(a) General principles. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction).
(b) Additional requirements. In addition to the requirements of §355.102 and §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs, and Specifications for Allowable and Unallowable Costs), the following apply to costs for the intermediate care facilities for persons with mental retardation (ICF/MR) program.
  (1) Attendant service costs. Attendant service costs are defined in §355.112 of this title (relating to Attendant Compensation Rate Enhancement).
  (2) Provider responsibilities. The provider is responsible for submission of the cost report to HHSC, and payment of amounts owed in accordance with subsection (c) of this section for services delivered on or before August 31, 2009, and payment of amounts owed in accordance with §355.112 of this title for services delivered on or after September 1, 2010, regardless of whether the provider contracts with another entity for the management or operation of the ICF/MR.
    (A) If the provider contracts with another entity for the management or operation of the ICF/MR, the provider must report the specific costs of that entity as required in the cost report instructions and not the amount for which the provider is contracting for the entity's services.
    (B) For staff whose duties include work other than the provision of attendant services for the provider, time spent providing attendant services and associated expenses may be reported as attendant service costs if properly documented in accordance with §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).
    (C) Allowable compensation for owners and related parties and definitions of owners and related parties are specified in §355.102(i) and §355.103(b)(2) of this title.
      (i) Time sheet requirement. Owners and related parties who provide multiple types of attendant service (e.g., direct care workers, direct care trainers, and job coaches) or both attendant services and non-attendant services must maintain daily time sheets that record the time spent on activities in each area. The provider must maintain documentation relating to the compensation, bonuses, and benefits of each owner or related party in accordance with §355.105(b)(2)(B)(xi) of this title.
      (ii) Calculation of allowable hourly wage rate and benefits. Allowable hourly wage rate and benefits for attendant service work must be the lesser of the actual hourly wage rate paid and benefits paid or the hourly wage rate and benefits for a comparable attendant assumed in the fully-funded model. The fully-funded model is the model as calculated under §355.456(d) of this title (relating to Reimbursement Methodology) prior to any adjustments made in accordance with §355.101 of this title (relating to Introduction) and §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations or Economic Factors Affect Costs) for the rate period.
      (iii) Calculation of allowable hours for attendants. Allowable hours per unit of service for an attendant when the reported hours include related-party hours, are determined as follows:
        (I) Step 1. Determine the hours per unit of service for a comparable attendant-service staff-type assumed in the fully-funded model as defined in clause (ii) of this subparagraph, adjusted for the provider's average Level of Need (LON) during the reporting period.
        (II) Step 2. Determine the hours per unit of service encompassed by the 90th percentile in the array of hours per unit of service for comparable attendant-service staff-types as reported by those contracted providers not reporting any related-party hours for that staff-type, adjusted for the provider's average LON during the reporting period.
        (III) Step 3. Determine the greater of Step 1 and Step 2.
        (IV) Step 4. Determine the actual hours worked by the staff-type per unit of service.
        (V) Step 5. Determine the lesser of Step 4 and Step 3. This value is the allowable hours per unit of service for the attendant-service staff-type.
      (iv) Exception to related party adjustment. If at least 40 percent of total labor hours in a specific related party's attendant-service staff-type were provided by non-related-parties, the related-party's hourly wage rate may be the higher of the model assumption for that attendant-service staff-type described in clause (ii) of this subparagraph or the non-related party average for that attendant-service staff-type, so long as the non-related party average does not exceed the related-party's actual hourly wage.
      (v) Maximum attendant-care hours. During any single fiscal year, the sum of all attendant-care hours reported on any cost report(s) for any individual owner or related party cannot exceed 2,600.
      (vi) Classification of hours over the limit. Hours, hourly wages and benefits above the limits described in clauses (ii) - (v) of this subparagraph are to be reported as administrative hours, hourly wages and benefits.
  (3) Placement of vendor hold for change of ownership and contract termination. For services delivered on or before August 31, 2009, the Department of Aging and Disability Services (DADS) will place a vendor hold on a prior owner at a change of ownership which results in the execution of a new provider agreement or a contract termination. The prior owner must submit a cost report to HHSC for the current reporting period. Upon receipt of an acceptable cost report and resolution of any outstanding balances, the vendor hold will be released. For services delivered on or after September 1, 2010, placement of vendor hold for change of ownership and contract termination will be governed by the information in §355.112 of this title.
  (4) Ownership change or contract termination and failure to submit a cost report. For services delivered on or before August 31, 2009, providers with an ownership change from one legal entity to a different legal entity or a contract termination that do not submit a cost report for the fiscal year of the ownership change or contract termination within 60 days of the change of ownership or contract termination are subject to recoupment of funds related to fiscal accountability as described in subsection (c)(1)(D) of this section. The recouped funds will not be restored until the provider submits an acceptable cost report and has paid the actual amount due as specified in subsection (c)(1)(A) - (C) of this section. If an acceptable cost report is not received within 365 days of the change of ownership or contract termination date, the recoupment will become permanent. For services delivered on or after September 1, 2010, recoupment of funds related to failure to submit a cost report after an ownership change from one legal entity to a different legal entity or a contract termination will be governed by the information in §355.112 of this title.
  (5) Failure to submit a cost report. For services delivered on or before August 31, 2009, providers that do not submit a cost report completed in accordance with all applicable rules and instructions within 60 days of the placement of a vendor hold due to the failure to submit the cost report are subject to an immediate recoupment of funds related to fiscal accountability as described in subsection (c)(1)(D) of this section. The recouped funds will not be restored until the provider submits an acceptable cost report and has paid the actual amount due as specified in subsection (c)(1)(A) - (C) of this section. If an acceptable cost report is not received within 365 days of the due date, the recoupment will become permanent. For services delivered on or after September 1, 2010, recoupment of funds related to failure to submit a cost report within 60 days of the placement of a vendor hold due to failure to submit the cost report will be governed by the information in §355.112 of this title.
  (6) Other applicable rules. For cost reports pertaining to providers' fiscal years ending in calendar year 2004 and subsequent years the following applies:
    (A) Providers must follow the cost-reporting guidelines as specified in §355.105 of this title.
    (B) Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 and §355.103 of this title.
    (C) Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).
  (7) Field audit and desk review. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of the field audits are determined by HHSC to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments).
Cont'd...