The Texas Health and Human Services Commission (HHSC) may take
the following actions for administrative contract violations.
(1) HHSC grants the following compliance periods for
administrative contract violations:
(A) For failure to submit a cost report by the due
date, HHSC grants the provider a compliance period of no more than
15 calendar days.
(B) For all other administrative contract violations,
HHSC grants the provider a compliance period of no more than 15 calendar
days to correct a contract violation. At the end of the compliance
period, if HHSC determines that a contract violation is not corrected,
but determines that the provider has made substantial progress toward
correcting the contract violation, HHSC may grant an additional one-time
extension period of up to 15 calendar days.
(2) If the contract violation is not corrected within
the compliance period, HHSC imposes vendor hold on payments to the
(3) If a contract violation is not corrected within
60 days from the date the provider is placed on vendor hold, HHSC
may cancel the provider's contract on the 61st day. A provider may
request an appeal hearing of the contract cancellation. Formal appeals
are conducted in accordance with the provisions of §§357.481
- 357.498 of this title (relating to Hearings Under the Administrative
Procedure Act). If there is a conflict between the applicable section
of Chapter 357 of this title (relating to Hearings) and the provisions
of this chapter, the provisions of this chapter prevail. If the provider
appeals the contract cancellation by HHSC and the adverse action is
sustained by an administrative law judge or judicial proceeding, the
effective date of the contract cancellation is the date specified
in the notice of contract cancellation. Unless otherwise specifically
provided for, HHSC makes no payment for services provided by the provider
after the effective date of the provider's contract cancellation.
HHSC may continue payments for no more than 30 calendar days from
the date HHSC or its designee cancels or fails to renew a provider's
contract if HHSC determines that:
(A) reasonable efforts are being made to transfer clients
to another provider or to alternate care; and
(B) additional time is needed to effect an orderly
transfer of the clients.
Source Note: The provisions of this §355.111 adopted to be effective September 1, 1996, 21 TexReg 7866; duplicated effective September 1, 1997, as published in the Texas Register October 17, 1997, 22 TexReg 10311; amended to be effective December 29, 1997, 22 TexReg 12485; amended to be effective June 26, 2000, 25 TexReg 6089; amended to be effective August 31, 2004, 29 TexReg 8093; amended to be effective August 3, 2009, 34 TexReg 5062; amended to be effective January 1, 2015, 39 TexReg 9193