By: Montford S.B. No. 1351
A BILL TO BE ENTITLED
AN ACT
1-1 relating to provisions governing insurance fraud, creating a penal
1-2 offense; and making an appropriation.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 7, Penal Code, is amended by the addition
1-5 of Chapter 35, which reads as follows:
1-6 CHAPTER 35. INSURANCE FRAUD.
1-7 Sec. 35.01. DEFINITIONS. In this chapter:
1-8 (1) "Insurer" means any person or government who does
1-9 business as an insurer in this state, including an insurer that is
1-10 not authorized to do business in this state. The term includes a
1-11 health maintenance organization, a company subject to Chapter 20,
1-12 Insurance Code, and an organization that is self-insured and that
1-13 provides health care benefits to its employees.
1-14 (2) "Statement" means any oral or written
1-15 communication, or any record or documented representation of fact
1-16 evidencing a loss, injury or expense. A statement may be
1-17 computer-generated.
1-18 (3) "Health care provider" means a person who renders
1-19 or causes to be rendered health care services or an agent or
1-20 employee of an organization that renders or provides the facility
1-21 and means to render health care services, and includes whether
1-22 licensed or unlicensed: physicians, surgeons, persons who may be
1-23 selected by an insured or a beneficiary under Article 21.52,
2-1 Insurance Code, and persons defined as a provider of health care
2-2 under Article 4495b, Subchapter A, Section 2.05(d)(1), Texas
2-3 Medical Practice Act.
2-4 (4) "Health care services" includes all services
2-5 intended to improve or maintain the physical or mental condition of
2-6 an individual rendered, directed or supervised by a health care
2-7 provider.
2-8 (5) "Health care goods" means any tangible product,
2-9 device, medicine or other object, whether provided permanently or
2-10 temporarily in conjunction with a health care service.
2-11 Sec. 35.02. INSURANCE FRAUD. (a) A person commits an
2-12 offense if, with intent to defraud or deceive an insurer:
2-13 (1) the person causes to be prepared or presents to an
2-14 insurer in support of a claim for payment under a health or
2-15 property insurance policy a statement that the person knows
2-16 contains false or misleading information concerning a matter that
2-17 is material to the claim that effects:
2-18 (A) a person's right to a payment; or
2-19 (B) the amount of payment to which a person is
2-20 entitled; or
2-21 (2) the person causes to be prepared or presents to an
2-22 insurer in support of a claim for payment under a health or
2-23 property insurance policy a statement that the person knows
2-24 conceals or fails to disclose a material fact that affects:
2-25 (A) a person's right to a payment;
3-1 (B) the amount of payment to which a person is
3-2 entitled.
3-3 (b) A person commits an offense if the person, with intent
3-4 to defraud or deceive an insurer, solicits, offers, pays or
3-5 receives a benefit in connection with the furnishing of health care
3-6 goods or services for which payment is sought under an insurance
3-7 policy.
3-8 (c) For purposes of Subsection (a) of this chapter,
3-9 information concerning a matter that is material to a claim for
3-10 payment under an insurance policy includes, but is not limited to,
3-11 information concerning:
3-12 (1) whether health care goods or services were
3-13 provided;
3-14 (2) whether health care goods or services were
3-15 medically necessary under professionally accepted standards;
3-16 (3) the nature of the health care goods or services
3-17 provided;
3-18 (4) the date on which health care goods or services
3-19 were provided;
3-20 (5) the medical record of goods or services provided;
3-21 (6) the condition treated or diagnosis made;
3-22 (7) the identity and applicable license of the
3-23 provider or the recipient of health care goods or services;
3-24 (8) whether property was damaged or lost in the manner
3-25 and under the circumstances described in a statement related to a
4-1 claim for insurance payment; or
4-2 (9) whether any other claim for insurance payment has
4-3 been communicated to any other insurer concerning property damage
4-4 or loss to the same property.
4-5 (d) Except as provided by Subsection (e) of this section, an
4-6 offense under this section is:
4-7 (1) a Class C misdemeanor if the value of the claim is
4-8 less than $20; or
4-9 (2) a Class B misdemeanor if the value of the claim is
4-10 $20 or more but less than $500;
4-11 (3) a Class A misdemeanor if the value of the claim is
4-12 $500 or more but less than $1,500;
4-13 (4) a state jail felony if the value of the claim is
4-14 $1,500 or more but less than $20,000;
4-15 (5) a felony of the third degree if the value of the
4-16 claim is $20,000 or more but less than $100,000;
4-17 (6) a felony of the second degree if the value of the
4-18 claim is $100,000 but less than $200,000; or
4-19 (7) a felony of the first degree if the value of the
4-20 claim is $200,000 or more.
4-21 (e) A person who is subject to prosecution under both this
4-22 section and another section of this code may be prosecuted under
4-23 either or both sections.
4-24 Sec. 35.03. AGGREGATION AND MULTIPLE OFFENSES. (a) When
4-25 separate insurance claims in violation of this chapter are
5-1 communicated to an insurer or group of insurers pursuant to one
5-2 scheme or continuing course of conduct, the conduct may be
5-3 considered as one offense and the amounts aggregated in determining
5-4 the category of the offense, and paragraph (b) of this section
5-5 shall not apply.
5-6 (b) When three or more separate claims in violation of this
5-7 chapter are communicated to an insurer or group of insurers, the
5-8 penalty for such multiple offenses shall be one category higher
5-9 than the most serious single offense proven from the separate
5-10 claims, unless aggregation under paragraph (a) of this section has
5-11 already been applied to raise the category above the most serious
5-12 single offense proven from the separate claims; except that if the
5-13 most serious single offense is a felony of the first degree, the
5-14 offense is a felony of the first degree.
