Current through Reg. 50, No. 13; March 28, 2025
(a)
The following is the authority and process for determining payment rates:
(1) For payment rates established prior to
September 1, 2005, the Department of Family and Protective Services (DFPS;
formerly the Department of Protective and Regulatory Services) reviewed payment
rates for providers of 24-hour residential child care services every other year
in an open meeting, after considering financial and statistical information,
DFPS rate recommendations developed according to the provisions of this
subchapter, legislative direction, staff recommendations, agency service
demands, public testimony, and the availability of appropriated revenue. Before
the open meeting in which rates were presented for adoption, DFPS sent rate
packets containing the proposed rates and average inflation factor amounts to
provider association groups. DFPS also sent rate packets to any other
interested party, by written request. Providers who wished to comment on the
proposed rates could attend the open meeting and give public testimony. Notice
of the open meeting was published on the Secretary of State's web site at
http://www.sos.state.tx.us/open [File Link Not Available]. DFPS notified all
foster care providers of the adopted rates by letter.
(2) For payment rates established September
1, 2005 and thereafter, the Department of Family and Protective Services (DFPS)
approves rates that are statewide and uniform. The Health and Human Services
Commission (HHSC) calculates the rates for DFPS and takes into consideration
staff recommendations based on the application of formulas and procedures
described in this chapter when calculating the rates. However, DFPS may adjust
staff recommendations when DFPS deems such adjustments are warranted by
particular circumstances likely to affect achievement of program objectives,
including economic conditions and budgetary considerations. Reimbursement
amounts will be determined coincident with the state's biennium. Providers of
24-hour residential child care services will have the opportunity to discuss
rate changes in regularly scheduled DFPS public meetings.
(b) For payment rates in effect for state
fiscal year (SFY) 2002 and 2003, DFPS develops rate recommendations for Board
consideration for foster homes serving Levels of Care 1 through 4 children as
follows:
(1) For all Level of Care 1 rates,
DFPS analyzes the most recent statistical data available on expenditures for a
child published by the United States Department of Agriculture (USDA) from
middle income, dual parent households for the "Urban South." USDA data includes
costs for age groupings from 0 to 17 years of age. An age differential is
included with one rate for children ages 0-11 years, and another rate for
children 12 years and older. Foster homes providing services to Level of Care 1
children receive the rate that corresponds to the age of the child in care.
(A) DFPS excludes health care costs, as
specified in the USDA data, from its calculations since Medicaid covers these
costs. USDA specified child-care and education costs are also excluded since
these services are available in other DFPS day-care programs.
(B) DFPS includes the following cost
categories for both age groups as specified in the USDA data: housing, food,
transportation, clothing, and miscellaneous.
(C) The total cost per day is projected using
the Implicit Price Deflator-Personal Consumption Expenditures (IPD-PCE) Index
from the period covered in the USDA statistics to September 1 of the second
year of the biennium, which is the middle of the biennium that the rate period
covers. Information on inflation factors is specified in subsection (h) of this
section.
(2) For Levels
of Care 2 through 4 rates, DFPS analyzes the information submitted in audited
foster home cost surveys and related documentation in the following ways:
(A) A statistically valid sample of
specialized (therapeutic, habilitative, and primary medical) foster homes
complete a cost survey covering one month of service if they meet the following
criteria:
(i) the foster home currently has a
DFPS foster child(ren) residing in the home; and
(ii) the number of children in the home,
including the children of the foster parents, is 12 or fewer.
(B) For rates covering the fiscal
year 2002-2003 biennium, child-placing agency homes are the only foster homes
that complete a cost survey because the children they serve are currently
assigned levels of care verified by an independent contractor. By September 1,
2001, children served in DFPS specialized foster homes will also be assigned
levels of care verified by an independent contractor. All future sample
populations completing a one-month foster home cost survey will include both
child-placing agency and DFPS specialized foster homes. As referenced in
subsection (j) of this section, during the 2004-2005 biennium, when the rate
methodology is fully implemented, DFPS specialized foster homes and
child-placing agency foster homes will be required to receive at a minimum the
same foster home rate as derived by this subsection.
