DAHS vs. DAHS-ISS: Two Licenses, Two Ways to Get Paid

Texas has quietly become a state with two kinds of day programs under one license chapter. As of September 1, 2026, HHSC's directories list 343 traditional Day Activity and Health Services facilities, 48 licensed for both DAHS and Individualized Skills and Socialization, and 736 licensed for ISS only — more ISS-only facilities than traditional DAHS. If you hold both licenses, or you are thinking about adding the second one, the first thing to understand is that the two services are paid in completely different ways. One of them you bill yourself. The other one you never bill at all.

We wrote this because our own customers who hold both licenses kept asking the same question — 'can we bill ISS the way we bill DAHS?' — and nobody could give them a clear answer. Here it is.

Two licenses, one chapter

Both services are licensed by HHSC Long-Term Care Regulation under 26 TAC Chapter 559. Traditional DAHS serves adults with a chronic medical condition and a functional limitation, mostly people 65 and older or with disabilities on Medicaid or Title XX. ISS is a different population and a different service: it replaced 'day habilitation' for people with intellectual and developmental disabilities in the HCS, TxHmL, and DBMD waiver programs. Day habilitation stopped being a billable service on March 1, 2023, and ISS took its place, delivered on-site at a licensed facility, off-site in the community, or in the person's own home.

The ISS license comes in two flavors — 'DAHS with ISS' and 'DAHS-ISS only' — under Subchapter H of the same chapter. Subchapter H was substantially amended this year: HHSC adopted heightened health-and-safety standards, new rights protections, and administrative penalties as an alternative to license revocation, effective February 9, 2026. If your ISS policies were written for the 2023 rules, they are due for a review.

How DAHS gets paid: you bill

The traditional service is the one we covered in depth in How Texas Medicaid Pays for DAHS. The short version: the billing unit is a half day, three to under six hours is one unit, six or more hours is two units, and the rate has been a flat $18.59 per unit since September 1, 2025. The facility builds its claim from its daily attendance record and submits it monthly — to TMHP for fee-for-service clients, or to the member's STAR+PLUS plan. The facility is the Medicaid provider. The money comes to you.

How ISS gets paid: someone else bills

ISS turns that around. An ISS facility is not a Medicaid provider for ISS. The HCS program rules say an ISS provider 'must be the program provider or a contractor of the program provider' (26 TAC §263.2011), and HHSC's guidance to HCS providers states it plainly: the HCS, TxHmL, or DBMD program provider is responsible for submitting billing claims for ISS, and payment to the ISS service provider is the responsibility of the program provider.

So the money moves in two steps. Medicaid pays the program provider — the HCS, TxHmL, or DBMD waiver agency that holds the contract for that individual's entire plan of care — at the state's hourly ISS rate, on a claim the program provider submits to TMHP. The program provider then pays your facility under a private subcontract. From the state's point of view there is no 'ISS claim' for a DAHS-ISS facility to file. There is an invoice to another company, backed by a service-delivery log that the state regulates in detail.

A facility can become an HCS or TxHmL program provider itself and bill TMHP directly for the individuals enrolled with it. But that means taking on responsibility for each person's whole plan — residential, nursing, everything — not just the day program. It is an option, not a shortcut.

What the state pays the program provider

ISS is priced by the hour, by the individual's Level of Need, and by setting. Per HHSC's HCS rate schedule effective September 1, 2025 (TxHmL pays the same amounts):

• On-site ISS: $7.82 an hour at LON 1, $8.78 at LON 5, $10.98 at LON 6 and LON 8, and $26.41 at LON 9.
• Off-site ISS: $10.73 an hour at LON 1 and LON 5, $16.80 at LON 6 and LON 8, and $26.41 at LON 9.
• Off-site ISS with enhanced staffing: $16.80 an hour at Level 1 (LON 1 and 5), and $24.90 at Level 2 (LON 1 through 8).
• DBMD pays a flat $26.91 an hour, on-site or off-site.

The unit is one hour, billed in quarter-hour fractions using HHSC's conversion table in the HCS Program Billing Requirements: 8 to 22 minutes is a quarter hour, 23 to 37 is a half, 38 to 52 is three quarters, 53 to 67 is a full hour, and fewer than 8 minutes is not billable. The caps are 6 hours a day, 30 hours a week, and 1,560 hours per plan year across all ISS types. On-site and off-site cannot overlap in the same service event, and transportation time between sites counts as off-site ISS, not as a separate charge. For whoever files the claim, the procedure code is H2014, with modifier KX for on-site and ER for off-site, under Service Group 21 for HCS, 22 for TxHmL, and 16 for DBMD.

