Part 5. TEXAS FACILITIES COMMISSION
Chapter 115. FACILITIES LEASING PROGRAM
Subchapter A. STATE LEASED PROPERTY
1 TAC §§115.1 - 115.3, 115.8, 115.10, 115.13
Introduction and Background.
During its rule review, published in the December 21, 2007, issue of the Texas Register (32 TexReg 9735), the Texas Facilities Commission (Commission) has reviewed and considered Texas Administrative Code, Title 1, Chapter 115 for readoption, revision, or repeal, in accordance with the Texas Government Code §2001.039 (Vernon 2000). The Commission determined that Texas Administrative Code, Title 1, §§115.1 - 115.3, 115.8 and 115.10, which govern leasing facilities for the use and benefit of state agencies are still necessary. Revisions to these rules, however, are required to reflect the agency's name change, to delete definitions no longer in use, and to correct typographical errors, including reformatting. In addition, staff identified the necessity for a new §115.13, entitled Best Value Guidelines, which is proposed to comply with statutory rulemaking requirements. See Texas Government Code, §2167.0021(b) (Vernon Supp. 2007). In a concurrent miscellaneous notice, the Commission announces its intent to readopt Texas Administrative Code, Title 1, §§115.1 - 115.3, 115.8 and 115.10 with amendments and to propose a new §115.13. The rule amendments are proposed pursuant to the rulemaking authority granted to the Commission in Texas Government Code, §2167.0021(b) (Vernon 2000) and §2167.008 (Vernon Supp. 2007).
Section by Section Summary.
Proposed revisions to existing rules are required to reflect the agency's name change, to delete definitions no longer in use, to correct typographical errors, and include reformatting. Section 115.1 defines terms used in this chapter. Section 115.2 establishes prerequisites to leasing space, such as state agency requests for lease space and certification of availability of funds. Section 115.3 specifically addresses requests for leasing space by Health and Human Services Commission agencies. Section 115.8 imposes certain requirements on private firms used by the Commission to obtain lease space, including disclosure of any potential conflicts of interest. Section 115.10 discusses tenant agency responsibilities and reporting with respect to leased space. Also, pursuant to statutory rulemaking requirements, a new §115.13, entitled Best Value Guidelines , is added to outline in greater detail the factors considered when the Commission evaluates responses to solicitations associated with the procurement of lease space for the use and benefit of state agencies under Texas Government Code, Chapter 2167 and makes a best value determination on which a solicitation award is based.
Fiscal Note.
Edward L. Johnson, Executive Director, has determined that for each year of the first five-year period the proposed rules are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the proposed rules.
Public Benefit/Cost Note.
Mr. Johnson has also determined that for each year of the first five-year period the proposed rules are in effect the public benefit will be further clarification by updating the references to the Commission and internet websites, omission of definitions no longer in use, and correction of typographical errors.
Mr. Johnson has further determined that there will be no effect on individuals or large, small, and micro-businesses as a result of the proposed rules. Consequently, an Economic Impact Statement and Regulatory Flexibility Analysis, pursuant to Texas Government Code, §2006.002 (Vernon Supp. 2007), are not required.
In addition, Mr. Johnson has determined that for each year of the first five-year period the proposed rules are in effect there should be no effect on a local economy; therefore, no local employment impact statement is required under Administrative Procedure Act, Texas Government Code, §2001.022 (Vernon Supp. 2007).
Request for Comments.
Interested persons may submit written comments on the proposed rules to General Counsel, Legal Services Division, Texas Facilities Commission, P.O. Box 13047, Austin, TX 78711-3047. Comments may also be sent via email to rulescomments@tfc.state.tx.us. For comments submitted electronically, please include "Proposed Facilities Leasing Program" in the subject line. Comments must be received no later than thirty (30) days from the date of publication of the proposal to the Texas Register . Comments should be organized in a manner consistent with the organization of the proposed rule. Questions concerning the proposed new rules may be directed to Ms. Susan Maldonado, Assistant General Counsel, at (512) 463-3960.
Statutory Authority.
The amended rules are proposed under Texas Government Code, Title 10, Subtitle D, §2167.0021(b) (Vernon 2000) and §2167.008 (Vernon Supp. 2007).
Cross Reference to Statute.
