(a) DADS may impose a sanction if DADS determines that the contractor failed to follow the terms of the contract or the contractor failed to comply with program rules, policies, and procedures. Examples of these failures include:      
        (1) jeopardizing a ward's health and safety;       
        (2) failing to comply with a plan of correction;       
        (3) failing to follow an agreed-upon audit resolution payment plan;       
        (4) failing to provide services according to the contract or program requirements; or       
        (5) a validated report of abuse, neglect, or exploitation when the perpetrator is an owner, employee, or volunteer who has contact with a ward or with the estate or  benefits of a ward.       
      (b) DADS may impose a sanction described in this subsection.      
        (1) Plan of correction. DADS may require a contractor to submit a plan of correction that includes the date the findings will be corrected.       
        (2) Protective action plan. DADS may require a contractor to take immediate action and put into place an abbreviated and immediate protective action plan if DADS identifies health or safety issues. The plan must address the contractor's actions to be taken to ensure the health and safety of the ward.       
        (3) Recoupment. DADS may collect money the contractor owes as the result of overpayments or other billing irregularities or both.       
        (4) Ward  referral hold. DADS may stop referring new wards to the contractor. The ward referral hold is released when DADS determines the contractor has resolved the reason for the hold.       
        (5) Contractor hold. DADS may withhold a contractor's payments. The contractor hold is released when DADS determines the contractor has resolved the reason for the hold.       
        (6) Involuntary contract termination. DADS may terminate a contractor's contract for cause by citing the contractor's failure to comply with the terms of the contract or with DADS program rules, policies, and procedures. If DADS terminates a contract, DADS conducts a review to determine any overpayment or underpayment and makes a final review to determine if the contractor has met the  terms of the contract. If the account is overpaid, the contractor must reimburse DADS within 30 calendar days after receiving written notice from DADS. If the account balance is not paid in full by that time, DADS may charge interest on all unpaid debts starting on the 31st day after the contractor received the written notice from DADS. Interest is computed on a simple interest basis in accordance with the Texas Finance Code, Chapter 304, on the unpaid balance due. DADS may charge and collect interest on installment payments. If an appeal is made, interest continues to accrue during any administrative appeal process extending beyond the 31st day after notice of a balance due. If any part of an appeal is found in the contractor's favor, the interest that accrued against the part of  the appeal found in the contractor's favor is dismissed.       
        (7) Suspension. DADS may temporarily suspend the contractor's right to conduct business with DADS. The causes for and conditions of suspension are described in subsection (a) of this section. A suspension is in effect until an investigation, hearing, or trial is concluded and DADS can make a determination about the agency's future right to contract. DADS may impute the conduct of an individual, corporation, partnership, or other association to the contractor.       
      (c) A contractor may appeal an adverse action DADS takes against its contract. To appeal an action, the contractor must request the appeal in writing in accordance with 1 TAC Chapter 357, Subchapter I.     
     Source Note:        The provisions of this §361.207 adopted to be effective September 1, 2006, 31 TexReg 6797; amended to be effective February 9, 2015, 40 TexReg 609; transferred effective March 15, 2022, as published in the February 25, 2022 issue of the Texas Register, 47 TexReg 983