Part 3.
TEXAS COMMISSION ON ALCOHOL AND DRUG ABUSE
Chapter 144.
CONTRACT ADMINISTRATIVE REQUIREMENTS
The Texas Commission on Alcohol and Drug Abuse (Commission) adopts
new Chapter 144, §§144.401, 144.411 - 144.418, and 144.501, concerning
Contract Administrative Requirements, with changes to the text that was published
in the September 5, 2003,
Texas Register
(28
TexReg 7660).
The new Chapter 144 sections contain certain requirements and provisions
for funded organizations that enter into a substance abuse services contract
with the Commission. Revisions to Chapter 144 include general clarification
of current requirements and review for conformity with State and Federal law;
adding the requirement for workers' compensation insurance and the option
to use funds to purchase life insurance for key officers and employees; changing
the amount of the required fidelity bond; and adding a subsection on compliance
with security provisions in the behavioral health integrated provider system
(BHIPS).
Changes have been made to Chapter 144 as proposed. The Commission has deleted
the requirement for contractors to purchase bonds for the storage and protection
of records and data, clarified that the requirement for excess revenue to
be refunded to the Commission applies to cost reimbursement programs only,
and revised §144.416(d) to prohibit programs from billing for outpatient
services in an amount that is greater than the residential/day treatment rate
for the equivalent level of services. Language referring to the maximum hours
allowed for billing outpatient treatment services was eliminated. In addition
to the changes discussed below, the Commission makes other grammatical and
non-substantive changes for the purpose of clarifying its intent.
The public comment period began on September 5, 2003, with the publication
of the proposed rules in the
Texas Register
and
on the Commission's website, and ended October 22, 2003. Public meetings to
discuss the rules were held during the comment period in Austin, Dallas and
Houston. The Commission received the majority of comments in writing by email,
fax and U.S. mail. Commission staff summarized the comments received and published
draft responses for review on the Commission's website in advance of its November
12, 2003, open meeting. The draft included a number of changes in response
to the concerns expressed. As directed by the Commissioners at the November
12 meeting, the rules were revised further and published along with a draft
final order on the Commission's website in advance of the December 9, 2003,
open meeting. Chapter 144 was approved for adoption during that meeting.
The Commission received comments on the proposed rules from Amarillo Council
on Alcoholism and Drug Abuse (Amarillo Council); Association for the Advancement
of Mexican-Americans, Inc.; The Association of Substance Abuse Programs (ASAP);
Austin Travis County MHMR; Brazos Valley Council on Alcohol and Substance
Abuse; Gulf Coast Center; Heart of Texas Council on Alcohol and Drug Abuse;
Mid Texas Council on Alcohol and Drug Abuse; Nexus Recovery Center; Rainbow
Days, Inc.; Sandstone Health Care, Inc.; Serenity Foundation of Texas; and
various individual commenters. The comments received and the Commission's
responses appear below in rule number order.
144.401(d)(3). General Contract Provisions.
Mid
Texas Council on Alcohol and Drug Abuse comments that the requirement for
workers compensation insurance should not apply to those who do not provide
inpatient treatment services. Organizations that provide prevention, intervention
and outpatient treatment services do not put people in harm's way on a daily
basis. There have not been any incidents requiring workers compensation for
10 years and the commenter wonders how the organization will pay for the required
insurance.
The Commission responds that the purpose of workers compensation is to
compensate covered workers for work related injuries or illnesses, even if
the injured workers' negligence contributed to the accident. As such, accidents
and injuries are not confined to residential treatment facilities. Employee
injury cases are more likely to result in lawsuits if an employer does not
carry workers compensation insurance. Employers without workersł compensation
face potentially unlimited liability, including possible punitive damages,
arising from workplace accidents. Payment of workers compensation insurance
is an allowable program expense that serves to reduce risk. As such, requiring
workers compensation insurance serves the legitimate Commission goal of having
a stable, statewide service delivery system.
§144.401(d)(5). General Contract Provisions.
