TITLE 1. ADMINISTRATION

PART 1. OFFICE OF THE GOVERNOR

CHAPTER 4. TEXAS MILITARY PREPAREDNESS COMMISSION

SUBCHAPTER B. DEFENSE ECONOMIC ADJUSTMENT ASSISTANCE GRANT PROGRAM

1 TAC §§4.32, 4.35, 4.36

The Texas Military Preparedness Commission (Commission) adopts amendments to 1 TAC §§4.32, 4.35, and 4.36, concerning the Defense Economic Adjustment Assistance Grant program under Subchapter E, Chapter 436 of the Texas Government Code. The amendments are adopted without changes to the proposed text as published in the August 2, 2019, issue of the Texas Register (44 TexReg 3975) and will not be republished.

REASONED JUSTIFICATION

The Defense Economic Adjustment Assistance Grant (DEAAG) program offers grants to eligible local governmental entities that the Commission determines may be adversely or positively affected by an anticipated, planned, announced, or implemented action of the United States Department of Defense to close, reduce, increase, or otherwise realign defense worker jobs or facilities. The primary purpose of the adopted amendments to the rules is to update the criteria used to award such grants based on latest practices and in response to statutory revisions to the Texas Government Code enacted by the 86th Legislature, Regular Session, in Senate Bill 1443, which became effective September 1, 2019 (SB 1443).

The Commission's rules at 1 TAC §4.32, before the proposed amendment, established a numeric threshold at which the loss of defense worker jobs was considered significant for purposes of determining the eligibility of a local government entity to receive a grant under the DEAAG program. The Commission adopts an amendment to the rule that removes this unnecessary numeric threshold and allows the Commission to determine when the loss of defense worker jobs is considered significant.

Effective as of September 1, 2019, SB 1443 removed from statute certain factors previously required to be considered in evaluating DEAAG applications and instead now allows the Commission to establish any additional criteria used in such evaluations. The adopted amendments to §4.36 generally remove such factors from the evaluation of DEAAG applications, as well as remove other criteria, such as the extent to which displaced defense workers will be retrained, that are difficult to measure and assess or are otherwise outdated or duplicative. In place of such criteria, the adopted amendments enable the Commission to determine additional criteria set out in the grant solicitation.

Finally, the Commission adopts amendments to §4.35 eliminating the requirement that applicants provide certain information in their DEAAG applications, as that information is no longer needed as a result of the updated evaluation criteria or is otherwise no longer helpful.

SUMMARY OF COMMENTS AND COMMISSION RESPONSES

The public comment period on the proposal began August 2, 2019 and ended September 2, 2019. Following is a summary of the one public comment and one question received and the Commission's response to each.

Comment. One individual commented that §4.32(b) ties grant eligibility for positively-affected local governmental entities to a positive impact resulting from the Base Realignment and Closure process, while §4.32(a) ties grant eligibility for negatively-affected local governmental entities to a negative impact resulting from broader circumstances. The individual did not indicate whether he or she was for or against the adoption of the amendments to the rules.

Commission Response. The Commission declines to propose changes to §4.32(b) at this time, but may consider amending subsection (b) at a later date with stakeholder input.

Comment. The same individual requested clarification regarding the meaning of "military value" as used in the Commission's rules in relation to the meaning of such phrase as used in Chapter 436, Government Code.

Commission Response. The Commission does not intend to set out a definition for the phrase "military value" in the rules at this time.

STATUTORY AUTHORITY

The amendments are adopted under Government Code, §436.101(f), which provides that the Commission can adopt rules necessary to implement its duties.

CROSS REFERENCE TO STATUTE

Subchapter E, Chapter 436, Government Code, as amended by Senate Bill 1443, 86th Legislature, Regular Session.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 28, 2019.

TRD-201903999

Keith Graf

Director, Texas Military Preparedness Commission

Office of the Governor

Effective date: November 17, 2019

Proposal publication date: August 2, 2019

For further information, please call: (512) 475-1475


PART 3. OFFICE OF THE ATTORNEY GENERAL

CHAPTER 64. STANDARDS OF OPERATION FOR LOCAL COURT-APPOINTED VOLUNTEER ADVOCATE PROGRAMS

1 TAC §§64.1, 64.3, 64.5, 64.7, 64.9, 64.11, 64.13

The Office of the Attorney General (OAG) adopts the repeal of Chapter 64, concerning standards of operation for local court-appointed volunteer advocate programs. The proposed repeal was published in the August 30, 2019, issue of the Texas Register (44 TexReg 4596).

