1 TAC §355.308
The Texas Health and Human Services Commission (HHSC) adopts
an amendment to §355.308, with changes to the proposed text published
in the August 30, 2002, issue of the
Texas Register
(27 TexReg 8070).
Justification for the amendment is to ensure that direct care staff only
are included in the direct care staff cost center. To this end, the amendment
specifies that assistant administrators cannot be included in the direct care
staff cost center. Because it is necessary to receive the enrollment contract
amendments by the deadline, the amendment clarifies how the enrollment deadline
is handled when the deadline falls on a holiday or weekend and that enrollment
contract amendments will not be accepted if received after the deadline. Since
reinvestment payments are calculated based on the Staffing and Compensation
Reports submitted by the provider, the rule specifies that eligibility for
reinvestment is contingent on the receipt of an acceptable report. Since compliance
with the spending requirement is determined from annual Staffing and Compensation
Reports, the rules specify that for providers with multiple facilities requesting
to aggregate their costs for this determination, the request to aggregate
must be received along with the report. When a facility terminates its contract
after the end of the rate year but before compliance with the spending requirements
is determined for the rate year, the facility is not eligible to be included
in any aggregate spending calculation for the rate year. The facility is not
eligible because its spending requirement is determined upon receipt of its
final Staffing and Compensation report, which will have been received prior
to the calculation of the aggregate spending calculation. Since the spending
requirement is determined based on the Staffing and Compensation Report submitted
by the provider, the spending requirement cannot be determined until the report
is received. Therefore, the rule establishes a 10% recoupment on the direct
care rate for facilities that do not file an acceptable report within 60 days
of the due date. This recoupment is returned to the provider upon receipt
of the report and settlement of any recoupment. To allow more time to adjust
to the incentives in the Enhanced Direct Care Staff Rate, an increase in the
spending requirement scheduled to be implemented September 1, 2002, was removed.
In an attempt to reduce the number of providers requesting higher levels of
enhanced rates than they can achieve, limitations are placed on enrollment
for facilities that miss their staffing requirement by four or more levels.
To allow facilities that staffed higher than their required staffing to receive
reinvested funds, the requirement that a facility must have requested a higher
level of enhancement than the level they were awarded in order to qualify
for reinvestment was removed. To allow new owners of facilities to increase
staffing in their facilities, the rule allows new owners of existing facilities
to request a higher enhancement level than the enhancement level inherited
from the previous owner. The award of these higher enhancements is limited
to available funds. To receive the performance-based mitigation a performance
weight must exist. Therefore, facilities whose contracts are terminated prior
to the calculation of the performance weights needed in the calculation of
the performance-based mitigation of the spending requirement are not eligible
for the performance- based mitigation. All of these changes advance the goals
of increasing staffing and pay for direct care staff and more equitably distributing
limited funds to providers participating in the enhancement program.
Section 355.308(m)(2)(B) has been revised to clarify that, in addition
to applying the steps outlined in §355.308(m)(2)(B)(i)-(vi) when the
number of unadjusted LVN-equivalent minutes is less than the number of minutes
required but greater than the minimum required LVN- equivalent minutes, these
steps are performed when the number of unadjusted LVN-equivalent minutes maintained
is equal to the minimum required LVN-equivalent minutes.
HHSC received written comments from the Texas Health Care Association.
A summary of the comments and the commission's responses follow.
Comment: Concerning §355.308(a)(7), we suggest allowing assistant
administrators in facilities with 80 or fewer licensed beds to be considered
as direct care staff as long as: (1) the direct care staff hours and pay can
be documented, (2) care is provided by staff certified as the nurse aide,
and (3) a differential in pay exists between job functions.
Response: Assistant administrators are hired to provide administrative
and supervisory support to the nursing facility. The enhancement program is
intended to increase the staffing and pay of direct care staff of the facility
that are hired for that purpose. To reclassify the assistant administrator
as direct care staff for the purposes of the enhancement program is in opposition
to the intent of the enhanced payment rates. If facilities want to receive
enhanced payment rates, they must hire additional direct care staff or increase
the wages paid to direct care staff. HHSC adopts this paragraph without change.
Comment: Concerning §355.308(f)(3), we suggest either lowering the
recoupment factor to five percent or phasing in the recoupment over a series
of months.
Response: Providers are given 60 days to complete a Staffing and Compensation
Report. This rule specifies that if the report is not received within 60 days
of the due date then 10% of the direct care payments made to the facility
can be recouped until an acceptable report is received. Since this report
is required to determine if the 85% spending requirement is met, a repayment
of 10% of the 15% the facility is not required to spend is reasonable. When
the provider submits an acceptable report the recouped funds will be restored.
If the facility never submits an acceptable report, then HHSC can recover
some of the possible overpayment to the facility. HHSC adopts this paragraph
without change.
Comment: Concerning §355.308(f)(4), we suggest changing the proposed
rule to allow a provider-initiated amended accountability report to be submitted
within a reasonable time period following notification of potential recoupment.
Response: The rule proposal specifies the deadline for submitting an amended
Staffing and Compensation Report. The provider has an additional opportunity
to submit verifiable changes to its Staffing and Compensation Report during
the informal review process outlined in §355.110 of this title (relating
to Informal Reviews and Formal Appeals). The date of the letter notifying
the facility of its compliance with spending and/or staffing requirements
begins the timeframe for the informal review process. The timeframe for facilities
to submit changes to the Staffing and Compensation Report under the informal
review process was recently extended. HHSC adopts this paragraph without change.
Comment: Concerning §355.308(n)(2), we recommend that providers start
with a clean "slate" each annual election period, regardless of the facility's
staffing performance.
Response: This limitation was proposed in order to more equitably distribute
limited funds to providers participating in the enhancement program that have
proven that they spent the enhancement funds that they were given on either
direct care staffing or spending. To allow a facility to continue to receive
increased enhanced funds when the facility has failed, by a large margin,
to spend the funds it was given on direct care staffing or spending would
in effect limit the funds to those facilities that are spending the funds
as intended. HHSC adopts this paragraph without change.
