1 TAC §354.1450
The Texas Health and Human Services Commission (HHSC) proposes
new §354.1450, relating to audits of Medicaid providers.
Background and Justification
Added by Senate Bill 630, 79th Legislature, Regular Session, 2005, the
Human Resources Code (HRC) §32.070 requires HHSC to adopt rules governing
the audit of Medicaid providers. New §354.1450 implements the provisions
of the statute.
Section-by-Section Summary
Section 354.1450(a) defines "provider" as the term is used in the rule.
Section 354.1450(b) implements the HRC §32.070(d) exempting an audit
using the Medicaid Fraud Detection Audit System, or an audit or investigation
conducted by the Medicaid Fraud Control Unit of the Office of Attorney General,
Office of the State Auditor, Office of Inspector General, or the United States
Department of Health and Human Services Inspector General.
Section 354.1450(c) describes the audit requirements with which an agency
must comply.
Section 354.1450(d) allows a provider to request an informal, early review
of a final audit report or unfavorable finding by an HHSC ad hoc review panel.
This review does not require legal counsel and the panel recommendations are
advisory only.
Fiscal Note
Tom Suehs, Deputy Executive Commissioner for Financial Services, has determined
that during the first 5-year period the proposed rule is in effect there will
be no fiscal impact to state government. The proposed rule will not result
in any fiscal implications for local health and human services agencies. Local
governments will not incur additional costs.
Small and Micro-business Impact Analysis
Mr. Suehs has also determined that there will be no effect on small businesses
or micro businesses to comply with the proposal as they will not be required
to alter their business practices as a result of the rule. There are no anticipated
economic costs to persons who are required to comply with the proposed rule.
There is no anticipated negative impact on local employment.
Public Benefit
Tom Suehs, Deputy Executive Commissioner, Financial Services, has determined
that for each year of the first five years the section is in effect, the public
will benefit from the adoption of the section. The anticipated public benefit,
as a result of enforcing the section, will be regulatory criteria audits of
providers who contract with HHSC, affording providers the opportunity to explain
discrepancies to the auditing agencies before having to obtain legal counsel
to mediate any audit findings.
Regulatory Analysis
HHSC has determined that this proposal is not a "major environmental rule"
as defined by §2001.0225 of the Texas Government Code. "Major environmental
rule" is defined to mean a rule the specific intent of which is to protect
the environment or reduce risk to human health from environment exposure and
that may adversely affect, in a material way, the economy, a sector of the
economy, productivity, competition, jobs, the environment or the public health
and safety of a state or a sector of the state. This proposal is not specifically
intended to protect the environment or reduce risks to human health from environment
exposure.
Takings Impact Assessment
HHSC has determined that this proposal does not restrict or limit an owner's
right to his or her property that would otherwise exist in the absence of
government action and, therefore, does not constitute a taking under §2007.043
of the Government Code.
Public Comment
Written comments on the proposal may be submitted to Sharon Thompson at
P.O. Box 85200, Austin, Texas 78708-5200, by fax to (512) 833-6043, or by
e-mail to sharon.thompson@hhsc.state.tx.us within 30 days of publication of
this proposal in the
Texas Register
.
Statutory Authority
The new rule is proposed under the Texas Government Code, §531.033,
which provides the Executive Commissioner of HHSC with broad rulemaking authority;
the Human Resources Code, §32.021 and the Texas Government Code, §531.021(a),
which provide HHSC with the authority to administer the federal medical assistance
(Medicaid) program in Texas; the Human Resources Code, §32.070, which
provides the Commissioner of HHSC with the authority to adopt rules governing
audit of Medicaid providers; and the Texas Government Code, §531.021(b),
which provides HHSC with the authority to propose and adopt rules governing
the determination of Medicaid reimbursements).
The proposed new rule affects the Human Resources Code, Chapter 32, and
the Texas Government Code, Chapter 531. No other statutes, articles, or codes
are affected by this proposal.
§354.1450Audits of Medicaid Providers.
(a)
In this section, "provider" means an individual, firm,
partnership, corporation, agency, association, institution, or other entity
that is or was approved by HHSC to provide Medicaid under contract or provider
agreement with HHSC.
(b)
This section does not apply to a computerized audit conducted
using the Medicaid Fraud Detection Audit System or an audit or investigation
conducted by the Medicaid Fraud Control Unit of the Office of the Attorney
General, the Office of the State Auditor, the Office of Inspector General,
or the Office of Inspector General in the United States Department of Health
and Human Services.
(c)
Except as described in subsection (b) of this section,
an agency auditing division or entity must:
(1)
Notify the provider, and the provider's corporate headquarters,
if the provider is a pharmacy that is incorporated, of the impending audit
not later than the seventh day before the date the field audit portion of
the audit begins;
(2)
Limit the period covered by an audit to three years;
(3)
Accommodate the provider's schedule to the greatest extent
possible when scheduling the field audit portion of the audit;
(4)
Conduct an entrance interview before beginning the field
audit portion of the audit;
(5)
Audit all providers of the same type under the same standards
and parameters;
(6)
Conduct the audit in accordance with generally accepted
government auditing standards issued by the Comptroller General of the United
States or other appropriate standards;
(7)
Conduct an exit interview at the close of the field audit
portion of the audit with the provider to review the agency's initial findings;
(8)
At the exit interview, allow the provider to:
(A)
Respond to questions by the agency;
(B)
Comment, if the provider desires, on the initial findings
of the agency; and
(C)
Submit additional supporting documentation, for consideration,
that meets the auditing standards required by paragraph (6) of this subsection,
to correct a questioned cost, if there is no indication that the error or
omission that resulted in the questioned cost demonstrates intent to commit
fraud;
(9)
Provide to the provider a preliminary audit report and
a copy of any document used to support a proposed adjustment to the provider's
cost report;
(10)
Permit the provider to produce, for consideration, documentation
to address any exception found during an audit not later than the 10th day
after the date the field audit portion of the audit is completed;
(11)
Deliver a draft audit report to the provider not later
than the 60th day after the date the field audit portion of the audit is completed;
(12)
Permit the provider to submit, for consideration, a written
management response to the draft audit report or to informally appeal the
findings in the draft audit report not later than the 30th day after the date
the draft audit report is delivered to the provider. The informal appeal will
consist of a desk review by the auditing division or entity; and
(13)
Deliver the final audit report to the provider not later
than the 180th day after the date the field audit portion of the audit is
completed or the date on which a final decision is issued on an appeal made
under subsection (d) of this section, whichever is later.
(d)
Upon receipt of the final audit report specified in subsection
(c)(13) of this section, the provider may request an informal, early review
of a final audit report or an unfavorable audit finding by an HHSC ad hoc
review panel without the need to obtain legal counsel. All recommendations
of the ad hoc review panel are advisory in nature and are not binding on HHSC.
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 April 20, 2006.
TRD-200602252
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: June 4, 2006
For further information, please call: (512) 424-6576