The statutory provisions affected by the proposed rules are those set forth in Chapter 2167 of the Texas Government Code.
§115.1.Definitions.
The following words and terms, when used in this
chapter [subchapter
], shall have the following meanings, unless
the context clearly indicates otherwise:
(1) Commission--The Texas Facilities Commission. [
Building and Procurement Commission.]
[(2) Negotiated Lease--
A lease negotiated directly with a public or private entity on behalf
of the State by the Commission or its tenant representative.]
[(3) Request for Proposal
(RFP)-- A procurement for lease space conducted by the Commission
or its tenant representative through a public process under the guidelines
set forth by procedures established by the Leasing Division and approved
by the Commission.]
(2) [(4)
] State agency or agency--A
board, a commission, or agency established by the Texas Legislature.
§115.2.Prerequisites for Leasing Space.
(a) When a board, commission or agency requests to lease property that is not owned by the state, the Commission shall verify that state-owned space is not available.
(b) All requests for lease space must be submitted by the office of the Executive Director or designated the agency representative head of the requesting agency party.
(c) The Chief Administrative Officer of the requesting agency must certify the availability of funds for the requested lease space, the number of full time employees to be located at the requested space and the agency's projected schedule.
(d) The requesting agency shall not submit any specifications that would:
(1) Unnecessarily limit meaningful competition for the requested space;
(2) Unnecessarily increase the cost of the lease;
(3) Exceed the authorized space limitations established by the Commission; or
(4) Require more than is reasonably necessary to carry out the business mandated to the requesting agency.
[(d) §2165.104(c) of the Texas
Government Code does not exempt any state entity from statutorily
imposed lease space restrictions. All requests for space exemptions
from state statute or rule shall be determined on a case by case basis
by the Commission. No exemption granted by the Commission will be
considered as a precedent for any future exemption requests.]
§115.3.Leasing Space for Health and Human Services Agencies.
(a) All requests for lease space by Health and Human Services Commission (HHSC) agencies must be submitted by the office of the Executive Commissioner.
(b) The Chief Administrative Officer of HHSC, or a designated representative, shall certify the availability of funds for the requested lease space, the number of full time employees to be located at the requested lease space and the agency's projected schedule.
§115.8.Use of Private Firms to Obtain Space.
(a) Any entity that provides lease services to the
Commission shall immediately disclose any conflict of interest in
a transaction to all parties [,] and shall withdraw from
all matters related to the conflict. Final determination of a conflict
of interest shall be made by the Commission.
(b) No broker, real estate firm, tenant representative or entity representing the state as an agent in a leasing matter may, during the term of the agency, simultaneously represent, participate or profit from the actions of buyers, sellers, owners or any other entity that possess an interest in any lease in which the Commissioner is the lessor.
§115.10.Tenant Agency Responsibility; Reporting.
(a) No state agency occupying state leased space shall commit any act or action that may endanger the State's interest under the lease contract.
(b) Any state agency that the Commission determines
has acted in bad faith against the State's interest, or is in noncompliance
as referenced in §2167.105 of the Government Code, shall be reported
to the Governor, Lieutenant [Lt.] Governor, Office
of the Speaker of the House [,] of Representatives, the
House Committee on Appropriations, [the Office of Lt. Governor]
and the Senate Committee on Finance.
§115.13.Best Value Guidelines.
(a) The Commission shall develop procedures, deadlines, site analyses and market analyses to ensure that recommendations for lease procurements reflect the best value to the State of Texas.
(b) In determining the specific procedures to be used to evaluate the properties and identification of the best value to the state, the Commission shall develop and maintain documents in the permanent lease file of the Commission detailing its evaluation of each of the following criteria for all qualified sites selected for final consideration:
(1) analysis of the total cost of occupancy offered by the proposed Lessor;
(2) utility costs;
(3) age, type and condition of the premises;
(4) costs, if any, of improvements required to meet the approved agency specifications;
(5) location of the property and access to public facilities and transportation;
(6) access to and cost of parking;
(7) security premises;
(8) space planning considerations including implementation of the Facilities Master Plan and space consolidation options;
(9) direct and indirect costs of relocation; and
(10) any other considerations relevant to the approved agency specifications and existing market conditions.