Comment: Concerning §355.308(p), we request the establishment of an
additional mitigation component that recognizes ancillary types of expenses.
Response: This comment does not address the proposed changes to this rule
subsection. HHSC adopts this subsection without changes.
Comment: Concerning §355.308(y), we request clarification that new
ownership can opt a previously non-participating facility into the enhancement
program and allow a one-time, 90 day retroactive application of this rule
to account for changes of ownership that are currently being considered.
Response: HHSC agrees, and has clarified that the new owner may request
to become a participant. The language has also changed to specify that the
effective date for the change in enhancement level, if granted, is the effective
date of the ownership change, which can be retroactive 90 days or longer depending
on the circumstances. In addition, the language has changed to clarify that
if the change of ownership occurs during an open enrollment period as defined
in subsection (c) of this section, then the owner recognized by DHS on the
last day of the enrollment period may request to modify the enrollment status
of the facility in accordance with subsection (d) of this section.
Comment: Concerning §355.308(aa), we suggest using a prorated basis
for including facilities that change ownership into aggregate spending requirement
calculations.
Response: Because facilities that change ownership have their vendor funds
held until an acceptable Staffing and Compensation Report is received and
any recoupments are made, it is necessary that the state act on processing
the report and recoup funds as promptly as possible so that the vendor hold
can be released. These ownership changes can occur throughout the rate year,
which would prolong the hold on the vendor payments from six to16 months while
waiting to aggregate the report with the other annual Staffing and Compensation
Reports submitted by the provider. HHSC adopts this subsection without change.
Comment: Concerning §355.308(cc), we propose that funds recouped through
the spending floor should be funneled back into the base reimbursement rate
for participating and non-participating facilities through some type of modest
inflationary increase. Funds recouped through missed staffing targets, on
the other hand, should be redistributed to facilities that staffed at levels
higher than they were reimbursed.
Response: This comment does not address the proposed changes to this rule
subsection. HHSC adopts this subsection without changes.
Additional comments were received that did not pertain to the rule proposal.
In addition to the changes indicated above, HHSC made minor editorial changes
to the rule in order to improve clarity and understanding.
The amendment is adopted under the Texas Government Code, §531.033,
which authorizes the commissioner of the Texas 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 amendment implements the Government Code, §§531.033 and 531.021(b).
§355.308.Enhanced Direct Care Staff Rate.
(a)
Direct care staff cost center. This cost center will include
compensation for employee and contract labor Registered Nurses (RNs), including
Directors of Nursing (DONs) and Assistant Directors of Nursing (ADONs); Licensed
Vocational Nurses (LVNs), including DONs and ADONs; medication aides; and
nurse aides performing nursing-related duties for Medicaid contracted beds.
(1)
Compensation to be included for these employee staff types
is the allowable compensation defined in §355.103(b)(1) of this title
(relating to Specifications for Allowable and Unallowable Costs) that is reported
as either salaries and/or wages (including payroll taxes and workers' compensation)
or employee benefits. Benefits required by §355.103(b)(1)(A)(iii) of
this title (relating to Specifications for Allowable and Unallowable Costs)
to be reported as costs applicable to specific cost report line items are
not to be included in this cost center.
(2)
Direct care staff who also have administrative duties not
related to nursing must properly direct charge their compensation to each
type of function performed based upon daily time sheets maintained throughout
the entire reporting period.
(3)
Nurse aides must meet the qualifications enumerated under
40 TAC §94.3 (relating to Facility Requirements) to be included in this
cost center. Nurse aides include Certified nurse aides and nurse aides in
training as per 40 TAC §94.4(c) (relating to Facility Requirements).
(4)
Contract labor refers to personnel for whom the contracted
provider is not responsible for the payment of payroll taxes (such as FICA,
Medicare, and federal and state unemployment insurance) and who perform tasks
routinely performed by employees. Allowable contract labor costs are defined
in §355.103(b)(2)(C) of this title (relating to Specifications for Allowable
and Unallowable Costs).
(5)
For facilities receiving supplemental reimbursement for
children with tracheostomies requiring daily care as described in §355.307(b)(3)(F)
of this title (relating to Reimbursement Setting Methodology), staff required
by 40 TAC §19.901(14)(C)(iii) (relating to Quality of Care) performing
nursing-related duties for Medicaid contracted beds are included in the direct
care staff cost center.
(6)
For facilities receiving supplemental reimbursement for
qualifying ventilator-dependent residents as described in §355.307(b)(3)(E)
of this title (relating to Reimbursement Setting Methodology), Registered
Respiratory Therapists and Certified Respiratory Therapy Technicians are included
in the direct care staff cost center.
(7)
Nursing facility administrators and assistant administrators
are not included in the direct care staff cost center.
(8)
Staff members performing more than one function in a facility
without a differential in pay between functions are categorized at the highest
level of licensure or certification they possess. If this highest level of
licensure or certification is not that of an RN, LVN, medication aide, or
certified nurse aide, the staff member is not to be included in the direct
care staff cost center but rather in the cost center where staff members with
that licensure or certification status are typically reported.
(b)
Rate year. The standard rate year begins on the first day
of September and ends on the last day of August of the following year.
(c)
Open enrollment. Open enrollment will begin on the first
day of July and end on the last day of that same July preceding the rate year
for which payments are being determined unless the Texas Health and Human
Services Commission (HHSC) notified providers prior to the first day of July
that that open enrollment has been postponed or cancelled. Should conditions
warrant, HHSC may conduct additional enrollment periods during a rate year.
