Sec. 32.021. ADMINISTRATION OF THE PROGRAM

(a) The department is the state agency designated to administer the medical assistance program provided in this chapter.

(b) The department shall enter into agreements with any federal agency designated by federal law to administer medical assistance when the department determines the agreements to be compatible with the state's participation in the medical assistance program and within the limits of appropriated funds. The department shall cooperate with federal agencies designated by federal law to administer medical assistance in any reasonable manner necessary to qualify for federal funds.

(c) The department shall establish methods of administration and adopt necessary rules for the proper and efficient operation of the program.

(d) The department shall include in its contracts for the delivery of medical assistance by nursing facilities provisions for monetary penalties to be assessed for violations as required by 42 U.S.C. Section 1396r, including without limitation the Omnibus Budget Reconciliation Act (OBRA), P. L. 100-203, Nursing Home Reform Amendments of 1987, provided that the department shall:

(1) provide for an informal dispute resolution process in the Health and Human Services Commission as provided by Section 531.058, Government Code; and

(2) develop rules to adjudicate claims in contested cases, including claims unresolved by the informal dispute resolution process of the Health and Human Services Commission.

(e) Rules governing the application of penalties shall include the following:

(1) specific and objective criteria which describe the scope and severity of a contract violation which results in a recommendation for each specific penalty. Penalties must be appropriate to the violation, and the most severe financial penalties must be reserved for situations which create an immediate and serious threat to the health and safety of residents; "immediate and serious threat" means a situation in which there is a high probability that serious harm or injury to patients could occur at any time or already has occurred and may well occur again if patients are not protected effectively from the harm or if the threat is not removed;

(2) a system to ensure standard and consistent application of penalties among surveyors and different areas of the state;

(3) due process for nursing facilities providers, including an appeals procedure consistent with Chapter 2001, Government Code; and

(4) per diem and/or minimum penalties. The department may by rule prescribe a minimum penalty period; however, once a facility gives the department notice that deficiencies have been corrected, if surveyors are unable to revisit the facility within five days and the deficiencies are later shown to be corrected, the per diem penalties cease as of the day the facility gave notice to the department or on the last day of the minimum penalty period established by the department, whichever is later.

(f) To encourage facilities to provide the best possible care, the department shall develop an incentive program to recognize facilities providing the highest quality care to Medicaid residents.

(g) Funds collected as a result of the imposition of penalties shall be applied to the protection of the health or property of residents of nursing facilities, including the cost of relocation of residents to other facilities and maintenance or operation of a facility pending correction of deficiencies or closure, or to incentive programs which recognize the highest quality care to residents who are entitled to Medicaid.

(h) Medicaid nursing facilities shall also comply with state licensure rules, which may be more stringent than the requirements for certification. The department shall use appropriate civil, administrative, or criminal remedies authorized by state or federal law with respect to a facility that is in violation of a certification or licensing requirement.

(i) Repealed by Acts 2003, 78th Leg., ch. 204, Sec. 16.03(1).

(j) Repealed by Acts 2001, 77th Leg., ch. 1284, Sec. 3.04, eff. June 15, 2001.

(k) Repealed by Acts 2003, 78th Leg., ch. 204, Sec. 16.03(1).

(l) The department may not include as a reimbursable item to a nursing facility an administrative or civil penalty assessed against the facility under this chapter or under Chapter 242, Health and Safety Code.

(m) Notwithstanding any provision of law to the contrary, the department shall terminate a nursing facility's provider agreement if the department has imposed required Category 2 or Category 3 remedies on the facility three times within a 24-month period. The executive commissioner of the Health and Human Services Commission by rule shall establish criteria under which the requirement to terminate the provider agreement may be waived. In this subsection, "Category 2 remedies" and "Category 3 remedies" have the meanings assigned by 42 C.F.R. Section 488.408.

(n) An assessment of monetary penalties under this section is subject to arbitration under Subchapter H-2, Chapter 242, Health and Safety Code.

(o) In any circumstance in which a nursing facility would otherwise be required to admit a resident transferred from another facility, because of an emergency or otherwise, the nursing facility may not admit a resident whose needs cannot be met through service from the facility's staff or in cooperation with community resources or other providers under contract. If a nursing facility refuses to admit a resident under this subsection, the nursing facility shall provide a written statement of the reasons for the refusal to the department within a period specified by department rule. A nursing facility that fails to provide the written statement, or that includes false or misleading information in the statement, is subject to monetary penalties assessed in accordance with this chapter.

(p) In order to increase the personal needs allowance under Section 32.024(v), as added by Chapter 1333, Acts of the 76th Legislature, Regular Session, 1999, the department shall develop an early warning system to detect fraud in the handling of the personal needs allowance and other funds of residents of long-term care facilities.

(q) The department shall include in its contracts for the delivery of medical assistance by nursing facilities clearly defined minimum standards that relate directly to the quality of care for residents of those facilities. The department shall consider the recommendations made by the nursing facility quality assurance team under Section 32.060 in establishing the standards. The department shall include in each contract:

(1) specific performance measures by which the department may evaluate the extent to which the nursing facility is meeting the standards; and

(2) provisions that allow the department to terminate the contract if the nursing facility is not meeting the standards.

(r) The department may not award a contract for the delivery of medical assistance to a nursing facility that does not meet the minimum standards that would be included in the contract as required by Subsection (q). The department shall terminate a contract for the delivery of medical assistance by a nursing facility that does not meet or maintain the minimum standards included in the contract in a manner consistent with the terms of the contract.

(s) Repealed by Acts 2011, 82nd Leg., R.S., Ch. 1083, Sec. 25(106), eff. June 17, 2011.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, Sec. 1, eff. Sept. 1, 1979. Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 15, Sec. 5.22, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49), eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1049, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1159, Sec. 2.01, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 974, Sec. 2, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1284, Sec. 3.01, 3.04, 7.04, eff. June 15, 2001; Acts 2003, 78th Leg., ch. 198, Sec. 2.92(a), eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 204, Sec. 16.03(1), eff. Sept. 1, 2003. Amended by: Acts 2007, 80th Leg., R.S., Ch. 809 , Sec. 1, eff. September 1, 2007. Acts 2011, 82nd Leg., R.S., Ch. 91 , Sec. 27.002(11), eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 1050 , Sec. 23(5), eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 1083 , Sec. 25(106), eff. June 17, 2011.