(a) Following receipt of a contractor's notice of claim, the commissioner or other designated representative shall review the contractor's claim(s) and the Department of State Health Services' (department) counterclaim(s), if any, and initiate negotiations with the contractor to attempt to resolve the claim(s) and counterclaim(s).
(b) The parties shall begin negotiations within a reasonable period of time, not to exceed 120 days following the date the department receives the contractor's notice of claim.
(c) The parties may conduct negotiations according to an agreed schedule as long as they begin negotiations no later than 120 days following the date the department receives contractor's notice of claim.
(d) Subject to subsection (e) of this section, the parties shall complete the negotiations that are required by this subchapter as a prerequisite to a contractor's request for contested case hearing no later than 270 days after the department receives the contractor's notice of claim.
(e) The parties may agree in writing to extend the time for negotiations on or before the 270th day after the department receives the contractor's notice of claim. The agreement shall be signed by representatives of the parties with authority to bind each respective party and shall provide for the extension of the statutory negotiation period until a date certain. The parties may enter into a series of written extension agreements that comply with the requirements of this section.
(f) The contractor may request a contested case hearing before the State Office of Administrative Hearings (SOAH) pursuant to §4.23 of this title (relating to Request for Contested Case Hearing) on or before the 270th day after the department receives the contractor's notice of claim, or the expiration of any extension agreed to under subsection (d) of this section.
(g) The parties may agree to mediate the dispute at any time before the 120th day after the department receives the contractor's notice of claim or before the expiration of any extension agreed to by the parties pursuant to subsection (e) of this section. A contractor and the department may mediate the dispute even after the case has been referred to SOAH for a contested case. Any mediation shall be governed by this subchapter.
(h) Nothing in this section is intended to prevent the parties from agreeing to commence negotiations earlier than the deadline established in subsection (b) of this section, or from continuing or resuming negotiations after the contractor requests a contested case hearing before SOAH.

Source Note: The provisions of this §4.18 adopted to be effective September 16, 2010, 35 TexReg 8369