(a) HHSC may assess an administrative penalty if a facility:

(1) violates Texas Human Resources Code (THRC), Chapter 103, a rule, standard, or order adopted under this chapter, or a term of a license issued under this chapter;

(2) makes a false statement of a material fact that the facility knows or should know is false: (A) on an application for a license or a renewal of a license or in an attachment to the application; or (B) with respect to a matter under investigation by HHSC;

(3) refuses to allow an HHSC representative to inspect: (A) a book, record, or file required to be maintained by a facility; or (B) any portion of the premises of a facility;

(4) willfully interferes with the work of a representative of HHSC or the enforcement of this chapter;

(5) willfully interferes with an HHSC representative who is preserving evidence of a violation of THRC, Chapter 103, a rule adopted under this chapter, or a term of a license issued under this chapter;

(6) fails to pay a penalty assessed under THRC, Chapter 103 or a rule adopted under this chapter not later than the 30th day after the date the assessment of the penalty becomes final; or

(7) fails to notify HHSC of a change of ownership before the effective date of the change of ownership.

(b) HHSC assesses administrative penalties against a facility in accordance with the schedule of appropriate and graduated penalties established in this section. HHSC considers the following in determining the amount of an administrative penalty:

(1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the situation, and the hazard or potential hazard created by the situation to the health or safety of the public;

(2) the history of previous violations by a facility;

(3) the amount necessary to deter future violations;

(4) the facility's efforts to correct the violation; and

(5) any other matter that justice may require.

(c) Each day of a continuing violation constitutes a separate violation. The administrative penalties for each day of a continuing violation cease on the date the violation is corrected. A violation that is the subject of a penalty is presumed to continue on each successive day until it is corrected. The date of correction alleged by the facility in its written plan of correction will be presumed to be the actual date of correction unless it is later determined by HHSC that the correction was not made by that date or was not satisfactory.

(d) The administrative penalty schedule includes violations that warrant an administrative penalty.

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(e) HHSC may not collect an administrative penalty from a facility if, not later than the 45th day after the date the facility receives notice under subsection (j) of this section, the facility corrects the violation.

(f) Subsection (e) of this section does not apply to:

(1) a violation that HHSC determines: (A) is a pattern of violation that results in actual harm; (B) is widespread in scope and results in actual harm; (C) is widespread in scope, constitutes a potential for more than minimal harm, and relates to: (i) staffing, including staff training, ratio, and health under §98.62(b), §98.62(c), and §98.62(e) of this chapter (relating to Program Requirements); (ii) administration of medication under §98.62(f) of this chapter; or (iii) emergency preparedness and response under §98.64 of this chapter (relating to Emergency Preparedness and Response); (D) is an immediate threat to the health or safety of an elderly person or a person with a disability receiving services at a facility; or (E) substantially limits the facility's capacity to provide care;

(2) a violation described by subsection (a)(2) - (7) of this section;

(3) a violation of THRC, Chapter 102; or

(4) a second or subsequent violation of §98.62(e)(3) of this chapter that occurs before the second anniversary of the date of a previous violation of §98.62(e)(3) of this chapter.

(g) A facility that corrects a violation must maintain the correction. If the facility fails to maintain the correction until at least the first anniversary after the date the correction was made, HHSC may assess and collect an administrative penalty for the subsequent violation. An administrative penalty assessed under this subsection is equal to three times the amount of the original penalty assessed but not collected. HHSC is not required to provide the facility with an opportunity to correct the subsequent violation.

(h) HHSC issues a preliminary report stating the facts on which HHSC concludes that a violation has occurred after HHSC has:

(1) examined the possible violation and facts surrounding the possible violation; and

(2) concluded that a violation has occurred.

(i) In the report, HHSC may recommend the assessment of an administrative penalty for each violation and the amount of the administrative penalty.

(j) HHSC provides a written notice of a preliminary report to the facility not later than 10 days after the date HHSC issues the preliminary report. The written notice includes:

(1) a brief summary of each violation;

(2) the amount of each recommended administrative penalty;

(3) a statement of whether a violation is subject to correction in accordance with subsection (e) of this section and, if the violation is subject to correction, a statement of: (A) the date on which the facility must file with HHSC a plan of correction for approval by HHSC; and (B) the date on which the facility must complete the plan of correction to avoid assessment of the administrative penalty; and

(4) a statement that the facility has a right to an administrative hearing on the occurrence of the violation, the amount of the penalty, or both.

