ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 1. ADMINISTRATION PART II. Texas Ethics Commission CHAPTER 30.Lobbyist Registration SUBCHAPTER A.General Provisions 1 TAC sec.sec.30.1, 30.3, 30.5 The Texas Ethics Commission adopts the repeal of sec.sec.30.1, 30.3, and 30.5, concerning general provisions relating to lobbyist registration rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10255). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new chapter and section numbers to those rules being retained or replaced. No comments were received regarding the repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.sec.305.002, 305.003, 305.004, and 305.005. Issued in Austin, Texas, on November 27, 1996. TRD-9617331 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER B.Compensated Lobbying 1 TAC sec.sec.30.11, 30.13, 30.15, 30. 17, 30.19 The Texas Ethics Commission adopts the repeal of sec.sec.30.11, 30.13, 30.15, 30.17, and 30.19, concerning lobby compensation provisions relating to the lobby registration rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10255). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new chapter and section numbers to those rules being retained or replaced. No comments were received regarding the repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.sec.305.003, 305.004, and 305.005. Issued in Austin, Texas, on November 27, 1996. TRD-9617332 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER C.Expenditures to Lobby 1 TAC sec.sec.30.31, 30.33, 30.35, 30.37, 30.39, 30.41 The Texas Ethics Commission adopts the repeal of sec.sec.30.31, 30.33, 30.35, 30.37, 30.39, and 30.41, concerning lobby expenditure provisions relating to lobbyist registration rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10256). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new chapter and section numbers to those rules being retained or replaced. No comments were received regarding repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.sec.305.003, 305.004, 305.005, and 305.006. Issued in Austin, Texas, on November 27, 1996. TRD-9617333 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER D.Registration Procedures and Requirements 1 TAC sec.sec.30.51, 30.53, 30.55, 30.57, 30.59, 30.61, 30.63, 30.65, 30.67 The Texas Ethics Commission adopts the repeal of sec.sec.30.51, 30.53, 30.55, 30.57, 30.59, 30.61, 30.63, 30.65., and 30.67, concerning the registration procedure and requirement provisions relating to the lobbyist registration rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10256). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new chapter and section numbers to those sections being retained or replaced. No comments were received regarding repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.305.005, and sec.305.008. Issued in Austin, Texas, on November 27, 1996. TRD-9617334 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 CHAPTER 32.Activity Reporting by a Lobbyist SUBCHAPTER A.Reports to be Filed 1 TAC sec.sec.32.1, 32.3, 32.5 The Texas Ethics Commission adopts the repeal of sec.sec.32.1, 32.3, and 32.5, concerning the filing of reports relating to lobby activity reporting rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10257). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new chapter and section numbers to those sections being retained or replaced. No comments were received regarding the repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.305.006, and sec.305.063. Issued in Austin, Texas, on November 27, 1996. TRD-9617335 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER B.General Information to be Reported 1 TAC sec.sec.32.21, 32.23, 32.25, 32.27, 32.29, 32.31 The Texas Ethics Commission adopts the repeal of sec.sec.32.21, 32.23, 32.25, 32.27, 32.29, and 32.31, concerning general reporting information provisions relating to lobby activity reporting rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10258). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new chapter and section numbers to those sections being retained or replaced. No comments were received regarding the repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.sec.3005.006, 305.0061, and 305.0062; and Election Code, sec.251.001(2)(B). Issued in Austin, Texas, on November 27, 1996. TRD-9617336 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER C.Detailed Information to be Reported 1 TAC sec.sec.32.51, 32.53, 32.55, 32.57, 32.59, 32.61 The Texas Ethics Commission adopts the repeal of sec.sec.32.51, 32.53, 32.55, 32.57, 32.59, and 32.61, concerning detailed information reporting provisions relating to the lobby activity reporting rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10258). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new chapter and section numbers to those sections being retained or replaced. No comments were received regarding the repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.sec.305.006, 305.0061, and 305.0062. Issued in Austin, Texas, on November 27, 1996. TRD-9617337 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 CHAPTER 34.Conduct of Lobbyists SUBCHAPTER A.Restrictions on Lobby 1 TAC sec.sec.34.1, 34.3, 34.5, 34.7, 34.9, 34.11 The Texas Ethics Commission adopts the repeal of sec.sec.34.1, 34.3, 34.5, 34.7, 34.9, and 34.11, concerning lobby restriction provisions relating to the conduct of lobbyists rules, without changes to the propposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10259). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new section numbers to those sections being retained or replaced. No comments were received regarding the repeal of these rules. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.sec.305.006, 305.0061, 305.024, and 305.025. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 27, 1996. TRD-9617338 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 CHAPTER 34.Regulation of Lobbyists SUBCHAPTER A.General Provisions 1 TAC sec.sec.34.1, 34.3, 34.5, 34.7, 34.9, 34.11, 34.13, 34.13, 34.15, 34.17, 34.19, 34.21 The Texas Ethics Commission adopts new sec.sec.34.1, 34.3, 34.5, 34.7, 34.9, 34.11, 34.13, 34.15, 34.17, 34.19, and 34.21, concerning certain requirements of those persons regulated by Government Code, Chapter 305. Section 34.5 and sec.34.15 are adopted with changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10260). Sections 34.1, 34.3, 34.7, 34.9, 34.11, 34.13, 34.17, 34.19, and 34.21 are adopted without changes and will not be republished. These sections provide definitions, duties, procedures, and restrictions applicable to lobbyists. It also sets forth certain requirements to be followed by lobbyists when lobbying. One written comment was received from the Independent Bankers Association of Texas asking that the commission codify Ethics Advisory Opinion Number 15 (1992) in the new rules. The change made to sec.34.5(3) codifies the advisory opinion as requested. The deletion of proposed subsection (b) of sec.34.15 reflects a change made in the statute during the 1995 Legislative Session. These rules are adopted under Texas Government Code, Chapter 571, sec.571.062, which provides the commission with the authority to promulgate rules to implement laws administered and enforced by the commission; and by Government Code, Chapter 305. These rules affect Texas Government Code, Chapter 305, sec.sec.305.002, 305.003, 305.005, 305.006, 305.011, 305.022, and 305.024. sec.34.5.Certain Compensation Excluded. Compensation received for the following activities is not included for purposes of calculating the registration threshold under Government Code sec.305.003(a)(2), and this chapter and is not required to be reported on a lobby activity report filed under Government Code, Chapter 305, and this chapter. (1) requesting a written opinion that interprets a law, regulation, rule, policy, practice, or procedure administered by a state office or agency; (2) preparation or submission of an application or other written document that merely provides information required by law, statute, rule, regulation, order, or subpoena, or that responds to a document prepared by a state agency; (3) communicating merely for the purpose of demonstrating compliance with an audit, inspection, examination of a financial institution, or government investigation to interpret and determine compliance with existing laws, rules, policies, and procedures; (4) communicating for the purpose of achieving compliance with existing laws, rules, policies, and procedures, including communications to show qualification for an exception of general applicability that is available under existing laws, rules, policies, and procedures; (5) communicating in the capacity of one's service on an advisory committee or task force appointed by a member; (6) responding to a specific request for information from a member of the legislative or executive branch, when the request was not solicited by or on behalf of the person providing the information; (7) communicating to an agency's legal counsel, an administrative law judge, or a hearings examiner concerning litigation or adjudicative proceedings to which the agency is a party, or concerning adjudicative proceedings of that agency; (8) providing testimony, making an appearance, or any other type of communication documented as part of a public record in a proceeding of an adjudicative nature of the type authorized by or subject to the Administrative Procedure Act, Government Code, Chapter 2001, whether or not that proceeding is subject to the Open Meetings Law; (9) providing oral or written comments, making an appearance, or any other type of communication, if documented as part of a public record in an agency's rule- making proceeding under the Administrative Procedure Act, Government Code, Chapter 2001, or in public records kept in connection with a legislative hearing; (10) providing only clerical assistance to another in connection with the other person's lobbying (for example, a person who merely types or delivers another person's letter to a member); or (11) communicating to a member of the executive branch concerning purchasing decisions of a state agency, or negotiations regarding such decisions. sec.34.15.Reporting Subject Matter. (a) A registrant reporting subject matter under Government Code, sec.305.005(f)(4), (f)(5)(B), or sec.305.006(d), of this chapter, shall report subject matter by marking the appropriate subject matter categories. (b) A registrant reporting the subject matter of communications to influence administrative action shall also report, if known or reasonably available to the registrant, the docket number or other administrative designation of any administrative action that is the subject of the registrant's direct communication with a member of the executive branch, and the name of the agency or department at which the administrative action is pending. Issued in Austin, Texas, on November 27, 1996. TRD-9617340 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER B.Prohibited Conduct 1 TAC sec.sec.34.31, 34.33, 34.35 The Texas Ethics Commission adopts the repeal of sec.sec.34.31, 34.33, and 34.35, concerning prohibited conduct provisions relating to the conduct of lobbyists rules, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 Tex Reg 10259). The sections are being repealed due to the recodification of commission rules concerning lobbyists resulting in the assignment of new section numbers to those rules being retained or replaced. No comments were received regarding the repeal of these sections. The repeals are adopted under the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The repeals affect Government Code, Chapter 305, sec.sec.305.0011, 305.021, and 305.022. Issued in Austin, Texas, on November 27, 1996. TRD-9617339 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER B.Registration Required 1 TAC sec.sec.34.41, 34.43, 34.45 The Texas Ethics Commission adopts new sec.sec.34.41, 34.43, and 34.45, concerning registration requirements applicable to persons regulated by Government Code, Chapter 305. Section 34.41 and sec.34.43 are adopted with changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10262). Section 34.45 is adopted without changes and will not be republished. These sections concern the expenditure and compensation thresholds that trigger registration. No comments were received regarding adoption of the new sections. The changes to sec.34.41(a) and sec.34.43(a) make the language in the new rules consistent with the statutory language of Government Code Chapter 305. These rules are adopted under Texas Government Code, Chapter 571, sec.571.062, which provides the commission with the authority to promulgate rules to implement laws administered and enforced by the commission; and by Government Code, Chapter 305. These rules affect Texas Government Code, Chapter 305, sec.305.003. sec.34.41.Expenditure Threshold. (a) A person must register under Government Code, sec.305.003(a)(1), if the person makes total expenditures of more than $500 in a calendar quarter, not including expenditures for the person's own travel, food, lodging, or membership dues, on activities described in Government Code sec.305.006(b) to communicate directly with one or more members of the legislative or executive branch to influence legislation or administrative action. (b) An expenditure made by a member of the judicial, legislative, or executive branch of state government or an officer or employee of a political subdivision of the state acting in his or her official capacity is not included for purposes of determining whether a person is required to register under Government Code, sec.305.003(a)(1). (c) An expenditure made in connection with an event to promote the interests of a designated geographic area or political subdivision is not included for purposes of determining whether a person has crossed the registration threshold in Government Code, sec.305.003(a)(1), if the expenditure is made by a group that exists for the limited purpose of sponsoring the event or by a person acting on behalf of such a group. sec.34.43.Compensation and Reimbursement Threshold. (a) A person must register under Government Code, sec.305.003(a)(2), if the person receives more than $1,000 in a calendar quarter in compensation and reimbursement, not including reimbursement for the person's own travel, food, lodging, or membership dues, from one or more other persons to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action. (b) For purposes of Government Code, sec.305.003(a)(2), and this chapter, a person is not required to register if no more than five percent of the person's compensated time during a calendar quarter is time spent engaging in lobby activity. (c) For purposes of Government Code, sec.305.003(a)(2), and this chapter, a person shall make a reasonable allocation of compensation between compensation for lobby activity and compensation for other activities. Issued in Austin, Texas, on November 27, 1996. TRD-9617341 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER C.Completing the Registration Form 1 TAC sec.sec.34.61, 34.63, 34.65, 34.67, 34.69, 34.71 The Texas Ethics Commission adopts new sec.sec.34.61, 34.63, 34.65, 34.67, 34.69, and 34.71, concerning the registration form requirements applicable to persons regulated by Government Code, Chapter 305, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10263) and will not be republished. These sections concern the registration fees and the reporting of compensation and subject matter, the listing of assistants, and the amending of the registration form by persons required to register under Government Code, Chapter 305. No comments were received regarding adoption of the new sections. These rules are adopted under Texas Government Code, Chapter 571, sec.571.062, which provides the commission with the authority to promulgate rules to implement laws administered and enforced by the commission; and by Government Code, Chapter 305. These rules affect Texas Government Code, Chapter 305, sec.305.005. Issued in Austin, Texas, on November 27, 1996. TRD-9617342 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 SUBCHAPTER D.Lobby Activity Reports 1 TAC sec.sec.34.81, 34.83, 34.85 The Texas Ethics Commission adopts new sec.sec.34.81, 34.83, and 34.85, concerning the lobby activity report requirements of persons regulated by Government Code, Chapter 305, without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10264) and will not be republished. These sections concern the election to file annually, time of expenditure, and the individual's reporting of an expenditure by an entity by those persons required to file lobby activity reports under Government Code, Chapter 305. No comments were received regarding adoption of the new sections. These rules are adopted under Texas Government Code, Chapter 571, sec.571.062, which provides the commission with the authority to promulgate rules to implement laws administered and enforced by the commission; and by Government Code, Chapter 305. These rules affect Texas Government Code, Chapter 305, sec.sec.305.006, 305.0061, 305.0062, and 305.0063 Issued in Austin, Texas, on November 27, 1996. TRD-9617343 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 CHAPTER 50.Legislative Salaries and Per Diem 1 TAC sec.50.1 The Texas Ethics Commission adopts an amendment to sec.50.1, to set the legislative per diem as required by the Texas Constitution, Article III, sec.24a. Section 50.1 is adopted without changes to the proposed text as published in the October 18, 1996, issue of the Texas Register (21 TexReg 10264) and will not be republished. This section sets the per diem for members of the legislature and the lieutenant governor at $95 for each day during the regular session and any special session. The Texas Ethics Commission received no written comments concerning this rule. This amendment is proposed under the Texas Constitution, Article III, sec.24a, which provides that the commission shall set the per diem of members of the legislature and the lieutenant governor, and the Government Code, Chapter 571, sec.571.062, which authorizes the Texas Ethics Commission to adopt rules to implement laws administered and enforced by the commission. The amended section affects the Texas Constitution, Article III, sec.24, Article III, sec.24a, and Article IV, sec.17. Issued in Austin, Texas, on November 27, 1996. TRD-9617344 Tom Harrison Executive Director Texas Ethics Commission Effective date: December 18, 1996 Proposal publication date: October 18, 1996 For further information, please call: (512) 463-5800 TITLE 25. HEALTH SERVICES PART I. Texas Department of Health CHAPTER 30.Medicaid Managed Care SUBCHAPTER B.Standards for the State of Texas Access Reform (STAR) 25 TAC sec.sec.30.21-30.32 The Texas Department of Health (department) adopts new sec.sec.30.21 -30.32 concerning Standards for Managed Care Organizations serving Medicaid clients. New sec.sec.30.21 - 30.32 are adopted with changes to the proposed text as published in the August 6, 1996, issue of the Texas Register (21 TexReg 7322- 7327). The new sections implement Senate Bill 600, codified at sec.12.017 Texas Health and Safety Code, which requires the department to adopt standards for managed care organizations participating in the Medicaid program. General rulemaking authority for the rules is contained in Texas Health and Safety Code, sec.12.001, which requires the Texas Board of Health to adopt rules for its procedures and for the performance of any duty imposed by law on the Texas Board of Health, the department and the Commissioner of Health. The new sections establish standards for managed care organizations serving Medicaid clients concerning enrollment, marketing, selection of managed care organizations, scope of services, accessibility of services, managed care benefits and services for children under 21 years of age, member complaint procedures, quality improvement, rates and payment structures, and financial standards. Changes to the text were made as a result of comments received and for clarification purposes. These changes, and the relevant issues concerning the rules, are described in the following summary of comments received concerning the proposed rules and summary of the department's responses to the comments. Comment: Concerning the state's Medicaid managed care program in general, one commenter requested that the Medical Care Advisory Committee (MCAC) serve as a single oversight entity over the implementation of a statewide Medicaid managed care system, noting the lack of a single body responsible for providing input to the Health and Human Services Commission (commission) and the department on implementation of this delivery system. Response: The MCAC's advisory role is set out in Human Resources Code sec.32.022, and the department recognizes the importance of the committee. The MCAC represents a broad range of interests and areas of expertise, making it a valuable forum for input. It is the department's intent to seek public input at the MCAC as well as through other public meetings. Comment: Concerning the state's Medicaid managed care program in general, a commenter requested a mechanism to centralize the collection and dissemination of all applicable provisions contained in rules, contracts, and RFAs to interested parties. Response: The department disagrees with the commenter. Addressing such coordination is outside the scope of these rules. Comment: Concerning the preamble, one commenter stated that there will be adverse fiscal implications to local government as a result of the state enforcing or administering these rules, including a negative impact on local employment. Response: The department disagrees with the commenter. The rules impose standards affecting the internal operations of managed care organizations (MCOs). Any costs incurred because of the rules would be absorbed by MCOs as the cost of doing business. Comment: Concerning the preamble to the proposed rules, one commenter said the Medicaid managed care program now being implemented through 1915(b) waivers will adversely affect revenue of local units of government, including hospital districts; reduce local job opportunities; and decrease the number of family practice doctors trained for Texas. Response: The department disagrees with the commenter. The determination of fiscal impact was made in reference to the proposed rules and not to the implementation of and transition to Medicaid managed care. Comment: Concerning the rules in general, numerous commenters said the provisions contained in the Medicaid managed care rules should be more prescriptive. Response: While the department has set standards for many facets of the Medicaid managed care program, as required by state legislation, it is imperative to allow for flexibility in instituting managed care across the state. Flexibility is necessary if 1) managed care is to be equally effective in all areas of Texas, despite its great diversity, and 2) the state expects to benefit as experience in Medicaid managed care is gained in Texas and other states. Comment: Concerning the rules in general, two commenters stated that the rules do not specify enforcement action that would be taken against an MCO failing to comply with the rules. One of the commenters suggested a new section of the rules be developed to address remedial or enforcement action for non-compliance and the other commenter stated that fiscal solvency provisions are inadequate. Response: MCOs contracting to provide services in the Medicaid program are required to abide by the terms of the contract, and they risk contractual penalties as well as termination of the contract for non-compliance. The contract specifies a number of intermediate penalties to induce compliance, including withholding of capitation payments and suspension of new enrollments into the HMO. Financial solvency of MCOs serving Medicaid clients is under the jurisdiction of the Texas Department of Insurance (TDI). In addition, SB 600 charges TDI with establishing fiscal solvency standards for MCOs which serve Medicaid clients. TDI published its proposed rules in the Texas Register on October 1, 1996. Comment: Concerning the rules in general, one commenter stated that state legislation (Senate Bill 600) requires the state to establish by rule standards for performance, operation, quality of care, marketing and financial standards and standards relating to children's access to good quality health care services. The commenter questioned how the rules address performance and operation standards. Response: Standards contained in the rules address many aspects of MCO performance and operation, while they are not specifically labeled as "performance" or "operation" standards in section headers. Additionally, the department will continue its rulemaking process to address additional performance and operation standards. Comment: Concerning the rules in general, two commenters said the rules are applicable to the 1915(b) waiver program but should be applicable to Medicaid managed care whether it is operated under authority of a sec.1915(b) or sec.1115 waiver. Response: The department agrees with the commenters. References to the 1915(b) waiver program which were included in the proposed rules were meant to ensure conformity with federal law when a 1915(b) waiver program is instituted. Language in sec.sec.30.22, 30.25, and 30.30 has been amended to broaden the affected provisions to apply to any federal waiver allowing implementation of Medicaid managed care in Texas. In sec.30.30, the reference to independent waiver assessments currently required by Health Care Financing