(C) Cost categories included in the one-month
foster home cost survey include:
(i) shared
costs, which are costs incurred by the entire family unit living in the home,
such as mortgage or rent expense and utilities;
(ii) direct foster care costs, which are
costs incurred for DFPS foster children only, such as clothing and personal
care items. These costs are tracked and reported for the month according to the
level of care of the child; and
(iii) administrative costs that directly
provide for DFPS foster children, such as child-care books, and dues and fees
for associations primarily devoted to child care.
(D) A cost per day is calculated for each
cost category and these costs are combined for a total cost per day for each
level of care served.
(E) A
separate sample population is established for each type of specialized foster
home (therapeutic, habilitative, and primary medical). Each level of care
maintenance rate is established by the sample population's central tendency,
which is defined as the mean, or average, of the population after applying two
standard deviations above and below the mean of the total population.
(F) The rates calculated for each type of
specialized foster home are averaged to derive one foster care maintenance rate
for each of the Levels of Care 2 through 4.
(G) The total cost per day is projected using
the IPD-PCE Index from the period covered in the cost report to September 1 of
the second year of the biennium, which is the middle of the biennium that the
rate period covers. Information on inflation factors is specified in subsection
(h) of this section.
(c) For payment rates in effect for state
fiscal year (SFY) 2002 and 2003, DFPS develops rate recommendations for Board
consideration for child-placing agencies serving Levels of Care 1 through 4
children as follows:
(1) The rate-setting
model defined in subsection (g) of this section is applied to child-placing
agencies' cost reports to calculate a daily rate.
(2) At a minimum, child-placing agencies are
required to pass through the applicable foster home rate derived from
subsection (b) of this section to their foster homes. The remaining portion of
the rate is provided for costs associated with case management, treatment
coordination, administration, and overhead.
(3) For rate-setting purposes, the following
facility types are included as child-placing agencies and will receive the
child-placing agency rate:
(A) child-placing
agency;
(B) independent foster
family/group home;
(C) independent
therapeutic foster family/group home;
(D) independent habilitative foster
family/group home; and
(E)
independent primary medical needs foster family/group home.
(d) For payment rates in
effect for state fiscal year (SFY) 2002 and 2003, DFPS develops rate
recommendations for Board consideration for residential care facilities serving
Levels of Care 1 through 6 as follows:
(1)
For Levels of Care 1 and 2, DFPS applies the same rate paid to child-placing
agencies as recommended in subsection (c) of this section.
(2) For Levels of Care 3 through 6, the
rate-setting model defined in subsection (g) of this section is applied to
residential care facilities' cost reports to calculate a daily rate.
(3) For rate-setting purposes, the following
facility types are included as residential care facilities and will receive the
residential care facility rate:
(A)
residential treatment center;
(C) intermediate
care facility for individuals with an intellectual disability or related
conditions;
(e) For payment rates in
effect for state fiscal year (SFY) 2002 and 2003, DFPS develops rate
recommendations for Board consideration for emergency shelters as follows:
(1) DFPS analyzes emergency shelter cost
report information included within the rate-setting population defined in
subsection (f) of this section. Emergency shelter costs are not allocated
across levels of care since, for rate-setting purposes, all children in
emergency shelters are considered to be at the same level of care.
(2) For each cost report in the rate-setting
population, the total costs are divided by the total number of days of care to
calculate a daily rate.
(3) The
total cost per day is projected using the IPD-PCE Index from the period covered
in the cost report to September 1 of the second year of the biennium, which is
the middle of the biennium that the rate period covers. Information on
inflation factors is specified in subsection (h) of this section.
(4) The emergency shelter rate is established
by the population's central point or central tendency. The measure of central
tendency is defined as the mean, or average, of the population after applying
two standard deviations above and below the mean of the total
population.
(f) For
payment rates in effect for state fiscal year (SFY) 2002 and 2003, level of
care rates for contracted providers including child-placing agencies,
residential care facilities, and emergency shelters are dependent upon provider
cost report information. The following criteria applies to this cost report
information:
(1) DFPS excludes the expenses
specified in §
700.1805 and §
700.1806 of this title (relating
to Unallowable Costs and Costs Not Included in Recommended Payment Rates).
Exclusions and adjustments are made during audit desk reviews and on-site
audits.
