Current through Reg. 49, No. 38; September 20, 2024
(a) Reimbursement ceiling determination. When
the Texas Health and Human Services Commission (HHSC) does not require a cost
report, HHSC may adjust the rate ceiling as appropriate, based on cost data
collected through the budget worksheets or other appropriate cost data related
to the program in accordance with §
RSA
355.105(h) of this title
(relating to General Reporting and Documentation Requirements, Methods, and
Procedures). For the purposes of this section, HHSC means the Texas Health and
Human Services Commission or its designee.
(b) Reimbursement ceiling determination based
on a cost-reporting process. If HHSC deems it appropriate to require cost
reporting, cost reports will be governed by the information in this subsection.
HHSC applies the general principles of cost determination as specified in
§
RSA 355.101 of this
title (relating to Introduction). The cost-reporting process is as follows:
(1) Documentation requirements. Provider
agencies must follow the cost-reporting guidelines specified in §
RSA
355.105 of this title.
(2) Excused from submission of cost reports.
If required by HHSC, a contracted provider agency must submit a cost report
unless the agency meets one or more of the conditions in §
RSA
355.105(b)(4)(D) of this
title.
(3) Exclusion of cost
reports.
(A) Provider agencies are
responsible for reporting only allowable costs on the cost report, except where
cost report instructions indicate that other costs are to be reported in
specific lines or sections. Only allowable cost information is used to
determine recommended reimbursement. HHSC excludes from reimbursement
determination any unallowable expenses included in the cost report and makes
the appropriate adjustments to expenses and other information reported by
provider agencies. The purpose is to ensure that the database reflects costs
and other information that are necessary for the provision of services and are
consistent with federal and state regulations.
(B) Individual cost reports may not be
included in the database used for reimbursement determination if:
(i) there is reasonable doubt as to the
accuracy or allowability of a significant part of the information reported;
or
(ii) an auditor determines that
reported costs are not verifiable.
(4) Allowable and unallowable costs. Provider
agencies must follow the guidelines in determining whether a cost is allowable
or unallowable as specified in §
RSA
355.102 of this title (relating to General
Principles of Allowable and Unallowable Costs). Provider agencies must follow
the guidelines for allowable and unallowable costs as specified in §
RSA
355.103 of this title (relating to
Specifications for Allowable and Unallowable Costs).
(5) Revenue. Revenue must be reported on the
cost report according to §
RSA 355.104 of this
title (relating to Revenues).
(6)
Review of cost reports. HHSC staff perform either desk reviews or field audits
on all contracted provider agencies. The frequency and nature of the field
audits are determined by HHSC to ensure the fiscal integrity of the program.
Desk reviews and field audits will be conducted in accordance with §
RSA
355.106 of this title (relating to Basic
Objectives and Criteria for Audit and Desk Review of Cost Reports), and
provider agencies will be notified of the results of a desk review or a field
audit in accordance with §
RSA
355.107 of this title (relating to
Notification of Exclusions and Adjustments). Provider agencies may request an
informal and, if necessary, an administrative hearing to dispute an action
taken by HHSC under §
RSA
355.110 of this title (relating to Informal
Reviews and Formal Appeals).
(c) Reimbursement ceiling. This subsection
applies when a cost report is required. HHSC staff determine the recommended
reimbursement ceiling as follows.
(1) HHSC
staff allocate payroll taxes and employee benefits to each salary line item on
the cost report on a pro rata basis based on the portion of that salary line
item to the amount of total salary expense. The employee benefits for
administrative staff are allocated directly to the corresponding salaries for
those positions. The allocated payroll taxes are Federal Insurance
Contributions Act (FICA) or social security, Workers' Compensation Insurance
(WCI), Federal Unemployment Tax Act (FUTA), and Texas Unemployment Compensation
Act (TUCA).
(2) HHSC staff project
allowable expenses, excluding depreciation and mortgage interest, from each
provider agency's reporting period to the next ensuing reimbursement period.
HHSC determines reasonable and appropriate economic adjusters as described in
§
RSA
355.108 of this title (relating to
Determination of Inflation Indices) to calculate the projected expenses. HHSC
staff also adjust reimbursement if new legislation, regulations, or economic
factors affect costs as specified in §
RSA
355.109 of this title (relating to Adjusting
Reimbursement When New Legislation, Regulations, or Economic Factors Affect
Costs).
(3) HHSC staff combine
allowable reported costs into four cost areas.
(A) The administrative cost area includes
administrative salaries, wages, and other administrative expenses.
(B) The facility cost area includes building
and equipment expenses, and operation and maintenance expenses.
(C) The food preparation cost area includes
raw food costs, salaries and wages of food service staff, and subcontracted
costs when food preparation is purchased.
(D) The meal delivery cost area includes meal
delivery expenses, including mileage paid; meal container expenses; and vehicle
rental, lease, use, and/or depreciation costs.
(4) A contracted provider agency's projected
expenses in each cost area are divided by its total units of service for the
reporting period to determine the projected cost per unit of service.
(5) The contracted provider agency's
projected costs per unit of service are ranked from low to high in each cost
area.
(6) The 80th percentile cost
is determined for each cost area. The recommended reimbursement ceiling is the
sum of the 80th percentile costs of the four cost areas.
(d) Reimbursement determination authority.
The reimbursement determination authority for this reimbursement ceiling is
specified in §
RSA 355.101 of this
title.
(e) Contract-specific
reimbursement. DADS determines the actual reimbursement for each contract
through negotiations between DADS staff and the provider agency. In no instance
may the negotiated unit reimbursement exceed the unit reimbursement
ceiling.
