Proposed Rules Title 1

TITLE 1. ADMINISTRATION

PART 1. OFFICE OF THE GOVERNOR

CHAPTER 3. CRIMINAL JUSTICE DIVISION

SUBCHAPTER J. STATE PLANNING ASSISTANCE GRANTS

1 TAC §§3.9400, 3.9405, 3.9410, 3.9415, 3.9420, 3.9425, 3.9430, 3.9435

The Office of the Governor proposes the addition of Title 1, Part 1, Chapter 3, Subchapter J (State Planning Assistance Grants), which includes §§3.9400, 3.9405, 3.9410, 3.9415, 3.9420, 3.9425, 3.9430, and 3.9435.

The Office of the Governor has designated its Criminal Justice Division (CJD) as the division of the Office of the Governor that will administer State Planning Assistance Grants (SPAG). To reflect this designation, the Office of the Governor proposes moving the administrative rules regarding SPAG from Chapter 5 (the chapter relating to the Budget and Planning Office) to Chapter 3 (the chapter relating to CJD).

The proposed addition of §§3.9400, 3.9405, 3.9410, 3.9415, 3.9420, 3.9425, 3.9430, and 3.9435 is intended to conform the rules to the requirements of the applicable statutes, satisfy recommendations made by State Auditor's Office in its Review of Regional Planning Commissions' Financial and Performance Reports (SAO Report No. 03-013; Released 12/30/02), improve the accountability of COGs in the use of state and federal funds, assist in promoting more effective oversight of COGs, and improve COG reporting requirements.

The proposed addition of §3.9400 adds the definitions previously found in §5.81, and deletes from the original language of the section the definitions that are already defined in Chapter 3 and the definitions of terms no longer included in the rules.

The proposed addition of §3.9405 adds the general regulations previously found in §5.82 and the lobbying requirements previously found in §5.89. The proposed addition also removes the provision regarding local government participation in a COG, which is no longer needed in the rules; allows CJD to establish application deadlines to improve the funding process for SPAG; allows CJD to use more up-to-date census data when determining the proper distribution of SPAG; and requires COGs to comply with the statutes governing COGs and any other applicable statutes, rules, regulations and guidelines.

The proposed addition of §3.9410 adds the financial audit requirements previously found in §5.83. The proposed addition also conforms the language of this section to the requirements of §391.0095, Local Government Code, by requiring a COG to submit copies of its annual financial report to CJD, the State Auditor, the Comptroller of Public Accounts, and the Legislative Budget Board and make the annual financial audit available to each member of the Legislature; allowing the Office of the Governor to request the State Auditor or an external auditor to review a COG's annual financial audit; requiring the State Auditor to report any findings and recommendations to the Legislative Audit Committee, CJD and the COG; and clarifying that an annual financial audit must be paid for from COG funds. In addition, the proposed addition specifies which auditing standards are applicable to financial audits.

The proposed addition of §3.9415 simplifies the requirements for the SPAG application previously found in §5.84 by allowing CJD to prescribe the format for the SPAG application and make a grant award after receipt and approval of the SPAG application.

The proposed addition of §3.9420 adds the requirements for salary schedules previously found in §5.85. The proposed amendment conforms the language of this section to the requirements of §391.0117, Local Government Code, by requiring a COG to submit its salary schedule to the State Auditor and make its salary schedule available to each member of the Legislature; and clarifying the responsibilities of CJD and the State Auditor regarding a COG's salary schedule.

The proposed addition of §3.9425 adds the restrictions on COG costs previously found in §5.86 and removes the definition provisions regarding the limit on the amount of total expenditure that may be spent on indirect costs. The limit on the amount of total expenditure that may be spent on indirect costs is still applicable to COGs pursuant to §391.0115.

The proposed addition of §3.9430 adds the requirements for reports previously found in §5.87 and annual work programs previously found in §5.90. The proposed addition updates the language of this section to conform it to the requirements of §391.0095, Local Government Code, by requiring a COG to submit its reports to CJD, the State Auditor, the Comptroller of Public Accounts, and the Legislative Budget Board. The proposed addition also specifies the types of information that must be included in certain COG reports.

The proposed addition of §3.9435 adds the sanctions provisions previously found in §5.88; clarifies that sanctions may be applied for a failure to submit a report or audit required under any provision in Subchapter J; and defines the roles of CJD and the State Auditor in the sanction process.

