S.B. No. 630
AN ACT
relating to audits of providers in the medical assistance program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 32, Human Resources Code,
is amended by adding Section 32.070 to read as follows:
Sec. 32.070. AUDITS OF PROVIDERS. (a) In this section,
"provider" means an individual, firm, partnership, corporation,
agency, association, institution, or other entity that is or was
approved by the department to provide medical assistance under
contract or provider agreement with the department.
(b) The executive commissioner of the Health and Human
Services Commission shall adopt rules governing the audit of
providers in the medical assistance program.
(c) The rules must:
(1) provide that the agency conducting the audit must
notify the provider, and the provider's corporate headquarters, if
the provider is a pharmacy that is incorporated, of the impending
audit not later than the seventh day before the date the field audit
portion of the audit begins;
(2) limit the period covered by an audit to three
years;
(3) provide that the agency conducting the audit must
accommodate the provider's schedule to the greatest extent possible
when scheduling the field audit portion of the audit;
(4) require the agency conducting the audit to conduct
an entrance interview before beginning the field audit portion of
the audit;
(5) provide that each provider must be audited under
the same standards and parameters as other providers of the same
type;
(6) provide that the audit must be conducted in
accordance with generally accepted government auditing standards
issued by the Comptroller General of the United States or other
appropriate standards;
(7) require the agency conducting the audit to conduct
an exit interview at the close of the field audit portion of the
audit with the provider to review the agency's initial findings;
(8) provide that, at the exit interview, the agency
conducting the audit shall:
(A) allow the provider to:
(i) respond to questions by the agency;
(ii) comment, if the provider desires, on
the initial findings of the agency; and
(iii) correct a questioned cost by
providing additional supporting documentation that meets the
auditing standards required by Subdivision (6) if there is no
indication that the error or omission that resulted in the
questioned cost demonstrates intent to commit fraud; and
(B) provide to the provider a preliminary audit
report and a copy of any document used to support a proposed
adjustment to the provider's cost report;
(9) permit the provider to produce documentation to
address any exception found during an audit not later than the 10th
day after the date the field audit portion of the audit is
completed;
(10) provide that the agency conducting the audit
shall deliver a draft audit report to the provider not later than
the 60th day after the date the field audit portion of the audit is
completed;
(11) permit the provider to submit to the agency
conducting the audit a written management response to the draft
audit report or to appeal the findings in the draft audit report not
later than the 30th day after the date the draft audit report is
delivered to the provider;
(12) provide that the agency conducting the audit
shall deliver the final audit report to the provider not later than
the 180th day after the date the field audit portion of the audit is
completed or the date on which a final decision is issued on an
appeal made under Subdivision (13), whichever is later; and
(13) establish an ad hoc review panel, composed of
providers practicing or doing business in this state appointed by
the executive commissioner of the Health and Human Services
Commission, to administer an informal process through which:
(A) a provider may obtain an early review of an
audit report or an unfavorable audit finding without the need to
obtain legal counsel; and
(B) a recommendation to revise or dismiss an
unfavorable audit finding that is found to be unsubstantiated may
be made by the review panel to the agency, provided that the
recommendation is not binding on the agency.
(d) This section does not apply to a computerized audit
conducted using the Medicaid Fraud Detection Audit System or an
audit or investigation of fraud and abuse conducted by the Medicaid
fraud control unit of the office of the attorney general, the office
of the state auditor, the office of the inspector general, or the
Office of Inspector General in the United States Department of
Health and Human Services.
SECTION 2. Not later than January 1, 2006, the executive
commissioner of the Health and Human Services Commission shall
adopt rules required by Section 32.070, Human Resources Code, as
added by this Act.
SECTION 3. If before implementing any provision of this Act
a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 4. This Act takes effect September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 630 passed the Senate on
May 5, 2005, by the following vote: Yeas 31, Nays 0; and that the
Senate concurred in House amendment on May 27, 2005, by the
following vote: Yeas 29, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 630 passed the House, with
amendment, on May 25, 2005, by a non-record vote.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor