ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 4. AGRICULTURE Part X. Texas Boll Weevil Eradication Foundation Chapter 195. Organic Cotton Regulations 4 TAC sec.sec.195.1-195.5 The Texas Boll Weevil Eradication Foundation, Inc. (the Foundation) adopts new sec.sec.195.1-195.5, without changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9327). The new sections are adopted in order to establish requirements and procedures governing boll weevil control in organic cotton fields, in accordance with the Texas Agriculture Code, sec.74.125, as amended by Senate Bill 1196, 74th Legislature, 1995. New sec.195.1 provides a statement of authority for regulating organic producers. New sec.195.2 provides guidelines for organic cotton producers to give notice to the foundation regarding organic production. New sec.195.3 provides for the payment by organic cotton growers of the assessment established by the growers and the Foundation. New sec.195.4 provides for eradication program activities unique to organic cotton production. New sec.195. 5 provides for indemnity funds to be established to reduce the loss to organic cotton producers when crop destruction is the only alternative to spraying an organic cotton field. New sec.sec.195.1-195.5 were originally published in the April 11, 1995, issue of the Texas Register (20 TexReg 2692), but were withdrawn due to inaction by the Foundation's Board of Directors within the time period specified by law. The comments received during the original comment period, ending May 11, 1995, have been incorporated into the record of this submission. During the 30-day period following the April 11, 1995, publication of the proposal, comments generally in support of the proposal were submitted by the Southern Rolling Plains Cotton Growers Association. The Chemical Connection submitted comments generally in disagreement with the proposal. The Texas Organic Marketing Cooperative submitted comments requesting several changes to the rules in regard to indemnification of producers and establishment of boll weevil trigger levels by the Foundation. A total of 18 letters commenting on the rules were received. Eleven of the letters were in a form letter format signed by individuals. Eleven comments expressed concern with the population of boll weevils used to determine trigger levels under the rules and requested a reasonable indemnity for losses due to plow-up or non-planting. These comments also suggested additions to the rules to allow for provisions showing numbers of boll weevils in fields to allow organic growers to make informed decisions as crops progress. The Foundation disagrees with these comments and believes the boll weevil trigger levels are acceptable, based on prior success of the program, and that adequate indemnity provisions have been provided for within the rules. Provisions for plow-up or non-plant requirements have been established within the rules and a regular, current trapping status report is available to growers, as stated in the rules. One comment suggested the rules lacked certainty in regard to indemnities for organic cotton growers and this lack of certainty would not be acceptable to lending institutions or practical business planning. The Foundation disagrees and believes the provisions for indemnities should remain as flexible as possible within the rules because of program differences from zone to zone, differences in the options organic and traditional growers within a particular zone may select, and differences among organic cotton producers regarding such variables as yield, crop mixes, etc. Another comment suggested sec.195.4 and sec.195.5 be changed to clarify monitoring methods and the terms of indemnification. The Foundation disagrees and believes the sections, as written, follow established eradication monitoring methods that have been successful in the program for many years and that indemnification, as previously stated, is adequately addressed under the rules. One comment suggested several options to indemnify organic cotton growers for any required crop destruction. It also suggested the planting of alternative crops as well as the application of biological control products or other non- chemical methods. The comment further suggested the Foundation not chemically treat any organic cotton. The Foundation disagrees and believes that indemnification should remain as flexible as possible for the reasons stated previously in this preamble. Furthermore, under Senate Bill 1196, as passed by the Texas Legislature, the Foundation is now required by law to not chemically treat and will not treat any organic cotton, but plow-up or non-planting may be required. One comment suggested organic cotton growers not pay assessments, questioned the established threshold level of boll weevils used to determine treatment and suggested the words "conventional spraying program" in sec.195.4 be changed to "conventional program" based on the assumption that current alternative methods may become conventional in the future. The Foundation disagrees and believes that it has been established that all cotton growers within an eradication zone will pay the assessment to keep cost sharing equal and that the current boll weevil threshold is acceptable based on years of successful eradication efforts. The Foundation, until further determination by scientific means, does not accept alternative treatment methods as conventional and have made no changes to sec.195.4(b). Three comments in support of the rules suggested organic cotton growers not be given any special consideration and no changes to the rules be allowed. The foundation disagrees and believes rules are necessary and required by law. A total of three letters commenting on the rules were received by the Foundation during the 30-day comment period following the November 14, 1995 publication. Two of the three commentators, all of whom oppose the proposal, had previously submitted comments during the comment period following the April 11, 1995 publication. Their comments were virtually unchanged from their previous submissions. The third respondent voiced concerns about trigger levels and the indemnification process as outlined in proposed sec.195.4 and sec.195.5, respectively. These concerns have been addressed elsewhere in this preamble. The Foundation believes the rules provide a fair consideration for organic cotton production. The new sections are adopted under the Texas Agriculture Code, sec.74.125, as amended by Senate Bill 1196, which provides the Texas Boll Weevil Eradication Foundation with the authority to adopt rules setting criteria for organic cotton producers in an eradication zone. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 30, 1996. TRD-9601258 Franklin D. Myers Executive Director Texas Boll Weevil Eradication Foundation Effective date: February 20, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 463-7583 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 31. Special Supplemental Nutrition Program for Women, Infants and Children (WIC) The Texas Department of Health (department) adopts the repeal of sec.sec.31. 1-31.4 and new sec.sec.31.1-31.3, concerning nutrition services. New sec.31.1 and sec.31.2 are adopted with changes to the proposed text as published in the December 1, 1995, issue of the Texas Register (20 TexReg 10180). The repeal of sec.sec.31.1-31.4 and new sec.31.3 are adopted without changes and therefore will not be republished. The changes are minor Texas Register formatting changes. Specifically, the sections cover the Special Supplemental Food Program for Women, Infants, and Children (WIC); the Farmers' Market Coupon Demonstration Project; and the register of mother-friendly businesses. The repeal of sec.sec.31.1-31.4 will allow Chapter 31 to be reorganized and renamed "Nutrition Services." When Chapter 31 was originally created, WIC was the only nutrition program requiring rules. Section 31.4, concerning the Farmers' Market Coupon Demonstration Project, was added to Chapter 31 effective June 1, 1989, but was not related to WIC. This year the addition of a new nutrition program also unrelated to WIC concerning the establishment of a register of "mother-friendly" businesses requires the reorganization and renaming of Chapter 31. The new title, "Nutrition Services", more appropriately includes all the department's related programs. New sec.31.1 includes language currently found in sec.sec.31.1-31.3, relating to WIC. New sec.31.2 includes language currently found in sec.31.4, relating to the Farmers' Market Coupon Demonstration Project. New sec.31.3 establishes procedures that a business must employ in order to comply with the minimum standards in Health and Safety Code, sec.165.003(a). A business seeking to use the term "mother-friendly" in its promotional materials must submit its policies to the department for review and approval. The department will make the register of "mother-friendly" businesses available to the public. The sections provide for the improvement of the health of both mothers and their children. No comments were received on the repeal and new sections as proposed. 25 TAC sec.sec.31.1-31.4 The repeals are adopted under Health and Safety Code, sec.12.001(b), which authorizes the board to adopt rules for the performance of every duty imposed by law on the board, the department, and the commissioner of health. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601238 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 19, 1996 Proposal publication date: December 1, 1995 For further information, please call: (512) 458-7236 Chapter 31. Nutrition Services 25 TAC sec.sec.31.1-31.3 The new sections are adopted under Health and Safety Code, sec.12.001(b), which authorizes the board to adopt rules for the performance of every duty imposed by law on the board, the department, and the commissioner of health. sec.31.1. Special Supplemental Food Program for Women, Infants, and Children (WIC). (a) Federal regulations. (1) The department adopts by reference the United States Department of Agriculture regulations on the Special Supplemental Food Program for Women, Infants, and Children (WIC). These regulations are contained in the Federal Register publication entitled "Special Supplemental Food Program for Women, Infants, and Children" dated February 13, 1985, as amended October 4, 1993, November 29, 1993, March 10, 1994, and March 11, 1994. (2) Copies of the regulations described in paragraph (1) of this subsection are filed in the department's Bureau of Nutrition Services-Women, Infants, and Children (WIC) Program, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756, and are available for public inspection during regular working hours. (b) WIC State Plan of Operations. (1) The department adopts by reference the United States Department of Agriculture regulations on the Special Supplemental Food Program for Women, Infants, and Children (WIC). The regulations are contained in the Federal Register publication titled "Special Supplemental Food Program for Women, Infants, and Children" dated February 13, 1985, as amended in October 1993. (2) Copies of the state plan are filed in the department's Bureau of Nutrition Services-Women, Infants, and Children (WIC) Program, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756, and are available for public inspection during regular working hours. (c) WIC Policy and Procedure Manual. (1) The department adopts by reference the publication titled "WIC Policy and Procedure Manual," which the department developed, as amended May 1, 1994. This policy and procedure manual has been developed by the department's WIC Program and approved by the United States Department of Agriculture. (2) Copies of the manual are filed in the department's Bureau of Nutrition Services-Women, Infants, and Children (WIC) Program, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756, and are available for public inspection during regular working hours. sec.31.2. Farmers' Market Coupon Demonstration Project. (a) The department adopts by reference the state plan for operations for the Farmers' Market Coupon Demonstration Project in Texas. The state plan is titled "Plan for Project Operations." (b) Copies of the state plan described in subsection (a) of this section are filed in the Bureau of Nutrition Services-Women, Infants, and Children (WIC), Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756, and are available for public inspection during regular working hours. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601239 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 19, 1996 Proposal publication date: December 1, 1995 For further information, please call: (512) 458-7236 Chapter 35. Pharmacy Services On behalf of the State Medicaid Director, the Texas Department of Health (department) submits the adoption of new sec.35.611, and the repeal of sec.35. 901, concerning the reimbursement methodology for pharmacy dispensing fees. New sec.35.611 is adopted with changes to the proposed text as published in the December 12, 1995, issue of the Texas Register (20 TexReg 10474-10476, 10660- 10662). The repeal of sec.35.901 is adopted as proposed. The new section defines an alternative methodology for determining reimbursement to contracted vendors, which is based on an analysis of market- related conditions. The new section allows the department to design its reimbursement methodology for determining dispensing fees based upon an analysis of market-related factors. The department will have the authority to obtain market-based information about other comparable third-party payor arrangements. A determination of pharmacy costs will no longer be made by the department. This change will provide relief to contracted vendors who currently must maintain substantial, complex record keeping to satisfy the department's reporting requirements. The department will continue to consider maintenance of recipient access to pharmacy services as a requisite element of its recommendations. Additional information on the basis for adoption of this rule is found in the December 12, 1995, issue of the Texas Register (20 TexReg 10474-10476, 10660- 10662). A summary of the comments and the department's responses to the comments follows. COMMENT: Concerning sec.35.611, several pharmacists commented that it was not the intent of the legislature, in Senate Bill 10 or Riders 25 and 44 to the department's provisions of the General Appropriations Act, to implement a reimbursement methodology which would decrease access to pharmacy services or harm small businesses. RESPONSE: The department shares the concerns regarding the maintenance of adequate access to pharmacy services. However, the department believes the market-based approach will prove to be both an adequate and a more efficient alternative to the current cost-based methodology. The language of Rider 25 to the department's provisions of the General Appropriations Act is particularly clear as it states that the department shall submit a Medicaid State Plan Amendment to modify the Vendor Drug Program's reimbursement methodology to reduce the dispensing fee to reflect current market conditions and rates. As required, the department and its consultants performed an analysis that effectively captured other comparable, third-party arrangements. This analysis serves as the basis for the department's action. The department has not identified any documentation in the history of Senate Bill 10 that links that legislation with the issues addressed by Riders 25 and 44 to the department's provision of the General Appropriations Act for the 1996-1997 biennium. No dispositive legislative intent has been identified by the department, other than that which is stated in the legislation. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a pharmacist stated that the rural/urban differential was meant as a way to protect those rural recipients and their providers and maintain adequate access to pharmacy services. RESPONSE: The department agrees with the need for Medicaid to maintain adequate access to pharmacy services for Medicaid recipients. Rider 44 to the department's provision of the General Appropriations Act, which states that the department shall review the need for a special dispensing fee for rural areas, is the basis for the $1.00 supplemental payment to rural pharmacies. A primary objective of the Texas Medicaid program is to provide medically necessary services to eligible Medicaid recipients and to ensure adequate and appropriate access to health care services for those recipients. A market-based approach is not designed to maintain a desired profit margin for particular providers, or to sustain particular businesses. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a number of independent and community-based pharmacists offered comments that the proposed rule change will have a detrimental economic impact on their businesses and may result in some independent pharmacies going out of business or cause them to reduce employment. RESPONSE: While the department is concerned about the potential economic impact that dispensing fees based on market-based reimbursement methodology will have on all contracted vendors throughout the state, the primary concern is ensuring that Medicaid recipients throughout the state maintain adequate access to pharmacy services. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several of the commenters stated that as a result of the financial harm imposed upon pharmacies from the proposed rule change, particularly independent and community-based pharmacies, recipient access to adequate pharmacy services will be detrimentally affected. RESPONSE: The department recognizes the potential for inadequate access to pharmacy services, which may develop due to provider non-participation, in a small percentage of areas. The department has amended the proposed rule to allow for an additional supplemental dispensing fee in the amount of the actual cost of shipping in order to ensure Medicaid recipients adequate access to pharmacy services. Changes to the proposed rule were made as a result of this comment. COMMENT: Concerning sec.35.611, several of the commenters stated that the current level of reimbursement for delivery services ($.10 per delivery) is inadequate. The commenters state that absent adequate payment, recipient access to pharmacy services will be impaired. RESPONSE: See previous response. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several commenters stated that the department's definition of rural and urban is inappropriate and that the counties in which their pharmacies are located, while classified as urban, should be considered rural. The commenters state that their pharmacies should, therefore, receive the rural supplemental payment of $1.00 per prescription. RESPONSE: The department disagrees. The department utilized the standardized definition of "rural area," as defined by the Office of Management and Budget (OMB), Office of the President of the United States. No alternate standardized definitions distinguishing urban from rural areas were proposed by commenters to the rule. The department developed the rural/urban payment differential in response to Rider 44 to the department's provision of the General Appropriations Act, which required that TDH review the need for a special dispensing fee for pharmacists in rural communities. The department reviewed the need for supplemental dispensing fees to ensure statewide access to adequate pharmacy services for Medicaid recipients. The department also amended the rule, in response to comments received, to provide a supplemental dispensing fee in the amount of the actual cost of shipping in order to ensure Medicaid recipients adequate access to pharmacy services. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several commenters stated that if a differential is to be paid, then the department should make supplemental payments to the pharmacies for which Medicaid represents a substantial portion of their business. RESPONSE: The department disagrees. Supplemental payments for high-volume Medicaid providers is not an element of a market-based system. Additionally, payment differentials based on a pharmacy's proportion of Medicaid business is inherently arbitrary. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, many pharmacists stated that the department's use of the Employees' Retirement System (ERS) as the basis for developing the market-based comparison was inappropriate. The commenters state that the department should have employed the cash-paying customer as a significant variable in the comparison since this component, combined with Medicaid, comprises the majority of their business. RESPONSE: The department disagrees. The market-based methodology adopted by the department views the market from the standpoint of other comparable, third-party payor programs which purchase drug prescription services. The department believes that comparing the largest purchaser of prescription drugs in the state with individual cash purchasers is inappropriate. One of the objectives of the market-based approach is for the department to utilize its purchasing power as the single largest payor of pharmacy services in the state. Using an individual cash customer as the basis for comparison implicitly assumes the absence of any purchasing power that might meaningfully affect the price paid for services. While the detailed comparison of the Texas Medicaid program is with the ERS system, analytical comparisons were also made with the University of Texas, Texas A&M, and the Teachers' Retirement System. These additional comparisons confirmed the findings of the January 10, 1995 report by the Legislative Budget Board to the Legislature. All of these systems are adopting or have adopted similar payment systems. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several commenters stated that the appropriate comparison with Employees' Retirement System (ERS) should be with the system which is currently in place and not the system that ERS is projecting for 1996. RESPONSE: The department disagrees. Using the current ERS system ignores the reality of the market for pharmacy services. Competition in the market for pharmacy services is resulting in reductions in reimbursement rates for these services. While ensuring adequate access to services is a necessary component of the Medicaid program, the department believes that this can be accomplished under the market-based methodology as specified in new sec.35.611. As indicated above, additional comparisons have also been made. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, independent and community-based pharmacists commented that the cost to serve Medicaid recipients is inherently higher because they are a more difficult population to serve. In particular, because many speak Spanish and some may be illiterate, additional time-consuming counseling is required. Because of this, simple comparison to other third-party arrangements may not be applicable. RESPONSE: The department agrees that while some Medicaid recipients may require more counseling and take more pharmacist time, this does not apply to all Medicaid recipients. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several of the independent and community-based pharmacists indicated that the current cost-based reimbursement methodology, which results in a dispensing expense of $5.01, is equitable and should be used as the basis for reimbursement. RESPONSE: The department disagrees. Rider 25 to the department's provisions of the General Appropriations Act specifically states that the department shall modify the Vendor Drug Program's reimbursement methodology to reduce the dispensing fee to reflect market practices and rates. In general, cost-based reimbursement systems are outdated and typically result in less than efficient program administration because incentives for cost containment do not exist. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a number of commenters and the Texas Pharmacy Association recommended that the current dispensing fee reimbursement methodology be maintained, a $5.01 dispensing expense be used in the formula, and the profit factor be set at 3.0%. RESPONSE: The department disagrees. As indicated above, the department considers the cost-based methodology to be inherently inefficient and believes that the market-based approach will result in more efficient program administration and maintain adequate access to pharmacy services for Medicaid recipients. With the exception of the Arkansas Medicaid program, the department finds no other states in which a profit factor is paid as an add-on to the dispensing expense and the cost of the drug. In a market-based approach, profit is considered to be an element of the overall payment that the state offers and a participating vendor accepts. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several commenters stated that the department should not pay for brand name drugs when a generic is available. RESPONSE: The department disagrees. The department's policy is to encourage the use of therapeutically equivalent generics through the Maximum Allowable Cost (MAC) payment caps. This comment is not germane to the new rule. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several commenters stated that the department should pay a differential dispensing fee for generics versus brand name drugs, as this is a common element of some other third-party payment plans that currently exist in the market. The commenters state that paying a higher fee for generics will serve to discourage the use of more expensive brand name drugs. RESPONSE: The department disagrees. Currently, the department estimates that only 1.0%-3.0% of generic medications are specifically substituted with brand name medications, at the written request of the physician. The department also has a program in place to identify physicians who consistently use brand name medication when a generically equivalent alternate exists and, in many instances, has been successful in altering prescription patterns. Because of the low potential for increased use of generics, paying a supplement for a service which is already being provided would result in an unnecessary increase in vendor drug expenditures. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several of the independent and community-based pharmacists suggested that the department employ a restrictive formulary in order to save money in lieu of a market-based dispensing fee. RESPONSE: The department disagrees. Using a restrictive formulary would make the department ineligible to participate in the federal rebate program, which equals approximately $120 million per year. There is no evidence that a restrictive formulary would result in savings which could approach the amount collected through the rebate program. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, some of the independent and community-based pharmacists stated that the department should limit the number of days supply for which a prescription is written. The commenters state that the current limit of 180 days should be reduced to 30-40 days. RESPONSE: The department disagrees. The department believes that the length of supply a prescription covers is primarily within the purview of the physician writing the prescription. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several of the pharmacists stated that the department should impose specific guidelines for physicians to follow which would require the use of less expensive drugs prior to prescribing more costly alternatives. RESPONSE: The department disagrees. The department's policy is that the overall content of the prescription is within the purview of the physician writing the prescription. The department's policy is to encourage the use of therapeutically equivalent generics through the Maximum Allowable Cost (MAC) payment caps. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several pharmacists criticized the current limit of three prescriptions per month for recipients over 21 years of age, and not residing in a nursing facility. The commenters state that this restriction actually results in greater overall expenditures resulting from more hospital and nursing facility admissions and should, therefore, be eliminated. RESPONSE: The department disagrees. The prescription limit referred to is not an element of the new rule, but is addressed in another section of the department's rules. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one pharmacist stated that the department should limit the number of prescriptions provided to recipients in skilled nursing facilities. RESPONSE: The department disagrees. The prescription limit referred to is not an element of the new rule, but is addressed in another section of the department's rules. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several independent pharmacists stated that they provide a unique array of services which are not typically provided by chain pharmacies, including translating instructions into Spanish, extra counseling, special packaging, and providing free delivery. The commenters state that if independent pharmacists elect against participating in the Medicaid program because of the new rule, these necessary services would not be provided by contracted chain pharmacies, and recipients would suffer. RESPONSE: The department disagrees. The department has seen no indication that the provision of translation and federally required counseling services are linked to the type of pharmacy providing the service. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several commenters stated that the department should not pay for over-the-counter drugs. RESPONSE: The department disagrees. The department believes that the result of not covering over-the-counter drugs will be the use of alternate, more expensive drugs. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several commenters recommended that the department establish a co-payment of $.50-$1.00 that recipients must pay to receive each prescription. RESPONSE: The department disagrees. The department believes that access to pharmacy services would be less than adequate if a co-payment were required of recipients and that the resulting administrative burden on pharmacies and the department would not enhance efficient program administration. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one independent pharmacist suggested that a voluntary co-payment of $.50-$1.00 be allowed. This comment indicated that the Medicaid recipients he serves would be willing to make such a payment in order to forego the hardship and likely reduction in services associated with switching pharmacies. RESPONSE: The department disagrees. The department is particularly concerned about the potential for misuse since this would necessarily be an unregulated arrangement between the provider and the Medicaid recipient. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one independent pharmacist stated that if reimbursement is reduced, the independent pharmacists will no longer be able to provide "lock-in" services. RESPONSE: The department disagrees. Providing "lock-in" services is an optional service that certain providers perform for the program. The purpose of the program is to identify Medicaid recipients who have demonstrated inappropriate use of the Medicaid program and assist them with managing their health care needs by limiting them to specific providers. This benefit accrues not only to the recipient, but to the provider and program as well, since the result is a more cost efficient use of health care resources. The department believes that the market-based methodology will result in adequate reimbursement and that providers will continue to voluntarily offer these services. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several pharmacists stated that the department inadequately reimburses for compounded and intravenously (IV) injected medications. The commenters stated that these medications require more time and effort and should be reimbursed at a higher amount. RESPONSE: This is an issue which warrants future consideration by the department. The department believes this issue is more appropriately addressed in the section of the department's rules that govern reimbursement for the acquisition cost of the drug. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one independent pharmacist stated that the department should eliminate Maximum Allowable Cost (MAC) overrides. RESPONSE: The comment does not address the reimbursement methodology for dispensing fees, which is the subject of the new rule. This comment refers to establishing pricing for generically equivalent drugs as they become available from the federal government, as required by federal law. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one commenter stated that the Medicaid program pays too much for drugs and continues to incur greater costs than are necessary for equivalent drug products. RESPONSE: This comment relates to reimbursement for the acquisition cost of the drug rather than to the dispensing fee, and reimbursement for drug cost is covered in another section of the department's rules. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one commenter stated that the Medicaid program should place greater restrictions on limiting refills. RESPONSE: The department disagrees. The department believes that it has in place adequate controls limiting the refilling of prescriptions. The new rule addresses reimbursement methodology for determining dispensing fees, rather than reimbursement for drug acquisition costs. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one commenter stated that the Medicaid program should obtain greater rebates for the more expensive, brand name drugs. RESPONSE: This is an issue which is governed by federal law and does not relate to the new rule. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one independent pharmacist stated that the department should reduce only slightly the opportunity for profit since a large reduction in reimbursement would force pharmacies that carry costly medications to turn away patients. RESPONSE: The department believes it would be inappropriate to pay a profit on all prescriptions to ensure that a small number of high cost drugs are available. This issue relates to the rule that governs the acquisition cost of the drug, rather than to the rate methodology for dispensing fees. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one commenter stated that the department should implement a tiered reimbursement system based on the cost of the drug dispensed because of the additional inventory expense associated with expensive drugs. The commenter states that paying more for expensive drugs will ensure their availability. RESPONSE: See previous response. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, one independent pharmacist stated that the department should obtain larger rebates from the manufacturer as a means to sustain reimbursement to pharmacists. RESPONSE: This is an issue which is governed by federal law and does not relate to the new rule. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several pharmacists stated that the department should pay for cognitive services for recipients that have diseases such as diabetes, asthma, and high blood pressure. RESPONSE: The department agrees that this issue warrants additional consideration. However, the department believes this to be outside the scope of the new rule. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several pharmacists stated that all of the Medicaid programs should share in making up for the budget shortfall and that the Vendor Drug program is being asked to shoulder a disproportionate share of the necessary savings. RESPONSE: The department disagrees. The new rule addresses rate methodology for determining dispensing fees, rather than program funding. The new rule is in response to Riders 25 and 44 to the department's provisions of the General Appropriations Act for the 1996-1997 biennium directing the department to reduce the dispensing fee and implement a market-based reimbursement methodology. The January 10, 1995 Legislative Budget Board report to the Legislature found that Medicaid's cost-based reimbursement is excessive. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a pharmacist providing services for home infusion patients stated that TDH reimbursement is too low to cover the cost of providing care to these patients. The additional services provided to these patients include establishing charts, counseling, compounding, extra pre- certification costs, extra supplies, and delivery. The commenter recommends leaving reimbursement unchanged. RESPONSE: The department believes that the issue raised by the commenter warrants further consideration by the department. However, the new rule addresses reimbursement methodology for determining market-based dispensing fees, rather than cost of providing care and drug acquisition cost. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a contracted pharmacy that provides hemophilia factor and receives federal, public health service pricing under the Public Health Services Act commented that the section of the proposed reimbursement methodology which allows the department to pay for actual shipping costs for such entities will still not reimburse them for many of the costs which are uniquely associated with the pharmaceutical treatment of hemophilia patients. The commenter states that in order to satisfy federal requirements for participation in this program, a pharmacy has been specially created with the sole purpose of receiving, packaging, and distributing hemophilia-related products. RESPONSE: The department believes that the supplemental dispensing fee in the amount of the actual cost of shipping is adequate. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a contracted pharmacy that provides hemophilia factor stated that the reduction in reimbursement impairs their ability to provide cognitive services that their patients need to survive. The proposed rates do not cover the cost of inventory or refrigeration of these special products. RESPONSE: The department disagrees. The department believes that the section of the adopted rules that addresses the supplemental fee paid to providers that obtain public health service pricing for dispensing hemophilia-related products will provide the necessary access to the entire range of services entailed. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, several pharmacists that serve long-term care facilities stated that many of the residents of these facilities that ultimately become Medicaid eligible will receive necessary pharmacy services while their eligibility status is pending. The commenter states that because the Medicaid program will not reimburse for prescriptions provided until eligibility is certified, the state, in effect, receives an interest free loan from the pharmacist. The commenter states that the cost of carrying these accounts receivable should be born by the state. RESPONSE: This comment relates to the client eligibility determination process and the issue of when payments for covered services can begin, rather than with the methodology for determining the dispensing fee. These issues are covered in other sections of the TDH rules. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, the representative for the Texas Health Care Association (THCA) stated that neither THCA nor the Texas Department of Human Services (TDHS) was aware of the proposed rule change. RESPONSE: The department satisfied the legal obligation regarding notification and publication of the proposed rule (see 20 TexReg 10474-10476, 10660-10662, December 12, 1995). Additionally, TDHS staff have been informed of the progress of the rule. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a commenter representing pharmacies that serve long-term care facilities stated that the comparison with the ERS system does not appropriately capture the differences between the two populations being served. The commenter states that the Medicaid long-term care population tends to be older and more frail, have complex medication regimens, are confined to the facility, and lack any discretionary funds. The commenter states that the dispensing fee methodology should recognize these differences. RESPONSE: The department disagrees. The department believes that this population will be adequately served under a market-based approach. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a commenter representing pharmacies that serve long-term care facilities stated that these pharmacies provide unit dose packaging and special delivery services that will not be adequately reimbursed under the new rule. These differences should be considered in developing a market-based methodology. RESPONSE: The department disagrees. The department does not believe that contracted pharmacies which are typically closed to retail business and which provide services exclusively to long-term care facilities inherently have a higher total cost of operation as a result of the population they serve and the services they offer. While there may be some elements of the cost structure for a closed pharmacy which exceed that of a retail, independently owned pharmacy, there are also offsetting, reduced expenditures that are not available to the more traditional pharmacy operation. These would include, but not be limited to, reduced rents since location is unlikely to be as important to the closed pharmacy, better drug purchases through volume discounts not available to independent pharmacists, and natural economies of scale generally associated with serving a specialized population. The department also believes that some of the services being provided, such as the "Drug Distribution Systems" are, perhaps, more appropriately recognized as part of the Medicaid Nursing Home program. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a commenter representing pharmacies that serve long-term care facilities stated that these types of providers also incur additional administrative burden as a result of the department's policy concerning documentation for H2 Antagonists. The commenter stated that the pharmacy must obtain written documentation not required of other medications. The commenter states that the department should reimburse these providers for the additional requisite paperwork. RESPONSE: The department disagrees. While the additional paperwork required is minimal, extra time is provided to the pharmacy for submitting the necessary documentation, hand-delivery is not required, and faxed copies are acceptable. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a commenter representing pharmacies that serve long-term care facilities stated that this type of facility incurs cost totaling $3.16 over and above that which other providers incur. The commenter states that reimbursement to such providers should be in excess of $8.00, since the most recent cost reports indicate a median cost of $5.01 to dispense each prescription. RESPONSE: The department disagrees. There is no indication that the $5.01 is representative of a market-based determination. Since these types of providers do not provide cost report information to the department, the use of cost report information from traditional pharmacy providers that contains no data on these types of providers is incomplete. No changes were made as a result of this comment. COMMENT: Concerning sec.35.611, a representative for the Texas Pharmacy Association stated that there must be reasoned justification for administrative rules, and in his opinion, that requirement has not been met. RESPONSE: The department disagrees. The department believes it has satisfied the applicable legal requirements regarding the reasoned justification for adoption of the new rule by: holding public hearings for the purpose of receiving comments to the rule as proposed; by receiving written comments to the rule as proposed for a 30 day comment period; by summarizing all the comments to the rule received by the department; by stating in the adoption preamble why the department disagrees with certain comments received; and, by making one editorial change to the rule in response to comments received with which the department agrees. The factual basis for adopting the new rule is as follows. The January 10, 1995 Legislative Budget Board report to the Texas Legislature, specifically required the department to modify the Vendor Drug Program's reimbursement methodology to reduce the dispensing fee to reflect market practices and rates, as stated in Rider 25 to the department's provisions of the General Appropriations Act for the 1996-1997 biennium. Following this report, the department and its consultants performed further review and analysis of other comparable, third-party arrangements in which prescription services are provided throughout the state. One analysis, which serves as the primary basis for the new rule, is a detailed comparison with the Texas Employees' Retirement System (ERS), which the department determined to be the system which most closely resembles the Texas Medicaid Vendor Drug Program. The market-based dispensing fee was calculated so that the total reimbursement would be comparable to the ERS system. These results were further confirmed with subsequent comparisons with other statewide, third party insurance programs. Rider 44 to the department's provisions of the General Appropriations Act for the 1996-97 biennium instructed the department to review the need for a special dispensing fee for rural areas. The department determined that a supplemental payment of $1.00 for rural areas, as defined by the Office of Management & Budget, will serve to ensure adequate access to these rural areas. In response to comments received, the department also determined that payment of one additional supplemental dispensing fee would be appropriate in order to ensure adequate access to pharmacy services for Medicaid recipients. Finally, the department believes that employing a market-based reimbursement methodology recognizes the reality of the environment within which these services are provided. The department recognizes the changes that are occurring in the market place for all health care services, and that continued reliance on a reimbursement system that is cost-based results in decreased efficiency because of the absence of incentives for providers to reduce costs. The department believes that the new rule will maintain adequate access to pharmacy services for Medicaid recipients, as well as enhance the efficient operation of the Medicaid program. No changes were made as a result of this comment. Comments were received from several independent and community-based pharmacists, representatives of pharmacies serving long-term care facilities, pharmacists serving Medicaid recipients with special needs, a representative of the Texas Federation of Drug Stores, and representatives of the Texas Pharmacy Association and the Texas Health Care Association. The department received comments in opposition to the proposed rule; comments which favored maintenance of the current rule, but recognized the need to reduce the dispensing fee; comments which were critical of the department's review of the need for a special Medicaid dispensing fee for pharmacists in rural areas; and, comments which were critical of the analysis performed by the department and its consultant. The department disagrees with the comments that favored maintaining the current rule. The department also disagrees with the comments in opposition to the new rule which establishes the market-based reimbursement methodology. The department agrees with the comments received regarding the need to ensure adequate access to pharmacy services, and has made one editorial change to allow for payment of an additional supplemental dispensing fee in order to ensure adequate access to pharmacy services for Medicaid recipients. Subchapter F. Reimbursement 25 TAC sec.35.611 The new section is adopted under the Human Resource Code, sec.32.021 and Texas Civil Statutes, Article 4413 (502), sec.16, which provides the Health and Human Services Commission with the authority to adopt rules to administer the state's medical assistance program and are submitted to the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the purchased health services program and authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). sec.35.611. Dispensing Fee. (a) Factors for determining dispensing fee(s). The Texas Department of Health (department) shall reimburse contracted Medicaid pharmacy providers for prescription dispensing services provided to Medicaid recipients on a market- related basis. (1) The department shall take into consideration current market conditions, practices, and levels of reimbursement, including payments made by other third- party payers, and other comparable purchasing arrangements. (2) The department shall consider the need to establish a supplemental dispensing fee for pharmacies located in rural communities. (3) The department shall consider the need to control the costs of expensive hemophilia-related products. (b) Dispensing fee(s). The Texas Board of Health (board), upon approval of the Health and Human Services Commission, shall determine the dispensing fee(s) based upon the factors set forth in subsection (a) of this section and upon the availability of funds. (1) Dispensing fees shall be determined prospectively. (2) The board shall review current market conditions, practices, and levels of reimbursement at least every two years. (3) The dispensing fee shall be $3.00 per prescription. (c) Supplemental dispensing fee(s). (1) Pharmacies that are located in a rural area shall be paid a supplemental dispensing fee of $1.00 per prescription. For the purposes of this subsection, "rural area" means a non-metropolitan area as defined by the Office of Management and Budget (OMB), Office of the President of the United States. The table in paragraph (3) of this subsection lists the 27 metropolitan statistical areas (MSAs) in Texas. All other counties are considered as non-MSAs and will receive the supplement. (2) A supplemental dispensing fee in the amount of the actual cost of shipping shall be paid to: (A) a provider for dispensing a hemophilia-related product which is subject to public health service pricing under the Veterans Health Care Act of 1992; and (B) the nearest participating provider in order to ensure adequate access to pharmacy services for medicaid recipients. (3) The following table provides the list of counties that currently comprise the OMB's definition of a Metropolitan Statistical Area for Texas. All other Texas counties shall receive the supplemental dispensing fee payment of $1.00. Figure 1: 25 TAC sec.35.611(c)(3) (d) Effective date. This section is effective March 1, 1996. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 30, 1996. TRD-9601285 Susan K. Steeg General Counsel Texas Department of Health Effective date: March 1, 1996 Proposal publication date: December 12, 1995 For further information, please call: (512) 458-7236 Subchapter I. Support Documents 25 TAC sec.35.901 The repeal is adopted under the Human Resource Code, sec.32.021 and Texas Civil Statutes, Article 4413 (502), sec.16, which provides the Health and Human Services Commission with the authority to adopt rules to administer the state's medical assistance program and are submitted to the Texas Department of Health under its agreement with the Health and Human Services Commission to operate the purchased health services program and authorized under Chapter 15, sec.1.07, Acts of the 72nd Legislature, First Called Session (1991). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 30, 1996. TRD-9601286 Susan K. Steeg General Counsel Texas Department of Health Effective date: March 1, 1996 Proposal publication date: December 12, 1995 For further information, please call: (512) 458-7236 Chapter 97. Communicable Diseases Sexually Transmitted Diseases Including Acquired Immune Deficiency Syndrome (AIDS) and Human Immunodeficiency Virus (HIV) 25 TAC sec.97.135 The Texas Department of Health (department) adopts an amendment to sec.97. 135, concerning mandatory serologic testing of women for syphilis and HIV during pregnancy and delivery, with changes to the proposed text as published in the October 31, 1995, issue of the Texas Register (20 TexReg 8961). The amendment implements Chapter 805 of the 74th Texas Legislature which requires the Board of Health to adopt standards for mandatory serologic testing of women for human immunodeficiency virus (HIV) during pregnancy and delivery. The amendment requires the physician or a person permitted by law to attend a pregnant woman and to provide printed materials about HIV, acquired immune deficiency syndrome (AIDS), and syphilis to the woman; submit a blood sample from the woman for a serologic test for HIV unless the woman objects; and provide or make available information relating to treatment of HIV infection and AIDS to women whose serologic HIV test and confirmatory test show that they are or may be infected with HIV or AIDS. The section will provide a means for educating pregnant women about HIV, AIDS, and syphilis through distribution of printed material; the early detection of HIV in pregnant women and early intervention to prevent transmission of HIV to newborns; post-test counseling; and increased awareness in the prevention of HIV and syphilis transmission. The following comments were received concerning the proposed text. Comment: Concerning sec.97.135 (d)[(c)], two commenters stated that it was unclear that HIV testing could not be done during delivery without the woman's consent to be tested. Response: The department agreed and added language to state that the woman must consent to the HIV test. Comment: Concerning sec.97.135 (f)(C), a commenter suggested that language be added which stresses the reduction of perinatal transmission of HIV. Response: The department agreed and added the suggested language. The commenters were Texas AIDS Network and Travis County HIV Educators Network. Both commenters were in favor of the rules, but both suggested adding language for clarification. The amendment is adopted under the Texas Health and Safety Code Ann.sec.81. 004(b) which provides the Texas Board of Health (board) with the authority to adopt rules necessary of the effective implementation regulations regarding Chapter 81, Communicable Diseases; Health and Safety Code sec.81.090 which provides for serologic testing of pregnant women for syphilis and HIV; and Health and Safety Code sec.12.001 which provides the board with authority to adopt rules for the performance of every duty imposed by law on the board, the department, and the commissioner of health. sec.97.135. Serological Testing for Syphilis and HIV During Pregnancy and Delivery. (a) At the time of first examination and visit, every physician or other person permitted by law to attend a pregnant woman during gestation or at the delivery of the infant resulting from such pregnancy shall for every woman so attended: (1) distribute to the woman printed materials about HIV, AIDS and syphilis which shall be provided by the Texas Department of Health and note on the woman's medical record that the distribution was made; (2) verbally notify the woman that an HIV test will be performed if the patient does not object and note on the medical records that verbal notification was given; (3) advise the woman that the result of the test taken under this section is not anonymous, and explain the difference between an anonymous and confidential test; and (4) take or cause to be taken a sample of the blood of the woman and submit such sample to a laboratory certified by the Clinical Laboratory Improvement Amendments of 1988 (CLIA-88; 42 United States Code sec.263a), for: (A) a standard serological test for syphilis; and (B) a standard serological test for HIV infection in accordance with sec.97.131 of this title (relating to Definitions). (b) (No change.) (c) If the woman objects to the test for HIV infection under subsection (a)(4)(B) of this section, the physician or other person may not conduct the test. The physician or other person shall refer the woman who objects to the test to an anonymous testing site or instruct the woman about anonymous testing methods. (d) A specimen of blood may be taken from the umbilical cord after it has been cut only if the person attending the delivery of an infant or fetus is not authorized by law or regulation to draw a specimen of blood from the mother. If a specimen of umbilical cord blood cannot be obtained by this person, he/she will arrange for a collection of a blood sample from the mother or the infant within 24 hours of delivery by a person authorized to do so. Consent for testing must be obtained in accordance with subsection (a)(2) of this section. (e) Every physician or other person required to report births or fetal deaths shall state on each birth or fetal death certificate whether a blood test for syphilis was performed during the pregnancy. (f) If the serologic screening and confirmatory test for HIV conducted under subsection (a)(4)(B) of this section shows that the woman is or may be infected with HIV, the physician or other person who submitted the sample for the test shall: (1) provide or make available to the woman information relating to treatment of HIV infection and acquired immune deficiency syndrome, or refer the woman to an entity that provides treatment for individuals infected with HIV or acquired immune deficiency syndrome; and (2) provide or make available to the woman post-test counseling which includes: (A) the meaning of the test result; (B) the possible need for additional testing; (C) measures to prevent the transmission of HIV, especially the reduction of perinatal transmission; (D) the availability of appropriate health services; (E) the benefits of partner notification and the availability of partner notification programs; (F) increased understanding of HIV infection; (G) explanation of potential need for confirmatory testing; (H) explanation of behavior changes to decrease the potential of HIV transmission; (I) encouragement to seek appropriate medical care; and (J) encouragement to notify persons with whom there has been contact capable of transmitting HIV. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601236 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 19, 1996 Proposal publication date: October 31, 1995 For further information, please call: (512) 458-7236 Chapter 169. Zoonosis Control Rabies Control and Eradication 25 TAC sec.sec.169.22, 169.23, 169.25-169.29, 169.31, 169.33, 169. 34 The Texas Department of Health (department) adopts amendments to sec.sec.169. 22, 169.23, 169.25-169.29, 169.31, 169.33, and 169.34, concerning rabies control procedures. Sections 169.25-169.27, 169.29, 169.33, and 169.34 are adopted with changes to the proposed text as published in the November 3, 1995, issue of the Texas Register (20 TexReg 9128). Sections 169.22, 169.23, 169.28, and 169.31 are adopted without changes and will not be republished. The amendments reflect the need for enhanced public health safety measures to be implemented because of two rabies epizootics occurring in Texas; indicate that the department's Bureau of Veterinary Public Health has been abolished and the responsibilities listed in these sections are now under the Zoonosis Control Division; clarify terms used in the sections; expand humane and security requirements for rabies quarantine facilities; clarify that the age for initial rabies vaccination of dogs and cats is three months; mandate that only rabies vaccine with a three-year duration of immunity in dogs be used; clarify the procedure for submitting specimens for rabies testing; and reflect amendments to Texas Health and Safety Code, Chapter 826, Chapter 44, Acts of the 74th Legislature, Regular Session, 1995. Chapter 44 changed the name of the local health authority for rabies control in Chapter 826 to the local rabies control authority in order to minimize ambiguity and restricted the movement within and from Texas of animals at high risk for transmitting rabies. The sections cover definitions, information relating to the control of rabies, reports of human exposure to rabies, facilities for the quarantining of animals, quarantine method and testing, public and private entities that operate a quarantine facility, vaccination requirement for dogs and cats, submissions of specimens for laboratory examination and area quarantine. The following comments were received concerning the proposed sections. COMMENT: One commenter requested that a reference be given in sec.169.25(c) to clarify what the term "appropriate action" means. RESPONSE: The department agrees and will add language to reference sec.169. 27. COMMENT: One commenter requested that the term "low risk animals" be defined in sec.169.22. RESPONSE: The definition of low risk animal is located in sec.169.22. COMMENT: One commenter believes that, because 30 days are required after the vaccine is administered for a dog or cat to be "currently vaccinated," any animal that is vaccinated at three months and one day would be in violation of the law because the Texas Health and Safety Code, Chapter 826 mandates that dogs and cats be vaccinated by four months of age. The commenter also believes that requiring the injection be given to the animal by the time it reaches four months of age is more reasonable. RESPONSE: The department believes that the threat of rabies due to the epizootics allows little leeway for laxity in vaccinating dogs and cats. Chapter 826 states that dogs and cats must be "vaccinated" by four months of age, not "currently vaccinated." The law also gives the Board of Health the option of changing that age. Therefore, requiring that the injection be given at three months of age is not inconsistent with statutory law and is in the best interest of public health. COMMENT: One commenter requested that triennial rabies vaccine be mandated in only those species for which it is approved and that annual vaccine be acceptable in other species. RESPONSE: The department will add language to reflect that only a rabies vaccine which has a three-year duration of immunity in dogs may be used according to label directions in any species for which it is approved. COMMENT: Two commenters believed that the new maximum temperature requirement for animal shelters would necessitate adding air conditioning to the facility and would exacerbate already existing budget problems. RESPONSE: The department does not want to impose unfunded mandates that would place hardships on local governments. Therefore, the department has changed the wording to a more liberal interpretation of humane conditions without referencing temperature requirements. COMMENT: Two commenters believed that it would place a financial burden on cities and counties operating animal shelters if they are required to vaccinate all dogs and cats prior to release. RESPONSE: The department has removed the words "or custodian" in sec.169.29. COMMENT: Several comments were received regarding the handling of domestic ferrets which have bitten humans. RESPONSE: The department appreciates these concerns; however, the department is required to propose rules to allow comments from domestic ferret owners before finalizing these rules. Therefore, the department is proposing amendments in the near future to include domestic ferrets. Several of the commenters were individuals who were generally in favor of the rules but requested clarification. Commenters who were not in favor of the amendment to sec.169.29 were the City of Plano and the Texas Municipal League, both of which believed that requiring that all dogs and cats be vaccinated against rabies prior to adoption or reclamation from an animal shelter would place financial burdens on the animal shelters. Commenters who were not in favor of the amendment to sec.169.26 were the Victoria City-County Health Department and the Texas Municipal League, who felt that the temperature requirements for quarantine facilities would require the animal shelters to install air conditioning, which is an expense they could not afford. The amendments are adopted under the Texas Health and Safety Code, Chapter 826, "Rabies," sec.826.011, which provides the board with the authority to administer the rabies control program and adopt rules necessary to effectively administer this program; and sec.12.001, which provides the Texas Board of Health with the authority to adopt rules for the performance of every duty imposed by law on the Texas Board of Health, the Texas Department of Health, and the Commissioner of Health. sec.169.25. Reports of Human Exposure to Rabies. (a) Any person having knowledge of a potential rabies exposure to a human as defined in the Texas Health and Safety Code, sec.826.041 will report the incident to the local rabies control authority as soon as possible, but not later than 24 hours from the time of the incident. This requirement does not apply to bites by low risk animals as defined in sec.169.22 of this title (relating to Definitions). (b) The owner or custodian of the potentially rabid animal will place that animal in quarantine or submit it for testing as prescribed in sec.169.27 of this title (relating to Quarantine Method and Testing). (c) The local rabies control authority will investigate each potential exposure and assure appropriate resolution, in accordance with sec.169.27. sec.169.26. Facilities for the Quarantining of Animals. (a) Generally. (1) Structural strength. Housing facilities shall be structurally sound and shall be maintained in good repair in order to protect the animals from injury, to contain them, and to prevent exposure to other animals and the public. (2)-(5) (No change.) (6) Management. The manager of a quarantine facility should be either a licensed veterinarian or an individual who has satisfactorily completed an appropriate TDH training course. (b) Facilities-indoor. (1) Heating. Indoor housing facilities shall be sufficiently heated when necessary to protect the animals; the room temperature must not fall below 50 degrees Fahrenheit (7.2 degrees Celsius) for more than four consecutive hours at any time dogs or cats are present. (2) Cooling and Ventilation. Indoor housing facilities shall be adequately cooled and/or ventilated to provide for the health and comfort of the animals at all times. Such facilities shall be provided with fresh air either by means of windows, doors, vents, fans, or air conditioning and shall be ventilated so as to minimize drafts, odors, and moisture condensation. (3) Lighting. Indoor housing facilities shall have ample light of sufficient intensity to permit routine inspection and cleaning during the entire work period. Primary enclosures shall be situated to protect the animals from excess illumination. (4) Interior surfaces. The interior building surfaces shall be constructed and maintained so that they are impervious to moisture and may be readily sanitized. (5) Drainage. A suitable method shall be provided to rapidly eliminate excess water from indoor housing facilities. If drains are used, they shall be properly constructed and kept in good repair to avoid foul odors therefrom. If closed drainage systems are used, they shall be equipped with traps and so installed as to prevent any backup of sewage onto the floor of the room. (c)-(h) (No change.) sec.169.27. Quarantine Method and Testing. (a) When a domestic dog or cat which has bitten a human has been identified, the owner or custodian will be required to place the animal in quarantine. Unvaccinated animals should not be vaccinated against rabies during the observation period. The ten-day observation period will begin on the day of the bite incident. The animal must be placed in a Texas Department of Health (department) approved facility specified by the local rabies control authority and observed at least twice daily. However, the owner or custodian of the animal may request permission from the local rabies control authority for home quarantine if the following criteria can be met. (1) Secure facilities must be available at the home of the animal's owner or custodian, and must be approved by the local rabies control authority. (2) (No change.) (3) The local rabies control authority or a licensed veterinarian must observe the animal at least on the first and last days of the quarantine period. If the animal becomes ill during the observation period, the local rabies control authority must be notified by the person having possession of the animal. At the end of the observation period, the release from quarantine must be accomplished in writing. (4) The animal was not a stray (as defined in the Texas Health and Safety Code, sec.826.002) at the time of the bite. (b) A domestic animal which has bitten a human and has been designated by the local rabies control authority as unclaimed may be humanely killed in such a manner that the brain is not mutilated. The brain shall be submitted to a department certified laboratory for rabies diagnosis. (c) (No change.) (d) If the biting animal is a low risk animal, neither quarantine nor rabies test will be required unless the local rabies control authority has cause to believe the biting animal is rabid, in which case it should be humanely killed and tested for rabies. (e) The local rabies control authority may require an animal which has inflicted multiple bite wounds, punctures, or lacerations to the face, head, or neck of a person to be humanely killed and the brain tested for rabies. (f) If the biting animal is not included in subsection (a), (b), (c), (d), or (e) of this section, the biting animal will be humanely killed and the brain tested for rabies or the local rabies control authority may require the animal to be confined for a 30-day observation period as an alternate method to killing and testing, otherwise conforming to the requirements delineated in subsection (a) of this section. (g) (No change.) (h) Currently vaccinated guide dogs in service or currently vaccinated police dogs when a bite is inflicted in the line of duty shall not be required to be placed in quarantine. sec.169.29. Vaccination Requirement. (a) The owner of each dog or cat shall have the dog or cat vaccinated against rabies at three months of age or earlier as prescribed by the United States Department of Agriculture (USDA) and within each subsequent 12-month interval thereafter. Only USDA-licensed rabies vaccines with a three-year duration of immunity in dogs or a vaccine which has been licensed for less than two years, and for which testing to obtain approval for three-year duration of immunity is in progress, may be used according to label directions in any species for which it is approved. (b)-(c) (No change.) (d) If a veterinarian ceases the practice of veterinary medicine, the duplicate rabies vaccination certificates retained by that practice shall be turned over to the local rabies control authority. This does not apply to the sale or lease of a practice, when the records of the practice are transferred to a new owner. sec.169.33. Submission of Specimens for Laboratory Examination. Preparation of specimens either for shipment or for personal delivery for rabies diagnosis shall include the following. (1) Damage to the brain caused by shooting or other traumatizing procedures shall be avoided. (2)-(3) (No change.) (4) If specimens are shipped, two containers shall be used for packing. (A) The immediate (inner) container. Only one head shall be placed in each immediate container which shall be double plastic bags. Attach the owner's name or an identification number to each double-sealed plastic bag. Adhesive tape is useful. Do not use masking tape. A completed Texas Department of Health Form G- 9, Rabies Submission Form, which is available at the department's Bureau of Laboratories, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756, shall be placed in a separate water-proof bag. The form must contain identical information as located on the specimen bag. One form is required for each head submitted. (B) The shipping (outer) container. (i) The immediate container(s) shall be placed in an insulated shipping container of adequate strength to withstand shipping conditions, such as a styrofoam container inside a cardboard box. (ii) Sufficient refrigerant shall be added so the head will remain chilled for a minimum of 48 hours. Do not use dry ice. Gel packs or similar refrigerants are recommended. Ice is not recommended but, if used, must be doubled-bagged in heavy-duty plastic bags. (iii) Packing material, such as newspaper, shall be added to absorb water and blood in the event of leakage and buffer the specimens. (iv) Submission form(s) shall be placed in a water-proof bag on top of the packing material, just under the box top. (v) Labeling on the outside of the shipping container shall be legible and include: (I) name, address, and phone number of the appropriate laboratory (listed in paragraph (6) of this section); (II) the return address, name, and telephone number of the shipper; and (III) the following statement: "RABIES SUSPECT-REFRIGERATE ON ARRIVAL." (5) The following procedures are required for shipment: (A) shipment shall be by bus or other reliable carrier; the department does not recommend the United States Postal Service. If an overnight carrier is used, such as United Parcel Service (UPS) or Federal Express, ship the specimen such that it will arrive by Friday or delay shipment until Monday. These services do not deliver to the department on the weekend; (B) (No change.) (C) at the time of the shipment, the shipper shall telephone the appropriate laboratory and notify laboratory personnel of the shipment; and (D) the shipper shall provide the return postage (in the form of stamps, not money) if return of the shipping container is desired. (6) The certified laboratories in Texas are: (A) Austin-Bureau of Laboratories, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756, telephone the rabies shipment notification hotline at 1-800-252-8163, or the local telephone at: (512) 458-7598 or (512) 458-7515. (B)-(C) (No change.) (D) San Antonio-Laboratory, San Antonio Metropolitan Health District, 332 West Commerce Street, Room 203, San Antonio, Texas 78205, (210) 207-8780. sec.169.34. Area Quarantine. (a) Introduction. The purpose of these rules is to prevent the spread of the south Texas canine, and Texas fox rabies epizootics in accordance with Texas Health and Safety Code, sec.826.045. This rule will be administered with the cooperation of the governing bodies of counties and municipalities within the quarantine area. (b) (No change.) (c) Declaration. The board declares an area rabies quarantine. (1) (No change.) (2) Animals subject to the area quarantine. Any live: domestic dog, wolf-dog hybrid, or cat over three months of age for which an official rabies vaccination certificate as described in sec.169.29(b) of this title (relating to Vaccination Requirement) cannot be produced, or coyote (Canis latrans ), raccoon (Procyon lotor), or species of foxes indigenous to North America, is subject to the area quarantine. (3) Transport exceptions. Animals subject to the area quarantine may be transported by employees or contractors of governmental entities, when such transport is a part of their official duty. If an exempt individual transports such animals for release, the animals must be released within a ten-mile radius or within ten miles of the city limits of where they were originally captured. (d)-(e) (No change.) (f) Prohibited acts. A person shall not remove from, nor transport within the area quarantine, any animal described in subsection (c)(2) of this section. For dogs and cats, submission to the court of a valid rabies certificate issued prior to the date of the citation or a signed euthanasia release form describing the transported animal, shall be a valid defense to a charge of violation of this quarantine. (g) Special provisions for rehabilitation of raccoons. Raccoons being rehabilitated shall be: (1) vaccinated with a vaccine approved for use in raccoons by the United States Department of Agriculture and held for 30 days after vaccination without clinical signs of rabies; (2) released within a ten-mile radius or within ten miles of the city limits of where they were originally captured; and (3) transported by employees or contractors of a city or county animal control agency. (h) Rehabilitation of other wild animals. Rehabilitation of other wild animals listed in subsection (c)(2) of this section is prohibited. (i) Violation of quarantine. As provided in Texas Health and Safety Code, sec.826.046: (1) a person commits an offense if the person violates or attempts to violate subsection (f) of this section; and (2) an offense is a Class C misdemeanor. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 30, 1996. TRD-9601325 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 21, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 458-7236 The Texas Department of Health (department) adopts amendments to sec.sec.169.62-169.64; repeal of sec.169.65; and new sec.169.65, concerning training and certification of animal shelter personnel. Section 169.62 is adopted with changes to the proposed text as published in the November 3, 1995, issue of the Texas Register (20 TexReg 9128). The repeal of sec.169.65, amendments to sec.169.63 and sec.169.64, and new sec.169.65 are adopted without changes and therefore will not be republished. The amendments and the repeal remove requirements of the department to provide for the certification of animal shelter personnel and the new section will define the training as prescribed in Texas Health and Safety Code, sec.823. 004. Also, the amendments provide clarification of the term "course" as it pertains to the training of animal shelter personnel. The sections define levels of proficiency, prerequisites for certification, and certification of proficiency of animal shelter personnel. The following comments were received concerning the proposed sections. COMMENT: One commenter stated that the verbiage "Any training session" in the definition of "course" gave the implication that it could be any continuing education course, not the specific training courses offered for different levels of proficiency in the program. RESPONSE: The department agrees and has changed the wording to "An appropriate training session." COMMENT: One commenter stated the department should continue to maintain the certification portion of the training program for animal shelter personnel. RESPONSE: The department believes that this would not be in the best interest of the animal shelter personnel training program. Chapter 823 of the Texas Health and Safety Code only mandates that the department conduct appropriate training of animal shelter personnel, not certification. The certification portion of the program has grown to the extent that maintenance of it has negatively impacted the development of the training portion of the program, which is important from a public health standpoint. Additionally, the Texas Animal Control Association, the professional organization for animal control officers, has agreed to maintain the certification portion. The commenters were one individual and a representative of the City of Plano, who were generally in favor of the amendments but requested clarification and expressed concerns regarding certification. Training of Animal Shelter Personnel 25 TAC sec.sec.169.62-169.65 The amendments and new section are adopted under the Texas Health and Safety Code, sec.823.004, which provides the board with the authority to prescribe standards for training animal shelter personnel in animal health and disease control, humane care and treatment of animals, control of animals in an animal shelter, and the transportation of animals; and sec.12.001, which provides the Texas Board of Health with the authority to adopt rules for the performance of every duty imposed by law on the Texas Board of Health, the Texas Department of Health, and the Commissioner of Health. sec.169.62. Definitions. The following words and terms, when used in this undesignated head, shall have the following meanings, unless the context clearly indicates otherwise. Course-An appropriate training session administered by the Texas Department of Health for basic animal control officers, advanced animal control officers, or administrative animal control officers. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601234 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 19, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 458-7236 25 TAC sec.169.65 The repeal is adopted under the Texas Health and Safety Code, sec.823.004, which provides the board with the authority to prescribe standards for training animal shelter personnel in animal health and disease control, humane care and treatment of animals, control of animals in an animal shelter, and the transportation of animals; and sec.12.001, which provides the Texas Board of Health with the authority to adopt rules for the performance of every duty imposed by law on the Texas Board of Health, the Texas Department of Health, and the Commissioner of Health. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601235 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 19, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 458-7236 Chapter 229. Food and Drug Licensure of Wholesale Device Distributors 25 TAC sec.229.444 The Texas Department of Health (department) adopts new sec.229.444, concerning the Device Distributors and Manufacturers Advisory Committee, with changes to the proposed text as published in the October 31, 1995, issue of the Texas Register (20 TexReg 8962). The new section covers applicable law, purpose, tasks, abolishment, terms of office, officers, meetings, attendance, staff, procedures, subcommittees, statements by members, and reports to the board. The new section allows the department to establish an advisory committee for medical device distributors and manufacturers as required by Health and Safety Code, sec.431.275, for the purpose of advising the board in the development of standards and procedures relating to the licensing of distributors and manufacturers of medical devices. No comments were received regarding adoption of the new section; however the Board of Health added clarifying language regarding the composition of the committee in subsection (f)(2). The new section is adopted under Texas Civil Statutes, Article 6252-33, which set standards for the evaluation of advisory committees by the agencies for which they function; and under Health and Safety Code, sec.12.001, which provides the board with authority to adopt rules for the performance of every duty imposed by law upon the board, the department, and the Commissioner of Health. sec.229.444. Device Distributors and Manufacturers Advisory Committee. (a) The committee. An advisory committee shall be appointed under and governed by this section. (1) The name of the committee shall be the Device Distributors and Manufacturers Advisory Committee (committee). (2) The committee is required to be established by the Texas Board of Health (board) by Health and Safety Code, sec.431.275. (b) Applicable law. The committee is subject to Texas Civil Statutes, Article 6252-33, relating to state agency advisory committees. (c) Purpose. The purpose of the committee is to provide advice to the board in the area of licensure of device distributors and manufacturers. (d) Tasks. (1) The committee shall advise the board concerning rules relating to licensing of device distributors and manufacturers. (2) The committee shall advise the board in the development of standards and procedures relating to the licensing of device distributors and manufacturers; make recommendations to the board relating to the content of the rules adopted to implement the licensing of device distributors and manufacturers; and perform any other functions requested by the board to implement and administer the rules regarding the licensing of device distributors and manufacturers. (3) The committee shall carry out any other tasks given to the committee by the board. (e) Review and duration. By September 1, 1999, the board will initiate and complete a review of the committee to determine whether the committee should be continued, consolidated with another committee, or abolished. If the committee is not continued or consolidated, the committee shall be abolished on that date. (f) Composition. The committee shall be composed of five members appointed by the board. The composition of the committee shall include: (1) two consumer representatives; and (2) three nonconsumer representatives, to include device dustributors and manufacturers. (g) Terms of office. The term of office of each member shall be three years. (1) Members shall be appointed for staggered terms so that the terms of a substantial equivalent number of members will expire on August 31st of each odd numbered year. (2) If a vacancy occurs, a person shall be appointed to serve the unexpired portion of that term. (h) Officers. The committee shall elect a presiding officer and an assistant presiding officer at its first meeting after August 31st of each year. (1) Each officer shall serve until the next regular election of officers. (2) The presiding officer shall preside at all committee meetings at which he or she is in attendance, call meetings in accordance with this section, appoint subcommittees of the committee as necessary, and cause proper reports to be made to the board. The presiding officer may serve as an ex-officio member of any subcommittee of the committee. (3) The assistant presiding officer shall perform the duties of the presiding officer in case of the absence or disability of the presiding officer. In case the office of presiding officer becomes vacant, the assistant presiding officer will serve until a successor is elected to complete the unexpired portion of the term of the office of presiding officer. (4) A vacancy which occurs in the offices of presiding officer or assistant presiding officer may be filled at the next committee meeting. (5) A member shall serve no more than two consecutive terms as presiding officer and/or assistant presiding officer. (6) The committee may reference its officers by other terms such as chairperson and vice-chairperson. (i) Meetings. The committee shall meet only as necessary to conduct committee business. (1) A meeting may be called by agreement of department staff and either the presiding officer or at least three members of the committee. (2) Meeting arrangements shall be made by department staff. Department staff shall contact committee members to determine availability for a meeting date and place. (3) Each meeting of the committee shall be announced and conducted in accordance with the Open Meetings Act, Texas Government Code, Chapter 551. (4) Each member of the committee shall be informed of a committee meeting at least five working days before the meeting. (5) A simple majority of the members of the committee shall constitute a quorum for the purpose of transacting official business. (6) The committee is authorized to transact official business only when in a legally constituted meeting with quorum present. (7) The agenda for each committee meeting shall include an item entitled public comment under which any person will be allowed to address the committee on matters relating to committee business. The presiding officer may establish procedures for