Effective September 1, 2015, Family Code §264.609 transferred rulemaking authority to adopt standards for local court-appointed volunteer advocate programs to the Texas Health and Human Services Commission (HHSC). HHSC adopted new standards into rule at 1 TAC Chapter 377, Subchapter B, effective July 11, 2017. Therefore, the OAG proposed the repeal of Chapter 64, which has been replaced by HHSC's rules.

No comments were received regarding the proposed repeal.

This repeal is adopted in accordance with Family Code §264.609, which transferred rulemaking authority to adopt standards for local court-appointed volunteer advocate programs to HHSC.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 28, 2019.

TRD-201904000

Ryan L. Bangert

Deputy Attorney General for Legal Counsel

Office of the Attorney General

Effective date: November 17, 2019

Proposal publication date: August 30, 2019

For further information, please call: (512) 475-3210


CHAPTER 65. STANDARDS OF OPERATION FOR LOCAL CHILDREN'S ADVOCACY CENTERS

SUBCHAPTER A. GENERAL

1 TAC §§65.1, 65.3, 65.5, 65.7, 65.9, 65.11

The Office of the Attorney General (OAG) adopts the repeal of Chapter 65, concerning standards of operation of local children's advocacy centers. The proposed repeal was published in the August 30, 2019, issue of the Texas Register (44 TexReg 4597).

Effective September 1, 2015, Family Code §264.410(c) transferred rulemaking authority to adopt standards for local children's advocacy centers to the Texas Health and Human Services Commission (HHSC). HHSC adopted new standards into rule at 1 TAC Chapter 377, Subchapter C, effective July 11, 2017. Therefore, the OAG proposed the repeal of Chapter 65, which has been replaced by HHSC's rules.

No comments were received regarding the proposed repeal.

This repeal is adopted in accordance with Family Code §264.410(c), which transferred rulemaking authority to adopt standards for local children's advocacy centers to HHSC.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 28, 2019.

TRD-201904001

Ryan L. Bangert

Deputy Attorney General for Legal Counsel

Office of the Attorney General

Effective date: November 17, 2019

Proposal publication date: August 30, 2019

For further information, please call: (512) 475-3210


PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 354. MEDICAID HEALTH SERVICES

SUBCHAPTER D. TEXAS HEALTHCARE TRANSFORMATION AND QUALITY IMPROVEMENT PROGRAM

The Texas Health and Human Services Commission (HHSC) adopts an amendment to §354.1707, concerning Performer Valuations, in Texas Administrative Code (TAC) Title 1, Chapter 354, Subchapter D, Division 7 and adopts new Division 8, concerning DSRIP Program Demonstration Years 9-10, consisting of new §354.1729, concerning Definitions; new §354.1731, concerning Medicaid and Low-income or Uninsured Patient Population by Provider; new §354.1733, concerning Regional Healthcare Partnerships (RHPs); new §354.1735, concerning Participants; new §354.1737, concerning RHP Plan Update for DY9-10; new §354.1739, concerning RHP Plan Update Review; new §354.1741, concerning RHP Plan Update Modifications; new §354.1743, concerning Independent Assessor; new §354.1745, concerning Categories; new §354.1747, concerning Performer Valuations; new §354.1749, concerning Category A Requirements for Performers; new §354.1751, concerning Category B Requirements for Performers; new §354.1753, concerning Category C Requirements for Performers; new §354.1755, concerning Category D Requirements for Performers; and new §354.1757, concerning Disbursement of Funds.

New §354.1731 and §354.1747 are adopted with changes to the proposed text as published in the August 2, 2019, issue of the Texas Register (44 TexReg 3977) and are being republished. The remaining sections are adopted without changes to the proposed text as published in the August 2, 2019, issue of the Texas Register (44 TexReg 3977), and therefore will not be republished.

BACKGROUND AND JUSTIFICATION

On December 12, 2011, the Centers for Medicare & Medicaid Services (CMS) approved Texas' request for a new Medicaid demonstration waiver entitled "Texas Healthcare Transformation and Quality Improvement Program" in accordance with section 1115 of the Social Security Act. This waiver authorized the establishment of the Delivery System Reform Incentive Payment (DSRIP) program. The DSRIP program provides incentive payments to hospitals, physician practices, community mental health centers, and local health departments to support their efforts to enhance access to health care, the quality of care, and the health of patients and families served.

The initial waiver was approved through September 30, 2016, and an initial extension was granted through December 31, 2017. On December 21, 2017, CMS granted a five-year extension of the waiver through September 30, 2022.