Administration (HCFA) policy for 1915(b) waivers was removed because of its applicability only to 1915(b) waivers. The state must comply with HCFA policies which require an independent waiver assessment during the two-year waiver period. Comment: Concerning the rules in general, one commenter asked that the rules include a provision prohibiting MCOs from excluding therapeutic optometrists from any medical panel simply because they are doctors of optometry rather than medical doctors. Response: It is outside the scope of these rules to mandate which health professionals must be included in an MCO's network. Comment: Concerning the rules in general, staff recommended numerous non- substantive editorial changes. Response: The department made numerous non-substantive editorial changes to the rules as proposed. Comment: Concerning the definitions contained in the rules, one commenter asked that "major life activity" be defined. Response: The department agrees with the commenter and has added a definition. Comment: Concerning the definitions contained in the rules, one commenter asked that definitions be included for the following terms: "children with special health care needs," "cultural competency," "emergency," "grievance," "medical necessity," "accessibility," "respite," "personal assistance services," and "assistive technology." Response: The following terms are not used in the rules and therefore are not included in the definitions section (sec.30.22): "children with special health care needs," "grievance," "respite," "personal assistance services," and "assistive technology." The terms "emergency services" and "emergency medical condition" are defined in the rules; however, these terms were deleted and replaced with a definition for "emergency care" in response to another comment. The general meaning of "accessibility" is widely understood. A more specific definition depends on particular circumstances, such as the type of medical service needed and characteristics of the service area. Definitions for "cultural competency" and "medically necessary health services" have been added to sec.30.22. Comment: Concerning the definitions contained in the rules, two commenters asked that the department define the criteria referenced in the definition of "traditional significant provider." In addition, one of the commenters said the definition of traditional provider should include federally qualified health clinics, rural health clinics, school based clinics and public health facilities. Response: The department disagrees with the commenter, as the criteria are set forth in Article 4413, Texas Civil Statutes. Comment: Concerning the definitions, one commenter said the definition of "behavioral health services" is vague. Response: The department disagrees with the commenter. The definition establishes the basic meaning of behavioral health services but allows for flexibility in modifying the operational definition as more experience is gained. The department's goal is to serve the needs of affected members as effectively as possible. Comment: Concerning the definitions, a commenter offered a definition for "medically necessary behavioral health services." Response: The department agrees a definition of this term is needed and has added a definition. Comment: Concerning the definition of "emergency behavioral health condition," two commenters offered changes to the definition. One of the commenters said the definition in the proposed rules contains terms no longer in use. Response: The department disagrees with the commenters. The definition in the rules is compatible with the commenter's recommended changes but allows for greater flexibility. Therefore, no changes were made. Comment: Concerning the definitions, one commenter suggested that the term "emergency care" be defined as it is defined in the department's HMO rules at 25 TAC sec.119.2 and in Texas Department of Insurance's (TDI) HMO rules at 28 TAC sec.11.2(b)(9), as defined in the HMO Act (Chapter 20A. Texas Insurance Code). Response: The department agrees to add a definition for "emergency care" and remove the definition of "emergency services" and "emergency medical condition." While the department agrees to use the term "emergency care" and make the definition as consistent as possible with the definition at 25 TAC sec.119.2 and at 28 TAC sec.11.2(b)(9), some differences exist. The definition contained in these rules is designed to fit the population served. Additionally, a definition of "emergency behavioral health services" was added, as necessitated by the change in definition from "emergency services" to "emergency care." The definition of "behavioral health condition" was deleted since it no longer appears in the rules due to the removal of definition for "emergency services." Comment: Concerning the definition of "primary care provider", two commenters recommended that the definition be expanded to include specialty providers and specialty providers for disabled and chronically ill patients. A third commenter suggested the department's definition mirror the definition for "primary care physician or primary care provider" contained in the rules for HMOs adopted by the department at 25 TAC sec.119.2 and by TDI at 28 TAC sec.11.2(b)(14). Response: The department disagrees with commenters concerning expanding the definition of primary care provider (PCP) because the definition of primary care provider does not prescribe all types of providers who can serve as PCPs. The department did amend the definition to provide for clarity and consistency with the department's HMO rules. However, the term "medical home" was retained in the definition in these rules to emphasize the importance of the concept in the transition from a traditional Medicaid system to a Medicaid managed care system. Comment: A commenter recommended that definitions contained in the department's rules and in the Texas Department of Mental Health and Mental Retardation's Medicaid managed care rules contain identical definitions for the same terms. Response: The department agrees with the commenter and has made changes to make the definitions identical. The department worked closely with the Texas Department of Mental Health and Mental Retardation (TDMHMR) to try to ensure that the terms will be identical when both agencies' Medicaid managed care rules are adopted. Comment: Concerning the definitions contained in the rules, one commenter recommended deleting the adjective "medical" from the definitions for "emergency services," "emergency behavioral health condition," "emergency medical condition," "medical home," "primary care provider," and "significant traditional provider." The commenter stated use of "medical" as an adjective in these definitions implied limiting the provision of health care to medical doctors. Response: The department disagrees that the use of "medical" as an adjective in these instances in any way limits the provision of health care to only medical doctors. The term "medical home" is a commonly used phrase that does not limit the provision of services to medical doctors. The term medical is used in "emergency services," "emergency behavioral health condition," and "emergency medical condition" largely to distinguish between medical conditions/services and behavioral health conditions/services. Therefore, changes were not made to these definitions in response to the commenter. However, the definition of "significant traditional provider" has been modified in sec.30.22 as recommended by the commenter. Comment: Concerning the definitions, staff recommended the department omit the definition of "enrollee" and replace enrollee with member in sec.30.23 for consistency. Response: The department agrees with the commenter and has made these changes. Comment: Concerning the definitions, staff stated that "Article" should be changed to "Chapter" in the references to the Texas Insurance Code contained in the definitions for health maintenance organization (HMO) and managed care organization (MCO). Response: The department agrees with the commenter and has made these changes. Comment: Concerning the definitions contained in the rules, a commenter requested definitions of "physical medicine" and "health-related services," terms used in the definition of "health care services or health services," be added. Response: The department disagrees with the commenter. Both terms are commonly understood in the context within which they are used. Comment: Concerning the definition of "health care services or health services," a commenter recommended the definition be consistent with the definition proposed by the Health and Human Services Commission and the one adopted by the department in its HMO rules at sec.25 TAC 119.2. The commenter recommended adopting the definition contained at sec.25 TAC 119.2. Response: The department disagrees with the commenter. The definition adopted at sec.25 TAC 119.2 contains terms not relevant to Medicaid managed care. Therefore, the commenter's recommendation was not accepted. For consistency, however, the department is incorporating language contained at 25 TAC sec.119.2, under the definition of "basic health services." This language is adopted in Section 30.22 of these rules as "health care services," with some modification. Comment: Concerning the definitions contained in the rules, a commenter pointed out inconsistencies between the definition of "complaint" as used in these rules and the department's rules for HMOs contained at 25 TAC sec.119.2. Response: The department agrees with the commenter and has changed the definition of "complaint" in sec.30.22 for consistency. Comment: Concerning the definition for "chronic and complex condition," one commenter stated that the definition is not consistent with the definition of "people with disabilities or chronic or complex conditions" used in the 1996 contract between the department and HMOs. The commenter stated the state must adopt a standard operational definition of "Children with Special Health Needs (CSHCN)". Response: The rules define "chronic and complex condition" and "disability" separately, instead of grouping a wide range of people under a single broad definition. The department does not believe the definition for "chronic and complex condition" is incompatible with the development of a standard operational definition for "CSHCN". The standardization of such a definition is being studied by the department. Comment: Concerning sec.30.23, one commenter stated that the rules do not list specific situations in which a member can be involuntarily disenrolled. The commenter asked that specific reasons under which involuntary disenrollment is allowed be listed in the rules and that reporting of all instances of involuntary disenrollment be required, including indication of whether the person is a person with disabilities or who has special health needs. Response: The department disagrees with the commenter and no changes have been made in response to the comment. Federal law prohibits an MCO from terminating a member's enrollment because of an adverse change in the member's health, and it requires the state to specify in its contract with MCOs the reasons for which an MCO may terminate a recipient's enrollment. The rule is consistent with those federal requirements. Therefore, no changes were made to sec.30.23 in response to this comment. Comment: Concerning sec.30.23, four commenters said the rules should define mandatory and voluntary enrollees. Two of the commenters wanted the criteria defined so that a change in rules and a public comment would be necessary were the definitions to change. One of the commenters said the determination of who is a mandatory managed care member and who is voluntary should be reviewed on an on-going basis and modified if access to health care services or the quality of such services is being compromised by the MCOs. Response: The department disagrees with the commenters that the criteria for assigning managed care members should be defined in the rules. Flexibility is needed by the state in order to meet the changing needs of the Medicaid population. Greater experience of serving various member groups through a managed care system will allow the state to determine the most effective means of serving all members. Comment: Concerning sec.30.23(b), one commenter said that MCOs must coordinate with the department to ensure that members receive information about the MCO's disenrollment process at the time the member is enrolled by the department in an MCO, as required by rule. Response: This is an administrative matter that is outside the scope of the rules. Comment: Concerning sec.30.23(c), one commenter stated that the rules should include specific stipulations the department must follow regarding outreach conducted in conjunction with enrolling Medicaid clients in MCOs. The commenter said the rules should set standards for the extent of outreach and should require the department or an enrollment broker to set standards regarding the speed and accuracy of processing enrollments. The commenter suggested that enrollment brokers make at least three attempts to contact each member using more than one method of contact. Response: The department disagrees with the commenter. Outreach efforts related to enrollment are governed by rules contained in sec.30.23, particularly subsections (b) and (c), and by sec.30.24, pertaining to marketing. The suggestions offered by the commenter entail a level of detail that is more appropriately addressed by administrative policy than departmental rules. No changes were made in response to the comments. Comment: Concerning sec.30.23(d), four commenters stated the default criteria should be detailed in the rules. Three commenters said the term "may" gives the state too much discretion in reference to establishing a priority criteria for the default process. The second commenter said the rules should specify how a Medicaid enrollee might question or change an assignment to a particular MCO. A third commenter recommended adding a provision that would require a member who has selected a PCP but not an MCO to be assigned to the MCO through which the PCP can perform his or her full scope of services, including hospital, emergency and diagnostic services. Another commenter said the rules should require "member criteria" to be given the highest priority in the process. The commenter also asked that the rules prohibit the state from automatically enrolling a member into the lowest bidding plan if the member fails to select a plan. Response: The department disagrees with the commenters that the default criteria should be detailed in the rules and has not modified the language contained in sec.30.23(d). The department believes it is important to preserve flexibility in determining the criteria as more experience is gained in Medicaid managed care. However, the department agrees with the commenter regarding changing "may" to "shall". This language has been modified. Comment: Concerning sec.30.23(d)(1) and (2), a commenter recommended changing the reference from "medical needs" to "health care needs" to appropriately reflect range of services and providers available through Medicaid managed care networks. Response: The department agrees and has made changes to those provisions. Comment: Concerning sec.30.23(e), a commenter says disenrollment could take effect as late as two months after the member submits a request for disenrollment. Response: The department agrees that the rule needs to be changed to clarify the department's intent, and the rule was changed in response to the comment. Comment: Concerning sec.30.23(e), one commenter asked that the provision specify that information about disenrollment procedures be comprehensible to members in both language and format. Response: The department agrees that all material provided by the MCOs to the enrolled population must be easily understandable to these members and be available in alternative formats and languages. The department has modified sec.30.23(e) and added a provision to sec.30.27 to reflect the commenter's suggestion. Comment: Concerning sec.30.23(f), one commenter said some physicians practicing in rural and medically underserved areas of the state may exceed the 1,500 limit on the number of Medicaid managed care members enrolled with a single provider. The commenter said the process for receiving an exception to this cap must be simple and timely to avoid any potential for limiting patient access. Response: This is an administrative matter and outside the scope of these rules. The department will take the commenter's concerns into consideration. Comment: Concerning sec.30.23(f), one commenter said when establishing limits for the assignment of members to PCPs, the department should look at the PCP's total active patient load, including Medicaid managed care, commercial managed care, and fee-for-service. The commenter further stated that exceptions to the enrollment limit should be available on a timely basis. Response: The department disagrees with the commenter. The department believes the criteria for establishing the limit should be established in the department's contracts and waiver of federal Medicaid regulations. The state wishes to maintain this flexibility in order to benefit as greater experience is gained in Medicaid managed care. Comment: Concerning sec.30.23(g), several commenters suggested changes to the language of the provision, which stipulates that Medicaid clients who live more than 30 miles from the nearest PCP cannot be enrolled in an MCO unless an exception is made. One commenter recommended specific language requiring comprehensive health care services in a member's local community. Two commenters suggested changes in the distance requirement, with one recommending a lower distance limit and the other a higher distance limit. Response: The department disagrees with the commenters. The rule is designed to ensure members good quality health care in their local community while allowing enough flexibility to meet members' needs in both rural and urban settings. No change was made to the rule as proposed. Comment: Concerning 30.23(h), a commenter asked questions concerning the process for obtaining a waiver to the federal rules requiring Medicaid and Medicare beneficiaries to constitute less than 75 percent of the total enrollment of an MCO participating in Medicaid managed care. Response: The commenter's questions are outside the scope of these rules. These are administrative questions that should directed to department staff at the Bureau of Managed Care. Comment: Concerning sec.30.24 in general, one commenter said enrollment forms should not be attached to marketing materials, materials should not give the appearance that state endorses a particular plan, marketing information should include a number to call for provider lists and other information to assist in selecting a provider, and the state should develop a guide to choosing a provider and make this available to prospective members in educational packets. Response: These suggestions concern administrative details which are outside the scope of these rules. These comments have been noted by the department and will be taken under consideration. Comment: Concerning sec.30.24(d), one commenter stated that this subsection provides an important protection but that the rules should also state that direct contact marketing includes all forms of direct media, such as mailings, telephone communication, and in-person soliciting. Response: The department disagrees with the commenter. These rules require, in sec.30.24(a), that all MCOs submit a marketing plan and all marketing materials to the department for prior written approval. Additionally, the definition of direct contact marketing is more properly defined in the department's contract with MCOs. Comment: Concerning sec.30.24(d)(4), one commenter asked what kinds of exceptions the department expects to this rule, which prohibits MCOs and providers from offering Medicaid clients material or financial gain as an inducement for enrollment. Three commenters said there should be no exceptions. Response: Marketing practices under Medicaid managed care are dictated largely by federal policy. Exceptions are permitted under strict conditions. The rule is consistent with applicable federal law and policy statements. Comment: Concerning sec.30.25 in general, one commenter said that other than stating the requirement that an MCO must be a licensed HMO or certified 501(a), the rules do not include the actual MCO selection criteria that are to be utilized by the department. Response: The exact criteria used to compare bidders relative to each other could vary over time as state and federal laws and regulations change and as the state gains more experience in Medicaid managed care. No changes were made to the rules in response to this comment. Comment: Concerning sec.30.25, one commenter said these rules should clarify that all MCOs are required to comply with all state and federal laws related to health and behavioral health care, provider licensure and MCO operations. Response: The department disagrees with the commenter. MCOs must comply with all relevant state and federal laws whether or not they are reiterated in this set of rules. Section 30.30(c) requires the department to ensure MCOs comply with MCO contracts, this subchapter, and all related state and federal rules, regulations and guidelines. Comment: Concerning sec.30.25, one commenter said the section should contain provisions concerning the responsibility that an HMO has for all subcontractors. Response: The department will take the comment under consideration but made no changes to the rule at this time. Comment: Concerning sec.30.25, one commenter said the rules do not address the process of monitoring the contracts between the department and MCOs. The commenter recommended provisions which a monitoring system should contain. Response: The department disagrees with the commenter. Section 30.30 requires the department to develop monitoring and review systems and procedures to ensure MCO compliance with MCO contracts, the rules, and all related state and federal rules, regulations and guidelines. Comment: Concerning sec.30.25(a), a commenter said the state is not required by federal regulation to use a competitive bidding process in selecting participating MCOs. Response: The department disagrees with the commenter, but has deleted 30.25(a) entirely, for clarity. The department is required to comply with state and federal law and with applicable policy statements issued by the Health Care Financing Administration (HCFA). Comment: In regard to sec.30.25(b), a commenter recommended the term "pre-paid" be changed to "risk comprehensive" to reflect federal terminology for fully capitated contract arrangements with MCOs. Response: The department agrees with the commenter and has made the change to sec.30.25(b). Comment: In regard to sec.30.26, two commenters said the scope and level of required services to be delivered by MCOs should be specified in the rules. Response: The department disagrees with the commenter. The scope and level of required services is determined largely by federal and state law. Within the parameters of these laws, the department may need to adjust the scope and level of services as more knowledge is gained about Medicaid managed care and to accommodate changes in state and federal rules and regulations. Comment: In regard to sec.30.26(c), one commenter said the section allows MCOs to bid a higher level of benefits than required by the state if there are no additional costs to the state. However, the commenter said the rules do not address notice and due process requirements if a higher benefit level is reduced to the minimum required by the state. Response: The department disagrees with the commenter. An MCO which submits a successful bid is bound by contract to provide all services bid. If the commenter is referring instead to a reduction in a member's level of services, the member has recourse through the department's fair hearing process and the MCO's complaint process, as referenced in sec.30.29(c). No changes have been made. Comment: Concerning sec.30.26, a commenter said MCOs should be flexible enough in their operating procedures to make exceptions to their guidelines governing scope of services and provision of care for persons with special needs. The commenter said specialist review should be available to assist with determinations on coverage of such services. Response: MCOs must meet the standards established in these rules and in the contract with the department. The flexibility of their operating procedures is outside the scope of these rules. Comment: Regarding sec.30.26(c), a commenter said the rules should require an MCO to increase the reimbursement rate it pays its providers if that MCO bids to provide a level and scope of services exceeding the level and scope required by the department. Response: The department disagrees with the commenter. The rate of reimbursement is between an MCO and its contractors and is outside the scope of these rules. Comment: In regard to sec.30.26(c), one commenter said MCOs should not be allowed to offer greater benefits or services beyond an identified level/scope of service. Response: The department disagrees with the commenter. The department has allowed MCOs to bid services above the required level as a way to encourage innovations to increase the effectiveness and quality of health-care services delivered through Medicaid managed care. Comment: Concerning sec.30.26(d), a commenter said a