(d)
Enrollment contract amendment. An initial enrollment contract
amendment is required from each facility choosing to participate in the enhanced
direct care staff rate. Participating and nonparticipating facilities may
request to modify their enrollment status (i.e., a nonparticipant can request
to become a participant, a participant can request to become a nonparticipant,
a participant can request to change its enhancement level) during any open
enrollment period. Requests to modify a facility's enrollment status during
an open enrollment period must be received by HHSC Rate Analysis by the last
day of the open enrollment period as per subsection (c) of this section. If
the last day of the open enrollment period falls on a weekend, a national
holiday, or a state holiday, then the first business day following the last
day of the open enrollment period is the final day the receipt of the enrollment
contract amendment will be accepted. An enrollment contract amendment that
is not received by the stated deadline will not be accepted. Facilities from
which HHSC Rate Analysis has not received an acceptable request to modify
their enrollment by the last day of the open enrollment period will continue
at the level of participation in effect during the open enrollment period
within available funds. To be acceptable, an enrollment contract amendment
must be completed according to instructions, signed by an authorized signator
as per the Texas Department of Human Services (DHS) Form 2031 applicable to
the provider's contract or ownership type, and be legible.
(e)
New facilities. For purposes of this section, for each
rate year a new facility is defined as a facility delivering its first day
of service to a DHS recipient after the first day of the open enrollment period,
as defined in subsection (c) of this section, for that rate year. Facilities
that underwent an ownership change are not considered new facilities. For
purposes of this subsection, an acceptable enrollment contract amendment is
defined as a legible enrollment contract amendment that has been completed
according to instructions, signed by an authorized signator as per the DHS
Form 2031 applicable to the provider's contract or ownership type, and received
by HHSC within 30 days of the mailing of notification to the facility by HHSC
that such an enrollment contract amendment must be submitted. New facilities
will receive the direct care staff rate associated with minimum staffing requirements
as determined in subsection (j)(1) of this section until:
(1)
for facilities specifying their desire to participate on
an acceptable enrollment contract amendment, the direct care staff rate is
adjusted as specified in subsection (l)(3) of this section, effective on the
first day of the month following receipt by HHSC of the acceptable enrollment
contract amendment.
(2)
for facilities specifying their desire not to participate
on an acceptable enrollment contract amendment, the direct care staff rate
is adjusted as specified in subsection (k) of this section retroactive to
the first day of their contract.
(3)
for facilities from which an acceptable enrollment contract
amendment is not received, the direct care staff rate is adjusted as specified
in subsection (k) of this section retroactive to the first day of their contract.
(f)
Staffing and Compensation Report submittal requirements.
Staffing and Compensation Reports must be submitted as follows:
(1)
Annual Staffing and Compensation Report. All contracted
facilities will provide HHSC, in a method specified by HHSC, an Annual Staffing
and Compensation Report reflecting the activities of the facility while delivering
contracted services from the first day of the rate year through the last day
of the rate year. This report will be used as the basis for determining compliance
with the staffing requirements and recoupment amounts as described in subsection
(n) of this section for participants, and as the basis for determining the
spending requirements and recoupment amounts as described in subsection (o)
of this section for all facilities. Facilities failing to submit an acceptable
Annual Staffing and Compensation Report within 60 days of the end of the rate
year will be placed on vendor hold until such time as an acceptable report
is received and processed by HHSC.
(A)
When a facility changes ownership, the prior owner must
submit a Staffing and Compensation Report covering the period from the beginning
of the rate year to the date recognized by DHS as the ownership-change effective
date. This report will be used as the basis for determining any recoupment
amounts as described in subsections (n) and (o) of this section. The new owner
will be required to submit a Staffing and Compensation Report covering the
period from the day after the date recognized by DHS as the ownership-change
effective date to the end of the rate year.
(B)
Facilities whose contracts are terminated either voluntarily
or involuntarily must submit a Staffing and Compensation Report covering the
period from the beginning of the rate year to the date recognized by DHS as
the contract termination date. This report will be used as the basis for determining
any recoupment amounts as described in subsections (n) and (o) of this section.
(C)
Participating facilities who voluntarily withdraw from
participation as per subsection (r) of this section must submit a Staffing
and Compensation Report within 60 days of the date of withdrawal as determined
by HHSC, covering the period from the beginning of the rate year to the date
of withdrawal as determined by HHSC. This report will be used as the basis
for determining any recoupment amounts as described in subsections (n) and
(o) of this section.
(D)
Facilities whose cost report year coincides with the state
of Texas fiscal year as per §355.105(b)(5) (relating to General Reporting
and Documentation Requirements, Methods and Procedures) are exempt from the
requirement to submit a separate Annual Staffing and Compensation Report.
For these facilities, their cost report will be considered their Annual Staffing
and Compensation Report.
(2)
Other reports. HHSC may require other Staffing and Compensation
Reports from all facilities as needed.
(3)
Vendor hold. HHSC or its designee will place on hold the
vendor payments for any facility that does not submit a Staffing and Compensation
Report completed in accordance with all applicable rules and instructions
by the due dates described in this subsection. This vendor hold will remain
in effect until an acceptable Staffing and Compensation Report is received
by HHSC. Facilities that do not submit a Staffing and Compensation Report
completed in accordance with all applicable rules and instructions within
60 days of the due dates described in this subsection will become nonparticipants
retroactive to the first day of the reporting period in question and will
be subject to an immediate recoupment of 10% of direct care dollars paid to
the facility for services provided during the reporting period in question.
These facilities will remain nonparticipants and recouped funds will not be
restored until they submit an acceptable report and repay to HHSC or its designee
funds identified for recoupment from subsections (n) and/or (o) of this section.
In addition, facilities with an ownership change or contract termination that
do not submit a Staffing and Compensation report completed in accordance with
all applicable rules within 60 days of the change in ownership or contract
termination will become nonparticipants retroactive to the first day of the
reporting period in question and will be subject to an immediate recoupment
of 10% of direct care dollars paid to the facility for services provided during
the reporting period in question. These facilities will remain nonparticipants
and recouped funds will not be restored until they submit an acceptable report
and repay to HHSC or its designee funds identified for recoupment from subsections
(n) and/or (o) of this section.
(4)
Provider-initiated amended accountability reports. Reports
must be received prior to the date the provider is notified of compliance
with spending and/or staffing requirements for the report in question as per
subsections (n) and/or (o) of this section.
(g)
Report contents. Annual Staffing and Compensation Reports
will include any information required by HHSC to implement this enhanced direct
care staff rate.
