(a) DADS may deny an application for an initial center license or for renewal of a license for:
  (1) a violation of the THSC Chapter 248A or a standard in this chapter committed by the license holder, applicant, or a person listed on the application;
  (2) an intentional or negligent act by the center or an employee of the center that DADS determines significantly affects the health or safety of a minor served at the center;
  (3) use of drugs or intoxicating liquors to an extent that affects the license holder's or applicant's professional competence;
  (4) a felony conviction, including a finding or verdict of guilty, an admission of guilt, or a plea of nolo contendere, in this state or in any other state of any person required by this chapter to undergo a background and criminal history;
  (5) fraudulent acts, including acts relating to Medicaid fraud and obtaining or attempting to obtain a license by fraud or deception, committed by any person listed on the application;
  (6) a license revocation, suspension, or other disciplinary action taken in Texas or another state against the license holder or any person listed on the application;
  (7) criteria described in Chapter 99 of this title (relating to Denial or Refusal of License) that applies to any person required by this chapter to undergo a background and criminal history check;
  (8) aiding, abetting, or permitting a substantial violation described in paragraph (1) of this subsection about which a person listed on the application had or should have had knowledge;
  (9) a license holder or applicant's failure to provide the required information as requested on the application or in follow-up to the review of the application;
  (10) a license holder or applicant who knowingly:
    (A) submits false or intentionally misleading statements to DADS on an application;
    (B) uses subterfuge or other evasive means of filing an application;
    (C) engages in subterfuge or other evasive means of filing an application on behalf of another who is unqualified for licensure; or
    (D) conceals a material fact on an application;
  (11) a person listed on the application failing to pay the following fees, taxes, and assessments when due:
    (A) licensing fees as described in §15.112 of this subchapter (relating to Licensing Fees);
    (B) franchise taxes, if applicable; and
    (C) federal taxes, as applicable; or
  (12) a person listed on the application having a history of any of the following actions during the five-year period preceding the date of the application:
    (A) operation of a facility in Texas or another state or jurisdiction that has been decertified or had its contract canceled under the Medicare or Medicaid program;
    (B) federal or state Medicare or Medicaid sanctions or penalties;
    (C) an unsatisfied final court judgment;
    (D) eviction in Texas or another state or jurisdiction involving any property or space used as a center; or
    (E) suspension in Texas or another state or jurisdiction of a license to operate a health facility, long-term care facility, assisted living facility, or a similar facility, or a center.
(b) DADS:
  (1) denies a license to an applicant to operate a center if an applicant has on the date of the application:
    (A) a debarment or exclusion from the Medicare or Medicaid programs by the federal government or a state; or
    (B) a court injunction prohibiting an applicant or manager from operating a center.
  (2) may deny a license to an applicant to operate a new center if an applicant has a history of any of the following actions at any time preceding the date of the application:
    (A) revocation of a license to operate a health care facility, long-term care facility, assisted living facility or similar facility, or center in any state;
    (B) surrender of a license in lieu of revocation or while a revocation hearing is pending;
    (C) expiration of a license while a revocation action is pending and the license is surrendered without an appeal of the revocation or an appeal is withdrawn; or
    (D) probation period placed on a license to operate a center.
(c) DADS may consider exculpatory information provided by any person described in §15.101(f) of this subchapter (relating to Criteria and Eligibility for a License) and grant a license if DADS finds that person able to comply with THSC Chapter 248A and this chapter.
(d) In determining the denial of a license, DADS considers all final actions taken against an applicant or license holder whether issued by DADS or another state or federal agency. An action is final when administrative and judicial remedies are exhausted. All actions, whether pending or final, must be disclosed.
(e) If an applicant owns multiple centers, DADS examines the overall record of compliance in all of the centers or other facilities types and agencies. An overall record poor enough to deny issuance of a new license will not preclude the renewal of licenses of individual centers with satisfactory records.
(f) If DADS denies an application for a license or refuses to issue a renewal of a license, an applicant or license holder may request a hearing by complying with the Texas Health and Human Services Commission's rules for hearings found in 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act) and DADS rules for hearings found in Chapter 91 of this title (relating to Hearings Under the Administrative Procedure Act). An administrative hearing is conducted in accordance with Texas Government Code, Chapter 2001; 1 TAC Chapter 357, Subchapter I; and Chapter 91 of this title.

Source Note: The provisions of this §550.115 adopted to be effective September 1, 2014, 39 TexReg 6569; transferred effective May 1, 2019, as published in the Texas Register April 12, 2019, 44 TexReg 1875