(2) DFPS includes therapy
costs in its recommended payment rates for emergency shelters and for Levels of
Care 3 through 6, and these costs will be considered as allowable costs for
inclusion on the provider's annual cost report, only if one of the following
conditions applies. The provider must access Medicaid for therapy for children
in their care unless:
(A) the child is not
eligible for Medicaid or is transitioning from Medicaid Managed Care to
fee-for-service Medicaid;
(B) the
necessary therapy is not a service allowable under Medicaid;
(C) service limits have been exhausted and
the provider has been denied an extension;
(D) there are no Medicaid providers available
within 45 miles that meet the needs identified in the service plan to provide
the therapy; or
(E) it is essential
and in the child's best interest for a non-Medicaid provider to provide therapy
to the child and arrange for a smooth coordination of services for a transition
period not to exceed 90 days or 14 sessions, whichever is less. Any exception
beyond the 90 days or 14 sessions must be approved by DFPS before provision of
services.
(3) DFPS may
exclude from the database any cost report that is not completed according to
the published methodology and the specific instructions for completion of the
cost report. Reasons for exclusion of a cost report from the database include,
but are not limited to:
(A) receiving the
cost report too late to be included in the database;
(C) auditor recommended exclusions;
(D) days of service errors;
(E) providers that do not participate in the
level of care system;
(F) providers
with no public placements;
(G) not
reporting costs for a full year;
(H) using cost estimates instead of actual
costs;
(I) not using the accrual
method of accounting for reporting information on the cost report;
(J) not reconciling between the cost report
and the provider's general ledger; and
(K) not maintaining records that support the
data reported on the cost report.
(4) DFPS requires all contracted providers to
submit a cost report unless they meet one or more of the conditions in §
355.105(b)(4)(D) of this chapter (relating to General Reporting and
Documentation Requirements, Methods, and Procedures).
(g) For payment rates in effect for state
fiscal year (SFY) 2002 and 2003, a rate-setting model is applied to
child-placing agencies' and residential care facilities' cost report
information included within the rate-setting population defined in subsection
(f) of this section. Three allocation methodologies are used in the
rate-setting model to allocate allowable costs among the levels of care of
children that are served. The methodologies are explained below and are applied
as follows:
(1) The first methodology is a
staffing model, validated by a statistically valid foster care time study,
driven by the number of direct care and treatment coordination staff assigned
to a child-placing agency or residential care facility to care for the children
at different levels of care. The staffing model produces a staffing complement
that is applied to direct care costs to allocate the costs among the levels of
care.
(A) Staff positions reported on the
direct care labor area of the cost report are grouped into the following
categories to more clearly define the staffing complement required at each
level of care:
(ii) treatment coordination;
(iv) direct care administration;
and
(B) A categorized staffing
complement for each Level of Care 1 through 6 is derived as follows:
(i) A 14-day foster care time study is
applied to a representative sample of residential care facilities and
child-placing agencies that completed a cost report.
(ii) Contracted staff, or employees, within
the sampled facilities complete a foster care time study daily activity log
that assigns half-hour units of each employee's time to the individual
child(ren) with whom the employee is engaged during the time period. By
correlating the distribution of the employee's time with the level of care
assigned to each child, the employee's time is distributed across the Levels of
Care 1 through 6.
(iii) The foster
care time study daily activity log also captures the type of activity
performed. The total amount of time spent in each of these activities is a
component in determining the number of staff needed in each of the categories
included in the staffing complement. The activities performed include:
(I) care and supervision;
(II) treatment planning and
coordination;
(III) medical
treatment and dental care; and
(IV)
other (administrative, managerial, training functions, or personal
time).
(iv) An analysis
of the cumulative frequency distribution of these time units by level of care
of all children served in the sample population, by category of staff
performing the activity, and by type of activity, establishes appropriate
staffing complements for each level of care in child-placing agencies and in
residential care facilities. These time units by level of care are reported as
values that represent the equivalent of a full-time employee. The results are
reported in the following chart for incorporation into the rate-setting model:
Attached
Graphic
(v) The
foster care time study should be conducted every other biennium, or as needed,
if service levels substantially change.
(C) Staff position salaries and contracted
fees are reported as direct care labor costs on the cost reports. Each staff
position is categorized according to the staffing complement outlined for the
time study. The salaries and contracted fees for these positions are grouped
into the staffing complement categories and are averaged for child-placing
agencies and residential care facilities included in the rate-setting
population. This results in an average salary for each staffing complement
category (case management, treatment coordination, direct care, direct care
administration, and medical).