What the program provider pays you

This is the part the state does not set. What your facility earns per hour is whatever your subcontract says. HHSC's default is that the ISS provider delivers the service at or below the direct-services portion of the applicable hourly rate unless the program provider agrees to pay more. On the LON 1 on-site rate, the direct-care components on the rate sheet come to about $3.58 of the $7.82 — which is why a subcontract that pays more than the default is worth negotiating for, and why the rate you agree to matters more than the rate the state publishes.

One thing that is not negotiable: nobody can charge the individual or the family anything on top. HHSC's Information Letter 2026-25, issued September 2, 2026, restates that under 26 TAC §52.103(f) the Medicaid rate is payment in full — no enrollment or application fees, no extra charges for off-site outings like event admission or craft workshops, no supplemental payments of any kind — and that this prohibition must be written into the agreement between the program provider and the ISS provider required by 26 TAC §52.115. Charging those costs to a client, family, or guardian puts both parties out of compliance and can be referred to the Office of Inspector General.

The log is the product

If you invoice rather than bill, the document that makes the program provider's claim payable is your service-delivery log — and that is what the state regulates. HHSC's model is Form 8615, revised June 2026. The instructions allow a provider-built tool instead, 'if it has all the required elements of Form 8615.' Those elements are:

• The individual's name and Level of Need, the ISS provider's name, address, and license number.
• For each service event, the date, the exact time in and time out, and the printed name and signature of the staff member who delivered it. A new form is required if more than two service events occur in a calendar day.
• For off-site events, the staffing ratio, the number of people in the group, and the name and address of every community location visited.
• Initials in at least one activity area — socialization, self-help, adaptive skills, implementation-plan skill development, or community integration — that justifies the time billed.
• Completion within 14 calendar days of the service.

The HCS Program Billing Requirements add the documentation standard behind that form: a specific description of what was done that ties to the person's implementation plan, no ditto marks, no photocopied entries, written by the person who delivered the service. Off-site staffing ratios under the HCS rules are 1:8 for LON 1 and 5, 1:2 for LON 6 and 8, and 1:1 for LON 9 or enhanced-staffing Level 2, and the ratio applies during transportation. On-site and off-site ISS are not Electronic Visit Verification services; only in-home ISS in the person's own home requires EVV.

Side by side

• Who is the Medicaid provider? DAHS: your facility. ISS: the HCS, TxHmL, or DBMD program provider.
• Who submits the claim? DAHS: you, to TMHP or the STAR+PLUS plan. ISS: the program provider, to TMHP.
• What you send. DAHS: a claim built from the attendance record. ISS: an invoice to the program provider, with the service log behind it.
• Unit and rate. DAHS: a half-day unit at $18.59. ISS: an hour, in quarter-hour fractions, at an LON-tiered rate the program provider receives — and a subcontract rate you negotiate.
• The record that gets audited. DAHS: the daily attendance record. ISS: the Form 8615 service-delivery log, within 14 days.
• Rules. DAHS: 26 TAC Chapter 559 and Chapter 211. ISS: 26 TAC Chapter 559 Subchapter H (amended February 9, 2026), plus the HCS, TxHmL, or DBMD program rules and billing requirements.

Where ElderSuite fits

For DAHS, this is home turf: ElderSuite submits Texas DAHS claims to TMHP directly, from the same attendance and transportation records the state audits.

For ISS, ElderSuite now does the other half of the job on Texas accounts — the log and the invoice, since there is no claim to file. Each HCS or TxHmL program provider you subcontract with is set up in the Claim Center under Manage ISS Program Providers with its contract number, and each Level of Need gets its own payment type marked ISS Program Provider. Staff record the day's exact pick-up and drop-off times as hourly attendance and complete the ISS Service Log — who delivered the service, the on-site or off-site setting, and the notes behind the time. When the month closes, the ISS Statement Wizard builds the statement to the program provider from those days in quarter-hour units, attaches a completed Form 8615 for each person and week, and flags any log that is incomplete or past the 14-day window so you decide what goes on the statement. Issued days are locked as Invoiced; a statement can be reprinted, marked paid, or voided later. The program provider gets what it needs to file its own H2014 claim, and you keep a record that matches the service. The full walkthrough is on the Texas DAHS-ISS billing software page. For the general workflow from attendance record to electronic claim, see ElderSuite's Medicaid billing guide.

Where to check

• HHSC's Individualized Skills and Socialization provider page (rules, FAQ, directories, quarterly webinars)
• 26 TAC Chapter 559, Subchapter H and the February 6, 2026 adoption notice
• The HCS Program Billing Requirements and the HCS rate schedule
• Form 8615 and Information Letter 2026-25