1. (a) Definitions. The following words and terms, when used in this section shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Allowable costs--Those expenses that are reasonable and necessary costs in the normal conduct of operations relating to case management services as defined in §355.102(f)(1) and (2) of this title (relating to General Principles of Allowable and Unallowable Costs).
   2. (2) Provider--The mental retardation authority (MRA) which, pursuant to Texas Health and Safety Code, §531.002(11), the Texas Health and Human Services Commission (HHSC) has delegated its authority and responsibility within a specified region for planning, policy development, coordination, including coordination with criminal justice entities, and resource development and allocation and for supervising and ensuring the provision of mental retardation services to persons with mental retardation in the most appropriate and available setting to meet individual needs in one or more local service areas.
   3. (3) Unit of Service--A monthly face-to-face billable unit.
   4. (4) Reconciled Rates--The allowable cost reconciled to the billable units.
2. (b) Reimbursement. Qualified providers are reimbursed a monthly uniform statewide rate for service coordination provided to Medicaid-eligible individuals.

3. (c) Rate methodology.

   1. (1) Initial rate. The initial rate effective June 1, 2010, will be determined by analyzing the combined costs from two sources:

      1. (A) the reconciled rates paid to providers for services delivered under the MR Service Coordination program prior to June 1, 2010; and
      2. (B) the legislative appropriations designated to provide case management services for Home and Community-Based Services clients as detailed in Special Provisions Relating To All Health and Human Services Agencies, Section 48 Contingency Appropriation for the Reshaping of the System for Providing Services to Individuals with Developmental Disabilities.

   2. (2) Rates determined for effective dates after June 1, 2010. At such time as HHSC determines that cost data collected as described in subsection (d) of this section is reliable, statewide reimbursement rates will be developed based on cost report data submitted by providers in the following manner:

      1. (A) Each provider's total allowable costs are analyzed and 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).
      2. (B) Each provider's projected cost from subparagraph (A) of this paragraph is divided by the provider's units of service delivered to determine the projected cost per unit of service.
      3. (C) The median provider cost per unit of service is then calculated as follows: The allowable costs per unit of service for each service for each contracted provider are arrayed from low to high. The units of service for each contracted provider in the array are summed until the median unit of service is reached. The corresponding expense to the median unit of service is the proposed rate.
   3. (3) Rates are determined according to §355.702 of this title (relating to Method for Cost Determination). The Health and Human Services Commission (HHSC) may also adjust reimbursement if new legislation, regulations, or economic factors affect costs, as described in §355.109 of this title (relating to Adjusting Reimbursement When New Legislation, Regulations, or Economic Factors Affect Costs).

4. (d) Reporting of costs. Each provider must submit financial and statistical information in a cost report. A survey may be developed and used to gather additional or specific information.

   1. (1) Cost reporting guidelines. Except for the provision defining the cost report year, Providers must follow the cost-reporting guidelines as specified in §355.702 of this title.
   2. (2) Number of cost reports to be submitted. Contracted providers are required to submit one cost report per provider per federal fiscal year.

   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 rates. To ensure that the database reflects costs and other information which are necessary for the provision of services and is consistent with federal and state regulations, HHSC excludes from rate determination any unallowable expenses included in the cost report and makes the appropriate adjustments to expenses and other information reported by providers.

      2. (B) Individual provider 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.
   4. (4) Allowable and unallowable costs. Providers must follow the guidelines in determining whether a cost is allowable or unallowable as specified in §355.102 and §355.103 of this title, (relating to Specifications for Allowable and Unallowable Costs).
   5. (5) Revenues must be reported on the cost report in accordance with §355.104 of this title (relating to Revenues).
5. (e) Desk reviews and field audits. As specified in §355.106 of this title (relating to Basic Objectives and Criteria for Audit and Desk Review of Cost Reports), HHSC reviews cost reports. Cost reports not completed according to instructions or rules will be corrected and resubmitted by the provider within the time frame prescribed by HHSC. HHSC may perform a sufficient number of audits each year to ensure the fiscal integrity of the rates. HHSC notifies providers 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). If a provider disagrees with HHSC on cost report disallowances, it may request a review of the disallowances as specified in §355.110 of this title (relating to Informal Reviews and Formal Appeals).
6. (f) Access to records. The provider must allow HHSC access to any and all records necessary to verify information on the cost report in accordance with §355.105 of this title (relating to General Reporting and Documentation Requirements, Methods, and Procedures).

Source Note:The provisions of this §355.746 adopted to be effective June 1, 2010, 35 TexReg 4373.