1. (a) The following definitions apply to this section:

   1. (1) Debt service on revenue bonds--The principal and interest payments on Veterans Home Revenue Bonds sold under authorization of Chapter 164, Texas Natural Resources Code, and issued for the purpose of acquisition, construction, operation, and maintenance of a state veterans home or homes.
   2. (2) Deposits to the operating reserve--The monthly deposits by the Veterans Land Board (VLB) to a facility's operating reserve as required by the trust indenture(s) related to State of Texas Veterans Home Revenue Bonds as authorized under 40 TAC §176.3 (relating to Sale of Bonds).
   3. (3) Health and Human Services Commission (HHSC)--The state administrative agency authorized to adopt standards and rules to govern reimbursement rates and methodologies for Medicaid nursing facility services pursuant to Government Code §531.021.
   4. (4) Management agreement--The management and operations agreement between the Veterans Land Board (VLB) of the State of Texas and the operator of a state veterans home in effect during the rate period.
   5. (5) Rate period--The state fiscal year.
   6. (6) State veterans home--A nursing facility as defined in Title 40, Texas Administrative Code (TAC) §176.1 (relating to Veterans Homes Definitions) that is contracted with DHS under 40 TAC §19.2322 (relating to Allocation, Reallocation, and Decertification Requirements) to provide nursing facility services to eligible Medicaid recipients who reside in a state veterans home.
   7. (7) Texas Department of Human Services (DHS)--The state administrative agency authorized to contract for nursing facility services to Medicaid recipients pursuant to Chapter 32, Human Resources Code.
   8. (8) Transportation agreement--The agreement between the VLB and the operator of the facility in effect during the rate period. Not all operators may have a transportation agreement.
   9. (9) Veterans Land Board (VLB)--The state administrative agency authorized under Chapter 164, Natural Resources Code, to establish and operate state veterans homes.
   10. (10) VLB administrative expenses--VLB expenses related to oversight of the state veterans home program.
2. (b) DHS reimburses the VLB for nursing facility services provided by the VLB to Medicaid clients in state veterans homes.
3. (c) HHSC determines reimbursement rates for state veterans homes to provide nursing facility services.
4. (d) Reimbursement rates for state veterans homes are determined prospectively for each home based on the lower of an estimate of per diem cost for the rate period as calculated in subsection (e) of this section or the state veterans home semi-private basic daily rate in effect on the first day of the rate period. Rates are reconciled retrospectively based on actual cost in accordance with subsection (k) of this section.

5. (e) For each home, the estimated per diem costs are calculated as follows:

   1. (1) For the rate period, sum the following:

      1. (A) the monthly fixed-fee component of the management and operation fee as described in the management agreement for each month in the rate period,
      2. (B) the variable-fee component of the management and operation fee per patient day in effect during the rate period times estimated patient days during the rate period,
      3. (C) vehicle payments, if any, as defined in the transportation agreement,
      4. (D) deposits to the operating reserve,
      5. (E) debt service on the revenue bonds, and
      6. (F) VLB administrative expenses.
   2. (2) Divide the sum, as determined in paragraph (1) of this subsection, by the estimated patient days for the rate period to determine the interim prospective per diem rate. Estimated patient days for the rate period are determined based on the most recently available, reliable utilization data for the facility.
6. (f) The facility-specific payment rate, as determined in subsection (d) of this section, will be paid for all Medicaid eligible residents of a state veterans home regardless of the Texas Index for Level of Effort (TILE) level of the resident.
7. (g) Veterans Administration (VA) per diem payments to the State of Texas VLB for nursing home care as defined in 38 Code of Federal Regulations (CFR) §51.40 (relating to monthly payment) are considered third-party resources (TPRs) under 40 TAC §15.215 (relating to Third-Party Resources). These payments are offset against per diem payment rates for Medicaid-eligible residents of a state veterans home.
8. (h) Residents of a state veterans home are not eligible to receive the supplemental reimbursements authorized under §§355.307(b)(3)(E) and (F) of this title (relating to Qualifying Ventilator-Dependent Residents and Qualifying Children with tracheostomies).
9. (i) State veterans homes are not eligible to participate in §355.308 of this title (relating to Enhanced Direct Care Staff Rate).
10. (j) The VLB submits financial and statistical information in a format designated by HHSC. This information may be reviewed or audited in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports). Financial and statistical information submitted by the VLB is not included in the cost report databases used in the reimbursement determination process for the Texas Medicaid Nursing Facility program.
11. (k) For each state veterans home, the prospective per diem rate is adjusted retrospectively based on actual costs accrued during the rate period, with capital equipment and capital improvement costs accrued by the VLB for the facility substituted for deposits to the operating reserve in the cost calculation, and actual patient days provided substituted for estimated patient days.

Source Note:The provisions of this §355.311 adopted to be effective November 19, 2001, 26 TexReg 9376.