Social Security Act, §1912(a)(1) (42 U.S.C. §1396k(a)(1)).

§4.10.Work Requirement.

Temporary Assistance for Needy Families (TANF)-level medical assistance recipients receiving TANF cash assistance must comply with work requirements, as provided by the Social Security Act, §1931(b)(3) (42 U.S.C. §1396u- 1(b)(3)).

§4.11.Failure to Comply with Work Requirements.

A Temporary Assistance for Needy Families (TANF)-level medical assistance recipient whose TANF cash assistance was terminated pursuant to Social Security Act, §407(e)(1)(B) (42 U.S.C. §607(e)(1)(B)) because of refusing to work without good cause is ineligible for Medicaid until there is no longer a basis for the termination of cash assistance because of such refusal, as provided by the Social Security Act, §1931(b)(3) (42 U.S.C. §1396u-1(b)(3)).

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 16, 2003.

TRD-200303643

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 4. MEDICAID PROGRAMS- -CHILDREN AND PREGNANT WOMEN

Subchapter A. ELIGIBILITY REQUIREMENTS

40 TAC §§4.1002, 4.1004, 4.1006, 4.1008, 4.1010, 4.1012, 4.1014, 4.1016

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

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001-22.038 and §§32.001- 32.053.

§4.1002.Application Procedures.

§4.1004.Eligible Groups.

§4.1006.Requirements for Application.

§4.1008.Definition.

§4.1010.Determining Income Eligibility.

§4.1012.Medicaid Eligibility.

§4.1014.Right to Appeal.

§4.1016.Client Reporting Requirements.

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 16, 2003.

TRD-200303642

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 15. MEDICAID ELIGIBILITY

Subchapter E. INCOME

40 TAC §15.450

The Texas Department of Human Services (DHS) proposes to amend §15.450, concerning general principles concerning income, in its Medicaid Eligibility chapter. The purpose of the amendment is to comply with House Bill 2292, in which the 78th Legislature approved a reduction in the personal needs allowance (PNA) for Medicaid clients in nursing facilities and intermediate care facilities for persons with mental retardation or related conditions (ICF/MR- RC). The PNA reduction from $60 to $45 per month is effective September 1, 2003. For Supplemental Security Income (SSI) clients who receive the $30 federal benefit rate, the proposal changes their state supplement from $30 to $15 per month, so they also have $45 for personal use.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are fiscal implications for state government as a result of enforcing or administering the section. There are no fiscal implications for local governments as a result of enforcing or administering the section.

The effect on state government for the first five-year period the section is in effect is an estimated reduction in cost of $6,472,668 in fiscal year (FY) 2004; $6,520,313 in FY 2005; $6,520,313 in FY 2006; $6,520,313 in FY 2007; and $6,520,313 in FY 2008.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, 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 is DHS will be in compliance with state law and the agency's legislative appropriation. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because facilities will collect an additional $15 per month from Medicaid clients to offset the $15 reduction in the Medicaid vendor payment. The additional $15 monthly payment ($180 per year) by Medicaid clients is an anticipated economic cost to persons who are required to comply with the section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Randy Wyatt at (512) 438- 4807 in DHS's Medicaid Eligibility section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-244, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment affects the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§15.450.General Principles Concerning Income.

(a)-(g) (No change.)

(h) A personal needs allowance (PNA) is an amount of a client's income that a client in an institutional setting may retain for his personal use. It will not be applied against the costs of medical assistance furnished in the facility. Clients in institutional settings may retain $45 [ $60 ] per month for their personal use. In couple cases, each spouse may retain $45 [ $60 ]. For SSI clients who receive the $30 reduced federal benefit, the state supplements their incomes by $15 [ $30 ] per month to allow a total of $45 [ $60 ] for personal needs. The effective date of the $45 [ $60 ] PNA is September 1, 2003 [ 2001 ].

(i) (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 16, 2003.

TRD-200303644

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 19. NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION

The Texas Department of Human Services (DHS) proposes to amend §19.216, concerning license fees; §19.602, concerning incidents of abuse and neglect reportable to DHS by facilities; §19.1504, concerning drug security; §19.1510, concerning emergency medication kits; §19.1921, concerning general requirements for a nursing facility; §19.2008, concerning investigations of incidents and complaints; and §19.2116, concerning involuntary appointment of a trustee, in its Nursing Facility Requirements for Licensure and Medicaid Certification chapter.

The purpose of the amendments is to implement changes mandated by the 78th Legislature. The amendment to §19.216 implements Senate Bill (SB) 1237 by exempting veterans homes from paying a trust fund fee. The amendment to §19.602 implements House Bill (HB) 1074 by requiring facility owners and employees to report abuse, neglect, or exploitation of residents to DHS. The amendment also identifies allegations or findings that must be reported to local or state law enforcement agencies and adds "law enforcement agencies" to the rule title to more accurately identify the section's content. The amendment to §19.1504 implements HB 2292 regarding medication storage requirements. The amendment to §19.1510 implements HB 1040 by allowing a U.S. Department of Veterans Affairs or other federally operated pharmacy to maintain emergency medication kits for veterans homes. The amendment to §19.1921 references Health and Safety Code, Chapter 250, which states that nursing homes and assisted living facilities must obtain criminal history checks for all employees in accordance with SB 923. The amendment to §19.2008 implements SB 1074 by deleting procedural language for investigating complaints and incidents, which will be investigated in accordance with §242.126 of the Health and Safety Code. The amendment to §19.2116 implements SB 1237 by adding language that requires the Veterans Land Board to pay the fee for veterans home trustees.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are fiscal implications for state government as a result of enforcing or administering the sections. There are no fiscal implications for local governments as a result of enforcing or administering the sections.

The effect on state government for the first five-year period the sections are in effect is an estimated loss in revenue of $7,680 in fiscal year (FY) 2004; $7,680 in FY 2005; $7,680 in FY 2006; $7,680 in FY 2007; and $7,680 in FY 2008.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, 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 rules regarding the Texas State Veterans Homes Program is a cost savings for the Veterans Homes Program. Eliminating trust fund licensing fees and allowing veterans homes to obtain medications from federally operated pharmacies saves costs for the Veterans Homes Program. Outlining proper storage of medication ensures the integrity and quality of medications administered to nursing facility residents. Requiring nursing facility owners and employees to report serious allegations of abuse, neglect, or exploitation to local or state law enforcement agencies heightens security for residents. Deleting obsolete, prescriptive, or redundant language results in sections that are more accurate and easier for the general public to understand. A safer environment for residents should be created when facilities are required to check criminal histories for all of their employees and when the number of crimes that will bar employment in long term care facilities is increased.

There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because allowing veterans homes to obtain medications for emergency medication kits from federally operated pharmacies will have negligible impact on commercial pharmacies. Veterans homes currently use federally operated pharmacies to fill prescriptions, and the proposal gives the four homes in Texas the option of refilling medications with federally operated pharmacies when the kits are used. Exempting veterans homes from paying the trust fund licensing fee will not result in an adverse effect on businesses because only four of more than 1,000 nursing facilities in Texas are affected. The increase in fees to other nursing facilities will be negligible. Other rule revisions delete obsolete or prescriptive language and do not add any additional requirements for nursing facilities. The rule that stipulates that owners as well as employees must report abuse, neglect, or exploitation and report certain findings or allegations to local or state law enforcement agencies at the most will require an additional notification to law enforcement on rare occasions and is considered a negligible expense. The cost to facilities of obtaining criminal history checks for facility applicants and employees should be negligible. There should be negligible or no additional costs to nursing facilities to properly store medications. The anticipated economic cost to persons who are required to comply with the proposed sections is negligible. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Marcia Bowen at (512) 438-3529 in DHS's Long Term Care-Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-251, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

Subchapter C. NURSING FACILITY LICENSURE APPLICATION PROCESS

40 TAC §19.216

The amendment is proposed under the Health and Safety Code, Chapter 242, which authorizes DHS to license and regulate convalescent and nursing homes and related institutions.

The amendment affects the Health and Safety Code, §§242.001 - 242.852

§19.216.License Fees.

(a) (No change.)

(b) Trust fund fee.

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

(3) Veterans homes (as defined in the Natural Resources Code, §164.002) are exempt from paying a trust fund fee.

(4) [ (3) ] DHS may charge and collect a fee more than once a year only if necessary to ensure that the amount in the nursing and convalescent trust fund is sufficient to allow required disbursements.

(c) (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 13, 2003.

TRD-200303584

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter G. RESIDENT BEHAVIOR AND FACILITY PRACTICE

40 TAC §19.602

The amendment is proposed under the Health and Safety Code, Chapter 242, which authorizes DHS to license and regulate convalescent and nursing homes and related institutions.

The amendment affects the Health and Safety Code, §§242.001 - 242.852.

§19.602.Incidents of Abuse and Neglect Reportable to the Texas Department of Human Services (DHS) and Law Enforcement Agencies by Facilities.

(a) A [ Any ] facility owner or employee [ staff member ] who has cause to believe that the physical or mental health or welfare of a resident has been or may be adversely affected by abuse, neglect, or exploitation caused by another person must report the abuse, neglect, or exploitation.

(b) - (d) (No change.)

(e) A local or state law enforcement agency must be notified of reports described in subsection (a) of this section, which allege that:

(1) a resident's health or safety is in imminent danger;

(2) a resident has recently died because of conduct alleged in the report of abuse or neglect or other complaint;

(3) a resident has been hospitalized or treated in an emergency room because of conduct alleged in the report of abuse or neglect or other complaint;

(4) a resident has been a victim of any act or attempted act described in the Penal Code, §§21.11, 22.011, or 22.021; or

(5) a resident has suffered bodily injury, as that term is defined in the Penal Code, §1.01, because of conduct alleged in the report of abuse or neglect or other complaint.

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 13, 2003.

TRD-200303585

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter P. PHARMACY SERVICES

40 TAC §19.1504, §19.1510

The amendments are proposed under the Health and Safety Code, Chapter 242, which authorizes DHS to license and regulate convalescent and nursing homes and related institutions.

The amendments affect the Health and Safety Code, §§242.001 - 242.852.

§19.1504.Drug Security.

(a) - (e) (No change.)

(f) The facility must store medications under appropriate conditions of sanitation, temperature, light, moisture, ventilation, segregation, and security [ drugs requiring refrigeration in a refrigerator in the medication room or in a separate locked medication storage box in a refrigerator near the nursing station. Only food and beverage items for resident use may be kept in the medication refrigerator, but they must be kept separate from the residents' drugs ].

[(g) The facility must store drugs used externally separately from internal drugs. The facility must store poisons separately from all drugs.]

(g) [ (h) ] Medications of deceased residents, medications that [ which ] have passed the expiration date, and medications that [ which ] have been discontinued must be securely stored and reconciled. These medications must be disposed of according to federal and state laws or rules on a quarterly basis. Discontinued drugs may be reinstated if reordered prior to destruction. These medications cannot be given to a family member or representative.

(h) [ (i) ] When the directions for administration of a resident's medication have changed, but the existing supply of medication can still be administered accurately, the medication must not be destroyed. The facility must affix a change-of-direction ancillary sticker or similar system and use the remaining medication. The medication label must be updated at the time of next dispensing.

§19.1510.Emergency Medication Kits.

Stocks of inventoried emergency medications may be kept in facilities.

(1) Emergency medication kits must be maintained in compliance with 22 TAC §291.20(b) (relating to Remote Pharmacy Services [ Using Emergency Medication Kits ]) , with the exception of emergency medication kits in veterans homes, as defined by Natural Resources Code, §164.002. In veterans homes, a United States Department of Veterans Affairs pharmacy or another federally operated pharmacy may maintain emergency medication kits .

(2) (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 13, 2003.

TRD-200303586

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter T. ADMINISTRATION

40 TAC §19.1921

The amendment is proposed under Health and Safety Code, Chapter 250, which authorizes DHS to adopt rules on criminal history checks on persons employed by certain types of facilities.

The amendment affects the Health and Safety Code, §250.001 - 250.009.

§19.1921.General Requirements for a Nursing Facility.

(a) - (k) (No change.)

(l) Each facility must comply with the provisions of the Health and Safety Code, Chapter 250 (relating to Nurse Aide Registry and Criminal History Checks of Employees and Applicants for Employment in Certain Facilities Serving the Elderly or Persons with Disabilities) [ Persons convicted of certain crimes may not be employed in nursing facilities. As required by Chapter 250 of the Health and Safety Code and as found in §§76.101-76.106 of this title (relating to Criminal History Check of Employees in Facilities for Care of the Aged and Persons with Disabilities), the facility must, prior to an offer of employment, conduct criminal history checks on persons whose positions involve direct contact with residents, unless they are licensed under another law ].

(m) (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 13, 2003.

TRD-200303587

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter U. INSPECTIONS, SURVEYS, AND VISITS

40 TAC §19.2008

The amendment is proposed under the Health and Safety Code, Chapter 242, which authorizes DHS to license and regulate convalescent and nursing homes and related institutions.

The amendment affects the Health and Safety Code, §§242.001 - 242.852.

§19.2008.Investigations of Incidents and Complaints.

(a) - (c) (No change.)

(d) Investigations under this section are conducted in accordance with Health and Safety Code, §242.126. [ DHS will begin the investigation: ]

[(1) within 24 hours of receipt of the report or other allegation if the report of abuse or neglect or other complaint alleges:]

[(A) a resident's health or safety is in imminent danger;]

[(B) a resident has recently died because of conduct alleged in the report of abuse or neglect or other complaint; or]

[(C) a resident has been hospitalized or been treated in an emergency room because of conduct alleged in the report of abuse or neglect or other complaint; or]

[(2) before the end of the next working day after the date of receipt of the report of abuse or neglect or other complaint if the report or complaint alleges the existence of circumstances that could result in abuse or neglect and that could place a resident's health or safety in imminent danger.]

[(e) In investigating the report of abuse or neglect or other complaint, the DHS investigator will:]

[(1) make an unannounced visit to the nursing facility to determine the nature and cause of the alleged abuse or neglect of the resident;]

[(2) interview each available witness identified by any source as having personal knowledge relevant to the report of abuse or neglect or other complaint;]

[(3) personally inspect any physical circumstance that is relevant and material to the report of abuse or neglect or other complaint and that may be objectively observed; and]

[(4) not later than the 30th day after the date the investigation is complete, write an investigation report that includes:]

[(A) the investigator's personal observations;]

[(B) a review of relevant documents and records;]

[(C) a summary of each witness' statement; and]

[(D) a statement of the factual basis for the findings for each incident or problem alleged in the report or other allegation.]

[(f) Upon receipt of a complaint, other than those described under subsections (b) through (e) of this section, DHS will make a preliminary review of the complaint. Within a reasonable time after receipt of the complaint, DHS will make an on-site inspection or otherwise respond to the complaint, unless DHS determines that:]

[(1) the person made the complaint to harass the facility;]

[(2) the complaint is without reasonable basis; or]

[(3) sufficient information in the possession of DHS indicates that corrective action has been taken.]

(e) [ (g) ] Investigations of reports do not preclude actions under the provisions of Subchapter V [ H ] of this chapter (relating to Enforcement).

(f) [ (h) ] If the initial phase of an incident or complaint investigation concludes that no abuse or neglect adversely affecting the physical or mental health or welfare of a resident has occurred, no further investigation will be undertaken.

[(i) In cases concluded to be abuse, neglect, or exploitation, the written report of the investigation by DHS, along with its recommendations, will be submitted to the appropriate district attorney and, if a law enforcement agency has not investigated the report of abuse or neglect or other complaint, to the appropriate law enforcement agency, as well as to the appropriate state agencies, upon request. The investigation report will include:]

[(1) the nature, extent and cause of such abuse or neglect;]

[(2) the identity of the person responsible for the abuse or neglect;]

[(3) the names and conditions of other residents who are affected or likely to be affected by the alleged abuse or neglect;]

[(4) the evaluation of the persons responsible for the care of residents including the adequacy of the persons in numbers and the competence of persons to deliver the care intended, including specific evaluation individually of those persons directly involved in causing abuse or neglect; and]

[(5) the adequacy of the environment which may include general operation, competence of staff, attitude of staff, physical environment, and other considerations.]

