1. (a) The Resource Utilization Group (RUG-III) 34-group classification system has seven major classification groups. The groups represent the recipient's relative direct care resource requirements.
2. (b) The Activities of Daily Living (ADL) score is based on the recipient's care needs that are provided by the nursing facility staff. The ADL score is used to determine a recipient's placement in a RUG-III category and is based on the recipient's care needs provided by the nursing facility staff. The score is incorporated into acuity measurements established under the RUG-III recipient classification methodology. The clinical record must support items claimed for Medicaid reimbursement on the Minimum Data Set (MDS).
3. (c) The state-specific Long-Term Care Medicaid Information Section is a part of the MDS assessment Resident Assessment Instrument (RAI) in Texas and must be completed for Medicaid reimbursement. The Long-Term Care Medicaid Information Section must include the last name and license number of the registered nurse (RN) assessment coordinator.

4. (d) The Basic Tracking Form must include:

   1. (1) The signature and title of each licensed nurse or health care professional completing any section of the MDS assessment for Medicaid reimbursement; and
   2. (2) The section(s) and completion date(s) corresponding to the signature of the nurse or health care professional.
5. (e) Each individual signing the signature section on the Basic Tracking Form is certifying that the information entered on the MDS assessment is accurate. A facility that submits false or inaccurate information is subject to sanctions under §371.1643 of this title (relating to Use of Sanctions).

6. (f) If the nursing facility recipient is a hospice recipient, the nursing facility must comply with the requirements of 40 TAC §19.1926 (relating to Medicaid Hospice Services) and maintain in the recipient's clinical record, copies of the completed Texas Medicaid Hospice Program Recipient Election/Cancellation/Discharge Notice (Form 3071), and the DADS Medicaid/Medicare Hospice Program Physician Certification of Terminal Illness (Form 3074).

   1. (1) The nursing facility must acknowledge a recipient's admission to hospice services on the Special Treatments, Procedures, and Programs section when completing an MDS full, comprehensive, or quarterly assessment.
   2. (2) An MDS assessment indicating that a recipient has elected hospice services will not be processed until the Texas Medicaid Hospice Program Recipient Election/Cancellation/Discharge Notice (Form 3071), and the DADS Medicaid/Medicare Hospice Program Physician Certification of Terminal Illness (Form 3074) are received by the Texas Medicaid Claims Administrator (MCA).
   3. (3) When a recipient is admitted to hospice and there has not been a significant change in condition, a significant change in status assessment does not have to be completed. The recipient's next scheduled assessment may be used.
7. (g) Each nurse's license number submitted on the MDS assessment, Long-Term Care Medicaid Information Section, will be validated with the Texas Board of Nursing or will be validated as applicable as a nurse compact license with the licensing state. An MDS assessment will be rejected for Medicaid reimbursement if an invalid or delinquent license number is submitted on the MDS assessment, Long-Term Care Medicaid Information Section.

8. (h) Nursing facility staff must complete the HHSC-approved MDS training in accordance with this subsection.

   1. (1) The nursing facility RN Assessment Coordinator must complete the HHSC-approved online MDS training course prior to completing an MDS assessment for Medicaid payment. All other staff completing the MDS assessment for Medicaid payment are encouraged to take the MDS Training prior to completing the MDS assessment.
   2. (2) The nursing facility RN Assessment Coordinator must repeat the MDS online training every two years. A certificate of completion will be issued at the conclusion of the training.
   3. (3) If the nursing facility RN Assessment Coordinator does not complete the MDS training every two years as required by HHSC, the license number of the RN Assessment Coordinator will not be accepted into the state database and the MDS assessment will be rejected by the Medicaid claims administrator.

9. (i) An admission assessment, a quarterly assessment, significant change in status assessment, annual assessment, significant correction to a prior quarterly assessment, or a significant correction to a prior annual assessment establishes a RUG-III group.

   1. (1) A significant change in status assessment, which requires a comprehensive MDS with Resident Assessment Protocols (RAPs), must be completed by the end of the 14th calendar day following determination that a significant change has occurred.
   2. (2) A significant change in status assessment resets the schedule for the next annual assessment.
10. (j) Permanent medical necessity is determined by the Texas Department of Aging and Disability Services (DADS) in accordance with 40 TAC §19.2403 (relating to Medical Necessity Determination).

11. (k) When correcting errors in an MDS assessment, the nursing facility staff must use the MDS Correction Policy in Chapter 5 of the Minimum Data Set, Resident Assessment Instrument User's Manual, published by the Centers for Medicare and Medicaid Services (CMS).

    1. (1) Documentation must be maintained in the clinical record to support the corrected MDS assessment form and be available for review by HHSC-OIG staff during MDS utilization reviews.
    2. (2) The Correction Request Form attestation of accuracy of signatures must contain the RN assessment coordinator's and DON's signatures, and the date the correction was completed.
    3. (3) A correction to a RUG reclassification error identified during an onsite review is considered an assessment error as described in subsection (r)(2) of this section. This does not negate the facility's responsibility to make quality of care corrections pursuant to the CMS MDS Correction Policy referenced in this section.
12. (l) The MDS assessment establishes the rate(s) at which the Texas Medicaid program pays a nursing facility, or hospice provider for the facility's hospice residents, to support the care the nursing facility's residents receive and any information on the MDS RAI shall be considered part of each corresponding claim for Medicaid reimbursement.

13. (m) Prior to entering a nursing facility for review, HHSC-OIG identifies a population of paid claims from which a sample will be drawn.

    1. (1) The population is defined as claims associated with RUG classifications:

       1. (A) paid to the nursing facility, or hospice provider for the facility's hospice residents, for a specified time period; and
       2. (B) that meet certain criteria, such as dollar or claim volume, as determined by HHSC-OIG.
    2. (2) HHSC-OIG will identify the population of paid claims, along with their related RUG classifications and MDS assessment claim forms, from which a statistically valid random sample will be drawn for review. The sample generated will be a statistically valid random sample generated at a minimum confidence level of 90% and a maximum precision of 10%. Related extrapolations will be done at the lower limit of the applicable confidence interval.

14. (n) Utilization reviews will be conducted in accordance with this subsection.

    1. (1) An HHSC-OIG nurse reviewer will conduct an unannounced onsite MDS utilization review of a nursing facility at least every 15 months. The frequency of onsite reviews will be determined by the accuracy of the MDS assessment(s) and the facility's error rate.

    2. (2) The onsite review period begins when an HHSC-OIG nurse reviewer presents an entrance letter to the facility, and ends when the HHSC-OIG nurse reviewer informs the facility that the onsite review is completed. The onsite review period is subject to the provisions in subparagraphs (A) - (D) of this paragraph. The onsite review period does not include the exit conference, which is described in paragraph (3) of this subsection.

       1. (A) The nursing facility shall provide the HHSC-OIG nurse reviewer initial access to clinical records and resources the HHSC-OIG nurse reviewer determines are necessary to initiate the onsite review process within two hours of entrance to the nursing facility. Although the facility is not required to produce all records within two hours, documentation to be reviewed must continue to be made available to the HHSC-OIG nurse reviewer during the onsite review period. If the facility indicates that necessary records or resources are located off-site or otherwise unavailable for immediate retrieval, and the facility can substantiate this fact, HHSC-OIG will grant an extension to the two-hour initial production of records requirement.
       2. (B) The nursing facility, upon HHSC-OIG nurse reviewer request, must provide the signed and notarized Records Affidavit described in subsection (q)(4) of this section for each MDS assessment for which copies of clinical record documentation are provided to the nurse reviewer, attesting that the facility used its best efforts to obtain all relevant records, and that the documentation provided to the HHSC-OIG nurse reviewer is as complete a compilation as was possible during the onsite review period. If the nursing facility refuses to provide the required Records Affidavit, the nursing facility must state the refusal in writing and attach the statement to the records provided to the nurse reviewer.
       3. (C) The nursing facility must ensure an assigned staff member knowledgeable of the MDS and clinical record is available at the facility to the HHSC-OIG nurse reviewer during the entire onsite review.

       4. (D) When the HHSC-OIG nurse reviewer identifies an item coded on the assessment that can not be substantiated or does not accurately reflect the recipient's status during the applicable look back period, the HHSC-OIG nurse reviewer will notify the assigned nursing facility staff and request supporting documentation.

          1. (i) The nursing facility must provide the requested supporting documentation to validate the coded items to the HHSC-OIG during the onsite review period and prior to the exit conference.

             1. (I) If the onsite review period is more than one day, the nursing facility must provide the requested information during regular business hours to the HHSC-OIG reviewer by the end of the day the documentation was requested. Provided, however, that the facility shall be allowed a minimum of six business hours in which to provide requested information.
             2. (II) Nothing in this provision shall be construed to affect the timing of an exit conference or require the reviewer to incorporate an overnight stay near the facility. It shall be the facility's responsibility to submit the supplemental records to the reviewer's place of business. The reviewer's exit conference conclusions and error rates may change after reviewing the supplemental records. Any such changes will be communicated to the provider within one business day.
             3. (III) If a facility cannot produce or make available the requested information, the facility must provide a written statement explaining why the information cannot be provided as requested. The submission of a written statement does not negate HHSC-OIG's authority to take enforcement action under Subchapter G of this chapter (relating to Legal Action Relating to Providers of Medical Assistance).
          2. (ii) Lack of documentation to validate the items claimed on the MDS as described in this paragraph may be the basis for an error and RUG III group reclassification.
          3. (iii) Lack of documentation, inconsistent documentation that misrepresents the patient's actual condition at the time it is documented, or altered documentation, which does not follow generally accepted error correction guidelines such as the MDS Correction Policy in Chapter 5 of the Minimum Data Set, may be the basis for an error and adjustment in the RUG-III group. The error or adjustment will be made based on a review of the clinical record documentation provided for the look-back period of the MDS assessment.

    3. (3) The HHSC-OIG nurse reviewer will hold an exit conference with nursing facility staff.

       1. (A) The exit conference will be held with the nursing facility staff at the conclusion of the onsite review period. Hospice staff is encouraged to attend to discuss the review findings of the MDS assessments for hospice recipients for whom the representative provided hospice services.

       2. (B) The HHSC-OIG nurse reviewer will provide the nursing facility representative(s) in a leadership position(s) (e.g., the administrator, DON, charge nurse) formal written notification of all MDS validation findings during the exit process.

          1. (i) If a hospice representative is present at the exit conference, written notification will be provided only on recipients to whom they provided services.
          2. (ii) If the hospice representative is not present during the exit conference, HHSC-OIG will provide formal written notification of all RUG-III changes within 15 calendar days of the exit conference.
          3. (iii) If the nursing facility disagrees with the HHSC RUG-III determination or assessment of errors, the nursing facility may submit a request for reconsideration as provided in subsection (q) of this section.

15. (o) The HHSC-(OIG) may sanction any provider or person as defined in §371.1601 of this title (relating to Definitions), including a managed care organization or subcontractor, pursuant to Subchapter G of this chapter that:

    1. (1) fails to grant immediate access upon reasonable request to:

       1. (A) the HHSC-OIG;
       2. (B) the Attorney General's Medicaid Fraud Control Unit or Civil Fraud Division;
       3. (C) any state or federal agency authorized to conduct compliance, regulatory, or program integrity functions on the provider, person, or the services rendered by the provider or person; or
       4. (D) any agent or consultant of any agency or division within an agency described in subparagraph (A) of this paragraph;
    2. (2) fails to allow the HHSC-OIG or any other federal or state agency, division, agent, or consultant, as described in paragraph (1) of this subsection to conduct any duties that are necessary to the performance of their statutory functions; or

    3. (3) fails to provide to the HHSC-OIG or any other federal or state agency, division, agent, or consultant, as described in paragraph (1) of this subsection, upon request and as requested, for the purpose of reviewing, examining, and securing custody of records, access to, disclosure of, and custody of:

       1. (A) copies or originals of any records, documents, or other requested items, as determined necessary by the HHSC-OIG or those specified in paragraph (1) of this subsection to perform statutory functions;
       2. (B) any records the provider or person is required to maintain;
       3. (C) any records necessary to verify items or services furnished and delivered under Medicaid, any other health and human services program, or any state health care program to determine whether payment for those items or services is due or was properly made; or

