TITLE 40.SOCIAL SERVICES AND ASSISTANCE

Part 1. TEXAS DEPARTMENT OF HUMAN SERVICES

Chapter 3. TEXAS WORKS

Subchapter L. WORK REGISTRATION

40 TAC §3.1203

The Texas Department of Human Services (DHS) adopts an amendment to §3.1203, concerning work requirement, without changes to the proposed text published in the January 18, 2002, issue of the Texas Register (27 TexReg 474). The amendment will not be republished.

Justification for the amendment is to comply with the requirements of the Food Stamp Employment and Training (FSE&T) program. The proposed rule change will ensure that Able Bodied Adults Without Dependents (ABAWDs) are exempt from the federal time limit if employment and training services are not offered as required by the recently approved E&T state plan.

The department received no comments regarding adoption of the amendment.

The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 33, which authorizes the department to administer public and nutritional assistance programs.

The amendment implements the Human Resources Code, §§22.001-22.030 and §§33.001-33.027.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on March 1, 2002.

TRD-200201282

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Effective date: March 21, 2002

Proposal publication date: January 18, 2002

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) adopts amendments to §19.210 and §19.2308 in its Nursing Facility Requirements for Licensure and Medicaid Certification chapter. The amendment to §19.210 is adopted without changes to the proposed text published in the November 30, 2001, issue of the Texas Register (26 TexReg 9764), and will not be republished. The amendment to §19.2308 is adopted with changes to the proposed text published in the November 30, 2001, issue of the Texas Register (26 TexReg 9764).

Justification for the amendments is to incorporate changes made by the 77th Legislature that provide for a temporary change of ownership license in Senate Bill 37, and an expedited change of ownership license for nursing facilities in Senate Bill 772.

DHS received written comments from the Texas Health Care Association and the Texas Health and Human Services Commission (HHSC). All comments were given serious consideration. DHS made one change to correct a reference and one change to correct grammar in the adopted rules. A summary of the comments and DHS's responses follow.

Comment: The proposed rule (§19.210(a)) does not address how DHS intends to handle situations where an applicant that has been approved for temporary licensure but fails to obtain approval for the permanent license where the applicant does not pass on the §19.201 review or on inspection. Does the facility's license for the prior operator go back into effect? Or, does the facility become an unlicensed facility and close? Guidance is needed for providers, their ownership, and residents about how the department intends to handle such situations.

Response: A change will not be made to the rule language. If a facility fails to obtain a permanent license, the license for the prior operator will not go back into effect. If a facility fails to pass the required inspections and fails to obtain a permanent license, the facility will no longer be licensed. The operator may apply for an initial license. DHS will develop a provider letter to address the procedures an applicant will follow when a permanent license cannot be issued. The provider letter will outline additional information for applicants, such as temporary license expiration dates, scheduling of follow-up visits, and detailed procedures DHS will follow in processing temporary change of ownership licenses. These procedural aspects of the process will be addressed in a detailed provider letter.

Comment: The proposed rule (§19.210(b)) references the criteria for "excellent performing nursing facility license holder" as §19.2322(d) relating to allocation, reallocation, and decertification requirements. The §19.2322(d) criteria will surely result in a very small percentage of nursing facility operators who would qualify in the state. The general point of the legislation was to direct the department to identify a realistically qualified group who would be able to take over homes in an expedited fashion. Because of the nature of the 19.2322(d) criteria, multi-facility operators will have a difficult time satisfying the criteria. Finally, the exceptions to satisfying the criteria in §19.2322(d) do not work in the context of licensure, as opposed to application for certified beds. Exceptions applicable to the licensure should be created.

Response: The criteria listed in §19.2322(d) were developed as a quality screen by a work group of providers and DHS staff when the current version of §19.2322 was developed. DHS feels the use of this criteria will allow the department to establish and maintain a listing of excellent performing nursing facility license holders. A high standard must be used to distinguish a facility operator as an "excellent performing nursing facility license holder." No changes will be made to the rule language.

Comment: In §19.2308(2)(C), instead of saying "the prior owner meets DHS final reporting requirements," can you say "the prior owner meets the final reporting requirements as specified in Title 1, Texas Administrative Code §355.306 (relating to Cost Finding Methodology)?"

Response: DHS made the recommended technical change.

Subchapter C. NURSING FACILITY LICENSURE APPLICATION PROCESS

40 TAC §19.210

The amendment is adopted under the Health and Safety Code, Chapter 242, which authorizes the department to license and regulate nursing facilities.

The amendment implements the Health and Safety Code, §§242.001-242.268.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 28, 2002.