(g) [ (j) ] The individual reporting the alleged abuse or neglect or other complaint, the resident, the resident's family, any person designated by the resident to receive information concerning the resident, and the facility will be notified of the results of DHS's investigation of a reported case of abuse or neglect or other complaint.

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 13, 2003.

TRD-200303588

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter V. ENFORCEMENT

2. LICENSING REMEDIES

40 TAC §19.2116

The amendment is proposed under the Health and Safety Code, Chapter 242, which authorizes DHS to license and regulate convalescent and nursing homes and related institutions.

The amendment affects the Health and Safety Code, §§242.001 - 242.852.

§19.2116.Involuntary Appointment of a Trustee.

(a) (No change.)

(b) A trustee appointed under this section is entitled to a reasonable fee as determined by the court, to be paid from the Nursing and Convalescent Home Trust Fund , unless the trustee is placed in a veterans home. When a trustee is placed in a veterans home (as defined in Natural Resources Code, §164.002), the Veterans Land Board pays the trustee's fee .

(c) - (f) (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 13, 2003.

TRD-200303589

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter E. RESIDENT RIGHTS

40 TAC §19.405

The Texas Department of Human Services (DHS) proposes to amend §19.405, concerning additional requirements for trust funds in Medicaid-certified facilities, in its Nursing Facility Requirements for Licensure and Medicaid Certification chapter. The purpose of the amendment is to comply with the requirements of House Bill 2292, 78th Texas Legislature, which amended the Human Resources Code, §32.0321, concerning surety bonds. The amendment allows Medicaid nursing facilities to obtain surety bonds to guarantee resident trust funds in an amount not to exceed the 12-month average of the monthly averages of the trust funds and provides that if a facility employee is responsible for the loss of trust fund monies, neither the resident, the resident's family members, nor the resident's legal representative is responsible for charges due the facility.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the section.

Bettye Mitchell, Deputy Commissioner for Long Term Care, 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 is that, by lowering the dollar value of the surety bonds, facilities will be able to obtain bonds more readily. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because the section decreases the dollar amount of the trust fund surety bonds that Medicaid nursing facilities are required to purchase. There is no anticipated economic cost to persons who are required to comply with the proposed section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Doris Gifford at (512) 438- 2538 in DHS's Community Care Contracting section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-243, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment implements the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§19.405.Additional Requirements for Trust Funds in Medicaid-certified Facilities.

(a)-(f) (No change.)

(g) Assurance of financial security. The facility must purchase a surety bond, or otherwise provide assurance satisfactory to the Secretary of Health and Human Services to assure the security of all personal funds of residents deposited with the facility.

(1) The amount of a surety bond must equal the average monthly balance of all the facility's resident trust fund accounts for the 12-month period preceding the bond issuance or renewal date.

(2) Resident trust fund accounts are specific only to the single facility purchasing a resident trust fund surety bond.

(3) If a facility employee is responsible for the loss of funds in a resident's trust fund account, the resident, the resident's family, and the resident's legal representative are not obligated to make any payments to the facility that would have been made out of the trust fund had the loss not occurred.

(h)-(r) (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 16, 2003.

TRD-200303645

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 20. COST DETERMINATION PROCESS

40 TAC §20.112

The Texas Department of Human Services (DHS) proposes to amend §20.112, concerning attendant compensation rate enhancement, in its Cost Determination Process chapter. The purpose of the amendment is to limit the enrollment of new contracted providers in the Attendant Compensation Rate Enhancement, pending available funds. This amendment restricts the participation opportunity of new contracted providers if legislation or budgetary constraints limit the number of enhancement levels and/or enhanced amounts awarded to providers currently participating in the rate enhancement. By limiting the participation opportunity, this amendment will allow current participating providers to continue to receive their awarded enhancement levels without being subjected to an open enrollment and the possibility of reduced enhancement levels or enhanced amounts. If funding becomes available, new contracted providers will have the opportunity to participate in the rate enhancement during the subsequent open enrollment period.

The Texas Health and Human Services Commission (HHSC) is proposing related policy in its Chapter 355 in this issue of the Texas Register .

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the section.

Bettye Mitchell, Deputy Commissioner for Long Term Care, 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 is that providers currently participating in the rate enhancement will continue to receive their awarded enhancement levels without being forced to lower their enhancement or be removed from participation. New contracted providers will have the opportunity to participate in the rate enhancement during the subsequent open enrollment period if funding becomes available. There is no adverse economic effect on small or micro businesses, or on any size business, as a result of enforcing or administering the section, because the proposal allows participating providers to maintain their current enhancement payment level. There is no anticipated economic cost to persons who are required to comply with the proposed section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Alisa Jacquet at (512) 685- 3129 in HHSC's Rate Analysis section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-263, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

A public hearing is scheduled for Wednesday, July 16, 2003, from 2:00 pm until 5:00 pm. The hearing will be held in room 1410 at the Brown-Heatly Building, 4900 N. Lamar Blvd., Austin, Texas 78751.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapters 22, which authorizes DHS to administer public assistance programs.

The amendment implements the Human Resources Code, §§22.0001-22.038.

§20.112.Attendant Compensation Rate Enhancement.

(a)-(f) (No change.)

(g) New contracts. For the purposes of this section, for each rate year a new contract is defined as a contract delivering its first day of service to a DHS client 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 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 signator as per the DHS Corporate Board of Directors Resolution applicable to the provider's contract or ownership type, and received by DHS or its designee within 30 days of the date 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. The granting of newly requested rate enhancement increments as outlined in subsection (p) of this section is limited to available funds. New contracts will receive the nonparticipant attendant compensation rate as specified in subsection (m) of this section until:

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

(h)-(o) (No change.)

(p) Granting additional attendant compensation rate enhancement increments. DHS or its designee divides all requests for attendant compensation rate enhancement increments into two groups: pre-existing rate enhancement increments which providers requested to carry over from the prior year and newly requested rate enhancement increments. Newly requested rate enhancement increments may be requested by providers that were nonparticipants in the prior year , [ or ] by providers that were participants during the prior year desiring to be granted additional rate enhancement increments , or by new contracts as described in subsection (g) of this section . Using the process described herein, DHS or its designee first determines the distribution of carry-over rate enhancement increments. If funds are available after the distribution of carry-over rate enhancement increments, DHS or its designee determines the distribution of newly requested rate enhancement increments as follows:

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

(q)-(dd) (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 16, 2003.

TRD-200303667

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 46. LICENSED PERSONAL CARE FACILITIES CONTRACTING WITH THE TEXAS DEPARTMENT OF HUMAN SERVICES TO PROVIDE RESIDENTIAL CARE SERVICES

The Texas Department of Human Services (DHS) proposes to repeal Subchapter A, concerning scope, §46.1; Subchapter B, concerning definitions, §46.1001; Subchapter C, concerning provider participation, §§46.2001, 46.2005, and 46.2006; Subchapter D, concerning claims payment, §§46.3001, 46.3005, and 46.3007; Subchapter E, concerning provider contracts, §§46.4004 - 46.4006; Subchapter F, concerning records, §46.5001; Subchapter G, concerning support documents, §46.7002; and Subchapter H, concerning administrative and financial errors, §§46.8001 - 46.8003. DHS proposes new Subchapter A, concerning introduction, §46.1 and §46.3; Subchapter B, concerning provider contracts, §§46.11, 46.13, 46.15, 46.17, 46.19, 46.21, 46.23, 46.25, and 46.27; Subchapter C, concerning provider requirements, §§46.31, 46.33, 46.35, 46.37, 46.39, 46.41, 46.43, 46.45, 46.47, 46.49, 46.51, and 46.53; and Subchapter D, concerning trust funds, §§46.61, 46.63, 46.65, 46.67, 46.69, and 46.71, in its renamed Contracting to Provide Assisted Living and Residential Care Services chapter.

An earlier version of this proposal appeared in the March 28, 2003, issue of the Texas Register (28 TexReg 2709) in order to rewrite the chapter in plain language. The proposal was withdrawn on June 6, 2003. The repeals and new sections of Chapter 46 are being re-proposed at this time to incorporate both the plain language rewrite and to add new sections that include requirements for a room and board payment.

The purpose of the repeals and new sections is to rewrite the chapter in plain language so that the sections are easier to understand. The new sections also incorporate existing policy into rule language, as well as provide clearer definitions and explanations of policies. These improved policies include: a new definition of personal leave day, a list of additional items the client may request and for which the facility may charge, directions for the facility when a credit balance exists on the client's copayment and room and board account, documentation requirements for a copayment and room and board ledger system, improved trust fund guidelines patterned after nursing facility trust fund guidelines, receipt requirements, clarification of reasons for service suspension to ensure consistency with other Community Care for Aged and Disabled (CCAD) programs, a listing of required financial records the facility is expected to keep for audit purposes, and a clarification of facility monitoring methods. Current provider requirements for the Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) Program and the CCAD Residential Care (RC) Program are in different rule chapters. The new sections also incorporate provider requirements for the CBA AL/RC and CCAD RC programs into the same rule chapter.

The purpose of new §§46.3(18), 46.21(e), 46.27(c)(2)(F)(iv), 46.37, and 46.49(d)(1) is to add room and board requirements for the CCAD RC Program. The addition of a room and board payment requirement will provide DHS with greater flexibility in funding and administering the program. Effective September 1, 2003, all CCAD RC clients will begin to pay a room and board payment directly to the facility. The total amount of money the client pays will not increase. Clients and provider agencies will be notified of the standard room and board amounts initially, and when changes occur.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the sections.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, 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 is to have rules that providers, facilities, and the public can more easily navigate and understand. Rule consistency will help providers and agency staff ensure quality services for clients. New and enhanced requirements for trust funds will also better protect both clients and facilities when a trust fund exists. In addition, the proposal allows clients to be served by the CCAD RC Program within appropriated funds. The public will benefit by having rules available that reflect and implement the most recent legislative changes. There is no anticipated adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because the proposal does not add any new requirements that would have a negative economic impact on businesses. The majority of policy additions to this chapter are already program policy. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Cathryn Horton at (512) 438-4259 in DHS's Long Term Care section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-116, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

Subchapter A. SCOPE

40 TAC §46.1

(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 Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeal affects the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.1.Scope

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 16, 2003.

TRD-200303650

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter B. DEFINITIONS

40 TAC §46.1001

(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 Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeal affects the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.1001.Definitions of Program Terms.

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 16, 2003.

TRD-200303651

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter C. PROVIDER PARTICIPATION

40 TAC §§46.2001, 46.2005, 46.2006

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

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.2001.Required Services.

§46.2005.Standards for Operation.

§46.2006.Facility Reporting and Notification Requirements.

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 16, 2003.

TRD-200303652

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter D. CLAIMS PAYMENT

40 TAC §§46.3001, 46.3005, 46.3007

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

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.3001.General Billings/Claims Payment Requirements.

§46.3005.Claims Requirements.

§46.3007.Copayment.

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 16, 2003.

TRD-200303653

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter E. PROVIDER CONTRACTS

40 TAC §§46.4004 - 46.4006

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

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.4004.Unit Rate Contracts.

§46.4005.Facility Charges for Hospital/Nursing Facility Stays.

§46.4006.Termination of Contract.

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 16, 2003.

TRD-200303654

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter F. RECORDS

40 TAC §46.5001

(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 Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeal affects the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.5001.Record Requirements.

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 16, 2003.

TRD-200303655

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter G. SUPPORT DOCUMENTS

40 TAC §46.7002

(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 Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeal affects the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.7002.Reimbursement Methodology for Residential Care.

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 16, 2003.

TRD-200303656

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter H. ADMINISTRATIVE AND FINANCIAL ERRORS

40 TAC §§46.8001 - 46.8003

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

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.8001.Administrative Errors.

§46.8002.List of Administrative Errors.

§46.8003.Financial Errors.

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 16, 2003.

TRD-200303657

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 46. CONTRACTING TO PROVIDE ASSISTED LIVING AND RESIDENTIAL CARE SERVICES

Subchapter A. INTRODUCTION

40 TAC §46.1, §46.3

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.1.Purpose.

This chapter establishes the requirements for facilities contracting to provide assisted living and residential care services to eligible clients through the Texas Department of Human Services Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) Program and the Community Care for the Aged and Disabled (CCAD) Residential Care (RC) Program. The requirements described in this chapter apply to both CBA AL/RC and CCAD RC, unless otherwise specified in the text.

§46.3.Definitions.

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

(1) Assisted living services--Services provided in an assisted living facility to eligible Texas Department of Human Services (DHS) clients under the Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) or the Community Care for Aged and Disabled (CCAD) Residential Care (RC) programs.

(2) Assisted Living/Residential Care (AL/RC) Program--A 24-hour residential care program for CBA clients.

(3) Attendant--A facility employee who provides direct care to clients. An attendant may have other duties in addition to direct client care.

(4) Case manager--A DHS employee who is responsible for case management activities. Activities include eligibility determination, client registration, assessment and reassessment of client need, service plan development, and intercession on the client's behalf.

(5) Client--A CCAD or CBA client, as defined in Chapter 48 of this title (relating to Community Care for Aged and Disabled), who is eligible to receive services under this chapter.

(6) Community Based Alternatives (CBA)--A Medicaid program that provides services to eligible adults who are aged and/or disabled as an alternative to institutional care in a nursing facility. CBA services are provided in accordance with the waiver provisions of §1915(c) of the Social Security Act (42 U.S.C. §1396n(c)).

(7) Community Care for Aged and Disabled (CCAD)--A group of DHS programs that provides a variety of Title XIX and Title XX-funded community-based services.

(8) Contract--The formal, written agreement between DHS and an assisted living facility to provide services to DHS clients eligible under this chapter in exchange for reimbursement.

(9) Contract manager--A DHS employee who is responsible for the overall management of the contract with the assisted living facility.

(10) Contracted assisted living facility--An assisted living facility that contracts with DHS to provide CBA AL/RC services or CCAD RC services or both. Any reference to facility in this chapter means contracted assisted living facility, unless otherwise specified in the text.

(11) Copayment--The amount of personal income a client must pay to the facility toward the cost of care.

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

(13) Facility manager--The facility employee who is responsible for the day-to-day operation of a facility.

(14) Licensed assisted living facility--A facility licensed by DHS Long Term Care Regulatory under the Health and Safety Code, Chapter 247.

(15) Personal leave day--A continuous 24-hour period, measured from midnight to midnight, when the client is absent from the facility for personal reasons.

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

(17) Residential Care (RC) Program--An assisted living and emergency care program for CCAD clients.

(18) Room and board--The amount of personal income a client must pay to the facility toward the cost of lodging and food.

(19) Signature--A person's name or a mark representing his/her name on a document to certify it is correct. Initials are not an acceptable substitute for a signature.

(20) Trust fund--The services provided when the facility performs or assists with money management at the written request of the client or the client's representative.

(21) Witness--A person who signs to verify distribution to or from a trust fund. A witness is identified in the client file by name, address, and relationship to the client, the client's representative, or the facility. A witness can be any person except:

(A) the person(s) responsible for accounting for the client's trust fund;

(B) the supervisor of the person(s) responsible for the client's trust fund;

(C) a person supervised by the person(s) responsible for the client's trust fund; or

(D) the person(s) who accepts the withdrawn funds.

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

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 16, 2003.

TRD-200303646

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter B. PROVIDER CONTRACTS

40 TAC §§46.11, 46.13, 46.15, 46.17, 46.19, 46.21, 46.23, 46.25, 46.27

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.11.Contracting Requirements.

(a) General contracting requirements. A facility must meet all provisions described in this chapter and Chapter 49 of this title (relating to Contracting for Community Care Services).