(h)
Completion of Reports. All Staffing and Compensation Reports
must be completed in accordance with the provisions of §§355.102-355.105
of this title (relating to General Principles of Allowable and Unallowable
Costs, Specifications for Allowable and Unallowable Costs, Revenues, and General
Reporting and Documentation Requirements, Methods, and Procedures) and may
be reviewed or audited in accordance with §355.106 of this title (relating
to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports).
Beginning with the state fiscal year 2002 report, all Staffing and Compensation
Reports must be completed by preparers who have attended the required nursing
facility cost report training as per §355.102(d) (relating to General
Principles of Allowable and Unallowable Costs).
(i)
Enrollment. Facilities choosing to participate in the enhanced
direct care staff rate must submit to HHSC a signed contract amendment as
described in subsection (d) of this section, before the end of the open enrollment
period. Participation will remain in effect, subject to availability of funds,
until the facility notifies HHSC in accordance with subsection (r) of this
section that it no longer wishes to participate or the facility is removed
from participation as described in subsection (n) of this section. Facilities
voluntarily withdrawing from participation will have their participation end
effective on the date of the withdrawal as determined by HHSC.
(j)
Determination of staffing requirements for participants.
Facilities choosing to participate in the enhanced direct care staff rate
agree to maintain certain direct care staffing levels. In order to permit
facilities the flexibility to substitute RN, LVN and aide (Medication Aide
and nurse aide) staff resources and, at the same time, comply with an overall
nursing staff requirement, total nursing staff requirements are expressed
in terms of LVN equivalent minutes. Conversion factors to convert RN and aide
minutes into LVN equivalent minutes are based upon most recently available,
reliable relative compensation levels for the different staff types.
(1)
Minimum staffing levels. HHSC determines, for each participating
facility, minimum LVN equivalent staffing levels as follows.
(A)
Determine minimum required LVN equivalent minutes per resident
day of service for various types of residents using time study data, cost
report information, and other appropriate data sources.
(i)
Determine LVN equivalent minutes associated with Medicare
residents based on the data sources from subparagraph (A) of this paragraph
adjusted for estimated acuity differences between Medicare and Medicaid residents.
(ii)
Determine minimum required LVN equivalent minutes per
resident day of service associated with each Texas Index for Level of Effort
(TILE) case mix group and additional minimum required minutes for residents
reimbursed under the TILE system who also qualify for supplemental reimbursement
for ventilator care or pediatric tracheostomy care as described in §355.307
of this title (relating to Reimbursement Setting Methodology) based on the
data sources from subparagraph (A) of this paragraph adjusted for acuity differences
between Medicare and Medicaid residents and other factors.
(B)
Based on most recently available, reliable utilization
data, determine for each facility the total days of service by TILE group,
days of service provided to TILE residents qualifying for Medicaid supplemental
reimbursement for ventilator or tracheostomy care, total days of service for
Medicare Part A residents, and total days of service for all other residents.
(C)
Multiply the minimum required LVN equivalent minutes for
each TILE group and supplemental TILE reimbursement group from subparagraph
(A) of this paragraph by the facility's Medicaid days of service in each TILE
group and supplemental TILE reimbursement group from subparagraph (B) of this
paragraph and sum the products.
(D)
Multiply the minimum required LVN equivalent minutes for
Medicare residents by the facility's Medicare Part A days of service.
(E)
Effective for reporting periods beginning on or after September
1, 2001, divide the sum from subparagraph (C) of this paragraph by the facility's
total Medicaid days of service, with a day of service for a Medicaid TILE
recipient who also qualifies for a supplemental TILE reimbursement counted
as one day of service, compare this result to the minimum required LVN-equivalent
minutes for a TILE 207 and multiply the lower of the two figures by the facility's
other resident days of service.
(F)
Sum the results of subparagraphs (C), (D) and (E) of this
paragraph, divide the sum by the facility's total days of service, with a
day of service for a Medicaid TILE recipient who also qualifies for a supplemental
TILE reimbursement counted as one day of service. The results of these calculations
are the minimum LVN equivalent minutes per resident day a participating facility
must provide.
(2)
Enhanced staffing levels. Participating facilities desiring
to staff above the minimum requirements from paragraph (1) of this subsection
may request LVN-equivalent staffing enhancements from an array of LVN-equivalent
enhanced staffing options and associated add- on payments during open enrollment.
(3)
Granting of staffing enhancements. HHSC divides all requested
enhancements into two groups: pre-existing enhancements that facilities request
to carry over from the prior year and newly-requested enhancements. Newly-requested
enhancements may be enhancements requested by facilities that were nonparticipants
in the prior year or by facilities that were participants in the prior year
desiring to be granted additional enhancements. For the granting of enhancements
to be effective on or after September 1, 2001, for an enhancement to qualify
as a pre-existing enhancement a facility must have actually met the enhancement's
staffing requirements during the most recent reporting period from which reliable
data is available at the time qualification is determined. Enhancements held
by nursing facilities whose staffing requirements were not met during the
most recent reporting period from which reliable data is available will qualify
as pre-existing if the facility submitted, with that staffing report, documentation
that demonstrates to the satisfaction of HHSC that the facility has been unable,
despite diligent efforts (including offering wages at the community prevailing
rate for nursing facilities), to recruit appropriate personnel. If the report
from the subsequent rate year indicates that the staffing requirement was
again not met, the unmet staffing will no longer be considered pre-existing.
Using the process described herein, HHSC first determines the distribution
of carry-over enhancements. If funds are available after the distribution
of carry-over enhancements, HHSC then determines the distribution of newly
requested enhancements. HHSC may not distribute newly requested enhancements
to facilities owing funds identified for recoupment from subsections (n) and/or
(o) of this section.
(A)
HHSC determines projected units of service for facilities
requesting each enhancement option and multiplies this number by the rate
add-on associated with that enhancement as determined in subsection (l) of
this section.
(B)
HHSC compares the sum of the products from subparagraph
(A) of this paragraph to available funds.
(i)
If the product is less than or equal to available funds,
all requested enhancements are granted.