       4. (D) information that includes, without limitation:

          1. (i) clinical patient records;
          2. (ii) other records pertaining to the patient;
          3. (iii) any other records of services provided to Medicaid or other health and human services program recipients and payments made for those services;
          4. (iv) documents related to diagnosis, treatment, service, lab results, charting, billing records, invoices, documentation of delivery of items, equipment, or supplies, and radiographs, and all requirements of §371.1617(a)(2) of this title (relating to Program Violations);
          5. (v) business and accounting records with backup support documentation, statistical documentation, computer records and data, patient sign-in sheets, and schedules; or
          6. (vi) any records necessary to fulfill its duty under the Improper Payments Information Act of 2002, Public Law 107-300, 116 Stat. 2350 (November 26, 2002) requiring state agencies take action to reduce improper payments. The term "improper payment" means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements, including any payment to an ineligible recipient, any payment for an ineligible service, any duplicate payment, any payment for services not received, or any payment that does not account for credit for applicable discounts.

16. (p) A facility that uses an electronic clinical record system and electronic submissions shall comply with this subsection.

    1. (1) A nursing facility that elects to submit electronic or digital signatures on MDS assessments is required to have a policy in effect on the date of transmission that ensures they have proper security measures to protect against the use of an electronic or digital signature by anyone other than the individual to whom the electronic or digital signature belongs. The policy must also ensure that clinical records are made available to the HHSC-OIG and others who are authorized by law.
    2. (2) In order to receive Medicaid reimbursement, a nursing facility that utilizes a clinical record system which is entirely electronic must maintain a hard copy of all MDS assessments in the recipient's clinical record. The hard copy of an MDS assessment must include the signatures, title, and date of all individuals completing the MDS.

17. (q) The HHSC-OIG will conduct a reconsideration review upon receipt of a written request for reconsideration.

    1. (1) The reconsideration request must be sent in the form of a letter. The letter must describe in detail the reason a reconsideration review is requested for each specified assessment error. A copy of each signed affidavit executed during the onsite review for which reconsideration is requested must be attached to the letter. The reconsideration request must be submitted in the order outlined in the reconsideration request requirements provided to the nursing facility staff during the exit conference, and must include all of the information required for a reconsideration request.

    2. (2) The reconsideration request must be mailed to the HHSC-OIG Utilization Review (UR) unit at the address indicated on the exit documentation provided to facility staff at the exit conference.

       1. (A) The reconsideration request must be postmarked on or before the 15th calendar day after the date of the exit conference, provided, however, that if the 15th calendar day falls on a Sunday or national holiday as defined in Texas Government Code Annotated §662.003(a), the request must be postmarked on the next following business day.
       2. (B) A reconsideration request that does not meet the requirements of this paragraph will not be granted.
    3. (3) An MDS assessment error that is not identified in the request will not be reconsidered.
    4. (4) A nursing facility may submit additional clinical records along with a timely request for reconsideration review. Any such additional records must be accompanied by a notarized Fact and Records Affidavit that properly authenticates the documents as true and correct duplicates of business records pursuant to TEX. R. EVID. 803(6) and TEX. R. EVID, 902(10). Additionally, the Fact Affidavit must specify: why the records were not produced during the onsite review, when the records were obtained, where the records were located, who located the records, and the circumstances under which the records were obtained. If recipient medical record documentation that was not provided during the onsite review is submitted for reconsideration, the weight to be given any supplemental documentation shall remain within the discretion of the reviewer.
    5. (5) If the reconsideration review establishes that the HHSC-OIG has changed an MDS RUG-III group in error, HHSC-OIG will direct the Texas Medicaid claims administrator to correct the error retroactively.
    6. (6) If the provider disagrees with the reconsideration determination, the provider may request a formal appeal as described in Chapter 357, Subchapter I of this title (relating to Hearings Under the Administrative Procedure Act).
    7. (7) The RUG-III group and the associated per diem rate specified in the reconsideration determination remain in effect during the formal appeal process.

18. (r) The HHSC-OIG will recover overpayments based on onsite review findings associated with an administrative or assessment error in accordance with this subsection.