PCCM contract administrator must be subject to providing the same scope of services as an MCO in the same service area. Response: The scope and level of services provided in Medicaid managed care is largely determined by state and federal law for all members, no matter which service delivery model is utilized. In response to staff recommendations concerning sec.30.26(d), the department is removing this provision from the rules. Accordingly, the department has deleted the definition for PCCM contract administrator. Comment: In regard to sec.30.27, a commenter suggested that access to regular and preventive care, including access to specialty providers, is an important issue and should be described more clearly in the rules. Response: The department disagrees with the commenter. The rules require MCOs to establish adequate provider networks, which would be able to provide the range of health care services needed by members including preventive and specialty care. Comment: In regard to sec.30.27(a), one commenter requested that the department set specific minimum standards for PCP networks, rather than using non-specific terms such as "broad-based" and "accessible" which are open to interpretation. The commenter suggested that the standards described in the 1996 HMO STAR contract are common among states today and are reasonable for urban and suburban areas in Texas. Response: The department disagrees with the commenter and therefore has made no changes. These general terms give the department the ability to modify more specific standards in the contract if necessary to accommodate different areas of the state or as experience dictates. Comment: In regard to sec.30.27(b), one commenter stated that minimum ratios should be prorated to ensure that PCPs working less than full time are assigned proportionate numbers of patients. Response: This is an administrative matter and is beyond the scope of these rules. Comment: In regard to sec.30.27(b), a commenter stated that regulations should be in place requiring MCOs to report changes in their PCP networks to ensure that minimum ratios are not exceeded after initial enrollment. Response: The department will take the comment under consideration for development of future rules, but has made no change to the rules at this time. Comment: One commenter suggested that the 30 mile limitation specified in sec.30.27(c) is too great a distance for a maximum travel standard in an urban area, and that allowances should be made for differences in the time needed to travel in urban versus rural areas. In addition, the commenter suggested that there should also be specific guidelines set for travel to other medical providers and facilities, such as hospitals, pharmacies, specialists, and emergency care centers. Response: The department disagrees with the commenter, therefore no change was made to the rule as proposed. The rule is designed to ensure members good quality health care in their local community while allowing enough flexibility to meet members' needs in both rural and urban settings. The great variety of other providers and facilities and the circumstances under which those services are demanded would place cumbersome restrictions that could inhibit the program from effectively meeting the needs of the members. Comment: One commenter suggested that sec.30.27(d) should be amended to include specific time standards for appointments and office waiting rather than the description of "unreasonable amount of time." The commenter suggested the need and offered guidelines for primary, diagnostic, and specialty care. The commenter also recommended that the regulations include waiting time standards for authorization of services (including drugs) and for referrals to specialists. Response: The department disagrees with the commenter. Flexibility is needed to meet the varying medical and geographic circumstances of the population served. Comment: In regard to sec.30.27(d), one commenter requested that the rule be clarified to specify limitations on the number of members that may be assigned to an individual PCP. The commenter suggested that by specifying the limitations, the limitations would be subject to public comment and would also allow revision if experience showed that access to care has been adversely affected. Response: The department disagrees with the commenter. The department will consider proposing a PCP enrollment limit by rule after more is learned through the current program. Comment: A commenter suggested that specific ratios between specialists and patients be included in sec.30.27(e) and that persons with disabilities should be allowed to self-refer to providers. Another commenter requested that the department define in the rules the "reasonable availability and accessibility" of specialists. Response: The department disagrees with the commenters. Because of the vast number of types of specialists available, the department believes a general rule is more effective in addressing the wide variety of circumstances that will be encountered in delivering specialized care. Unrestricted self-referral to providers is inconsistent with the basic principles of managed care, in which a member's PCP agrees to provide a medical home for the patient. The medical home includes referral to specialists and health-related providers. Although broad- based self-referral is not allowed, exceptions may be made for specific services or provider types. Comment: Concerning sec.30.27(e), one commenter recommended that the department consider the same text in 25 TAC sec.119.21(g) which states that a member shall not have to travel in excess of 75 miles to see referral specialists. Response: The department agrees with the commenter. MCOs must follow laws which govern their operations in Texas, including 25 TAC sec.119.21, where applicable. The department is adding provisions similar to 25 TAC sec.119.21(g)(h) and (i) and a related definition of "special hospital" to sec.30.27. Comment: Several commenters suggested revisions to proposed sec.30.27(g) to broaden the scope of the cultural competency plan to take into account the disabilities and special health care needs of patients, to require a departmental plan for surveying the communication needs and cultural backgrounds of members, to require the employment of persons with disabilities, and to require that MCOs provide professional interpretation when possible and provide written materials in the primary language of any minority population comprising 5% or more of their Medicaid managed care members. Response: The department agrees in part with the commenters and has added a provision to sec.30.27 requiring the MCOs to ensure that communication barriers do not deter members from getting health care services. The provision requires the MCOs to provide information in appropriate communication formats. The department disagrees with the comment to require the employment of persons with disabilities. The requirement in the rules to hire multi-cultural and multi- lingual staff is related to assuring cultural barriers such as language do not hinder members' access to health care services. The department disagrees with the comment that requirements for provision of interpreters be further specified in the rules. This requirement is covered in general terms under adopted sec.30.27(i)(2). The department also disagrees with establishing a 5% primary- language threshold in the rules. The department believes this level of specificity should be contained in the contracts and not in these sections. Comment: In regard to proposed sec.30.27(h), a commenter asked that the department define "significant traditional provider" and specify the period of time significant traditional providers must be included in the networks and under what conditions they can be excluded. Response: Significant traditional provider is defined by the department in sec.30.22. The department disagrees with the commenter in regard to specifying length of participation and conditions for exclusion. The criteria are set forth in Texas Civil Statutes Article 4413. Comment: Concerning proposed sec.30.27(h), a commenter requested a change in the rules to list or define these conditions as well as the length of the time period. Another commenter requested that MCOs be required to contract with traditional providers who meet quality standards and that this process should occur within specific time frames. Another commenter suggested that the financial arrangements between MCOs and traditional providers should allow a choice between accepting a capitation fee worked out with the MCO or "100% reasonable cost reimbursement" as calculated by the state at the end of each year. Response: The department disagrees with the commenters, as the criteria are set forth in Texas Civil Statutes Article 4413. Comment: One commenter stated that sec.30.28(a) and (b) should be rewritten to impose requirements on MCOs rather than on the department. Response: The department disagrees with the commenter. Section 30.28(a) and (b) impose requirements on the MCOs. Comment: Concerning sec.30.29 in general, one commenter requested the section address the resolution of provider problems with an MCO which may involve medical necessity disputes or payment denials, as well as the right of the provider to appeal through the department's fair hearing process. Response: The department disagrees with the commenter. The definition of complainant allows a designated provider to act on behalf of a member in regard to the MCO's complaint procedures described in this section. Provisions governing the department's fair hearing process are outside the scope of these rules but are addressed at 25 TAC sec.119.4 and in rules currently being proposed by the department in its client appeals process. Provider dispute resolution procedures are governed by MCO contracts with providers and by Texas Department of Insurance rules contained at 28 TAC Chapter 11, as applicable. No changes were made to this subchapter. Comment: Two commenters recommended that sec.30.29 include a requirement that MCOs which are HMOs comply with 25 TAC sec.119.3(d) relating to internal complaint procedures. Response: The department disagrees with the commenters to add a provision to sec.30.29. All HMOs operating under a certificate of authority from the state must comply with applicable state and federal law. However, a provision has been added to sec.30.21 referencing rules adopted elsewhere which apply to HMOs and are to be read in conjunction with this subchapter. Comment: Several commenters recommended that sec.30.29(a) describe complaint procedures in greater detail, including requirements that MCOs are responsible for resolving member complaints, that members have access to the fair hearings process, that MCO complaint procedures are identical for Medicaid-eligible members as for other members of the MCO; and that members have a right to designate a physician, provider, or other individual to act on their behalf. Commenters also recommended the rule include requirements concerning publicizing the complaint process, composition of an appeal panel within an MCO, a member's right to file an oral complaint; an expedited process for review and resolution of complaints regarding urgent care; and a second level of appeal independent of the HMO (prior to submission to the fair hearing process). Response: The department believes an MCO's responsibility for resolving complaints, a member's right to a fair hearing, and a member's ability to designate a representative are adequately addressed in the proposed rules. The department disagrees that the rules require identical complaint procedures, since state and federal law can impose requirements that affect only Medicaid- eligible members. The department disagrees with the commenter concerning specifying in these rules methods for publicizing complaint procedures, which involves an administrative matter outside the scope of these rules. The department disagrees with the commenters in regard to including in these rules the composition of an appeal panel, a member's right to an oral complaint, an expedited process for urgent care complaints, as these issues are addressed in a detailed complaint process contained at 25 TAC sec.119.3. Currently, all MCOs that contract with Medicaid are HMOs, which are governed by 25 TAC sec.119.3. The department is considering future rule-making to adopt similar complaint procedures in this chapter. The department disagrees with commenters in regard to adding provisions for appealing directly to the department outside the fair hearing process; this is outside the scope of these rules but is addressed in rules currently proposed by the department regarding its client appeals process. Comment: One commenter requested that time frames for grievance review decisions should be stated in sec.30.29(b) and that HMOs must investigate and resolve complaints within 30 days or within an additional 14 days (if supported by appropriate justification). Response: The department disagrees with the commenter. Time frames are outlined at 25 TAC sec.119.3 for all HMOs. Additionally, the department believes specific time frames are more appropriately addressed in the department's contracts with MCOs. Comment: Two commenters requested an editorial change to sec.30.29(c) by inserting the words for each member into the phrase "... easy to understand...," making the phrase read " ... easy for each member to understand ...." Response: The department agrees in part with the commenters and has modified the existing language to clarify the department's intent by identifying the enrolled population as the target audience. Comment: Concerning sec.30.29(c), two commenters stated that a member's primary care physician, in addition to the member, should be notified of any reduction, denial, or termination of a member's benefits. Another commenter requested that any notices to patients about these changes include the reasons the decision was made, cite the rule or criteria that formed the basis for the decision, and clearly state the member's right to appeal. Response: The department disagrees with the commenters. The complaint procedure framework outlined in these rules are meant to conform with and enhance detailed complaint procedures contained at 25 TAC sec.119.3 and which govern HMOs in the state. Currently, all MCOs that contract with Medicaid are HMOs, which are governed by 25 TAC sec.119.3. The department is considering future rule-making to adopt similar complaint procedures in this chapter. Comment: One commenter suggested that sec.30.29(d) be revised to state that the department shall both review and approve the MCOs' complaint procedures. Another commenter inquired as to whether consumers will have access to the complaint summaries required in this subsection. Response: The department agrees with the commenter that the department has the authority to approve as well as review MCO complaint procedures. Although this authority is implicitly stated in the rule as proposed, the department has modified sec.30.29(d) for clarity. The public availability of complaint summaries is governed by the Texas Public Information Act, Texas Government Code Chapter 552. Comment: Several commenters disagreed with the minimum quality improvement program (QIP) requirements outlined in sec.30.30. The commenters made numerous suggestions for prescriptive detail to be included as minimum requirements, including clarifying how people with disabilities will participate in quality improvement (QI) functions; ensuring the independence of the QI structure within an MCO, defining a standard definition of Children with Special Health Care Needs (CSHCN); examining CSHCN as a group in QI processes; outlining when MCOs will begin collecting data; ensuring a process is in place for identifying problems at the provider level; requiring MCOs to ensure that strategies are implemented, evaluated, and corrected as needed; requiring the department to conduct annual member satisfaction surveys; clarifying that confidentiality protections extend to utilization reviews; outlining an appeals process for providers; requiring a Medical and Provider Advisory Committee to develop a utilization review management program; specifying the periodicity of monitoring reviews for MCOs, establishing protocols for treating persons with disabilities; and outlining specific guidelines on denials of services, utilization review and auditing procedures, credentialing and disciplining of providers, and performance standards for the availability and accessibility of emergency services. Two commenters said the section does not establish minimum standards for MCOs as required by legislation. Response: This section is designed to require MCOs to institute a quality improvement program which is based on the best available industry standards. To accomplish this, the department requires quality standards and MCOs' quality improvement programs to be based on Quality Assurance Reform Initiative (QARI) and Health Plan Employer Data and Information Set (HEDIS) guidelines. In response to a staff recommendation, the department has modified the language of sec.30.30(a) to state that an MCO's QI standards must be based on QARI and HEDIS guidelines, as opposed to Medicaid HEDIS guidelines. This change will allow the department to adopt current Medicaid HEDIS guidelines as well as proposed HEDIS guidelines which combine both Medicaid HEDIS and commercial HEDIS into a common set of standards. The department believes the detailed standards established in QARI and HEDIS guidelines provide a strong basis for quality standards the MCOs are required by this section to meet. The department believes basing the required quality improvement programs on QARI and HEDIS standards will allow the department to adopt new and more appropriate standards as they are developed. Overly prescriptive provisions in these rules could therefore decrease the effectiveness of MCOs' quality improvement programs. The department believes a greater level of detail is best included in the MCO contract. The department disagrees with the last commenters that sec.30.30 violates legislative intent. The section outlines a broad framework of standards which can be refined as experience is gained throughout the country about Medicaid managed care. Comment: Concerning sec.30.31, one commenter suggested numerous, specific changes in the department's approach to the current rate and payment structures for hospitals, rural health clinics, and home health and transportation services. Another commenter said the section should state specifically what the rate computation methodology includes. Another commenter requested the addition of a paragraph to this section stating that the department will develop a methodology for determining the standard provider reimbursement rate for STAR Program services, and the rate will be the same for each member in each client risk group regardless of age or gender. The commenter also requested that the section state that the department will develop guidelines for the payment of providers by the MCO. Another commenter requested that the rules include more detail on how payment methodologies would be established and specify an oversight or review procedure for the rate-setting process. Response: The department disagrees with the commenters. Having available a range of payment structures is necessary given diverse conditions across the state, the dynamic health care market in Texas, and the state's limited experience with Medicaid managed care. Comment: Regarding sec.30.31, a commenter expressed concerns about the impact of managed care on children with complex and costly conditions, as well as providers with the expertise to serve these difficult cases. The commenter stated that the proposed rules do not include any safeguards to ensure that capitation rates or payment rates are reasonable for the population enrolled in a plan or serviced by a provider. Response: The department will take these comments under consideration but has made no changes in the rules at this time. The department is currently working with a broad-based group that includes community representatives and children's advocates to develop definitions and to address issues related to Children with Special Health Care Needs. Comment: One commenter requested the deletion of sec.30.32(b) because the commenter believes the paragraph violates the intent of the statute by allowing the department to enter into a profit-sharing or "experience rebate" arrangement with MCOs. The commenter believes that the paragraph exhibits a direct conflict of interest for the department to award contracts to the MCOs and then receive part of the profit for awarding that contract. Another commenter requested clarification on who will determine the amount of profits, as well as the state's share of profits. The commenter emphasized the need for legislative oversight of this process to ensure these profits are not redirected into other human or social service programs. Response: The department disagrees with the commenter that sec.30.32(b) violates legislative intent. Profit-sharing is a means for the state to benefit from the cost-savings of managed care and serves as an incentive for MCOs to deliver services as cost-effectively as possible while still adhering to the quality standards and program requirements set by the state and federal governments. The language in 30.32(b) has been modified to clarify that the department will determine the profit-sharing rate. Comment: A commenter requested clarification about whether sec.30.32(c) also allows the PCP to receive additional "incentive payments" for meeting or exceeding STAR Program goals (since MCOs receive these payments). Response: The department disagrees with the commenter. The department contracts with the MCOs, and incentives to providers by Medicaid MCOs are governed by federal law. The department received approximately 23 responses from individuals and organizations commenting on the rules, including the following: Americaid Community Care, Incarnate Word Health Services, JPS Health Network, Texas Conference of Catholic Health Facilities, Children's Hospital Association of Texas, Coalition for Nurses in Advanced Practice, Disability Policy Consortium, Lon Burnam, Texas Legal Services Center, Texas Rural Health Association, Texas Health and Human Services Commission, Texas Department of Health's Health Facility Licensing Division, Texas Department of Mental Health and Mental Retardation, Texas Osteopathic Medical Association, Texas Hospital Association, Texas Optometric Association, Texas Medical Association, Texas Society of the American College of Osteopathic Family Physicians, St. Joseph Services Corporation, National Seating and Mobility, Mental Health Association in Texas, Texas Commission on Alcohol and Drug Abuse, and department staff. All commenters were neither for nor against the rules in their entirety. However, they raised questions, offered comments for clarification, and suggested clarifying language concerning specific provisions in the rules. These sections are adopted under the authority of Senate Bill 10, sec.6, as passed by the 74th Legislature, and Senate Bill 600, codified at sec.12.017 Texas Health and Safety Code, which requires the department to adopt standards for the managed care program. General rulemaking authority for these rules is contained at Chapter 12, sec.12.001. Texas Health and Safety Code, which requires the Texas Board of Health to adopt rules for its procedures and for the performance of any duty imposed by law on the Texas Board of Health, the department, or the Commission of Health. sec.30.21.General Provisions. (a) These rules shall be read in conjunction with rules adopted by other state agencies charged with regulation and administration of the state's Medicaid managed care program (STAR Program), including the Texas Health and Human Services Commission, at 1 Texas Administrative Code (TAC) Chapter 353, and the Texas Department of Mental Health and Mental Retardation, at 25 TAC sec.sec.409.401 - 409.406; and the Texas Department of Insurance, at 28 TAC Chapter 11, Subchapter S. (b) These rules shall be read in conjunction with Chapter 119 of this title (relating to Health Maintenance Organizations) and the Texas Department of Insurance rules regarding regulation of HMOs at 28 TAC Chapter 11. sec.30.22.Definitions. The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise. Behavioral health services - Allowable services for the treatment of mental or emotional disorders and treatment of chemical dependency disorders. Chronic or complex condition - A physical or developmental condition which may have no known cure and/or is progressive and/or can be debilitating or fatal if left untreated or under-treated. Client - Any Medicaid eligible recipient and, where the context indicates, a Medicaid eligible recipient who meets the qualifications for enrollment in Medicaid managed care. See also "member". Commission - The Texas Health and Human Services Commission. Complainant - A member or a treating provider or other individual designated to act on behalf of the member, who files a complaint. Complaint - Any dissatisfaction, expressed by a complainant orally or in writing to the MCO, with any aspect of the MCO's operation, including but not limited to dissatisfaction with plan administration; appeal of an adverse determination; the denial, reduction or termination of a service; the way a service is provided; or disenrollment decisions expressed by a complainant. A complaint is not a misunderstanding or