(a) Authority. Payments are made to qualified providers delivering specialized rehabilitation services to Medicaid-eligible individuals who are eligible for services in the Early Childhood Intervention Program (ECI) according to the program rules established by the Department of Assistive and Rehabilitative Services (DARS). The reimbursement determination authority is specified in §355.101 of this title (relating to Introduction).
(b) Unit of service. The unit of service is one hour and will be pro-rated for 15-minute intervals for specialized rehabilitation services on an individual and group basis.
(c) Rate methodology.
  (1) Initial rates. The rate effective October 1, 2011, will be the initial statewide rate.
  (2) Cost report-based rates. After the Health and Human Services Commission (HHSC) determines that cost data collected as described in subsection (d) of this section is reliable and sufficient to support development of a cost report-based rate, HHSC will develop statewide reimbursement rates using that data to replace 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), to arrive at the projected cost per type of service;
    (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 low to high 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.
(d) Reporting of costs.
  (1) All rehabilitation services 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. A 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 Provider Finance Department before the due date of the cost report as set out in §355.105(c) of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).
  (2) Cost reporting. Rehabilitation services providers must submit cost report data according to HHSC's specifications. In addition to the requirements of this section, the following cost reporting requirements 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 §355.11 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 the reported costs are not verifiable.

Source Note: The provisions of this §355.8422 adopted to be effective March 1, 1993, 18 TexReg 593; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; transferred effective September 1, 1997, as published in the Texas Register December 11, 1998, 23 TexReg 12660; amended to be effective October 1, 2011, 36 TexReg 5665; amended to be effective February 22, 2024, 49 TexReg 858