    1. (1) An administrative error occurs if a requirement in subsections (c) and (d) of this section are not met, or the Long-Term Care Medicaid Information Section or Basic Tracking Form is not made available to the HHSC-OIG during regular business hours of the onsite review period and prior to the exit conference.

       1. (A) If the onsite review period is more than one day, the nursing facility must provide the requested information to the HHSC-OIG reviewer by the end of the day information is requested, during regular business hours.
       2. (B) If a facility cannot produce or make available the requested information, the facility must provide a written statement explaining why the information cannot be provided as requested. The submission of a written statement does not negate HHSC-OIG's authority to take enforcement action under Subchapter G of this chapter.
       3. (C) An administrative error may be reconsidered as described in subsection (q) of this section.

    2. (2) An assessment error is a RUG reclassification resulting in an overpayment or underpayment of an MDS assessment claim(s) identified during a utilization review of a facility.

       1. (A) During the MDS assessment utilization review of a facility, HHSC-OIG will identify each assessment error (e.g. overpayment amount or underpayment amount of an MDS assessment claim) from the population as that term is described in subsection (m) of this section.
       2. (B) Following the onsite review of the sampled MDS assessment claim forms, an assessment error rate will be calculated as follows:
          Attached Graphic
          

       3. (C) The HHSC-OIG will process all RUG reclassifications identified as a result of the onsite utilization review.

          1. (i) The HHSC-OIG will recover from the facility any overpayment(s) associated with an MDS assessment claim. The recovered amount is a debt owed by the facility to the Texas Medicaid program. The facility will be reimbursed for any underpayment(s) identified.

          2. (ii) To calculate any overpayment, HHSC-OIG will extrapolate to the population and the extrapolation will be applied only to the RUG classifications found in error. An adjustment equal to the net value of the identified overpayment(s) and underpayment(s) will be made. Any net overpayments will constitute a debt owed by the facility/provider, as applicable, to the Texas Medicaid program. Net underpayments will be reimbursed to the facility/provider, as applicable.

             1. (I) For Utilization Reviews conducted on September 1, 2008 through August 31, 2009, HHSC-OIG Utilization Review will extrapolate to the population only when the error rate exceeds 25%.
             2. (II) For Utilization Reviews conducted on September 1, 2009 through February 28, 2010, HHSC-OIG Utilization Review will extrapolate to the population only when the error rate exceeds 20%.
             3. (III) For Utilization Reviews conducted on March 1, 2010 through August 31, 2010, HHSC-OIG Utilization Review will extrapolate to the population only when the error rate exceeds 15%.
             4. (IV) For Utilization Reviews conducted on or after September 1, 2010, HHSC-OIG Utilization Review will extrapolate to the population in all cases of overpayment as set forth in clause (ii) of this subparagraph and the extrapolation will be applied only to the RUG classifications found in error.
          3. (iii) An error rate greater than 25% or suspected program violation described in §371.1617 of this chapter (relating to Program Violations), will result in a referral for investigation to the HHSC-OIG Medicaid Program Integrity (MPI) Division. This referral will be made part of the state's method for identification, investigation and referral for fraud under Chapter 357, Subchapter M, of this title (relating to Fraud or Abuse Involving Medical Providers) and Chapter 371, Subchapter G of this title (relating to Legal Action Relating to Providers of Medical Assistance).

       4. (D) An assessment error is subject to reconsideration in accordance with subsection (q) of this section.

          1. (i) If the facility timely requests reconsideration of the onsite review results, the assessment error rate will be based on the results of the reconsideration.
          2. (ii) If the facility does not timely request reconsideration of the onsite review, the assessment error rate will be based on the results of the onsite review.
19. (s) Suspected fraudulent documentation, such as medical or clinical records that appear to have been altered, falsified, or fabricated, will result in a referral for investigation to the HHSC-OIG Medicaid Program Integrity (MPI) Division. This referral will be made part of the state's method for identification, investigation and referral for fraud under Chapter 357, Subchapter M, of this title.

Source Note:The provisions of this §371.214 adopted to be effective October 9, 2008, 33 TexReg 8311.