public comment, including a time limit on each comment. (j) Attendance. Members shall attend committee meetings as scheduled. Members shall attend meetings of subcommittees to which the member is assigned. (1) A member shall notify the presiding officer or appropriate department staff if he or she is unable to attend a scheduled meeting. (2) It is grounds for removal from the committee if a member cannot discharge the member's duties for a substantial part of the term for which the member is appointed because of illness or disability, is absent from more than half of the committee and subcommittee meetings during a calendar year, or is absent from at least three consecutive committee meetings. (3) The validity of an action of the committee is not affected by the fact that it is taken when a ground for removal of a member exists. (4) The attendance records of the members shall be reported to the board. The report shall include attendance at committee and subcommittee meetings. (k) Staff. Staff support for the committee shall be provided by the department. (l) Procedures. Roberts Rules of Order, Newly Revised , shall be the basis of parliamentary decisions except where otherwise provided by law or rule. (1) Any action taken by the committee must be approved by a majority vote of the members present once quorum is established. (2) Each member shall have one vote. (3) A member may not authorize another individual to represent the member by proxy. (4) The committee shall make decisions in the discharge of its duties without discrimination based on any person's race, creed, gender, religion, national origin, age, physical condition, or economic status. (5) Minutes of each committee meeting shall be taken by department staff. (A) A draft of the minutes approved by the presiding officer shall be provided to the board and each member of the committee within 30 days of each meeting. (B) After approval by the committee, the minutes shall be signed by the presiding officer. (m) Subcommittees. The committee may establish subcommittees as necessary to assist the committee in carrying out its duties. (1) The presiding officer shall appoint members of the committee to serve on subcommittees and to act as subcommittee chairpersons. The presiding officer may also appoint nonmembers of the committee to serve on subcommittees. (2) Subcommittees shall meet when called by the subcommittee chairperson or when so directed by the committee. (3) A subcommittee chairperson shall make regular reports to the advisory committee at each committee meeting or in interim written reports as needed. The reports shall include an executive summary or minutes of each subcommittee meeting. (n) Statement by members. The board, the department, and the committee shall not be bound in anyway by any statement or action on the part of any committee member except when a statement or action is in pursuit of specific instructions from the board, department, or committee. (o) Reports to board. The committee shall file an annual written report with the board. (1) The report shall list the meeting dates of the committee and any subcommittees, the attendance records of its members, a brief description of actions taken by the committee, a description of how the committee has accomplished the tasks given to the committee by the board, the status of any rules which were recommended by the committee to the board, anticipated activities of the committee for the next year, and any amendments to this section requested by the committee. (2) The report shall identify the costs related to the committee's existence, including the cost of agency staff time spent in support of the committee's activities. (3) The report shall cover the meetings and activities in the immediate preceding 12 months and shall be filed with the board each August. It shall be signed by the presiding officer and appropriate department staff. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601240 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 19, 1996 Proposal publication date: October 31, 1995 For further information, please call: (512) 458-7236 II. Texas Department of Health Note: The following adopted sections submitted by the Texas Department of Health will be serialized beginning in the February 13, 1996 issue of the Texas Register. The effective date for these sections is February 19, 1996. Chapter 295. Occupational Health Texas Environmental Lead Reduction 25 TAC sec.sec.295.201-295.216, 295.218-295.220 (new) TITLE 37. PUBLIC SAFETY AND CORRECTION Part XIII. Texas Commission on Fire Protection Chapter 421. Standards for Certification 37 TAC sec.421.3 The Texas Commission on Fire Protection adopts an amendment to sec.421.3, concerning minimum standards set by the commission, without changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9399). The justification for this section is that participation in the IFSAC accreditation process insures that Texas certification requirements comply with national standards for testing and training of fire protection personnel and benefits Texas fire fighters by increasing their mobility to other accredited jurisdictions. The change to this section adds language concerning objectives of the commission, to recognize the participation of the commission in the accreditation program outlined by the International Fire Service Accreditation Congress (IFSAC), by allowing the commission to grant individuals from Texas IFSAC certification. The amendment has an effective date of January 1, 1997. No comments were received on the adoption of the amendment. The amendment is adopted under Texas Government Code, sec.419.008, which provides the Texas Commission on Fire Protection with authority to propose rules for the administration of its powers and duties; and Texas Government Code, sec.419.022(a)(5), which provides the commission with authority to establish minimum requirements for fire protection personnel. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601227 Jack Woods General Counsel Texas Commission on Fire Protection Effective date: January 1, 1997 Proposal publication date: November 14, 1995 For further information, please call: (512) 918-7189 Chapter 423. Fire Suppression Subchapter A. Minimum Standards for Structure Fire Protection Personnel Certification 37 TAC sec.423.11 The Texas Commission on Fire Protection adopts new sec.423.11, concerning International Fire Service Accreditation Congress (IFSAC) certification, without changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9399). The justification for this section is that participation in the IFSAC accreditation process insures that Texas certification requirements comply with national standards for testing and training of fire protection personnel and benefits Texas fire fighters by increasing their mobility to other accredited jurisdictions. The new section allows individuals holding current Texas certification as structural fire protection personnel to apply for IFSAC certification. The new section has an effective date of January 1, 1997. No comments were received on the adoption of the new section. The new section is adopted under Texas Government Code, sec.419.008, which provides the Texas Commission on Fire Protection with authority to propose rules for the administration of its powers and duties; and Texas Government Code, sec.419.022(a)(5), which provides the commission with authority to establish minimum requirements for fire protection personnel. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601228 Jack Woods General Counsel Texas Commission on Fire Protection Effective date: January 1, 1997 Proposal publication date: November 14, 1995 For further information, please call: (512) 918-7189 Chapter 427. Certified Training Facilities 37 TAC sec.sec.427.5, 427.7, 427.9, 427.11, 427.13, 427.15, 427. 17, 427.19 The Texas Commission on Fire Protection adopts new sec. sec.427.5, 427.7, 427. 9, 427.11, 427.13, 427.15, 427.17, and 427.19, concerning certified training facilities for paid fire protection personnel, without changes to the proposed text as published in the September 12, 1995, issue of the Texas Register (20 TexReg 7175). The justification for these sections is administrative convenience. The new sections replace repealed sections dealing with the same subject matter. The new sections are being renumbered to correct the omission of sec.427.5. No comments were received on the proposed new sections. The new sections are adopted under Texas Government Code, sec.419.008, which provides the Texas Commission on Fire Protection with authority to propose rules for the administration of its powers and duties; and Texas Government Code, sec.419.028(2), which provides the commission the authority to certify facilities operated for training fire protection personnel or recruits. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601230 Jack Woods General Counsel Texas Commission on Fire Protection Effective date: February 19, 1996 Proposal publication date: September 12, 1995 For further information, please call: (512) 918-7189 37 TAC sec.sec.427.7, 427.9, 427.11, 427.13, 427.15, 427.17, 427.19, 427.21 The Texas Commission on Fire Protection adopts the repeal of sec.sec.427.7, 427.9, 427.11, 427.13, 427.15, 427.17, 427.19, and 427.21, concerning certified training facilities for paid fire protection personnel, without changes to the proposed text as published in the September 8, 1995, issue of the Texas Register (20 TexReg 7027). The justification for these repeals is administrative convenience. The repealed sections are replaced by new sections dealing with the same subject matter. No comments were received on the adoption of the repeals. The repeals are adopted under Texas Government Code, sec.419.008, which provides the Texas Commission on Fire Protection with authority to propose rules for the administration of its powers and duties; and Texas Government Code, sec.419.028(2), which provides the commission the authority to certify facilities operated for training fire protection personnel or recruits. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601229 Jack Woods General Counsel Texas Commission on Fire Protection Effective date: February 19, 1996 Proposal publication date: September 8, 1995 For further information, please call: (512) 918-7189 Fees 37 TAC sec.437.3 The Texas Commission on Fire Protection adopts an amendment to sec.437.3, concerning certification fees, without changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9400). The justification for this section is that local governments that employ previously certified fire protection personnel will not incur costs associated with proficiency testing that the commission deems unnecessary. The amendments conform subsection (f) to other rule changes concerning fire instructor certification and change the language in subsections (h), (i) and (j) relating to certificate expiration to allow re-certification without testing to the extent permitted by Government Code, sec.419.034. The amendment has an effective date of March 1, 1996. No comments were received on the adoption of the amendment. The amendment is adopted under Texas Government Code, sec.419.008, which provides the Texas Commission on Fire Protection with authority to propose rules for the administration of its powers and duties; Texas Government Code, sec.419.026, which provides the commission with authority to establish fees for certification and examinations; and Texas Government Code, sec.419.034, which provides the commission with authority to establish standards for certificate renewal. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601232 Jack Woods General Counsel Texas Commission on Fire Protection Effective date: March 1, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 918-7189 37 TAC sec.437.17 The Texas Commission on Fire Protection adopts new sec.437.17, concerning fees for International Fire Service Accreditation Congress seals, without changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9400). The justification for this section is that participation in the IFSAC accreditation process insures that Texas certification requirements comply with national standards for testing and training of fire protection personnel and benefits Texas fire fighters by increasing their mobility to other accredited jurisdictions. The new section allows the commission to charge a fee for individual IFSAC seals. The new section has a proposed effective date of January 1, 1997. No comments were received on the adoption of the new section. The new section is adopted under Texas Government Code, sec.419.008, which provides the Texas Commission on Fire Protection with authority to propose rules for the administration of its powers and duties; and Texas Government Code, sec.419.022(a)(5), which provides the commission with authority to establish minimum requirements for fire protection personnel. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601231 Jack Woods General Counsel Texas Commission on Fire Protection Effective date: January 1, 1997 Proposal publication date: November 14, 1995 For further information, please call: (512) 918-7189 Chapter 439. Examinations for Certification 37 TAC sec.439.15 The Texas Commission on Fire Protection adopts an amendment to sec.439.15, concerning testing for certification status, without changes to the proposed as text published in the November 14, 1995, issue of the Texas Register (TexReg 9401). The justification for this section is that local governments that employ previously certified fire protection personnel will not incur costs associated with proficiency testing that the commission deems unnecessary. The amendment imposes a testing requirement on individuals whose certificate has been expired for one year or longer instead of referring to "inactive status." The amendment has an effective date of March 1, 1996. No comments were received on the adoption of the amendment. The amendment is adopted under Texas Government Code, sec.419.008, which provides the Texas Commission on Fire Protection with authority to propose rules for the administration of its powers and duties; Texas Government Code, sec.419.026, which provides the commission with authority to establish fees for certification and examinations; and Texas Government Code, sec.419.034, which provides the commission with authority to establish standards for certificate renewal. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 29, 1996. TRD-9601233 Jack Woods General Counsel Texas Commission on Fire Protection Effective date: March 1, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 918-7189 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 47. Primary Home Care The Texas Department of Human Services (DHS) adopts the repeal of sec.47. 