(b) Assisted living services contracting requirements. To qualify to provide assisted living services under contract with the Texas Department of Human Services (DHS), a facility must comply with the following requirements:

(1) The facility must be licensed as defined in §92.4 of this title (relating to Types of Assisted Living Facilities). The facility must be allowed under licensure to provide the required services described in §46.41 of this chapter (relating to Required Services). Due to the licensure requirements, Type C and Type E facilities are not able to provide the required services under this chapter.

(2) The facility must have a separate contract for each facility that provides assisted living services.

(3) The facility must specify the number of beds for DHS clients in its contract, as follows:

(A) The facility must ensure that the number of beds contracted are in rooms that meet the requirements in §46.13 of this chapter (relating to Housing Options).

(B) The facility must ensure the number of DHS clients served by the facility does not exceed the number of contracted DHS beds.

(C) The facility may adjust the number of beds for DHS clients by contract amendment.

(4) The facility must comply with all other applicable DHS rules and regulations.

(c) Disclosure statement requirements. The facility must ensure that the Assisted Living Disclosure Statement, as required by Chapter 92 of this title (relating to Licensing Standards for Assisted Living Facilities), does not conflict with the program requirements.

(d) Client referrals. The facility must accept all DHS referrals unless:

(1) the referral would cause the facility to exceed licensed capacity;

(2) the referral would cause the facility to exceed the number of beds for DHS clients that the facility has specified in its contract;

(3) there are no specific DHS designated rooms or apartments available at the time of the referral; or

(4) the facility is unable to meet the client's needs and has followed the procedures described in §46.35 of this chapter (relating to Interdisciplinary Team).

(e) Contract assignment. In addition to the procedures described in §49.5 of this title (relating to Contract Assignment), the facility must follow the procedures described in §46.71 of this chapter (relating to Trust Fund Procedures for Client Discharge) for assignment of the trust fund account and records.

§46.13.Housing Options.

(a) Setting. A facility must specify in the contract the type(s) of setting(s) it uses to provide assisted living services according to the following guidelines:

(1) Assisted living apartment. An assisted living apartment setting is a living unit that is a private space with living and sleeping areas, a kitchen, a bathroom, and adequate storage space. The bedroom must be single occupancy, except when the participant requests double occupancy in writing. The living unit must have private kitchen and bath facilities.

(A) Size. Assisted living apartments must have a minimum of 220 square feet, not including the bathroom. Current contracted assisted living apartments that do not meet the square footage requirement may remain at their current size unless the apartment is remodeled. Remodeling includes:

(i) the construction, removal, or relocation of walls and partitions;

(ii) the construction of foundations, floors, or ceiling-roof assemblies;

(iii) the expansion or alteration of safety systems, including:

(I) sprinkler;

(II) fire alarm; and

(III) emergency systems; or

(iv) the conversion of space in a facility to a different use.

(B) Kitchen. The kitchen is an area equipped with a sink, refrigerator, a cooking appliance, adequate space for food preparation, and storage space for utensils and supplies. The cooking appliance must be a stove, microwave, or built-in surface unit. The cooking appliance must be able to be removed or disconnected.

(C) Bathroom. The bathroom must be a separate room in the individual's living area with a toilet, sink, and an accessible bath.

(2) Residential care apartment. A residential care apartment setting is a living unit that is a private space with connected sleeping, kitchen, and bathroom areas and adequate storage space. The bedroom must be double occupancy. The living unit must have private kitchen and bath facilities.

(A) Size. Residential care apartments must have a minimum of 350 square feet of space per client. Indoor common areas used by Texas Department of Human Services (DHS) clients must be included in computing the minimum square footage. The portion of the common area allocated must not exceed usable square footage divided by the maximum number of individuals who have access to the common areas.

(B) Kitchen. The kitchen is an area equipped with a sink, refrigerator, a cooking appliance, adequate space for food preparation, and storage space for utensils and supplies. The cooking appliance must be a stove, microwave, or built-in surface unit. The cooking appliance must be able to be removed or disconnected.

(C) Bathroom. The bathroom must contain a toilet, sink, and an accessible bath.

(3) Residential care non-apartment. A residential care non-apartment setting is a living unit that does not meet either the definition of an assisted living apartment or a residential care apartment. A residential care non-apartment must be double occupancy.

(A) The facility that specifies the residential care non-apartment setting must be a freestanding building not physically attached to another licensed facility.

(B) The facility must be licensed as an assisted living facility with a capacity of 16 or fewer beds.

(4) Personal Care 3. A Personal Care 3 setting is only available in the Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) Program, and must meet the following qualifications:

(A) The facility must be licensed for four to 16 beds in a residential care non-apartment setting.

(B) The facility must provide 60% or more of its CBA clients with a single occupancy bedroom.

(C) The facility must maintain a minimum staffing ratio of one direct care staff member for every:

(i) four clients, including private pay clients, during the day and evening shifts; and

(ii) eight clients, including private pay clients, during the night shift.

(D) Sixty percent or more of the total clients served each month must require one-to-one staff assistance. One-to-one assistance is determined by a value of three or more on the DHS Client Assessment, Review, and Evaluation form in one or more of the following activities of daily living:

(i) transferring;

(ii) eating; or

(iii) toileting.

(b) Occupancy. The facility must provide each client with a private (singe occupancy) or semi-private (double occupancy) living unit.

§46.15.Additional Services and Fees.

(a) The facility may charge the client or the client's representative for additional items or services that the Texas Department of Human Services (DHS) does not require the facility to provide. The client or the client's representative must request and approve the additional items or services in writing.

(b) The facility must not charge the client or the client's representative for any service provided to the client as required by its contract with DHS.

(c) The facility must inform the client or the client's representative of the additional items or services and the charges for those items or services at the following times:

(1) at admission;

(2) before a change in the additional items, services, or charges; and

(3) when the client requests the additional items or services.

(d) The facility may charge the client or the client's representative for additional items or services, including:

(1) private telephone;

(2) television and/or radio for personal use;

(3) cable television services;

(4) personal comfort items, including smoking materials, notions and novelties, and confections;

(5) cosmetics and grooming items and services in excess of those required;

(6) personal clothing;

(7) personal reading material;

(8) gifts purchased on behalf of a client;

(9) flowers and plants;

(10) social events and entertainment outside the scope of the required activities program;

(11) the cost of being a single occupant in a double occupancy room, except for:

(A) a therapeutically required single occupancy room, such as isolation for infection control; or

(B) services provided in the assisted living apartment setting, as defined in §46.13(a)(1) of this chapter (relating to Housing Options);

(12) specially prepared or alternative food requested instead of the food generally prepared by the facility;

(13) the actual amount of the fee charged by the bank for checks written by the client or the client's representative that are returned for non-sufficient funds;

(14) charges for damage to the facility beyond expected wear and tear. The facility must not charge a security/damage deposit to DHS clients; and

(15) pet deposit. A pet deposit does not apply to service animals. A service animal is any guide dog, signal dog, or other animal trained to provide assistance to an individual with a disability.

§46.17.Termination of Contract.

(a) General requirements for termination. The Texas Department of Human Services (DHS) will terminate the facility's contract as described in Chapter 49 of this title (relating to Contracting for Community Care Services) or as otherwise described in this chapter or the facility's contract with DHS.

(b) Physical location. DHS will terminate the facility's contract if the facility loses the right to occupy the physical premises identified as the service delivery location. The contract termination is effective on the date the facility loses its right to occupy the physical premises, unless DHS notifies the facility of a later termination date. DHS will not pay for services provided after the termination date.

(c) Payment suspension. DHS may suspend the facility's payments if the contract is terminated for any reason at any time other than the last day of a month. Payments will remain suspended until the facility has refunded all unearned copayment and room and board payments and all trust fund balances to all clients served.

§46.19.Recordkeeping.

(a) General documentation requirements. The facility must maintain the documentation described in Chapter 49 of this title (relating to Contracting for Community Care Services).

(b) Record retention requirements. The facility must retain records for the time periods described in §69.205 of this title (relating to Contractor's Records).

(c) Daily service delivery documentation. The facility must document the client's daily service delivery.

(1) The daily service delivery documentation must contain the:

(A) client name;

(B) facility vendor number issued by Texas Department of Human Services (DHS);

(C) coverage period of the daily service delivery documentation;

(D) tasks assigned;

(E) tasks performed during the coverage period;

(F) signature of the facility manager or supervisor; and

(G) date of signature of the facility manager or supervisor.

(2) The daily service delivery documentation must be on a single document. If services delivered during the coverage period exceed the space on the single document, the facility may use multiple pages. The daily service delivery document must clearly indicate the number of pages used for the coverage period.

(d) Daily census documentation. The facility must document the daily census of clients.

(1) The daily census documentation must contain the:

(A) name of the facility;

(B) facility vendor number issued by DHS;

(C) coverage period of the daily census documentation;

(D) name of each client served during the coverage period;

(E) daily status of each client for each day during the coverage period. Types of daily status are:

(i) admission;

(ii) discharge;

(iii) present;

(iv) personal leave;

(v) institutional leave;

(vi) emergency care (emergency care applies only to the Community Care for Aged and Disabled (CCAD) Residential Care (RC) program); and

(vii) ineligible emergency care (ineligible emergency care applies only to the CCAD RC program);

(F) total of each type of daily status during the coverage period;

(G) signature of the authorized timekeeper; and

(H) date of the authorized timekeeper's signature.

(2) The daily census documentation must be on a single document. If the number of clients served during the coverage period exceeds the space on the single document, the facility may use multiple pages. The daily census document must clearly indicate the number of pages used for the coverage period.

(e) Financial records. The facility must maintain financial records:

(1) to support its billings to DHS for payment under §46.21 of this chapter (relating to Reimbursement);

(2) to document reimbursements made by DHS. The documentation must include:

(A) amount of reimbursement;

(B) voucher number;

(C) warrant number;

(D) date of receipt; and

(E) any other information necessary to trace deposits of reimbursements and payments made from the reimbursements in the facility's accounting system.

(3) in accordance with generally accepted accounting principles (GAAP) and DHS procedures. A facility's financial records must include but are not limited to the following:

(A) deposit slips, bank statements, cancelled checks, and receipts;

(B) purchase orders;

(C) invoices;

(D) journals and ledgers;

(E) timesheets and payroll and tax records;

(F) inventory records for food and other supplies;

(G) Internal Revenue Service, Department of Labor, and other government records and forms;

(H) records of insurance coverage, claims, and payments (for example, medical, liability, fire and casualty, and worker's compensation);

(I) equipment inventory records;

(J) records of the facility's internal accounting procedures;

(K) chart of accounts, as defined by GAAP; and

(L) records of the facility's company policies.

(f) Subcontractor records. If a provider agency utilizes a subcontractor, the provider agency must maintain records of the subcontractor's activities. Maintenance of all records to support subcontractor claims is the responsibility of the provider agency.

(g) Registered nurse access. The facility must allow the home and community support services agency's registered nurse access to the client's medical and service plan records for use in the assessment.

§46.21.Reimbursement.

(a) The facility must bill for services provided as described in Chapter 49 of this title (relating to Contracting for Community Care Services).

(b) The Texas Department of Human Services (DHS) will pay for eligible services provided and billed in compliance with this chapter.

(c) A unit of service is one billable day of authorized service delivered to a client.

(d) The facility must agree to accept the unit rate authorized by DHS, plus any applicable room and board payments, as payment in full for services required by DHS.

(e) The unit rate reimbursed by DHS includes any copayment. The combined reimbursement from DHS and the client or the client's representative for the required services described in §46.41 of this chapter (relating to Required Services) must not exceed the unit rate plus room and board specified for each type of setting. The unit rate does not include charges for services described in §46.15 of this chapter (relating to Additional Services and Fees).

(f) The facility must deduct the copayment amount from reimbursement claims submitted to DHS.

(g) The facility must not bill DHS for the day of discharge, unless the discharge is due to the death of the client.

(h) The facility must bill the double occupancy (Residential Care Apartment) rate for clients in the single occupancy (Assisted Living Apartment) setting who request double occupancy.

(i) The facility must bill DHS for the balance of the bedhold charge for any clients whose daily copayment is less than the maximum bedhold charge allowed by DHS.

(1) The facility must determine the client's daily copayment amount by dividing the client's monthly copayment charge by the number of days in the month.

(2) The facility must deduct the client's daily copayment amount from the bedhold rate and submit the claim to DHS.

(3) This subsection does not apply to the Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) Program.

(j) The facility may bill DHS for emergency care provided to clients for:

(1) up 60 days per authorization for eligible clients; or

(2) five days for a client ineligible for emergency care.

(k) The facility must not bill for services provided before or after the authorized effective dates for CBA AL/RC or Community Care for Aged and Disabled (CCAD) Residential Care (RC) services, as those dates are determined by DHS.

(l) When the facility requests a Texas Index of Level of Effort (TILE) reset, the facility may bill DHS at the new TILE level effective the date of the TILE assessment. The facility may request only two TILE resets during each calendar year for each CBA client for the following time periods:

(1) January through June; and

(2) July through December.

(m) CCAD RC services will be reimbursed at the double occupancy rate, regardless of the actual occupancy.

§46.23.Monitoring Reviews.

Monitoring reviews are conducted through an on-site review and in accordance with Chapter 49 of this title (relating to Contracting for Community Care Services). The Texas Department of Human Services (DHS) reviews records on a regular and systematic basis, and as often as DHS deems necessary. DHS conducts the following types of monitoring:

(1) Compliance monitoring. Compliance monitoring is a review to determine if the facility is delivering services according to the rules in this chapter. Compliance monitoring includes:

(A) review of consumer satisfaction surveys conducted;

(B) review of client records;

(C) interviews with clients and staff;

(D) observation of clients and staff; and

(E) consultations with others as appropriate.

(2) Fiscal monitoring. Fiscal monitoring is a review of documentation that supports the facility's billing. The facility is liable for recoupment of payment if monitoring errors indicate the monthly claims do not correspond with the daily census documentation and daily service delivery documentation. Fiscal monitoring includes:

(A) Financial errors. DHS applies the error to the entire unit of service. Financial errors include:

(i) The facility is reimbursed for services, but the daily census documentation and the daily service delivery documentation are missing for the period for which services are reimbursed. DHS applies the error to the total number of units reimbursed for the billing period for which forms are missing.

(ii) The facility is reimbursed for units that exceed the units recorded on daily census documentation and daily service delivery documentation. DHS applies the error to the total number of units reimbursed in excess of units recorded.

(iii) The facility is reimbursed for units of service and the client did not receive services. DHS applies the error to the total number of units reimbursed for the days the client did not receive services.

(iv) The facility is reimbursed for units of service and the client was Medicaid ineligible. DHS applies the error to the total number of units reimbursed for the days the client was Medicaid ineligible. This does not apply to the Community Care for Aged and Disabled (CCAD) Residential Care (RC) program.

(B) Administrative errors. Documentation is reviewed for administrative errors as they exist at the time DHS staff arrive to conduct the monitoring review. DHS applies the error to the administrative portion of the unit of service. The administrative portion is 12% of the paid unit rate. Administrative errors include:

(i) The facility enters a date of signature on the daily census documentation that is before the date the last day services are provided. DHS applies the error to the total number of units reimbursed after the signature date.

(ii) The facility fails to sign the daily census documentation. DHS applies the error to the total number of units reimbursed on the unsigned form.

(iii) The facility fails to enter a date of signature on the daily census documentation to certify total number of units provided to the client. DHS applies the error to the number of units reimbursed on the undated form.

(iv) The facility corrects the date of signature on the daily census documentation, but fails to initial the correction. DHS applies the error to the total number of units reimbursed after the earliest signature date.

(v) The facility uses a signature stamp on the daily census documentation, but fails to initial the stamped signature. DHS applies the error to the total number of units reimbursed on the signature stamped form.

(vi) The facility makes an illegible entry or illegible correction to any portion of the record of time on the daily census documentation. DHS applies the error to the total number of units reimbursed for the days in which entries are illegible.

(vii) The facility enters an illegible date of signature or makes an illegible correction to the date of signature on the daily census documentation. DHS applies the error to the total number of units on the form.

(viii) The facility fails to complete the entire daily census documentation in ink, as described in §49.11(d) of this title (relating to Record Documentation Requirements). DHS applies the error to the total number of units reimbursed that were not completed in ink.

(ix) The facility uses a method other than crossing out and initialing to change an entry on the daily census documentation. DHS applies the error to the total number of units reimbursed that were corrected in a manner other than crossing out and initialing.

(x) The facility fails to list the client on the daily census documentation, but the client was listed on the daily service delivery documentation. DHS applies the error to the total number of units reimbursed for the period the client was left off the daily census documentation.

(xi) The facility leaves the daily status blank on the daily census documentation, but daily activity can be verified on the daily service delivery documentation. DHS applies the error to the total number of units reimbursed for which the daily status is left blank on the daily census documentation.

§46.25.Complaints.

A facility must comply with the complaint procedures described in §49.13 of this title (relating to Client Rights and Responsibilities) and §49.14 of this title (relating to Complaint Procedures).

§46.27.Reimbursement Methodology for Residential Care.

(a) General requirements. The Texas Department of Human Services (DHS), or its designee, applies the general principles of cost determination as specified in §20.101 of this title (relating to Introduction).

(b) Cost reporting.

(1) Providers must follow the cost-reporting guidelines as specified in §20.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

(2) All contracted providers must submit a cost report unless the number of days between the date the first DHS client received services and the provider's fiscal year end is 30 days or fewer.

(3) The provider may be excused from submitting a cost report if circumstances beyond the control of the provider make cost report completion impossible, such as the loss of records due to natural disasters or removal of records from the provider's custody by any regulatory agency. Requests to be excused from submitting a cost report must be received by the Texas Health and Human Services Commission's (HHSC) Rate Analysis department before the due date of the cost report.

(c) Reimbursement determination.

(1) Reporting and verification of allowable costs.

(A) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursements. DHS or its designee excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers. The purpose is to ensure that the database reflects costs and other information that are necessary for the provision of services and that are consistent with federal and state regulations.

(B) Individual cost reports may not be included in the database used for reimbursement determination if:

(i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or

(ii) an auditor determines that reported costs are not verifiable.

(C) When material pertinent to proposed reimbursements is made available to the public, the material will include the number of cost reports eliminated from reimbursement determination for the reason stated in subparagraph (B)(i) of this paragraph.

(2) Residential care reimbursement. Recommended per diem reimbursement for residential care is determined as follows.

(A) Reported allowable expenses are combined into four cost areas:

(i) attendant;

(ii) other direct care;

(iii) facility; and

(iv) administration and transportation.

(B) Facility, transportation (vehicle), and administration expenses are lowered to reflect expenses for a provider at the lower of:

(i) 85% occupancy rate; or

(ii) the overall average occupancy rate for licensed beds in facilities included in the database during the cost-reporting periods included in the base. The occupancy adjustment is applied if the provider's occupancy rate is below 85% or the overall average, whichever is lower. The occupancy adjustment is determined by the individual provider occupancy rate being divided by .85 or the average occupancy rate of all providers in the database.

(C) Payroll taxes and employee benefits are allocated to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense for the appropriate group of staff. Employee benefits will be charged to a specific salary line item if the benefits are reported separately. The allocated payroll taxes and employee benefits are Federal Insurance Contributions Act or Social Security, Medicare contributions, Workers' Compensation Insurance, the Federal Unemployment Tax Act, and the Texas Unemployment Compensation Act.

(D) Allowable salaries paid to the director, administrator, assistant administrator, owner, or partner who works for the Residential Care contracted provider may be limited to the 90th percentile of an array of salary costs for the director, administrator, assistant administrator, owner, or partner.

(E) The attendant cost area from subparagraph (A)(i) of this paragraph will be calculated as specified in §20.112 of this title (relating to Attendant Compensation Rate Enhancement).

(F) The following applies to the cost areas from subparagraph (A)(ii) - (iv) of this paragraph:

(i) Each provider's total reported allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost-reporting period to the prospective reimbursement period as described in §20.108 of this title (relating to Determination of Inflation Indices). The prospective reimbursement period is the period of time that the reimbursement is expected to be in effect.

(ii) Cost area per diem expenses are calculated by dividing total reported allowable costs for each cost area by the total days of service. Cost area per diem expenses are rank ordered from low to high to produce projected per diem expense arrays.

(iii) Reimbursement is determined by selecting from each cost area the median day of service and the corresponding per diem expense times 1.07. The resulting cost area amounts are totaled to determine the per diem reimbursement.

(iv) The client is required to pay the room and board portion of the per diem reimbursement. DHS will pay the services portion of the per diem reimbursement.

(3) Exceptions to the reimbursement determination methodology. Reimbursement may be adjusted in accordance with §20.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs) when new legislation, regulations, or economic factors affect costs.

(d) Authority to determine reimbursement. The authority to determine reimbursement is specified in §20.101 of this title.

(e) Allowable and unallowable costs. In determining whether a cost is allowable or unallowable, providers must follow the guidelines as specified in §20.102 of this title (relating to General Principles of Allowable and Unallowable Costs) and §20.103 of this title (relating to Specifications for Allowable and Unallowable Costs). In addition to these sections, the following allowable and unallowable costs are applicable in the Community Care for Aged and Disabled Residential Care program.

(1) Allowable costs. Medical supplies required to provide residential care services are allowable. Allowable medical costs include supply costs associated with the administration of medications, such as medication cups, syringes for insulin injections, stethoscopes, blood pressure cuffs, and thermometers.

(2) Unallowable costs. Unallowable costs include prescription drugs; non-legend drugs; medical records costs; and compensation for physicians, pharmacists, and medical directors.

(f) Reporting revenue. Revenues must be reported on the cost report in accordance with §20.104 of this title (relating to Revenues).

(g) Reviews and field audits of cost reports. Desk reviews or field audits are performed on cost reports of all contracted providers. The frequency and nature of the field audit are determined by DHS or its designee to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §20.106 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 §20.107 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 under §20.110 of this title (relating to Informal Reviews and Formal Appeals).

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 16, 2003.

TRD-200303647

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter C. PROVIDER REQUIREMENTS

40 TAC §§46.31, 46.33, 46.35, 46.37, 46.39, 46.41, 46.43, 46.45, 46.47, 46.49, 46.51, 46.53

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.31.Staff Requirements.

The facility must have staff as described in §92.41 of this title (relating to Standards for Type A, Type B, and Type E Assisted Living Facilities).

§46.33.Staff Training.

(a) General training requirements. The facility must provide all staff with training as described in §92.41 of this title (relating to Standards for Type A, Type B, and Type E Assisted Living Facilities).

(b) Facility manager. In addition to the requirements described in subsection (a) of this section, the facility must train the facility manager on the following topics:

(1) facility requirements for the Community Care for Aged and Disabled (CCAD) Residential Care (RC) or Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) programs or both, as applicable; and

(2) client characteristics and needs.

(c) Attendants. In addition to the requirements described in subsection (a) of this section, the facility must train the attendant in performing the tasks identified on the service plan described in §46.39(d) of this chapter (relating to Service Initiation).

(d) Training of new staff. The facility must provide training to new staff hired after the initial orientation described in §49.3(b) of this title (relating to General Contractual Requirements).

§46.35.Interdisciplinary Team.

(a) Interdisciplinary Team (IDT).

(1) The IDT is a designated group that includes the following individuals who meet when the need arises to discuss service delivery issues:

(A) the client or the client's representative, or both;

(B) a facility representative;

(C) the case manager or the case manager's designee;

(D) the regional nurse or contract manager, or both; and

(E) other persons as necessary.

(2) The facility must convene an IDT Meeting within three working days of the date the facility identifies a service delivery issue.

(b) IDT meeting.

(1) The IDT meeting may be conducted by telephone conference call or in person.

(2) The IDT must:

(A) evaluate the issue;

(B) identify any solutions to resolve the issue; and

(C) make recommendations to the facility.

(c) IDT meeting outcome. The facility must do one of the following within two working days after the IDT meeting:

(1) implement the recommendations of the IDT; or

(2) discharge the client from the facility and refer the case back to the case manager for referral to another facility.

(d) Documentation of the IDT meeting. The facility must document the IDT meeting in the client file, including the:

(1) specific reasons for calling the IDT meeting;

(2) recommendations of the IDT;

(3) efforts made to resolve the issue;

(4) facility's action as a result of the IDT recommendations; and

(5) reasons for the facility's actions.

§46.37.Copayment and Room and Board.

(a) Amount. The facility must collect the copayment and room and board amounts indicated on the Texas Department of Human Services' (DHS's) Notification of Community Care Services form or DHS's Notification of Community Based Alternatives (CBA) Services form. This subsection does not apply to clients who receive Community Care for Aged and Disabled emergency care service.

(b) Due date.

(1) The facility must designate a due date for copayment and room and board in writing. The due date must be during the same month the copayment and room and board is applied.

(2) The facility must collect the entire copayment and room and board on or before the due date. If the due date falls on a weekend or a holiday, the facility must collect the entire copayment and room and board on or before the first working day thereafter.

(3) If the client or the client's representative fails to pay the entire copayment and room and board by the due date, the facility must notify the client or the client's representative and the case manager in writing no later than the first working day after the due date.

(c) Credit balances.

(1) A credit balance is an amount due to the client or the client's representative when there is an overpayment by the client or the client's representative.

(2) The facility must handle credit balances as follows:

(A) The facility must contact the client or the client's representative within 14 days of receipt of the payment resulting in a credit balance.

(B) The facility must refund the credit balance the month the facility receives the payment that results in a credit balance, and offer the client or the client's representative the following options:

(i) the client or the client's representative provides the corrected payment, and the facility returns the original payment;

(ii) the facility provides the client or the client's representative with a refund of the credit balance; or

(iii) the client or the client's representative has the credit balance applied to the following month's payment. If the client or the client's representative pays an incorrect amount the following month, the facility must issue a refund check for the credit balance within 14 days of receipt of the second incorrect payment.

(d) Copayment and room and board receipts.

(1) The facility must provide receipts for all copayment and room and board payments received from or on behalf of clients at the time the payment is received.

(2) The facility must keep a copy of all copayment and room and board receipts.

(3) Copayment and room and board receipts must contain the following in any format:

(A) the name of the client;

(B) the month, day, and year the payment was received;

(C) the total amount collected;

(D) the specific amounts of copayment and room and board collected; and

(E) the month and year of the coverage period for the payment received.

(e) Copayment and room and board ledger. The facility must maintain a copayment and room and board ledger system in any format for each client.

(1) The facility may keep the copayment and room and board ledger systems as separate ledgers, or the facility may combine both ledgers into a single ledger system. If the facility chooses to keep a single ledger system, a separate entry must be made for each copayment and room and board entry.

(2) The copayment and room and board ledger system must reflect the following:

(A) all charges for copayment and room and board by client;

(B) all payments for copayment and room and board made by or on behalf of a client;

(C) all credits for copayment and room and board by client, including the:

(i) specific amount credited;

(ii) month and year of the coverage period of the credit;

(iii) type of payment credited; and

(iv) reason for the credit; and

(D) a running balance by client.

(3) The facility must record all activities on the copayment and room and board ledger system within 14 days of occurrence.

(4) The copayment and room and board ledger must be maintained in accordance with generally accepted accounting principles (GAAP).

(f) Refunds upon discharge. The facility must refund the client's copayment and room and board for the remaining days of the month following the date of discharge or death. The refund must be made within five working days of awareness that the client will be discharged or is deceased.

§46.39.Service Initiation.

(a) Negotiated move-in date. The facility must negotiate a move-in date with the Texas Department of Human Services (DHS) case manager and the client or the client's representative.

(b) Reserved space. The facility must reserve a living unit for three days from the agreed upon move-in date for each referred client. The facility may request another referral after three days if the move-in date is not re-negotiated.

(c) Client and facility agreement. The facility must have a written agreement with the client or the client's representative. Both parties must sign the written agreement before or at the time of admission. The written agreement must include the following:

(1) bedhold policies for hospital and nursing facility stays;

(2) personal leave policies and charges;

(3) eviction procedures;

(4) all available services in the facility; and

(5) charges for services not paid by DHS and charges not included in the facility's basic daily rate, as described in §46.15 of this chapter (relating to Additional Services and Fees).

(d) Health assessment and service plan.

(1) The facility must complete a health assessment and develop an individual service plan as described in §92.41(c) of this title (relating to Standards for Type A, Type B, and Type E Assisted Living Facilities).

(2) In addition to the items described in §92.41(c) of this title, the health assessment developed by the facility must contain the following items:

(A) vision patterns;

(B) skin conditions;

(C) body control problems; and

(D) vital signs, height, and weight.

(3) The health assessment and individual service plan must be completed:

(A) within 72 hours of admission to the facility; and

(B) by the appropriate facility staff.

(i) The facility manager or facility nurse must complete the health assessment and individual service plan.

(ii) The facility nurse must complete the medication administration portion of the health assessment for Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) clients. If the facility nurse is a licensed vocational nurse (LVN), the facility must have a registered nurse (RN) consultant to sign off on the medication administration portion of the health assessment.

§46.41.Required Services.

(a) Service delivery. The facility must provide services according to the service plan completed for the client.

(b) Required services. Services include:

(1) Personal care. The facility must provide or assist with personal care services identified on the service plan completed for the client. Personal care services are activities related to the care of the client's physical health that include at a minimum:

(A) bathing;

(B) dressing;

(C) grooming;

(D) routine hair and skin care;

(E) exercising;

(F) toileting;

(G) medication administration, including injections. This does not apply to the Community Care for Aged and Disabled (CCAD) Residential Care (RC) Program;

(H) transferring/ambulating. This does not apply to clients residing in a Type A assisted living facility;

(I) twenty-four-hour supervision. The facility must conduct and document in the client file checks or visits to each client to ensure that each client is safe and well. The checks or visits must be made as identified on the service plan completed for the client; and

(J) meal services. The facility must:

(i) provide meal services as described in §92.41(m) of this title (relating to Standards for Type A, Type B, and Type E Assisted Living Facilities);

(ii) offer dietary counseling and nutrition education to the client;

(iii) modify food texture, including:

(I) chopping, grinding, and mashing foods for clients who have trouble chewing; and

(II) cutting up food into bite size pieces for clients who have trouble cutting food; and

(iv) assist with eating, including:

(I) assistance with spoon-feeding in instances when the client is temporarily ill;

(II) bread buttering; and

(III) opening containers or pouring liquids for clients with hand deformities, paralysis, or hand tremors.

(2) Home management. The facility must provide or assist with activities related to housekeeping that are essential to the client's health and comfort, including:

(A) changing bed linens;

(B) housecleaning;

(C) laundering;

(D) shopping;

(E) storing purchased items in the client's living unit. This includes medical supplies delivered to Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) clients; and

(F) washing dishes.

(3) Transportation and escort.

(A) The facility must provide the client with transportation, escort, or both to:

(i) local community areas where a client may purchase items to meet his or her personal needs or conduct personal business according to the facility's published schedule;

(ii) recreational activities, field/community trips according to the facility's published schedule; and

(iii) the nearest available medical provider for medical appointments, therapies, and other medical care.

(B) The facility must make arrangements for other transportation for the client to the medical care provider of the client's choice if the client's medical provider is not the nearest available provider.

(4) Social and recreational activities. The facility must provide a minimum of four scheduled social and recreational activities per week.

(A) Activity requirements. The social and recreational activities must be:

(i) planned to meet the social needs and interests of the clients; and

(ii) listed on a monthly calendar that is posted in plain view at the facility at least one week in advance.

(B) Types of activities. Social and recreational activities include:

(i) activities that require group and client-initiated activities;

(ii) opportunities to interact with other people;

(iii) interaction, cultural enrichment, educational, or recreational activities; and

(iv) other social activities on site or in the community.

(5) Participation in the client assessment. The facility must designate someone who is familiar with the CBA AL/RC client's needs and service plan to participate with the client's assessment. The assessment will determine the Texas Index of Level of Effort (TILE) at both the annual assessment, and a requested re-TILE. Participation in the client assessment does not apply to the CCAD RC Program.