(c) Prior to making any recommendation to the Commission, an assessment of the proposed Lessor shall be performed to determine the relevant experience, financial condition, and history of bankruptcy, litigation and judgments involving the proposed Lessor, and, as appropriate, its owners, officers, directors, subsidiaries, affiliates, or predecessors that may be relevant indicators of proposed Lessor's ability to perform under the lease contract. The findings of this inquiry shall be maintained in the permanent lease of the Commission.
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 18, 2008.
TRD-200802019
Kay Molina
General Counsel
Texas Facilities Commission
Earliest possible date of adoption: June 1, 2008
For further information, please call: (512) 463-7220
Chapter 352. QUALITY ASSURANCE FEE
(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Health and Human Services Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Health and Human Services Commission (HHSC) proposes the repeal of §352.10, Quality Assurance Fee for the Home and Community-based Services and Community Living Assistance and Support Services waiver programs, under Title 1, Part 15, Chapter 352.
Background and Justification
Senate Bill (S.B.) 1830, 79th Legislature, Regular Session, 2005, required the Executive Commissioner of HHSC to impose a quality assurance fee (QAF) on persons providing services under the home and community-based services (HCS) waiver and community living assistance and support services (CLASS) waiver. However, Section 1 of S.B. 1830 included a requirement that if HHSC determined that the imposition of the QAF would not entitle Texas to receive additional federal Medicaid matching funds, the QAF would be discontinued.
Section 352.10, regarding the Quality Assurance Fee for the Home and Community-based Services and Community Living Assistance and Support Services, was adopted effective February 27, 2006 (31 TexReg 1017). The QAF was not implemented, however, pending confirmation from the Centers for Medicare and Medicaid Services (CMS) that the imposition of this QAF would entitle Texas to additional Medicaid matching funds under 42 C.F.R. §§433.55 - 433.68. On the basis of its discussions with CMS and the explanatory preamble to the CMS final rule on Health Care-Related Taxes, HHSC has determined that this QAF would not qualify for matching funds under §§433.55 - 433.68 of Title 42 of the Code of Federal Regulations. The CMS final rule appeared in the Federal Register on February 22, 2008 (73 FedReg 9685) Based on its discussion with CMS and the final CMS rule, HHSC is proposing to repeal §352.10.
Section-by-Section Summary
This proposal repeals §352.10.
Fiscal Note
Gordon E. Taylor, Chief Financial Officer for the Department of Aging and Disability Services, has determined that during the first five-year period the repeal is in effect there will be no fiscal impact to state government. The repeal will not result in any fiscal implications for local health and human services agencies. There are no fiscal implications for local governments as a result of enforcing or administering the section.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on small businesses or micro-businesses as a result of enforcing or administering the repeal. The implementation of the proposed repeal does not require any changes in practice or any additional cost to the contracted provider.
HHSC does not anticipate that there will be any economic cost to persons who are required to comply with this repeal. The repeal will not affect local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that, for each of the first five years the repeal is in effect, the expected public benefit is that rule language that will never be implemented will be eliminated.
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 Texas Government Code §2007.043.
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 environmental 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 environmental exposure.
Public Comment
Questions about the content of this proposal may be directed to Pam McDonald in the HHSC Rate Analysis Department by telephone at (512) 491-1373. Written comments on the proposal may be submitted to Ms. McDonald by facsimile at 512-491-1998, by e-mail to pam.mcdonald@hhsc.state.tx.us, or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200, Austin, Texas 78708-5200, within 30 days of publication of this proposal in the Texas Register.
Statutory Authority
The repeal is proposed under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out the commission's duties; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Human Resources Code, Chapter 32.
The repeal affects Texas Government Code Chapter 531 and Texas Human Resources Code Chapter 32. No other statutes, articles, or codes are affected by this proposal.
§352.10.Quality Assurance Fee for the Home and Community-based Services and Community Living Assistance and Support Services.
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 15, 2008.
TRD-200801963
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: June 1, 2008
For further information, please call: (512) 424-6900
Subchapter A. COST DETERMINATION PROCESS
The Health and Human Services Commission (HHSC) proposes amendments to §355.105, concerning General Reporting and Documentation Requirements, Methods, and Procedures.