Ken C. Nicolas, Executive Director of CJD, has determined that for the first five-year period the additions are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections.

Mr. Nicolas has also determined that for the first five-year period that the additions are in effect the public benefit anticipated as a result of enforcing the sections will be more efficient processes and procedures and the current rules will be more easily understood. There will be no anticipated economic cost to persons or businesses for complying with the proposed rules.

Comments on the proposed additions may be submitted to Heather Morgan, Office of the Governor, Criminal Justice Division, P.O. Box 12428, Austin, Texas 78711, (512) 475-2594, hmorgan@governor.state.tx.us. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register.

The addition of §§3.9400, 3.9405, 3.9410, 3.9415, 3.9420, 3.9425, 3.9430, and 3.9435 is proposed under §391.009, Local Government Code, which provides the Office of the Governor with the authority to adopt rules regarding the operation and oversight of COGs, the receipt and expenditure of funds by COGs, the annual reporting requirements of COGs, the audit requirements on funds received or expended by COGs, the establishment and the use of standards by which the productivity and performance of COGs can be evaluated, and the guidelines that COGs and governmental units must follow in carrying out the review and comment procedures for loans and grants-in-aid.

The proposed addition of §§3.9400, 3.9410, 3.9430, and 3.9435 implements §391.0095, Local Government Code, regarding reporting and audit requirements.

The proposed addition of §3.9405 and §3.9415 implements §391.012, Local Government Code, regarding state financial assistance.

The proposed addition of §3.9420 implements §391.0095, Local Government Code, regarding reporting and audit requirements and §391.0117, Local Government Code, regarding salary schedules.

No other statutes, articles, or codes are affected by the addition of these rules.

§3.9400.Definitions

In addition to the definitions listed in §3.3 of this chapter, the following words and terms shall have the following meanings, unless the context clearly indicates otherwise, when used in this subchapter.

(1) Automobile allowance: a monthly or other periodic stipend to defray the costs of operating a motor vehicle, which does not require mileage or other documentation.

(2) Indirect costs: costs that are incurred for a common or joint purpose benefiting more than one cost objective, that are not readily assignable to the cost objectives specifically benefited without effort disproportionate to the results. CJD shall use the federal Office of Management and Budget Circulars A-87 and A-122, UGMS, and any rules relating to the determination of indirect costs adopted under Chapter 783, Government Code, in administering indirect cost recovery provisions of these rules.

(3) Officially sanctioned conference or meeting: a conference or meeting conducted or attended as a part of a COG's official business.

§3.9405.General Regulations.

(a) The Office of the Governor will recognize one COG organized under Chapter 391, Local Government Code, in each state planning region or subregion. Only the COG recognized by the Office of the Governor will be eligible for a state planning assistance grant.

(b) All applications from COGs for financial assistance programs covered by the Texas Review and Comment System shall be submitted to the Office of the Governor's State Grants Team for review and comment prior to the submission to any federal, state, or other agency.

(c) Funding under the state planning assistance grant program will be based on member counties and incorporated municipalities as of September 1 for the fiscal year in which funds are being sought. The population of member cities in nonmember counties will be included in computing the amount of state grant eligibility. The population of member cities in nonmember counties shall be determined using the most recent population estimates produced by the Texas State Data Center.

(d) State aid can be expended for any legal activity of a COG as defined in §391.005, Local Government Code. State funds may be utilized as local matching funds for any other state or federal program approved by the governing body of the COG. In no case may state aid be used to pay entertainment expenses or other prohibited costs.

(e) COGs may apply for state planning assistance grant funds in accordance with application schedules developed by CJD.

(f) A COG applying for state planning assistance grant funds must have funds available annually from sources other than the state or federal governments equal to or greater than one-half of the state planning assistance grant funds for which the COG applies. The applicant may count local cash funds which will be collected during the applicant's entire fiscal year toward meeting the requirement of this subsection. Local funds carried forward from a previous fiscal year, above the amount that was equal to one-half of the state planning assistance grant funds for which the commission applied, may be counted in subsequent fiscal years as funds available from sources other than the state or federal government.

(g) The nepotism provisions of Chapter 573, Government Code, apply to a COG.

(h) An employee of a COG is subject to the rules regarding lobbying activities contained in Chapter 556, Government Code, when using state-appropriated funds.