misinformation that is resolved promptly by supplying the appropriate information or clearing up the misunderstanding to the satisfaction of the member. Contract administrator - An entity contracting with the department to carry out specific administrative functions under the state's Medicaid managed care program. Cultural competency - The ability of individuals and systems to provide services effectively to people of various cultures, races, ethnic backgrounds, and religions in a manner that recognizes, values, affirms, and respects the worth of the individuals and protects and preserves their dignity. Department - The Texas Department of Health. Disability - A physical or mental impairment that substantially limits one or more of the major life activities of an individual. Emergency behavioral health condition - Any condition, without regard to the nature or cause of the condition, which requires immediate intervention and/or medical attention without which members would present an immediate danger to themselves or others or which renders members incapable of controlling, knowing or understanding the consequences of their actions. Emergency behavioral health services - Inpatient or outpatient behavioral health services provided in response to an emergency behavioral health condition. Emergency care- Physical medicine, emergency behavioral health services and health-related services provided in response to any condition requiring immediate intervention and/or medical treatment, including emergency labor and delivery and any medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that the absence of immediate medical attention could reasonably be expected to result in: (A) placing the patient's health in serious jeopardy; (B) serious impairment to bodily functions; (C) serious dysfunction of any bodily organ or part; or (D) an emergency behavioral health condition. EPSDT - The federally mandated Early and Periodic Screening, Diagnosis and Treatment program contained at 42 United States Code, 1396d(r). (See definition for Texas Health Steps.) The name has been changed to Texas Health Steps in the state of Texas. EPSDT-CCP - The Early and Periodic Screening, Diagnosis and Treatment- Comprehensive Care Program, under which the department added comprehensive care benefits to the federal EPSDT program requirements. The name has been changed to Texas Health Steps in the state of Texas. Federal waiver - Any waiver permitted under federal law which allows states to implement Medicaid managed care, in accordance with a waiver from compliance with federal law, approved by the federal government. Federal waivers include a sec.1915(b) waiver, sec.1115 waiver, or any other allowable waiver of federal law which would enable the state to implement Medicaid managed care. HCFA - The Health Care Financing Administration, the federal agency charged with oversight of all states participating in the Medicaid program. Health care services - Physical medicine, behavioral health care and health- related services which an enrolled population might reasonably require in order to be maintained in good health, including, as a minimum, emergency care and inpatient and outpatient services. HEDIS - The Health Plan Employer Data and Information Set. (See definition for Medicaid HEDIS.) HMO - Health maintenance organization - An organization which holds a certificate of authority from the Texas Department of Insurance to operate as an HMO under Chapter 20A of the Texas Insurance Code. Inpatient stay - At least a 24-hour stay in a facility licensed to provide hospital care. Major life activities - Functions such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working. Managed care - A health delivery system in which the overall care of a patient is coordinated by or through a single provider or organization. MCO - Managed care organization. An entity which has a current Texas Department of Insurance certificate of authority to operate as an HMO under Chapter 20A of the Texas Insurance Code or as an approved nonprofit health corporation under Chapter 21.52F of the Texas Insurance Code. Medicaid HEDIS - A standardized set of performance measures published by the National Committee for Quality Assurance, which are designed specifically to assess how well Medicaid clients are served by managed care organizations in a capitated managed care system. Medical home - A primary care provider who has accepted the responsibility for providing accessible, continuous, comprehensive and coordinated care to members participating in the state's Medicaid managed care program. Medically necessary behavioral health services - Those behavioral health services which: (A) are reasonably necessary for the diagnosis or treatment of a mental health or chemical dependency disorder or to improve or to maintain or to prevent deterioration of functioning resulting from such a disorder; (B) are in accordance with professionally accepted clinical guidelines and standards of practice in behavioral health care; (C) are furnished in the most appropriate and least restrictive setting in which services can be safely provided; (D) are the most appropriate level or supply of service which can safely be provided; and (E) could not have been omitted without adversely affecting the member's mental and/or physical health or the quality of care rendered. Medically necessary health services - Health services other than behavioral health services which are: (A) reasonably necessary to prevent illnesses or medical conditions, or provide early screening, interventions, and/or treatments for conditions that cause suffering or pain, cause physical deformity or limitations in function, threaten to cause or worsen a handicap, cause illness or infirmity of a member, or endanger life; (B) provided at appropriate facilities and at the appropriate levels of care for the treatment of members' medical conditions; (C) consistent with health care practice guidelines and standards that are issued by professionally recognized health care organizations or governmental agencies; (D) consistent with the diagnoses of the conditions; and (E) no more intrusive or restrictive than necessary to provide a proper balance of safety, effectiveness, and efficiency. Member - Any Medicaid eligible recipient who is enrolled in the state's Medicaid managed care program. Participating MCOs - Those MCOs which have a contract with the department to provide services to Medicaid managed care members. PCCM- Primary care case management - PCCM is a managed care delivery system allowed under federal waiver in which the department contracts with providers to form a managed care provider network. Primary care physician or primary care provider - A physician or provider who has agreed with the department or an MCO to provide a medical home to members and who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care. Provider - An individual or entity and its employees and contractors that provide health care services to members under the state's Medicaid managed care program. QARI guidelines - The Quality Assurance Reform Initiative guidelines of HCFA. Service area - The Counties included in a site selected for a STAR pilot program, within which a participating MCO must provide services. Significant traditional provider - A provider with whom Medicaid recipients have well-established or longstanding provider/client relationships, or to whom the recipients have typically or traditionally gone for health care, emergency care or family planning advice. A provider falling within this definition shall be determined by criteria established by the department and the Commission. Special hospital - An establishment that: (A) offers services, facilities, and beds for use for more than 24 hours for two or more unrelated individuals who are regularly admitted, treated, and discharged and who require services more intensive than room, board, personal services, and general nursing care; (B) has clinical laboratory facilities, diagnostic X-ray facilities, treatment facilities, or other definitive medical treatment; (C) has a medical staff in regular attendance; and (D) maintains records of the clinical work performed for each patient. STAR Program - The State of Texas Access Reform Program and is the name of the State of Texas Medicaid managed care program established in response to legislative mandate and by federal waiver. THSteps - Texas Health Steps. Texas Health Steps - The name adopted by the State of Texas for the federally mandated Early and Periodic Screening, Diagnostic and Treatment (EPSDT) program. It includes the state's Comprehensive Care Program extension to EPSDT, which adds benefits to the federal EPSDT requirements contained in 42 United States Code, sec.1396d(r), and defined and codified at 42 Code of Federal Regulations sec.440.40 and sec.sec.441.56-62. The department's rules are contained in Chapter 33 of the title (relating to Early and Periodic Screening, and Diagnosis and Treatment). sec.30.23.Enrollment. (a) The department shall determine which Medicaid eligible clients residing in a STAR Program service area will be mandatory or voluntary members and which Medicaid eligible clients may be excluded from participation in managed care. (b) The department shall conduct enrollment and disenrollment activities or contract with another agency or contractor to assume administration of these functions. The department may not contract with a participating managed care organization to serve as the administrator for enrollment or disenrollment activities in any area of the state. (c) The department shall establish procedures for enrollment into participating MCOs and primary care providers (PCP), including enrollment periods and time limits within which enrollment must occur. Members who are mandatory members must select an MCO or PCP within the time period allowed by the department or be defaulted to an MCO or PCP. (d) Mandatory members who fail to select an MCO or PCP during the period established by the department will have a plan selected for them by the department or its contractor using criteria determined by the department. The department shall establish the priority of the criteria. The criteria shall include: (1) member criteria such as health care needs, established provider/client, and/or provider/client/family relationships, member preferences, and any location, transportation and mobility needs of the client; (2) provider/MCO criteria such as the ability and availability to meet the health care and personal needs of the member; and (3) any other criteria rationally related to the selection process. (e) A member may request to change MCOs at any time and for any reason, regardless of whether the MCO was selected by the member or assigned by the department. Disenrollment will take place no later than the first day of the second month after the month in which the member has requested termination. MCOs must inform members of disenrollment procedures at the time of enrollment. MCOs must notify members in appropriate communication formats. (f) The department shall establish limits for the number of members each PCP may accept to ensure members have reasonable access to the provider. The department shall develop criteria to allow exceptions to this limit on a case-by-case basis, provided the exceptions do not adversely affect member access. (g) TDH may not enroll any Medicaid eligible recipient who is excluded from participation by federal rule or regulation. Recipients who are located more than 30 miles from the nearest PCP in an MCO cannot be enrolled in the MCO unless an exception is made by the department. (h) Medicaid recipients and Medicare beneficiaries must constitute less than 75 percent of the total enrollment of an MCO, unless the MCO has received a waiver for this requirement under 42 Code of Federal Regulations sec.434.26. sec.30.24.Marketing. (a) Managed care organizations (MCO) must submit a marketing plan and all marketing materials to the department for prior written approval. (b) MCOs may present their marketing materials to eligible Medicaid clients through any method or media determined to be acceptable by the department. The media may include but are not limited to: written materials, such as brochures, posters, or fliers which can be mailed directly to the client or left at Texas Department of Human Services eligibility offices; department-sponsored community enrollment events; and public service announcements on radio. (c) MCO enrollment or marketing representatives are required to complete the department's marketing orientation and training program prior to engaging in marketing activities on behalf of the MCO. (d) Prohibited marketing practices. (1) MCOs and providers shall not conduct any direct contact marketing except through department-sponsored enrollment events. (2) MCOs and providers shall not make any written or oral statement containing material misrepresentations of fact or law relating to their plan or the STAR Program. (3) MCOs and providers shall not make false, misleading or inaccurate statements relating to services or benefits, or providers or potential providers through their plan. (4) MCOs and providers shall not offer Medicaid recipients material or financial gain as an inducement for enrollment, unless an exception is made by the department. (5) Marketing or enrollment practices of MCOs and providers shall not discriminate against a client because of a client's race, creed, age, color, religion, national origin, ancestry, marital status, sexual orientation, physical or mental disability, health status, or existing need for medical care. sec.30.25.Selection of Managed Care Organizations (MCO). (a) An entity or person that contracts with the department under a federal waiver to provide or arrange for services under this subchapter on a risk comprehensive basis, as defined at 42 CFR 434.21(b), must be an MCO as defined in this subchapter. (b) Entities or individuals who subcontract with an MCO to provide benefits or perform services, or carry out any essential function of the MCO contract shall meet the same qualifications and contract requirements as the MCO for the service, benefit, or function delegated under the subcontract. (c) The department shall require all MCOs to comply with the department's policy on contracting and subcontracting with historically underutilized businesses (HUBs). The department's policy is to meet the goals and good faith effort requirements as stated in the General Services Commission rules, at 1 Texas Administrative Code (TAC), sec.sec.111.11-111.24. sec.30.26.Scope of Services. (a) All Managed Care Organizations (MCO) shall provide services and benefits available to Medicaid recipients under the purchased or fee for service Medicaid program, except services which are excluded from the STAR Program or by contract. (b) The department shall establish the scope and level of benefits which all MCOs must agree to provide as a condition for participation. These requirements may exceed the scope and level of covered benefits and services available to purchased or fee for service Medicaid recipients. These requirements shall be contained in all contracts entered into by MCOs and the department. (c) MCOs are encouraged to provide any services or benefits beyond the level and scope required as a condition for participation in the competitive procurement process. Any services or benefits offered by an MCO beyond those required by the state will be considered as a selection factor during the competitive procurement process. These services or benefits can be any that may make member access to services easier, increase the quality or timeliness of services or benefits offered members, or increase the scope of services offered by the MCO. These services and benefits cannot increase the cost borne or capitation rates paid by the department during any current contract term or in any subsequent contract term. These services or benefits cannot violate any other state or federal rule or regulation. sec.30.27.Accessibility of Services. (a) Managed care organizations (MCO) must provide a broad-based and accessible primary care provider (PCP) network within the service area to ensure member accessibility to providers in time, distance, cultural competency and language. (b) MCOs shall have pediatric and family practitioner PCPs in their network of providers in sufficient numbers to provide regular and preventive pediatric care and THSteps services to all eligible children enrolled in the service area. (c) MCOs shall have PCPs available throughout the service area to ensure that no member must travel more than 30 miles to access the PCP, unless an exception has been made by the department. (d) MCOs shall have PCPs in sufficient numbers to ensure that PCPs do not exceed the maximum allowable enrolled members, that no member must wait an unreasonable amount of time for an appointment, and that no member must wait an unreasonable amount of time to be seen at their appointed time. (e) MCOs shall ensure the reasonable availability and accessibility of specialists in all areas of medical and behavioral health practice. Specialists must also be reasonably accessible to members in time, distance, cultural competency and language. (f) A member shall not be required to travel in excess of 75 miles to secure initial contact with referral specialists; special hospitals; psychiatric hospitals; diagnostic and therapeutic services; and single service health care physicians, dentists or providers except as provided in subsections (g) and (h) of this section. (g) If any service or provider is not available to a member within the mileage radius specified in subsection (f) of this section, the MCO shall submit to the department for approval health care utilization data which indicates a normal pattern for securing health care services within the service area. (h) The provisions in subsection (f) of this section do not preclude an MCO from making arrangements with another source outside the service area for members to receive a higher level of skill or specialty than the level which is available within the MCO service area such as, but not limited to, treatment of cancer, burns, and cardiac diseases. (i) MCOs shall provide education and training to providers on the specific health and behavioral health problems and needs of STAR Program members, and the contract and rule requirements for accessibility and availability. MCOs and the department shall cooperate and coordinate education and training activities for providers. (j) MCOs shall develop a written cultural competency plan describing how the MCO will effectively provide health care services to members from varying cultures, races, ethnic backgrounds and religions to ensure those characteristics do not pose barriers to gaining access to needed services. As part of the requirement to develop the cultural competency plan, the MCO must at a minimum: (1) employ multi-cultural and multi-lingual staff; (2) make available interpreter services for members as necessary to ensure availability of effective communication regarding treatment, medical history or health education; (3) display to the department through the written plan a method for incorporating the plan into the MCO's policy-making process, administration, and daily practices; and (4) submit the written plan to the department for review and approval at intervals specified by the department. (k) MCOs must ensure that communication or physical access barriers do not deter members' timely access to health care services. The MCOs shall provide information in appropriate communication formats, including formats accessible to people with disabilities. (l) MCOs are prohibited from excluding significant traditional Medicaid providers from their network for a period of time and under conditions determined by the state and specified in the contract. (m) MCOs shall develop written provider manuals clearly stating the policies and procedures adopted by the MCO to meet the provider's duties and obligations required by these and other agency rules and the contract. sec.30.28.Managed Care Benefits and Services for Children Under 21 Years of Age. (a) The department shall require all participating managed care organizations (MCO) to provide comprehensive, timely and cost-effective diagnostic, screening and treatment services of the medical, vision, hearing, and dental needs of eligible STAR Program members under the age of 21, at a level and frequency that meet the requirements of the federal EPSDT Program found at 42 United States Code, sec.1396d(r) and the Texas Health Steps Program (THSteps) found at Chapter 33 of this title (relating to Early and Periodic Screening, Diagnosis and Treatment. These requirements shall be contained in all contracts. (b) The department shall require the MCOs to make available special training about THSteps benefits and goals to all providers of health and dental services contracting with the MCO, to providers' staffs, and to all employees and contractors of the MCO who will provide oral presentations or marketing to members or prospective members. To fulfill this requirement, the MCOs may use the training programs created by the department or its contractors, or they may create their own training programs. Any training program created by the MCO under this subsection must meet the requirements of the department and be approved by the department. (c) MCOs shall coordinate and cooperate with the department in developing effective outreach, access, and monitoring systems to ensure that all qualified members receive THSteps benefits. (d) The managed care programs of participating MCOs are intended to complement and enhance the effectiveness and availability of THSteps benefits in the service areas. The department shall not delegate the responsibility and accountability of monitoring and for ensuring that THSteps benefits are available and accessible to all eligible children. sec.30.29.Member Complaint Procedures. (a) Managed care organizations (MCO) shall develop and maintain a system and process for taking, tracing, reviewing, and reporting member complaints. (b) MCOs shall establish and maintain internal procedures for the resolution of member complaints. The procedures must be in writing. The procedures must be detailed and specific regarding how complaints are to be taken, to whom complaints are referred, and by when a complaint must be resolved. (c) MCOs shall establish a procedure to assist members in understanding and using the MCO's internal complaint process. The members' complaint procedure must be in writing and distributed to each member upon enrollment. The member must also receive written notice of the procedure each time the member's benefits are being reduced, denied, or terminated for any reason. The procedure must be easy for members to understand and simple to follow. The procedure must contain a prominent notice to the member that they retain all of their rights as Medicaid recipients to a fair hearing through the department, in addition to the MCO's complaint process. (d) The department shall review the MCO's complaint procedures to determine they comply with the department's standards before approval for MCO use of the complaint procedure is given by the department. Reports containing complaint summaries shall be submitted to the department in compliance with department policy. (e) The department shall retain the authority to make the final decision following the department's fair hearing process. sec.30.30.Quality Improvement. (a) Each managed care organization (MCO) shall develop and follow quality standards based on current Quality Assurance Reform Initiative (QARI) and Health Plan Employer Data and Information Set (HEDIS) guidelines as a minimum requirement of its internal quality improvement program (QIP). MCOs shall establish a QIP system that includes at least the following: (1) a system of oversight and supervision for the MCO quality improvement (QI) processes; (2) an independent organizational structure within the MCO responsible for performing QI functions. This organization must meet operational and documentation requirements of the department, including the requirement that membership includes Medicaid managed care members and members with disabilities or a chronic or complex condition. (3) written contracts for all QI functions subcontracted to outside contractors; (4) written policies and procedures for ensuring providers in the MCO's network are qualified and properly credentialed, and a system to periodically update and review qualifications and credentials of all providers; (5) policies and procedures for disciplinary actions against providers and an appeal process for providers who have disciplinary action taken against them; (6) a procedure for informing MCO members of their rights and responsibilities, benefits and services, MCO policies, and other information required in the Texas Health and Human Services Commission's rules on client education and member bill of rights and responsibilities, and the MCO contract with the department; (7) performance standards for the availability of and accessibility to routine and emergency care, referral to specialists, and telephone services; (8) time standards within which providers must respond to the medically necessary physical and behavioral health needs of the members; (9) standards for the confidentiality, accessibility, and availability of medical records; (10) a written utilization review and management program which gives guidelines and criteria for determining medical necessity, preauthorization, and utilization of services; (11) an effective referral and coordination of care system to ensure comprehensive and coordinated care for members through the PCPs; and (12) a complaint system for members as described in sec.30.29 of this title (relating to Member Complaint Procedures). (b) The QIP functions may be subcontracted but the responsibility for QIP compliance cannot be delegated by the MCO. (c) The department shall develop monitoring and review systems and procedures to ensure MCO compliance with MCO contracts, this subchapter, and all related state and federal rules, regulations, and guidelines. Department monitoring and review shall include but not be limited to the following. (1) The department shall monitor each MCO to ensure it is following its QIP standards. (2) The department shall require MCOs to submit QIP information at regular and periodic intervals. (3) The department shall require all MCOs to submit to periodic inspection and review to determine compliance with all contract terms, and state and federal rules, regulations, and policies. (d) Evaluations of each MCO's quality of services in each Medicaid managed care service area and the cost-effectiveness, member access, and quality of care under each waiver shall be conducted by independent, external entities after initial implementation of Medicaid managed care in a particular service delivery area. The quality evaluation shall be conducted at the end of the first year following initial implementation; and the assessment of cost-effectiveness, member access, and quality of care under each waiver shall be conducted once during the first two years of the time period for which a waiver has been approved. The periodicity of both evaluation types shall be re-evaluated by the department after each evaluation is initially completed in a managed care service delivery area. sec.30.31.Rates and Payment Structures. (a) The department shall develop payment methodologies based on state maximum capitation amounts or negotiated rates to determine payments for providing STAR Program services. (b) In a service arrangement in which the state contracts with a hospital to provide services for STAR Program members, the department may negotiate with hospitals to establish payment rates for inpatient and outpatient services. sec.30.32.Financial Standards. (a) Managed care organizations (MCO) must meet solvency standards established by the Texas Department of Insurance at 25 TAC Chapter 11 Subchapter S and by the department in its competitive procurement proposals. (b) The state may share in profits realized by MCOs providing services on a risk basis at a rate determined by the department, as long as the profit-sharing arrangement complies with federal law and is contained in the contract between the MCO and the department. (c) The department may establish incentive payment programs to encourage MCOs to meet or exceed the goals and objectives of the STAR Program established by the department through its contract. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 27, 1996. TRD-9617345 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 18, 1996 Proposal publication date: August 6, 1996 For further information, please call: (512) 458-7236 CHAPTER 38.Chronically Ill and Disabled Children's Services Program 25 TAC sec.sec.38.2, 38.3, 38.13 The Texas Department of Health (department) adopts amendments to sec.sec.38.2, 38.3, and 38.13 concerning definitions, eligibility for client services, and payment of services in the Chronically Ill and Disabled Children's Services Program (CIDC). Section 38.13 is adopted with changes to the proposed text as published in the August 13, 1996, issue of the Texas Register (21 TexReg 7633). Section 38.2 and sec.38.3 are adopted without changes and therefore will not be republished. These amendments include housekeeping amendments and clarifying provisions related to financial eligibility criteria which are being proposed to improve the sections' clarity. In addition, because of increasing service costs without significant increases in general revenue funding, an amendment is adopted to establish a cost-saving reimbursement methodology for hemophilia factor. The amendments to sec.38.2 add definitions for "bona fide," "financial independence," "household," "social service organization," "United States Public Health Service (USPHS) price," and "usual and customary." The term "bona fide" modifies "resident" as used in sec.38.2 and describes the state of mind of an applicant who declares that he or she is a Texas resident, i.e., "in or with good faith, honestly, openly, and sincerely; without deceit or fraud." The term "financial independence," relates to sec.38.3(3)(A)(ii), and is one of the criteria for determining whose income should be used to determine CIDC eligibility if an applicant is over the age of 18. The applicant would be eligible if, among other requirements, he or she "currently files his or her own personal U.S. income tax return and is not claimed as a dependent by any other party on his or her U. S. income tax return." The term "household" also relates to sec.38.3(3)(A)(i) and defines which persons are considered part of the household and whose income should be included in determining financial eligibility of the applicant, i.e., "the living unit in which the applicant resides and which includes mother, father, step-parent, or managing conservator; and siblings, step-brother(s), or step-sister(s)." "Usual and customary" refers to one of the reimbursement methodologies included in the CIDC Fee Schedule, sec.38.13(3), as revised. These additions are being adopted to clarify word usage and reduce ambiguity in CIDC rules and procedures. The amendments to sec.38.2 also add an exception to the definition of eligibility dates for benefits related to trauma. Currently, the eligibility date for CIDC benefits is 15 days prior to the date of receipt of the application by CIDC, with one exception for newborns. Since the CIDC program is established primarily to provide reimbursement for rehabilitative services, rather than acute care services, the proposed section provides that eligibility for benefits begins the day after the acute care phase of a trauma ends. The amendments to sec.38.3(3)(A)(i), sec.38.3(3)(A)(ii), and sec.38.3(9)(B) relate to criteria for determining financial eligibility for CIDC. The amendment to sec.38.3(3)(A)(i) requires that the combined gross income of all persons residing in the household and who are legally obligated to support the child will be considered in determining financial eligibility. The amendment to sec.38.3(3)(A)(ii) clarifies the circumstances under which the gross income of an applicant who is over the age of 18 will be considered in determining financial eligibility for CIDC. An amendment to sec.38.3(9)(B) allows CIDC to require determination of financial eligibility more frequently than once a year. The amendment to sec.38.13(3) incorporates the CIDC Program Fee Schedule in the rules. The amendment will make this information more easily accessible to providers and others. Subsection 38.13(3)(A)(i)(II)(-a-) authorizes reimbursement of hotel occupancy taxes paid by CIDC clients and/or their families when travel is necessary to receive medical care. In addition, housekeeping amendments to sec.38.13(6) delete provisions titled "Linkage with Medically Needy Program," which has been superseded by sec.38.3(3)(A)(iv) and sec.38.3(3)(A)(v). An amendment also excerpts a portion of sec.38.13(3) relating to CIDC payment of copayments and deductibles for third party coverage by moving it to a newly created sec.38.13(2)(D). These amendments will help to clarify CIDC rules and avoid ambiguity. Another amendment to sec.38.13 relates to payment of services by CIDC. Increasing service costs, without significant increases in general revenue funding, have necessitated review of all aspects of CIDC service delivery and client eligibility. New sec.38.13(3)(A)(iii)(IV) authorizes CIDC to reimburse providers for hemophilia factor at the lower of either the billed price or the United States Public Health Service (USPHS) price plus a dispensing fee of four cents per unit of factor. Use of the USPHS pricing methodology, as authorized by the Veteran's Health Care Act, P.L. 102-585, November 4, 1992, would allow CIDC to reduce its reimbursement costs for hemophilia factor while maintaining access to the factor for clients with hemophilia. The following comments were received regarding the proposed amendments: COMMENT: Concerning sec.sec.38.13(3)(A)(v)(I) and (II), program staff recommended adding the phrase "the lower of the billed amount or the" to enable the program to reimburse charges lower than Vendor Drug Price, if submitted. RESPONSE: The department agrees and has amended the sections accordingly. COMMENT: Concerning sec.38.13(3)(A)(v)(III)(-b-), one commenter recommended that "physician's prescription" be changed to "a licensed provider's prescription" or "a prescription signed by a physician, advanced practice nurse, or physician's assistant." RESPONSE: The department acknowledges that the proposed wording inappropriately refers to only one category of prescriber, and sec.38.13(3)(A)(v)(III)(-b-) has been amended to be consistent with current Texas law and Texas Medicaid Vendor Drug Program regulations. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), several commenters stated that clients' free choice of providers would be limited if they can obtain blood factor only through USPHS covered entities, and also that there is no alternative pricing method for noncovered USPHS entities. RESPONSE: The department intended to refer to USPHS pricing as a base price without limiting clients' choice of provider. The department seeks to insure that provider access is adequate to meet client need. No changes have been made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that private- sector providers who are Texas taxpayers and Texas employers would not be able to purchase drug products using USPHS acquisition prices, and therefore, would not be able to serve CIDC patients without losing money due to the high cost of purchasing factor. The commenter also stated that providing products and services below cost could be potentially construed as an inducement for referrals, a violation of federal and state laws. RESPONSE: The department acknowledges that while not all private sector providers may be able to purchase blood factor products at USPHS prices, some high volume purchasers are able to acquire products at costs substantially lower than the CIDC reimbursement rates. Although reimbursement rates vary considerably among third party payers, the department does not believe that such differences alone induce providers to begin or cease providing this service. No changes have been made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), several commenters stated that adoption of the section as proposed would cause some private sector providers to withdraw from the CIDC program, which would reduce or eliminate competition with USPHS covered entities for this group of clients. The absence of competition would in turn lead to a reduction in patient care quality, disruption of distribution and care patterns, potentially increased medical complications for clients, and resulting increased costs for CIDC clients. RESPONSE: Some changes in health care delivery systems or the distribution of providers result in program savings without loss of service. Current managed care delivery plans often limit competition and a client's choice of providers. The commenters offered no examples to substantiate their concerns about reduced care quality, increased complications, or increased costs to this client population due to reduced competition. By contrast, comprehensive care provided through a hemophilia treatment center is a proven model of care which reduces long-term morbidity, mortality, and cost. No changes have been made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), two commenters observed that the nature of competition in today's health care delivery system is changing, especially with managed care, and that many third party payers limit patient choice, including patients who are beneficiaries of governmental programs. RESPONSE: The department agrees and has made no change in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that the provision of care in a hemophilia treatment center and the quality of that care are not related to the means by which factor is delivered to the patient. RESPONSE: The department agrees and has made no changes in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), two commenters stated that the proposed reimbursement does not take all cost elements into account, including medically necessary support services associated with utilization of the drug products and management of therapy. RESPONSE: Authorization for medically necessary support services is based on individual patient information, which may be somewhat subjective. Since cost considerations limit the program's capacity to reimburse beyond essential services, the program reimburses reasonable costs associated with the acquisition, preparation, and distribution of blood factor product, but not for all cost elements. No changes were made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that the proposed reimbursement levels will have a negative impact on small business, and that some private providers would discontinue doing business in Texas. RESPONSE: Although some providers indicated that they might not be able to continue providing services to CIDC clients, no specific examples of negative impact on small businesses were provided, and no individual private providers who would discontinue doing business in Texas were named. No changes were made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that the proposed pricing methodology would encourage some prescribers, who may also be affiliated with USPHS pharmacy providers, to prescribe more factor than necessary in order to increase income from the dispensing fee. RESPONSE: There is no evidence that prescribing patterns of physicians at hemophilia treatment centers are related either to the source of blood factor product or to the quantity prescribed, except when higher quantities of factor are prescribed and consistently administered in prophylactic therapy, which produces better long-term outcomes for patients. Hemophilia treatment centers derive much of their funding from federal and state sources, and any impropriety in the utilization of factor or the compensation of center staff would have serious consequences. No changes were made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), two commenters observed that there is no reason for a USPHS entity to over-prescribe factor. They added that such practice is not consistent with the comprehensive model standard of care, and would be in no one's best interest, because inappropriate use of governmental third party resources would compromise a USPHS entity's capability to provide care in the future. RESPONSE: The department agrees. No changes were made in response to these comments. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), two commenters stated that there is currently only one USPHS provider in Texas, which will restrict access to services for CIDC clients. Private sector home care pharmacy providers are located throughout the state and are more numerous than USPHS eligible pharmacy providers. RESPONSE: There are three hemophilia treatment centers which are qualified to be USPHS covered entities. Centers in Houston and San Antonio presently provide blood factor product to their patients. The Dallas center is pursuing designation as a covered entity. Each of these centers also has satellite clinic sites. The geographic distribution of the treatment centers and their satellite clinics is adequate to treat people diagnosed with hemophilia in Texas. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that the hemophilia treatment centers in Texas function in a network with one another, they all are eligible to qualify for USPHS pricing, and they have the ability to provide 24-hour access to factor for all CIDC clients throughout Texas. RESPONSE: The department agrees and has made no changes in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that clients who are not patients of hemophilia treatment centers would not be able to obtain blood factor products, and that proximity determines whether a client is a patient of the hemophilia treatment center. RESPONSE: Program staff reviewed the list of clients who have received blood factor product through the program in the past two years. Virtually all of the clients are patients at the hemophilia treatment centers or at satellite clinics. In addition, center physicians provide regular evaluations and consultations for treatment by telephone and other remote means. When a client is unable to afford travel to a center, CIDC will pay for travel, meals, and lodging. No changes have been made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), several commenters maintained that CIDC does not have the authority to access USPHS pricing, because it is not among those covered entities listed in federal law. RESPONSE: The program proposed using the USPHS price as a reference price upon which reimbursement rates would be based. The program must secure the least expensive sources of quality goods and services. The program does not intend to become a direct purchaser of product. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), two commenters stated that the State of Texas has a responsibility to seek the lowest possible cost for medications covered by CIDC, especially when there is access and the assurance of a comparable quality of care. RESPONSE: The department agrees. Since the program does not receive rebates comparable to those paid by pharmaceutical manufacturers through the Medicaid Vendor Drug Program, the department must seek the lowest possible cost for covered medicines. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that it is not feasible to apply what was intended as a wholesale price to a retail transaction. RESPONSE: The department does not agree that wholesale prices should not be evaluated when determining reimbursement rates. No changes were made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), several commenters stated that the dispensing fee formula based upon $0.04 per unit of blood factor dispensed would allow a USPHS covered entity to benefit in a manner not contemplated by the Veterans Act, and that a two-tier reimbursement rate should be developed to accommodate both those providers who are able to access USPHS prices and those who are not. RESPONSE: The Veteran's Act does not prohibit recovery of reasonable costs associated with dispensing pharmaceutical products. No changes have been made in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that efforts to control costs through reduced reimbursement are misplaced and may result in fewer participating CIDC providers. The commenter stated that the Texas Legislature should enact laws prohibiting exclusions and pre-existing condition limitations by private health insurance carriers. RESPONSE: Although the department agrees that prohibiting exclusions and pre- existing condition limitations would benefit children with special health care needs, this approach is beyond the scope of this rule, and no changes have been made. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter supported the section, stating that caps or ceilings on the reimbursement of factor for individual clients as an alternative cost control are contrary to present standards of comprehensive care for hemophilia. RESPONSE: The department agrees and has made no changes in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), one commenter stated that the purpose of USPHS pricing is to reduce the cost to the end payer, in many cases a governmental entity, and that the USPHS entity is required by federal law to pass on these savings. RESPONSE: The department agrees and has made no changes in response to this comment. COMMENT: Concerning sec.38.13(3)(A)(v)(IV), program staff recommended providing individual notification to clients and their parents, to providers, and to prescribing physicians concerning the change in reimbursement for hemophilia blood factor products and allowing a transition period of approximately 60 days. RESPONSE: The department agrees and has amended the section to include an effective implementation date of March 1, 1997. COMMENT: Concerning sec.38.13(3)(A)(v)(V), one commenter stated that the proposed reimbursement rate for Pulmozyme® is lower than the provider's actual acquisition cost, enclosing a copy of the manufacturer's invoice as proof. The commenter also provided expense invoices to prove that the actual costs of dispensing, package preparation, special handling, or shipping Pulmozyme to a patient exceed the proposed dispensing fee. RESPONSE: The department agrees and has deleted this section. COMMENT: Concerning sec.38.13(3)(A)(v)(V), one commenter stated that the proposed rule will negatively impact small businesses in Texas. RESPONSE: The department disagrees concerning the impact on small business in Texas based on the comparatively low volume of product covered by the program. COMMENT: Concerning sec.38.13(3)(A)(v)(V), one commenter stated that reimbursement problems may cause providers to stop dispensing Pulmozyme®. RESPONSE: The department seeks to insure that a sufficient number of providers are available to meet client need. COMMENT: Concerning sec.38.13(3)(A)(v)(V), one commenter stated that the reimbursement methodology is unclear, because the rebate is not defined. RESPONSE: The department understands the need for clarification and has deleted this section of the proposed rule. COMMENT: Concerning sec.38.13(3)(A)(v)(V), one commenter stated that the section violates the Texas Administrative Procedure Act, because the drugs which fall within the subcategory are not identified, the method for their identification is not defined, and there is no provision for notification of providers concerning the identification of the drugs. RESPONSE: The department acknowledges this concern and has deleted this section. COMMENT: Concerning sec.38.13(3)(A)(vi)(II), program staff recommended inserting an effective date of February 1, 1997 to allow for a full 30 days notice to providers of this change in maximum allowable reimbursement. RESPONSE: The department agrees and has amended the section to include an effective date of February 1, 1997. COMMENT: Concerning sec.38.13(3)(A)(viii), one commenter stated that the proposed reimbursement was inadequate to cover the actual costs of care, including such items as laboratory work and nursing services, and added that Medicare reimbursement methodology allows separate payment for nursing services. The commenter referred to a recent study concerning actual costs of providing total parenteral nutrition services. RESPONSE: Although the department believes the proposed global fee is consistent with current Texas Medicaid reimbursement rates, the program also will pay for medically necessary laboratory studies. The study referenced by the commenter reflects a very broad range of actual cost responses, and the number of responses to the survey was fairly low. COMMENT: Concerning sec.38.13(3)(A)(ix), one commenter endorsed the section as proposed. RESPONSE: The department acknowledges the comment. COMMENT: Concerning sec.38.13(3)(B)(iii), one commenter stated that "physician charges" should be changed to "physician or advanced practice nurse charges." RESPONSE: Advanced nurse practitioners are not eligible to enroll as providers in the program. Most care provided by an advanced nurse practitioner is routine primary care, and children who have conditions covered by CIDC have complex medical needs which require the services of highly specialized physician providers. No changes have been made. COMMENT: Concerning sec.38.13(3)(B)(v), program staff stated that the correct reimbursement category should be "hospital ambulatory surgical centers" and that the reimbursement methodology as proposed was incorrect. RESPONSE: The department agrees and sec.38.13(3)(B)(v) has been amended accordingly. COMMENT: Concerning sec.38.13(3)(B)(vii), program staff stated that this section was inadvertently omitted from the proposed publication. The section is consistent with current program policy. RESPONSE: The department agrees, and sec.38.13(3)(B)(vii) has been amended accordingly. COMMENT: Concerning sec.38.13(3)(C), department staff stated that the CIDC dental fee schedule is higher than the Texas Health Steps dental fee schedule, adding that some but not all clients in both the CIDC Program and Texas Health Steps clients have disabilities which make them more difficult to treat. In some cases, providers may be treating CIDC clients preferentially over Texas Health Steps clients. The Texas Health Steps Operations Director has recommended that the maximum allowable fee for CIDC dental claims should be the same as that for Texas Health Steps claims. RESPONSE: Dental claims for CIDC clients, which include only medically-related dental abnormalities, currently are reimbursed according to the dental fee schedule proposed under sec.38.13(3)(C). Current Dental Terminology (CDT-2) coding is approaching implementation, and the fee schedule for dental services under the Texas Health Steps Program may be amended accordingly. Changes in the proposed CIDC dental fee schedule will be considered after the program reviews CDT-2 and