Background and Justification
This rule establishes cost reporting and documentation requirements, methods and procedures for all Department of Aging and Disability Services (DADS) programs for which the Health and Human Services Commission (HHSC) administers rates. HHSC, under its authority and responsibility to administer and implement rates, is updating this rule by clarifying certain requirements relating to continuous daily timesheets and detailing the procedures for determining limits on related-party salaries, wages and benefits.
Continuous daily timesheets are required when a provider directly charges payroll costs of direct care employees who work across cost areas, service areas and/or job classifications. Existing rules do not detail the content requirements for these timesheets. This proposed rule will give providers clear guidance as to what information must be included in a timesheet to be acceptable for cost report documentation purposes.
Currently, HHSC applies salary caps to salary amounts reported on Medicaid cost reports by providers for related-party administrators, directors, assistant administrators, assistant directors, and owners, partners and stockholders. The salary caps are applied by HHSC under the authority of §355.102, which requires that, for cost reporting purposes, allowable costs must be reasonable and necessary, and, for nursing facilities (NFs), under the authority of §355.306, which describes the capping methodology in detail. The proposed rule creates a consolidated related-party salary capping rule for all DADS programs in a single Texas Administrative Code (TAC) section and codifies the methodology used to calculate these caps for all programs. This proposed amendment will ensure that the calculation of related-party compensation limitation for non-NF programs is described as clearly in the rules as is the calculation of such limitations for the NF program. The proposed rule does not change the current method used to cap related-party salaries on the cost report, the rule change only serves to clarify and consolidate current practice into the rule.
The proposed amendment also deletes obsolete language, deletes the requirement that legacy Texas Department of Mental Health and Mental Retardation providers maintain financial records for five years and instead requires these providers to comply with DADS record keeping requirements that financial records be maintained for three years and 30 days, updates agency references and updates references to other sections of the TAC. These changes will make the rule easier to understand and apply.
Section-by-Section Summary
The amendment revises §355.105 to:
Revise subsection (b)(2)(A)(i) to replace references to the legacy Texas Department of Human Services and DHS with references to the Texas Department of Aging and Disability Services and DADS. The paragraph is also revised to correct an erroneous reference to another section of the TAC.
Revise subsection (b)(2)(A)(ii) to delete references to the legacy Texas Department of Mental Health and Mental Retardation (MHMR) and specific records retention requirements for providers contracted with (MHMR).
Delete the language in subsection (b)(2)(A)(iv) as obsolete and renumber subsection (b)(2)(A)(v) as subsection (b)(2)(A)(iv).
Delete obsolete language in subsection (b)(2)(B)(iv) pertaining to luxury vehicles leased prior to January 1, 1997.
Add new subsection (b)(2)(B)(xii)(I) which details requirements for continuous daily timesheets for staff required to maintain such time sheets as per §355.102(j).
Add new subsection (b)(2)(B)(xii)(II) to describe which employees in the Intermediate Care Facilities for Persons with Mental Retardation, Home and Community-based Services and Texas Home Living programs are required to maintain continuous daily time sheets.
Delete obsolete language in subsection (b)(4)(vii) pertaining to cost reports from 1997 and 2004.
Delete the language in subsection (b)(4)(B)(ii) as obsolete renumber subsection (b)(4)(B)(iii) as subsection (b)(4)(B)(ii).
Delete the language in subsection (b)(4)(C)(ii) as obsolete and renumber subsection (b)(4)(C)(iii) as subsection (b)(4)(C)(ii).
Delete obsolete language in subsection (b)(5) pertaining to reporting periods beginning on September 1, 2001.
Delete the language in subsection (f)(2) as obsolete and renumber subsection (f)(3) as subsection (f)(2).
Add new subsection (i) which details procedures for determining limits on related-party salaries, wages and/or benefits.
Fiscal Note
Gordon E. Taylor, Chief Financial Officer for the Department of Aging and Disability Services, has determined that during the first five-year period the amended 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. There are no fiscal implications for local governments as a result of enforcing or administering the section.
Small Business and Micro-business Impact Analysis
HHSC has determined that there is no adverse economic effect on small businesses or micro-businesses as a result of enforcing or administering the amendment. The implementation of these proposed rule amendments does not require any changes in practice or any additional cost to the contracted provider.
HHSC does not anticipate that there will be any economic cost to persons who are required to comply with this amendment. The amendment will not affect local employment.
