Enrolled Bill Summary

            House Bill 1743 amends provisions of the Human Resources Code, Government Code, Penal Code, and Code of Criminal Procedure relating to the investigation and prevention of fraud and abuse under Medicaid.

            The bill brings the statutes current with federal requirements by adding "abuse" to provisions related to fraud detection and prevention and establishes the punishment for certain violations as a state jail felony. The bill authorizes the Health and Human Services Commission (HHSC) to prescribe criteria under which certain people who commit certain violations are not prohibited from providing services under Medicaid and makes specific exceptions for generally accepted business practices. The Health and Human Services Commission is authorized to perform a prepayment review of a claim for reimbursement by a provider, to withhold payment while performing the review, and to impose a postpayment hold on future claims under certain circumstances. The Health and Human Services Commission is required to adopt rules to allow providers to seek an informal resolution of issues resulting in a postpayment hold and to require certain providers under Medicaid to file a surety bond with the commission.

            On receipt of a complaint of Medicaid fraud or abuse, the commission is required to conduct an integrity review to determine if a full investigation by the commission's office of investigations and enforcement is warranted. The bill sets out procedures for the integrity review and the actions required of the commission in the event a provider is suspected of fraud or abuse, including referral to the state's Medicaid fraud control unit, a hold on payment of claims for reimbursement without notice, and, on request of a provider, filing a request with the State Office of Administrative Hearings for an expedited hearing on the hold.

            House Bill 1743 requires third-party billing vendors to enter into a contract with HHSC authorizing the vendor to submit claims under Medicaid and specifies certain provisions to be contained in the contracts. On receipt of a claim by a third-party billing vendor, HHSC is required to send a notice to the provider referenced in the claim to verify the claim's accuracy.

            The Health and Human Services Commission and the attorney general's office are required to amend the memorandum of understanding between the two agencies relating to the referral of cases to the state's Medicaid fraud control unit, and the bill includes provisions relating to the jurisdiction of the attorney general to prosecute cases involving Medicaid fraud and abuse.

            House Bill 1743 increases the membership of the Medicaid and Public Assistance Fraud Oversight Task Force to include a representative of the Texas Department of Health. The bill takes effect September 1, 2003, except for provisions relating to third-party billing vendors which take effect January 1, 2004.