The Program Funding and Mechanics (PFM) protocol and Measure Bundle Protocol govern DSRIP for Demonstration Years (DYs) 9-10 (October 1, 2019 - September 30, 2021). HHSC posted the draft PFM protocol proposal for DYs 9-10, along with a survey to solicit stakeholder feedback on the proposal, to the Transformation Waiver website on January 3, 2019. HHSC revised the PFM protocol proposal based on these survey responses and submitted it to CMS on March 29, 2019. The adopted rules closely align with the PFM protocol proposal submitted to CMS. HHSC will update these rules, as necessary, in accordance with CMS guidance.

The purpose of the new rules is to specify the DSRIP program requirements for DYs 9-10 consistent with the PFM protocol HHSC proposed to CMS. The purpose of the amendment to §354.1707, relating to Performer Valuations, is to reflect the reduction to the Regional Healthcare Partnership (RHP) 9 private hospital valuation and minimum private hospital valuation per DY for DYs 7-8 due to the closure of a private hospital in that RHP.

COMMENTS

The 31-day comment period ended September 2, 2019. During this period, HHSC received comments regarding the proposed rules from three entities: Gjerset & Lorenz, LLP, The Hospitals of Providence Memorial, and The Hospitals of Providence East Campus. A summary of the comments and HHSC's responses follow.

Comment: One commenter requested clarification on whether DSRIP performing providers would be allowed to carry forward achievement of their DY 10 goal achievement milestones for Category C pay-for-performance (P4P) measures to performance year (PY) 5 (January 1, 2022 - December 31, 2022).

Response: The proposed rules are based on the PFM protocol proposal for DY 9-10 that HHSC submitted to CMS on March 29, 2019. In July 2019, CMS indicated that DSRIP performing providers would not be allowed to carry forward achievement of their DY 10 goal achievement milestones for Category C P4P measures to PY 5. Therefore, HHSC will need to amend the rules after adoption to reflect this.

Comment: Two commenters expressed support for proposed §354.1753(e)(1) and (e)(2), which specify that for DYs 9 and 10, 33 percent of the funds for Category C P4P measures will be allocated to reporting milestones and 67 percent will be allocated to goal achievement milestones.

Response: HHSC appreciates comments in support of the proposal. No changes were made to the rule in response to the comments. However, the proposed rules are based on the PFM protocol proposal for DY 9-10 that HHSC submitted to CMS on March 29, 2019. In July 2019, CMS indicated that only 25 percent of the funds for Category C P4P measures could be allocated to reporting milestones and that 75 percent must be allocated to goal achievement milestones. Therefore, HHSC will need to amend the rules after adoption to reflect this.

Comment: Two commenters expressed support for proposed §354.1753(h) and §354.1757(c)(2)(A)(i), which allow DSRIP performing providers to carry forward achievement of their DY 10 goal achievement milestones for Category C P4P measures to PY 5.

Response: HHSC appreciates comments in support of the proposal. No changes were made to the rule in response to the comments. However, the proposed rules are based on the PFM protocol proposal for DY 9-10 that HHSC submitted to CMS on March 29, 2019. In July 2019, CMS indicated that DSRIP performing providers would not be allowed to carry forward achievement of their DY 10 goal achievement milestones for Category C P4P measures to PY 5. Therefore, HHSC will need to amend the rules after adoption to reflect this.

Minor editorial changes were made to §354.1731 and §354.1747 to reflect proper rule formatting.

DIVISION 7. DSRIP PROGRAM DEMONSTRATION YEARS 7-8

1 TAC §354.1707

STATUTORY AUTHORITY

The amendment is authorized by Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which provides HHSC with the authority to propose and adopt rules governing the determination of Medicaid payments.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 23, 2019.

TRD-201903862

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: November 12, 2019

Proposal publication date: August 2, 2019

For further information, please call: (512) 923-0644


DIVISION 8. DSRIP PROGRAM DEMONSTRATION YEARS 9-10

1 TAC §§354.1729, 354.1731, 354.1733, 354.1735, 354.1737, 354.1739, 354.1741, 354.1743, 354.1745, 354.1747, 354.1749, 354.1751, 354.1753, 354.1755, 354.1757

STATUTORY AUTHORITY

The new rules are authorized by Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which provides HHSC with the authority to propose and adopt rules governing the determination of Medicaid payments.

§354.1731.Medicaid and Low-income or Uninsured Patient Population by Provider.

For the purposes of determining the Medicaid and Low-income or Uninsured Patient Population by Provider (PPP):

(1) An individual is classified a Medicaid individual served if the individual was enrolled in Medicaid or the Children's Health Insurance Program at the time of at least one encounter during the applicable DY.

(2) An individual is classified a low-income or uninsured individual (LIU) served if the individual was either at or below 200 percent of the FPL or did not have health insurance at the time of at least one encounter during the applicable DY.

