(a) Authority. Payments are made to qualified providers delivering Mental Health Case Management (CM) to Medicaid-enrolled individuals who are eligible for CM according to program rules established by the Department of State Health Services (DSHS). The reimbursement determination authority is specified in §355.101 of this title (relating to Introduction).
(b) Reimbursement rates. Separate rates are set for services based on the following:
  (1) Site-based setting. Routine CM is a face-to-face contact with the client at the provider's place of business (e.g., clinic, outpatient office).
  (2) Community-based setting. Intensive CM is a face-to-face contact with the client at the client's home, work place, school, or other location that best meets the need of the client.
(c) Qualified providers are reimbursed based on a 15-minute face-to-face unit of service that is prospective and uniform statewide.
(d) Rate methodology.
  (1) Initial rates. The initial rates effective September 1, 2011, will be determined by summing the total agency expenditures for each type of case management service for the most recent cost-settled fiscal year, and dividing by the total number of units of each type of service provided during that fiscal year. The total agency expenditures to provide case management services include both the interim rates paid and any adjustments made to the interim rates, such as additional payments or recoupments.
  (2) Cost report-based rates. After the Health and Human Services Commission (HHSC) determines that cost data collected as described in subsection (e) of this section is reliable and sufficient to support development of a cost report-based rate, HHSC will develop statewide reimbursement rates using the data that replaced the initial rates as follows:
    (A) Project each provider's total allowable cost per type of service from the historical cost reporting period to the prospective reimbursement period using inflation factors according to §355.108 of this title (relating to Determination of Inflation Indices);
    (B) For each provider, divide the projected cost per type of service, determined in subparagraph (A) of this paragraph, by the provider's total units of service per type of service delivered during the historical cost reporting period, to arrive at the provider's projected cost per unit of service for each type of service; and
    (C) For each type of service:
      (i) Arrange all providers' projected cost per unit of service in an array from low to high, with the corresponding total number of units of service for each provider;
      (ii) Sum the total number of units of service for each provider in the array progressively, from the lowest projected cost per unit to the highest, to create a running total;
      (iii) Divide the total number of units of service by two;
      (iv) Identify the value, from the running total sums calculated in clause (ii) of this subparagraph, that is closest to the result in clause (iii) of this subparagraph; and
      (v) Identify the cost per unit of service that corresponds to the value identified in clause (iv) of this subparagraph, to arrive at the recommended rate for that service.
(e) Reporting of costs. CM providers must submit cost report data according to HHSC's specifications.
  (1) All CM providers must submit a cost report unless the number of days between the date the first client received services and the 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 HHSC Rate Analysis Department before the due date of the cost report.
  (2) CM service providers must submit cost report data according to HHSC's specifications. In addition to the requirements of this section, the following cost reporting guidelines apply: §355.101 of this title (relating to Introduction); §355.102 of this title (relating to General Principles of Allowable and Unallowable Costs); §355.103 of this title (relating to Specifications for Allowable and Unallowable Costs); §355.104 of this title (relating to Revenues); §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures); §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports); §355.107 of this title (relating to Notification of Exclusions and Adjustments); §355.108 of this title (relating to Determination of Inflation Indices); §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs); §355.110 of this title (relating to Informal Reviews and Formal Appeals); and §355.111 of this title (relating to Administrative Contract Violation).
  (3) 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 rates. To ensure that the database reflects costs and other information that are necessary for the provision of services and is consistent with federal and state regulations, HHSC excludes from rate determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers.
  (4) Individual provider cost reports may not be included in the database used for reimbursement determination if:
    (A) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or
    (B) an auditor determines that reported costs are not verifiable.

Source Note: The provisions of this §355.743 adopted to be effective October 13, 2002, 27 TexReg 9308; amended to be effective August 31, 2004, 29 TexReg 8263; amended to be effective September 1, 2011, 36 TexReg 4653