Heart of Texas Council on Alcohol & Drug Abuse, Alcohol and Drug
Educational Services in El Paso and the Association for the Advancement of
Mexican Americans, Inc. ask whether "key officers" mean "board members" for
life insurance purposes. They also inquire whether it is the intention of
the rule to make the organization the beneficiary. They question the rationale
for the rule considering the additional administrative and direct costs to
the program. The commenters acknowledge that it is necessary to include provisions
for workers compensation insurance and life insurance on key employees to
comply with the labor laws of Texas. They realize program employers need to
recognize the professionalism of the field and provide for their employees.
They ask if self-insurance is an option when providing workers compensation
insurance.
The Commission responds that the term "key officers" does not include board
members. The organization cannot be named the beneficiary in the life insurance
policy, or costs for such insurance are not allowable. The life insurance
represents additional compensation to the key individual and as such is considered
a fringe benefit. An organization can establish a self-insurance program for
workers compensation provided the plan meets the same requirements as the
State's workers compensation plans. The organization must also comply with
the self-insurance provisions in the federal circulars.
§144.401(e)(f). General Contract Provisions.
Heart of Texas Council on Alcohol & Drug Abuse, Alcohol and Drug
Educational Services in El Paso and Montrose Counseling Center question the
amount of the fidelity bond or insurance coverage that contractors are required
to carry to cover losses due to fraudulent or dishonest acts by the contractor's
employees or volunteers with access to funds. For example, what is the minimum
and maximum coverage if an organization's contract is $95,000? They suggest
that required coverage be a minimum of 15% of the contract amount, up to a
maximum of $100,000. Due to the amount of funding received, one of the contractors
commenting would be required to obtain a bond in the amount of $500,000 under
the proposed rules, but has had difficulty finding coverage for $500,000.
The contractor suggests that the maximum be decreased to $200,000.
In response to the example in the comment, pursuant to §144.401(e)(1),
the coverage would be equal to the contract amount, $95,000. The Commission
has reassessed the proposed rule change and has revised the maximum percentage
of coverage to be 35% instead of 50% of the contract amount. The maximum amount
of required coverage of $500,000 will not change from the current rule. Note
that in the referenced rule, the Commission has clarified expectations for
contractors with respect to insurance coverage. Premiums for such coverage
are impacted by a number of variables, such as loss histories, deductibles,
amount of coverage selected, etc. One such difficulty in obtaining a bond
is if an organization "overbuys," i.e., attempts to obtain a bond that provides
coverage in excess of the amount of funding received from their various funding
sources. In high dollar contracts, $500,000 represents a reasonable assessment
of the maximum risk to the Commission.
The Commission has also revised §144.401(f) to delete the requirement
that contractors shall purchase a bond sufficient in value to provide for
the storage and protection of records and data after the end of the contract
or if the contractor closes its business operations. The provision is unnecessarily
burdensome for the contractor.
§144.411(a)(1)-(2). Procurement of Goods
and Services.
Rainbow Days, Inc., ASAP, and Serenity Foundation of
Texas support the thresholds set for purchases in §144.411 (a)(1)-(2).
The Commission agrees with these comments.
§144.412. Travel.
ASAP, Serenity Foundation
of Texas, and Rainbow Days, Inc. ask if there is a state or federal requirement/law
that disallows gratuities. They believe that tipping wait staff is a standard
and legitimate travel expense and would place a hardship on staff required
to travel as part of their job if staff are not reimbursed for gratuities.
They recommend deletion of gratuities as an unallowable expense unless required
by law. The Commission responds that it complies with the State of Texas Travel
Allowance Guide, issued by the Texas Comptroller of Public Accounts and has
passed down these requirements to subcontractors. In accordance with Chapter
7, Special Provisions, §7.07 Incidental Expenses, B. Non-reimbursable
expenses (3), tips or gratuities are unallowable.
§144.413(a)-(g). Financial Eligibility and
Third Party Payment.
Austin Travis County MHMR suggests exempting OSR
programs from §144.413 (a) which states that all programs are subject
to financial eligibility requirements, including all treatment programs. The
commenter does not feel that the requirement for financial eligibility determination
should be stipulated in the contract. The commenter suggests changing the
wording to state that programs refer people who are found to be ineligible
for financial or clinical reasons to a Commission contracted OSR instead of
just providing appropriate referrals.