(3) If an individual was enrolled in Medicaid or the Children's Health Insurance Program at the time of one encounter during the applicable DY and was LIU at the time of a separate encounter during the applicable DY, that individual is classified as a Medicaid individual served.

§354.1747.Performer Valuations.

(a) A performer's total valuation per demonstration year (DY) for DY9 and DY10 is calculated as follows:

(1) If a performer has a DY8 total valuation that is less than or equal to $1 million, its total valuation for each demonstration year of DY9 and DY10 is equal to its total valuation for DY8. These valuations are subtracted from the DY9 and DY10 DSRIP pool amounts.

(2) If a performer has a DY8 total valuation that is greater than $1 million, its total valuation for each demonstration year of DY9 and DY10 is calculated as follows:

(A) The remaining DY9 and DY10 DSRIP pool amounts are divided by the DY8 valuation for all performers with a DY8 total valuation greater than $1 million to determine the percentage reductions for DY9 and DY10;

(B) The performer's DY8 valuation is multiplied by the percentage reduction in valuation from DY8 for the applicable DY to determine the total valuation for each demonstration year of DY9 and DY10; and

(C) The performer's total valuation for each demonstration year of DY9 and DY10 is not reduced to less than $1 million.

(3) If a performer withdrew from participating in DSRIP during DY8 or withdraws during the RHP Plan Update for DY9-10, the performer's valuation is proportionately distributed among the remaining performers in its RHP based on each performer's percent share of DY8 valuation in the RHP.

(b) A performer's valuation must comport with the following funding distribution for DY9 and DY10:

Figure: 1 TAC §354.1747(b) (.pdf)

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 23, 2019.

TRD-201903863

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: November 12, 2019

Proposal publication date: August 2, 2019

For further information, please call: (512) 923-0644


CHAPTER 355. REIMBURSEMENT RATES

SUBCHAPTER J. PURCHASED HEALTH SERVICES

DIVISION 11. TEXAS HEALTHCARE TRANSFORMATION AND QUALITY IMPROVEMENT PROGRAM REIMBURSEMENT

1 TAC §355.8216, §355.8218

The Texas Health and Human Services Commission (HHSC) adopts new §355.8216, concerning Delivery System Reform Incentive Payments for Demonstration Years 9-10; and new §355.8218, concerning Funding for DSRIP Monitoring Program for Demonstration Years 9-10. These new sections are adopted without changes to the proposed text as published in the August 2, 2019, issue of the Texas Register (44 TexReg 3994), and therefore will not be republished.

BACKGROUND AND JUSTIFICATION

On December 12, 2011, the Centers for Medicare & Medicaid Services (CMS) approved Texas' request for a new Medicaid demonstration waiver entitled "Texas Healthcare Transformation and Quality Improvement Program" in accordance with section 1115 of the Social Security Act. This waiver authorized the establishment of the Delivery System Reform Incentive Payment (DSRIP) program. The DSRIP program provides incentive payments to hospitals, physician practices, community mental health centers, and local health departments to support their efforts to enhance access to health care, the quality of care, and the health of patients and families served.

The initial waiver was approved through September 30, 2016, and an initial extension was granted through December 31, 2017. On December 21, 2017, CMS granted a five-year extension of the waiver through September 30, 2022.

The Program Funding and Mechanics (PFM) protocol and Measure Bundle Protocol govern DSRIP for Demonstration Years (DYs) 9-10 (October 1, 2019 - September 30, 2021). HHSC posted the draft PFM protocol proposal for DYs 9-10, along with a survey to solicit stakeholder feedback on the proposal, to the Transformation Waiver website on January 3, 2019. HHSC revised the PFM protocol proposal based on these survey responses and submitted it to CMS on March 29, 2019. The adopted rules closely align with the PFM protocol proposal submitted to CMS. HHSC will update these rules, as necessary, in accordance with CMS guidance.

The purpose of the new rules is to specify the DSRIP program requirements for DYs 9-10 consistent with the PFM protocol HHSC proposed to CMS. New §355.8216 describes performer eligibility for payments, the payment methodology, and recoupment. New §355.8218 describes how the DSRIP monitoring program is funded.

COMMENTS

The 31-day comment period ended September 2, 2019. During this period, HHSC did not receive any comments regarding the proposed rules.

STATUTORY AUTHORITY

The new rules are authorized by Texas Government Code §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; Texas Human Resources Code §32.021 and Texas Government Code §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code §531.021(b), which provides HHSC with the authority to propose and adopt rules governing the determination of Medicaid payments.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 23, 2019.

TRD-201903864

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: November 12, 2019

Proposal publication date: August 2, 2019

For further information, please call: (512) 923-0644