By Counts, Duncan H.B. No. 1487
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the investigation, prosecution, and punishment of the
1-3 offense of insurance fraud.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 7, Penal Code, is amended by adding Chapter
1-6 35 to read as follows:
1-7 CHAPTER 35. INSURANCE FRAUD
1-8 Sec. 35.01. DEFINITIONS. In this chapter:
1-9 (1) "Health care goods" means a tangible product,
1-10 device, medicine, or other object provided in conjunction with a
1-11 health care service.
1-12 (2) "Health care provider" means a person who renders
1-13 health care services or an agent or employee of an organization
1-14 that renders or provides a facility and means to render health care
1-15 services. The term includes a physician, surgeon, person who may
1-16 be selected by an insured or a beneficiary under Article 21.52,
1-17 Insurance Code, and person defined as a provider of health care
1-18 under Section 2.05(d)(1), Medical Practice Act (Article 4495b,
1-19 Vernon's Texas Civil Statutes).
1-20 (3) "Health care service" means a service that is
1-21 intended to improve or maintain the physical or mental condition of
1-22 an individual and that is rendered, directed, or supervised by a
1-23 health care provider.
2-1 (4) "Insurer" means a person who engages in the
2-2 business of insurance in this state, including:
2-3 (A) an insurer that is not authorized to do
2-4 business in this state;
2-5 (B) a health maintenance organization;
2-6 (C) a group hospital service corporation
2-7 regulated under Chapter 20, Insurance Code; and
2-8 (D) any person who self-insures and provides
2-9 health care benefits to the person's employees.
2-10 (5) "Statement" means an oral or written communication
2-11 or a record or documented representation of fact evidencing a loss,
2-12 injury, or expense. The term includes computer-generated
2-13 information.
2-14 Sec. 35.02. INSURANCE FRAUD. (a) A person commits an
2-15 offense if, with intent to defraud or deceive an insurer, the
2-16 person prepares or presents to an insurer in support of a claim for
2-17 payment under a health or property and casualty insurance policy a
2-18 statement that the person knows contains false or misleading
2-19 information concerning a matter that is material to the claim, and
2-20 the matter affects a person's right to a payment or the amount of
2-21 payment to which a person is entitled.
2-22 (b) A person commits an offense if the person, with intent
2-23 to defraud or deceive an insurer, solicits, offers, pays, or
2-24 receives a benefit in connection with the furnishing of health care
2-25 goods or services for which payment is sought under an insurance
3-1 policy.
3-2 (c) For purposes of Subsection (a), information concerning a
3-3 matter that is material to a claim for payment under an insurance
3-4 policy includes information concerning:
3-5 (1) whether health care goods or services were
3-6 provided;
3-7 (2) whether health care goods or services were
3-8 medically necessary under professionally accepted standards;
3-9 (3) the nature of the health care goods or services
3-10 provided;
3-11 (4) the date on which health care goods or services
3-12 were provided;
3-13 (5) the medical record of goods or services provided;
3-14 (6) the condition treated or diagnosis made;
3-15 (7) the identity and applicable license of the
3-16 provider or the recipient of health care goods or services;
3-17 (8) whether property was damaged or lost in the manner
3-18 and under the circumstances described in a statement related to a
3-19 claim for insurance payment; or
3-20 (9) whether any other claim for insurance payment has
3-21 been communicated to any other insurer concerning property damage
3-22 or loss to the same property.
3-23 (d) An offense under this section is:
3-24 (1) a state jail felony if the value of the claim or
3-25 of the benefit solicited, offered, paid, or received is $1,500 or
4-1 more but less than $20,000;
4-2 (2) a felony of the third degree if the value of the
4-3 claim or of the benefit solicited, offered, paid, or received is
4-4 $20,000 or more but less than $100,000;
4-5 (3) a felony of the second degree if the value of the
4-6 claim or of the benefit solicited, offered, paid, or received is
4-7 $100,000 or more but less than $200,000; or
4-8 (4) a felony of the first degree if the value of the
4-9 claim or of the benefit solicited, offered, paid, or received is
4-10 $200,000 or more.
4-11 Sec. 35.03. AGGREGATION AND MULTIPLE OFFENSES. (a) If
4-12 benefits are received in violation of this chapter or if statements
4-13 are made in support of multiple claims pursuant to one scheme or
4-14 continuing course of conduct, whether from the same or several
4-15 sources, the conduct may be considered as one offense and the
4-16 benefits or claims aggregated in determining the category of the
4-17 offense.
4-18 (b) If three or more offenses are committed in violation of
4-19 this chapter, the penalty for each offense is one category higher
4-20 than the penalty for the most serious single offense for which the
4-21 defendant is convicted. However, if the punishment for the most
4-22 serious single offense is a felony of the first degree, the penalty
4-23 for each offense is a felony of the first degree.
4-24 (c) If the attorney representing the state seeks enhancement
4-25 under Subsection (b), the state may not aggregate amounts under
5-1 Subsection (a) in the prosecution of the case.
