(a) DADS may terminate a provider agreement:
  (1) for reasons set forth in federal or state laws, rules or regulations, including this subchapter and 1 TAC Chapter 355 (relating to Reimbursement Rates);
  (2) if the program provider fails to comply with the terms of the provider agreement, including failure of the program provider's facility to maintain ICF/IID Program certification;
  (3) if federal or state laws, rules or regulations are enacted, amended, repealed or judicially interpreted so as to render the fulfillment of the provider agreement by either the program provider or DADS unfeasible or impossible, and DADS and program provider cannot agree upon amendments to the provider agreement necessary to comply with such changes to laws, rules or regulation;
  (4) if a certification made by the program provider in the provider agreement is false or becomes inaccurate;
  (5) if DADS determines that a program provider has failed to implement a DPoC in accordance with §9.267 of this division (relating to Directed Plan of Correction and Vendor Hold Based on State Survey Agency Findings); or
  (6) if, during an 18-month period, three vendor holds are imposed on payments due under that provider agreement in accordance with §9.267 of this division.
    (A) A vendor hold may be used to terminate a provider agreement in accordance with this paragraph regardless of whether there was an actual interruption of payment to the program provider.
    (B) A vendor hold may be used no more than once to terminate a provider agreement in accordance with this paragraph.
(b) If DADS proposes to terminate a provider agreement, DADS may place a vendor hold on payments due to the program provider under the provider agreement until:
  (1) an audit of the program provider's financial records, conducted in accordance with §9.269 of this division (relating to Audits) is completed;
  (2) a review of the program provider's fiscal accountability cost report, conducted in accordance with 1 TAC §355.452 (relating to Cost Reporting Procedures) and 1 TAC §355.457 (relating to Cost Finding Methodology) is completed; and
  (3) any amounts owed to DADS as a result of the audit and review are resolved.
(c) If DADS proposes to terminate a provider agreement, DADS sends a written notice of the proposed termination to the program provider. The program provider may submit a written request for an informal reconsideration (IR) in accordance with paragraph (1) of this subsection.
  (1) DADS considers a request for an IR only if the program provider submits the request and any supporting documentation the program provider wants DADS to consider to DADS, within seven days after receiving DADS notice of proposed termination.
  (2) If the program provider submits a timely request for an IR, DADS provides a written response to the program provider affirming or reversing the proposed termination.
  (3) If the program provider does not submit a timely request for an IR, or DADS affirms the proposed termination, DADS proceeds with the proposed termination in accordance with subsection (d) of this section.
(d) If DADS proposes to terminate a provider agreement after the process described in subsection (c) of this section, DADS sends a second written notice of the proposed termination to the program provider. The program provider may submit a written request for an administrative hearing in accordance with 1 TAC §357.484 (relating to Request for a Hearing).
(e) If DADS proposes to terminate a provider agreement and the program provider requests an administrative hearing in accordance with 1 TAC §357.484, DADS does not terminate the provider agreement before the completion of the administrative hearing, but payments to the program provider may be withheld by DADS.
  (1) If the final decision of the administrative hearing is favorable to DADS or the program provider does not make a timely request for an administrative hearing, then payments withheld will not be made by DADS to the program provider.
  (2) If the final decision is favorable to the program provider, then DADS pays amounts withheld and resumes payment under the provider agreement.
(f) If DADS terminates a provider agreement, DADS does not enter into a new provider agreement with the program provider until at least two days have elapsed from the effective date of the termination.
(g) DADS may enter into a new provider agreement with a program provider that has had its provider agreement terminated if:
  (1) within 30 days after termination, the program provider requests a new provider agreement; and
  (2) within 90 days after termination, DADS determines that all deficiencies or actions that led to termination of the provider agreement have been corrected and the program provider is otherwise qualified to enter into a provider agreement.
(h) In determining whether to enter into a new provider agreement with a program provider that has had its provider agreement terminated, DADS considers:
  (1) the nature, severity, and pervasiveness of the deficiencies or actions that led to termination of the provider agreement; and
  (2) the facility's or the program provider's history of compliance with ICF/IID Program requirements.
(i) The term and effective date of a new provider agreement entered into in accordance with subsection (f) of this section will be determined by DADS.
(j) If DADS determines not to enter into a new provider agreement:
  (1) a local authority must assist DADS in relocating individuals who choose to move from the facility; and
  (2) the program provider must assist DADS or the local authority in relocating individuals who choose to move from the facility.

Source Note: The provisions of this §261.268 adopted to be effective January 1, 2001, 25 TexReg 12790; amended to be effective March 31, 2002, 27 TexReg 2475; transferred effective September 1, 2004, as published in the Texas Register September 10, 2004, 29 TexReg 8841; amended to be effective November 4, 2013, 38 TexReg 7724; transferred effective October 1, 2020, as published in the Texas Register August 28, 2020, 45 TexReg 6127