(6) Emergency care. The facility must provide emergency care as authorized by the case manager.

(A) Emergency care is assisted living services provided to clients while the case manager seeks a permanent living arrangement.

(B) Emergency care services do not apply to the CBA AL/RC program.

§46.43.Service Plan Changes.

(a) The facility must complete a new service plan anytime there is a need for a change in the client's service plan.

(b) The facility must implement service plan changes within seven days from the assessment date.

§46.45.Required Notifications.

(a) The facility must notify the Texas Department of Human Services (DHS) when one of the following happens:

(1) significant changes in the client's health and/or condition;

(2) the client temporarily enters an institution;

(3) serious occurrences or emergencies involving the client or facility staff;

(4) the client or the client's representative requests that services end;

(5) the client refuses to comply with the service plan;

(6) the client engages in discrimination in violation of applicable law;

(7) the client or the client's representative fails to pay copayment;

(8) the client uses ten personal leave days in the current calendar year;

(9) the client or the client's representative requests to move to another facility; or

(10) when the facility believes that a client's functional needs have changed such that it will impact the client's Texas Index of Level of Effort (TILE). This only applies to facilities providing assisted living services under the Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) Program that participate in the attendant compensation rate option.

(b) The facility must notify the client's DHS case manager orally or by facsimile about the change no later than one DHS workday after the change happens. If the facility's first notification is oral, the facility must send written notification to the case manager within five working days of the initial notification.

§46.47.Suspension of Services.

(a) The facility must suspend services when one of the following happens:

(1) the client dies;

(2) the client moves from the facility;

(3) the client is discharged because he threatens the health or safety of himself or other clients in the facility;

(4) the client is permanently admitted to an institution;

(5) the Texas Department of Human Services (DHS) enforces sanctions against the facility by terminating the contract;

(6) the client's eligibility is denied; or

(7) the case manager requests that services be suspended or terminated.

(b) The facility must notify the client's DHS case manager orally or by facsimile about the suspension no later than one DHS workday after services are suspended. If the facility's first notification is oral, the facility must send written notification to the case manager within five working days of the initial notification.

§46.49.Institutional Leave.

(a) Institution. An institution is defined as a hospital, nursing facility, state school, state hospital, or intermediate care facility serving persons with mental retardation or a related condition.

(b) Institutional leave. Institutional leave is when clients are absent from the facility because they temporarily enter an institution.

(c) Bedhold. The facility must hold the client's bed:

(1) for a Community Care for Aged and Disabled (CCAD) Residential Care (RC) client for:

(A) 60 days if the client is in a hospital; or

(B) 30 days if the client is in any other type of institution; and

(2) for a Community Based Alternatives (CBA) Assisted Living/Residential Care (AL/RC) client for 60 days if the client is in any type of institution.

(d) Bedhold charges. The facility must charge the client or the client's representative for bedhold during institutional leave.

(1) Bedhold charges for a CCAD RC client are the bedhold rate established by the Texas Department of Human Services (DHS), plus room and board charges.

(2) Bedhold charges for a CBA AL/RC client are the room and board charges.

(e) Refund of copayment. The facility must not charge the client or the client's representative more than the maximum amount allowed by DHS for bedhold. The facility must refund the client's copayment for the days the client uses institutional leave.

(1) The facility must refund any copayment paid by a CCAD RC client or the client's representative that is in excess of the bedhold amount. If the client's copayment amount is less than the bedhold charge, DHS pays the difference as described in §46.21 of this chapter (relating to Reimbursement).

(2) The facility must refund all copayments paid by a CBA AL/RC client or the client's representative.

(3) The refund must be made according to the procedures in §46.37(c) of this chapter (relating to Copayment and Room and Board).

(f) Billing during institutional leave. The facility must charge the client or the client's representative only the bedhold amount for the date of admission to an institution. The facility must charge the client or the client's representative the full rate for date of return.

(g) Notification of institutional leave. The facility must notify the DHS case manager of any institutional leave as described in §46.45 of this chapter (relating to Required Notifications).

§46.51.Personal Leave.

(a) Personal leave. A client is entitled to 14 days of personal leave per calendar year.

(b) Client charges. The facility must collect the entire copayment and room and board charges for all personal leave days.

(c) Texas Department of Human Services (DHS) payment during personal leave. The facility must not bill DHS for more than 14 days of personal leave taken by the client each calendar year.

(d) Notification of personal leave days. The facility must notify the DHS case manager of personal leave days as described under §46.45 of this chapter (relating to Required Notifications).

(e) Charge for exceeding personal leave days. The client is responsible for all charges for services if he exceeds the allowable limit of personal leave days.

§46.53.Client Terminations.

(a) Client discharge. The facility must convene an Interdisciplinary Team (IDT) meeting, as described in §46.35 of this chapter (relating to Interdisciplinary Team) before discharging a client, except when the client threatens the health or safety of others or himself. The facility must notify the DHS case manager as described under §46.47 of this chapter (relating to Suspension of Services).

(b) Assistance with move. The facility must help the client prepare for transfer or discharge.

(c) Refunds. The facility must refund the following:

(1) copayment and room and board, as described in §46.37(f) of this chapter (relating to Copayment and Room and Board); and

(2) trust fund balances, as described in §46.71 of this chapter (relating to Trust Fund Procedures for Client Discharge).

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 16, 2003.

TRD-200303648

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter D. TRUST FUNDS

40 TAC §§46.61, 46.63, 46.65, 46.67, 46.69, 46.71

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001 - 22.038 and §§32.001 - 32.053.

§46.61.Trust Fund Management.

(a) Clients have the right to:

(1) perform their own money management;

(2) request that the facility provide or assist with money management; or

(3) designate another person to provide or assist with money management.

(b) The case manager will inform the facility if a client wishes the facility to provide or assist with money management.

(c) The facility must not require clients to request the facility provide or assist with money management. The facility must have the client's or the client's representative's written authorization to provide or assist with money management.

(d) The facility must provide a written statement of the trust fund rights and responsibilities regarding the client's financial affairs. The written statement must:

(1) be provided to each client or client's representative who chooses to have the facility provide or assist with money management;

(2) be provided at the time of admission or request; and

(3) include the following:

(A) a statement that the facility must not require clients to allow the facility to provide or assist with money management;

(B) the client or the client's representative's written request and authorization to provide or assist with money management; and

(C) any charge by the facility for providing or assisting with money management is included in the facility's basic rate.

§46.63.Trust Fund Bank Account.

(a) Bank account.

(1) The contracted assisted living facility must keep funds received from or on behalf of a client for a trust fund in a separate bank account from the facility's operating funds. The account must be identified as "Trustee, (Name of Facility), Client's Trust Fund Account."

(2) The facility may use the following type of checking accounts for the trust fund:

(A) a pooled checking account, which is a single checking account that contains all the personal funds received from each client utilizing the trust fund;

(B) a client-choice individual checking account, which is a single checking account that contains only the personal funds of a single client. The client or the client's representative must request this type of trust fund in writing; or

(C) a facility-choice individual checking account, which is a single checking account that contains only the funds of a single client. This type of trust fund is set up for the convenience of the facility.

(b) Commingled funds. A facility may commingle the trust funds of private-pay clients and Texas Department of Human Services (DHS) clients.

(1) Each private-pay client or the client's representative whose funds are commingled with DHS client funds must sign and date a permission form upon admission or at the time of request for trust fund services. The permission form must include:

(A) permission for the facility to commingle the personal funds of the private pay client with DHS clients;

(B) permission for the facility to maintain trust fund records of private-pay clients in the same manner as the DHS client's trust fund records; and

(C) a provision allowing inspection of the private-pay client's trust fund records by DHS staff.

(2) The facility must keep financial records of private pay clients with commingled funds in the same manner as the financial records of DHS clients as specified in this chapter.

(c) Banking charges.

(1) The facility is responsible for bank fees for the trust fund kept in a pooled checking account or in facility-choice individual checking accounts. The facility must not charge these fees to the client or the client's representative. The facility may report these fees as allowable costs on its cost report.

(2) The client or the client's representative is responsible for bank fees for the trust fund kept in client-choice individual checking accounts.

(3) The facility must not charge the client or the client's representative for the administrative handling of any allowable type of checking account. The facility may report these costs on its cost report.

(d) Interest earned. The facility must distribute the interest earned on the pooled checking account, if the pooled checking account is interest-bearing, to all clients utilizing the trust fund. The facility must prorate the actual interest earned to each client's account:

(1) at the time the financial institution pays the interest; and

(2) on the basis of the client's balance at the time the financial institution pays the interest.

§46.65.Trust Fund Transactions.

(a) Transactions.

(1) The facility must keep records of all trust fund transactions.

(2) Facility staff must record on the client's trust-fund ledger or deposit/withdrawal document at least the following:

(A) the date and amount of each deposit;

(B) the source of each deposit;

(C) the date and amount of each withdrawal;

(D) the reason for each withdrawal;

(E) the name of the person or entity who accepted the withdrawn funds; and

(F) the balance after each transaction.

(3) The client or the client's representative must sign for each withdrawal transaction at the time of the transaction.

(A) The signature must be on the trust-fund ledger, deposit/withdrawal document, or trust fund receipt.

(B) At least one witness must sign for each withdrawal transaction if the client or the client's representative cannot sign.

(C) A signature is not required if the payment meets the definition of a recurring payment as described in subsection (c) of this section.

(4) The facility must record transactions within 14 days of occurrence.

(b) Bulk purchases. The facility may make bulk purchases for items used by multiple clients.

(1) The bulk purchase must be traceable to individual clients.

(2) The receipt for the bulk purchase must show the following:

(A) the names of the clients for whom the purchase was made; and

(B) the portion of the total price charged to each client.

(3) The facility must not charge the client or the client's representative more than the actual cost of the client's portion of items that are purchased in bulk.

(c) Recurring payments.

(1) The facility must obtain the client's or the client's representative's written request and authorization to make recurring payments on behalf of the client. The written authorization must include the:

(A) name of the business or entity to which the recurring payment is made;

(B) amount of the recurring payment. If the recurring payment is not a set amount, the authorization must include the method for determining the amount of the recurring payment;

(C) date the payment will begin; and

(D) signature and signature date of the client or the client's representative.

(2) The client or the client's representative must request and authorize the facility to stop recurring payments on behalf of the client.

(A) The authorization may be oral or written.

(B) The facility must document the request, including the:

(i) name of the business or entity to which the recurring payment is made; and

(ii) date the payment will stop.

(3) The facility is not required to have a receipt for recurring payments made on behalf of the client.

(d) Petty cash fund.

(1) A petty cash fund is part of the pooled checking account trust fund kept on hand in cash by the facility. The petty cash fund is used for disbursement to clients for the purchase of minor items.

(2) The facility must keep the petty cash fund locked.

(3) The facility must set a dollar limit for petty cash transactions.

(A) The facility must document:

(i) the dollar limit of petty cash transactions; and

(ii) a list of any exceptions to the petty cash transaction limit, if applicable.

(B) The facility must follow the procedures in subsection (a) of this section for withdrawals that exceed the petty cash transaction limit.

(4) The facility must keep records of all petty cash fund transactions. The petty cash fund record must be a:

(A) petty cash fund ledger; or

(B) petty cash fund receipt.

(5) A petty cash fund ledger or receipt must include the:

(A) name of the client;

(B) date of the withdrawal;

(C) amount of the withdrawal; and

(D) signature of client or the client's representative, or at least one witness if the client or the client's representative cannot sign.

(6) The facility must use the following guidelines to replenish the petty cash fund:

(A) Count the money in the petty cash fund.

(B) Determine the difference between amount in the petty cash fund and the amount needed in the petty cash fund.

(C) Cash a check for the difference between the amount in the petty cash fund and the amount needed in the petty cash fund.

(i) Write the check for cash on the appropriate checking account, either the:

(I) pooled trust fund checking account; or

(II) individual client trust fund checking account.

(ii) Indicate "petty cash fund" in the "memo" line of the check.

(D) Put the cash in the petty cash fund.

(7) The facility must reconcile the petty cash fund at least once every 14 days.

(8) The facility must follow the requirements for transactions in subsection (a) of this section to post petty cash fund transactions to the trust fund ledger. However, the client's or the client's representative's signature is not required on the trust fund ledger or trust fund receipt if the client's or the client's representative's signature is on the petty cash fund ledger or receipt.

(e) Receipts.

(1) A trust fund receipt is required when a direct payment is made from the client's trust fund. The facility may use printed receipts from vendors as trust fund receipts only if:

(A) all elements from paragraph (4) of this subsection are present; or

(B) any missing elements from paragraph (4) of this subsection are added.

(2) A trust fund receipt is required when a payment is received by the facility on behalf of a client. This is not applicable to funds direct-deposited to the trust fund account.

(3) A trust fund receipt is not required when the client or the client's representative makes a direct purchase with funds withdrawn from the trust fund. The withdrawn funds must meet the requirements listed in subsection (a) of this section.

(4) A trust fund receipt must contain the:

(A) name of the client;

(B) month, day, and year the receipt was written or created;

(C) total amount of money spent or received for the client;

(D) specific item(s) purchased; and

(E) name of the business or entity from which the purchase was made or the payment received.

(5) A trust fund receipt may contain the signature of the client or the client's representative for payments made from the trust fund. At least one witness must sign for each payment made if the client or the client's representative cannot sign.

(f) Limitations on withdrawals. The facility must not use the client's personal funds to purchase any item or service that the Texas Department of Human Services requires the facility to provide. The facility must purchase additional items or service with the client's personal funds only as described in §46.15 of this chapter (relating to Additional Services and Fees).

§46.67.Trust Fund Documentation.

(a) Accounting and records.

(1) The facility must keep written records of all financial transactions involving the client's personal funds that the facility is holding, safeguarding, and accounting.

(2) The facility must keep the accounting records in accordance with generally accepted accounting principles (GAAP).

(3) The facility must keep records in accordance with its fiduciary duties for client trust funds.

(4) The facility must include at least the following in the accounting records:

(A) each client's name;

(B) identification of each client's representative or person assigned to receive the client's income, if any;

(C) admission date;

(D) each client's earned interest, if any;

(E) documentation of each transaction; and

(F) receipts for purchases and payments, including cash register tapes or sales statements from a seller.

(b) Quarterly statement. The facility must provide quarterly statements to the client or the client's representative, as described in §92.125(a)(3)(L) of this title (relating to Resident's Bill of Rights and Provider Bill of Rights).

(c) Access to trust fund records.

(1) The facility must make an individual client's financial record and supporting documents available at any time during working hours to the client, the client's representative, and the Texas Department of Human Services.

(2) This review can be made without prior notification.

§46.69.Trust Fund Refunds.

(a) The facility must return the full balance of the client's personal funds held in the facility to the client or the client's representative immediately upon request if the request is made during normal business hours. For purposes of this subsection, normal business hours are 8:00 a.m. to 5:00 p.m. on working days, or at the beginning of the next normal business hours if the request is received during hours other than normal business hours.

(b) The facility must return the full balance of the client's personal funds that the facility has deposited in any bank account to the client or the client's representative within ten working days of request. This refund must include any interest accrued.

§46.71.Trust Fund Procedures for Client Discharge.

(a) Client transfer.

(1) The facility must write a check to the resident for all funds held in the pooled checking account. This must include any interest accrued.

(2) The facility must complete the transfer within ten working days of the effective date of the transfer.

(3) The facility must not make any payments out of a client's trust fund after the effective date of transfer, except as described in this subsection.

(4) The cleared check will suffice as a receipt.

(b) Client discharge.

(1) The facility must refund the discharged client's personal funds and provide a final accounting of those funds to the client or the client's representative either:

(A) in person; or

(B) by mail via certified return receipt.

(2) The facility must complete the refund and provide a final accounting within ten working days of the date of discharge, or the date of the facility's awareness of the client's discharge, whichever is later.

(3) The facility must not make any payment out of a discharged client's trust fund, except as described in this subsection.

