BILL ANALYSIS
C.S.H.B. 2523
By: McDonald (West, R.)
Health and Human Services
5-24-95
Senate Committee Report (Substituted)
BACKGROUND
As Medicaid spending increases in Texas, the incidence of
fraudulent claims against the system have become greater. Local
offices of the attorney general have received complaints asserting
abuse of eligibility standards and invalid facility certification.
Medicaid fraud diverts funding from those who are truly eligible
for Medicaid services, and because tax contributions fund Medicaid
programs, taxpayers assume the resulting additional burden.
Currently, there are no Texas statutes that specifically address
the growing problem of Medicaid Fraud.
PURPOSE
As proposed, C.S.H.B. 2523 provides for the prevention of Medicaid
fraud; imposes civil penalties.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Title 2, Human Resources Code, by adding Chapter
36, as follows:
CHAPTER 36. MEDICAID FRAUD PREVENTION
Sec. 36.001. DEFINITIONS. Defines "claim," "documentary
material," "fiscal agent," "health care practitioner,"
"medicaid program," "medicaid recipient," "physician,"
"provider," "service," "signed," and "unlawful act."
Sec. 36.002. UNLAWFUL ACTS. Sets forth provisions under which
a person commits an unlawful act.
Sec. 36.003. INJUNCTIVE RELIEF. (a) Authorizes the attorney
general, if the attorney general has reason to believe that a
person is committing, has committed, or is about to commit an
unlawful act, to institute an action for an appropriate order
to restrain the person from committing or continuing to commit
the act.
(b) Requires an action under this section to be brought in
a district court of Travis County or of a county in which
any part of the unlawful act occurred, is occurring, or is
about to occur.
Sec. 36.004. CIVIL REMEDIES. (a) Sets forth provisions for
which a person who commits an unlawful act is liable to the
state.
(b) Sets forth consideration for the trier of fact, in
determining the amount of the civil penalty described by
Subsection (a)(3).
(c) Authorizes the trier of fact to assess a total of not
more than two times the value of a payment or benefit
described by Subsection (a)(1) if the trier of fact makes
certain findings.
(d) Requires an action under this section to be brought in
Travis County or in a county in which any part of the
unlawful act occurred.
(e) Authorizes the attorney general to bring an action for
civil remedies under this section together with a suit for
injunctive relief under Section 36.003; or institute an
action for civil remedies independently of an action for
injunctive relief.
Sec. 36.005. INVESTIGATION. (a) Sets forth provisions under
which the attorney general may take action under Subsection
(b).
(b) Sets forth authorized actions for the attorney general
in investigating an unlawful act.
Sec. 36.006. CIVIL INVESTIGATIVE DEMAND. (a) Requires an
investigative demand to contain certain information.
(b) Authorizes a civil investigative demand to require
disclosure of any documentary material that is discoverable
under the Texas Rules of Civil Procedure.
(c) Sets forth provisions by which service of an
investigative demand may be made.
(d) Requires documentary material demanded under this
section to be produced for inspection and copying during
normal business hours at the office of the attorney general
or as agreed by the person served and the attorney general.
(e) Prohibits the office of the attorney general from
producing for inspection or copying or otherwise disclosing
the contents of documentary material obtained under this
section to a person other than an authorized employee of the
attorney general without the consent of the person who
produced the documentary material, except as ordered by a
court for good cause shown. Requires the attorney general to
prescribe terms and conditions allowing the documentary
material to be available for inspection and copying by the
person who produced the material or by an authorized
representative of that person. Authorizes the attorney
general to use the documentary material or copies of it as
the attorney general determines necessary in the enforcement
of this chapter, including presentation before a court.
(f) Authorizes a person to file a petition to extend the
return date for the demand or to modify or set aside the
demand. Requires a petition under this section to be filed
in a district court of Travis County by a certain date.
(g) Requires a person on whom a demand has been served under
this section to comply with the terms of an investigative
demand.
(h) Provides that a person who has committed an unlawful act
in relation to the Medicaid program in this state has
submitted to the jurisdiction of this state and personal
service of an investigative demand under this section may be
made on the person outside of this state.
(i) Provides that this section does not limit the authority
of the attorney general to conduct investigations or to
access a person's documentary materials or other information
under another state or federal law, the Texas Rules of Civil
Procedure, or the Federal Rules of Civil Procedure.
(j) Authorizes the attorney general, if a person fails to
comply with an investigative demand, or if copying and
reproduction of the documentary material demanded cannot be
accomplished and the person refuses to surrender the
documentary material, to file in a district court of Travis
County a petition for an order to enforce the investigative
demand.
(k) Authorizes the court, if a petition is filed under
Subsection (j), to determine the matter presented and to
enter an order to implement this section.
(l) Provides that failure to comply with a final order
entered under Subsection (k) is punishable by contempt.
(m) Subjects a final order issued by a district court under
Subsection (k) to appeal to the supreme court.
Sec. 36.007. DOCUMENTARY MATERIAL IN POSSESSION OF STATE
AGENCY. (a) Requires a state agency to provide the attorney
general access to all documentary materials of persons and
Medicaid recipients under the Medicaid program to which that
agency has access. Provides that documentary material provided
under this subsection is provided to permit investigation of
an alleged unlawful act or for use or potential use in an
administrative or judicial proceeding.
(b) Sets forth conditions under which the office of the
attorney general is prohibited from disclosing the contents
of documentary material obtained under this section.
Sec. 36.008. IMMUNITY. Provides that a person is not civilly
or criminally liable for providing access to documentary
material under this chapter to certain authorized entities.
Sec. 36.009. SUSPENSION OR REVOCATION OF AGREEMENT;
PROFESSIONAL DISCIPLINE. (a) Authorizes the commissioner of
human services, the commissioner of public health, the
commissioner of mental health and mental retardation, the
executive director of the Department of Protective and
Regulatory Services, or the executive director of another
state health care regulatory agency to suspend or revoke: a
provider agreement between the department or agency and a
person found liable under Section 36.004; or a permit,
license, or certification granted by the department or agency
to a person found liable under Section 36.004.
(b) Subjects a person licensed by a state regulatory agency
who commits an unlawful act to professional discipline under
the applicable licensing law or rules adopted under that
law.
Sec. 36.010. APPLICATION OF OTHER LAW. Provides that the
application of a civil remedy under this chapter does not
preclude the application of another common law, statutory, or
regulatory remedy, except that a person may not be liable for
a civil remedy under this chapter and civil damages or a
penalty under Section 32.039 if the civil remedy and civil
damages or penalty are assessed for the same act.
Sec. 36.011. RECOVERY OF COSTS, FEES, AND EXPENSES. Authorizes
the attorney general to recover fees, expenses, and costs
incurred in obtaining injunctive relief or civil remedies or
in conducting investigations under this chapter.
Sec. 36.012. USE OF MONEY RECOVERED. Requires the legislature,
in appropriating money recovered under this chapter, to
consider the requirements of the attorney general and other
affected state agencies in investigating Medicaid fraud and
enforcing this chapter.
SECTION 2. Effective date: September 1, 1995.
SECTION 3. Emergency clause.