(i) A COG must comply with all applicable federal, state, and local statutes, rules, regulations and guidelines.

§3.9410.Financial Audit Requirements.

(a) Not later than nine months after the close of each COG's fiscal year, each COG shall submit a completed financial audit prepared by a certified public accountant, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and the provisions of OMB Circular A-133 and the State Single Audit Circular, when applicable, to CJD, the State Auditor, the Comptroller of Public Accounts, and the Legislative Budget Board, and shall make the financial audit available to each member of the Legislature.

(b) CJD will place primary reliance upon state single audit coordinating agencies to review COG audits. However, CJD may request that COG audits be reviewed by the State Auditor or by an external auditor. The State Auditor may review the audits, subject to approval by the Legislative Audit Committee for inclusion in the audit plan under §321.013, Government Code. If an audit is reviewed by the State Auditor or an external auditor, any findings and recommendations shall be reported to CJD, the Legislative Audit Committee, and the COG.

(1) the amount and source of funds received by the COG;

(2) the amount and source of funds expended by the COG;

(3) an explanation of any method used by the COG to compute an expense of the COG, including computation of any indirect costs of the COG; and

(4) a statement of indirect costs which compares actual indirect cost allocations with the proposed indirect cost allocation plan used to establish an indirect cost rate.

(d) Audit costs are allowable costs as identified in UGMS and are allocable to the various programs administered by a COG.

(e) The annual financial audit shall be paid for from the funds of the COG.

§3.9415.State Planning Assistance Grant Application.

CJD will award the entire amount of the COG's state planning assistance grant allocation upon receipt and approval of a completed grant application in a format prescribed by CJD.

§3.9420.Salary Schedules.

(a) For each fiscal year, each COG shall publish a salary schedule containing a classification salary schedule for classified positions, and identifying and specifying the salaries for positions exempt from the classification salary schedule.

(b) The salary schedule adopted by the COG may not exceed, for classified positions, the state salary schedule for classified positions as prescribed by the general appropriations act adopted by the most recent legislature. A COG may adopt a salary schedule that is equal to or less than the state salary schedule.

(c) A position may only be exempted from the classification salary schedule adopted by the COG if the exemption and the salary paid for the exempt position is within the range prescribed by the general appropriations act.

(d) Wage and salary comparability will be determined from the state position classification plan, positions exempt from the state position classification plan, the State Auditor's biennial reports on state classification and pay, and the State Auditor's reports on benefits as a percentage of salary, as well as the U.S. Department of Labor's Employment Cost index and other appropriate sources, including documentation provided by the COG.

(e) Not later than the 45th day before the date of the beginning of each COG's fiscal year, each COG shall submit its salary schedule, as approved by its governing body, including the salaries of all exempt positions, to the State Auditor and shall make its salary schedule available to each member of the Legislature.

(f) If the State Auditor, subject to the Legislative Audit Committee's approval for inclusion in the audit plan under §321.013, Government Code, has recommendations to improve a COG's salary schedule or a portion thereof, the State Auditor shall report the recommendations to CJD.

(g) CJD may not allow the portion of the schedule for which the State Auditor has recommendations to go into effect until revisions or explanations are received from a COG that are satisfactory to CJD and support the recommendations from the State Auditor.

(h) This section does not apply to a COG if the most populous county that is a member of the COG has an actual average weekly wage that exceeds the state actual average weekly wage by 20% or more for the previous year as determined by the Texas Workforce Commission in its County Employment and Wage Information Report.

(1) A COG exempted from the salary provisions by this subsection shall annually file an exemption notice with the State Auditor.

(2) The exemption notice shall contain supporting information from the Texas Work Force Commission's County Employment and Wage Information Report for the applicable period.

§3.9425.Restrictions on COG Costs.

(a) In reimbursing COG personnel for travel expenses, a COG must comply with the general appropriations act and the travel regulations adopted by the Comptroller of Public Accounts for mileage, per diem, and lodging reimbursement.

(b) A COG may not expend funds for travel in excess of the amount that may be expended for state personnel under the general appropriations act or travel regulations adopted by the Comptroller of Public Accounts for mileage, per diem, and lodging reimbursement. COG personnel eligible to receive reimbursement for actual expenses for meals and lodging may not receive reimbursement at a higher rate than those allowed for state personnel authorized to receive reimbursement for actual expenses.

