SECTION 392.317. Adverse Actions

(a) DARS or HHSC may impose an adverse action when the contractor fails to follow the terms of the contract or fails to comply with DARS or HHSC rules, policies, and procedures. DARS or HHSC may impose adverse actions for reasons including:

(1) DARS' or HHSC's determination that consumer health and safety is jeopardized;

(2) the contractor's failure to comply with its corrective action plan;

(3) the contractor's failure to follow an agreed-upon audit resolution payment plan;

(4) the contractor's failure to submit an acceptable cost report, if applicable;

(5) the contractor's failure to comply with the contract or program requirements;

(6) the contractor's failure to maintain a current required license or the contractor allowing the expiration of any required license, if applicable;

(7) the contractor's relocation to a new facility address that does not have the appropriate license, if applicable;

(8) the contractor's exclusion from contracting with DARS, any health and human services program, or the federal government; or

(9) validated report(s) of abuse, neglect, or exploitation when the perpetrator is an owner, employee, or volunteer who has direct access to consumers.

(b) Types of adverse actions may include:

(1) Recoupment. DARS or HHSC collects money the contractor owes as the result of overpayments or other billing irregularities.

(2) Vendor hold. DARS or HHSC withholds the contractor's contract payments. DARS or HHSC may put one or all of the contractor's contracts on vendor hold. The vendor hold is released when DARS or HHSC determines that the contractor has resolved the reason(s) for the hold. In addition to the reasons listed in subsection (a) of this section, DARS or HHSC may place a vendor hold on the contractor's contract(s):

(A) to recoup overpayments made to the contractor; or

(B) to recover any audit exceptions assessed against the contractor.

(3) Denial of claim. DARS or HHSC denies payment in whole or part for a claim filed within program time limits.

(4) Suspension of subcontractor's participation or payments; termination of subcontract. DARS or HHSC directs a contractor to suspend a subcontractor's participation, suspend a subcontractor's payments, or terminate a subcontract.

(5) Involuntary contract termination. DARS or HHSC may terminate a contract for cause by citing the contractor's failure to comply with the terms of the contract or with DARS or HHSC rules, policies, and procedures.

(6) Suspension. DARS or HHSC temporarily suspends the contractor's right to conduct business with DARS. The causes for and conditions of suspension are described in §392.323 of this subchapter (relating to Causes and Conditions of Suspension).

(7) Debarment. DARS or HHSC does not allow a contractor to conduct business with DARS, in any capacity, for a certain period of time. The causes for and conditions of debarment are described in §392.321 of this subchapter (relating to Causes and Conditions of Debarment).

Source Note: The provisions of this §392.317 adopted to be effective June 17, 2015, 40 TexReg 3638