1 TAC §§355.102, 355.105, 355.108
The Texas Health and Human Services Commission (HSSC) proposes
amendments to §355.102, concerning general principles of allowable and
unallowable costs; §355.105, concerning general reporting and documentation
requirements, methods, and procedures; and §355.108, concerning determination
of inflation indices, in its Cost Determination Process chapter. The purpose
of the amendments is to change the cost report training cycle to require training
every odd-numbered year, so that training will be required on the cost report
that will be used to determine payment rates for the state's biennium. A process
will be established for providers filing for bankruptcy to obtain a waiver
of the requirement that accrued expenses must be paid within 180 days after
the end of the cost reporting period. The references from the Implicit Price
Deflator - Personal Consumption Expenditures inflation index will be revised
to references to the Personal Consumption Expenditures chain-type price index
that was developed as a more accurate overall inflation index. Providers with
records outside of the state of Texas would be required to make the necessary
records available to auditors within Texas within 15 working days of notification;
otherwise, the provider must pay for the actual travel costs of the auditor
to conduct the on-site audit out-of state.
Don Green, chief financial officer, has determined that for the first five-year
period the sections are in effect there will be no fiscal implications for
state government as a result of enforcing or administering the sections.
Commissioner Don Gilbert has determined that for each year of the first
five years the sections are in effect the public benefit anticipated as a
result of enforcing the sections will be to provide guidance to contracted
providers regarding cost determination procedures and guidelines. The changes
will make the cost report training cycle the same cycle for all providers,
will allow providers that have filed for bankruptcy to include their allowable
costs in rate determination when the bankruptcy process may have delayed some
payments of expenses past the 180 days currently required to be considered
allowable for rate determination, will use the revised inflation index that
is a more accurate overall inflation index, and will provide a definite deadline
to providers with out-of-state records as to when those records must be brought
to Texas to be audited on- site. There will be no effect on large, small,
or micro businesses, because no changes in practice are required of any business.
Questions about the content of this proposal may be directed to Carolyn
Pratt at (512) 438-4057 in DHS's Rate Analysis Department. 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
.
Under §2007.003(b) of the Texas Government Code, the department has
determined that Chapter 2007 of the Government Code does not apply to these
rules. Accordingly, the department is not required to complete a takings impact
assessment regarding these rules.
The amendments are proposed under the Government Code, §531.033,
which authorizes the commissioner of the Health and Human Services Commission
to adopt rules necessary to carry out the commission's duties, and §531.021(b),
which establishes the commission as the agency responsible for adopting reasonable
rules governing the determination of fees, charges, and rates for medical
assistance payments under Chapter 32, Human Resources Code.
The amendments implement the Government Code, §§531.033 and 531.021(b).
§355.102.General Principles of Allowable and Unallowable Costs.
(a)-(c)
(No change.)
(d)
Cost report training. DHS is responsible for conducting,
at no charge to the provider, comprehensive cost report training for each
contracted program. [
Beginning with the 1997 cost reports, it
]
It
is the responsibility of the provider to ensure that each preparer
signing the Cost Report Methodology Certification has attended
the required
cost report training conducted by DHS. Preparers may be employees of
the provider or persons who have been contracted by the provider for the purpose
of cost report preparation. Preparers must attend cost report training for
each program for which a cost report is submitted.
Beginning with the
2001 cost report, preparers
[
Preparers
] must attend cost
report training
every other year for the odd-year cost report in order
to be certified to complete both that odd-year cost report and the following
even-year cost report. If a new preparer wishes to complete an even-year cost
report and has not attended the previous odd-year cost report training, to
be certified to complete the even-year cost report, he/she must attend an
even- year cost report training. For the 2000 cost report, preparers that
met their two-consecutive-year training requirement for the 1999 cost report
are not required to attend cost report training for the 2000 cost report.
Preparers that did not meet their two- consecutive-year requirement for the
2000 cost report are required to attend cost report training for the 2000
cost report.
[
for two consecutive years, after which they are required
to attend training on at least a biennial basis.
] A copy of the most
recent cost report training certificate for each preparer of the cost report
must be submitted with each cost report. Travel costs to attend the state-sponsored
cost report training are allowable within the travel limits specified in §355.103(b)(12)
of this title (relating to Specifications for Allowable and Unallowable Costs).
Contracted preparer's fees to attend state-sponsored cost report training
are allowable.
(1)-(2)
(No change.)
(e)-(k)
(No change.)
§355.105.General Reporting and Documentation Requirements, Methods, and Procedures.
(a)
(No change.)
(b)
Cost report requirements. Unless specifically stated in
program rules, each provider must submit financial and statistical information
on cost report forms provided by DHS, or on facsimiles which are formatted
according to DHS specifications and are pre-approved by DHS staff, or electronically
in DHS- prescribed format in programs where these systems are operational.
The cost reports must be submitted to DHS in a manner prescribed by DHS. The
cost reports must be prepared to reflect the activities of the provider while
delivering contracted services during the fiscal year specified by the cost
report. Cost reports or other special surveys or reports may be required for
other periods at the discretion of DHS. Each provider is responsible for accurately
completing any cost report or other special survey or report submitted to
DHS.