(c) A member of the governing body of a COG may not be reimbursed from state-appropriated funds, including federal funds, for official travel in an amount in excess of the rates set for travel by state board and commission members.

(d) A COG may not expend any funds for the purchase of alcoholic beverages or entertainment.

(e) A COG must comply with provisions equivalent to those applied to local governments by Chapter 252, Local Government Code, when purchasing goods or services.

(f) A COG may not expend funds for an automobile allowance for a member of the governing body of the COG if the member holds another state, county, or municipal office.

§3.9430.Reports.

Not later than the last business day of the month of December of each year, each COG shall submit the following to CJD, the State Auditor, the Comptroller of Public Accounts, and the Legislative Budget Board, in a format prescribed by CJD:

(1) a report of the COG's productivity and performance during the most recently completed fiscal year, which shall include:

(A) the outcomes of the program's activities at the most detailed level reported to each sponsoring agency, including:

(i) any program output measures the COG is required to report to an entity sponsoring the program; and

(ii) any outcome measures the COG is required to report to an entity sponsoring the program;

(B) a comparison of planned performance and actual results; and

(2) a projection of the COG's productivity and performance during the next fiscal year based upon the COG's specified goals, objectives, and performance measures for the next fiscal year;

(3) a report of any assets disposed of by the COG, which shall include the following:

(A) an itemized list describing each disposed asset;

(B) the acquisition date of each disposed asset;

(D) the reason for disposing of each asset;

(E) the disposition date of each disposed asset; and

(F) the final disposition price for each disposed asset;

(4) a complete annual financial statement, which shall include a list of receipts and expenditures by accounts.

§3.9435.Sanctions.

If a COG fails to submit a report or audit required under this subchapter or is determined by the State Auditor to have failed to comply with a rule, requirement, or guideline adopted under §391.009, Local Government Code, the State Auditor shall report the failure to CJD. CJD may, until the failure is corrected:

(1) withhold any appropriated funds of the COG; or

(2) appoint a receiver to operate or oversee the COG.

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 August 18, 2008.

TRD-200804438

David Zimmerman

Assistant General Counsel

Office of the Governor

Earliest possible date of adoption: September 28, 2008

For further information, please call: (512) 936-0181

CHAPTER 5. BUDGET AND PLANNING OFFICE

SUBCHAPTER A. FEDERAL AND INTERGOVERNMENTAL COORDINATION

DIVISION 3. STATE PLANNING ASSISTANCE GRANTS

1 TAC §§5.81 - 5.90

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

The Office of the Governor proposes the repeal of Title 1, Part 1, Chapter 5, Subchapter A, Division 3 (State Planning Assistance Grants), which includes §§5.81 - 5.90.

Ken C. Nicolas, Executive Director of CJD, has determined that for the first five-year period the repeals are in effect there will be no fiscal implications for state or local government as a result of the repeals.

Mr. Nicolas has also determined that for the first five-year period that the repeals are in effect the public benefit anticipated as a result of the repeals will be more efficient processes and procedures and the current rules will be more easily understood. There will be no anticipated economic cost to persons or businesses resulting from the proposed repeals.

Comments on the proposed repeals may be submitted to Heather Morgan, Office of the Governor, Criminal Justice Division, P.O. Box 12428, Austin, Texas 78711, (512) 475-2594, hmorgan@governor.state.tx.us. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register.

The repeal of §§5.81 - 5.90 is proposed under §391.009, Local Government Code, which provides the Office of the Governor with the authority to adopt rules regarding the operation and oversight of COGs, the receipt and expenditure of funds by COGs, the annual reporting requirements of COGs, the audit requirements on funds received or expended by COGs, the establishment and the use of standards by which the productivity and performance of COGs can be evaluated, and the guidelines that COGs and governmental units must follow in carrying out the review and comment procedures for loans and grants-in-aid.

No other statutes, articles, or codes are affected by the repeal of these rules.

§5.81.Definitions.

§5.82.General Regulations.

§5.83.Financial Audit Requirements.

§5.84.State Planning Assistance Application Package.

§5.85.Required Prior Approval of Salaries.

§5.86.Restrictions on Regional Planning Commission Costs.

§5.87.Reports.

§5.88.Sanctions.

§5.89.Lobbying.

§5.90.Annual Work Program.

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 August 18, 2008.

