(a) HHSC conducts contract and fiscal monitoring on site or by desk review:
  (1) to determine if:
    (A) a contractor is in compliance with its contract, which requires compliance with applicable federal and state laws, rules, and regulations, provider manuals and handbooks, billing guidelines, and communications promulgated by HHSC including information letters; or
    (B) a contractor is in compliance with a corrective action plan as described in §49.522 of this chapter (relating to Corrective Action Plan) or an immediate protection plan as described in §49.511 of this chapter (relating to Immediate Protection and Immediate Protection Plan);
  (2) for purposes described in paragraph (1)(A) of this subsection, at least once during the term of a provisional contract and periodically after the effective date of a standard contract, on a schedule determined by HHSC;
  (3) by evaluating standards in accordance with:
    (A) for all contractors, a program-specific HHSC contract and fiscal compliance monitoring tool; and
    (B) for contractors that have an FMSA contract listed in §49.101(a)(5) of this chapter (relating to Application), a CDS tax monitoring tool; and
  (4) at a location identified by HHSC, which may include a location where the contractor conducts business or provides contracted services.
(b) To conduct contract and fiscal monitoring, HHSC:
  (1) sends a written notice to a contractor that includes the date the monitoring will begin and lists the records the contractor must provide at the entrance conference described in paragraph (2) of this subsection;
  (2) conducts an entrance conference with the contractor;
  (3) performs other activities, which may include:
    (A) reviewing the contractor's records;
    (B) reviewing the contractor's policies and procedures;
    (C) reviewing consumer satisfaction surveys;
    (D) interviewing a person with knowledge relevant to the contract, including an individual receiving services or the contractor's employee; and
    (E) observing an individual receiving services;
  (4) conducts an exit conference with the contractor, at which HHSC reports the compliance score for each standard reviewed and an overall compliance score; and
  (5) notifies the contractor, in writing, of the results of the monitoring.
(c) A contractor must provide records listed in the notice described in subsection (b)(1) of this section to HHSC at the entrance conference described in subsection (b)(2) of this section. If a contractor does not provide records in accordance with this subsection, HHSC conducts contract monitoring with any records provided.
(d) If HHSC determines that a contractor's compliance score for a standard on a monitoring tool described in subsection (a)(3) of this section is less than 90 percent, HHSC requires the contractor to submit an acceptable corrective action plan to HHSC in accordance with §49.522 of this chapter.
(e) If HHSC determines that a contractor's overall compliance score on a monitoring tool described in subsection (a)(3) of this section is less than 90 percent, HHSC considers the contractor out of substantial compliance with the contract and may:
  (1) determine that a contractor does not qualify for a standard contract;
  (2) impose an action or sanction in accordance with Subchapter E of this chapter (relating to Enforcement by HHSC and Termination by Contractor);
  (3) conduct additional monitoring in accordance with this section; or
  (4) take a combination of the actions described in paragraphs (1) - (3) of this subsection.
(f) If, during a contract and fiscal monitoring, HHSC determines that the contractor is not protecting an individual's health and safety, HHSC may require the contractor to:
  (1) immediately protect the individual's health and safety; and
  (2) submit an immediate protection plan in accordance with §49.511 of this chapter.

Source Note: The provisions of this §52.211 adopted to be effective September 1, 2014, 39 TexReg 6637; amended to be effective September 1, 2018, 43 TexReg 5230; transferred effective April 29, 2024, as published in the March 29, 2024, issue of the Texas Register, 49 TexReg 2091