(ii)
If the product is greater than available funds, enhancements
are granted beginning with the lowest level of enhancement and granting each
successive level of enhancement until requested enhancements are granted within
available funds. Based upon an examination of existing staffing levels and
staffing needs, HHSC may grant certain enhancement options priority for distribution.
(4)
Notification of granting of enhancements. Participating
facilities are notified, in a manner determined by HHSC, as to the disposition
of their request for staffing enhancements.
(k)
Determination of direct care staff rates for nonparticipating
facilities.
(1)
Determine the sum of recipient care costs from the direct
care staff cost center in subsection (a) of this section in all nursing facilities
included in the Texas Nursing Facility Cost Report database used to determine
the nursing facility rates in effect on January 1, 2000 (hereinafter referred
to as the initial database).
(2)
Adjust the sum from paragraph (1) of this subsection in
order to account for inflation utilizing the inflation factors used in the
determination of the nursing facility rates in effect January 1, 2000.
(3)
Divide the result from paragraph (2) of this subsection
by the sum of recipient days of service in all facilities in the initial database
and multiply the result by 1.07. The result is the average direct care staff
rate component for ineligible facilities.
(4)
To calculate the direct care staff per diem rate component
for nonparticipating facilities for each of the 11 TILE case mix groups and
for the default group, multiply each of the standardized statewide case mix
indices associated with the initial database by the average direct care staff
rate component from paragraph (3) of this subsection.
(5)
The direct care staff per diem rates will remain constant
except as follows. For rates effective September 1, 2000, the rate derived
in paragraph (3) of this subsection will be multiplied by 1.016. Effective
September 1, 2001, and thereafter, the direct care staff per diem rate will
remain constant except for adjustments necessitated by increases in the personal
consumption expenditures (PCE) chain-type price index.
(l)
Determination of direct care staff rates for participating
facilities. Direct care staff rates for participating facilities as defined
in subsection (i) will be determined as follows:
(1)
Determine the direct care staff rate associated with maintaining
LVN equivalent minutes at the minimum levels required for participation.
(A)
Determine the sum of recipient care costs from the direct
care staff cost center in subsection (a) in all nursing facilities as included
in the initial database from subsection (k)(1) of this section.
(B)
Adjust the sum from subparagraph (A) of this paragraph
as specified in §355.108 of this title (relating to Determination of
Inflation Indices) to inflate the costs to the prospective rate year.
(C)
Divide the result from subparagraph (B) of this paragraph
by the sum of recipient days of service in all facilities in the initial database
from subsection (k)(1) of this section and multiply the result by 1.07. The
result is the average direct care staff rate associated with maintaining LVN
equivalent minutes at the minimum levels required for participation.
(D)
Case mix adjustment of direct care staff per diem rate
component. To calculate the direct care staff per diem rate component associated
with maintaining LVN equivalent minutes at the minimum levels required for
participation for each of the 11 TILE case mix groups, for the default group
and for each supplemental reimbursement group, multiply each of the standardized
statewide case mix indices associated with the initial database from subsection
(k)(1) of this section by the average direct care staff rate component from
subparagraph (C) of this paragraph.
(E)
The initial database from subsection (k)(1) of this section
used in determining the direct care staff rates will not change, except for
adjustments for inflation from subparagraph (B) of this paragraph. HHSC may
also recommend adjustments to the rates in accordance with §355.109 of
this title (relating to Adjusting Reimbursement When New Legislation, Regulations,
or Economic Factors Affect Costs).
(2)
Determine the direct care staff rate add-on associated
with each enhanced staffing level. Taking into consideration the most recently
available, reliable data relating to LVN equivalent compensation levels, HHSC
will determine a per diem add-on payment for each enhanced staffing level.
(3)
Determine each participating facility's total direct care
staff rate. Each participating facility's direct care staff rate will be equal
to the direct care staff rate associated with maintaining LVN equivalent minutes
at the minimum levels required for participation from paragraph (1) of this
subsection plus any add-on payments associated with enhanced staffing levels
selected by and awarded to the facility during open enrollment.
(m)
Staffing requirements for participating facilities. Each
participating facility will be required to maintain adjusted LVN-equivalent
minutes equal to those determined in subsection (j) of this section. Each
participating facility's adjusted LVN-equivalent minutes maintained during
the reporting period will be determined as follows.
(1)
Determine unadjusted LVN-equivalent minutes maintained.
Upon receipt of the staffing and spending information described in subsection
(f) of this section, HHSC will determine the unadjusted LVN-equivalent minutes
maintained by each facility during the reporting period.
(2)
Determine adjusted LVN-equivalent minutes maintained. Compare
the unadjusted LVN- equivalent minutes maintained by the facility during the
reporting period from paragraph (1) of this subsection to the LVN-equivalent
minutes required of the facility as determined in subsection (j) of this section.
The adjusted LVN-equivalent minutes are determined as follows:
(A)
If the number of unadjusted LVN-equivalent minutes maintained
by the facility during the reporting period is greater than or equal to the
number of LVN-equivalent minutes required for the facility or less than the
minimum LVN-equivalent minutes required for participation as determined in
subsection (j)(1) of this section; the facility's adjusted LVN-equivalent
minutes maintained is equal to its unadjusted LVN-equivalent minutes; or
(B)
If the number of unadjusted LVN-equivalent minutes maintained
by the facility during the reporting period is less than the number of LVN-equivalent
minutes required of the facility, but greater than or equal to the minimum
LVN-equivalent minutes required for participation as determined in subsection
(j)(1) of this section, the following steps are performed.
(i)
Determine what the facility's accrued Medicaid fee-for-service
revenue for the reporting period would have been if their staffing requirement
had been set at a level consistent with the highest LVN-equivalent minutes
that the facility actually maintained, as defined in subsection (j) of this
section.
(ii)
Determine the facility's adjusted accrued revenue by multiplying
the accrued revenue from clause (i) of this subparagraph by 0.85.
(iii)
Determine the facility's accrued allowable Medicaid fee-for-service
direct care staff expenses for the rate year.