(D)
The staffing complement values, as outlined in the chart at paragraph
(1)(B)(iv) of this subsection, are multiplied by the appropriate average salary
for each staffing complement category. The products for all of the staffing
complement categories are summed for a total for each level of care for both
child-placing agencies and residential care facilities. The total by level of
care is multiplied by the number of days of service in each level of care, and
this product is used as the primary allocation statistic for assigning each
provider's direct care costs to the various levels of care.
(E) Direct care costs include the following
areas from the cost reports:
(ii) total payroll
taxes/workers compensation; and
(iii) direct care non-labor for
supervision/recreation, direct services, and other direct care (not
CPAs).
(2) The
second methodology allocates the following costs by dividing the total costs by
the total number of days of care for an even distribution by day regardless of
level of care. This amount is multiplied by the number of days served in each
level:
(A) direct care non-labor for
dietary/kitchen;
(B) building and
equipment;
(E) net educational and
vocational service costs.
(3) The third methodology allocates the
following administrative costs among the levels of care by totaling the results
of the previous two allocation methods, determining a percent of total among
the levels of care, and applying those percentages:
(A) administrative wages/benefits;
(B) administration (non-salary);
(C) central office overhead; and
(D) foster family development.
(4) The allocation methods
described in paragraphs (1) - (3) of this subsection are applied to each
child-placing agency and residential care facility in the rate-setting
population, and separate rates are calculated for each level of care served.
Rate information is included in the population to set the level of care rate if
the following criteria are met:
(A) Providers
must have at least 30% of their service days within Levels of Care 3 through 6
for residential settings. For example, for the provider's cost report data to
be included for calculating the Level of Care 3 rate, a provider must provide
Level of Care 3 services for at least 30% of their service days.
(B) For Levels of Care 5 and 6, a contracted
provider could provide up to 60% of "private days" services to be included in
the rate-setting population. They must provide at least 40% state-placed
services.
(5) Considering
the criteria in paragraph (4) of this subsection, the rate-setting population
is fully defined for each level of care. Based on this universe, each level of
care rate will be established by the group's central point or central tendency.
The measure of central tendency is defined as the mean, or average, of the
population after applying two standard deviations above and below the mean of
the total population.
(6) The total
cost per day for each child-placing agency and residential care facility is
projected using the IPD-PCE Index from the period covered in the cost report to
September 1 of the second year of the biennium, which is the middle of the
biennium that the rate period covers. Information on inflation factors is
specified in subsection (h) of this section.
(h) For payment rates in effect for state
fiscal year (SFY) 2002 and 2003, DFPS uses the Implicit Price Deflator -
Personal Consumption Expenditures (IPD-PCE) Index, which is a general cost
inflation index, to calculate projected allowable expenses. The IPD-PCE Index
is a nationally recognized measure of inflation published by the Bureau of
Economic Analysis of the United States Department of Commerce. DFPS uses the
lowest feasible IPD-PCE Index forecast consistent with the forecasts of
nationally recognized sources available to DFPS when the rates are prepared.
Upon written request, DFPS will provide inflation factor amounts used to
determine rates.
(i) All
reimbursement rates will be equitably adjusted to the level of appropriations
authorized by the Legislature.
(j)
There will be a transition period for the fiscal year 2002-2003 biennium.
During this period current rates will not be reduced, and any increased funding
will be applied to those levels of care that are less adequately reimbursed
according to the methodology. Since increased funding was appropriated at a
different percentage for each year of the 2002-2003 biennium, the rates will be
set separately for each year instead of setting a biennial rate, and inflation
factors will be applied to the middle of each year of the biennium.
(k) For the SFY 2004 through 2005, DFPS
determines payment rates using the rates determined for SFY 2002 and 2003 from
subsections (a) - (h) of this section, with adjustments for the transition from
a six level of care system to a four service level system of payment
rates.
(l) For the state fiscal
year 2006 through 2007 biennium, the 2005 payment rates in effect on August 31,
2005 will be adjusted by equal percentages based on a prorata distribution of
additional appropriated funds.
