(a) HHSC may propose to terminate a contract:
  (1) without cause by giving at least 60 days written notice to the contractor as provided by the contract; or
  (2) for good cause as determined by HHSC, including if:
    (A) the contractor has not provided any services under the contract during a period of 12 consecutive months;
    (B) the contractor has not complied with the terms of the contract, including:
      (i) the contractor's overall compliance score from a contract monitoring is less than 90 percent, as described in §49.411(e) of this chapter (relating to Contract and Fiscal Monitoring);
      (ii) the contractor has not submitted or complied with a corrective action plan as described in §49.522(d) of this subchapter (relating to Corrective Action Plan);
      (iii) the contractor has not submitted or complied with an immediate protection plan as described in §49.511(d) of this subchapter (relating to Immediate Protection and Immediate Protection Plan); or
      (iv) DADS or HHSC has imposed repeated actions or sanctions against the contractor that, when considered cumulatively, constitute significant non-compliance with the contract;
    (C) the contractor undergoes a change of ownership or change of legal entity and the requirements in §49.210 (a)(1) - (4) of this chapter (relating to Contractor Change of Ownership or Legal Entity) are not met, as described in §49.210(c)(1) of this chapter;
    (D) the contractor's application packet described in §49.203(a)(3) of this chapter (relating to Provisional Contract Application Process):
      (i) contained incorrect information; or
      (ii) contains information that has become incorrect and the contractor has not notified HHSC in accordance with §49.302(i) - (q) of this chapter (relating to General Requirements);
    (E) the contractor or a controlling person of the contractor is under a period of exclusion in accordance with §§1128, 1128A, 1136, 1156, or 1842(j)(2) of the Social Security Act;
    (F) the contractor or a controlling person of the contractor is ineligible to contract with HHSC in accordance with §49.206 of this chapter (relating to Ineligibility Due to Criminal History);
    (G) the contractor or a controlling person of the contractor is prohibited from contracting with HHSC in accordance with Chapter 79, Subchapter S of this title (relating to Contracting Ethics);
    (H) the contractor is required to register with the Texas Secretary of State and contractor's status with the Texas Secretary of State is not "in existence";
    (I) the contractor is required to pay Texas franchise tax and the contractor's right to transact business status with the Texas Comptroller of Public Accounts is not "active";
    (J) HHSC or another governmental entity proposed or imposed a penalty, revocation, denial, termination, or suspension against a license, certification, or registration held by the contractor;
    (K) the contractor no longer has a license, certification, accreditation or other document required by §49.302(a) of this chapter;
    (L) the contractor or a controlling person of the contractor is listed on:
      (i) the HHSC employee misconduct registry as unemployable;
      (ii) the HHSC nurse aide registry as revoked or suspended;
      (iii) the United States System for Award Management maintained by the General Services Administration;
      (iv) the LEIE maintained by the United States Department of Health and Human Services, Office of Inspector General;
      (v) the LEIE maintained by the HHSC Office of Inspector General;
      (vi) the Debarred Vendor List maintained by the Texas Comptroller of Public Accounts and the period of debarment has not expired; or
      (vii) the HHS list of exclusions;
    (M) the contractor or a controlling person of the contractor has been confirmed by DFPS or HHSC as having committed abuse, neglect, or exploitation;
    (N) HHSC proposed or imposed an action or sanction against:
      (i) another contract of the contractor or a controlling person of the contractor; or
      (ii) a contract of a person for whom the contractor or a controlling person of the contractor was a controlling person;
    (O) a governmental entity other than HHSC or a managed care organization contracting with a governmental entity proposed or imposed an action or sanction against:
      (i) a contractual agreement of the contractor or a controlling person of the contractor; or
      (ii) a contractual agreement of a person for whom the contractor or a controlling person of the contractor was a controlling person;
    (P) the contractor or a controlling person of the contractor terminated a contractual agreement with a governmental entity in a federal health care program, as defined in §1128B(f) of the Social Security Act, while an adverse action or sanction was proposed or in effect;
    (Q) the contractor or a controlling person of the contractor terminated another contract while an action or sanction was proposed or in effect;
    (R) the contractor or a controlling person of the contractor has an unresolved financial liability with HHSC or another governmental entity;
    (S) HHSC denies or terminates certification of a contractor that has a contract for the HCS or TxHmL Program, in accordance with §9.183 of this title (relating to Program Provider Compliance and Corrective Action) or §9.587 of this title (relating to Program Provider Compliance and Corrective Action); or
    (T) for a contractor that has a contract for Title XIX DAHS, Title XX AFC, RC, or DAHS, the contractor does not have a legal right to occupy the facility under the contract.
(b) If HHSC proposes to terminate a contract:
  (1) in accordance with subsection (a)(1) of this section, HHSC notifies the contractor of the proposed termination in writing at least 60 days before the effective date of termination; or
  (2) in accordance with subsection (a)(2) of this section, HHSC notifies the contractor of the proposed termination in writing, which may be less than 60 days before the effective date of termination.
(c) If HHSC proposes to terminate a contract, HHSC notifies individuals receiving services from the contractor and the individual's LARs that:
  (1) HHSC has proposed to terminate the contract and has placed the contractor's payments on a vendor hold; and
  (2) an individual or LAR may choose to receive services under a contract listed on the choice list, subject to program-specific requirements.
(d) HHSC terminates a contract on the date given in HHSC's notice of proposed termination if:
  (1) the contractor does not appeal the proposed contract termination; or
  (2) the contractor appeals the proposed contract termination and the final decision from the administrative hearing is favorable to HHSC.
(e) HHSC does not pay a contractor for services provided after the effective date of contract termination.
(f) If HHSC terminates a contract, HHSC notifies the contractor and any controlling person of the contractor, in writing, of the application denial period set in accordance with §49.702(c) or (d) of this chapter (relating to Application Denial Period).

Source Note: The provisions of this §52.315 adopted to be effective September 1, 2014, 39 TexReg 6637; amended to be effective September 1, 2018, 43 TexReg 5230; amended to be effective April 28, 2020, 45 TexReg 2725; transferred effective April 29, 2024, as published in the March 29, 2024, issue of the Texas Register, 49 TexReg 2091