Public Benefit
Carolyn Pratt, Director of Rate Analysis, has determined that, for each of the first five years the amendment is in effect, the expected public benefit is that obsolete rule language will be eliminated and that the rule will provide clear guidance to agency staff and providers on time sheet documentation requirements and the calculation of related-party salary limitations.
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 Texas Government Code §2007.043.
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 environmental 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 environmental exposure.
Public Comment
Questions about the content of this proposal may be directed to Pam McDonald in the HHSC Rate Analysis Department by telephone at (512) 491-1373. Written comments on the proposal may be submitted to Ms. McDonald by facsimile at (512) 491-1998, by e-mail to pam.mcdonald@hhsc.state.tx.us, or by mail to HHSC Rate Analysis, Mail Code H-400, P.O. Box 85200, Austin, Texas 78708-5200, within 30 days of publication of this proposal in the Texas Register.
Statutory Authority
The amendment is proposed under Texas Government Code §531.033, which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out the commission's duties; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Human Resources Code, Chapter 32.
The amendment affects Texas Government Code Chapter 531 and Texas Human Resources Code Chapter 32. No other statutes, articles, or codes are affected by this proposal.
§355.105.General Reporting and Documentation Requirements, Methods, and Procedures.
(a) (No change.)
(b) Cost report requirements. Unless specifically stated in program rules, each provider must submit financial and statistical information on cost report forms provided by HHSC, or on facsimiles that are formatted according to HHSC specifications and are pre-approved by HHSC staff, or electronically in HHSC-prescribed format in programs where these systems are operational. The cost reports must be submitted to HHSC in a manner prescribed by HHSC. 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 HHSC. Each provider is responsible for accurately completing any cost report or other special survey or report submitted to HHSC.
(1) (No change.)
(2) Recordkeeping and adequate documentation. There is a distinction between noncompliance in recordkeeping, which equates with unauditability of a cost report and constitutes an administrative contract violation or, for the Nursing Facility program, may result in vendor hold, and a provider's inability to provide adequate documentation, which results in disallowance of relevant costs. Each is discussed in the following paragraphs.
(A) Recordkeeping. Providers must ensure that records are accurate and sufficiently detailed to support the legal, financial, and other statistical information contained in the cost report. Providers must maintain all workpapers and any other records that support the information submitted on the cost report relating to all allocations, cost centers, cost or statistical line items, surveys, and schedules. HHSC may require supporting documentation other than that contained in the cost report to substantiate reported information.
(i) For Texas Department of Aging and Disability [Human
] Services (DADS)- [(DHS)] contracted
providers, each provider must maintain records according to the requirements
stated in 40 TAC §69.158 [§69.205]
(relating to
How long must contractors, subrecipients, and subcontractors
keep contract-related records? [Contractor's Records])
and according to the HHSC's prescribed chart of accounts, when available.
(ii) [For Texas Department of Mental Health and
Mental Retardation (TDMHMR) contracted providers, contractors must
keep financial and supporting documents, statistical records, and
any other records pertinent to the services for which a claim or cost
report is submitted to HHSC. The records and documents must be kept
for a minimum of five years after the end of the reporting period.
If any litigation, claims, or audit involving these records begins
before the five-year period expires, the contractor must keep the
records and documents for not less than five years or until all litigation,
claims, or audit findings are resolved.] If a contractor is
terminating business operations, the contractor must ensure that:
(I) - (II) (No change.)
(iii) (No change.)
[(iv) For Intermediate Care Facilities
for Persons with Mental Retardation, Home and Community-based Services,
Service Coordination/Targeted Case Management, Rehabilitative Services,
and Texas Home Living programs, failure to maintain all workpapers
and any other records that support the information submitted on the
cost report relating to all allocations, cost centers, cost or statistical
line items, surveys and schedules constitutes an administrative contract
violation, procedural guidelines and informal reconsideration and/or
appeal processes are specified in §355.111 of this title (relating
to Administrative Contract Violations).]
(iv) [(v)] For all other programs,
failure to maintain all workpapers and any other records that support
the information submitted on the cost report relating to all allocations,
cost centers, cost or statistical line items, surveys and schedules
constitutes an administrative contract violation. In the case of an
administrative contract violation, procedural guidelines and informal
reconsideration and/or appeal processes are specified in §355.111
of this title (relating to Administrative Contract Violations).
