(a) To be eligible for reimbursement for IMD services, an IMD provider must:
  (1) submit an approved application for enrollment through means established by the department, to include evidence that the provider:
    (A) meets the Medicare conditions of participation referenced in 42 CFR §482.60(b);
    (B) is accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO);
    (C) if applicable, licensed as a mental hospital under the Texas Health and Safety Code, Chapter 577; and
    (D) has a consistent historical pattern of accepting persons involuntarily committed for inpatient mental health treatment as evidenced by having provided mental health services to a minimum of 20 persons, 65 years of age or older, involuntarily committed for inpatient mental health treatment under the Texas Health and Safety Code, Chapters 573 and 574, during the two-year period immediately preceding the date of application for participation.
  (2) have in effect a written provider agreement with the department which:
    (A) describes respective responsibilities of the provider and the department, including arrangements to ensure:
      (i) joint planning efforts;
      (ii) development of alternative methods of care;
      (iii) access by the department and HHSC to the institution, its patients, and patients' records when necessary to carry out the agencies' responsibilities;
      (iv) recording, reporting, and exchanging medical and social information about the patients; and
      (v) other procedures that may be required to achieve the purposes of the agreement;
    (B) assures the capacity of the provider to admit, readmit from alternate care, and treat both eligible persons voluntarily seeking services under the Texas Health and Safety Code, Chapter 572, and persons involuntarily committed for inpatient mental health treatment under the Texas Health and Safety Code, Chapters 573 and 574;
    (C) assures that the provider is meeting the requirements specified in 42 CFR §440.140(a) pertaining to providers of inpatient hospital services to persons age 65 or older in institutions for mental diseases;
    (D) assures that the provider is in compliance with those provisions of the Texas Administrative Code, Title 25, Part I, that relate to patient care and treatment in inpatient mental health facilities;
    (E) assures that the provider is serving a patient population in which more than 50% currently require institutionalization because of a mental disease; and
    (F) assures that the provider will submit cost reports and audit data in a manner authorized by the department.
(b) An IMD provider's eligibility for reimbursement must be renewed periodically at a time designated by the department, but not to exceed two years.
(c) Evidence of compliance with subsection (a) of this section is validated through reviews by the department, which occur at intervals decided upon by the department. For each Medicaid patient, the department additionally reviews:
  (1) the adequacy of services available to meet the patient's current health needs and promote the patient's maximum physical, mental, and psychosocial well-being; and
  (2) the necessity or desirability of the patient's continued placement in the IMD, including an examination of barriers to serving the patient in a less restrictive setting and the efforts of the IMD to achieve a less restrictive placement for the patient.
(d) If the IMD provider fails to provide evidence of compliance with subsection (c) of this section, then the provider may be required to take corrective action based on the findings contained in the department's report. If corrective action is required, the IMD provider must submit a corrective action plan to the department for approval. Failure to implement the corrective action plan constitutes a contract violation and the IMD provider may be subjected to any sanctions provided for in the contract, including termination.

Source Note: The provisions of this §419.375 adopted to be effective December 20, 1998, 23 TexReg 12683; amended to be effective July 3, 2007, 32 TexReg 4010