The Commission responds that there is no reason to exclude OSR programs
from rule §144.413(a) based on the fact that they are cost reimbursement
programs. The proposed rule states that, if applicable to a prevention or
intervention program, the requirement for financial eligibility shall be stipulated
in the contract. This addresses whether the program is cost-reimbursement
or unit rate. The Commission believes that if a person is not found to be
eligible for financial or clinical reasons then the program should provide
the most appropriate referrals to the person. This may or may not include
the OSR. A person may need services that OSR does not provide and instead
need a referral to another agency/organization.
§144.413(b)(2). Financial Eligibility and
Third Party Payment.
Brazos Valley Council on Alcohol & Substance
Abuse suggests deleting duplicative language in the current rules stating
that persons with access to other funding sources that pay for an individual's
substance abuse services are ineligible for Commission funded services. The
Commission responds that §144.105 is in the current rules and will be
replaced by §144.413 (b)(2) in the new rules.
§144.413(c). Financial Eligibility and Third
Party Payment.
Brazos Valley Council on Alcohol & Substance Abuse
suggests additional language for §144.413(c) allowing the program to
complete and document a financial assessment of each applicant no later than
48 hours after admission to the program instead of prior to admission. If
the program sends a client to retrieve documentation, a client may change
his mind about getting treatment. The Commission agrees and has revised §144.413(c)
to allow the program to admit the client, ensuring that he/she enters treatment.
Once the form is completed, then the contractor may bill the Commission for
the services if the client meets the financial eligibility criteria.
§144.413(j). Financial Eligibility and Third
Party Payment.
Brazos Valley Council on Alcohol & Substance Abuse
suggests additional language in §144.413(j) whereby insured clients who
fall below the federal poverty guidelines and whose deductible and co-pay
prevent them from receiving treatment services should be eligible for Commission
funding using the sliding fee scale. These insured clients have disaster insurance
but have very high-deductibles and co-pays and can "fall through the cracks."
The Commission responds that the contractor is allowed to bill the Commission
for the deductible if documentation in the financial assessment verifies that
the client does not have the financial resources to cover the deductible amount.
Taking financial responsibility is an important step in the recovery process.
Persons that are insured generally have greater resources than the uninsured,
and it is the Commission's expectation that personal financial management
will extend to insurance deductibles.
In response to the Children's Health Insurance Program (CHIP) substance
abuse benefit being restored through additional funding, the Commission reinstates §144.413
(i) that requires contractors serving individuals under 18 years of age to
take the necessary steps to become an approved CHIP provider.
§144.416(d)(1)-(3). Billing for Treatment
Services.
Amarillo Council, ASAP, Serenity Foundation of Texas, Gulf
Coast Center, and Sandstone Health Care, Inc believe that a reduction in the
number of billable hours per week for transitional outpatient, intensive outpatient,
and day treatment will have a significant financial and clinical impact on
services. The comments suggest that the agency should be more flexible to
allow the provision of a range of service intensities based on the client's
need. A reduction in billable hours is not in the best interest of quality
outpatient services and will create financial and programmatic hardships for
those providing outpatient services. There are no corresponding guidelines
defining day treatment, intensive and transitional outpatient services in
Chapter 148 which make it difficult to interpret and comply with the proposed
billing caps. It seems to contradict the Commission's emphasis on providing
more outpatient services.
The Commission responds by revising §144.416(d) to prohibit programs
from billing for outpatient services in an amount that is greater than the
residential/day treatment rate for the equivalent level of services. Language
referring to the maximum hours allowed for billing outpatient treatment services
is deleted.
Nexus Recovery Center raises a concern that certain treatment programs
are serving pregnant women in their programs as they would any non-pregnant
client while not providing the required additional services. They suggest
that treatment centers that treat pregnant women should be required to submit
additional documentation, such as an itemized bill of services offered, in
order to substantiate that the additional requirements for specialized female
services are being provided. The Commission responds that additional documentation
is not necessary. Contractors are required to comply with the rule provisions
relating to specialized female services and compliance, including documentation,
is routinely monitored by the Commission's Licensing and Enforcement Branch.
Subchapter D. CONTRACT ADMINISTRATION