TITLE 40.SOCIAL SERVICES AND ASSISTANCE

Part 1. TEXAS DEPARTMENT OF HUMAN SERVICES

The Texas Department of Human Services (DHS) proposes to amend §3.1003, concerning deductions, in its Texas Works chapter. The purpose of the amendment is to allow households that have elderly or disabled members the option of choosing between a standard medical expense or actual allowable medical expenses. DHS will negotiate the amount of this standard deduction annually with the Food and Nutrition Service (FNS).

James R. Hine, Commissioner, has determined that for the first five-year period the proposed section will be in effect, there will be fiscal implications for state and local government as a result of enforcing or administering the section.

The effect on state government for the first five-year period the section will be in effect is an estimated additional cost of $0 in fiscal year (FY) 2002; $33,125 in FY 2003; $0 in FY 2004; $0 in FY 2005; and $0 in FY 2006.

Mr. Hine also has determined that for each year of the first five years the section is in effect, the public benefit anticipated as a result of enforcing the section will be to establish a standard medical expense, which will improve elderly and disabled client access to benefits, increase DHS workload efficiency, and reduce the risk of error in quality control cases. There will be no effect on small or micro businesses as a result of enforcing or administering the section, because the proposed amendment to the food stamp deduction rule 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 section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-129, 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 amendment is proposed under the Human Resources Code, Title 2, Chapter 33, which authorizes the department to administer nutritional assistance programs.

The amendment implements the Human Resources Code, §§33.001-33.027.

§3.1003.Deductions.

(a) (No change.)

(b) Food stamps. DHS allows deductions from income as stipulated in the Food Stamp Act of 1977 as amended by Title VIII, Section 809 of Public Law 104-193, Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Regarding standard utility deductions, DHS allows either a Standard Utility Allowance (SUA) or a Basic Utility Allowance (BUA) as specified in 7 United States Code ( U.S.C. ) §2014(7)(C). Households that have out-of- pocket heating and cooling costs [ ~~cost~~ ] qualify for the SUA. Other households may receive the BUA. Regarding a standard shelter deduction for homeless households, DHS allows the standard as computed annually as stipulated in 7 U.S.C. §2014(5). Regarding medical deductions, DHS allows households the option of choosing a standard medical deduction or actual allowable medical expenses. DHS will negotiate the amount of this standard deduction annually with the Food and Nutrition Service (FNS).

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 March 27, 2002.

TRD-200201924

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: May 12, 2002

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

Chapter 20. COST DETERMINATION PROCESS

40 TAC §20.101, §20.105

The Texas Department of Human Services (DHS) proposes to amend §20.101, concerning introduction, and §20.105, concerning general reporting and documentation requirements, methods, and procedures, in its Cost Determination Process chapter. The purpose of the amendments is to specify that the payment rates for the biennium are based upon the odd-year cost reports, which are the most recent audited cost reports available during the legislative session. The proposal also allows providers participating in the attendant compensation rate enhancement program to elect to use the state fiscal year as their reporting period, which will allow providers to combine cost reports and accountability reports into a single report.

James R. Hine, Commissioner, has determined that for the first five-year period the proposed sections will be in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the sections.

Mr. Hine also has determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of adoption of the proposed sections will be to clarify that odd-year cost reports will be used to determine payment rates for the biennium. In addition, providers will now have the option of changing their reporting period to the state fiscal year, thereby reducing the number of reports they must submit. There will be no effect on small or micro businesses as a result of enforcing or administering the sections, because the amendments identify the odd-year cost report as the cost report used for rate determination and offers an option to providers to reduce paperwork if they change their reporting period to the state fiscal year. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There will be no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Carolyn Pratt at (512) 438- 4057 in HHSC's Rate Analysis section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-118, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

The amendments are proposed under the Human Resources Code, Title 2, Chapter 22, which authorizes DHS to administer public assistance programs.

The amendments implement the Human Resources Code, §§22.001-22.030.

§20.101.Introduction.

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

(c) The Texas Department of Human Services (DHS) reimburses providers for contracted client services through reimbursement amounts determined as described in this chapter and in reimbursement methodologies for each program. Non-Medicaid, statewide, uniform reimbursements, and reimbursement ceilings are approved by DHS [ ~~the Texas Department of Human Services~~ ]. Medicaid, statewide, uniform reimbursements, and reimbursement ceilings are approved by the Texas Health and Human Services Commission (HHSC). In Medicaid programs where reimbursements are contractor-specific, [ ~~the~~ ] HHSC approves the reimbursement parameter dollar amounts, e.g., ceilings, floors, or program reimbursement formula limits. In approving reimbursement amounts DHS or [ ~~the~~ ] HHSC takes into consideration staff recommendations based on the application of formulas and procedures described in this chapter and in reimbursement methodologies for each program. However, DHS or [ ~~the~~ ] HHSC may adjust staff recommendations when DHS or [ ~~the~~ ] HHSC deems such adjustments are warranted by particular circumstances likely to affect achievement of program objectives, including economic conditions and budgetary considerations. Medicaid reimbursement methodology rules are developed and recommended for approval to [ ~~the~~ ] HHSC. [ ~~The~~ ] HHSC has oversight authority with respect to the state's Medicaid rules.

(1) Reimbursement amounts will be determined coincident with the state's biennium , based upon odd-year cost reports .

(2) - (3) (No change.)

§20.105.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 that [ ~~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) - (4) (No change.)

(5) Cost report year. Effective for reporting periods beginning on September 1, 2001, and thereafter, a [ A ] provider's cost report year must coincide with the provider's fiscal year as used by the provider for reports to the Internal Revenue Service (IRS) or with the state of Texas' fiscal year, which begins September 1 and ends August 31 .

(A) Providers whose cost report year coincides with their IRS fiscal year are responsible for reporting to the Texas Health and Human Services Commission (HHSC) [ ~~DHS~~ ] any change in their IRS fiscal year and subsequent cost report year by submitting written notification of the change to HHSC [ ~~DHS~~ ] along with supportive IRS documentation. HHSC [ ~~DHS~~ ] must be notified of the provider's change in IRS fiscal year no later than 30 days following the provider's receipt of approval of the change from the IRS.

(B) Providers who choose to change their cost report year from their IRS fiscal year to the state fiscal year, or from the state fiscal year to their IRS fiscal year, must submit a written request to HHSC by August 1 of state fiscal year in question.

(6) (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 March 27, 2002.

TRD-200201927

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: May 12, 2002

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