Texas Administrative Code › Title 1 - ADMINISTRATION › Part 15 - TEXAS HEALTH AND HUMAN SERVICES COMMISSION › Chapter 355 - REIMBURSEMENT RATES › Subchapter A - COST DETERMINATION PROCESS › Section 355.102 - General Principles of Allowable and Unallowable Costs

Current through Reg. 49, No. 28; July 12, 2024
(a) Allowable and unallowable costs.
				  Allowable and unallowable costs, both direct and indirect, are defined to
				  identify expenses that are reasonable and necessary to provide contracted
				  client care and are consistent with federal and state laws and regulations.
				  When a particular type of expense is classified as unallowable, the
				  classification means only that the expense will not be included in the database
				  for reimbursement determination purposes because the expense is not considered
				  reasonable and/or necessary. The classification does not mean that individual
				  contracted providers may not make the expenditure. The description of allowable
				  and unallowable costs is designed to be a general guide and to clarify certain
				  key expense areas. This description is not comprehensive, and the failure to
				  identify a particular cost does not necessarily mean that the cost is an
				  allowable or unallowable cost.
(b)
				  Cost-reporting process. The primary objective of the cost-reporting process is
				  to provide a basis for determining appropriate reimbursement to contracted
				  providers. To achieve this objective, the reimbursement determination process
				  uses allowable cost information reported on cost reports or other surveys. The
				  cost report collects actual allowable costs and other financial and statistical
				  information, as required. Costs may not be imputed and reported on the cost
				  report when no costs were actually incurred (except as stated in §
										355.103(b)(19)(A)(i)
				  of this title (relating to Specifications for Allowable and Unallowable Costs)
				  or when documentation does not exist for costs even if they were actually
				  incurred during the reporting period).
(c) Accurate cost reporting. Accurate cost
				  reporting is the responsibility of the contracted provider. The contracted
				  provider is responsible for including in the cost report all costs incurred,
				  based on an accrual method of accounting, which are reasonable and necessary,
				  in accordance with allowable and unallowable cost guidelines in this section
				  and in §
										355.103 of this title, revenue
				  reporting guidelines in §
										355.104 of this title (relating to
				  Revenues), cost report instructions, and applicable program rules. Reporting
				  all allowable costs on the cost report is the responsibility of the contracted
				  provider. The Texas Health and Human Services Commission (HHSC) is not
				  responsible for the contracted provider's failure to report allowable costs;
				  however, in an effort to collect reliable, accurate, and verifiable financial
				  and statistical data, HHSC is responsible for providing cost report training,
				  general and/or specific cost report instructions, and technical assistance to
				  providers. Furthermore, if unreported and/or understated allowable costs are
				  discovered during the course of an audit desk review or field audit, those
				  allowable costs will be included on the cost report or brought to the attention
				  of the provider to correct by submitting an amended cost report.
(d) Cost and accountability report training.
				  It is the responsibility of the provider to ensure that each cost or
				  accountability report preparer has completed the required state-sponsored
				  training. Preparers may be employees of the provider or persons who have been
				  contracted by the provider for the purpose of cost or accountability report
				  preparation. Preparers must complete training for each program for which a cost
				  or accountability report is submitted, as applicable. Contracted preparer's
				  fees to complete training are considered allowable expenses for cost reporting
				  purposes. Preparers that participate in training may be assessed a convenience
				  fee, which will be determined by HHSC. Convenience fees assessed for training
				  are allowable costs. Applicable federal and state accessibility standards apply
				  to training. Beginning with the 2018 cost reports and 2019 accountability
				  reports, reporting schedules per program are determined by HHSC and are
				  published on the HHSC website.
(1) Training
				  schedules.
(A) For programs with odd-year and
				  even-year cost reports. Preparers must complete state-sponsored cost report
				  training every other year in order to be eligible to complete both that
				  odd-year cost report and the following even-year cost report. If a new preparer
				  wishes to complete an even-year cost report and has not completed the previous
				  odd-year cost report training, the preparer must complete an even-year cost
				  report training.
(B) For programs
				  with odd-year and even-year accountability reports. Preparers must complete
				  state-sponsored accountability report training every other year in order to be
				  eligible to complete both that odd-year accountability report and the following
				  even-year accountability report. If a new preparer wishes to complete an
				  even-year accountability report and has not completed the previous odd-year
				  accountability report training, the preparer must complete an even-year
				  accountability report training.
(C)
				  For all other programs. Preparers must complete the state-sponsored training
				  for each program for which a cost or accountability report is submitted.
				  Beginning with the 2018 cost reports, new preparers must complete cost report
				  training every other year for each program cost or accountability report being
				  prepared in order to be eligible to complete both that year's cost report and
				  the following year's accountability report, if applicable. If a new preparer
				  wishes to complete an accountability report and has not completed the previous
				  year's cost report training, the preparer must complete an accountability
				  report training for that program for that year.