(iv)
Determine the facility's direct care spending surplus
for the reporting period by subtracting the facility's adjusted accrued revenue
from clause (ii) of this subparagraph from the facility's accrued allowable
expenses from clause (iii) of this subparagraph.
(v)
If the facility's direct care spending surplus from clause
(iv) of this subparagraph is less than or equal to zero, the facility's adjusted
LVN-equivalent minutes maintained is equal to the unadjusted LVN-equivalent
minutes maintained as calculated in paragraph (1) of this subsection.
(vi)
If the facility's direct care spending surplus from clause
(iv) of this subparagraph is greater than zero, the adjusted LVN-equivalent
minutes maintained by the facility during the reporting period is set equal
to the facility's direct care spending surplus from clause (iv) of this subparagraph
divided by the per diem enhancement add-on as determined in subsection (l)(2)
of this section plus the unadjusted LVN-equivalent minutes maintained by the
facility during the reporting period from paragraph (1) of this subsection
according to the following formula: (Direct Care Spending Surplus / Per Diem
Enhancement Add-on for One LVN-equivalent Minute) + Unadjusted LVN-equivalent
Minutes.
(n)
Staffing accountability. Participating facilities will
be responsible for maintaining the staffing levels determined in subsection
(j) of this section. HHSC will determine the adjusted LVN- equivalent minutes
maintained by each facility during the reporting period by the method described
in subsection (m) of this section.
(1)
HHSC or its designee will recoup all direct care staff
revenues associated with unmet staffing goals from participating facilities
that fail to meet their staffing requirements during the reporting period.
(2)
In addition, facilities that fail to maintain the required
LVN-equivalent minutes by four or more adjusted LVN-equivalent minutes, and
facilities required to provide at least four LVN- equivalent minutes above
their minimum staffing requirement, as determined in subsection (j)(1) of
this section, and that fail to meet their minimum staffing requirement, are
subject to the following:
(A)
Effective the first day of the rate year immediately following
the determination that a facility met the qualifications detailed in paragraph
(2) of this subsection, the facility will have its enrollment in the enhancement
program limited to a level consistent with the highest adjusted LVN-equivalent
minutes, as defined in subsection (m) of this section, that the facility actually
attained plus two additional LVN-equivalent minutes. If the adjusted level
attained is more than two LVN-equivalent minutes below the minimum direct
care staff requirement for participation, the facility will be precluded from
enrollment in the enhancement program and will be a nonparticipant. These
enrollment limitations will remain in effect for the longer of either one
full rate year or until the first day of the rate year that begins after funds
identified for recoupment from subsections (n) and/or (o) of this section
are repaid to HHSC or its designee.
(B)
HHSC or its designee will collect interest from facilities
that meet the qualifications of paragraph (2) of this subsection as follows:
(i)
Determine the average excess funds available to the provider
over the reporting period as the recoupment amount from paragraph (1) of this
subsection divided by two.
(ii)
Determine the annualized average three-month United States
Treasury Bill rate during the provider's reporting period as the unweighted
monthly average for all months included, either partially or fully, in the
reporting period.
(iii)
Determine the interest rate on the recoupment amount
by multiplying the annualized average rate from clause (ii) of this subparagraph
by the number of days in the reporting period divided by the number of days
in the rate year.
(iv)
Determine the interest on the recoupment amount by multiplying
the recoupment interest rate calculated in clause (iii) of this subparagraph
by the average excess funds available to the provider over the reporting period
from clause (i) of this subparagraph.
(o)
Spending requirements for all facilities. All facilities,
participants and nonparticipants alike, are subject to a direct care staff
spending requirement with recoupment calculated as follows:
(1)
At the end of the rate year, a spending floor will be calculated
by multiplying accrued Medicaid fee-for-service direct care staff revenues
(net of revenues recouped by HHSC or its designee due to the failure of the
facility to meet a staffing requirement as per subsection (n) of this section)
by 0.85.
(2)
Accrued allowable Medicaid direct care staff fee-for-service
expenses for the rate year will be compared to the spending floor from paragraph
(1) of this subsection. HHSC or its designee will recoup the difference between
the spending floor and accrued allowable Medicaid direct care staff fee-for-service
expenses from facilities whose Medicaid direct care staff spending is less
than their spending floor.
(p)
Mitigation of recoupment. Recoupment of funds described
in subsection (o) of this section may be mitigated as follows.
(1)
Dietary and Fixed Capital Mitigation. Recoupment of funds
described in subsection (o) of this section may be mitigated by high dietary
and/or fixed capital expenses as follows.
(A)
Calculate dietary cost deficit. At the end of the facility's
rate, accrued Medicaid dietary per diem revenues will be compared to accrued,
allowable Medicaid dietary per diem costs. If costs are greater than revenues,
the dietary per diem cost deficit will be equal to the difference between
accrued, allowable Medicaid dietary per diem costs and accrued Medicaid dietary
per diem revenues. If costs are less than revenues, the dietary cost deficit
will be equal to zero.
(B)
Calculate dietary revenue surplus. At the end of the facility's
rate, accrued Medicaid dietary per diem revenues will be compared to accrued,
allowable Medicaid dietary per diem costs. If revenues are greater than costs,
the dietary per diem revenue surplus will be equal to the difference between
accrued Medicaid dietary per diem revenues and accrued, allowable Medicaid
dietary per diem costs. If revenues are less than costs, the dietary revenue
surplus will be equal to zero.
(C)
Calculate fixed capital cost deficit. At the end of the
facility's rate year, accrued Medicaid fixed capital per diem revenues will
be compared to accrued, allowable Medicaid fixed capital per diem costs as
defined in §355.306(a)(2)(B) of this title (relating to Cost Finding
Methodology). If costs are greater than revenues, the fixed capital cost per
diem deficit will be equal to the difference between accrued, allowable Medicaid
fixed capital per diem costs and accrued Medicaid fixed capital per diem revenues.
If costs are less than revenues, the fixed capital cost deficit will be equal
to zero. For purposes of this paragraph, fixed capital per diem costs of facilities
with occupancy rates below 85% are adjusted to the cost per diem the facility
would have accrued had it maintained an 85% occupancy rate throughout the
rate year.
