1. (a) The Texas Department of Mental Health and Mental Retardation (TDMHMR) or its successor agency reimburses qualified community mental health centers for Mental Health Case Management (CM) provided to Medicaid-eligible individuals who are eligible for CM according to program rules established by TDMHMR or its successor agency.

2. (b) Separate rates. Separate rates are set for services based on their intensity:

   1. (1) Routine CM which is a low intensity service that will be provided to both adults and children who need limited assistance in obtaining access to services and is primarily site-based; and
   2. (2) Intensive CM is a high-intensity service that will be provided to just children who need a greater level of assistance in obtaining services and is primarily community-based.
3. (c) Section 1396n(g) of Title 42 of the U.S. Code is invoked to limit the provision of CM to state mental health authorities, TDMHMR or its successor agency, or its designated community mental health centers authorized under §534.054 of the Texas Health and Safety Code, who offer a service delivery system of required services as outlined in §534.053 of the Texas Health and Safety Code.
4. (d) Rules and procedures. TDMHMR or its successor agency has implemented rules and procedures to ensure that CM is provided by persons who meet the requirements specified by TDMHMR or its successor agency and is provided in compliance with federal and state laws, rules, and regulations.

5. (e) Reimbursement methodology. HHSC determines reimbursement according to §355.101 of this title (relating to Introduction). HHSC may also 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).

   1. (1) At the end of each reimbursement period HHSC will compare the difference between the interim rate and each community mental health center CM costs as submitted on its cost report in accordance with subsection (g) of this section.

      1. (A) If a community mental health center's costs are less than 95 percent of the interim rate, the community mental health center will pay TDMHMR the difference between that community mental health center's costs and 95 percent of the interim rate. The community mental health center will be notified of the amount due to TDMHMR by certified mail.

         1. (i) The community mental health center will have 30 days to make payment. If payment is not received from the community mental health center within 30 days of the date that the notice was received, as specified on the certified mail receipt, HHSC will notify TDMHMR to place the community mental health center on vendor hold.
         2. (ii) A community mental health center that has been placed on vendor hold may request an administrative hearing in accordance with §355.110 of this title (relating to Informal Reviews and Formal Appeals).
      2. (B) If a community mental health center's costs exceed the interim rate, TDMHMR will reimburse the community mental health center its costs up to 125 percent of the interim rate. TDMHMR will notify the community mental health center by certified mail of the amount that is owed to the community mental health center and will make payment within 30 days of the date that the notice was received, as specified on the certified mail receipt.

   2. (2) At such time as HHSC determines that cost data collected as described in subsection (g) of this section are reliable, community mental health centers will be reimbursed a uniform statewide, interim rate with a cost-related year-end settle-up. The interim rate is determined biennially for each service type based on cost reports. Interim reimbursement rates will be developed based on the cost data submitted by community mental health centers in the following manner:

      1. (A) Total allowable costs for each provider for each rate will be determined from analyzing the allowable historical costs reported on the cost report.
      2. (B) Each provider's total allowable costs are projected from the historical cost reporting period to the prospective reimbursement period using inflation factors according to §355.108 of this title (relating to Determination of Inflation Indices) for each covered contact.
      3. (C) Each provider's projected cost per unit of service is calculated. The mean provider cost per contact is calculated, and the statistical outliers (those providers whose cost per contact exceeds plus or minus (+/-) two standard deviations of the mean provider cost per contact) are removed. After removal of the statistical outliers, the mean cost per contact is calculated. This mean cost per contact becomes the recommended cost per contact. Following each annual reimbursement period, allowable costs will be compared to reimbursement and any resulting monetary reconciliation will be made in accordance with paragraph (2) of this subsection.

6. (f) Reimbursable unit of service.

   1. (1) The unit of service upon which reimbursement is made is a face-to-face contact with a Medicaid-eligible individual eligible for CM in accordance with TDMHMR's or its successor agency's program rules by:

      1. (A) a community mental health center as required by subsection (c) of this section; and
      2. (B) a person who meets the qualifications set forth in TDMHMR's or its successor agency's program rules.
   2. (2) The face-to-face contact must include the provision of one or more services as defined in TDMHMR's or its successor agency's program rules.
   3. (3) Reimbursement is one unit of service per 15 continuous minutes of face-to-face contact with a Medicaid-eligible individual.