TRD-200804436

David Zimmerman

Assistant General Counsel

Office of the Governor

Earliest possible date of adoption: September 28, 2008

For further information, please call: (512) 936-0181

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 354. MEDICAID HEALTH SERVICES

SUBCHAPTER A. PURCHASED HEALTH SERVICES

DIVISION 15. HEARING AID SERVICES

1 TAC §§354.1231, 354.1233, 354.1235

The Texas Health and Human Services Commission (HHSC) proposes to amend §354.1231, Benefits and Limitations; §354.1233, Requirements for Hearing Aid Services; and §354.1235, Requirements for Provider Participation, in Title 1, Part 15, Chapter 354, Subchapter A, Division 15, related to Medicaid hearing aid services.

Background and Justification

These rules apply to Medicaid clients 21 years of age and older for whom hearing aid services are payable by the Texas Medicaid program. Hearing aid services for Medicaid clients younger than 21 years of age are reimbursed through the Program for Amplification for Children of Texas (PACT).

HHSC proposes to amend these rules to better align Medicaid rules with current hearing aid technology and standards of care and to clarify the rule content.

Section-by-Section Summary

HHSC proposes to amend §354.1231, Benefits and Limitations, to:

clarify that the hearing aid services benefit includes monaural and binaural hearing aids;

add hearing aid repairs as a reimbursable benefit;

add replacement batteries and related supplies as a reimbursable benefit;

clarify that all authorized hearing aid providers are subject to the limitations and exclusions in subsection (b);

specify that hearing aid repairs are limited to one repair per year per hearing aid, additional repairs require prior authorization, and delete the statement: "The Texas Medicaid program shall not pay for the replacement of batteries and cords";

clarify requirements for replacement of lost, destroyed or abused hearing aids;

change the benefit for hearing aid replacement from once every six years to once every five years (per aid);

lower the decibel level for determining hearing loss from the current 45 decibels (dB) to the proposed level of 35 dB to address hearing issues and provide intervention before the client has total hearing loss;

update the binaural hearing aid benefit to correspond with current standards of care by allowing recipients to receive hearing aids for both ears if they meet the conditions for a monaural aid, and have a least a 35 dB hearing loss in both ears; and

make other necessary changes to clarify the hearing aid services benefit and update a reference from the "department" to the "Health and Human Services Commission (Commission)."

HHSC proposes to amend §354.1233, Requirements for Hearing Aids, to:

clarify that physicians, physician assistants (PAs), nurse practitioners, and clinical nurse specialists are providers that can be reimbursed for hearing examinations and evaluations;

allow audiologists to be reimbursed for fitting and dispensing hearing aids, which is within their scope of practice;

clarify the minimum warranty period for hearing aids;

clarify that providers may not charge recipients more than $2 per day for renting hearing aids during a trial period; and

remove references to "allowable fees" and requirements to purchase United States manufactured hearing aids. These references are being removed since the Medicaid reimbursement methodology for hearing aids is covered under a separate reimbursement rule at §355.8141, which will be revised later this year to change the hearing aid reimbursement methodology from manual pricing to fixed fee pricing.

HHSC proposes to amend §354.1235, Requirements for Provider Participation, to:

clarify that all authorized hearing aid providers must be enrolled in the Texas Medicaid Program and meet licensure requirements;

remove the Medicaid provider licensure requirement by their licensing board in subsection (b)(1) - (3) because the preceding sentence already states this; and

update a reference from the "department" to the "Health and Human Services Commission (Commission)."

Fiscal Note

Thomas M. Suehs, Deputy Executive Commissioner for Financial Services, has determined that during the first five years the amended rules are in effect there will be a fiscal impact to state government with the state being responsible for $4,947,428 in 2009, $5,340,230 in 2010, $5,762,108 in 2011, $6,217,214 in 2012 and $6,708,482 in 2013. The proposed rules will not result in any fiscal implications for local health and human services agencies. Local governments will not incur additional costs.

Small and Micro-Business Impact Analysis

Mr. Suehs has also determined that there will not be an effect on small businesses or micro businesses to comply with the proposed amendments, as they will not be required to alter their business practices as a result of the rules. There are no anticipated economic costs to persons who are required to comply with the proposed rules. There is no anticipated negative impact on local employment.