(4) The facility must maintain the following documentation in the client's trust fund record:

(A) a copy of the final accounting of the client's personal funds;

(B) the amount refunded to the discharged client or the client's representative;

(C) the date the refund was made. The date the refund was made is either:

(i) the date the funds were refunded in person; or

(ii) the date the certified return receipt shows the refund was mailed; and

(D) the method of refund. The facility must:

(i) obtain the signature of the client or the client's representative if the refund was in cash; or

(ii) document the check number if the refund was made by check.

(c) Client death.

(1) The facility must refund the deceased client's personal funds and provide a final accounting of those funds to the beneficiary, heir, or executor of the deceased client's estate either:

(A) in person; or

(B) by mail via certified return receipt.

(2) The facility must complete the refund and provide a final accounting within 30 days of awareness of the client's death, if the beneficiary, heir, or executor is known, located, or identified. The facility must make a bona fide effort to locate the beneficiary, heir, or executor of a deceased client's estate within 30 days.

(3) The facility must not make any payments out of a deceased client's trust fund, except as described in this subsection.

(4) The facility must maintain the following documentation in the client trust fund record:

(A) a copy of the final accounting of the client's personal funds;

(B) the amount refunded to the beneficiary, heir, or executor of the deceased client's estate;

(C) the date the refund was made. The date the refund was made is either:

(i) the date the funds were refunded in person; or

(ii) the date the certified return receipt shows the refund was mailed; and

(D) the method of refund. The facility must:

(i) obtain the signature of the client or the client's representative if the refund was in cash; or

(ii) document the check number if the refund was made by check.

(5) The facility must use the following procedures to clear the client's account if it is unable to locate or identify the beneficiary, heir, or executor of a deceased client's estate within 30 days:

(A) The facility must send the personal funds of the deceased client to the Texas Department of Human Services (DHS), Fiscal Division, P.O. Box 149055, Austin, Texas 78714-9055 with the following information:

(i) the client's name;

(ii) the client's social security number; and

(iii) the amount of money being submitted to DHS for escheat.

(B) The facility must maintain the following in the client trust fund record:

(i) documentation of the facility's efforts to locate the beneficiary, heir, or executor of a deceased client's estate; and

(ii) proof of submission of the personal funds of a deceased client to DHS.

(d) Contract assignment.

(1) The assignor (the facility transferring the contract) must transfer the bank balances of the trust fund to the assignee (the facility to which the contract assignment is made) either:

(A) in person; or

(B) by mail via certified return receipt.

(2) The assignor must complete the transfer within five working days of the effective date of the contract assignment.

(3) The assignor must not make any payments out of a client's trust fund after the effective date of the contract assignment, except as described in this subsection.

(4) The assignor must provide the assignee with a list of the clients who are utilizing the trust fund and their balances.

(5) The assignee must provide the assignor with a receipt for the transfer of these funds. The receipt must contain the following elements:

(A) the date of the transfer of funds. The date the transfer was made is either the:

(i) date the funds were refunded in person; or

(ii) date the certified return receipt shows the refund was mailed;

(B) the name of the assignor;

(C) the amount received by the assignee; and

(D) the check number for the transfer of funds.

(6) The assignor must keep the receipt for audit purposes.

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 16, 2003.

TRD-200303649

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 47. PRIMARY HOME CARE

The Texas Department of Human Services (DHS) proposes the following changes in its Primary Home Care chapter. DHS proposes to repeal §47.2909, concerning physician supervision for Primary Home Care, and proposes to amend §47.1901, concerning definitions; §47.1903, concerning staffing requirements; §47.2901, concerning referrals to provider agencies; §47.2902, concerning assessment, service plan, and requesting prior approval; §47.2903, concerning provider agency requirements after verbal referral for Primary Home Care or community attendant services; §47.2904, concerning critical omissions/errors for Primary Home Care or community attendant services; §47.2911, concerning orientation of attendants; §47.2912, concerning service plan changes; §47.2913, concerning prior approval renewal for community attendant services; §47.2914, concerning suspension of services; §47.3906, concerning claims payment reviews and audits; §47.4902, concerning Primary Home Care provider qualifications; and §47.5902, concerning reimbursement methodology for Primary Home Care. DHS also proposes new §47.2909, concerning medical need determination, and new §47.3908, concerning retroactive payment procedures.

The proposal amends provider agency requirements in the Primary Home Care (PHC) program to allow DHS to continue the program within reduced funding levels. The proposal adds a definition for "Primary Home Care Program" and clarifies the three types of services under the PHC program by amending the definitions of "family care services" and "primary home care services," and by replacing references to "1929(b) PHC (Frail Elderly) services" with the term "community attendant services" and defining that term. The proposal removes the provider agency nurse from program requirements to require only a non-nurse supervisor, thus deleting the definition of "RN supervisor" and amending the definition of "supervisor." The proposal adds a definition for "practitioner" and uses this more accurate term in place of "physician." It also adds a definition for "practitioner's statement" and uses this term in place of "physician's order," thus deleting the definition for "physician's order." In addition to requiring only a non-nurse supervisor, the proposal changes provider agency licensing requirements. It requires that a provider agency be licensed as a home and community support services agency but only under the Personal Assistance Services (PAS) category of licensure. Finally, the proposal adds rules regarding medical need determination and retroactive payment procedures, and corrects several cross-references to other sections of the Texas Administrative Code.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the sections.

Bettye Mitchell, Deputy Commissioner for Long Term Care, 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 is that clients will continue to be served by the Primary Home Care program despite reduced funding. In addition, costs for provider agencies will be reduced and the burden on agencies to have a nurse for the Primary Home Care Program will be lifted. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because requiring a PAS home and community support services agency license only and removing the requirement for PHC agencies to have a nurse for the program should result in a reduction in cost for both small and large businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Cathryn Horton at (512) 438-4259 in DHS's Long Term Care section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-245, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

Subchapter A. GENERAL PROVISIONS AND SERVICES

40 TAC §47.1901, §47.1903

The amendments are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendments affect the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§47.1901.Definitions.

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

(1)-(7) (No change.)

(8) Community attendant (CA) services--A service under the Primary Home Care program providing in-home attendant services to eligible clients. Clients receiving CA services must have a medical need for specific tasks. CA services are provided under Title XIX of the federal Social Security Act (relating to Grants to States for Medical Assistance Programs), at 42 U.S.C. §1396t (relating to Home and community care for functionally disabled elderly individuals).

(9) [ (8) ] Controlling interest--an owner who is a sole proprietor, a partner owning 5.0% or more of the partnership, or a corporate stockholder owning 5.0% or more of the outstanding stock of the contracted provider, or a member of the board of directors.

(10) [ (9) ] Days-- Any reference to days means calendar days, unless otherwise specified in the text. Calendar days include weekends and holidays [ All references to number of days are based on calendar days unless the text clearly states otherwise ].

(11) [ (10) ] Department--The Texas Department of Human Services.

(12) [ (11) ] Emancipated minor--A person under 18 years of age who has the power and capacity of an adult. This includes a minor who has had the disabilities of minority removed by a court of law or a minor who, with or without parental consent, has been married.

(13) [ (12) ] Exploitation--The illegal or improper act or process of a caretaker or others using an adult's resources for monetary or personal benefit, profit, or gain.

(14) [ (13) ] Family care (FC) services --A service under the Primary Home Care Program providing in-home attendant services to eligible adults. FC services are provided under Title XX of the federal Social Security Act (relating to Block Grants to States for Social Services), at 42 U.S.C. §1397 et seq [ nonskilled, nontechnical in- home attendant service provided to eligible aged and disabled adults who are functionally limited in performing daily activities ].

(15) [ (14) ] Income eligible--An adult who is neither a Supplemental Security Income (SSI) or Temporary Assistance for Needy Families (TANF) client, but who has income that is equal to or less than the eligibility level established by the department.

(16) [ (15) ] Institution--A nursing home, personal care home, intermediate care facility for the mentally retarded (ICF-MR), or state hospital.

(17) [ (16) ] Medicaid eligible--An individual who is eligible for Medicaid as an SSI or TANF client, or who is eligible for medical assistance only while living in the community.

(18) [ (17) ] Neglect--Failure to provide for oneself the goods or services that are necessary to avoid physical harm, mental anguish, or mental illness; or the failure of a caretaker to provide these goods or services.

(19) [ (18) ] Person with a disability--A person who, because of physical, mental, or developmental impairment, is limited in his capacity to adequately perform one or more essential activities of daily living. Activities of daily living include but are not limited to:

(A) personal and health care;

(B) mobility;

(C) communication; and

(D) money management.

[(19) Physician's order--An order for primary home care services that is signed and dated by a medical doctor (MD) or doctor of osteopathy (DO) who is licensed to practice medicine and who does not have a prohibitive ownership or significant financial or contractual relationship (42 Code of Federal Regulations 424.22(d)) with the agency that will deliver primary home care.]

(20) 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.

(21) Practitioner's statement--A document signed by a practitioner that includes a client's diagnosis, current medications, and a statement that the client has a current medical need for assistance with personal care tasks and other activities of daily living.

(22) Primary Home Care Program--A Texas Department of Human Services attendant care services program. Community attendant (CA), primary home care (PHC), and family care (FC) are the three types of services available under the Primary Home Care Program.

(23) [ (20) ]Primary home care (PHC) services -- A service under the Primary Home Care Program providing in-home attendant services to eligible clients. Clients receiving PHC services must have a medical need for specific tasks. PHC services are provided under Title XIX of the federal Social Security Act, at 42 U.S.C. §1396(a)(1) (relating to State plans for medical assistance) [ In-home, nontechnical, medically related service provided by an attendant to clients whose chronic health problems cause them to be functionally limited in performing activities of daily living ].

(24) [ (21) ] Prior approval--A decision made by the department regional nurse/caseworker, before services begin and before payment can be made, that the applicant or client meets the department criteria for the requested service.

(25) [ (22) ] Provider agency--A home and community support services agency that has a contract with the department to provide services under the Primary Home Care Program [ primary home care ].

(26) [ (23) ] Provisional contract--A time-limited contract.

[(24) RN supervisor--A nurse who is currently licensed as a registered nurse by the Texas Board of Nurse Examiners and who supervises the primary home care attendants.]

(27) [ (25) ] Special attendant--A provider agency employee who can substitute for another attendant.

(28) [ (26) ] Supervisor--A provider agency employee who:

(A) coordinates the delivery of services in the client's service plan;

(B) supervises attendants; and

(C) complies with §97.404 of this title (relating to Standards Specific to Agencies Licensed to Provide Personal Assistance Services) [ licensed nurse or individual who meets home and community support services personal assistance services licensing standards. For primary home care services, the supervisor must be a registered nurse. This description applies when the term "supervisor" is used as a stand-alone term. Other types of supervisors are clearly referenced in context ].

(29) [ (27) ] Unit of service--One hour of authorized service delivered to a prior- approved client.

[(28) Waiver 5--Federally approved waiver for individuals who meet income and resources criteria for Medicaid nursing home placement in Texas and who meet functional assessment and medical criteria for primary home care.]

§47.1903.Staffing Requirements.

(a)-(b) (No change.)

(c) The two types of attendants are as follows:

(1) Regular attendants. Each regular attendant must receive a general orientation as described in §47.2911 [ §47.2906 ] of this chapter [ title ] (relating to Orientation of Attendants), before or at the time services begin.

(2) Special attendants. Special attendants may be used to initiate services, prevent a break in service, or provide ongoing services. Although special attendants are required to receive the general orientation specified in paragraph (1) of this subsection, they do not have to receive it in the client's home as long as they meet the following requirements.

(A) (No change.)

(B) The special attendant must either:

(i) meet the requirements described in §97.701 of this title (relating to Home Health Aides) [ 25 TAC §115.13(a) concerning Home Health Aides; Training Course; Duties ]; or

(ii) meet the following requirements:

(I) (No change.)

(II) have demonstrated competency in providing personal care tasks to the satisfaction of the supervisor . [ ; or ]

[(iii) be listed as a nurses aide on the Texas Department of Health nurse aide registry.]

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 16, 2003.

TRD-200303658

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter B. SERVICE REQUIREMENTS

40 TAC §§47.2901 - 47.2904, 47.2909, 47.2911 - 47.2914

The amendments and new section are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendments and new section affect the Human Resources Code, §§22.0001- 22.038 and §§32.001-32.053.

§47.2901.Referrals to Provider Agencies.

(a) Unless a client needs a verbal referral for services, provider agencies receive written referrals based on the following priorities:

(1) client's choice; and

[(2) physician's choice, if stated; and]

(2) [ (3) ] rotation of eligible providers.

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

§47.2902. Assessment, Service Plan, and Requesting Prior Approval [ for Primary Home Care ].

(a)-(c) (No change.)

(d) The supervisor [ A registered nurse (RN) ] must conduct an initial on- site [ onsite health ] assessment for all referrals [ primary home care/family care clients, ] using the client [ health ] assessment form [ , to determine if the attendant should be supervised by an RN or someone who is not an RN ].

(e) If the supervisor [ RN ] cannot conduct the [ health ] assessment within 14 days of the referral date, the provider agency must notify the caseworker about the reason for delay. The notification must be sent on the case information form, within the 14-day period.

(f) Using the service plan form, the supervisor [ RN ] must develop a service plan for the client. The service plan must be agreed upon and signed by the client/client's family and agency. The service plan must include:

(1) the client [ health ] assessment;

(2)-(4) (No change.)

(g) After the supervisor [ RN ] conducts the [ health ] assessment, he must obtain the practitioner's statement described in §47.2909 of this chapter (relating to Medical Need Determination) [ a physician's order by sending the physician's order form to the client's physician ]. If the provider agency cannot obtain the practitioner's statement [ physician's order ] within 14 days of the referral date, the provider agency must notify the caseworker about the reason for delay by sending the case information form within the 14-day period. The case information form must include the date of the [ health ] assessment and must be dated after the [ health ] assessment date.

[(h) The provider agency may be reimbursed for services provided to an eligible client up to three months prior to the month a completed, signed, and dated Texas Department of Human Services' (DHS's) application for assistance form (for aged and disabled) is received by DHS.]

[(i) If DHS determines that the client is eligible for primary home care services, the provider agency must reimburse the client the entire amount of all payments made to the provider for eligible services during the three months preceding eligibility, regardless of whether or not those payments exceeded the amount the provider will be reimbursed for those services under Medicaid.]

§47.2903.Provider Agency Requirements after Verbal Referral for Primary Home Care or Community Attendant Services .

(a) When a provider agency is contacted by a caseworker about the need for verbal prior approval, the supervisor [ RN ] must make an on-site [ onsite health ] assessment of the applicant and must contact the applicant's practitioner [ physician ] to get the verbal or written practitioner's statement [ physician's order ].

(b) The supervisor [ RN ] must verbally request prior approval and give the regional nurse:

(1) a summary of the service plan, including:

(A) (No change.)

(B) results of the [ health ] assessment; and

(C) (No change.)

(2) the date of the verbal or written practitioner's statement [ physician's verbal order for primary home care services ];

(3)-(4) (No change.)

(c) The [ RN ] supervisor documents in the client's case folder the date and time of the verbal approval and the name of the regional nurse who gave the approval.

(d)-(f) (No change.)

§47.2904.Critical Omissions/Errors for Primary Home Care or Community Attendant Services .

(a) If the client [ health ] assessment/service plan form or the practitioner's statement [ physician's order for primary home care ] is missing, or if any of the following critical omissions or errors has occurred in the required documentation, the provider agency cannot obtain prior approval.

(1) The supervisor [ RN ] fails to sign or date the client [ health ] assessment/service plan [ or omits the RN credentials that should follow his signature ].

(2) Major functional impairment documented on the client [ health ] assessment is not related to the medical diagnosis(es) on the form, or functional impairment is not documented.

(3)-(4) (No change.)

(5) The medical diagnosis(es) on the practitioner's statement [ physician's order for primary home care ] does not support the client's functional impairment.

(6) The practitioner's statement [ physician's order form ] does not include the [ MD or DO ] credential of the practitioner [ physician ] who signed the order.

