1. (a) General specifications. The Texas Department of Human Services (DHS) determines the reimbursement for the provider, Bienvivir, under a Medicaid 1115 waiver program to provide care to recipients. The effective date of this reimbursement methodology is the same date as implementation of the waiver, contingent upon Health Care Financing Administration (HCFA) approval of the waiver.
2. (b) Frequency of reimbursement determination. DHS determines reimbursement for the provider at least annually. The reimbursement is revised each time the reimbursements for the Nursing Facility program are revised. The reimbursement may be determined more often if the DHS board determines it to be necessary.

3. (c) Reimbursement determination. To determine the cost savings to the Nursing Facility program, the average cost of a nursing home recipient is calculated, including the cost of nursing home care; support services (rehabilitative and emergency dental); prescribed drugs; and acute care services. The calculated cost of care for an average nursing home recipient is multiplied by a factor of 0.95 to ensure a savings to the state for implementing this alternative to nursing home care. The following reimbursement is calculated on a per diem basis:

   1. (1) the average nursing facility reimbursements weighted by the case mix Texas Index for Level of Effort (TILE) distribution for El Paso county clients;
   2. (2) plus the cost of support services (rehabilitative and emergency dental);
   3. (3) minus the average statewide applied income;
   4. (4) plus the average cost of prescribed drugs for nursing home recipients;
   5. (5) plus the DHS acute care premium, less the fee for administrative claims processing, for nursing facility recipients.
   6. (6) The resulting calculation from applying paragraphs (1)-(5) of this subsection is multiplied by 0.95.
   7. (7) The resulting calculation from applying paragraph (6) of this subsection is multiplied by the number of days in the year, and the product of the multiplication is divided by 12 months to convert the per diem amount from paragraph (6) of this subsection to a monthly reimbursement.

4. (d) Reporting of cost. The provider must submit an independently certified annual cost report, in the form and detail prescribed by HCFA. DHS reserves the right to require submittal of financial and statistical information on a cost report or in a survey format designated by DHS.

   1. (1) Cost report due date. The annual cost report must be submitted to DHS no later than 180 days after the end of the fiscal year.
   2. (2) Reporting periods. The provider must prepare the cost report to reflect the activities of the provider's entire fiscal year. Cost reports may be required for other periods at the discretion of DHS. Should the provider agency terminate its contract (provider agreement) with the department, a cost report must be submitted for that period beginning with the first day of the provider's fiscal year and ending with the effective date of termination of its contract.
   3. (3) Allowable and unallowable costs. The provider must complete the cost report according to Medicare guidelines regarding allowable and unallowable costs as specified in 42 CFR 417.536 through 417.550, and the chart of accounts as specified by HCFA.
   4. (4) Failure to file an acceptable cost report. If the provider fails to file a cost report or cost report supplement by the due date or fails to submit a cost report according to all applicable rules and instructions, the department may withhold all provider payments until the provider agency submits an acceptable cost report.
   5. (5) Accounting requirements. The provider must ensure that financial and statistical information submitted in cost reports is based upon the accrual method of accounting. The provider agency's treatment of any financial or statistical item must reflect the application of the generally accepted accounting principles (GAAP) approved by the American Institute of Certified Public Accountants. If there are any differences between GAAP and Medicare guidelines, Medicare guidelines take precedence.
   6. (6) Allocation method. If allocation of cost is necessary, the provider must use reasonable methods of allocation. DHS adjusts allocated costs if the department considers the allocation method to be unreasonable. The provider agency must retain work papers supporting allocations.
   7. (7) Cost report certification. The provider must certify in the format specified by HCFA the accuracy of the cost report submitted to DHS. The provider agency may be liable for civil and/or criminal penalties in the case of misrepresented or falsified information.
   8. (8) Cost report supplements. The department may at times require additional financial and statistical information other than the information contained in the cost report.
   9. (9) Review of the cost report. DHS staff review the cost report to ensure that all financial and statistical information submitted conforms to all applicable rules and instructions. The review of the cost report includes a desk audit. DHS reviews cost reports according to the criteria in 40 TAC §24.201 (Basic Objectives and Criteria for Desk Review of Cost Reports). If the provider agency fails to complete cost reports according to instructions or rules, the department returns the cost reports to the provider agency for proper completion. The department may require information other than that contained in the cost report to substantiate reported information.
   10. (10) On-site audits. The department may perform on-site audits of the provider agencies that participate in the program. DHS determines the frequency and nature of audits but ensures that they are not less than that required by federal regulations related to the administration of the program.
   11. (11) Notification of exclusions and adjustments. DHS notifies the provider of exclusions and adjustments to reported expenses made during desk reviews and on-site audits of cost reports as specified in 40 TAC §24.401 (Notification).
   12. (12) Reviews of cost report disallowances. A provider who disagrees with the determination of exclusions and adjustments to reported expenses may request an informal review and, when necessary, an administrative hearing as specified in 40 TAC §24.601 (Reviews and Administrative Hearings).
   13. (13) Access to records. The provider and its designated agent(s) must allow access to all records necessary to verify information submitted to DHS on cost reports. This requirement includes records pertaining to related-party transactions and other business activities engaged in by the provider agency. If the provider agency does not allow inspection of pertinent records within 30 days following written notice from DHS, a hold is placed on vendor payments until access to the records is allowed. If the provider agency continues to deny access to records, DHS may cancel the provider agency's contract.
   14. (14) Record-keeping requirements. The provider agency must maintain records according to the requirements of 42 CFR 417.480. Records must be retained for five years from the end of the fiscal period to which they apply.
   15. (15) Failure to maintain adequate records. If the provider agency fails to maintain adequate records to support the financial and statistical information reported in cost reports, the department allows 90 days for the provider agency to bring record-keeping into compliance. If the provider agency fails to correct deficiencies within 90 days from the date of notification of the deficiency, the department may cancel the provider agency's contract for services.

Source Note:The provisions of this §355.501 adopted to be effective March 15, 1992, 17 TexReg 1656; amended to be effective August 15, 1993, 18 TexReg 4510; amended to be effective February 15, 1994, 19 TexReg 512; amended to be effective June 1, 1996, 21 TexReg 4417; transferred effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311.