(k) Not later than 20 days after the date on which a facility receives a written notice of a preliminary report, the facility may:

(1) give HHSC written notice that the facility agrees with HHSC report and consents to the recommended penalty; or

(2) make a written request for an administrative hearing.

(l) If a violation is subject to correction under subsection (e) of this section, the facility must submit a plan of correction to HHSC for approval not later than 10 days after the date on which the facility receives the written notice.

(m) If a violation is subject to correction, and the facility reports to HHSC that the violation has been corrected, HHSC inspects the correction or takes any other step necessary to confirm the correction and notify the facility that:

(1) the correction is satisfactory and HHSC will not assess an administrative penalty; or

(2) the correction is not satisfactory and HHSC recommends an administrative penalty.

(n) Not later than 20 days after the date on which a facility receives a notice that the correction is not satisfactory and HHSC recommends an administrative penalty, the facility may:

(1) give HHSC written notice that the facility agrees with HHSC's determination and consents to the recommended administrative penalty; or

(2) make a written request to HHSC for an administrative hearing.

(o) If a facility consents to the recommended administrative penalty or does not timely respond to a notice sent under subsection (j) of this section (written notice of the preliminary report), the executive commissioner or designee assesses the recommended administrative penalty. If the executive commissioner or designee assesses the penalty, HHSC gives written notice of the penalty to the facility and the facility must pay the penalty within 30 days after receiving the notice.

(p) An administrative hearing is held in accordance with Chapter 91 of this title (relating to Hearings Under the Administrative Procedure Act) and HHSC rules at 1 Texas Administrative Code Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act).

(q) An administrative law judge sets a hearing and gives notice of the hearing if a facility that is assessed a penalty requests a hearing.

(r) The hearing is held before an administrative law judge who makes findings of fact and conclusions of law regarding the occurrence of a violation under THRC, Chapter 103, a rule adopted under this chapter or a term of a license issued under this chapter.

(s) Based on the findings of fact and conclusions of law and the recommendation of the administrative law judge, the executive commissioner or designee, by order, finds:

(1) a violation has occurred and assesses an administrative penalty; or

(2) a violation has not occurred.

(t) Executive commissioner or designee provides notice of the findings made under subsection (s) of this section to the facility charged with a violation. If the executive commissioner finds that a violation has occurred, the executive commissioner or designee provides written notice to the facility of:

(1) the findings;

(2) the amount of the administrative penalty;

(3) the rate of interest payable on the penalty and the date on which interest begins to accrue; and

(4) the facility's right to judicial review of the order of the executive commissioner.

(u) Not later than the 30th day after the date on which the order of the executive commissioner or designee is final, the facility assessed an administrative penalty must:

(1) pay the full amount of the penalty; or

(2) file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both.

(v) Notwithstanding subsection (o) of this section, HHSC may permit a facility to pay an administrative penalty in installments.

(w) If a facility does not pay an administrative penalty within the period provided by subsection (o) or (u) of this section or in accordance with the installment plan permitted by HHSC:

(1) the penalty is subject to interest; and

(2) HHSC may refer the matter to the attorney general for collection of the penalty and interest.

(x) Interest accrues:

(1) at a rate equal to the rate charged on loans to depository institutions by the New York Federal Reserve Bank; and

(2) for the period beginning on the day after the date on which the penalty becomes due and ending on the date the penalty is paid.

(y) If the amount of a penalty is reduced or the assessment of a penalty is not upheld on judicial review, the executive commissioner or designee must:

(1) remit to the facility the appropriate amount of any penalty payment plus accrued interest; or

(2) execute a release of the supersedeas bond if one has been posted.

(z) Accrued interest on the amount remitted by the executive commissioner or designee must be paid:

(1) at a rate equal to the rate charged on loans to depository institutions by the New York Federal Reserve Bank; and

(2) for the period beginning on the date the penalty is paid and ending on the date the penalty is remitted to the facility.

Source Note: The provisions of this §559.105 adopted to be effective May 1, 2013, 38 TexReg 2643; amended to be effective October 28, 2018, 43 TexReg 7210; transferred effective January 15, 2021, as published in the Texas Register December 18, 2020, 45 TexReg 9249