Public Benefit

Chris Traylor, Associate Commissioner for Medicaid and CHIP, has determined that for each of the first five years the proposed rules are in effect, the public will benefit from the adoption of the rules. The anticipated public benefit, as a result of enforcing the proposed amendments, is availability of hearing aid services consistent with current technology and standards of care for Medicaid eligible adults.

Regulatory Analysis

HHSC has determined that this proposal is not a "major environmental rule" as defined by the Government Code, §2001.0225. A "major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure.

Takings Impact Assessment

HHSC has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under the Government Code, §2007.043.

Public Comment

Written comments on the proposal may be submitted to Clarice Cefai, Senior Policy Analyst, Medicaid/CHIP Division, Texas Health and Human Services Commission, P.O. Box 85200, Austin, Texas 78708-5200, Mail Code H-390 91X; by fax to (512) 249-3736; or by e-mail to Clarice.Cefai@hhsc.state.tx.us within 30 days of the publication of this proposal in the Texas Register.

Public Hearing

A public hearing is scheduled for September 18, 2008, from 3:30 - 4:30 p.m., at the John H. Winters Building, Public Hearing Room, 125-E, located at 701 W. 51st Street, Austin, Texas. Persons requiring further information, special assistance, or accommodations should contact Pamela Dunn at (512) 491-1488.

Statutory Authority

The amendments are proposed under the Texas Government Code, §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; and the Human Resources Code, §32.021, and the Texas Government Code, §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas.

The proposed amendments affect the Human Resources Code, Chapter 32, and the Texas Government Code, Chapters 531 and 533. No other statutes, articles, or codes are affected by this proposal.

§354.1231.Benefits and Limitations.

(a) Benefits. Reimbursement for hearing aid services available through the Texas Medical Assistance (Medicaid) Program shall be provided in accordance with federal regulations found at 42 CFR Subchapter C, Medical Assistance Programs, and the provisions and procedures found elsewhere in this chapter [~~as cited at §354.1233, Requirements for Hearing Aid Services~~]. The following hearing aid services shall be reimbursed[,] through the Texas Medicaid Program:

(1) Examinations [~~Physician examination~~] to determine the medical necessity for a hearing aid performed by a physician, nurse practitioner, clinical nurse specialist, or physician assistant (PA);

(2) Hearing aid evaluations performed by a physician, nurse practitioner, clinical nurse specialist, physician assistant (PA) or audiologist, including home visit hearing evaluations;

(3) Hearing aids (monaural or binaural) and hearing aid repairs [~~aid~~];

(4) Replacement batteries and related hearing aid supplies;

(5) [~~(4)~~] Initial fitting, dispensing, and post-fitting check of the hearing aid(s) [~~aid~~]; and

(6) [~~(5)~~] First and second revisits to assess the recipient's adaptation to the hearing aid(s) [ ~~aid~~] and the functioning of the instrument(s) [ ~~instrument~~].

(b) Limitations and exclusions. All authorized hearing [ ~~Hearing~~] aid providers, as described in §354.1233 of this Division (relating to Requirements for Hearing Aid Services), [ ~~audiologists, and examining physicians~~] must comply with the following conditions and limitations established by the Health and Human Services Commission (Commission) [ ~~department~~] or its designee.

(1) Hearing aid services are available to persons who are 21 years of age and older and eligible for Medicaid services.

(2) An individual using a hearing aid before becoming eligible for Medicaid benefits may have a hearing evaluation conducted by an approved hearing aid services provider after becoming eligible for Medicaid. Medicaid reimbursement for a new hearing aid shall be denied if the provider concludes, based upon the evaluation findings, that the recipient's present hearing aid adequately compensates for the degree of hearing loss.

(3) Providers may not submit a hearing evaluation claim to the Commission or its designee unless the Medicaid recipient meets the eligibility criteria in §354.1233, Requirements for Hearing Aid Services.

(4) Repairs are limited to one per year per hearing aid. Additional repairs require prior authorization. [ ~~The Texas Medicaid program shall not pay for the replacement of batteries or cords.~~]

(5) Replacement of an aid may be considered when loss or irreparable damage has occurred. Replacement of a hearing aid requires prior authorization. Replacement will not be authorized in situations where the equipment has been abused or neglected.

(6) [~~(5)~~] Recipients may receive home visit hearing evaluations and hearing aid fittings only on the written recommendation of a physician.

