(a) Definition. In the context of this subchapter, the term vendor hold means detaining accrued vendor payments from the effective date of the hold until the release date.
(b) Reasons for placing a pharmacy provider on vendor hold are as follows:
  (1) violation of the provisions of the pharmacy provider agreements and/or amendments;
  (2) failure to pay, within the allotted period of time, the amount of restitution as revealed by an audit of the pharmacy provider;
  (3) a request by the Office of Inspector General or the Office of Attorney General, pursuant to an investigation of a pharmacy provider for possible fraud;
  (4) failure to file a required cost report according to applicable instructions and within the prescribed time period;
  (5) failure to allow access to financial and other records in accordance with §354.1807 of this division (relating to Access to Records); or
  (6) a credible allegation of fraud, as defined in 42 CFR §455.2.
(c) HHSC will lift a vendor hold when it determines that the reason for the placement of the vendor hold is no longer present.
  (1) A vendor hold placed due to a violation of a pharmacy provider agreement and/or amendments, as described in subsection (b)(1) of this section, will be lifted when the provider proves to be compliant with the pharmacy provider agreements and/or amendments.
  (2) A vendor hold placed due to a failure to pay restitution within the allotted time period, as described in subsection (b)(2) of this section, will be lifted when restitution is paid in full.
  (3) A vendor hold placed pursuant to an investigation of fraud, as described in subsection (b)(3) of this section, will be lifted when the investigation of possible fraud ends. If fraud is found, however, the pharmacy provider's participation in the Medicaid program will be terminated.
  (4) A vendor hold placed due to a pharmacy provider's failure to file a required cost report, as described in subsection (b)(4) of this section, remains in effect until all cost-reporting deficiencies are corrected. If the cost reporting deficiencies are not corrected within three months following the due date of the report, the pharmacy provider's agreement may be cancelled. The pharmacy provider is notified of agreement cancellation when this action is taken. Notice is considered to have been made as of the date of delivery to the United States Postal Service.
  (5) A vendor hold placed due to a pharmacy provider's failure to allow access to financial and other records, as described in subsection (b)(5) of this section, remains in effect until access to the requested records is allowed. If access to the requested records is not provided within 31 days of the refusal, the pharmacy provider's agreement may be cancelled. The pharmacy provider is notified of agreement cancellation when the action is taken.
  (6) A vendor hold placed due to a credible allegation of fraud, as described in subsection (b)(6) of this subsection, will be lifted when the investigation of the fraud allegation ends. If fraud is found, however, the pharmacy provider's participation in the Medicaid program will be terminated.

Source Note: The provisions of this §354.1813 adopted to be effective December 31, 2012, 37 TexReg 9905