Texas Administrative Code › Title 1 - ADMINISTRATION › Part 15 - TEXAS HEALTH AND HUMAN SERVICES COMMISSION › Chapter 355 - REIMBURSEMENT RATES › Subchapter A - COST DETERMINATION PROCESS › Section 355.108 - Determination of Inflation Indices

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Purpose. In conducting reviews for adjustments to reimbursement, the Texas
				  Health and Human Services Commission (HHSC) adjusts allowable costs to account
				  for inflation between the reporting period and the prospective reimbursement
				  period. HHSC retains the discretion to measure and apply inflation adjustments
				  on a program-by-program basis using the options set forth in this
				  section.
(b) Contracting for
				  inflation index development. HHSC may contract with a reputable and experienced
				  independent firm to develop an appropriate inflation index. If HHSC obtains
				  such an index under contract, the agency retains the option, on a
				  program-by-program basis, to use this index and those described in subsection
				  (c) of this section, either separately or in combination, for reimbursement
				  determination purposes.
(c)
				  Inflation indices. Allowable costs are inflated using the general inflation
				  index defined in paragraph (1) of this subsection unless otherwise specified in
				  paragraph (2) of this subsection.
(1) General
				  inflation index. HHSC uses the Personal Consumption Expenditures (PCE)
				  chain-type price index, published by the Bureau of Economic Analysis of the
				  U.S. Department of Commerce, as the index for general inflation.
(2) Item-specific and program-specific
				  inflation indices. HHSC may use a specific inflation index in place of the
				  general inflation index defined in paragraph (1) of this subsection when an
				  item- or program-specific inflation index is developed using data from HHSC
				  cost reports or other surveys or data made available from another source, and
				  HHSC has determined that this specific index is derived from information that
				  adequately represents the program or cost to which the specific index is to be
				  applied. Program-specific inflation indices may be designated in
				  program-specific reimbursement methodology rules. Item-specific inflation
				  indices that HHSC may use include those listed in the subparagraphs of this
				  paragraph.
(A) HHSC uses the employment cost
				  index of wages and salaries for private industry workers in nursing and
				  residential care facilities to measure the inflation of wages and salaries of
				  licensed vocational nurses and nurse aides. This index is published by the U.S.
				  Bureau of Labor Statistics. Periodic reviews of the chosen inflation index are
				  performed based on comparisons to cumulative HHSC cost report data on nursing
				  wages and salaries; HHSC may modify the chosen inflation index and its
				  application based on these periodic reviews.
(B) To adjust costs associated with fixed
				  capital assets, HHSC uses one of two options. HHSC may follow program-specific
				  reimbursement methodology rules to calculate a fixed capital asset component of
				  the overall reimbursement in the form of a use fee. As an alternative to
				  calculating the fixed capital asset use fee, HHSC may use one-half of the
				  percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U)
				  to measure the inflation of lease expenses and to adjust the base of allowable
				  depreciation for assets that have undergone an ownership change.
(C) Professional and paraprofessional wage
				  and benefit inflation rates for state employees are based on state employee
				  wage and salary increases determined by the Texas Legislature.