(7) [~~(6)~~] Hearing aids may be replaced once every five years. [~~Recipients are limited to one hearing aid every six years (72 months) from the dispensing month of the present instrument.~~]

[~~(7) Binaural fittings are not reimbursed except for legally blind, hearing-impaired recipients who provide documentation that they do not have any other available resources.~~]

[~~(8) Hearing aid providers shall dispense United State manufactured hearing aids if the purchase price and quality are comparable to those of foreign manufacturers.~~]

(8) [~~(9)~~] Hearing aid services do not include auditory training, speechreading [ ~~speech, reading~~], or other types of [~~habilitative or~~ ] rehabilitative services.

(9) [~~(10)~~] Hearing aids are limited to eligible recipients whose air conduction puretone average (500 Hz, 1000 Hz, 2000 Hz) in the better ear is 35 [45] dB hearing loss (HL) or greater.

(10) Recipients meet the criteria for binaural aids if they meet the conditions for a monaural hearing aid and have at least a 35 dB hearing loss in both ears.

§354.1233.Requirements for Hearing Aid Services.

(a) Hearing aid services. Providers of hearing aid services must comply with all applicable federal and state laws and regulations, recognized professional standards, and the provisions cited in Division 1, of this subchapter, Medicaid Procedures for Providers, and Division 11 of this subchapter, General Administration, in addition to the conditions, specifications, limitations established by the Texas Health and Human Services Commission (Commission) or its designee, and applicable requirements of their licensing authority.

(1) Physicians and physician assistants (PAs). Physicians and PAs shall be reimbursed for all services covered by the Texas Medicaid Program, including [:] examinations and hearing evaluations.

(2) Certain Advanced Practice Nurses. Nurse practitioners and clinical nurse specialists shall be reimbursed for examinations and hearing evaluations.

(3) [~~(2)~~] Audiologists. Audiologists shall be reimbursed for hearing evaluations and for the fitting and dispensing of hearing aids.

(4) [~~(3)~~] Fitters and dispensers. Hearing aid fitters and dispensers shall be reimbursed for the fitting and dispensing of [a] hearing aids [~~aid~~].

(b) Hearing evaluations. The Commission will only reimburse for a hearing evaluation if [~~Hearing evaluations must be~~] recommended by a provider listed in subsection (a)(1) or (a)(2) of this section [~~physician~~] based upon examination of the recipient. [Reimbursement for hearing evaluations will be made only to physicians or licensed audiologists. The recipient must have a medical necessity for a hearing aid as stated in §354.1231, Benefits and Limitations.] The recipient must not have any medical contraindications to the ability to use or wear a hearing aid.

(1) The providers listed in subsection (a)(1) and (a)(2) of this section recommending [ ~~A physician who recommends~~ ] a hearing evaluation must be licensed [~~to practice medicine~~] in the state where and when the examination [ ~~evaluation~~] is conducted.

(2) The physician, nurse practitioner, clinical nurse specialist, or physician assistant must indicate on the Physician Examination Report form if the recipient needs a hearing evaluation based on the examination of the recipient. Medicaid reimbursement for a hearing evaluation shall be based on the [~~physician's~~] recommendation on the Physician Examination Report form that the hearing evaluation is medically necessary.

(3) Providers must administer hearing evaluations using appropriate procedures as specified within their scope of practice and recognized professional standards.

(4) Reimbursement for home visit hearing evaluations shall be made if the recipient's physician has documented that the recipient's medical condition prohibits traveling to the provider's place of business.

(5) Providers of hearing evaluations must have a report in the recipient's record. Providers must include in the report hearing evaluation test data.

(6) Hearing evaluations performed by fitters and dispensers are not reimbursable. If a fitter or dispenser performs a hearing evaluation on a recipient, the recipient shall not be billed for the hearing evaluation.

(c) Hearing aids. Providers must offer each recipient eligible for a hearing aid a new instrument that meets the recipient's hearing need [~~and that is within the allowable fee paid by the Texas Medicaid Program~~].

[ (1) Hearing aids above the maximum allowable fee. The Texas Medicaid Program reimburses only up to the maximum allowable fee for hearing aids as referenced in §355.8141, Reimbursement for Hearing Aid Services.]

(1) [~~(2)~~] Warranty. Providers must ensure that each hearing aid purchased through the Texas Medicaid Program is a new and current model that meets the performance specifications of the manufacturer and the hearing needs of the recipient. Providers must also ensure that each hearing aid is covered by at least a standard 12-month manufacturer's warranty, effective from the dispensing date.

