1. (a) General information. The Texas Health and Human Services Commission (HHSC) applies the general principles of cost determination as specified in §355.101 of this title (relating to Introduction). HHSC will reimburse qualified Texas Medicaid contracted providers for waiver services provided to individuals who are deaf-blind with multiple disabilities.
2. (b) Other sources of cost information. If HHSC has determined that there is not sufficient reliable cost report data from which to set reimbursements and reimbursement ceilings for waiver services, reimbursements and reimbursement ceilings will be developed by using rates for similar services from other Medicaid programs; data from surveys; cost report data from other similar programs; consultation with other service providers or professionals experienced in delivering contracted services; and other sources.

3. (c) Waiver rate determination methodology. If HHSC deems it appropriate to require contracted providers to submit a cost report, recommended reimbursements for waiver services will be determined on a fee-for-service basis in the following manner for each of the services provided:

   1. (1) Total allowable costs for each provider will be determined by analyzing the allowable historical costs reported on the cost report.
   2. (2) Each provider's total reported allowable costs, excluding depreciation and mortgage interest, are projected from the historical cost-reporting period to the prospective reimbursement period as described in §355.108 of this title (relating to Determination of Inflation Indices). The prospective reimbursement period is the period of time that the reimbursement is expected to be in effect.
   3. (3) Payroll taxes and employee benefits are allocated to each salary line item on the cost report on a pro rata basis based on the portion of that salary line item to the amount of total salary expense for the appropriate group of staff. Employee benefits will be charged to a specific salary line item if the benefits are reported separately. The allocated payroll taxes are Federal Insurance Contributions Act (FICA) or Social Security, Medicare Contributions, Workers' Compensation Insurance (WCI), the Federal Unemployment Tax Act (FUTA), and the Texas Unemployment Compensation Act (TUCA).
   4. (4) Allowable administrative and overall facility/operations costs are allocated or spread to each waiver service cost component on a pro rata basis based on the portion of each waiver service's service units reported to the amount of total waiver service units reported. Service-specific facility and operations costs for out-of-home assisted living, out-of-home respite, and habilitation day services will be directly charged to the specific waiver service.
   5. (5) For professional services, including physical therapy, occupational therapy, speech/hearing/language, case management, nursing services provided by an RN, nursing services provided by an LVN, dietary services, auditory services and behavioral support services, an allowable cost per unit of service is calculated for each contracted provider cost report in accordance with paragraphs (1) - (4) of this subsection. The allowable costs per unit of service for each contracted provider cost report is multiplied by 1.044. This adjusted allowable costs per unit of service may be combined into an array with the allowable cost per unit of service of similar services provided by other programs in determining rates for these services in accordance with §355.502 of this title (relating to Reimbursement Methodology for Professional Services in Home and Community-Based Services Waivers).
   6. (6) Requisition fees. Requisition fees are reimbursements paid to the Deaf-Blind Multiple Disabilities (DBMD) contracted providers for their efforts in acquiring adaptive aids and minor home modifications for DBMD participants. Reimbursement for adaptive aids and minor home modifications will vary based on the actual cost of the adaptive aid and minor home modification. Reimbursements are determined using a method based on modeled projected expenses, which are developed by using data from surveys; cost report data from similar programs; consultation with other service providers or professionals experienced in delivering contracted services; or other sources.

   7. (7) For habilitation day, residential habilitation (less than 24-hour and 24-hour residential habilitation), assisted living (24-hour supervision and less than 24-hour supervision), and intervener services, two cost areas are created:

      1. (A) The attendant cost area, which includes salaries, wages, benefits, and mileage reimbursement calculated as specified in §355.112 of this title (relating to Attendant Compensation Rate Enhancement).
      2. (B) An "other direct care" cost area, which includes costs for services not included in subparagraph (A) of this paragraph as determined in paragraphs (1) - (4) of this subsection. An allowable cost per unit of service is determined for each contracted provider cost report for the other direct care cost area. The allowable costs per unit of service for each contracted provider cost report are arrayed. The units of service for each contracted provider cost report in the array are summed until the median unit of service is reached. The corresponding expense to the median unit of service is determined and is multiplied by 1.044.
      3. (C) The attendant cost area and the other direct care cost area are summed to determine the cost per unit of service.
      4. (D) The room and board payments for waiver clients receiving assisted living services are covered in the reimbursement for these services and will be paid to providers from the client's Supplemental Security Income, less a personal needs allowance.
   8. (8) The lifetime ceiling per client for minor home modifications is determined from sources other than cost reports for this program. The annual ceiling per client for adaptive aids is determined from sources other than cost reports for this program.
   9. (9) Pre-enrollment assessment services are based on the hourly case management reimbursement.
   10. (10) HHSC may adjust reimbursement if new legislation, regulations, or economic factors affect costs, according to §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).
4. (d) Authority to determine reimbursement. The authority to determine reimbursement is specified in §355.101 of this title.

5. (e) Reporting of cost.

   1. (1) Cost-reporting guidelines. If HHSC requires a cost report for any waiver service in this program, providers must follow the cost-reporting guidelines as specified in §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).
   2. (2) Excused from submission of cost reports. If required by HHSC, all contracted providers must submit a cost report unless the number of days between the date the first Department of Aging and Disabilities Services (DADS) client received services and the provider's fiscal year end is 30 days or fewer. The provider may be excused from submitting a cost report if circumstances beyond the control of the provider make cost-report completion impossible, such as the loss of records due to natural disasters or removal of records from the provider's custody by any regulatory agency. A DBMD Waiver contracted provider may also be excused from submitting a cost report if the total number of DBMD clients served during the reporting period is three or less. Requests to be excused from submitting a cost report must be received by HHSC's Rate Analysis Department before the due date of the cost report.

   3. (3) Reporting and verification of allowable cost.

      1. (A) Providers are responsible for reporting only allowable costs on the cost report, except where cost-report instructions indicate that other costs are to be reported in specific lines or sections. Only allowable cost information is used to determine recommended reimbursements. HHSC excludes from reimbursement determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers, in order to ensure the database reflects costs and other information necessary for the provision of services and is consistent with federal and state regulations.

      2. (B) Individual cost reports may not be included in the database used for reimbursement determination if:

         1. (i) there is reasonable doubt as to the accuracy or allowability of a significant part of the information reported; or
         2. (ii) an auditor determines that reported costs are not verifiable.
      3. (C) Material pertinent to proposed reimbursements and made available to the public shall include the number of cost reports eliminated from reimbursement determination for the reason stated in subparagraph (B) of this paragraph.

   4. (4) Allowable and unallowable costs. Providers must follow the guidelines specified in §355.102 and §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs and Specifications for Allowable and Unallowable Costs), in determining whether a cost is allowable or unallowable. In addition, providers must adhere to the following principles:

      1. (A) Client room and board expenses are not allowable, except for those related to respite care.
      2. (B) The actual cost of adaptive aids is not allowable for cost-reporting purposes.
6. (f) Reporting revenue. Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).
7. (g) Reviews and field audits of cost reports. Desk reviews or field audits are performed on cost reports for all contracted providers. The frequency and nature of field audits are determined by HHSC staff to ensure the fiscal integrity of the program. Desk reviews and field audits will be conducted in accordance with §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), and providers will be notified of the results of a desk review or a field audit in accordance with §355.107 of this title (relating to Notification of Exclusions and Adjustments). Providers may request an informal review and, if necessary, an administrative hearing to dispute an action taken under §355.110 of this title (relating to Informal Reviews and Formal Appeals).

Source Note:The provisions of this §355.513 adopted to be effective September 1, 2009, 34 TexReg 5654.