any changes in the Texas Health Steps fees. The comments were received from the Texas Pharmacy Association, the Coalition for Nurses in Advanced Practice, the Visiting Nurse Association, the Texas Health Steps Operations Director, and the CIDC Operations Director. Commenters both opposed and supported individual sections and offered suggestions regarding changes, but were neither for nor against the sections in their entirety. The Children with Special Health Care Needs Advisory Committee met on November 1, 1996, and voted to support the rules as proposed. The rules are adopted under Health and Safety Code (HSC) sec.35.005, which requires the Board of Health (board) to adopt rules to define eligibility for program services; HSC sec.35.009, which allows the board to adopt reasonable procedures and standards for the determination of fees and charges for program services; and HSC sec.12.001(b), which provides the board with the authority to adopt rules for the performance of every duty imposed by law on the board, the department, and the commissioner of health. sec.38.13.Payment of Services. The Chronically Ill and Disabled Children's Services (CIDC) Program reimburses for covered services for CIDC Program eligible clients. Payment may be made only after the delivery of the service. The client or client's family must not be billed for the service or be required to make a preadmission or pretreatment payment or deposit. Providers and facilities must agree to accept established fees as payment in full. The program may negotiate reimbursement alternatives to reduce costs through requests for proposals, contract purchases, and/or incentive programs. (1) (No change.) (2) Claims with health insurance coverage or Medicaid. Any health insurance that provides coverage to the client must be utilized before the CIDC Program can pay for services. Providers must file a claim with health insurance or Medicaid prior to submitting any claim to the CIDC Program for payment. Claims with health insurance must be submitted to the CIDC Program within 90 days of the date of disposition by the other third party resource. (A)-(C) (No change.) (D) Copayments and deductibles. If the client has other third party coverage, the CIDC Program may pay a deductible or copayment for the client as long as the deductible and/or copayment does not exceed the CIDC Program's fee schedule in use at the time of service, and conforms with current CIDC Program policies regarding third party resources, deductible, and copayments. (3) CIDC Program fee schedules. The CIDC Program shall reimburse claims for covered medical, dental, and other services according to the following fee schedules and/or methodologies. (A) The CIDC Program central office shall process claims as follows: (i) meals, lodging, and transportation: (I) meals - the billed amount, up to $15.00 per person per day. (II) lodging: (-a-) hotel - the billed amount, up to $40.00 per night plus all applicable hotel occupancy taxes; and (-b-) Ronald McDonald House - the billed amount, up to $15.00 per night; and (III) transportation: (-a-) mileage - $ .15 per mile, according to the Texas State Mileage Guide; (-b-) air fare - the ticket price reflecting the state discount if ordered by CIDC, or the billed amount if CIDC had no opportunity to order/mail; (-c-) cab fare - the billed amount; and (-d-) ambulance service - the billed amount, up to the maximum allowed by Medicaid (according to the Health Care Financing Administration (HCFA) Common Procedure Coding System (HCPCS)); (ii) remains: (I) first call - $75.00; (II) embalming - $100.00; (III) container - $75.00; (IV) mileage billed by funeral home - $1.00; and per mile; and (V) air freight - the billed amount; (iii) administrative fee to social service organizations - five percent of the billed amount; (iv) nutritional supplements - the billed amount, up to $450.00 per month per client, according to the prices in the 1996 edition of the Drug Topics Red Book, published by Medical Economics Company, Inc., Montvale, New Jersey 07645-1742, on file with the CIDC Program; (v) medications (unless otherwise indicated) and the methodology for calculating vendor drug price (VDP)): (I) medications covered by Medicaid when billed by pharmacies - (the lower of the billed amount or the Vendor Drug Price (VDP) + $4.65) / 0.970; (II) medications covered by Medicaid when billed by hospitals - (the lower of the billed amount or the VDP + $2.28) / 0.970; (III) VDP shall be calculated as follows. (-a-) The pharmacist must provide the National Drug Code (NDC) for each drug dispensed. The pharmacist should also state whether the Wholesale Estimated Acquisition Cost (WEAC) or the Direct Estimated Acquisition Cost (DEAC) pricing methodology applies. If the pharmacist indicates neither WEAC nor DEAC on the claim, the CIDC Program shall pay the DEAC price, if available. If no current DEAC price is listed, the CIDC Program shall pay the WEAC price. (-b-) If a licensed practitioner's prescription is attached for a brand name drug for which a Maximum Allowable Cost (MAC) has been established, CIDC will pay the full price of the drug. If no prescription is attached, CIDC will pay the MAC price. (-c-) If the NDC indicates that no MAC has been assigned to a brand name drug, the CIDC Program shall pay the full price of the drug. (-d-) If the NDC indicates that the medication is a generic drug, the CIDC Program shall pay the full generic price whether or not a MAC has been assigned. (-e-) The CIDC Program shall multiply the NDC reimbursement amount for the acquisition method utilized by the pharmacist on the date the medication was dispensed by the quantity dispensed, and then shall add the dispensing fee; (IV) Hemophilia blood products - the lower of either the billed price or the United States Public Health Service (USPHS) price in effect on the date of service plus a dispensing fee of $0.04 per unit of factor. This subclause shall become effective March 1, 1997. (vi) supplies: (I) IV (infusion) - the billed amount, up to the maximum fee allowable by HCPCS; and (II) other expendable medical supplies; (-a-) the billed amount, up to the maximum fee allowable by HCPCS. This item shall become effective February 1, 1997; and (-b-) a monthly limit of $150.00 per client per supply need, and a total monthly reimbursement limit of $250.00 for each client with multiple supply needs; (vii) durable medical equipment: (I) non-customized - the lower of the billed amount or the maximum fee allowable by HCPCS; (II) customized; (-a-) customized, non-powered equipment - the billed amount, up to the Manufacturer's Suggested Retail Price (MSRP) less 18%; (-b-) power wheelchairs - the billed amount, up to the MSRP less 15%; and (-c-) other - when no MSRP has been published, the billed amount, up to the dealer's cost + 25%; and (III) orthotics and prosthetic - the billed amount, up to the maximum fee allowed by HCPCS; (viii) total parenteral nutrition hyperalimentation (including equipment, supplies and related services) - the billed amount, up to $145.00 per day; (ix) home health care (skilled nursing services through a CIDC-approved home health agency) - up to a maximum of 80 hours per year per client; (I) services provided by a registered nurse (RN) - the billed amount, up to a maximum of $50.00 per hour; and (II) services provided by a licensed vocational nurse (LVN) - the billed amount, up to a maximum of $40.00 per hour; (x) outpatient physical therapy, occupational therapy, and speech-language pathology: (I) services provided by therapists other than physicians - the billed amount, up to a maximum of $40.00 per hour, with a maximum of one hour per type of therapy per client per day. Bills may be paid for service increments of 15 or 30 minutes; and (II) services provided by physicians - the billed amount, up to the maximum fee allowable by HCPCS; (xi) seating clinics - the billed amount, up to a maximum global fee of $200.00; (xii) Insurance Premium Payment Assistance (IPPA) Program - the lowest premium for the plan which covers the child, if available, and if cost-effective. (B) The National Heritage Insurance Company (NHIC) shall process claims as follows: (i) hospital claims - reimbursed at 80% of the rate authorized by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which is equivalent to the hospital's Medicaid interim rate. Reimbursement is limited to 60 inpatient days per calendar year; (ii) inpatient rehabilitation claims - reimbursed at 80% of TEFRA rates. Reimbursement is limited to 90 inpatient days per calendar year; (iii) physician charges - the billed amount, up to the maximum fee allowable under Texas Medicaid reimbursement methodology (sec.29.1104 of this title relating to Texas Medicaid Reimbursement Methodology (TMRM)); (iv) freestanding surgical centers - the amount billed, up to the maximum fee allowable according to the Ambulatory Surgical Code Groupings payment schedule approved by HCFA; (v) hospital ambulatory surgical centers - reimbursed at 80% of the rate authorized by the (TEFRA), which is equivalent to the hospital's Medicaid interim rate; (vi) independent laboratory - the least of the following: (I) the maximum fee authorized by the state fee schedule; (II) the maximum fee authorized by the national fee schedule; or (III) the amount billed; and (vii) radiology services - the billed amount, up to the maximum fee allowable under Texas Medicaid reimbursement methodology set out in sec.29.1104 of this title. (C) The CIDC Program shall reimburse dental claims in accordance with the following Dental Fee Schedule. FIGURE 1. 25 TAC, sec.38.13(3)(C), 8 pages (4)-(5) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 27, 1996. TRD-9617352 Susan K. Steeg General Counsel Texas Department of Health Effective date: December 23, 1996 Proposal publication date: August 13, 1996 For further information, please call: (512) 458-7236 TITLE 28. INSURANCE PART I. Texas Department of Insurance CHAPTER 1.General Administration SUBCHAPTER AA.Employee Training 28 TAC sec.sec.1.2701 - 1.2703 The Commissioner of Insurance adopts new sec.sec.1.2701--1.2703, relating to training for employees of the Texas Department of Insurance without changes to the proposed text as published in the October 15, 1996, Texas Register (21 TexReg 10164). The new sections are necessary to codify policies and procedures currently implemented and administered by the department to provide for an adequately trained, capable and qualified workforce to provide responsive regulatory and consumer services in the performance of insurance regulation duties. The expected public benefit derived from enforcement and administration of the sections will be a department workforce which is effectively prepared for technological and legal developments; which can provide necessary services more effectively; and which will contribute to the proficiency of the department to deliver the level of regulatory services expected of it under Texas law. Section 1.2701 addresses general overview provisions for employee training. Section 1.2702 sets out the specific details of the employee training program for the department, including the three components of that program: agency- sponsored training, seminars and conferences, and tuition reimbursement provisions. Section 1.2703 discloses that the opportunity and approval to participate in a training program has no impact on an employee's at-will status. No comments were received on the sections as proposed and published. The new sections are adopted under the Insurance Code, Article 1.03A and the Government Code, sec.656.048. The Insurance Code, Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The Government Code, sec.656.048 provides for the adoption of rules by state agencies relating to training and education of agency employees. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 27, 1996. TRD-9617289 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: December 18, 1996 Proposal publication date: October 15, 1996 For further information, please call: (512) 463-6327 TITLE 30. ENVIRONMENTAL QUALITY PART I. Texas Natural Resource Conservation Commission CHAPTER 238. Water Well Drillers Rules The Texas Natural Resource Conservation Commission (TNRCC or commission) adopts new sec.sec.238.2, 238.31, 238.32, 238.43-238.46, 238.49, 238.50 and 238.61, concerning well drillers and water well pump installers, with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6207). Sections 238.1, 238.41, 238.42, 238.47, 238.48, 238.51, 238.60, 238.70, and 238.80-238.83 are adopted without changes and will not be republished. The new Chapter 238 contains essentially the same requirements as Chapter 338 with modifications as stated below. Chapter 338 is being repealed in concurrent rulemaking. EXPLANATION OF ADOPTED RULES The purpose of this repeal and new chapter is to provide flexibility to owners of smaller lots in locating wells and septic systems; achieve consistency in the numbering system for rules concerned primarily with the protection of water quality; and to update this chapter to allow the use of new and proven technology for well drilling, pump installation, and well plugging without requiring owners/operators to obtain a variance from the current rule requirements. The requirements of sec.sec.338.91-338.99 have not been adopted into the new Chapter 238 as they are redundant sections which are duplicated in this title. TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated, sec.2007.043. The following is a summary of that assessment. The specific purpose of these rules is to improve protection of the state's groundwater resources by establishing levels of quality. The rules will substantially advance this specific purpose by clarifying or amending definitions, procedures, and standards for well construction, operation, maintenance, and plugging. Promulgation and enforcement of these rules will not affect private real property. PUBLIC HEARING AND COMMENTERS A public hearing was held on July 24, 1996, in Lubbock. Eighteen commenters submitted testimony during the comment period which closed on August 5, 1996. Opposing the proposal were Sun Belt Engineers, Inc. (Sun Belt), Texas Cattle Feeders Association (Texas Cattle), Irion County Conservation District (Irion), Springhills Water Management District (Springhills), Texas Utilities Services, Inc. (TUS), Almeda Water Well Service (Almeda), O'Day Drilling Company, Inc. (O'Day), South Plains Underground Water Conservation District (South Plains), High Plains Underground Water Conservation District Number 1 (High Plains), Texas Poultry Federation (Texas Poultry), Hi Plains Drilling, Inc. (Plains Drilling), and Jones and Carter, Inc. Consulting Engineers (J&C). Supporting the proposal with recommended changes were North Plains Groundwater Conservation District Number 2 (North Plains), Emerald Underground Water Conservation District of Crockett County (Emerald), Certainteed Corporation (Certainteed), San Antonio Water System (SAWS), and an individual. One individual supported the proposal without recommended changes. GENERAL COMMENTS Section 238.2. Definitions of Terms. Sun Belt recommended that language be added to the definition of "irrigation distribution system" that would include reservoirs filled from wells. They also commented that the definition of "recovery well' could include any well with concentrations of chemicals above established maximums and would include public supply wells with treatable concentrations. The commission has added the recommended language to the definition of "irrigation distribution system" to increase the flexibility of the rule. The definition of "recovery well" states that it is a well constructed primarily for the purpose of recovering and treating undesirable groundwater. The purpose of construction is the key point in the definition and consequently would not include wells constructed for public water supply. TUS stated that the use of the word mineral is not clear in the definition of "monitoring well" and recommended that language be added that excluded wells used in coal and lignite production from this definition. The commission has added the recommended language to clarify the definition. North Plains commented that during the last session of the Texas Legislature, Chapter 52 of the Texas Water Code was repealed and replaced with Chapters 35 and 36, and the term "underground water conservation district" was replaced with "groundwater conservation district". For consistency the commission should use the new term and reference in the definitions and elsewhere in the new Chapter 238. The commission has made the appropriate changes in the definition and throughout the rule. Section 238.31. State Well Reports, and Section 238.32. Reporting Undesirable Water or Constituents. Plains Drilling commented that the commission should allow the use of forms supplied by the local groundwater conservation district to report well plugging, alteration, and undesirable water in those areas under the jurisdiction of a groundwater conservation district. These forms could be used in place of the forms supplied by the executive director to prevent duplicate paperwork. The commission agrees with the comment and has added the appropriate language. TUS commented that the commission should clarify the term "undesirable water". For the purposes of this chapter, "undesirable water" is defined in sec.238.2, Definition of Terms. Springhills stated that the term "immediate" be clarified in sec.238.32(a) to allow for a reasonable time period in which to notify a landowner or person causing a well to be drilled that undesirable water had been encountered. They also requested that the section allow notification of the owners agent for cases where the landowner may not be in the area where the well is drilled. The commission has added language to this section which will allow 24-hour notification to the landowner, the person causing the well to be drilled, or their agent. Section 238.42. Standards of Completion for Public Water System Wells. Sun Belt requested that the commission clarify the application of Subchapter C: Well Drilling, Completion, Capping, and Plugging. Specifically, they wanted confirmation on which portions of Subchapter C apply to public water supply wells. O'Day commented that landowners should be solely responsible for the private or public use of a well on their property, not the driller. It is only sec.238.42, Standards of Completion for Public Water System Wells, that applies to wells drilled for public use. The remainder of Subchapter C applies to private wells. Landowners do retain responsibility for the use of wells on their property and bear the consequences if a well used for public water supply does not meet public supply standards. Because certain actions are required of well drillers when completing public supply wells, they must "to the best of their ability" determine how a well is to be used. The term "to the best of their ability" recognizes that certain facts cannot be known or may change without the knowledge of the driller and limits the liability of the driller. Section 238.43. Location of New Wells, and Section 238.44. Standards of Completions for Wells. The majority of comments on this proposal concerned the location of wells in relation to property line and potential sources of contamination. Irion commented that well setback should not be a part of this rule as setback from a property line is not a water quality issue, and the stated purpose of the rule was to achieve consistency in the rule numbering system. Irion also disagreed with the proposal to reduce the horizontal setback of wells from 150 feet to 100 feet for reasons of possible contamination. They would prefer a setback of 150 feet from sources of potential contamination without reference to property line. Texas Cattle commented that the setback of 100 feet as proposed is inconsistent with 30 TAC 321.193(7) which deals with concentrated animal feeding operations (CAFO). Sun Belt and J&C stated that a setback of 100 feet from property lines is unnecessary as long as the sanitary easement from potential sources of contamination is maintained. They believe that this will require lots larger than necessary in rural subdivisions. South Plains, North Plains, and Plains Drilling commented that this setback could make drilling on some properties impossible due to the size of the lot and could constitute a taking of property if no exception is available. Plains Drilling also commented that setting a well back 100 feet from a property line would make the well head an obstruction to agriculture. South Plains commented that referencing well setback from property lines could lead to lawsuits in cases where property lines are in dispute. The proposal allowed the setback of wells from property lines to be reduced to 50 feet provided that the well was cemented under pressure to a depth of 100 feet below the surface. Wells located 100 feet or more from a property line only needs to be cemented to the normal depth of 10 feet below the surface. Plains Drilling recommended that 10 feet of additional concrete or bentonite casing seal be added for every 10 feet under 100 feet a well is located from the property line. O'Day and Almeda stated that the setback requirement should be modified to allow the construction of a septic line or tank within 50 feet of a well cased to a depth of 100 feet O'Day also recommended the setback of wells be reduced from 50 feet to 20 feet in instances where the setback is from sewage collection lines that are capable of holding pressure. Texas Poultry commented that there should be no minimum setback for wells from a dry litter poultry farming facility. With this adoption, the commission is seeking to provide landowners the greatest possible use of their land while ensuring that wells remain free of contamination. The commission maintains that the setback of private wells from septic drain fields can be reduced from 150 feet to 100 feet with minimal risk of contamination provided the well is completed to standards by filling the annular space to a distance of 10 feet below the surface with cement or bentonite. This setback is consistent with proposed standards in TNRCC rules for on-site sewage treatment systems. The commission believes this reduction in setback distances is justified. Septic systems will be subject to a site evaluation to determine the ability of the installation to purify wastewater. The commission is also reducing the setback of private wells from dry litter poultry facilities due to the small risk of contamination from these facilities. The best protection against well contamination is sealing the well by pressure injected cement or bentonite. The commission is adopting language which will allow the horizontal setback from all potential sources of contamination to be reduced to 50 feet, provided the well is sealed to a depth of 100 feet below the surface. For wells less than 100 feet deep the sealing material shall be placed to the top of the producing layer. The commission believes that requiring sealing to this depth will provide ample protection against contamination and eliminate confusion in determining the depth a well must be sealed. The commission also believes it is important to retain the minimum horizontal setback from potential sources of contamination of 50 feet in order to provide ample protection against well contamination. The adoption of these requirements should also provide landowners reasonable flexibility in the use of their land, especially on smaller lots. These requirements will also be consistent with existing TNRCC regulations. The commission agrees with the statements of Irion, Sun Belt, and J&C that horizontal setback from a property line is not, by itself, a water quality issue. However, there is potential for conflicting uses on adjacent properties that could bring a well within 50 feet of a contamination source if no property line setback was observed. To address these potential conflicts and still allow maximum reasonable use of the land by a property owner, the commission has added language to this proposal that will allow a well to be located a minimum distance of 50 feet from any property line if the well is sealed to the minimum requirement of 10 feet below the surface, and as close as 10 feet to a property line, provided the well is sealed to depth of 100 feet and is located at least 50 feet from a potential source of contamination on an adjacent property. The commission does recognize that property lines may be in dispute. This type of dispute is not the subject of this rule and cannot be addressed here. High Plains and South Plains commented that the power to regulate well spacing and pumpage is given to ground water conservation districts in Texas Water Code sec.36.116. Texas Water Code sec.36.116 does allow ground water conservation districts to make rules on well spacing and pumpage, but the power to regulate spacing is not exclusive to the districts. The state retains that power. This adoption does not address pumpage. Springhills stated that the requirement to inject cement under pressure into the well annular space was not necessary and this provision could be removed to reduce costs. They also commented that the requirement to extend a well casing 24 inches above a known flood prone area or level would make servicing the well difficult, may not be higher than flood levels, and would make the casing more vulnerable to damage from flood debris. Sun Belt suggested that the well be placed in a 6 feet square foundation that extends 2 feet above known flood level with the well casing another 18 