(a) This section applies to nursing facilities (NFs) that have been licensed and certified as eligible for participation under Title XIX.
(b) Each nursing facility (NF) must comply with the state requirements for participation and the facility's contract on a continuing basis.
(c) Each NF must comply with the Texas Health and Human Services Commission's (HHSC's) utilization review requirements as provided in 1 TAC §371.212 (relating to Minimum Data Set Assessments) and §371.214 (relating to Resource Utilization Group Classification System).
(d) A facility may not participate in the Texas Medical Assistance Program if it has restrictive policies or practices, including:
  (1) requiring the resident to make a will, with the facility named as legatee or devisee;
  (2) requiring the resident to assign his life insurance to the facility;
  (3) requiring the resident to transfer property to the facility;
  (4) requiring the resident to pay a lump sum entrance fee or make any other payment or concession to the facility beyond the recognized rate for board, room, and care as a condition for entry, departure, or continued stay;
  (5) controlling or restricting the resident, the resident's guardian, or responsible party in the use of the resident's personal needs allowance;
  (6) restricting the resident from leaving the facility at will except as provided by state law;
  (7) restricting the resident from applying for Medicaid for a specified period of time;
  (8) denying appropriate care to an individual on the basis of his race, religion, color, national origin, sex, age, disability, marital status, or source of payment; and
  (9) preventing terminally ill adult residents from exercising their will in making written or unwritten directives to reject life-sustaining procedures.
(e) If DADS has documentation showing good cause, it reserves the right to reject the facility's participation or to cancel an existing contract if the facility charges the Title XIX resident, any member of his family, or any other source for supplementation or for any item except as allowed within DADS policies and regulations.
(f) If DADS suspends a facility's vendor payments or proposes to terminate a facility's contract, the facility may request an administrative hearing to challenge the action. If a facility requests a hearing, the facility must make the request in accordance with HHSC rules at 1 TAC Chapter 357, Subchapter I.
(g) DADS' interpretations of the requirements for participation or the contract may not be appealed to HHSC's hearings department unless the interpretation has caused an adverse action for the facility.
(h) Facilities must allow representatives of DADS, the Medicaid Fraud Control Unit, and the Department of Health and Human Services to enter the premises at any time to make inspections or to privately interview the residents receiving assistance from DADS.
(i) Facilities must supply DADS complete information according to federal and state requirements about the identity of:
  (1) each person who directly or indirectly owns interest of 5% or more in the facility;
  (2) each owner (in whole or in part) of any property, assets, mortgage, deed of trust, note, or other obligation secured by the facility;
  (3) each officer and director, if the facility is organized as a corporation;
  (4) each partner, if the facility is organized as a partnership (A copy of the partnership agreement is required, but the dollar amount of capital contributions of the partners may be omitted); and
  (5) any director, officer, agency, or managing employee of the institution, agency, or organization, who has ever been convicted of a criminal offense related to the person's involvement in programs established by Title XVIII, XIX, and XX (Effective dates for disclosure of any convictions are July 1, 1966, for Medicare, and January 1, 1969, for Medicaid.)
(j) If a profit-making corporation operates the facility, a copy of the following material is required:
  (1) certificate of incorporation (for Texas corporations only);
  (2) certificate of authority to do business in Texas (for out-of-state corporations only);
  (3) a resolution from the board of directors authorizing a specific person or officer to sign contracts between DADS and the corporation; and
  (4) any management contract for the facility. If no stockholder owns, directly or beneficially, 5.0% or more of the corporate stock, the president and secretary of the corporation should state this on the department form.
(k) If a nonprofit corporation operates the facility, a copy of the following material is required:
  (1) certificate of incorporation (for Texas corporations only);
  (2) certificate of authority to do business in Texas (for out-of-state corporations only);
  (3) a resolution from the board of directors authorizing a specific person or officer to sign contracts with DADS; and
  (4) a copy of any management contract for the facility.
(l) Facilities other than those described in subsections (j) and (k) of this section must furnish a copy of:
  (1) charter or other legal basis for the organization which owns the facility;
  (2) any management contract or agreement for the facility;
  (3) by-laws of the organization (if applicable); and
  (4) other information required by DADS to determine the status of the legal entity that owns the facility.
(m) Facilities must disclose business transaction information. A facility must send to DADS, within 35 days after the date of a written request, complete information on:
  (1) the ownership of a subcontractor with whom the facility has had, during the previous 12 months, business transactions totaling more than $25,000; and
  (2) any business transactions between the facility and any wholly owned supplier, or between the facility and any subcontractor during the five-year period ending on the date of the request.
(n) The facility must report changes in the required information promptly to DADS.
(o) Failure to provide this information may result in suspension, termination, or other contract action, including holding vendor funds. Payment to the facility is denied beginning on the day after the date information was due, and ending on the day before the date the information is received by DADS.
(p) Each facility must comply with Government Code, §531.116. A facility that furnishes services under the Medicaid program is subject to Occupations Code, Chapter 102. The facility's compliance with that chapter is a condition of the facility's eligibility to participate as a facility under those programs.

Source Note: The provisions of this §554.2302 adopted to be effective May 1, 1995, 20 TexReg 2393; amneded to be effective January 1, 2002, 26 TexReg 10389; amended to be effective June 1, 2004, 29 TexReg 5416; amended to be effective August 31, 2004, 29 TexReg 8140; amended to be effective September 1, 2008, 33 TexReg 7264; transferred effective January 15, 2021, as published in the Texas Register December 11, 2020, 45 TexReg 8871