(D)
Calculate fixed capital revenue surplus. At the end of
the facility's rate year, accrued Medicaid fixed capital per diem revenues
will be compared to accrued, allowable Medicaid fixed capital per diem costs
as defined in §355.306(a)(2)(B) of this title (relating to Cost Finding
Methodology). If revenues are greater than costs, the fixed capital revenue
per diem surplus will be equal to the difference between accrued Medicaid
fixed capital per diem revenues and accrued, allowable Medicaid fixed capital
per diem costs. If revenues are less than costs, the fixed capital revenue
surplus will be equal to zero. For purposes of this paragraph, fixed capital
per diem costs of facilities with occupancy rates below 85% are adjusted to
the cost per diem the facility would have accrued had it maintained an 85%
occupancy rate throughout the rate year.
(E)
Facilities with a dietary per diem cost deficit will have
their dietary per diem cost deficit reduced by their fixed capital per diem
revenue surplus, if any. Any remaining dietary per diem cost deficit will
be capped at $2.00 per diem.
(F)
Facilities with a fixed capital cost per diem deficit will
have their fixed capital cost per diem deficit reduced by their dietary revenue
per diem surplus, if any. Any remaining fixed capital per diem cost deficit
will be capped at $2.00 per diem.
(G)
Each facility's recoupment, as calculated in subsection
(o) of this section, will be reduced by the sum of that facility's dietary
per diem cost deficit as calculated in subparagraph (E) of this paragraph
and its fixed capital per diem cost deficit as calculated in subparagraph
(F) of this paragraph.
(2)
Performance-based Mitigation. Recoupment of funds described
in paragraph (1)(G) of this subsection will be mitigated based upon each facility's
compliance with state and federal regulations as well as on the basis of resident
outcomes as follows.
(A)
Calculation of Performance-based Mitigation Index. Calculate
the performance-based mitigation index (PMI) using the formula: PMI = (A+B)
x C Where "A", "B", and "C" are the performance weights as detailed in 1 TAC §§355.309(l),
(m), and (i) (relating to Performance-based Add-on Payment Methodology) for
potential advantages, potential disadvantages, and regulatory compliance,
respectively. The performance weights used in the calculation of the PMI will
be those calculated for the service period as defined in §355.309 (relating
to Performance-based Add-on Payment Methodology) that coincides with the rate
year to which the recoupment described in subsection (o) of this section applies.
(B)
Recoupment eligible for Performance-based Mitigation. Recoupment
eligible for Performance-based Mitigation is limited to what the facility's
recoupment as described in paragraph (1)(G) of this paragraph would have been
if the facility had been a nonparticipant in the enhancement program during
the reporting period.
(C)
Calculation of Performance-based Mitigation. For each facility,
multiply the PMI from subparagraph (A) of this paragraph by the recoupment
eligible for Performance-based Mitigation from subparagraph (B) of this paragraph.
The resulting product is the performance- based mitigation.
(D)
Determination of recoupment after Performance-based Mitigation.
Each facility's recoupment as calculated in paragraph (1)(G) of this subsection
will be reduced by that facility's performance-based mitigation as described
in subparagraph (C) of this paragraph.
(E)
In cases where a responsible entity has requested to have
its contracts' compliance with the spending requirements evaluated in the
aggregate, performance-based mitigation will be based on the lowest PMI associated
with any of its contracts.
(F)
Facilities, for which a PMI cannot be calculated due to
missing, invalid or unverifiable data are not eligible for performance-based
mitigation. Facilities that are missing a PMI cannot be included in the group
of facilities to be aggregated as defined in subsection (aa), and must have
their spending requirement determined on a facility-specific basis.
(G)
Facilities whose contracts are terminated, either voluntarily
or involuntarily, prior to the calculation of the performance weights described
in subparagraph (A) of this paragraph are not eligible for performance-based
mitigation.
(q)
Adjusting staffing requirements. Facilities that determine
that they will not be able to meet their staffing requirements from subsection
(m) of this section may request a reduction in their staffing requirements
and associated rate add-on. These requests will be effective on the first
day of the month following approval of the request.
(r)
Voluntary withdrawal. Facilities wishing to withdraw from
participation must notify HHSC in writing by certified mail. Facilities voluntarily
withdrawing must remain nonparticipants for the remainder of the rate year.
(s)
Notification of recoupment based on Annual Staffing and
Compensation Report. Facilities will be notified, in a manner specified by
HHSC, within 90 days of the due date of their Annual Staffing and Compensation
Report or within 90 days of the date the report is submitted, whichever is
later, of the amount to be repaid to HHSC or its designee. If a subsequent
review or audit results in adjustments to the Annual Staffing and Compensation
Report as described in subsection (f)(1) of this section that changes the
amount to be repaid to HHSC or its designee, the facility will be notified
in writing of the adjustments and the adjusted amount to be repaid. HHSC or
its designee will recoup any amount owed from a facility's vendor payment(s)
following the date of the notification letter.
(t)
Vendor hold. Facilities required to submit a Staffing and
Compensation Report due to a change of ownership or contract termination as
described in subsection (f)(1)(A)-(B) of this section will have funds held
as per 40 TAC §19.2308(2) (relating to Change of Ownership) until an
acceptable Staffing and Compensation Report is received by HHSC and funds
identified for recoupment from subsections (n) and/or (o) of this section
are repaid to HHSC or its designee. HHSC or its designee will recoup any amount
owed from the facility's vendor payments that are being held. In cases where
funds identified for recoupment cannot be repaid from the held vendor payments,
the responsible entity from subsection (x) of this section will be jointly
and severally liable for any additional payment due to HHSC or its designee.
Failure to repay the amount due or submit an acceptable payment plan within
60 days of notification will result in placement of a vendor hold on all DHS
contracts controlled by the responsible entity and will bar the responsible
entity from enacting any new contracts with DHS until repayment is made in
full.
