Chapter 11, Contract Monitoring

Revision 23-1, Effective Nov. 13, 2023

Contracts with service providers that provide independent living services under the Independent Living Services (ILS) Program are monitored per the HHS Procurement and Contract Management Handbook (CMH) published pursuant to Texas Government Code, Section 2261.256, on the Texas Comptroller of Public Accounts webpage.

Contract monitoring is the systematic review of a service provider’s records, business processes, deliverables, and activities to ensure compliance with the terms and conditions of the contract. The goal of contract monitoring is to protect the health and safety of people who receive services, to ensure delivery of quality goods and services, and to protect the financial interest of the state. Monitoring includes planned, ongoing, periodic, or unscheduled activities that cover financial, programmatic and administrative components.

The assigned contract manager is primarily responsible for oversight and monitoring of the contract, based on risk, and includes:

• a contract award approved budget and work plan;
• uniform terms and conditions;
• any special provisions or restrictions;
• deliverables and performance measures or targets; and
• billing or invoicing for costs with actual-to-budget trends.

The Independent Living Services Program and compliance staff will have roles and responsibilities for monitoring Independent Living Services Program contracts per the Health and Human Services System CMH. These responsibilities include monitoring and quality assurance requirements of the Independent Living Services Standards for Providers.

11.1 Monitoring Team

Revision 23-1, Effective Nov. 13, 2023

A monitoring team consists of representatives from HHSC staff. When a contractor is selected for an announced monitoring review, the lead monitor sends a letter announcing the review, providing information about the scope of the review, and instructions on how to prepare for the review.

11.1.1 Monitoring Review

Revision 23-1, Effective Nov. 13, 2023

The monitoring review typically consists of three parts:

• entrance conference;
• records review; and
• exit conference.

At the entrance conference, the lead monitor:

• introduces the monitoring team members;
• briefly explains the monitoring process, purpose and scope of the review;
• requests that the contractor assign a person who will be accessible to and work with the team; and
• ensures the team has an acceptable work area to use while conducting the review, if conducted at the service provider’s facility.

During the records review, the monitoring team:

• completes appropriate monitoring tools;
• reviews the contractor's files;
• compares information in the contractor's files with information in the HHSC files; and
• may conduct interviews or observations with people who receive services.

The exit conference is held at the conclusion of the review. At the exit conference, the lead monitor verbally provides the contractor with:

• preliminary review results;
• any anticipated recoupment amount;
• notice that HHSC will send the contractor a findings report, if applicable; and
• information on the time frames and process for the contractor's response and the importance of meeting deadlines.

11.1.2 Report of the Monitoring Results

Revision 23-1, Effective Nov. 13, 2023

For routine monitoring reviews, the lead monitor sends the service provider written notice of the results of the monitoring review through either a monitoring review closeout letter or a findings report, if instances of noncompliance were noted.

The findings report:

• includes findings of noncompliance with program or financial standards; and
• asks the service provider to either:
  • implement a corrective action plan; or
  • provide further documentation to help resolve the findings.

11.1.3 Corrective Action Plan

Revision 23-1, Effective Nov. 13, 2023

If HHSC has requested the service provider implement a corrective action plan, the contractor must, by the date requested in the report of findings:

• implement a corrective action plan, including financial restitution, if required; or
• rebut a finding and submit documentation that substantiates the rebuttal.

HHSC reviews the documentation of the implementation of the corrective action plan and may accept or recommend changes.

If the service provider does not submit an acceptable corrective action plan or make financial restitution when required, HHSC may take adverse action against the contractor, which can include contract termination.

11.1.4 Monitoring Closeout

Revision 23-1, Effective Nov. 13, 2023

If there are no findings, or when the monitoring team accepts the implemented corrective action plan, HHSC sends the contractor a letter to close the monitoring review.

Contract Noncompliance and Performance Deficiencies

HHSC may temporarily suspend a contractor from providing services for reasons such as:

• suspected fraud;
• suspected individual abuse;
• failure to meet contract specifications; or
• failure to perform per the terms and conditions of the contract.

Depending on the type and severity of the noncompliance, HHSC may require the contractor to take corrective action to return to compliance before the contractor is allowed to resume providing services.

HHSC may impose adverse actions in conjunction with, or instead of, requesting a corrective action plan. For example, HHSC may recoup overpayments from a service provider as part of a corrective action plan. Some situations may require HHSC to impose a more serious adverse action, such as contract termination and debarment, without allowing the service provider to take corrective action.

As described under Chapter 10 Reporting and Quality Assurance, the service providers that provide independent living services under the ILS Program are required to generate and provide performance monitoring data pursuant to Texas Human Resources Code, Section 117.080(d). The service provider will be required to submit contract performance data through methods established by HHSC. This includes periodic reporting of financial and performance data through standard reports or direct entry into an independent living data reporting system.

If a service provider also contracts with organizations or other persons to provide independent living services under the ILS Program, the service provider must establish and document a process for monitoring its contracts.

11.2 Allegations or Incidents of Abuse, Exploitation, or Neglect of People with Disabilities

Revision 23-1, Effective Nov. 13, 2023

Texas law requires that allegations or incidents of abuse, exploitation, or neglect of people with disabilities be immediately reported to the appropriate investigatory agency as shown in the table below, or, if taking place in other than a residential situation, the local law enforcement agency. If a licensed professional is involved, report to the appropriate professional licensure agency and the local law enforcement agency.

The service provider must develop written policies and procedures regarding the recognition and appropriate reporting of such allegations or incidents. These procedures must also require notification of the appropriate HHSC staff member within one working day. Procedures must also ensure cooperation with investigations conducted by the HHSC Ombudsman Office.

The appropriate investigating agency's toll-free number and the HHSC Ombudsman Office number 877-787-8999 or Relay Texas for people with a hearing or speech disability, 7-1-1 or 800-735-2989, must be posted in a location that is readily accessible to people and staff members.