Current through Reg. 49, No. 38; September 20, 2024
(a)
Purpose. In conducting reviews for adjustments to reimbursement, the Texas
Health and Human Services Commission (HHSC) adjusts allowable costs to account
for inflation between the reporting period and the prospective reimbursement
period. HHSC retains the discretion to measure and apply inflation adjustments
on a program-by-program basis using the options set forth in this
section.
(b) Contracting for
inflation index development. HHSC may contract with a reputable and experienced
independent firm to develop an appropriate inflation index. If HHSC obtains
such an index under contract, the agency retains the option, on a
program-by-program basis, to use this index and those described in subsection
(c) of this section, either separately or in combination, for reimbursement
determination purposes.
(c)
Inflation indices. Allowable costs are inflated using the general inflation
index defined in paragraph (1) of this subsection unless otherwise specified in
paragraph (2) of this subsection.
(1) General
inflation index. HHSC uses the Personal Consumption Expenditures (PCE)
chain-type price index, published by the Bureau of Economic Analysis of the
U.S. Department of Commerce, as the index for general inflation.
(2) Item-specific and program-specific
inflation indices. HHSC may use a specific inflation index in place of the
general inflation index defined in paragraph (1) of this subsection when an
item- or program-specific inflation index is developed using data from HHSC
cost reports or other surveys or data made available from another source, and
HHSC has determined that this specific index is derived from information that
adequately represents the program or cost to which the specific index is to be
applied. Program-specific inflation indices may be designated in
program-specific reimbursement methodology rules. Item-specific inflation
indices that HHSC may use include those listed in the subparagraphs of this
paragraph.
(A) HHSC uses the employment cost
index of wages and salaries for private industry workers in nursing and
residential care facilities to measure the inflation of wages and salaries of
licensed vocational nurses and nurse aides. This index is published by the U.S.
Bureau of Labor Statistics. Periodic reviews of the chosen inflation index are
performed based on comparisons to cumulative HHSC cost report data on nursing
wages and salaries; HHSC may modify the chosen inflation index and its
application based on these periodic reviews.
(B) To adjust costs associated with fixed
capital assets, HHSC uses one of two options. HHSC may follow program-specific
reimbursement methodology rules to calculate a fixed capital asset component of
the overall reimbursement in the form of a use fee. As an alternative to
calculating the fixed capital asset use fee, HHSC may use one-half of the
percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U)
to measure the inflation of lease expenses and to adjust the base of allowable
depreciation for assets that have undergone an ownership change.
(C) Professional and paraprofessional wage
and benefit inflation rates for state employees are based on state employee
wage and salary increases determined by the Texas Legislature.
(d) Inflation
adjustment calculations. When adjusting costs for inflation, HHSC considers
economic conditions and regulatory changes that may be reasonably anticipated
for the prospective reimbursement period as specified in §
RSA
355.109 of this subchapter (relating to
Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors
Affect Costs). For each inflation index specified in subsection (c) of this
section:
(1) the inflation index is
forecasted using a nationally recognized source available to HHSC at the time
proposed payment rates are prepared for public dissemination and comment;
and
(2) a rate of inflation over a
specific period of time is calculated and applied to the allowable costs
appropriate to that index as follows:
(A)
costs reported in HHSC cost reports or other surveys are multiplied by the
result of the inflation rate at the midpoint of the prospective reimbursement
period divided by the inflation rate at the midpoint of the provider's
reporting period; or
(B) costs are
multiplied by the result of the average inflation rate during the entire
prospective reimbursement period divided by the average inflation rate during
the entire base period.