(B) Adequate documentation. To be allowable, the relationship between reported costs and contracted services must be clearly and adequately documented. Adequate documentation consists of all materials necessary to demonstrate the relationship of personnel, supplies, and services to the provision of contracted client care or the relationship of the central office to the individual service delivery entity level. These materials may include, but are not limited to, accounting records, invoices, organizational charts, functional job descriptions, other written statements, and direct interviews with staff, as deemed necessary by HHSC auditors to perform required tests of reasonableness, necessity, and allowability.
(i) - (iii) (No change.)
(iv) To substantiate the allowable cost of leasing
a luxury vehicle as defined in §355.103(b)(7)(C)(i) of this title,
the provider must obtain at the time of the lease a separate quotation
establishing the monthly lease costs for the base amount allowable
for cost-reporting purposes as specified in §355.103(b)(7)(C)(i)
of this title. [
If the lease of the luxury vehicle occurred prior
to January 1, 1997, then the provider must obtain the separate quotation
prior to submitting its 1997 cost report in order for the allowable
costs to be reported on the cost report.
] Without adequate documentation
to verify the allowable lease costs of the luxury vehicle, the reported
costs shall be disallowed.
(v) - (xi) (No change.)
(xii) Regarding all forms of compensation, providers must maintain documentation for each employee which clearly identifies each compensation component, including regular pay, overtime pay, incentive pay, mileage reimbursements, bonuses, sick leave, vacation, other paid leave, deferred compensation, retirement contributions, provider-paid instructional courses, health insurance, disability insurance, life insurance, and any other form of compensation. Types of documentation would include insurance policies; provider benefit policies; records showing paid leave accrued and taken; documentation to support hours (regular and overtime) worked and wages paid; and mileage logs or other documentation to support mileage reimbursements and travel allowances. For accrued benefits, the documentation must clearly identify the period of the accrual. For example, if an employee accrues two weeks of vacation during 20x1 and receives the corresponding vacation pay during 20x3, that employee's compensation documentation for 20x3 should clearly indicate that the vacation pay received had been accrued during 20x1.
(I) For staff required to maintain continuous daily time sheets as per §355.102(j) of this title and subclause (II) of this clause, the daily timesheet must document, for each day, the staff member's start time, stop time, total hours worked, and the actual time worked (in increments of 30 minutes or less) providing direct services for the provider, the actual time worked performing other functions, and paid time off. The employee must sign each timesheet. The employee's supervisor must sign the timesheets each payroll period or at least monthly. Work schedules are unacceptable documentation for staff whose duties include multiple direct service types, both direct and indirect service component types, and both direct hands-on support and first level supervision of direct care workers.
(II) For the Intermediate Care Facilities for Persons with Mental Retardation, Home and Community-based Services and Texas Home Living programs, staff required to maintain continuous daily timesheets include staff whose duties include multiple direct service types, both direct and indirect service component types and/or both direct hands-on support and first-level supervision of direct care workers.
(xiii) - (xx) (No change.)
(3) (No change.)
(4) Requirements for cost report completion.
(A) A completed cost report must:
(i) - (vi) (No change.)
(vii) contain a copy of the state-issued cost report
training certificate[, beginning with the 1997 cost report for
DHS contracted providers and beginning with the 2004 cost report for
TDMHMR contracted providers].
(B) Providers are required to report amounts on the appropriate line items of the cost report pursuant to guidelines established in the methodology rules, cost report instructions, and/or policy clarifications. Refer to program-specific reimbursement methodology rules, cost report instructions, and/or policy clarifications for guidelines used to determine placement of amounts on cost report line items.
(i) (No change.)
[(ii) For Intermediate Care Facilities
for Persons with Mental Retardation, Home and Community-based Services,
Service Coordination/Targeted Case Management, Rehabilitative Services,
and Texas Home Living programs, placement on the cost report of an
amount, which was determined to be inaccurately placed, constitutes
an administrative contract violation. In the case of an administrative
contract violation, procedural guidelines and informal reconsideration
and/or appeal processes are specified in §355.111 of this title.]
(ii) [(iii)] For all other programs,
placement on the cost report of an amount, which was determined to
be inaccurately placed, constitutes an administrative contract violation.
In the case of an administrative contract violation, procedural guidelines
and informal reconsideration and/or appeal processes are specified
in §355.111 of this title.