5901 and new sec.47.5901 in its Primary Home Care chapter. New sec.47.5901 is adopted with changes to the proposed text as published in the August 1, 1995, issue of the Texas Register (20 TexReg 5737). The repeal of sec.47.5901 is adopted without changes to the proposed text and will not be republished. Section 47.5902 is being withdrawn in this issue of the Texas Register. Also in this issue of the Texas Register , DHS is adopting related policies in Chapter 50 of this title and is withdrawing proposed new Chapter 20 and related policies in Chapters 19, 24, 46, 48, 50 and 52 of this title. Justification for the adoption is to provide a better understanding of the reimbursement methodology due to inclusion of additional detail, and a single set of guidelines to facilitate financial accountability relating to service delivery. The sections will function by clarifying current reimbursement methodology practice and incorporate cost report procedural changes. Family care services became an optional service under the Primary Home Care Program effective November 1, 1994. Therefore, the new sections also incorporate the reimbursement methodology for family care services into the rule chapter for primary home care. In addition, the proposal updates the methodology in order to base the determination of unit reimbursements on cost report data rather than on modeled analysis. The department received no comments regarding the proposal. DHS, however, is making the following changes. In sec.47.5901(a) DHS is deleting a reference to proposed rules which will not be adopted. DHS is changing sec.47.5901(b)(10) and (11) and (c)(8) to clarify that field audits are not limited to on-site audits. In sec.47.5901(c) DHS is eliminating procedures for treatment of cost reports covering less than a full fiscal year until such time as comprehensive cost determination rules are proposed and adopted. DHS is changing sec.47. 5901(c)(2)(B)(ii), and subsequently renumbering sec.47.5901(c)(2)(B)(iii) and revising sec.47.5901(c)(2)(C), to eliminate procedures for treatment of cost reports with low utilization or operation for less than a full fiscal year until such time as comprehensive cost determination rules are proposed and adopted. DHS is changing sec.47.5901(e)(9) to clarify that allowable employee entertainment expenses are reported as employee relations costs rather than as employee benefits. Support Documents 40 TAC sec.47.5901 The repeal is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs; and under Texas Civil Statutes, Article 4413(502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 31, 1996. TRD-9601329 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: February 21, 1996 Proposal publication date: August 1, 1995 For further information, please call: (512) 438-3765 The new section is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs; and under Texas Civil Statutes, Article 4413(502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. sec.47.5901. Reimbursement Methodology for Primary Home Care Services and Family Care Services. (a) General requirements. Cost reports pertaining to providers' fiscal years ending in calendar year 1994 or 1995 will be governed by the information in this section. (b) Cost reporting. Provider agencies must submit financial and statistical information at least annually on cost report forms provided by the Texas Department of Human Services (DHS) or on facsimiles which are formatted according to DHS specifications and are preapproved by DHS staff. All contracted providers must submit a cost report unless the number of days between the date the first DHS client received services and the provider's fiscal year end is 30 days or fewer. The provider may be excused from submitting a cost report if circumstances beyond the control of the provider make cost report completion impossible, such as the loss of records due to natural disasters or removal of records from the provider's custody by any governmental entity. Requests to be excused from submitting a cost report must be received by the Rate Analysis Department of DHS before the due date of the cost report. The Texas Board of Human Services determines reimbursements as specified in sec.24.101 and sec.24. 102 of this title (relating to General Specifications and Methodology). (1) Cost report due date. Provider agencies must submit cost reports to DHS no later than 90 days following receipt of the cost report forms. (2) Extension of due date. DHS may grant extensions of due dates for good cause. A good cause is defined as one that the provider agency could not reasonably be expected to control. Provider agencies must submit requests for extensions in writing to DHS before the cost report due date. Rate Analysis Department staff respond to requests within ten workdays of receipt. (3) Reporting period. The provider agency must prepare the cost report to reflect the activities of the provider agency during its previous fiscal year. Cost reports may be required for other periods at the discretion of DHS. (4) Failure to file an acceptable cost report. If a provider agency fails to file a cost report according to all applicable rules and instructions, DHS may withhold all provider payments until the provider agency submits an acceptable cost report. (5) Accounting requirements. The provider agency must ensure that financial and statistical information submitted in cost reports is based upon the accrual method of accounting, except for governmental institutions operated on the cash method of accounting. The provider agency's treatment of any financial or statistical item must reflect the application of the generally accepted accounting principles (GAAP) approved by the American Institute of Certified Public Accountants. (6) Allocation methods. If allocation of cost is necessary, provider agencies must use reasonable methods of allocation. DHS adjusts allocated costs if DHS considers the allocation method to be unreasonable. The provider agency must retain workpapers supporting allocations. (7) Cost report certification. Provider agencies must certify the accuracy of cost reports submitted to DHS in the format specified by DHS. Provider agencies may be liable for civil and/or criminal penalties in the case of misrepresented or falsified information. (8) Cost report supplements. DHS may at times require additional financial and statistical information other than the information contained in the cost report. (9) Review of cost reports. DHS staff review each cost report to ensure that all financial and statistical information submitted conforms to all applicable rules and instructions. The review of the cost report includes a desk audit. DHS reviews all cost reports according to the criteria in sec.24.201 of this title (relating to Basic Objectives and Criteria for Desk Review of Cost Reports). If a provider agency fails to complete cost reports according to instructions or rules, DHS returns the cost reports to the provider agency for proper completion. DHS may require information other than that contained in the cost report to substantiate reported information. (10) Field audits. DHS may perform field audits on all provider agencies that participate in the program. DHS determines the frequency and nature of audits, but ensures that they are not less than that required by federal regulations relating to the administration of the program. (11) Notification of exclusions and adjustments. DHS notifies providers of exclusions and adjustments to reported expenses made during desk reviews and field audits of cost reports as specified in sec.24.401 of this title (relating to Notification). (12) Access to records. Each provider agency or its designated agent(s) must allow access to any and all records necessary to verify information submitted to DHS on cost reports. This requirement includes records pertaining to related- party transactions and other business activities engaged in by the provider agency. If a provider agency does not allow inspection of pertinent records within 30 days following written notice from DHS, a hold is placed on vendor payments until access to the records is allowed. If the provider agency continues to deny access to records, DHS may cancel the provider agency's contract. (13) Recordkeeping requirements. Provider agencies must maintain records according to the requirements stated in sec.69.205 of this title (relating to Contractor's Records). Provider agencies must ensure that records are accurate and sufficiently detailed to support the financial and statistical information contained in cost reports. (14) Failure to maintain adequate records. If a provider agency fails to maintain adequate records to support the financial and statistical information reported in cost reports, DHS allows 30 days for the provider agency to bring recordkeeping into compliance. If a provider agency fails to correct deficiencies within 30 days from the date of notification of the deficiency, DHS may cancel the provider agency's contract for services. (c) Reimbursement determination. DHS determines reimbursement in the following manner. (1) Cost determination by cost area. DHS combines reported allowable costs into six cost areas, after allocating payroll taxes to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense and after applying employee benefits directly to the corresponding salary line item. (A) Primary Home Care (PHC) field supervisors cost area. This includes PHC field supervisors' salaries, wages, training, travel expenses and other expenses. These costs are divided by total hours of PHC service, including total nonpriority and Priority 1 service hours, in order to calculate each provider's PHC field supervisor unit cost. (B) Nonpriority attendants cost area. This includes PHC and Family Care (FC) attendants' salaries and wages, training, travel and other expenses. These costs are divided by total nonpriority hours of service, including PHC and FC, in order to calculate each provider's nonpriority attendant unit cost. (C) Administration cost area. This includes administrative salaries and wages, and other administrative expenses. These costs are allocated between nonpriority services for PHC and FC and Priority 1 services for PHC and FC, with $0.18 allocated per Priority 1 hour of service and the remaining administration costs allocated to nonpriority hours of service. The administration costs allocated to nonpriority services are divided by total nonpriority hours of service, combining PHC and FC nonpriority hours, in order to calculate each provider's nonpriority administration unit cost. The administration costs allocated to Priority 1 services are divided by total Priority 1 hours of service, combining PHC Priority 1 hours and FC Priority 1 hours, in order to calculate each provider's Priority 1 administration unit cost. (D) Facility cost area. This includes building and equipment expenses, and operation and maintenance expenses. These costs are divided by total hours of service, including nonpriority services and Priority 1 services for both PHC and FC, in order to calculate each provider's facility unit cost. (E) Priority 1 attendants cost area. This includes PHC and FC Priority 1 attendants' salaries and wages, training, travel and other expenses. These costs are divided by total Priority 1 hours of service, combining PHC and FC Priority 1 hours, in order to calculate each provider's Priority 1 attendant unit cost. (F) Family Care (FC) field supervisors cost area. This includes FC field supervisors' salaries, wages, training, travel expenses and other expenses. For reimbursement effective on or after November 1, 1994, the field supervisor costs from the 1992 Family Care Cost Report are divided by the total hours of FC service reported on the 1992 Family Care Cost Report in order to calculate each provider's FC field supervisor unit cost. (2) Exclusion of certain reported expenses and cost reports. (A) Providers are responsible for reporting only allowable costs on the cost report, except where cost report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursement. DHS excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers. The purpose is to ensure that the database reflects costs and other information which are necessary for the provision of services and are consistent with federal and state regulations. (B) Individual cost reports may not be included in the database used for reimbursement determination if: (i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or (ii) an auditor determines that reported costs are not verifiable. (C) When material pertinent to proposed reimbursements is made available to the public, the material will include the number of cost reports eliminated from reimbursement determination for the reason stated in subparagraph (B)(i) of this paragraph. (3) Projected costs. DHS projects allowable expenses per hour of service from each provider agency's reporting period to the next ensuing reimbursement period. DHS determines reasonable and appropriate economic adjusters as described in sec.24.301 of this title (relating to Determination of Inflation Indices) to calculate the projected expenses. DHS also adjusts reimbursements where new legislation, regulations, or economic factors affect costs as specified in sec.24.501 of this title (relating to Adjusting Rates When New Legislation, Regulations, or Economic Factors Affect Costs). (4) Projected cost arrays. To calculate reimbursement per hour of service, DHS rank-orders from low to high all provider agencies' projected allowable costs per hour of service in each cost area. (5) Recommended reimbursement for each cost area component. The hours of service used to calculate each cost area component for each provider agency are summed until the median hour of service is reached. The corresponding projected expense is the weighted median cost component. The cost component for each cost area is multiplied by 1.044 to calculate the recommended reimbursement for each cost area component. (6) Total recommended reimbursement. (A) For PHC nonpriority clients. DHS determines the recommended reimbursement by summing the recommended reimbursement described in paragraph (5) of this subsection for the cost area components described in paragraph (1)(A)-(D) of this subsection. (B) For PHC Priority 1 clients. DHS determines the recommended reimbursement by adding the recommended reimbursement described in subparagraph (A) of this paragraph to the recommended reimbur