(a) Based on Texas Health and Safety Code §533A.062(b-1) (relating to Plan on Long-Term Care for Persons with an Intellectual Disability), and as authorized by the Long-Term Care Plan for Individuals with Intellectual Disabilities and Related Conditions, the Texas Health and Human Services Commission (HHSC) must:
  (1) review the state-wide bed capacity of community intermediate care facilities for individuals with an intellectual disability or related conditions (ICF/IID); and
  (2) develop a process to reallocate beds held in suspension by HHSC.
(b) As provided in §551.14 of this title (relating to Increase in Capacity), a facility may not increase its capacity without approval from HHSC.
(c) For purposes of this section only, "applicant" means a person who requests reallocated Medicaid beds in accordance with this section. An applicant may be a person:
  (1) who is not a program provider;
  (2) who is a program provider operating a licensed facility; or
  (3) who is a program provider operating a facility that is exempt from licensure in accordance with Texas Health and Safety Code §252.003 (relating to Exemptions).
(d) Notwithstanding §261.206 of this chapter (relating to Application Process), the following provisions establish the process for HHSC Long-term Care Regulation to reallocate ICF/IID Medicaid beds.
(e) If an applicant wants to request reallocated Medicaid beds, the applicant:
  (1) can request no more than six reallocated beds for each facility;
  (2) interested in obtaining reallocated beds must:
    (A) complete form HHSC 3642, ICF/IID Medicaid Bed Reallocation Application; and
    (B) email the application and all supporting documentation to: Medicaid_Bed_Allocation@hhs.texas.gov.
(f) For the reallocation, HHSC calculates the number of available beds based on the numbers of surrendered or expired beds made available during the relevant state fiscal years.
(g) When HHSC receives a complete application for reallocation, HHSC:
  (1) processes the application in the order received;
  (2) reviews the application to determine if the applicant meets the criteria for reallocation;
  (3) determines if ICF/IID beds are available for reallocation;
  (4) verifies the applicant is immediately ready to use the beds;
  (5) determines if the applicant demonstrates a need for the beds as described in subsection (g) of this section; and
  (6) if the applicant is a current program provider, determines whether the applicant has an acceptable regulatory compliance history with HHSC.
(h) The applicant must provide documentation that demonstrates the need for the requested reallocated beds by providing:
  (1) data demonstrating occupancy rates of 80 percent or greater for nine of the 12 months preceding the application if the applicant is a current program provider;
  (2) documentation of a wait list, such as letters from individuals or family members attesting that they want to receive services from the applicant; or
  (3) any other documentation showing a need for a new ICF/IID.
(i) HHSC considers the regulatory compliance history for any facility operated by the applicant. An acceptable regulatory compliance history means that, in the preceding 24 months, the applicant and controlling persons have not received any of the following sanctions:
  (1) termination of Medicaid or Medicare certification;
  (2) termination of Medicaid contract;
  (3) denial, suspension or revocation of a provider license;
  (4) cumulative Medicaid or Medicare civil monetary penalties totaling more than $5,000 in a single facility;
  (5) imposition of civil penalties pursuant to Texas Health and Safety Code §252.064;
  (6) denial of payment for new admissions;
  (7) a pattern of substantial or repeated licensing or Medicaid sanctions, including administrative penalties; or
  (8) a condition listed in §551.17 of this title (relating to Criteria for Denying a License or Renewal of a License).
(j) An applicant having no compliance history to consider must meet all other criteria for reallocation.
(k) If an applicant meets all criteria for reallocation and ICF/IID beds are available, HHSC approves the application, grants the number of beds requested, up to a maximum of six beds, and sends an approval letter to the applicant.
(l) On approval of the reallocation, the applicant must submit an initial application in the Texas Unified Licensure Information Portal within 30 days from the date of the approval letter. The applicant must also complete the provider enrollment and Medicaid contracting process as referenced in §261.206 of this chapter and §261.208 of this chapter (relating to Provider Agreement).
(m) If the applicant fails to complete and submit the initial application, the reallocation application is cancelled, and HHSC will reallocate the beds to another approved applicant or hold the beds until another provider is approved.
(n) If HHSC denies the initial application or the applicant does not complete the provider enrollment or Medicaid contracting process, HHSC reallocates the beds to another approved applicant or holds the beds until approval of another applicant.
(o) If HHSC revokes the reallocation of beds, HHSC notifies the person to whom the beds were allocated. The person may not appeal the revocation of capacity.
(p) Once HHSC reallocates all available beds, HHSC will place any approved applicants who did not receive reallocated beds on a waiting list. As additional beds become available for reallocation, HHSC will contact approved applicants on the wait list.

Source Note: The provisions of this §261.220 adopted to be effective November 8, 2021, 46 TexReg 7637