TRD-200201251

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Effective date: April 1, 2002

Proposal publication date: November 30, 2001

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

Subchapter X. REQUIREMENTS FOR MEDICAID-CERTIFIED FACILITIES

40 TAC §19.2308

The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs and under Texas Government Code §531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment implements the Human Resources Code, §§22.001-22.030 and §§32.001-32.042.

§19.2308.Change of Ownership.

An ownership change is defined in §19.210(c) of this title (relating to Temporary Change of Ownership). For purposes of this section, prior owner is defined as the legal entity licensed to operate the facility before the change of ownership. The new owner is the legal entity licensed to operate the facility after the change. The Texas Department of Human Services (DHS) will recognize the ownership change subject to the following conditions:

(1) DHS will recognize an ownership change effective as the date of transfer of ownership agreed to between the prior owner and the new owner (agreed change date) if DHS receives written notice of the change at least 30 days before the effective date of the temporary change of ownership date. If written notice of the change is not received 30 days before the agreed change date, DHS is not responsible for payments made to the prior owner or new owner that do not reflect the established change date. DHS will not make a duplicate payment. It is the responsibility of the prior and new owner to make arrangements between themselves for such contingencies.

(2) When DHS receives information about a proposed or actual change of ownership, DHS may place vendor payments to the prior owner on hold until all of the following conditions are met:

(A) completion of a billing and claims reconciliation, or up to 12 months after submittal of the final bill, whichever is sooner. Money owed to DHS will be recouped from the funds placed on hold;

(B) DHS receives information sufficient to verify the ownership change, if DHS requests such information;

(C) the prior owner meets the final reporting requirements as specified in Title 1, Texas Administrative Code (TAC), §355.306 (relating to Cost Finding Methodology); and

(D) the prior owner provides, at DHS's option, one of the following documents in a format acceptable to DHS to cover possible liabilities of the prior owner:

(i) a surety bond or an irrevocable letter of credit as described in §19.2312 of this title (relating to Surety Bonds or Letters of Credit);

(ii) the new owner's nontransferable written agreement that the new owner has agreed to pay DHS for any liabilities that exist or may be found to exist during the period of the prior owner's contract with DHS; or

(iii) written authority by the prior owner to withhold and retain funds normally due the prior owner from other Medicaid contracts the prior owner may have with DHS.

(3) During the period between the issuance of the temporary change of ownership license and the inspection or survey of the nursing facility, DHS may not place a hold on vendor payments to the temporary license holder.

(4) If the nursing facility fails to pass the inspection or survey or fails to meet the requirements in §19.201 of this title (relating to Criteria for Licensing), DHS may place a hold on vendor payments to the temporary license holder.

(5) When a change in ownership occurs, DHS assigns the agreement to the new owner by issuing a new contract to the new owner effective on the later of: the agreed change date; the date DHS received written notice of the change; or the date necessary to avoid double payments. By signing the contract, the new owner is representing to DHS that the new owner meets the requirements of the contract and the requirements for participation in the Medicaid program. The new owner's contract is subject to the prior owner's contract terms and conditions that were in effect at the time of transfer of ownership, including, but not limited to, the following:

(A) any plan of correction;

(B) compliance with health and safety standards;

(C) compliance with the ownership and financial interest disclosure requirements of 42 Code of Federal Regulations, §§455.104, 455.105, and 1002.3;

(D) compliance with civil rights requirements in 45 Code of Federal Regulations, Parts 80, 84, and 90;

(E) compliance with additional requirements imposed by DHS; and

(F) any sanctions as specified in this chapter relating to remedies for violations of Title XIX nursing facility provider agreements, including deficiencies, vendor holds, compliance periods, accountability periods, monetary penalties, notification for correction of contract violations, probationary contracts, and history of deficiencies.

(6) Neither medical assistance nor amounts payable to vendors out of public assistance funds are transferable or assignable at law or in equity. DHS will not allow non-split agreements in the case of ownership changes. Non-split arrangements are arrangements where DHS does not interrupt payments to old and new owners but continues reimbursements as though no ownership change has occurred. A split in pay agreement ensures that payments to the prior owner stop on a certain date and payments for services thereafter go to the new owner.

(7) The new owner and the prior owner of a nursing facility may reach any agreement they wish, but DHS will not participate in a non-split procedure which would allow the new owner to receive the prior owner's accrued vendor payments.

(8) The prior owner of the facility may remove the financial records pertaining to his period of ownership from the facility, but must maintain them for the time period prescribed by law or until such time as all audit exceptions are reconciled, whichever period is the longer. The original copies of the trust fund records, including ledger cards, may be removed by the prior owner if an exact duplicate of the trust fund records, including ledger cards, remains with the new owner.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 28, 2002.

TRD-200201252

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Effective date: April 1, 2002

Proposal publication date: November 30, 2001

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