(C) A completed cost report must be filed by the cost report due date.
(i) (No change.)
[(ii) For Intermediate Care Facilities
for Persons with Mental Retardation, Home and Community-based Services,
Service Coordination/Targeted Case Management, Rehabilitative Services,
and Texas Home Living programs, failure to file a completed cost report
by the cost report due date constitutes an administrative contract
violation. In the case of an administrative contract violation, procedural
guidelines and informal reconsideration and/or appeal processes are
specified in §355.111 of this title.]
(ii) [(iii)] For all other programs,
failure to file a completed cost report by the cost report due date
constitutes an administrative contract violation. In the case of an
administrative contract violation, procedural guidelines and informal
reconsideration and/or appeal processes are specified in §355.111
of this title.
(D) (No change.)
(5) Cost report year. A [Effective
for reporting periods beginning on September 1, 2001 and thereafter, 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) - (B) (No change.)
(6) (No change.)
(c) - (e) (No change.)
(f) Cost of out-of-state audits. As specified in §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), HHSC conducts desk reviews of all cost reports not selected for field audit. HHSC also conducts field audits of provider records and cost reports. Although the number of field audits performed each year may vary, HHSC seeks to maximize the number of field audited cost reports available for use in its cost projections. Whenever possible, all the records necessary to verify information submitted to HHSC on cost reports, including related party transactions and other business activities engaged in by the provider, must be accessible to HHSC audit staff within the state of Texas within fifteen working days of field audit or desk review notification. When records are not available to HHSC audit staff within the state of Texas, the provider must pay the actual costs for HHSC staff to travel and review the records out-of-state. HHSC must be reimbursed for these costs within 60 days of the request for payment.
(1) (No change.)
[(2) For Intermediate Care Facilities
for Persons with Mental Retardation, Home and Community-based Services,
Service Coordination/Targeted Case Management, Rehabilitative Services,
and Texas Home Living programs, failure to reimburse HHSC for these
costs within 60 days of the date of the request for payment constitutes
an administrative contract violation. In the case of an administrative
contract violation, procedural guidelines and informal reconsideration
and/or appeal processes are specified in §355.111 of this title.]
(2) [(3)] For all other programs,
failure to reimburse HHSC for these costs within 60 days of the request
for payment constitutes an administrative contract violation. In the
case of an administrative contract violation, procedural guidelines
and informal reconsideration and/or appeal processes are specified
in §355.111 of this title.
(g) - (h) (No change.)
(i) Limits on related-party salaries, wages and/or benefits. HHSC may place upper limits or caps on related-party salaries, wages, and/or benefits as follows:
(1) For related-party administrators and directors, the upper limit for salaries and wages is equal to the 90th percentile in the array of all non-related party annualized salaries, wages and/or benefits as reported by all contracted providers within a program. In addition, the hourly wage and/or benefits for related-party administrators and directors is limited to the annualized upper limit for related-party administrators and directors divided by 2,080.
(2) For related-party assistant administrators and assistant directors, the upper limit for salaries and wages is equal to the 90th percentile in the array of all non-related party annualized salaries, wages and/or benefits as reported by all contracted providers within a program. In addition, the hourly wage and/or benefits for related-party assistant administrators and assistant directors is limited to the annualized upper limit for related-party assistant administrators and assistant directors divided by 2,080.
(3) For owners, partners, and stockholders (when the owner, partner, or stockholder is performing contract level administrative functions but is not the administrator, director, assistant administrator or assistant director), the upper limits for salaries and wages are equal to the upper limits for related-party administrators and directors.
(4) For all other staff types:
(A) For the Intermediate Care Facilities for Persons with Mental Retardation, Home and Community-based Services and Texas Home Living programs, related-party limitations are specified in §355.457 of this title (relating to Fiscal Accountability) and §355.722 of this title (relating to Reporting Costs by Home and Community-based Services (HCS) Providers).
(B) For all other programs, related-party salaries, wages and/or benefits are limited to reasonable and necessary costs as described in §355.102 of this title.
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 21, 2008.
TRD-200802065
Steve Aragón
General Counsel
Texas Health and Human Services Commission
Earliest possible date of adoption: June 1, 2008
For further information, please call: (512) 424-6576