(m)
For the state fiscal year 2008 through 2009 biennium, rates are paid for each
level of service identified by the DFPS. For foster homes, the payments
effective September 1, 2007 through August 31, 2009 for each level of service
will be equal to the minimum rate paid to foster homes for that level of
service in effect August 31, 2007 plus 4.3 percent. For Child Placing Agencies
(CPAs), the rates effective September 1, 2007, through August 31, 2009 for each
level of service will be equal to the rate paid to CPAs for that level of
service in effect August 31, 2007, plus 4.3 percent. Additional appropriated
funds remaining after the rate increase for foster homes and CPAs shall be
distributed proportionally across general residential operations and
residential treatment centers based on each of these provider type's ratio of
costs as reported on the most recently audited cost report to existing payment
rates.
(n) HHSC may adjust payment
rates, if determined appropriate, when federal or state laws, rules, standards,
regulations, policies, or guidelines are changed or adopted. These adjustments
may result in increases or decreases in payment rates. Providers must be
informed of the specific law, rule, standard, regulation, policy or guideline
change and be given the opportunity to comment on any rate adjustment resulting
from the change prior to the actual payment rate adjustment.
(o) To implement Chapter 1022 of the Acts of
the 75th Texas Legislature, §103, the executive director may develop and
implement one or more pilot competitive procurement processes to purchase
substitute care services, including foster family care services and specialized
substitute care services. The pilot programs must be designed to produce a
substitute care system that is outcome-based and that uses outcome measures.
Rates for the pilot(s) will be the result of the competitive procurement
process, but must be found to be reasonable by the executive director. Rates
are subject to adjustment as allowed in subsections (a) and (m) of this
section.
(p) Payment rates for
psychiatric step-down services are determined on a pro forma basis in
accordance with § 355.105(h) of this chapter. Payment rates for
psychiatric step-down services effective September 1, 2017, will be equal to
the rates in effect on August 31,
2015.
(q) Definitions.
(1) Child-placing agency (CPA)--Child-placing
agencies as defined in 40 Texas Administrative Code (TAC)
§745.21.
(2) Community-based
Care--Community-based Care as defined in 40 TAC §
700.108.
(3) CPA retainage--The portion of the rate
that includes the CPA's costs for administering the service, including, but not
limited to recruiting and training foster families, matching children with
foster families, monitoring foster families and foster homes, and the
associated overhead costs.
(4)
Emergency Care Services--Emergency care services as defined in 40 TAC
§748.61.
(5) Foster
home--Foster home as defined in 40 TAC §749.43 and §750.43.
(6) General Residential Operation
(GRO)--General residential operations as defined in 40 TAC
§748.43.
(7) Intensive
Psychiatric Transition Program (IPTP)-- Intensive Psychiatric Transition
Program as defined in 40 TAC §
700.2381.
(8) Levels of service--Levels of service as
described in 40 TAC Chapter 700, Subchapter W.
(9) Residential Treatment Center
(RTC)--Residential treatment center as defined in 40 TAC
§748.43.
(10) Temporary
Emergency Placement (TEP)--Temporary Emergency Placement as defined in 40 TAC
§
700.1337.
(11) Treatment Foster Care (TFF)--Treatment
Foster Care as defined in 40 TAC §
700.1335.
(r) Rates effective September 1, 2015. Rates
are paid for each level of service identified by DFPS.
(1) For CPAs, the rate consists of a foster
home payment described in paragraph (2) of this subsection and a CPA retainage.
Effective September 1, 2015, the CPA retainage for each level of service will
be equal CPA retainage for that level of service in effect August 31, 2015:
(A) plus 9.39 percent for the basic level of
service;
(B) plus 1.14 percent for
the moderate level of service;
(C)
plus 0.42 percent for the specialized level of service; and
(D) plus 0.01 percent for the intense level
of service.
(2) For
foster homes, the minimum daily rate to be paid to a foster home effective
September 1, 2015, for each level of service will be equal to the rate for that
level of service in effect August 31, 2015.
(3) For GROs and RTCs, the rates effective
September 1, 2015, will be equal to the rates paid to GROs and RTCs in effect
August 31, 2015:
(A) plus 9.58 percent for
the specialized level of service;
(B) plus 0.3 percent for the intense level of
service; and
(C) unchanged for
other levels of service.
(4) For emergency care services the rates
effective September 1, 2015, will be equal to the rates in effect August 31,
2015, plus 6.0 percent.
(s) Rates effective September 1, 2017. Rates
are paid for each level of service identified by DFPS.