(2) [~~(3)~~] Required package. Providers must dispense each hearing aid purchased through the Texas Medicaid Program with all necessary tubing, cords, connectors, and a one-month supply of batteries. The instructions for care and use of the hearing aid must be included with the hearing aid package.

(3) [~~(4)~~] Thirty-day trial period. Providers must allow each eligible recipient thirty days to determine if the recipient is satisfied with a hearing aid purchased through the Texas Medicaid Program. The trial period consists of thirty consecutive days from the dispensing date. Providers must inform recipients of the trial period and present the beginning and ending date of the trial period to the recipient in writing.

(A) During the trial period, providers may dispense additional hearing aids, as medically necessary, until the recipient is satisfied with the result of the hearing aid or the provider determines that the recipient cannot benefit from the dispensing of an additional hearing aid. A new trial period begins with the dispensing date of each hearing aid.

(B) Providers may charge a rental fee for hearing aids returned during the trial period.

(i) If a rental fee is charged, providers must assess the rental fee according to the rules and regulations established by the State Committee of Examiners in the Fitting and Dispensing of Hearing Instruments and the State Board of Examiners for Speech-Language Pathology and Audiology.

(ii) The [~~If there is no signed agreement between the recipient and the provider specifying a greater amount, the~~] maximum rental fee for eligible Medicaid recipients shall be $2 per day. This fee shall not be a covered benefit of the Texas Medicaid Program. Recipients shall be responsible for paying any rental fee assessed them for instruments returned during the 30-day period. Providers must keep in the recipient's file the signed certification acknowledging responsibility to pay hearing aid rental fees.

(iii) Providers must comply with all procedures and directions of the Texas Medicaid Program regarding forms and certifications required during the 30-day trial period. Providers must allow thirty days to elapse from the hearing aid dispensing date before completing a "30-day trial period certification statement." [.] The certification statement must be maintained by the provider in the recipient's file.

(4) [~~(5)~~] Post-fitting checks. The fitter and dispenser must perform a post-fitting check of the hearing aid within five weeks of the initial fitting. The post-fitting check is part of the dispensing procedure and is not reimbursed separately.

(5) [~~(6)~~] First revisit. The first revisit shall include a hearing aid check. Providers must make counseling available as needed within six months of the post-fitting check.

(6) [~~(7)~~] Second revisit. The purpose of the second revisit is to make any necessary adjustments to the hearing aid. Provider must conduct a second revisit as needed.

§354.1235.Requirements for Provider Participation.

(a) Provider enrollment. All authorized hearing aid providers, as described in §354.1233 of this Division (relating to Requirements for Hearing Aid Services), [~~Each physician, audiologist, or fitter and dispenser of hearing aids~~] claiming reimbursement for hearing aid services provided as a Title XIX benefit to an eligible Medicaid recipient must be enrolled in the Texas Medicaid Program.

(1) To be eligible for reimbursement of Title XIX benefits for hearing aid services covered by the Texas Medicaid Program, each provider of medical care and services must enter into a written agreement with the Health and Human Services Commission (Commission) [ ~~department~~].

(2) Participating providers must comply with all federal and state laws and regulations governing the Texas Medicaid Program. Providers must also comply with the provisions, conditions, certifications, and limitations as described in this subchapter.

(b) Provider licensure and certification. To be eligible for participation as a provider of hearing aid services under the Texas Medicaid Program, all authorized hearing aid providers, as described in §354.1233 of this Division, [~~physicians, audiologists, and fitters and dispensers~~] must meet applicable federal and state licensing and certification laws and rules for the services they provide. [~~For Medicaid providers of hearing aid services practicing in the State of Texas, these include:~~]

[ ~~(1) Physicians (MD or DO) must be currently licensed to practice medicine by the State Board of Medical Examiners.~~]

[(2) Audiologists must be currently licensed by the State Board of Examiners for Speech-Language Pathology and Audiology and be certified by the American Speech-Language-Hearing Association (ASHA) or meet ASHA equivalency requirements.]

[~~(3) Fitters and dispensers must be currently licensed by the State Committee of Examiners in the Fitting and Dispensing of Hearing Instrument.~~]

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 August 15, 2008.

TRD-200804393

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: September 28, 2008

For further information, please call: (512) 424-6900