5-2 Sec. 35.04. JURISDICTION OF ATTORNEY GENERAL. (a) The
5-3 attorney general may offer to an attorney representing the state in
5-4 the prosecution of an offense under Section 35.02 the
5-5 investigative, technical, and litigation assistance of the attorney
5-6 general's office.
5-7 (b) The attorney general may prosecute or assist in the
5-8 prosecution of an offense under Section 35.02 on the request of the
5-9 attorney representing the state described by Subsection (a).
5-10 SECTION 2. Article 2.12, Code of Criminal Procedure, is
5-11 amended to read as follows:
5-12 Art. 2.12. Who are peace officers. The following are peace
5-13 officers:
5-14 (1) sheriffs and their deputies;
5-15 (2) constables and deputy constables;
5-16 (3) marshals or police officers of an incorporated
5-17 city, town, or village;
5-18 (4) rangers and officers commissioned by the Public
5-19 Safety Commission and the Director of the Department of Public
5-20 Safety;
5-21 (5) investigators of the district attorneys', criminal
5-22 district attorneys', and county attorneys' offices;
5-23 (6) law enforcement agents of the Texas Alcoholic
5-24 Beverage Commission;
5-25 (7) each member of an arson investigating unit
6-1 commissioned by a city, a county, or the state;
6-2 (8) officers commissioned under Section 21.483,
6-3 Education Code, or Subchapter E, Chapter 51, Education Code;
6-4 (9) officers commissioned by the General Services
6-5 Commission;
6-6 (10) law enforcement officers commissioned by the
6-7 Parks and Wildlife Commission;
6-8 (11) airport police officers commissioned by a city
6-9 with a population of more than one million, according to the most
6-10 recent federal census, that operates an airport that serves
6-11 commercial air carriers;
6-12 (12) airport security personnel commissioned as peace
6-13 officers by the governing body of any political subdivision of this
6-14 state, other than a city described by Subdivision (11), that
6-15 operates an airport that serves commercial air carriers;
6-16 (13) municipal park and recreational patrolmen and
6-17 security officers;
6-18 (14) security officers commissioned as peace officers
6-19 by the State Treasurer;
6-20 (15) officers commissioned by a water control and
6-21 improvement district under Section 51.132, Water Code;
6-22 (16) officers commissioned by a board of trustees
6-23 under Chapter 341, Acts of the 57th Legislature, Regular Session,
6-24 1961 (Article 1187f, Vernon's Texas Civil Statutes);
6-25 (17) investigators commissioned by the Texas State
7-1 Board of Medical Examiners;
7-2 (18) officers commissioned by the board of managers of
7-3 the Dallas County Hospital District, the Tarrant County Hospital
7-4 District, or the Bexar County Hospital District under Section
7-5 281.057, Health and Safety Code;
7-6 (19) county park rangers commissioned under Subchapter
7-7 E, Chapter 351, Local Government Code;
7-8 (20) investigators employed by the Texas Racing
7-9 Commission;
7-10 (21) officers commissioned by the State Board of
7-11 Pharmacy;
7-12 (22) officers commissioned by the governing body of a
7-13 metropolitan rapid transit authority under Section 13, Chapter 141,
7-14 Acts of the 63rd Legislature, Regular Session, 1973 (Article 1118x,
7-15 Vernon's Texas Civil Statutes), or by a regional transportation
7-16 authority under Section 10, Chapter 683, Acts of the 66th
7-17 Legislature, Regular Session, 1979 (Article 1118y, Vernon's Texas
7-18 Civil Statutes);
7-19 (23) officers commissioned under the Texas High-Speed
7-20 Rail Act (Article 6674v.2, Revised Statutes) <by the Texas
7-21 High-Speed Rail Authority>;
7-22 (24) investigators commissioned by the attorney
7-23 general under Section 402.009, Government Code;
7-24 (25) security officers and investigators commissioned
7-25 as peace officers under Chapter 466, Government Code; <and>
8-1 (26) an officer employed by the Texas Department of
8-2 Health under Section 431.2471, Health and Safety Code;<.>
8-3 (27) <(26)> officers appointed by an appellate court
8-4 under Subchapter F, Chapter 53, Government Code;<.>
8-5 (28) <(26)> officers commissioned by the state fire
8-6 marshal under Chapter 417, Government Code; and
8-7 (29) an investigator commissioned by the commissioner
8-8 of insurance under Article 1.10D, Insurance Code.