(u)
Failure to document staff time and spending. Undocumented
direct care staff and contract labor time and compensation costs will be disallowed
and will not be used in the determination of direct care staff time and costs
per unit of service.
(v)
All other rate components. All other rate components will
be calculated as specified in §355.307 of this title (relating to Reimbursement
Setting Methodology) and will be uniform for all providers.
(w)
Appeals. Subject matter of informal reviews and formal
appeals is limited as per §355.110(a)(3)(B) of this title (relating to
Informal Reviews and Formal Appeals).
(x)
Responsible entities. The contracted provider, owner, or
legal entity that received the revenue to be recouped upon is responsible
for the repayment of any recoupment amount.
(y)
Change of ownership. Participation in the enhanced direct
care staff rate confers to the new owner as defined in 40 TAC §19.2308
(relating to Change of Ownership) when there is a change of ownership. The
new owner is responsible for the reporting requirements in subsection (f)
of this section for any reporting period days occurring after the change.
If the change of ownership occurs during an open enrollment period as defined
in subsection (c) of this section, then the owner recognized by DHS on the
last day of the enrollment period may request to modify the enrollment status
of the facility in accordance with subsection (d) of this section. The new
owner may request to become a participant or receive a higher enhancement
level than that conferred by submitting an acceptable enrollment contract
amendment to HHSC. To be acceptable, the enrollment contract amendment must
be received by HHSC Rate Analysis no later than 90 days from the date the
new owner is notified in writing by DHS of the ownership-change effective
date, be completed according to instructions, be signed by an authorized signator
as per DHS Form 2031, Corporate Board of Directors Resolution, and be legible.
Such requests will be granted within available funds to be effective on the
ownership change effective date.
(z)
Contract cancellations. If a facility's Medicaid contract
is cancelled before the first day of an open enrollment period as defined
in subsection (c) of this section and the facility is not granted a new contract
until after the last day of the open enrollment period, participation in the
enhanced direct care staff rate as it existed prior to the date when the facility's
contract was cancelled will be reinstated when the facility is granted a new
contract, if it remains under the same ownership.
(aa)
In cases where a parent company, sole member, or governmental
body controls more than one nursing facility (NF) contract, the parent company,
sole member, or governmental body may request at the time each Annual Staffing
and Compensation Report is submitted, in a manner prescribed by HHSC, to have
its contracts' compliance with the spending requirements detailed in subsection
(o) of this section for the applicable reporting period evaluated in the aggregate
for all NF contracts it controlled at the end of the rate year or at the effective
date of the change of ownership or termination of its last NF contract. In
limited liability partnerships in which the same single general partner controls
all the limited liability partnerships, that single general partner may make
this request. Other such requests will be reviewed on a case-by- case basis.
A new request to have compliance with spending requirements evaluated in the
aggregate must be submitted for each reporting period. NF contracts that change
ownership or terminate effective after the end of the applicable reporting
period, but prior to the determination of compliance with spending requirements
as per subsection (o) of this section, are excluded from all aggregate spending
calculations. These contracts' compliance with spending requirements will
be determined on an individual basis and the costs and revenues will not be
included in the aggregate spending calculation.
(bb)
Medicaid Swing Bed Program for Rural Hospitals. When a
rural hospital participating in the Medicaid swing bed program furnishes NF
nursing care to a Medicaid recipient under 40 TAC §19.2326 (relating
to Medicaid Swing Bed Program for Rural Hospitals), DHS makes payment to the
hospital using the same procedures, the same case-mix methodology and the
same TILE rates that HHSC authorizes for reimbursing NFs participating in
the enhanced direct care staff rate at the minimum level required for participation.
These hospitals are not subject to the staffing and spending requirements
detailed in this section.
(cc)
Reinvestment. HHSC will reinvest recouped funds in the
enhanced direct care staff rate program, to the extent that there are qualifying
facilities.
(1)
Identify qualifying facilities. Facilities meeting the
following criteria during the most recent completed reporting period are qualifying
facilities for reinvestment purposes.
(A)
The facility was a participant in the enhanced direct care
staff rate.
(B)
The facility's unadjusted LVN-equivalent minutes as determined
in subsection (m)(1) of this section were greater than the number of LVN-minutes
required of the facility as determined in subsection (j) of this section.
(C)
The facility met its spending requirement as determined
in subsection (o) of this section.
(D)
An acceptable Annual Staffing and Compensation Report for
the reporting period was received by HHSC Rate Analysis at least 30 days prior
to the date distribution of available reinvestment funds was determined.
(2)
Distribution of available reinvestment funds. Available
funds are distributed as described below.
(A)
HHSC determines units of service provided during the most
recent completed reporting period by each qualifying facility achieving, with
unadjusted LVN-equivalent minutes as determined in subsection (m)(1) of this
section, each enhancement option above the enhancement option awarded to the
facility during the reporting period and multiplies this number by the rate
add-on associated with that enhancement in effect during the reporting period.
(B)
HHSC compares the sum of the products from subparagraph
(A) of this paragraph to funds available for reinvestment.
(i)
If the product is less than or equal to available funds,
all achieved enhancements for qualifying facilities are retroactively awarded
for the reporting period.
(ii)
If the product is greater than available funds, retroactive
enhancements are granted beginning with the lowest level of enhancement and
granting each successive level of enhancement until achieved enhancements
are granted within available funds.
(3)
All retroactive enhancements are subject to spending requirements
detailed in subsection (o) of this section. Revenue from retroactive enhancements
is not eligible for mitigation of spending recoupment as described in subsection
(p) of this section.
(4)
Retroactively awarded enhancements do not qualify as pre-existing
enhancements for enrollment purposes.
(5)
Notification of reinvested enhancements. Qualifying facilities
are notified in a manner determined by HHSC, as to the award of reinvested
enhancements.
(dd)
Disclaimer. Nothing in these rules should be construed
as preventing facilities from adding direct care staff in addition to those
funded by the enhanced direct care staff rate.
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 December 18, 2002.
TRD-200208380
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Effective date: January 7, 2003
Proposal publication date: August 30, 2002
For further information, please call: (512) 438-3734