The Texas Department of Human Services (DHS) may take the following actions for administrative contract violations.

1. (1) DHS grants the following compliance periods for administrative contract violations:

   1. (A) For failure to submit a cost report by the due date, DHS grants the provider a compliance period of no more than 15 calendar days.
   2. (B) For all other administrative contract violations, DHS grants the provider a compliance period of no more than 30 calendar days to correct a contract violation. At the end of the compliance period, if DHS determines that a contract violation is not corrected, but determines that the provider has made substantial progress toward correcting the contract violation, DHS may grant an additional one-time extension period of up to 15 calendar days.
2. (2) If the contract violation is not corrected within the compliance period, DHS imposes vendor hold on payments to the provider.

3. (3) If a contract violation is not corrected within 60 days from the date the provider is placed on vendor hold, DHS may cancel the provider's contract on the 61st day. A provider may request an appeal hearing of the contract cancellation. DHS conducts formal appeals in accordance with the provisions of 40 TAC §§79.1601-79.1614 (Formal Appeals). If there is a conflict between the applicable section of 40 TAC Chapter 79 (Legal Services) and the provisions of this chapter, the provisions of this chapter prevail. If the provider appeals the contract cancellation by DHS and the adverse action is sustained by an administrative law judge or judicial proceeding, the effective date of the contract cancellation is the date specified in the notice of contract cancellation. Unless otherwise specifically provided for, DHS makes no payment for services provided by the provider after the effective date of the provider's contract cancellation. DHS may continue payments for no more than 30 calendar days from the date DHS cancels or fails to renew a provider's contract if DHS determines that:

   1. (A) reasonable efforts are being made to transfer clients to another provider or to alternate care; and
   2. (B) additional time is needed to effect an orderly transfer of the clients.

Source Note:The provisions of this §355.111 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective December 29, 1997, 22 TexReg 12485; amended to be effective June 26, 2000, 25 TexReg 6089.