7. (g) Reporting of costs. HHSC or its designee collects from community mental health centers statistical and cost data. The statistical data includes, but is not limited to, the total number of individuals receiving CM, and the number of Medicaid-eligible individuals receiving CM. The cost data include direct costs, programmatic indirect costs, and general and administrative costs including salaries, benefits, and non-labor costs.

   1. (1) Cost reports. Each community mental health center must submit financial and statistical information in a cost report or survey format designated by HHSC or its designee. The cost report will capture the expenses of the community mental health center including salaries and benefits, administration, building and equipment, utilities, supplies, travel, and indirect overhead costs related to the provision of CM Only allowable cost information is used to compile the cost base. Each community mental health center must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 & §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs and Specifications for Allowable and Unallowable Costs). Community mental health centers must follow the cost-reporting guidelines as specified in §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures). Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).

      1. (A) Accounting requirements. All information submitted on the cost reports must be based upon the accrual method of accounting unless the governmental entity operates on a cash or modified accrual basis. The community mental health center must complete the cost report according to the prescribed statement of allowable and unallowable costs as referenced in §355.101 of this title (relating to Introduction). Cost reporting should be consistent with generally accepted accounting principles (GAAP). In cases in which cost reporting rules conflict with GAAP, Internal Revenue Service, or other authorities, the cost reporting rules take precedence.
      2. (B) Reporting period. The community mental health center must prepare the cost report according to §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).
   2. (2) Exclusions or adjustments. Community mental health centers must exclude unallowable costs from the cost report. HHSC or its designee excludes from the cost reimbursement base any unallowable costs included in the cost report and makes adjustments to expenses reported by community mental health centers to ensure that the cost reimbursement base reflects costs which are consistent with efficiency, economy, and quality care, are necessary for the provision of CM services, and are consistent with federal and state Medicaid regulations as specified in §355.102 & §355.103 of this title (relating to General Principles of Allowable and Unallowable Costs and Specifications for Allowable and Unallowable Costs). If there is doubt as to the accuracy of allowability of a significant part of the information reported, individual cost reports may be eliminated from the cost base.
   3. (3) Desk reviews. As specified in §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), HHSC or its designee reviews such cost reports or surveys. Cost reports not completed according to instructions or rules will be corrected and resubmitted by the community mental health center within the time frame prescribed by HHSC.

   4. (4) On-site audit of cost reports. HHSC or its designee performs a sufficient number of audits each year to ensure the fiscal integrity of the CM reimbursement. The number of on-site audits actually performed each year may vary.

      1. (A) HHSC or its designee notifies community mental health centers of disallowances and adjustments to reported expenses made during desk reviews and on-site audits of cost reports according to §355.107 of this title (relating to Notification of Exclusions and Adjustments).
      2. (B) Reviews of cost report disallowances. A community mental health center that disagrees with HHSC or its designee on cost report disallowances, may request a review of the disallowances as specified in §355.110 of this title (relating to Informal Reviews and Formal Appeals).
   5. (5) Recordkeeping requirements. Each community mental health center must maintain records according to the requirements specified in TDMHMR or its successor agency's rules and the provider agreement. The community mental health center must ensure that the records are accurate and sufficiently detailed to support the financial and statistical information reported in the cost report. If a community mental health center does not maintain records, which support the financial and statistical information submitted on the cost report, the community mental health center will be given 90 days to correct this recordkeeping. HHSC will notify TDMHMR or its successor agency to place the community center on vendor hold if the correction is not made within 90 days from the date the community mental health center receives notification.
   6. (6) Access to records. The community mental health center must allow HHSC access to any and all records necessary to verify information on the cost report.

8. (h) Billing and payment reviews. The provider must allow TDMHMR or its successor agency access to any and all records regarding CM.

   1. (1) TDMHMR or its successor agency will conduct periodic billing and payment reviews utilizing TDMHMR's or its successor agency's Billing and Payment Review Protocol.
   2. (2) Recoupment will be taken according to the application of error calculations contained in TDMHMR's or its successor agency's Billing and Payment Review Protocol.

Source Note:The provisions of this §355.743 adopted to be effective October 13, 2002, 27 TexReg 9308; amended to be effective August 31, 2004, 29 TexReg 8263.