inches above the foundation. Almeda and O'Day suggested that the requirements of sec.238.43(d) be applied to flood ways with moving water instead of flood prone areas. The commission agrees that the requirement to cement under pressure be retained as this method results in a better seal of the well casing. However, the commission also agrees that extending a well case 24 inches above a known flood level could result in an impractical structure. The required extension of the well casing has been changed to 36 inches above ground level. The requirement for a watertight sanitary well seal is retained. The commission believes that the suggestion of Sun Belt could also result in an aboveground well structure that is difficult to service. The intent of the requirements of sec.238.43(d) is to prevent contamination of a well by floodwater or debris. The commission believes that this could occur in flooded areas whether or not water is flowing or just rising with little horizontal movement and chooses to apply these requirements in any flood prone area. Springhills commented that sec.238.44(2)(D) is unclear as to its application. They also recommended that the diameter of the steel sleeve required in sec.238.44(3)(A) be reduced from two inches greater to one inch greater than the plastic well casing. Irion suggested reducing the extension of the well case from 16 inches above ground surface to 12 inches. North Plains commented that it is necessary to clarify in sec.238.44(2) where polyvinyl chloride (PVC) or steel casing sleeves may be used. Sun Belt commented that the concrete slab supporting wells with plastic casing be expanded to 6 feet square and 6 inches thick. The commission has added the term "temporary monitoring well" to sec.238.44(2)(D) to clarify its application. The commission will retain the requirement that the steel sleeve be two inches greater diameter than the well casing as this will make a stronger well head once the annular space is cemented. The extension of the well case above the ground surface has been reduced from 16 inches to 12 inches to aid in well servicing and to enhance utility. The commission has added language to sec.238.44(2) to clarify the use of PVC or steel sleeves. The commission believes that the dimensions of the concrete support slab as suggested by Sun Belt would be an unnecessary expense and the proposed dimensions of the concrete support in sec.238.44(2)(A) are being retained. Certainteed recommended PVC screens installed in water wells be factory- fabricated with machined slots of suitable width to the surrounding embedment material. This suggestion would increase the regulatory requirements of the proposal and cannot be considered at this time. Emerald stated that the disinfection process would be inconvenient for drillers who have to travel long distances to return to well sites after allowing disinfected water to rest in the well casing for the required 12 hours. Irion suggested placing the sentence allowing the landowner to waive disinfection in a more prominent place in the regulation. J&C commented that disinfection procedures should be in accordance with American Water Works and the United States Environmental Protection Agency (EPA) standards. The disinfection procedures described in this rule are accepted industry practice and the commission believes it is necessary to retain them as written. However, sec.238.44(8) and (9) have been modified to make the option for waiver of disinfection by the landowner more prominent in the regulation. The practices spelled out in the regulation are accepted procedures by American Water Works and EPA. Section 238.45, Standards of Completion for Water Wells Encountering Undesirable Water or Constituents. Sun Belt stated that requiring well casing 25 feet below an undesirable water zone could shut off a good water zone where the zones are separated by an impervious layer less than 25 feet thick. The commission has removed the 25 feet requirement. The regulation retains language that requires drillers to cement to a depth adequate to protect groundwater. This will allow the depth to be determined on a case-by-case basis. Section 238.46, Standards for Wells Producing Undesirable Water or Constituents. Sun Belt commented that subsection (a) does not clearly state how to case a well drilled for the purpose of producing undesirable water. The commission has modified the language of this subsection to allow casing depth on a case-by-case basis to prevent mixing of water zones. Section 238.49, Standards for Plugging Wells. Texas Cattle and High Plains commented that it is not necessary to plug a well all the way to the surface using cement or bentonite. Texas Cattle recommended a dry, clean, clay type soil hydrated at frequent intervals stating that bentonite was too expensive. High Plains noted the slow movement of water through the Ogallala formation and recommended clean top soil to 10 feet of the surface followed by cement to 2 feet of the surface, then top soil to allow convenient farming over the plugged well. SAWS recommended plugging the well using washed gravel to a point 3-5 feet from the bottom of the casing, followed by 8-10 feet of bentonite or cement and, once the plug has set, cement or bentonite to the surface. This section as proposed strengthens well plugging requirements, and the commission believes these requirements should be followed in most cases. There may be, however, situations where the stringency of these plugging requirements is not needed. The commission has added language in this section, sec.238.49, Standards For Plugging Wells, and sec.238.50, Standards for Plugging Wells That Penetrate Undesirable Water or Constituent Zones, that allows an alternative to the plugging requirements of the section following the approval of the executive director. Section 238.61, Chemical Injection, Chemigation, and Foreign Substance Systems. Sun Belt stated that sec.238.61(b)(6) is unclear in its use of the words "drain" and "pipe" and that the location of the check dam in sec.238.61(b)(6)(B) should be downstream of the low pressure drain. The commission has modified the language in the referenced section to clarify the configuration of the low pressure drain and the meaning of the word "drain" and "pipe". Sun Belt is correct that the check dam should be downstream of the low pressure drain, and the commission has made the necessary change. Texas Cattle commented that the check valve used to prevent backflow into the well should not be required to have a mechanical force greater than the closing device, and that this would be an unnecessary complication. The commission believes that the mechanism used to prevent backflow of chemicals into the well is important to prevent contamination. The commission also believes that such a device can be simple and reliable, such as a spring loaded device. For these reasons the commission chooses to adopt the section as proposed. An individual commented on housekeeping procedures observed around wells and well heads used for chemigation that are beyond the scope and control of this regulation. The same individual stated a preference for agricultural chemical application by tractor or aircraft STATUTORY AUTHORITY These amendments are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the TNRCC with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these amendments are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code, which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. SUBCHAPTER A. General Provisions 30 TAC sec.238.1, sec.238.2 These sections are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these sections are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code, which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. sec.238.2. Definitions of Terms. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Abandoned well - A well that has not been used for six consecutive months. A well is considered to be in use in the following cases: (A) a non-deteriorated well which contains the casing, pump, and pump column in good condition; or (B) a non-deteriorated well which has been capped. Annular space - The space between the casing and borehole wall. Atmospheric barrier - A section of cement placed from two feet below land surface to the land surface when using granular sodium bentonite as a casing sealant or plugging sealant in lieu of cement. Bentonite - A sodium hydrous aluminum silicate clay mineral (montmorillonite) commercially available in powdered, granular, or pellet form which is mixed with potable water and used for a variety of purposes including the stabilization of borehole walls during drilling, the control potential or existing high fluid pressures encountered during drilling below a water table, and to provide a seal in the annular space between the well casing and borehole wall. Bentonite grout - A fluid mixture of sodium bentonite and potable water mixed at manufacturer's specifications to a slurry consistency which can be pumped through a pipe directly into the annular space between the casing and the borehole wall. Its primary function is to seal the borehole in order to prevent the subsurface migration or communication of fluids. Capped well - A well that is closed or capped with a covering capable of preventing surface pollutants from entering the well and sustaining weight of at least 400 pounds and constructed in such a way that the covering cannot be easily removed by hand. Casing - A watertight pipe which is installed in an excavated or drilled hole, temporarily or permanently, to maintain the hole sidewalls against caving, advance the borehole, and in conjunction with cementing and/or bentonite grouting, to confine the ground waters to their respective zones of origin, and to prevent surface contaminant infiltration. (A) Plastic casing - shall be National Sanitation Foundation (NSF) or American Society of Testing Material (ASTM) F-480 minimum SDR 26 approved water well casing. (B) Steel Casing - shall be ASTM A-53 Grade B or better and have a minimum weight and thickness of American National Standards Institute (ANSI) schedule 10. (C) Monitoring wells may use other materials, such as fluoropolymer (Teflon), glass-fiber-reinforced epoxy, or various stainless steel alloys. Cement - A neat portland or construction cement mixture of not more than seven gallons of water per 94-pound sack of dry cement, or a cement slurry which contains cement along with bentonite, gypsum or other additives; the well driller will adhere to the manufacturer's recommended water content for the mix. Chemigation - A process whereby pesticides, fertilizers or other chemicals, or effluent from animal wastes aradded to irrigation water applied to land or crops, or both, through an irrigation distribution system. Completed Monitoring Well - A monitoring well which allows water from a single water-producing zone to enter the well bore, but isolates the single water- producing zone from the surface and from all other water-bearing zones by proper casing and/or cementing procedures. The single water-producing zone shall not include more than one continuous water-producing unit unless a qualified geologist or groundwater hydrologist has determined that all the units screened or sampled by the well are interconnected naturally. Completed to Produce Undesirable Water - A completed monitoring well which is designed to extract water from a zone which contains undesirable water. Completed Water Well - Sealing off access of undesirable water to the well bore by proper casing and/or cementing procedures. Constituents - Elements, ions, compounds, or substances which may cause the degradation of the soil or ground water. Council - - Texas Water Well Drillers Advisory Council. Dam - Any barrier across the bottom chord of the pipe which is of sufficient height to back water into the low-pressure drain outlet and prevent any flow (check valve seepage) back into the water supply. Deteriorated well - A well, the condition of which will cause, or is likely to cause, pollution of any water in the state, including groundwater. Dewatering well - An artificial excavation constructed to produce groundwater to cause a lowering of the water table or potentiometric surface. The term shall not include any dewatering well which is used for the production of, or to facilitate the production of, any mineral under a state regulatory program. Dewatering well driller - A person, including an owner, operator, contractor, or drilling supervisor, who engages in the drilling, boring, coring, or construction of a dewatering well, but does not include a person who drills, bores, cores or constructs a dewatering well under the direct supervision of a licensed dewatering well driller and who is not primarily responsible for the drilling operation. Driller - A water well driller, injection well driller, dewatering well driller, or monitoring well driller. Dry Litter Poultry Facility - Fully enclosed poultry operation where wood shavings or similar material is used as litter. Easy access — Access is not obstructed by other equipment and the fitting can be removed and replaced with a minimum of tools without risk of breakage of the attachment parts. Edwards Aquifer Authority - A governmental agency and body politic and corporate of the State of Texas. The authority has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the Edwards Aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the Edwards Aquifer. Environmental soil borings - An artificial excavation constructed to measure or monitor the quality and quantity or movement of substances, elements, chemicals, or fluids beneath the surface of the ground. The term shall not include any well which is used in conjunction with the production of oil, gas, or any other minerals. Examination fee - The non-refundable fee required of each applicant each time that applicant takes a commission examination. Flapper - The clapper, closing, or checking device within the body of the check valve. Foreign substance - Includes recirculated tailwater and may include instances where open-ditch water is treated when a pump discharge pipe is submerged in the ditch. Freshwater - Water whose bacteriological, physical, and chemical properties are such that it is suitable and feasible for beneficial use. Granular sodium bentonite - Sized, coarse ground, untreated, sodium based bentonite (montmorillonite) which has the specific characteristic of swelling in freshwater. Groundwater Conservation District - Any district or authority created under Article III, Section 52, or Article XVI, Section 59 of the Constitution or under the provisions of Chapters 35 and 36, Texas Water Code that has the authority to regulate the spacing or production from water wells. Injection well - Includes: (A) an air conditioning return flow well used to return water used for heating or cooling in a heat pump to the aquifer that supplied the water; (B) a cooling water return flow well used to inject water previously used for cooling; (C) a drainage well used to drain surface fluid into a subsurface formation; (D) a recharge well used to replenish the water in an aquifer; (E) a saltwater intrusion barrier well used to inject water into a freshwater aquifer to prevent the intrusion of salt water into the freshwater; (F) a sand backfill well used to inject a mixture of water and sand, mill tailings, or other solids into subsurface mines; (G) a subsidence control well used to inject fluids into a non-oil or gas producing zone to reduce or eliminate subsidence associated with the overdraft of fresh water; and (H) a closed system geothermal well used to circulate water, other fluids, or gases through the earth as a heat source or heat sink. Installer- An individual who installs or repairs water well pumps and equipment for hire or compensation. This term excludes the following from testing and licensing: (A) A person who owns or is in control of property or the person's employee or a person not hired or compensated while acting on the person's behalf on the property the person owns or controls for the person's own use. (B) Pump manufacturers and sellers of new and used pumps and/or pump equipment including pump distributors and pump dealers who do not install pumps and/or pump equipment. Irrigation distribution system - A device or combination of devices having a hose, pipe. or other conduit which connects directly to any water well or reservoir connected to the well, through which water or a mixture of water and chemicals is drawn and applied to land. The term does not include any hand held hose sprayer or other similar device which is constructed so that an interruption in water flow automatically prevents any backflow to the water source. License fee - The fee to be paid by a successful applicant to become a licensed well driller and/or water well pump installer. Licensed driller - Any person who holds a license issued by the State of Texas pursuant to the provisions of Chapter 32 of the Texas Water Code. Licensed installer - A person who holds a license issued by the commission under Chapter 33 of the Texas Water Code. Monitoring well - An artificial excavation constructed to measure or monitor the quality and/or quantity or movement of substances, elements, chemicals, or fluids beneath the surface of the ground. Included within this definition are environmental soil borings, piezometer wells, observation wells, and recovery wells. The term shall not include any well which is used in conjunction with the production of oil, gas, coal, lignite, or any other minerals. Monitoring well driller - A person, including an owner, operator, contractor, or drilling supervisor, who engages in the drilling, boring, coring, or construction of a monitoring well. Mud - A relatively homogenous; viscous fluid produced by the suspension of clay- size particles in water. Person - An individual, firm, partnership, association, corporation, government, governmental subdivision, agency. or any other private legal entity. Piezometer- A device so constructed and sealed as to measure hydraulic head at a point in the subsurface. Piezometer well - A well of a temporary nature constructed to monitor well standards for the purpose of measuring water levels or used for the installation of piezometers resulting in the determination of locations and depths of permanent monitor wells. Plugging - An absolute sealing of the well bore. Pollution - The alteration of the physical, thermal, chemical, or biological quality of, or the contamination of, any water in the state that renders the water harmful, detrimental, or injurious to humans, animal life, vegetation, or property, or to public health, safety, or welfare, or impairs the usefulness or the public enjoyment of the water for any lawful or reasonable purpose. Public water system - A system supplying water to a number of connections or individuals, as defined by current rules and regulations of the Texas Natural Resource Conservation Commission, Chapter 290. Pump installation - The procedures employed in the placement, and preparation for operation, of equipment and materials used to obtain water from a well, including construction involved in establishing seals and safeguards as necessary to protect the water from contamination. The term includes repairs to an existing pump. Qualified Groundwater Scientist - A scientist or engineer who has received a baccalaureate or post-graduate degree in the natural sciences or engineering and has sufficient training and experience in ground water hydrology and related fields as may be demonstrated by state registration, professional certifications, or completion of accredited university programs that enable that individual to make sound professional judgements regarding ground water monitoring, contaminant fate and transport, and corrective action. Recovery Well - A well constructed for the purpose of recovering undesirable groundwater for treatment or removal of contamination. Renewal fee- The annual fee paid by a previously registered well driller, or pump installer. Sanitary well seal - A water tight device to maintain a junction between the casing and the pump column. Subsidence district - Any district or authority created under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution that has the authority to regulate the spacing of or production from water wells solely for the purpose of controlling subsidence caused by withdrawal of water from underground water reservoirs or their subdivisions. Undesirable water - Water that is injurious to human health and the environment or water that can cause pollution to land or the waters in the state. Water or waters in the state - Groundwater, percolating or otherwise, lakes, bays, ponds, impounding reservoirs, springs, rivers, streams, creeks, estuaries, marshes, inlets, canals, the Gulf of Mexico inside the territorial limits of the state, and all other bodies of surface water, natural or artificial, inland or coastal, fresh or salt, navigable or nonnavigable, and including the beds and banks of all watercourses and bodies of surface water, that are wholly or partially inside or bordering the state or inside the jurisdiction of the state. Water well - Any excavation constructed for the purpose of exploring for or producing groundwater. The term, however, shall not include any test or blast holes in quarries or mines, or any well or excavation for the purpose of exploring for, or producing oil, gas, or any other minerals unless the holes are used to produce groundwater. The term shall not include any injection water source well regulated by the Railroad Commission of Texas pursuant to the Natural Resources Code, sec.91.101. Water well driller - Any person (including an owner, operator, contractor, or drilling supervisor) who engages in the drilling, boring, coring, or construction of any water well in this state. The term, however, shall not include any person who drills, bores, cores, or constructs a water well on his or her own property for his or her own use or a person who assists in the construction of a water well under the direct supervision of a licensed driller and is not primarily responsible for the drilling operations. Water Well Drillers Advisory Council - An advisory council consisting of nine members appointed by the commissioners of the Texas Natural Resource Conservation Commission. Well - A water well, injection well, dewatering well, monitoring well, piezometer well, observation well, or recovery well. Well Report- A log recorded on forms prescribed by the commission, at the time of drilling showing the depth, thickness, character of the different strata penetrated, location of water-bearing strata, depth, size, and character of casing installed, together with any other data or information required by the commission. Each copy of a Well Report, other than a commission copy, shall include the name, mailing address, and telephone number of the commission. Well pumps and equipment - Equipment and materials used to obtain water from a well, including the seals and safeguards necessary to protect the water from contamination. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617319 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER B. State Well Reports and Reporting Undesirable Water 30 TAC sec.238.31, sec.238.32 These sections are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these sections are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code, which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. sec.238.31. State Well Reports. (a) Every licensed well driller who drills, deepens, or otherwise alters a well, within this state shall cause to be made and kept a legible and accurate State Well Report on forms supplied by the executive director. In areas under the jurisdiction of a local groundwater conservation district, the forms supplied by the district can be used instead. (b) Every licensed well driller shall deliver or transmit by certified mail the original of the State Well Report to the commission, and shall deliver or send by first-class mail a photocopy to the local groundwater conservation district and a copy to the owner or person for whom the well was drilled, within 60 days from the completion or cessation of drilling, deepening, or otherwise altering a well. (c) Every licensed well driller shall inform the owner or person having the well drilled, deepened, or otherwise altered that he or she may submit a written request both to the commission by certified mail and to the local groundwater conservation district in person or by first-class mail that the State Well Report be kept confidential and exempt from disclosure as a public record. sec.238.32. Reporting Undesirable Water or Constituents. (a) Each licensed well driller shall inform, within 24 hours, the landowner or person having a well drilled, deepened, or otherwise altered or their agent when undesirable water or constituents have been encountered. (b) The well driller shall submit to the executive director, to the local groundwater conservation district if required by the local authority, and to the landowner or person having the well drilled, deepened, or otherwise altered, on forms supplied by the executive director or by a local groundwater conservation district having jurisdiction, a statement signed by the well driller indicating that the landowner or person having the well drilled, deepened, or otherwise altered, has been informed that undesirable water or constituents have been encountered. (c) The statement indicated in subsection (b) of this section must be submitted within 30 days after encountering undesirable water or constituents. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617320 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER C. Well Drilling, Completion, Capping and Plugging 30 TAC sec.sec.238.41-238.51 These sections are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these sections are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. sec.238.43. Location of New Wells. (a) Water wells located within public well system sanitary easements must be constructed to public well standards. (b) A well shall be located a minimum horizontal distance of 50 feet from any water-tight sewage and liquid-waste collection facility, except in the case of monitoring, dewatering, piezometer, and recovery wells which may be located where necessity dictates. (c) Except as noted in sec.238.44(1) and sec.238.61 of this title, (relating to Standards of Completion for Wells and Chemical Injection, Chemigation and Foreign Substance Systems), a well shall be located a minimum horizontal distance of 150 feet from any concentrated sources of potential contamination such as, but not limited to, existing or proposed livestock or poultry yards, cemeteries, pesticide mixing/loading facilities, spray irrigation heads, and privies, except in the case of monitoring dewatering, piezometer, and recovery wells which may be located where necessity dictates. A well shall be located a minimum horizontal distance of 100 ft. from a septic system absorption field, a dry litter poultry facility and 50 feet from any property line provided the well is located at the minimum horizontal distance from the sources of potential contamination in this subsection. (d) A well shall be located at a site not generally subject to flooding; provided, however, that if a well must be placed in a flood prone area, it shall be completed with a watertight sanitary well seal and steel casing extending a minimum of 36 inches above ground level. sec.238.44. Standards of Completion for Wells. Wells shall be completed in accordance with the following specifications and in compliance with local groundwater conservation district or incorporated city ordinances: (1) The annular space to a minimum of ten feet shall be three inches larger in diameter than the casing and filled from ground level to a depth of not less than ten feet below the land surface or well head with cement slurry or eight feet solid column of granular sodium bentonite topped with a two feet cement atmospheric barrier, except in the case of monitoring, dewatering, piezometer, and recovery wells when the water to be monitored, recovered, or dewatered is located at a more shallow depth. In that situation, the cement slurry or bentonite column shall only extend down to the level immediately above the monitoring, recovery, or dewatering level. Unless the well is drilled within the Edwards Aquifer or is set back in reference to spray irrigation heads, the distances given for separation of wells from sources of potential contamination in sec.238.43 (c) of this title (relating to Location of New Wells) may be decreased to a minimum of 50 feet provided the annular space is three inches larger than the casing and the cement slurry or bentonite column is emplaced under pressure to a minimum depth of 100 feet to surface. For wells less than 100 feet deep, the cement slurry or bentonite column shall be placed to the top of the producing layer. A well cemented to 100 feet or to the top of the producing layer may be located no closer than ten feet from a property line provided it remains at least 50 feet from any of the potential sources of contamination listed in sec.238.43(c). In areas of shallow, unconfined groundwater aquifers, the cement or bentonite column need not be placed below the static water level. In areas of shallow, confined groundwater aquifers having artesian head, the cement or bentonite column need not be placed below the top of the water-bearing strata. (2) In all wells where plastic casing is used, except when a steel or polyvinyl chloride (PVC) sleeve or pitless adapter as described in paragraph (3) of this section, is used, a concrete slab or sealing block shall be placed above the cement slurry around the well at the ground surface. (A) The slab or block shall extend at least two feet from the well in all directions and have a minimum thickness of four inches and should be separated from the well casing by a plastic or mastic coating or sleeve to prevent bonding of the slab to the casing. (B) The surface of the slab shall be sloped to drain away from the well. (C) The top of the casing shall extend a minimum of 12 inches above the land surface except in the case of monitoring wells when it is impractical or unreasonable to extend the casing above the ground. Monitoring wells shall be placed in a waterproof vault the rim of which extends two inches above the ground surface and a sloping cement slurry shall be placed 18 inches around and two feet below the base of the vault between the casing and the wall of the borehole so as to prevent surface pollutants from entering the monitoring well. The well casing shall have a locking cap that will prevent pollutants from entering the well. The annular space of the monitoring well shall be sealed with an impervious bentonite or similar material from the top of the interval to be tested to the cement slurry below the vault of the monitoring well. (D) The well casing of a temporary monitoring well shall have a locking cap and the annular space shall be sealed 0 feet to 1 feet below ground level with an impervious bentonite or similar material; after 48 hours, the well must be completed or plugged in accordance with sec.238.44(2)(C) of this title (relating to Standards of Completion for Wells) and sec.238.48 of this title (relating to Well Plugging and Capping). (E) The annular space of a closed loop injection well used to circulate water or other fluids shall be backfilled to the total depth with impervious bentonite or similar material. (3) In wells where a steel or PVC sleeve is used: (A) The steel sleeve shall be a minimum of 3/16 inches in thickness and/or the plastic sleeve shall be a minimum of Schedule 80 sun resistant and 24 inches in length, and shall extend 12 inches into the cement, except when steel casing or a pitless adapter as described in paragraph (2) of this section is used. The casing shall extend a minimum of 12 inches above the land surface, and the steel sleeve shall be two inches larger in diameter than the plastic casing being used; or (B) A slab or block as described in paragraph (2)(A) of this section is required above the cement slurry except when a pitless adapter may be used. Pitless adapters may be used in such wells provided that: (i) the adapter is welded to the casing or fitted with another suitably effective seal; (ii) the annular space between the borehole and the casing is filled with cement to a depth not less than 20 feet below the adapter connection; and (iii) in lieu of cement as described in clause (ii) of this subparagraph, the annular space may be filled with a solid column of granular sodium bentonite to a depth of not less than 20 feet below the adapter connection. (4) All wells, especially those that are gravel packed, shall be completed so that aquifers or zones containing waters that differ in chemical quality are not allowed to commingle through the borehole-casing annulus or the gravel pack and cause quality degradation of any aquifer or zone. (5) The well casing shall be capped or completed in a manner that will prevent pollutants from entering the well. (6) Each licensed well driller drilling, deepening, or otherwise altering a well shall keep any drilling fluids, tailings, cuttings, or spoils contained in such a manner so as to prevent spillage onto adjacent property not under the jurisdiction or control of the well owner without the adjacent property owners written consent. (7) Each licensed well driller drilling, deepening, or otherwise altering a well shall prevent the spillage of any drilling fluids, tailings, cuttings, or spoils into any body of surface water. (8) Unless waived by written request from the landowner, a new, repaired, or reconditioned well or pump installation or repair on a well used to supply water for human consumption shall be properly disinfected. The well shall be properly disinfected with chlorine or other appropriate disinfecting agent under the circumstances. A disinfecting solution with a minimum concentration of 50 milligrams per liter (mg/l) (same as parts per million), shall be placed in the well as required by the American Water Works Association (AWWA), pursuant to ANST/AWWA C654-87 and the United States Environmental Protection Agency (EPA). (9) Unless waived in writing by the landowner, after performing an installation or repair, the licensed installer shall disinfect the well by: (A) treating the water in the well casing to provide an average disinfectant residual to the entire volume of water in the well casing of 50 mg/l. This may be accomplished by the addition of calcium hypochlorite tablets or sodium hypochlorite solution in the amounts shown in the attached Table 1 of ANSI/AWWA C654; (B) circulating, to the extent possible, the disinfected water in the well casing and pump column; and (C) pumping the well to remove disinfected water for a minimum of 15 minutes. (D) If calcium hypochlorite (granules or tablets) is used, it is suggested that the installer dribble the tablets of approximately five-gram (g) size down the casing vent and wait at least 30 minutes for the tablets to fall through the water and dissolve. If sodium hypochlorite (liquid solution) is used, care should be taken that the solution reaches all parts of the well. It is suggested that a tube be used to pipe the solution through the well-casing vent so that it reaches the bottom of the well. The tube may then be withdrawn as the sodium hypochlorite solution is pumped through the tube. After the disinfectant has been applied, the installer should surge the well at least three times to improve the mixing and to induce contact of disinfected water with the adjacent aquifer. The installer should then allow the disinfected water to rest in the casing for at least twelve hours, but for not more than twenty-four hours. Where possible, the installer should pump the well for a minimum of 15 minutes after completing the disinfection procedures set forth above until a zero disinfectant residual is obtained. In wells where bacteriological contamination is suspected, the installer should inform the well or property owner that bacteriological testing may be necessary or desirable. sec.238.45. Standards of Completion for Water Wells Encountering Undesirable Water or Constituents. (a) If a water well driller encounters undesirable water or constituents and the well is not plugged or made into a completed monitoring well, the licensed well driller shall see that the well drilled, deepened, or otherwise altered is forthwith completed in accordance with the following: (1) When undesirable water or constituents are encountered in a water well, the undesirable water or constituents shall be sealed off and confined to the zone(s) of origin. (2) When undesirable water or constituents are encountered in a zone overlying fresh water, the driller shall case the water well from an adequate depth below the undesirable water or constituent zone to the land surface to ensure the protection of water quality. (3) The annular space between the casing and the wall of the borehole shall be cemented an adequate depth below the undesirable water or constituent zone to the land surface to ensure the protection of groundwater. (4) When undesirable water or constituents are encountered in a zone underlying a fresh water zone, the part of the wellbore opposite the undesirable water or constituent zone shall be filled with cement to a height that will prevent the entrance of the undesirable water or constituents into the water well. (b) The person who performs the well completion operation on a water well shall, within 30 days after completing the well, submit a well completion report to the executive director on forms supplied by the executive director and a copy of the report to the local groundwater conservation district. sec.238.46. Standards for Wells Producing Undesirable Water or Constituents. (a) Wells completed to produce undesirable water or constituents shall be cased to prevent the mixing of water or consitutent zones. (b) The annular space between the casing and the wall of the borehole shall be cemented to the land surface. (c) Wells producing undesirable water or constituents shall be completed in such a manner that will not allow undesirable fluids to flow onto the land surface except when appropriate state authorization is obtained. sec.238.49. Standards for Plugging Wells. (a) If a well that does not contain any undesirable water or constituent zones is abandoned and deteriorating, all removable casing shall be removed from the well and the entire well pressure filled via a trimie pipe with cement from bottom up to the land surface. (b) In lieu of the procedure in subsection (a) of this section, the well shall be pressure filled via a trimie tube with a bentonite grout (ten pounds per gallon mud or more with a marsh funnel viscosity of 50 seconds or equivalent) followed by a cement plug extending from land surface to a depth of not less than ten feet, or if the well to be plugged has 100 feet or less of standing water the entire well may be filled with a solid column of 3/8 inch or larger granular sodium bentonite hydrated at frequent intervals while strictly adhering to the manufacturers recommended rate and method of application. If a bentonite grout is used, the entire well from not less than two feet below land surface may be filled with the bentonite grout. The top two feet above any bentonite grout or granular sodium bentonite shall be filled with cement as an atmospheric barrier. (c) Drillers may petition the executive director in writing for an alternative method of plugging a well. The petition should state in detail the alternative method proposed and all conditions applicable to the well that would make the alternative method preferable to those methods stated in subsection (a) and (b) of this section. sec.238.50. Standards for Plugging Wells That Penetrate Undesirable Water or Constituent Zones. (a) If the use of a well that penetrates undesirable water or constituents is to be permanently discontinued, all removable casing shall be removed from the well and the entire well pressure filled with cement via a trimie tube from the bottom up to the land surface. (b) In lieu of the procedure in subsection (a) of this section, either the zone(s) contributing undesirable water or constituents, or the fresh water zone(s) shall be isolated with cement plugs and the remainder of the wellbore filled with bentonite grout (ten pounds per gallon mud or more with a marsh funnel viscosity of 50 seconds or equivalent) to form a base for a cement plug extending from a depth of not less than two feet to the land surface, or if the section(s) of well bore to be filled with bentonite has 100 feet or less of standing water the section(s) may be filled with a solid column of 3/8 inch or larger granular sodium bentonite hydrated at frequent intervals while strictly adhering to the manufacturers recommended rate and method of application. If a bentonite grout is used, it should be set sufficiently to support the two-foot thick cement plug. The top two feet above any bentonite grout or granular sodium bentonite shall be filled with cement as an atmospheric barrier. (c) Drillers may petition the executive director in writing for an alternative method of plugging a well. The petition should state in detail the alternative method proposed and all conditions applicable to the well that would make the alternative method preferable to those methods stated in subsections (a) and (b) of this section. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617321 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER D. Water Distribution and Delivery Systems and Chemical Injection, Chemigation and Foreign Substance System 30 TAC sec.238.60, sec.238.61 These sections are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these sections are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. sec.238.61. Chemical Injection, Chemigation, and Foreign Substance Systems. (a) The well driller or pump installer is to inform the land owner and well owner that the land owner and well owner are responsible for complying with the rules and regulations under the standards set forth in this section. (b) All irrigation distribution systems or water distribution systems into which any type of chemical (except disinfecting agents) or other foreign substances will be injected into the water pumped from water wells shall be equipped with an in-line, automatic quick-closing check valve capable of preventing pollution of the ground water. The required equipment shall be installed on all systems whenever a pump is installed or repaired or at the time of a chemical injection, chemigation or foreign substance unit is added to a water delivery system or not later than January 1, 2000, if the well has a chemical injection, chemigation, or foreign substance unit in the delivery system. The type of check valve installed shall meet the following specifications: (1) The body of the check valve shall be constructed of cast iron, stainless steel, cast aluminum, cast steel, or of a material and design that provides a sturdy integrity to the unit and is resistant to the foreign substance being injected. All materials shall be corrosion resistant or coated to prevent corrosion. The valve working pressure rating shall exceed the highest pressure to which the valve will be subjected. (2) The check valve shall contain a suitable automatic, quick-closing and tight- sealing mechanism designed to close at the moment water ceases to flow in the downstream or output direction. The device shall, by a mechanical force greater than the weight of the closing device, provide drip-tight closure against reverse flow. Hydraulic back pressure from the system does not satisfy this requirement. (3) The check valve construction should allow for easy access for internal and external inspection and maintenance. All internal parts shall be corrosion resistant. All moving parts shall be designed to operate without binding, distortion, or misalignment. (4) The check valve shall be installed in accordance with the manufacturer's specifications and maintained in a working condition during all times in which any fertilizer, pesticide, chemical, animal waste, or other foreign substance is injected into the water system. The check valve shall be installed between the pump discharge and the point of chemical injection or foreign substance injection. (5) A vacuum-relief device shall be installed between the pump discharge and the check valve in such a position and in such a manner that insects, animals, floodwater, or other pollutants cannot enter the well through the vacuum-relief device. The vacuum-relief device may be mounted on the inspection port as long as it does not interfere with the inspection of other anti-pollution devices. (6) An automatic low pressure drain shall also be installed between the pump discharge and the check valve in such a position and in such a manner that any fluid which may seep toward the well around the flapper will automatically flow out of the pump discharge pipe. The drain must discharge away from rather than flow into the water supply. The drain must not collect on the ground surface or seep into the soil around the well casing. (A) The drain shall be at least three-quarter inch in diameter and shall be located on the bottom of the horizontal pipe between the pump discharge and the check valve. (B) The drain must be flush with the inside surface of the bottom of the pipe unless special provisions, such as a dam made downstream of the drain, forces seepage to flow into the drain. (C) The outside opening of the drain shall be at least two inches above the grade. (7) An easily-accessible inspection port shall be located between the pump discharge and the check valve, and situated so the automatic low pressure drain can be observed through the port and the flapper can be physically manipulated. (A) The port shall allow for visual inspection to determine if leakage occurs past the flapper, seal, seat, and/or any other components of the checking device. (B) The port shall have a minimum four-inch diameter orifice or viewing area. For irrigation distribution systems with pipe lines too small to install a four- inch diameter inspection port, the check valve and other anti-pollution devices shall be mounted with quick disconnects, flange fittings, dresser couplings, or other fittings that allow for easy removal of these devices. (8) Any check valve not fully meeting the specifications set forth in this section may on request be considered for a variance as given in sec.339.6 of this title (relating to Variance of Rules) if demonstrated to the satisfaction of the commission. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617322 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER E. Pump Installation and Temporary Well Protection 30 TAC sec.238.70 These sections are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these sections are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617361 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 23, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER F. Miscellaneous Provisions 30 TAC sec.sec.238.80-283.83 These sections are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these sections are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617312 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 CHAPTER 338. Water Well Drillers Rules The Texas Natural Resource Conservation Commission (TNRCC or commission) adopts the repeal of sec.sec.338.1, 338.2, 338.31, 338.32, 338.41-338.50, 338.71- 338.74, and 338.91-338.99, concerning well drillers and water well pump installers, without changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6207). In concurrent rulemaking, the commission is adopting new Chapter 238, concerning well drillers and water well pump installers. EXPLANATION OF ADOPTED RULES The purpose of this repeal and new chapter is to achieve consistency in the numbering system for rules concerned primarily with the protection of water quality and to update this chapter to allow the use of new and proven technology for well drilling, pump installation, and well plugging without requiring owners/operators to obtain a variance from the current rule requirements. The requirements of sec.338.91-338.99 are not adopted into the new Chapter 238 as they are redundant sections which are duplicated in this title. TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated, sec.2007.043. The following is a summary of that Assessment. The specific purpose of these rules is to improve protection of the state's groundwater resources by establishing levels of quality. The rules will substantially advance this specific purpose by clarifying or amending definitions, procedures, and standards for well construction, operation, maintenance, and plugging. Promulgation and enforcement of these rules will not affect private real property. PUBLIC HEARING AND COMMENTS A public hearing was held July 24, 1996, in Lubbock. No comments were received on the proposed repeals. STATUTORY AUTHORITY These repeals are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these repeals are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. SUBCHAPTER A. General Provisions 30 TAC sec.338.1, sec.338.2 These repeals are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these repeals are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617313 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18. 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER B. Well Logs and Reporting Undesirable Water 30 TAC sec.338.31, sec.338.32 These repeals are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these repeals are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617314 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER C. Well Drilling, Completion, Capping and Plugging 30 TAC sec.sec.338.41-338.50 These repeals are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these repeals are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617311 Kevin McCalla Director, Legal Division Texas Natural Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER D. Miscellaneous Provisions 30 TAC sec.sec.338.71-338.74 These repeals are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, these repeals are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617317 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640 SUBCHAPTER E. Licensing Procedures 30 TAC sec.sec.338.91-338.99 The repeals are adopted under the Texas Water Code (Vernon 1992), sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out the powers and duties under the Texas Water Code and other laws of this state. Additionally, the repeals are adopted pursuant to sec.32.009 and sec.33.007 of the Texas Water Code which provides the TNRCC with the authority to regulate the drilling of certain wells and pump installers as well as adopt rules consistent with Chapters 32 and 33 of the Texas Water Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on November 25, 1996. TRD-9617318 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: December 18, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 239-4640