(1)
Accounting methods. All financial and statistical information
submitted on cost reports must be based upon the accrual method of accounting,
except where otherwise specified in §355.102 and §355.103 of this
title (relating to General Principles of Allowable and Unallowable Costs,
and Specifications for Allowable and Unallowable Costs) and in the case of
governmental entities operating on a cash or modified accrual basis. For cost-reporting
purposes, accrued expenses must be incurred during the cost reporting period
and must be paid within 180 days after the end of that cost reporting period.
In situations where a contracted provider, any of its controlling entities,
its parent company/sole member, or its related-party management company has
filed for bankruptcy protection, the contracted provider may request an exception
to the 180-day requirement for payment of accrued allowable expenses by submitting
a written request to the Rate Analysis Department of DHS. The written request
must be submitted within 60 days of the date of the bankruptcy filing or at
least 60 days prior to the due date of the cost report for which the exception
is being requested, whichever is later. The contracted provider will then
be requested by the Rate Analysis Department to provide certain documentation,
which must be provided by the specified due date. Such exceptions due to bankruptcy
may be granted for reasonable, necessary and documented accrued allowable
expenses that were not paid within the 180-day requirement.
Accrued
revenues must be for services performed during the cost reporting period and
do not have to be received within 180 days after the end of that cost reporting
period in order to be reported as revenues for cost-reporting purposes. Except
as otherwise specified by the cost determination process rules of this chapter,
cost report instructions, or policy clarifications, cost reports should be
prepared consistent with generally accepted accounting principles (GAAP),
which are those principles approved by the American Institute of Certified
Public Accountants (AICPA). Internal Revenue Service (IRS) laws and regulations
do not necessarily apply in the preparation of the cost report. In cases where
cost reporting rules differ from GAAP, IRS, or other authorities, DHS rules
take precedence for provider cost-reporting purposes.
(2)-(6)
(No change.)
(c)-(e)
(No change.)
(f)
Cost of out-of-state audits. As specified in §355.106
of this title (relating to Basic Objectives and Criteria for Audit and Desk
Review of Cost Reports), DHS conducts desk reviews of all cost reports not
selected for field audit. DHS also conducts field audits of provider records
and cost reports. Although the number of field audits performed each year
may vary, DHS seeks to maximize the number of field audited cost reports available
for use in its cost projections. Whenever possible,
all
the records
necessary to verify information submitted to DHS on cost reports, including
related party transactions and other business activities engaged in by the
provider, must be accessible to DHS audit staff within the state of Texas
within fifteen working days of field audit or desk review notification
.
When records are not available to DHS audit staff within the state of Texas,
the provider must pay the actual costs for DHS staff to travel and review
the records out-of-state. DHS must be reimbursed for these costs within 60
days of the request for payment.
(1)-(2)
(No change.)
(g)-(h)
(No change.)
§355.108.Determination of Inflation Indices.
(a)-(c)
(No change.)
(d)
General cost inflation index. DHS uses the [
Implicit
Price Deflator-Personal
]
Personal
Consumption Expenditures
(PCE)
[
(IPD-PCE)
]
chain-type price index
as the
general cost inflation index. The
PCE
[
IPD-PCE
] is a
nationally recognized measure of inflation published by the Bureau of Economic
Analysis of the U.S. Department of Commerce. To project or inflate costs from
the reporting period to the prospective reimbursement period, DHS uses the
lowest feasible
PCE
[
IPD-PCE
] forecast consistent with
the forecasts of nationally recognized sources available to DHS at the time
proposed reimbursement is prepared for public dissemination and comment.
(e)
Item-specific and program-specific inflation indices. DHS
may use specific indices in place of the general cost inflation index specified
in subsection (d) of this section when appropriate item-specific or program-specific
cost indices are available from DHS cost reports or other surveys, other Texas
state agencies or independent private sources, or nationally recognized public
agencies or independent private firms, and DHS has determined that these specific
indices are derived from information that adequately represents the program(s)
or cost(s) to which the specific index is to be applied. For example, DHS
may use specific indices pertaining to cost items such as payroll taxes, key
professional and non-professional staff wages, and other costs subject to
specific federal or state limits. The specific indices that DHS may use include
the following.
(1)-(3)
(No change.)
(4)
Inflation factors for key professional and/or paraprofessional
staff wages and salaries, e.g., nurses, nurse aides and attendants, are based
on wage survey data pertaining to specific types of professional and paraprofessional
staff in Texas when DHS has determined that reliable data of this kind are
available for specific or comparable programs. Projections from the cost reporting
period to the reimbursement period are based on discernible trends or experience
as evidenced by the most recent reliable data available at the time proposed
reimbursement is prepared for public dissemination and comment, and take into
consideration economic conditions and regulatory changes which may be reasonably
anticipated for the reimbursement period. When DHS has determined that reliable
wage and salary data pertaining to specific types of staff in Texas are unavailable
for specific or comparable programs, inflation factors for professional and/or
paraprofessional staff are based on the lowest feasible forecast of the
PCE
[
IPD-PCE
]. Professional and/or paraprofessional wage
and benefit inflation rates for state employees are based on state employee
wage and salary increases determined by the Texas Legislature.
(5)
(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 July 6, 2000.
TRD-200004702
Marina Henderson
Executive Deputy Commissioner
Texas Health and Human Services Commission
Earliest possible date of adoption: August 20, 2000
For further information, please call: (512) 438-3734