TITLE 1. ADMINISTRATION

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 355. REIMBURSEMENT RATES

SUBCHAPTER F. REIMBURSEMENT METHODOLOGY FOR PROGRAMS SERVING PERSONS WITH MENTAL ILLNESS OR INTELLECTUAL OR DEVELOPMENTAL DISABILITY

1 TAC §355.727

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC) proposes new §355.727, concerning Add-on Payment Methodology for Home and Community-Based Services Supervised Living and Residential Support Services.

BACKGROUND AND PURPOSE

The purpose of the new section is to describe the methodology by which HHSC will temporarily increase the direct care portion of the supervised living and residential support services rates. Such direct care staffing add-on payments are to be used only for attendant compensation.

Home and Community-based Services (HCS) providers report being unable to afford wage increases for existing direct care staff or to offer higher starting wages. The HCS attendant compensation rate enhancement program has a maximum of 25 levels. To enable providers to afford the wage increases at the maximum level for direct care staff, HHSC must first increase the rates beyond the historical trend as the current methodology is based on historical costs. The rate increases will be an add-on to the current base rate for the direct care portion of the rate. The proposed methodology will be in effect from January 1, 2020, through August 31, 2021. HHSC assumes the cost data for this time period will support the increased wages for direct care staff.

While this temporary add-on payment methodology is in place, HHSC will implement a mandatory spending requirement add-on to ensure that providers spend these funds on direct care staff. While the spending requirement will be similar to the attendant compensation rate enhancement program, it will not supplant it. The attendant compensation rate enhancement will continue to be voluntary for supervised living and residential support services day habilitation, respite, supported employment, and employment assistance.

SECTION-BY-SECTION SUMMARY

Proposed new §355.727 adds the methodology for an add-on that will temporarily increase the direct care portion of the HCS supervised living and residential support services rates.

Proposed new §355.727(a) specifies the purpose of the direct care staffing add-on and references how the rates for supervised living and residential support services are determined in accordance with §355.723 (relating to Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs).

Proposed new §355.727(b) describes the direct care staffing add-on methodology and specifies the add-on for each level of need.

Proposed new §355.727(c) outlines the reporting requirements for HCS providers who deliver supervised living and residential support services during the time period the add-on is in effect.

Proposed new §355.727(d) specifies which providers must comply with the direct care staffing add-on spending requirement.

Proposed new §355.727(e) describes the calculation of the direct care staffing add-on spending requirement.

FISCAL NOTE

Trey Wood, Chief Financial Officer, has determined that for each of the first five years that the rule will be in effect, there will be an estimated additional cost to state government as a result of enforcing and administering the rule as proposed. Enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of local governments.

The effect on state government for each of the five years the proposed rule is in effect is an estimated cost of $4,347,702 in General Revenue (GR) ($11,054,416 in All Funds (AF)) in Fiscal Year (FY) 2020, $6,384,928 in GR ($16,793,603 AF) in FY 2021, $6,514,601 GR ($17,179,856 AF) in FY 2022, $6,573,233 GR ($17,334,475 AF) in FY 2023, and $6,632,392 GR ($17,490,485 AF) in FY 2024.

GOVERNMENT GROWTH IMPACT STATEMENT

HHSC has determined that during the five years that the rule will be in effect:

(1) the proposed rule will not create or eliminate a government program;

(2) implementation of the proposed rule will not affect the number of HHSC employee positions;

(3) implementation of the proposed rule will result in no assumed change in future legislative appropriations;

(4) the proposed rule will not affect fees paid to HHSC;

(5) the proposed rule will create a new rule;

(6) the proposed rule will not expand, limit, or repeal an existing rule; and

(7) the proposed rule will not change the number of individuals subject to the rule.

HHSC has insufficient information to determine the proposed rule's effect on the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Mr. Wood has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. The rule will provide a temporary rate increase in the direct care portion of the supervised living and residential support services rates.

LOCAL EMPLOYMENT IMPACT

The proposed rule will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to this rule because the rule does not impose a cost on regulated persons.

PUBLIC BENEFIT AND COSTS

Victoria Grady, Director of Rate Analysis, has determined that for each year of the first five years the rule is in effect, the public benefit will be the increased ability of an HCS provider to pay higher staff wages to supervised living and residential support services attendants and attract quality direct care staff.

Mr. Wood has also determined that for the first five years the rule is in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rule because the proposed rule will temporarily increase the direct care portion of the HCS supervised living and residential support services rates. While there is a recoupment component to the rule, it is not possible to determine whether an individual provider may be subject to a recoupment.

TAKINGS IMPACT ASSESSMENT

HHSC has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC HEARING

HHSC will conduct a public hearing on November 4, 2019, at 10 a.m. to receive public comments on the rule. The public hearing will be held at the Robert D. Moreton Building, 1100 W. 49th Street, Austin, TX 78751. Entry is through security at the main entrance to the building facing 49th Street. Free parking is available in the adjacent parking garage. HHSC will also broadcast the public hearing; the broadcast can be accessed at https://hhs.texas.gov/about-hhs/communications-events/live-archived-meetings. The broadcast will be archived and can be accessed on demand at the same website. The hearing will be held in compliance with Texas Human Resources Code §32.0282, which requires public notice of and hearings on proposed Medicaid reimbursements. Persons requiring further information, special assistance, or accommodations should contact the HHSC Rate Analysis Department Customer Information Center at (512) 424-6637.

PUBLIC COMMENT

Questions about this proposal may be directed to the HHSC Rate Analysis Department Customer Information Center at (512) 424-6637.