8-9 SECTION 3. Article 59.01(2), Code of Criminal Procedure, as
8-10 amended by Section 5, Chapter 761, and Section 1, Chapter 828, Acts
8-11 of the 73rd Legislature, Regular Session, 1993, is amended to read
8-12 as follows:
8-13 (2) "Contraband" means property of any nature,
8-14 including real, personal, tangible, or intangible, that is:
8-15 (A) used in the commission of:
8-16 (i) any first or second degree felony
8-17 under the Penal Code;
8-18 (ii) any felony under Chapters 29, 30, 31,
8-19 <or> 32, or 35, Penal Code; or
8-20 (iii) any felony under The Securities Act
8-21 (Article 581-1 et seq., Vernon's Texas Civil Statutes);
8-22 (B) used or intended to be used in the
8-23 commission of:
8-24 (i) any felony under Chapter 481, Health
8-25 and Safety Code (Texas Controlled Substances Act);
9-1 (ii) any felony under Chapter 483, Health
9-2 and Safety Code;
9-3 (iii) a felony under Article 350, Revised
9-4 Statutes; <or>
9-5 (iv) any felony under Chapter 34, Penal
9-6 Code; <or>
9-7 (v) <(iv)> a Class A misdemeanor under
9-8 Subchapter B, Chapter 365, Health and Safety Code, if the defendant
9-9 has been previously convicted twice of an offense under that
9-10 subchapter; or
9-11 (vi) <(v)> any felony under The Sale of
9-12 Checks Act (Article 489d, Vernon's Texas Civil Statutes);
9-13 (C) the proceeds gained from the commission of a
9-14 felony listed in Paragraph (A) or (B) of this subdivision or a
9-15 crime of violence; or
9-16 (D) acquired with proceeds gained from the
9-17 commission of a felony listed in Paragraph (A) or (B) of this
9-18 subdivision or a crime of violence.
9-19 SECTION 4. Article 59.06, Code of Criminal Procedure, is
9-20 amended by adding Subsection (j) to read as follows:
9-21 (j) Notwithstanding Subsections (b) and (c), the disposition
9-22 of property that is contraband because of its use in the commission
9-23 of an offense under Chapter 35, Penal Code, or because it is a
9-24 proceed gained from the commission of an offense under Chapter 35,
9-25 Penal Code, is as follows:
10-1 (1) to the attorney general, if the attorney general
10-2 has investigated, prosecuted, or assisted in the prosecution of the
10-3 offense;
10-4 (2) to the attorney representing the state; and
10-5 (3) to the insurer defrauded as a result of the
10-6 offense.
10-7 SECTION 5. Section 2, Article 1.10D, Insurance Code, is
10-8 amended by amending Subsections (b) and (e) and adding Subsections
10-9 (f) and (g) to read as follows:
10-10 (b) If the commissioner has reason to believe that a person
10-11 has engaged in or is engaging in an act or practice that may
10-12 constitute <a fraudulent> insurance fraud <act> or has committed,
10-13 or is about to commit, <a fraudulent> insurance fraud <act>, the
10-14 commissioner may make any investigation necessary inside or outside
10-15 this state to determine whether or not the act has occurred, or to
10-16 aid in the enforcement of the laws relating to fraudulent insurance
10-17 acts. <In regard to allegations of fraud on the part of a
10-18 policyholder or claimant, the commissioner's authority to initiate
10-19 investigations under this subsection is limited to those instances
10-20 in which there is evidence showing a pattern of fraudulent
10-21 activity.>
10-22 (e) This section does not prohibit or limit the authority of
10-23 an insurer to conduct its own independent investigation into a
10-24 suspected case of insurance claim fraud. Before an insurer may
10-25 request the commissioner to conduct an investigation of suspected
11-1 claim fraud, the insurer must have completed its investigation and
11-2 drafted a report of its findings. The insurer shall submit the
11-3 report and the related investigation file to the commissioner as
11-4 part of the insurer's request for investigation by the
11-5 commissioner. <In regard to an insurer's request for investigation
11-6 under this subsection, the commissioner's authority to undertake an
11-7 investigation against a policyholder or claimant is limited to
11-8 those instances in which the insurer's investigation reports show a
11-9 pattern of fraudulent activity.>
11-10 (f) The commissioner may employ investigators as the
11-11 commissioner considers necessary to enforce this article and may
11-12 commission those investigators as peace officers. An investigator
11-13 employed by the department as a peace officer must meet the
11-14 requirements for peace officers imposed under Chapter 415,
11-15 Government Code. If the commissioner elects to the commission
11-16 peace officers, the commissioner shall appoint a chief investigator
11-17 who is commissioned as a peace officer and who is qualified by
11-18 training and experience in law enforcement to supervise, direct,
11-19 and administer the activities of the commissioned investigators.
11-20 (g) An investigator employed by the department may request
11-21 the assistance of local law enforcement officers in conducting an
11-22 investigation authorized by this article.
11-23 SECTION 6. (a) The change in law made by Chapter 35, Penal
11-24 Code, as added by this Act, applies only to an offense committed on
11-25 or after the effective date of this Act. For purposes of this
12-1 section, an offense is committed before the effective date of this
12-2 Act if any element of the offense occurs before that date.
12-3 (b) An offense committed before the effective date of this
12-4 Act is governed by the law in effect when the offense was
12-5 committed, and the former law is continued in effect for that
12-6 purpose.
12-7 SECTION 7. This Act takes effect September 1, 1995.
12-8 SECTION 8. The importance of this legislation and the
12-9 crowded condition of the calendars in both houses create an
12-10 emergency and an imperative public necessity that the
12-11 constitutional rule requiring bills to be read on three several
12-12 days in each house be suspended, and this rule is hereby suspended.