(7) The practitioner's statement [ physician's order ] does not include the license number of the practitioner [ physician ] who signed it.

(8) The practitioner [ physician ] who signed the order is excluded from participation in Medicare or Medicaid.

(9) The practitioner's [ physician's ] signature is not on the practitioner's statement [ physician's order ].

(10) The practitioner's [ physician's ] signature date is missing or illegible and the provider agency's stamped date is missing from the practitioner's statement [ physician's orders ].

(11) The provider agency's stamped date used instead of the practitioner's [ physician's ] date on the practitioner's statement [ physician's orders ] does not include the provider agency's name, abbreviated name, or initials.

(b) (No change.)

§47.2909.Medical Need Determination.

(a) Applicability. This section does not apply to family care.

(b) Determining medical need. The provider agency must determine medical need by completing a practitioner's statement and submitting the statement within the time frame described in §47.2902 of this chapter (relating to Assessment, Service Plan, and Requesting Prior Approval) for:

(1) applicants who are referred to the provider agency (unless the applicant requests and is to receive family care only);

(2) clients who are receiving family care only and who are referred to the provider agency for primary home care or community attendant services; and

(3) clients who are referred to the provider agency to have medical need re-assessed, as requested by the case manager, such as when the initial medical need was established for a limited time.

(c) Negotiated referrals. In the case of negotiated referrals, the provider agency:

(1) must initially determine medical need by obtaining an oral statement of medical need from the practitioner before initiating services as described in §47.2905 of this chapter (relating to Initiation of Service); and

(2) must then complete and submit a practitioner's statement as described in §47.2903 of this chapter (relating to Provider Agency Requirements after Verbal Referral for Primary Home Care or Community Attendant Services).

(d) Mental illness and mental retardation. Persons diagnosed with mental illness or mental retardation or both are not considered to have established medical need based solely on such diagnoses, but may establish medical need through a related diagnosis.

(e) Documentation of medical need determination. The provider agency must maintain the practitioner's statement in the client file.

§47.2911.Orientation of Attendants.

(a) The supervisor [ , who is a registered nurse (RN) for a licensed home health agency, or is not an RN for a personal assistance services (PAS) agency, ] must orient the [ that ] attendant before or when services for the client begin. The supervisor must meet with the attendant and the client at the client's home to give the attendant a general orientation about the client. The purpose of the orientation is to:

(1) (No change.)

(2) ensure that the attendant is able to recognize and report any changes in the client's condition [ health (such as shortness of breath, swelling of feet, or chest pains in the presence of certain health conditions) ]; and

(3) (No change.)

(b) (No change.)

§47.2912.Service Plan Changes.

(a) (No change.)

(b) When a caseworker initiates an increase or decrease in hours or service termination, he sends the authorization for community care services to the provider agency to:

(1) authorize the change if the client receives family care or primary home care services [ under Medicaid eligibility status ]; and

(2) notify the provider agency to request authorization of the change from DHS's regional nurse when the change is for a client who receives community attendant services [ is eligible for primary home care under the provisions of the Social Security Act, §1929(b) ]. To request approval of the change, the provider agency must forward to DHS's regional nurse the authorization for community care services and the attendant orientation/supervisory visit form within seven days of the receipt of the authorization for community care services from the caseworker.

(c)-(e) (No change.)

§47.2913.Prior Approval Renewal for Community Attendant Services [ Primary Home Care ].

(a) For clients who receive community attendant services [ are eligible for primary home care under the provisions of the Social Security Act, §1929(b) ], the supervisor must send the following forms to the regional nurse to obtain renewal of prior approval:

(1) (No change.)

(2) authorization for community care services [ , if received from the caseworker ]; and

(3) (No change.)

(b) The supervisor must submit the prior approval material to the regional nurse within 14 days of the referral date [ in time for it to be postmarked or date-stamped by the department no later than one day after the termination date of the current prior approval period ].

§47.2914.Suspension of Services.

(a) The provider agency must suspend services before the end of the prior approval period if one or more of the following circumstances occurs.

(1)-(4) (No change.)

[(5) The physician requests that services end (not applicable to family care).]

(5) [ (6) ] The department denies the client's Medicaid eligibility (not applicable to family care).

(6) [ (7) ] The client or someone in the client's home threatens the health or safety of the attendant or his supervisor.

(7) [ (8) ] The department enforces sanctions against the provider agency by terminating the contract.

(b)-(c) (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 16, 2003.

TRD-200303659

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


40 TAC §47.2909

(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 Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeal is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeal affects the Human Resources Code, §§22.0001-22.038 and §§32.001- 32.053.

§47.2909.Physician Supervision for Primary Home Care.

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 16, 2003.

TRD-200303660

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter C. CLAIMS PAYMENT

40 TAC §47.3906, §47.3908

The amendment and new section are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment and new section affect the Human Resources Code, §§22.0001- 22.038 and §§32.001-32.053.

§47.3906.Claims Payment Reviews and Audits.

(a)-(d) (No change.)

(e) Failure to maintain records. If the provider agency fails to maintain records as specified in §69.205 [ §69.202 ] of this title [ chapter ] (relating to Contractor's [ Contractors' ] Records), the department may initiate corrective action plans and/or monetary exceptions.

(f)-(g) (No change.)

(h) List of financial errors. In the absence of acceptable secondary documentation, financial errors include, but are not limited to, the following.

(1)-(4) (No change.)

(5) The provider agency makes a claim for services, but a valid practitioner's statement [ physician's order ] is missing. The department applies the error to the total number of units claimed and not covered by a valid practitioner's statement [ order ].

(i) (No change.)

§47.3908.Retroactive Payment Procedures.

(a) Applicability.

(1) This section does not apply to family care.

(2) A provider agency that chooses to request retroactive payment must comply with the requirements of this section.

(b) Definition of retroactive payment. A retroactive payment is payment by the Texas Department of Human Services (DHS) to a provider agency for services under the Primary Home Care Program that are provided before the date the case manager determines the person's eligibility for the services.

(c) Reimbursement.

(1) The provider agency may be reimbursed for services provided before the date a completed, signed, and dated copy of DHS's Application for Assistance--Aged and Disabled form is received:

(A) for up to three months for a person who does not have Medicaid eligibility at the time of the request for retroactive payment; and

(B) for an indefinite period for a person who is Medicaid eligible at the time of the request for retroactive payment.

(2) DHS will only reimburse the provider agency for the:

(A) services described in §47.1902 of this chapter (relating to Required Services);

(B) number of hours of services allowed to be provided the person, calculated as described in §48.2918 of this title (relating to Eligibility for Primary Home Care); and

(C) allowable costs of the Primary Home Care Program, as described in 1 TAC, Chapter 355 (relating to Medicaid Reimbursement Rates).

(3) DHS will not reimburse the provider agency if:

(A) the provider agency fails to submit the required documentation within the required time frames; or

(B) the person provided services does not meet the requirements described in subsection (d) of this section.

(d) Requirements before requesting retroactive payment. The provider agency may not request retroactive payment unless:

(1) the person appears to be Medicaid eligible as defined in §48.1201 of this title (relating to Definition of Program Terms);

(2) the provider agency obtains the practitioner's statement and establishes medical need under §47.2909 of this chapter (relating to Medical Need Determination);

(3) the person requires at least one personal care service as described in §47.1902 of this chapter; and

(4) the provider agency has verified and documented that the person is not already receiving services under the Primary Home Care Program from another provider agency.

(e) Service plan. The provider agency must develop a service plan for the person as described in §47.2902 of this chapter (relating to Assessment, Service Plan, and Requesting Prior Approval).

(f) Intake referral. On the day that the provider agency develops a service plan for the person, the provider agency must contact the local DHS office by telephone and make an intake referral by providing DHS information on the person to start the eligibility process.

(g) Service initiation. The provider agency must begin to provide services to the person on the date the provider agency develops the service plan and processes the intake referral as described in subsections (e) and (f) of this section.

(h) Requesting retroactive payment.

(1) A provider agency's written request for retroactive payment must include:

(A) a copy of the service plan required by subsection (e) of this section; and

(B) the retroactive payment information, including the:

(i) name of the provider agency;

(ii) contact information for the person;

(iii) date services were started;

(iv) tasks provided to the person. This includes both tasks allowed and not allowed by the Primary Home Care Program;

(v) weekly hours of service provided to the person. This includes hours allotted to tasks allowed and not allowed by the Primary Home Care Program; and

(vi) cost per hour of service charged to the person.

(2) The provider agency must submit the written request for retroactive payment:

(A) to the case manager or, if no case manager has been assigned, to DHS intake staff; and

(B) within seven days after the date the provider agency processes the intake referral.

(i) Charges to persons provided services.

(1) The provider agency may charge a person for services for which the provider agency intends to request retroactive payment, unless the person is Medicaid eligible.

(2) The provider agency must reimburse the entire amount of all payments made by the person to the provider agency for eligible services, even if those payments exceed the amount DHS will reimburse for the services, if DHS determines that the person is eligible for the Primary Home Care Program.

(j) Documentation of retroactive payment requests. The provider agency must maintain documentation of retroactive payment requests in the client file.

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 16, 2003.

TRD-200303661

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter D. PROVIDER CONTRACTS

40 TAC §47.4902

The amendment is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment affects the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§47.4902.Primary Home Care Provider Qualifications.

(a) To qualify [ be qualified ] as a home and community support services (HCSS) agency [ provider to deliver primary home care services ] under contract with the Texas Department of Human Services (DHS) to provide services under the Primary Home Care Program , an HCSS agency must:

(1) (No change.)

(2) deliver primary home care services through the personal assistance services (PAS) [ or the licensed home health services ] category of licensure;

(3) have the counties in the DHS contract for primary home care services included in the identified licensed service area on file at DHS within personal assistance services [ or licensed home health services ] category of licensure; and

(4) (No change.)

(b) A provider agency may request that DHS amend the agency's contract to add counties, if the following conditions exist:

(1) (No change.)

(2) The counties to be added to the contract are included in the identified licensed service area on file at DHS within personal assistance services [ or licensed home health services ] category of licensure.

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 16, 2003.

TRD-200303662

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter E. SUPPORT DOCUMENTS

40 TAC §47.5902

The amendment is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment affects the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§47.5902.Reimbursement Methodology for Primary Home Care [ and Family Care Services ].

(a)-(b) (No change.)

(c) Reimbursement determination. Reimbursement is determined in the following manner.

(1) Cost determination by cost area. Allowable costs are combined [ for Primary Home Care and Family Care ] into three cost areas, after allocating payroll taxes to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense and after applying employee benefits directly to the corresponding salary line item.

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

(2)-(3) (No change.)

[(4) For 1929(b) clients participating in the vendor fiscal intermediary payment option. The hourly payment rate for required annual and other assessments performed by a registered nurse (RN) is the hourly payment rate determined for RN services in the Community Based Alternatives program.]

[(d) Reimbursement determination authority. The reimbursement determination authority is specified in §20.101 of this title (relating to Introduction).]

(d) [ (e) ] Desk reviews and field audits of cost reports. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of the field audits are determined by DHS or its designee to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §20.106 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 an audit in accordance with §20.107 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 under §20.110 of this title (relating to Informal Reviews and Formal Appeals).

(e) [ (f) ] Factors affecting allowable costs. Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §20.102 this title (relating to General Principles of Allowable and Unallowable Costs) and §20.103 of this title (relating to Specifications for Allowable and Unallowable Costs).

(f) [ (g) ] Reporting revenues. Revenues must be reported on the cost report in accordance with §20.104 of this title (relating to Revenues).

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 16, 2003.

TRD-200303663

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 48. COMMUNITY CARE FOR AGED AND DISABLED

Subchapter F. IN-HOME AND FAMILY SUPPORT PROGRAM

40 TAC §§48.2705, 48.2707, 48.2708

The Texas Department of Human Services (DHS) proposes to amend §§48.2705, 48.2707, and 48.2708, concerning the service plan, program restrictions, and service subsidy and capital expenditures for the In-Home and Family Support Program (IH/FSP), in its Community Care for Aged and Disabled chapter. The purpose of the amendments is to allow DHS to set grant amounts from $0 to $3,600 for IH/FSP. The proposed amendments will enable DHS to continue serving existing IH/FSP clients within reduced funding levels and to administer the program with greater flexibility. The amendment also changes the word applicant to client where appropriate. The amendments to §48.2707 and §48.2708 revise procedures for receipt reconciliation and subsidy issuance to assist regions in distributing and managing a reduced budget. The service subsidy will be issued based on the client's approved service plan for each six-month period, and caseworkers will no longer accept receipts for the six month period preceding the client's current subsidy period. These amendments will impact current IH/FSP recipients and new applicants by focusing on the ongoing service subsidies to individuals within the funding appropriated by the 78th Legislature.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the sections.

Bettye Mitchell, Deputy Commissioner for Long Term Care, 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 is that current IH/FSP clients will remain eligible for assistance despite reduced levels of funding for the program. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because the proposed amendments address eligibility and assistance levels for IH/FSP clients and do not affect the operation of any size business. There is no anticipated economic cost to persons who are required to comply with the proposed sections, but a reduction in the maximum amount of the cash grant may adversely affect clients. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Debbie Berliner at (512) 438-3199 in DHS's In-Home and Family Support Program. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-249, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

The amendments are proposed under the Human Resources Code, Chapters 22 and 35, which authorizes DHS to administer public assistance programs and provide support services to persons with disabilities.

The amendments implement the Human Resources Code, §§22.0001-22.038 and §§35.001-35.012.

§48.2705.Service Plan.

(a) A client [ An eligible applicant ] may receive [ qualify for ] either or both of the following two categories of program benefits.

(1) The client [ applicant ] may receive a one-time cash grant [ of up to $3,600 ] for architectural renovation or other capital expenditure to improve or facilitate the care, treatment, therapy, or general living conditions of the person who has a disability. A capital expenditure is defined as any one-time purchase costing more than $250. At its discretion and subject to available funding, the Texas Department of Human Services (DHS) may set the maximum grant at zero to $3,600.

(2) The client [ applicant ] may also receive a cash subsidy grant [ of up to $3,600 for any 12-month period ] to purchase services covered under §48.2706 of this title (relating to Allowable In-Home and Family Support Program (IH/FSP) Services). At its discretion and subject to available funding, the Texas Department of Human Services (DHS) may set the maximum grant at zero to $3,600.

(b)-(e) (No change.)

§48.2707.Program Restrictions.

(a)-(b) (No change.)

(c) The applicant must agree to submit receipts for service subsidy funds, and the copayment amount, if any, at intervals designated by the Texas Department of Human Services (DHS) during the 12-month certification period. A one-time submittal of receipts is required for the capital expenditure grant. If the applicant fails to furnish the required receipts, he is denied eligibility and may be required to make restitution for amounts for which there are no receipts. The receipts that are returned to verify how the program funds were spent must be approved allowable purchases and must not be dated prior to the date the individual was certified as eligible for the IH/FSP. Receipts are due within six months from date of approved certification. [ The caseworker may accept valid receipts for allowable services that were delivered or purchased during the six-month period immediately preceding a client's current subsidy period, if the receipts were not applied to previous receipt reconciliation and the client was certified for the IH/FSP during the prior six-month period. ] The receipts must:

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

(d) (No change.)

(e) Clients [ Applicants ] are limited to the maximum grants set by DHS minus their copayment amounts [ one $3600 grant for capital expenditures ].

(f)-(h) (No change.)

§48.2708.Service Subsidy and Capital Expenditure.

(a) The amounts of service subsidies and capital expenditures are based on costs of services minus the required copayment amounts up to the maximum grants set by the Texas Department of Human Services .

(b) The service subsidy is issued in intervals no greater than six months during the 12-month period of eligibility. [ The net amount of the In-Home and Family Support Program (IH/FSP subsidy is divided by two to determine the amount of the biannual subsidy payments. The first payment is issued at the beginning of the first six months of eligibility. The remaining subsidy amount is issued at the beginning of the second six months of eligibility. ] Continued program eligibility is contingent upon verification by the IH/FSP caseworker that all program benefits, including the copayment amount, are spent according to program requirements.

