1. (a) Definitions. Unless the context clearly indicates otherwise, the following words and terms when used in this section are defined as follows:

   1. (1) "Commission" means the Health and Human Services Commission.
   2. (2) "Medical assistance" means a medical or health care related service, item, or supply that is delivered to a Medicaid recipient and is approved and authorized for payment or reimbursement by the Commission or a health and human services agency pursuant to state and federal law.
   3. (3) "Program" means a specific component of the Medicaid program for which the Commission establishes either a methodology to reimburse a provider or a specific fee, payment rate, or charge that is paid to a provider for medical assistance in accordance with state and federal law.
   4. (4) "Provider" means a health care practitioner, institution, or other entity that is enrolled in the medical assistance program and is authorized to submit claims for payment or reimbursement of medical assistance.
2. (b) Purpose. This section implements the provisions of §531.021(d) and (e), Government Code and applies to all programs that provide medical assistance and to all reimbursement methodologies prescribed under this chapter.

3. (c) Establishment of fees, rates, and charges. The Commission establishes fees, rates, and charges to be paid for medical assistance in accordance with:

   1. (1) the formulas, procedures, or methodologies prescribed in this chapter;

   2. (2) the requirements of state and federal law, including:

      1. (A) legislative or Congressional enactments that change state or federal laws in a manner that affects such fees, rates, and charges;
      2. (B) changes in federal regulations, and policies that affect such fees, rates, and charges; and
      3. (C) judicial orders, opinions, or interpretations regarding state or federal law that affect such fees, rates, and charges;

   3. (3) the consideration of economic factors that, in the Commission's determination:

      1. (A) have or may have a significant and measurable effect on provider participation; or
      2. (B) have or may have a significant and measurable effect on providers' ability to deliver services in accordance with state and federal law; and
   4. (4) levels of appropriated state and federal funds or state or federal laws or enactments that limit, restrict, or condition the availability of appropriated funds for medical assistance.

4. (d) Adjustment of fees, rates, and charges. Notwithstanding any other provision of this chapter, the Commission may adjust fees, rates, and charges paid for medical assistance if:

   1. (1) state or federal law is enacted, amended, or judicially interpreted to:

      1. (A) require the Commission to increase or reduce a fee, rate, or charge paid to a provider for medical assistance;
      2. (B) change the amount, scope, or type of allowable or unallowable costs for providers of medical assistance that are required to report costs to the Commission or a health and human services agency for purposes of establishing a reimbursement rate for medical assistance;
      3. (C) require all providers within a program or category of providers to incur additional costs to provide medical assistance, other than unallowable costs, that are not currently recognized in the reimbursement methodology established by the Commission for the program; or
      4. (D) restrict, limit, or condition the availability of appropriated funds to the Commission for payment or reimbursement of medical assistance;

   2. (2) economic conditions that prevail among all providers within a specific program or category of providers and:

      1. (A) result in a demonstrable increase in the cost of providing services beyond amounts recognized in the Commission's established reimbursement methodology; or
      2. (B) require providers within a program or category of providers to incur costs, other than unallowable costs, that are not currently recognized in the reimbursement methodology established by the Commission for the program.
5. (e) Notice of adjustment of fees, rates, and charges. If the Commission adjusts fees, rates, or charges under this section, the Commission or its designee will publish notice of the proposed adjustment at the earliest feasible date but not later than 10 state working days before the effective date of the adjustment. If the adjustment is required by the enactment or amendment of state or federal law, such notice may be published before the effective date of such enactment or amendment, but the adjustment to fees, rates, or charges will not take effect before the effective date of the enactment or amendment. The notice must be published either by publication on the Commission's Internet web site, and in the Texas Register. In addition, the Commission may issue written or electronic communication to providers, if economically feasible.

6. (f) Contents of notice. The notice required under subsection (e) of this section will include the following:

   1. (1) a description of the specific increase or reduction of fees, rates, and charges;
   2. (2) the date on which such adjustment will take effect and the period during which the adjustment will be in effect;
   3. (3) a description of the legal and factual bases for the adjustment;
   4. (4) a description of the specific requirements of the rate setting methodology established under this chapter that cannot effectively be implemented as a result of the adjustment;
   5. (5) instructions for interested parties to submit written comments to the Commission regarding the proposed adjustment; and
   6. (6) The date, time, and location of a public hearing in accordance with §32.0282, Human Resources Code.

Source Note:The provisions of this §355.201 adopted to be effective September 1, 2003, 28 TexReg 7302.