(a) HHSC may deny an initial license or refuse to renew a license if any person described in §559.11(e) of this subchapter (relating to Criteria for Licensing):
  (1) is subject to denial or refusal as described in Chapter 560 of this title (relating to Denial or Refusal of License) during the time frames described in that chapter;
  (2) substantially fails to comply with the requirements described in §559.42 of this chapter (relating to Safety), §559.43 of this chapter (relating to Sanitation), and Subchapter D of this chapter (relating to Standards for Licensure), including:
    (A) noncompliance that poses a serious threat to health and safety; or
    (B) failure to maintain compliance on a continuous basis;
  (3) aids, abets, or permits a substantial violation described in paragraph (2) of this subsection about which the person had or should have had knowledge;
  (4) fails to provide the required information, facts, or references;
  (5) knowingly provides false or fraudulent information by:
    (A) submitting false or intentionally misleading statements to HHSC;
    (B) using subterfuge or other evasive means of filing;
    (C) engaging in subterfuge or other evasive means of filing on behalf of another who is unqualified for licensure;
    (D) knowingly concealing a material fact; or
    (E) being responsible for fraud;
  (6) fails to pay when due:
    (A) licensing fees as described in §559.37 of this subchapter (relating to Fees); and
    (B) franchise taxes, if applicable; or
  (7) has a history of any of the following actions during the five-year period preceding the date of the application:
    (A) received a sanction for operating a facility that has been decertified or had its contract canceled under the Medicare or Medicaid program in any state;
    (B) being assessed federal or state Medicare or Medicaid sanctions or penalties;
    (C) received unsatisfied final judgments;
    (D) was evicted from any property or space used as a facility in any state; or
    (E) received a suspension of a license to operate a health facility, long-term care facility, assisted living facility, or a similar facility in any state.
(b) Concerning subsection (a)(7) of this section, HHSC may consider exculpatory information provided by any person described in §559.11(e) of this subchapter and grant a license if HHSC finds that person able to comply with the rules in this chapter.
(c) HHSC does not issue a license to an applicant to operate a new facility if the applicant has a history of any of the following actions during the five-year period preceding the date of the application:
  (1) revocation of a license to operate a health care facility, nursing facility, assisted living facility, or similar facility in any state;
  (2) debarment or exclusion from the Medicare or Medicaid programs by the federal government or a state; or
  (3) a court injunction prohibiting any person described in §559.11(e) of this subchapter from operating a facility.
(d) Only final actions are considered for purposes of subsection (a)(7) of this section and subsection (c) of this section. An action is final when routine administrative and judicial remedies are exhausted. All actions, whether pending or final, must be disclosed.
(e) If an applicant owns multiple facilities, the overall record of compliance in all the facilities is examined. An overall record poor enough to deny issuing a new license does not preclude renewing licenses of individual facilities with satisfactory records.
(f) If HHSC denies a license or refuses to issue a license renewal, the applicant or license holder may request a hearing by following HHSC rules in 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act). An administrative hearing is conducted in accordance with Texas Government Code, Chapter 2001, and 1 TAC Chapter 357, Subchapter I.

Source Note: The provisions of this §559.31 adopted to be effective July 10, 2024, 49 TexReg 4909