SECTION 371.1665. Cost Report Violations

A person is subject to administrative actions or sanctions if the person:

(1) reports costs of non-covered or non-chargeable health care or administrative services, supplies, equipment, or other unallowable expenses in a cost report;

(2) incorrectly apportions or allocates costs in a cost report;

(3) reports costs of unallowable health care or administrative services, supplies, or equipment as allowable costs in a cost report;

(4) reports costs of health care services, supplies, or equipment that were not delivered to the recipient;

(5) reports costs of administrative services, supplies, or equipment that were not actually incurred;

(6) engages in an arrangement between providers and employees, related parties, independent contractors, suppliers, and/or others that appear to be designed to overstate the costs to the program through any device (such as commissions or fee splitting) or to siphon off or conceal illegal profits;

(7) reports costs in a cost report that were not incurred, that were incurred at a discount or lesser cost than that which was reported, or that were attributable to non-program activities, other enterprises, or personal expenses;

(8) manipulates or falsifies statistics that result in overstatement of costs or avoidance of recoupment, including incorrectly reporting square footage, hours worked, revenues received, or units of service delivered;

(9) claims bad debts without first attempting to collect payment;

(10) depreciates assets that have been fully depreciated or sold, or uses an incorrect basis for depreciation;

(11) affiliates with, retains, or employs a person excluded from participation in Medicare, Medicaid, or other HHS program and includes the salary, fringe, overhead, or any other costs associated with the excluded person within a cost report or any documents used to determine a person's payment rate, a statewide payment rate, or a fee;

(12) reports a cost above the cost actually paid to a related party;

(13) reports a damage, cost, or penalty collected by the OIG as an allowable expense in a cost report;

(14) minimizes or understates profits on a cost report;

(15) manipulates or understates profits on a cost report in a manner that reduces the experience rebate that would have been owing to the state;

(16) manipulates or falsifies supporting documentation related to a cost report, including the use of market data rather than actual expenses; or

(17) manipulates or falsifies any cost report supporting documentation including medical loss statistics, annual statements, encounter data, cash disbursement journal entries, or annual reports.

Source Note: The provisions of this §371.1665 adopted to be effective October 14, 2012, 37 TexReg 7989; amended to be effective May 1, 2016, 41 TexReg 2941