(c)-(g) (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 13, 2003.

TRD-200303594

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter H. ELIGIBILITY

40 TAC §48.2920

The Texas Department of Human Services (DHS) proposes to amend §48.2920, concerning supervised living, in its Community Care for Aged and Disabled chapter. The purpose of the amendment is to add room and board requirements for the Community Care for Aged and Disabled (CCAD) Residential Care (RC) Program. The addition of a room and board payment requirement will provide DHS with greater flexibility in funding and administering the program. Effective September 1, 2003, all CCAD RC clients will begin to pay a room and board payment directly to the facility. The total amount of money the client pays will not increase. Clients and provider agencies will be notified of the standard room and board amounts initially, and when changes occur. The proposal also changes the name of the section to Residential Care.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the section.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, 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 is that the CCAD RC Program will continue to provide a service option for eligible clients. The public will also benefit from a rule that reflects and implements the most recent legislative changes. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because the rate paid to assisted living facilities will not be affected. There is no anticipated economic cost to persons who are required to comply with the proposed section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Duanne Harris at (512) 438- 5464 in DHS's Long Term Care section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-248, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment affects the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§48.2920. Residential Care [ Supervised Living ].

(a) Eligibility for residential care [ supervised living ] is based on the following criteria:

(1)-(4) (No change.)

(b) The client must contribute to the total cost of the care that he receives , including payment for room and board. The room and board amount is calculated from the client's gross income. The client is responsible for paying this amount directly to the provider agency. The client may be required to pay a copayment based on the amount of income remaining after all allowances are deducted .

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

(3) In no case may the client's contribution, when added to the department's payment, exceed the rate established for residential care [ supervised living ].

(c)-(d) (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 16, 2003.

TRD-200303664

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


40 TAC §48.2925

The Texas Department of Human Services (DHS) proposes new §48.2925, concerning service authorizations, in its Community Care for Aged and Disabled chapter. The purpose of the new section is to adopt new utilization control procedures and criteria for the authorization of hours in personal assistance services (PAS). The new procedures and criteria allow for a 15% reduction in PAS hours for all but priority clients, which is necessary if DHS is to continue the programs within reduced funding levels as authorized by the 78th Texas Legislature.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are fiscal implications for state government as a result of enforcing or administering the section. There are no fiscal implications for local governments as a result of enforcing or administering the section.

The effect on state government for the first five-year period the section is in effect is an estimated reduction in cost of $43,776,618 in fiscal year (FY) 2004; $50,860,000 in FY 2005; $50,860,000 in FY 2006; $50,860,000 in FY 2007; and $50,860,000 in FY 2008.

Bettye Mitchell, Deputy Commissioner for Long Term Care, 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 is that all current clients in primary home care and family care will continue to receive some personal assistance services despite reduced levels of funding. The new section may have an adverse economic effect on small home and community support services agencies contracting with DHS to provide PAS hours due to the reduction of authorized hours for non- priority clients. However, since the rule imposes no compliance requirements on those agencies, there will be no economic cost to the agencies to comply with the rule. There is no anticipated economic cost to persons who are required to comply with the proposed section because it does not impose any compliance requirements, but persons whose service hours are reduced may be adversely affected. For each of the first five years the section is in effect, there may be an effect on local employment in geographic areas affected by this section, because, with a 15% reduction in PAS hours for non-priority clients, attendants hired will work fewer hours.

Questions about the content of this proposal may be directed to Duanne Harris at (512) 438- 5464 in DHS's Long Term Care Client Eligibility section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-247, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1:00 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The new section is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new section affects the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053.

§48.2925.Service Authorizations.

(a) In the Primary Home Care Program, including primary home care services, family care services, and community attendant services (operated under §1929(b) of the Social Security Act), the Texas Department of Human Services uses utilization methodologies for determining hours of service based on the assessment of an individual's functional needs.

(b) The utilization methodologies include the criteria described in §48.2918(f) of this chapter (relating to Eligibility for Primary Home Care) to determine whether an individual qualifies for priority status.

(c) Individuals who qualify for priority status will receive the maximum allowable number of service hours based on the client needs assessment for that person.

(d) Service hours for individuals who do not meet the criteria for priority status may be adjusted based on utilization control procedures.

(e) For a client to receive an increase in hours, the client must have a change in at least one of the following criteria:

(1) a medical condition that requires additional services;

(2) decrease in functional ability that requires additional services;

(3) loss of necessary caregiver support; or

(4) environmental changes requiring more care.

(f) Documentation on the client needs assessment and in the case record must justify a request for an increase in hours. The case manager submits the documentation to the supervisor for approval. Based on the documentation and the current utilization control procedures, the supervisor approves or denies the request for an increase in hours for the client.

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 16, 2003.

TRD-200303665

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 79. LEGAL SERVICES

The Texas Department of Human Services (DHS) proposes to amend §79.1917, concerning effect of an administrative determination of intentional program violation; §79.2001, concerning terms and general policy; and §79.2003, concerning determination and disposition of intentional program violations, in its Legal Services chapter. The purpose of the amendments is to implement changes mandated by House Bill (HB) 2292, 78th Legislature. HB 2292, Section 2.26, created Government Code, §531.114, which provides for sanctions for intentional program violations in the Temporary Assistance for Needy Families (TANF) Program. The amendment to §79.1917 incorporates those sanctions, which permanently disqualify a person from the TANF Program the second time the individual has been determined to have committed an intentional program violation and provides for judicial review for DHS's findings of intentional program violations. The amendment also permanently disqualifies a person convicted of a state or federal offense for conduct described in §531.114 or if the person is granted deferred adjudication or placed on community supervision for that conduct. The amendment to §79.2001 changes the definition of an intentional program violation. The amendment to §79.2003 changes the application of the permanent disqualification sanction outlined in §79.1917.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the sections.

Mary Ault, Deputy Commissioner for the Office of Program Integrity, 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 is clients will be provided with notice of the definition of an intentional program violation in the TANF Program, disqualification penalties imposed when an intentional program violation in the TANF Program has been committed, and the available remedy for Administrative Disqualification Determination. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because these rules impact the ability of TANF clients who have committed intentional program violations to receive TANF benefits, and will have no effect on small or micro businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Pam Colon at (512) 231- 5845 in DHS's Office of Program Integrity. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-261, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

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

Subchapter T. ADMINISTRATIVE FRAUD DISQUALIFICATION HEARINGS

40 TAC §79.1917

The amendment is proposed under Human Resources Code, Chapters 31 and 33, which authorizes DHS to administer financial assistance programs and to administer nutritional assistance programs.

The amendment affects the Human Resources Code, §§31.001-31.081 and §§33.001-33.027.

§79.1917.Effect of an Administrative Determination of Intentional Program Violation.

(a) If a hearing officer finds that a household member committed an intentional program violation, the household member is disqualified from the Food Stamp and/or Temporary Assistance for Needy Families (TANF) programs for the following periods.

(1) TANF. If the intentional program violation occurred on or after September 1, 2003, the [ The ] person is disqualified:

(A) 12 months for the first intentional program violation determination; and

(B) permanently [ 24 months ] for the second intentional program violation determination . [ ; ]

[ (C) permanently for the third intentional program violation determination; and]

[ (D) for a period of ten years, if convicted in a state or federal court of having made a fraudulent statement or representation with respect to the place of residence of the individual, in order to receive benefits in two or more states for the same period of time.]

(2) (No change.)

(b) The disqualification period does not depend upon the amount of benefits involved. The disqualification period set at the time of the hearing is applicable regardless of current eligibility. [ The household member may not: ]

[ (1) appeal the final intentional program violation decision; or]

[ (2) have this decision reversed by a subsequent fair hearing decision. The household member is entitled, however, to seek relief in a court having jurisdiction.]

(c) The decision of the hearing officer in the Administrative Disqualification Hearing is final. The household member:

(1) may not have this decision reversed by a subsequent Administrative Disqualification Hearing; and

(2) may appeal that determination by filing a petition in the district court in the county in which the violation occurred not later than the 30th day after the date the hearing officer made the determination.

(d) [ (c) ] If one hearing is held for several offenses, the Texas Department of Human Services [ (DHS) ] may impose only one disqualification period.

(e) [ (d) ] If the hearing officer imposes a one year disqualification for an initial violation, no further disqualifications may be imposed for violations occurring before the hearing decision that are later discovered. These violations may be brought to the hearing officer and, if appropriate, an intentional program violation may be found.

(f) [ (e) ] Although the hearing officer's decision regarding the intentional program violation is final, the appellant may appeal the investigator's computation of the amount of overpayment.

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 13, 2003.

TRD-200303592

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Subchapter U. FRAUD INVOLVING RECIPIENTS

40 TAC §79.2001, §79.2003

The amendment is proposed under Human Resources Code, Chapters 31 and 33, which authorizes DHS to administer financial assistance programs and to administer nutritional assistance programs.

The amendment affects the Human Resources Code, §§31.001-31.081 and §§33.001-33.027.

§79.2001.Terms and General Policy.

(a) Food stamp, medical assistance, and financial assistance are indicated when the term "assistance" is used in this subchapter. Medical assistance, Temporary Assistance for Needy Families (TANF) [ aid to families with dependent children (AFDC) ], and food stamp intentional program violations are not given special treatment except if specific procedural distinctions are noted.

(b) (No change.)

(c) A TANF [ An AFDC ] intentional program violation occurs when a person, for the purpose of establishing or maintaining the eligibility of a person and the person's family for financial assistance under the Human Resources Code, Chapter 31, or for the purpose of increasing or preventing a reduction in the amount of that assistance, intentionally [ has occurred if a recipient has intentionally, for the purpose of establishing or maintaining the family's eligibility for AFDC or for increasing or preventing a reduction in the amount of the grant ]:

(1) makes a statement that the person knows is false or misleading [ made a false or misleading statement ];

(2) misrepresents, conceals, or withholds a fact [ misrepresented, concealed, or withheld facts, or represented a falsehood to be a fact ]; or

(3) knowingly misrepresents a statement as being true [ violated any provision of the state or federal statutes or regulations applicable to the AFDC program ].

(d)-(e) (No change.)

(f) In food stamp and TANF [ AFDC ] intentional violation proceedings against individuals, actions under either the food stamp or TANF [ AFDC ] programs will be coordinated with the actions under the other, to the extent possible.

§79.2003.Determination and Disposition of Intentional Program Violations.

(a) The Texas Department of Human Services (DHS) determines the existence of intentional program violations; refers cases for investigation, administrative hearings, and prosecution; takes collection action and ensures clients' rights according to applicable Texas criminal statutes and the following:

(1) Temporary Assistance for Needy Families (TANF)--as provided in : [ Personal Responsibility and Work Opportunity Act (PL 104-193), and Chapter 31 Human Resources Code. ]

(A) Personal Responsibility and Work Opportunity Act 42 (U.S.C. §601 et. seq.);

(B) Human Resources Code, Chapter 31; and

(C) Government Code, §531.114;

(2) Food Stamp Program--7 Code of Federal Regulations, §§273.16-273.18; and

(3) Medicaid Program--42 Code of Federal Regulations, §455.2 and §455.16.

(b) Individuals found to have committed an intentional program violation in the food stamp and/or TANF programs [ either ] through an administrative disqualification hearing [ or by a court of appropriate jurisdiction, ] or who have signed a waiver of right to an administrative disqualification hearing are subject to the disqualification periods outlined in §79.1917 of this title (relating to Effect of an Administrative Determination of Intentional Program Violation) [ , or on the basis of a plea of guilty or nolo contendere or otherwise in cases referred for prosecution in a state or federal court are ineligible to participate in the program for 12 months for the first violation, 24 months for the second violation, and permanently for the third violation. In TANF cases, DHS does not take the needs of the disqualified individual into account during the period he is disqualified when determining the assistance unit's need and amount of assistance. DHS considers any resources and income of the disqualified individual as available to the assistance unit. DHS does not disqualify an individual from the TANF program unless the overissuance of benefits resulting from the intentional violation occurred in the month of October 1988 or later ].

(c) If a person is convicted of a state or federal offense for conduct, as described in §79.2001(c) of this title (relating to Terms and General Policy), and such conduct is committed on or after September 1, 2003, or if the person is granted deferred adjudication or placed on community supervision for that conduct, the person is permanently disqualified from receiving financial assistance.

(d) Individuals found to have committed an intentional program violation in the Food Stamp Program by a court of appropriate jurisdiction, or on the basis of a plea of nolo contendere or otherwise in cases referred for prosecution in state or federal court, are subject to the disqualification periods outlined in §79.1917(a) of this title.

(e) In TANF cases, DHS does not take the needs of the disqualified individual into account during the period he is disqualified when determining the assistance unit's need and amount of assistance. DHS considers any resources and income of the disqualified individual as available to the assistance unit. DHS does not disqualify an individual from the TANF program unless the overissuance of benefits resulting from the intentional violation occurred in the month of October 1988 or later.

(f) [ (c) ] Disqualified individuals are ineligible for TANF Medicaid benefits during the disqualification period. However, they may qualify for and receive benefits under provisions of Chapter 2 of this title (relating to Medically Needy and Children and Pregnant Women Programs [ the Medically Needy Program) or under provisions of Chapter 4 of this title (relating to the Medical Programs for Children and Pregnant Women ]).

(g) [ (d) ] A household member may be charged with an intentional program violation even if he has not actually received benefits to which he is not entitled.

(h) [ (e) ] The amount of the intentional program violation claim must be calculated back to the month the act of intentional program violation occurred, regardless of the length of time that elapsed until the determination of intentional program violation was made. However, DHS must not include in its calculation any amount of the overissuance that [ which ] occurred in a month more than six years from the date the overissuance was discovered for food stamp cases.

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 13, 2003.

TRD-200303593

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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


Chapter 90. INTERMEDIATE CARE FACILITIES FOR PERSONS WITH MENTAL RETARDATION OR RELATED CONDITIONS

Subchapter B. APPLICATION PROCEDURES

40 TAC §90.19

The Texas Department of Human Services (DHS) proposes to amend §90.19, concerning license fees, in its Intermediate Care Facilities for Persons with Mental Retardation or Related Conditions chapter. The purpose of the amendment is to clarify in DHS's rules that the quality assurance fee for intermediate care facilities for persons with mental retardation (ICF/MR) established in Health and Safety Code, Chapter 252, now applies to state schools in accordance with House Bill 2292, 78th Legislature. Under Health and Safety Code, §252.205, rules related to the actual imposition and collection of the quality assurance fee are the responsibility of the Health and Human Services Commission.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the section.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, 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 is clarification that the quality assurance fee for ICF/MR established in Health and Safety Code, Chapter 252, now applies to state schools. There is no adverse economic effect on small, micro, or other businesses as a result of enforcing or administering the section, because it has no economic impact. There is no anticipated economic cost to persons who are required to comply with the proposed section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Rose Rossman at (512) 438-3750 in DHS's Long Term Care Policy Section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-234, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

DHS will hold a public hearing on the proposal on July 11, 2003, at 1 p.m. in the John H. Winters Building Public Hearing Room, first floor, East Tower, 701 West 51st Street, Austin.

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Health and Safety Code, Chapter 252, which authorizes DHS to license and regulate intermediate care facilities for persons with mental retardation or related conditions.

The amendment implements the Health and Safety Code, §252.202(a).

§90.19.License Fees.

(a)-(c) (No change.)

(d) Quality Assurance Fee. A quality assurance fee is imposed on each facility licensed under the Health and Safety Code, Chapter 252 , [ of the Health and Safety Code and ] each intermediate care facility for persons with mental retardation owned by a community mental health and mental retardation center , and each facility owned by the Texas Department of Mental Health and Mental Retardation . The fee is payable monthly and is in addition to other fees imposed under this chapter. The amount of the fee, method of payment, and penalties for noncompliance are stated in 1 TAC Chapter 352.

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 13, 2003.

TRD-200303590

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: July 27, 2003

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