SECTION 49.532. Vendor Hold

(a) HHSC imposes a vendor hold on a contractor if:

(1) HHSC has proposed to terminate the contract and the contractor participates in attendant compensation rate enhancement as described in 1 TAC §355.112 (relating to Attendant Compensation Rate Enhancement); or

(2) The HHSC Office of Inspector General determines that a vendor hold must be imposed in accordance with 42 CFR §455.23(a) due to a credible allegation of fraud for which an investigation is pending under the Medicaid Program.

(b) HHSC may impose a vendor hold on a contractor:

(1) if HHSC has proposed to terminate the contract and the contractor does not participate in attendant compensation rate enhancement as described in 1 TAC §355.112;

(2) if HHSC does not offer the contractor a standard contract when its contract expires;

(3) if the contractor does not enter into a standard contract when its contract expires;

(4) if the contractor terminates the contract;

(5) if HHSC determines the contractor has not complied with the contract, including a determination of non-compliance described in §49.411(e) of this chapter (relating to Contract and Fiscal Monitoring) or §49.413(e) of this chapter (relating to Investigation);

(6) if the contractor has not submitted or has not complied with an immediate protection plan as described in §49.511(d) of this subchapter (relating to Immediate Protection and Immediate Protection Plan);

(7) if the contractor has not submitted or has not complied with a corrective action plan as described in §49.522(d) of this subchapter (relating to Corrective Action Plan); or

(8) if the contractor's application packet described in §49.203(a)(3) of this chapter (relating to Provisional Contract Application Process):

(A) contained incorrect information; or

(B) contains information that has become incorrect and the contractor has not notified HHSC in accordance with §49.302(i) - (q) of this chapter (relating to General Requirements);

(9) for a contractor that has a contract for the HCS Program, in accordance with §9.183 of this title (relating to Program Provider Compliance and Corrective Action); or

(10) for a contractor that has a contract for the TxHmL Program, in accordance with §9.587 of this title (relating to Program Provider Compliance and Corrective Action).

(c) If HHSC imposes a vendor hold on a contractor in accordance with subsection (a) or (b) of this section, HHSC notifies the contractor of the vendor hold in writing. HHSC may impose a vendor hold pending an administrative hearing appealing the vendor hold.

(d) HHSC releases a vendor hold less any amounts being recouped by HHSC:

(1) imposed in accordance with subsections (a)(1) and (b)(1) - (4) of this section if:

(A) the contract has been terminated or expires and any amounts owed to individuals and LARs have been paid by the contractor;

(B) HHSC withdraws the proposed contract termination; or

(C) the contractor appeals the proposed contract termination and the final decision from the administrative hearing is favorable to the contractor;

(2) imposed in accordance with subsection (a)(2) of this section, if the HHSC Office of Inspector General determines that HHSC must resume payment under the contract;

(3) imposed in accordance with subsection (b)(5) - (8) of this section, if HHSC determines the contractor has resolved the reason for the vendor hold; or

(4) imposed in accordance with subsection (b)(9) - (10) of this section if HHSC determines it may be released as described in §9.183 or §9.587 of this title.

Source Note: The provisions of this §49.532 adopted to be effective September 1, 2014, 39 TexReg 6637; amended to be effective September 1, 2018, 43 TexReg 5230; amended to be effective April 28, 2020, 45 TexReg 2725; amended to be effective December 22, 2020, 45 TexReg 9234