(1) For CPAs, the rate consists of a foster
home payment described in paragraph (2) of this subsection and a CPA retainage.
Effective September 1, 2017, the combined CPA retainage and foster home payment
for each level of service will be:
(A) $48.47
for the basic level of service;
(B)
$85.46 for the moderate level of service;
(C) $109.08 for the specialized level of
service; and
(D) $186.42 for the
intense level of service.
(2) For foster homes, the minimum daily rate
to be paid to a foster home effective September 1, 2017, for each level of
service will be:
(A) $27.07 for the basic
level of service;
(B) $47.37 for
the moderate level of service;
(C)
$57.86 for the specialized level of service; and
(D) $92.43 for the intense level of
service.
(3) For GROs and
RTCs, the rates effective September 1, 2017, will be:
(A) $45.19 for the basic level of
service;
(B) $103.03 for the
moderate level of service;
(C)
$197.69 for the specialized level of service;
(D) $277.37 for the intense level of service;
and
(E) $400.72 for the intense
plus level of service.
(4) For emergency care services, the rate
effective September 1, 2017, will be $129.53.
(5) For treatment foster care, the rate
effective September 1, 2017, will be $277.37.
(t) Community-based Care.
(1) Initial payment rates for a defined rate
period for Single Source Continuum Contractors under Community-based Care are
determined on a pro forma basis in accordance with § 355.105(h) of this
chapter using the official forecast of case mix for paid foster care for each
specific catchment area for the rate period available at the time the payment
rates are calculated.
(2) HHSC will
recalculate payments rates whenever a new official forecast of case mix for
paid foster care is available.
(3)
HHSC will compare the payment rates calculated using actual paid foster care
case mix data for each catchment area to the payment rates in place for the
rate period to determine the percentage difference between the two sets of
payment rates.
(4) If the payment
rates calculated using actual paid foster care case mix data for a catchment
area are at least 1% greater than the initial payment rates for the rate
period, HHSC will increase the catchment area payment rates.
(5) If the payment rates calculated using
actual paid foster care case mix for a catchment area are at least 1% less than
the initial payment rates for the rate period, HHSC will reduce the catchment
area payment rates;
(6)
Calculations and rate adjustments, if any, will be performed separately for
each catchment area.
(u)
Treatment Foster Family, Integrated Care Coordination Placement, Integrated
Care Coordination Case Management, and Temporary Emergency Placement.
(1) The payment rates for these services are
developed based on rates determined for other programs that provide similar
services. If payment rates are not available from other programs that provide
similar services, payment rates are determined using a pro forma approach in
accordance with § 355.105(h) of this chapter. The information in §
355.101 of this chapter (relating to Introduction) and § 355.105(g) of
this chapter also applies.
(2)
Reporting of cost. To gather adequate financial and statistical information
upon which to base reimbursement, HHSC may require a contracted provider to
submit a cost report for one or more of these services.
(v) Rates effective September 1, 2019. Rates
are paid for each level of service identified by DFPS.
(1) For CPAs, the rate consists of a foster
home payment described in paragraph (2) of this subsection and a CPA retainage.
The combined CPA retainage and foster home payment for each level of service
will be:
(A) $49.54 for the basic level of
service;
(B) $87.36 for the
moderate level of service;
(C)
$110.10 for the specialized level of service; and
(D) $186.42 for the intense level of service.
(2) For foster homes,
the minimum daily rate to be paid to a foster home each level of service will
be:
(A) $27.07 for the basic level of
service;
(B) $47.37 for the
moderate level of service;
(C)
$57.86 for the specialized level of service; and
(D) $92.43 for the intense level of service.
(3) For GROs and RTCs,
the rates will be:
(A) $45.19 for the basic
level of service;
(B) $108.18 for
the moderate level of service;
(C)
$197.69 for the specialized level of service;
(D) $277.37 for the intense level of service;
and
(E) $400.72 for the intense
plus level of service.
(4) For emergency care services, the rate
will be $137.30.
(5) For treatment
foster care, the rate consists of a foster home payment and a CPA retainage.
The combined CPA retainage and foster home payment will be $277.37.
(6) For Intensive Psychiatric Transition
Program (IPTP), the rate will be $374.33.
(7) For Temporary Emergency Placement (TEP),
the rate will be $400.72.