Written comments on this proposal may be submitted to the HHSC Rate Analysis Department, Mail Code H-400, P.O. Box 85200, Austin, Texas 78705-5200, by fax to (512) 730-7475, or by e-mail to RAD‑LTSS@hhsc.state.tx.us within 31 days after publication of this proposal in the Texas Register.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; or (2) e-mailed by midnight on the last day of the comment period. When e-mailing comments, please indicate "Comments on Proposed Rule 20R015" in the subject line.

STATUTORY AUTHORITY

The proposed new rule is authorized by Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services system; 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-1), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance (Medicaid) payments under Texas Human Resources Code Chapter 32.

The proposed new rule affects Texas Government Code §531.0055, Texas Government Code Chapter 531, and Texas Human Resources Code Chapter 32.

§355.727.Add-on Payment Methodology for Home and Community-Based Services Supervised Living and Residential Support Services.

(a) Purpose of methodology. Direct care staffing add-on payments for Supervised Living and Residential Support Services add funds to the direct care portion of the rates specifically for attendant compensation. The recommended rates for Supervised Living and Residential Support Services are determined in accordance with §355.723 of this subchapter (relating to Reimbursement Methodology for Home and Community-Based Services and Texas Home Living Programs).

(b) Direct Care Staffing Add-on Payment Methodology. Effective January 1, 2020, through August 31, 2021, HHSC will pay an add-on to the direct care portion of the Supervised Living and Residential Support Services rates.

(1) The add-on for each level of need (LON) is as follows:

(A) $4.06 per unit for LON 1;

(B) $4.53 per unit for LON 5;

(C) $5.22 per unit for LON 8;

(D) $6.04 per unit for LON 6; and

(E) $8.45 per unit for LON 9.

(2) The add-on is to be used only for attendant compensation as defined in §355.103(b)(1) of this chapter (relating to Specifications for Allowable and Unallowable Costs).

(c) Reporting requirements.

(1) All Home and Community-based Services (HCS) providers who deliver Supervised Living or Residential Support Services during the time period the add-on is in effect must submit either a cost report or accountability report as described in §355.105(b) of this chapter (relating to General Reporting and Documentation Requirements, Methods, and Procedures) for each reporting period during the time period the add-on is in effect.

(2) Providers who do not participate in attendant compensation rate enhancement and deliver no Supervised Living or Residential Support Services during the time period the add-on is in effect may be excused from submitting an accountability report for the years in which an HCS cost report is not required.

(d) Applicability of the Direct Care Staffing Add-on Spending Requirement.

(1) The spending requirement is applicable to all HCS providers who deliver Supervised Living or Residential Support Services during the time period the add-on is in effect regardless of their participation status in the attendant compensation rate enhancement described in §355.112 of this chapter (relating to Attendant Compensation Rate Enhancement).

(2) HCS providers who do not deliver Supervised Living or Residential Support Services during the time period the add-on is in effect are not subject to the spending requirement unless they participate in the attendant compensation rate enhancement described in §355.112 of this chapter.

(e) Calculation of the Direct Care Staffing Add-on Spending Requirement.

(1) HCS providers who deliver Supervised Living or Residential Support Services during the time period the direct care staffing add-on is in effect are required to spend at least 90 percent of the direct care staffing add-on revenues on attendant compensation as defined in §355.103(b)(1) of this chapter and §355.722 of this subchapter (relating to Reporting Costs by Home and Community-based Services (HCS) and Texas Home Living (TxHmL) Providers).

(2) The direct care staffing revenues are the following.

(A) For providers who do not participate in the attendant compensation rate enhancement described in §355.112 of this chapter, the base rate revenues as determined in §355.723 of this subchapter plus the direct care staffing add-on revenues; or

(B) For providers who participate in the attendant compensation rate enhancement described in §355.112 of this chapter:

(i) the base rate revenues as determined in §355.723 of this subchapter, plus;

(ii) the attendant compensation rate enhancement revenues based on the provider's enrolled level as described in §355.112 of this chapter, plus;

(iii) the direct care staffing add-on revenues.

(3) HHSC will determine the direct care staffing add-on spending requirement per unit of service delivered using attendant compensation spending from the following sources:

(A) the applicable cost report as specified in §355.105(b)-(c) of this chapter, or;

(B) the applicable Attendant Compensation Report (accountability report) as specified in §355.112(h) of this chapter, or;

(C) other appropriate data sources prescribed by HHSC.

(4) The provider's compliance with the direct care staffing add-on spending requirement is determined based on the total attendant compensation spending for each component code and is calculated as follows.

(A) The accrued direct care staffing add-on revenue per unit of service is multiplied by 0.90 to determine the spending requirement per unit of service.

(B) The accrued direct care staffing add-on revenues per unit of service will be subtracted from the direct care staffing add-on spending requirement per unit of service to determine the amount to be recouped.

(i) If the accrued attendant compensation spending per unit of service is greater than or equal to the direct care staffing add-on spending requirement per unit of service, there is no recoupment.

(ii) If the accrued attendant compensation spending per unit of service is less than the direct care staffing add-on spending requirement per unit of service, the direct care staffing add-on spending revenues per unit of service that exceed the direct care staffing actual attendant compensation spending are recouped. The amount paid per unit of service after adjustments for recoupment must not be less than the base rate revenues as determined in §355.723 of this subchapter.

(iii) For providers who participate in the attendant compensation rate enhancement described in §355.112 of this chapter, any remaining recoupment will be subtracted from the attendant compensation rate enhancement. The amount paid per unit of service after adjustments for recoupment must not be less than the base rate revenues as determined in §355.723 of this subchapter.

(C) Compliance with the spending requirement is determined separately for each component code.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on October 7, 2019.

TRD-201903595

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: November 17, 2019

For further information, please call: (512) 424-6637