5-15 Sec. 35.04. JURISDICTION OF ATTORNEY GENERAL. (a) The
5-16 attorney general may offer the investigative, technical, and
5-17 litigation assistance of his office in any prosecution of alleged
5-18 violations brought by a district attorney, criminal district
5-19 attorney, county attorney with felony responsibility, or county
5-20 attorney.
5-21 (b) If he is requested to do so by the district attorney,
5-22 criminal district attorney, county attorney with felony
5-23 responsibilities, or county attorney, the attorney general may
5-24 prosecute or assist in the prosecution of offenses under this
5-25 chapter.
6-1 Sec. 35.05. PROPERTY DISTRIBUTION UNDER ASSET FORFEITURE.
6-2 (a) If a person's assets are forfeited under Chapter 59, Code of
6-3 Criminal Procedure, pursuant to enforcement of this chapter, the
6-4 priority of payment for the distribution of those assets is as
6-5 follows:
6-6 (1) the attorney general, if the attorney general has
6-7 investigated, prosecuted, or assisted in the prosecution of the
6-8 case; and
6-9 (2) the district attorney, criminal district attorney,
6-10 county attorney with felony responsibilities, or county attorney,
6-11 if that person has investigated, prosecuted or assisted in the
6-12 prosecution of the case.
6-13 (b) Pursuant to the provisions of Chapter 47, Code of
6-14 Criminal Procedure, the judge may order that any remaining proceeds
6-15 be remitted to the property insurance or health insurance company
6-16 or companies that were defrauded.
6-17 SECTION 2. Subsection (2), Article 59.01, Code of Criminal
6-18 Procedure, is amended to read as follows:
6-19 (2) "Contraband" means property of any nature,
6-20 including real, personal, tangible, or intangible, that is:
6-21 (A) used in the commission of:
6-22 (i) any first or second degree felony
6-23 under the Penal Code;
6-24 (ii) any felony under Chapters 29, 30, 31,
6-25 or 32, Penal Code; or
7-1 (iii) any felony under The Securities Act
7-2 (Article 581-1 et seq., Vernon's Texas Civil Statutes);
7-3 (B) used or intended to be used in the
7-4 commission of:
7-5 (i) any felony under Chapter 481, Health
7-6 and Safety Code (Texas Controlled Substances Act);
7-7 (ii) any felony under Chapter 483, Health
7-8 and Safety Code;
7-9 (iii) a felony under Article 350, Revised
7-10 Statutes; <or>
7-11 (iv) any felony under Chapter 34, Penal
7-12 Code; <or>
7-13 (v) <(iv)> a Class A misdemeanor under
7-14 Subchapter B, Chapter 365, Health and Safety Code, if the defendant
7-15 has been previously convicted twice of an offense under that
7-16 subchapter;
7-17 (vi) <(v)> any felony under The Sale of
7-18 Checks Act (Article 489d, Vernon's Texas Civil Statutes); or
7-19 (vii) any felony under Chapter 35, Penal
7-20 Code.
7-21 (C) the proceeds gained from the commission of a
7-22 felony listed in Paragraph (A) or (B) of this subdivision or a
7-23 crime of violence; or
7-24 (D) acquired with proceeds gained from the
7-25 commission of a felony listed in Paragraph (A) or (B) of this
8-1 subdivision of a crime of violence.
8-2 SECTION 3. SEVERABILITY. If any section, sentence, clause,
8-3 or part of this Act shall, for any reason, be held invalid, such
8-4 invalidity shall not affect the remaining portions of the Act, and
8-5 it is hereby declared to be the intention of this legislature to
8-6 have passed each section, sentence, clause, or part irrespective of
8-7 the fact that any other section, sentence, clause, or part may be
8-8 declared invalid.
8-9 SECTION 4. CRIMINAL OFFENSES OR VIOLATIONS. (a) The
8-10 changes in law made by this Act apply only to a criminal offense
8-11 committed or a violation that occurs on or after the effective date
8-12 of this Act. For the purposes of this Act, a criminal offense is
8-13 committed or a violation occurs before the effective date of this
8-14 Act if any element of the offense or violation occurs before that
8-15 date.
8-16 (b) A criminal offense committed or violation that occurs
8-17 before the effective date of this Act is covered by the law in
8-18 effect when the criminal offense was committed or the violation
8-19 occurred, and the former law is continued in effect for this
8-20 purpose.
8-21 SECTION 5. APPROPRIATION OF FEES, COSTS, AND CIVIL AND
8-22 CRIMINAL PENALTIES. In addition to moneys appropriated elsewhere,
8-23 the attorney general is hereby appropriated all fees assessed
8-24 pursuant to and all recovered expenses incurred in obtaining
8-25 administrative and/or civil penalties authorized by Chapter 35,
9-1 Penal Code and credited to the attorney general law enforcement
9-2 account. Recovered expenses include, but are not limited to,
9-3 investigative costs, witness fees, attorneys' fees, and deposition
9-4 expenses. Moneys hereby appropriated may be expended only for
9-5 purposes of enforcing the provisions of Chapter 35, Penal Code, and
9-6 may not be appropriated for any other purpose. Unexpended balances
9-7 credited to the account at the end of each biennium are carried
9-8 over to each successive biennium.
9-9 SECTION 6. EFFECTIVE DATE. This Act takes effect on
9-10 September 1, 1995.
9-11 SECTION 7. EMERGENCY. The importance of this legislation
9-12 and the crowded condition of the calendars in both houses create an
9-13 emergency and an imperative public necessity that the
9-14 constitutional rule requiring bill to be read on three several days
9-15 in each house be suspended, and this rule is hereby suspended, and
9-16 it is so enacted.