LSL H.B. 1637 75(R) BILL ANALYSIS PUBLIC HEALTH H.B. 1637 By: Alvarado 4-2-97 Committee Report (Unamended) BACKGROUND According to the U.S. General Accounting Office, health care fraud costs American taxpayers about $100 billion each year, or roughly 10% of the $1 trillion total spent on health care annually. According to the report, Disturbing the Peace, issued by the Office of the Comptroller of Public Accounts, fraud and abuse in public and private health care programs in Texas is significant. Identified cases of fraud include several incidents in which Medicaid providers intentionally performed unnecessary procedures, such as crowning undamaged teeth, or charging the state for services that were never rendered on children. A recommendation was given that legislation be enacted to increase penalties against Medicaid providers, their affiliated entities, and managed care organizations that commit fraud resulting in injury to a child. PURPOSE H.B. 1637 imposes fines upon any health care provider who submits a false statement or representation or performs a needless medical procedure. The fines are adjusted depending on whether the procedure resulted in injury to a person younger than 18 years of age. The bill also excludes liable health care providers, for at least a full decade, (and in some cases permanently) from providing, or arranging to provide, health care services under the medical assistance and Medicaid programs. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants additional rulemaking authority to the depatment, which is the Health and Human Services Commission or an agency operating part of the medical assistance program, in Section 1 (Sec. 32.039(s), Human Resources Code) and to the board of a state agency that operates part of the Medicaid program in Section 4 (Sec. 36.009(b), Human Resources Code). SECTION BY SECTION ANALYSIS SECTION 1. Amends Sec. 32.039, Human Resources Code, as follows: Subsection (b)(3)(A) is added to increase the specified civil penalty payment amount to be paid by a person who knowingly presents or causes to be presented a claim to the department that contains a false statement or representation which results in injury to a person younger than 18 years of age. Subsection (b)(3)(B) is amended to specify the civil penalty amount if the false statement or representation does not result in injury to a person younger than 18 years of age. Subsection (s) is added to prohibit a person found liable for a false statement or representation that resulted in injury to a person younger than 18 years of age from providing or arranging to provide health care services under the medical assistance program for a period of 10 years. Allows the department, by rule, to provide for a period of ineligibility longer than 10 years. Establishes that this period begins on the date on which final determination of liability is made. SECTION 2. Adds Sec. 32.043, entitled "Prohibition of Certain Health Care Service Providers," to Subchapter B, Chapter 32, Human Resources Code, to establish that a person is permanently prohibited from providing or arranging to provide health care services under the medical assistance program if the person is convicted or the fraudulent act results in injury to a person under age 18. SECTION 3. Amends Sec. 36.004(a)(3)(A), Human Resources Code, to increase the specified civil penalty payment amount to be paid by a person who commits an unlawful act which results in injury to a person younger than 18 years of age, except as provided by Subsection (c). Subsection (a)(3)(B) is amended to specify the civil penalty amount if the unlawful act does not result in injury to a person younger than 18 years of age. SECTION 4. Amends Sec. 36.009, Human Resources Code, as follows: Subsection (a)(1) requires the commissioners of health, human services, mental health and mental retardation, the executive director of the Department of Protective and Regulatory Services, or executive director of another state health care regulatory agency to suspend or revoke a provider agreement between an agency or department and a liable person and a permit, license, or certification granted to a person found liable for an unlawful act resulting in injury to a person under age 18. Makes conforming change. Subsection (a)(2) allows the commissioners of health, human services, mental health and mental retardation, the executive director of the Department of Protective and Regulatory Services, or executive director of another state health care regulatory agency to suspend or revoke a provider agreement between an agency or department and a liable person and a permit, license, or certification granted to a person found liable for an unlawful act that does not result in injury to a person under age 18. Makes conforming change. Subsection (b) prohibits a person found liable under Sec. 36.004 for an unlawful act resulting in injury to a person under age 18 from providing or arranging to provide health care services under the state Medicaid program for 10 years. Allows the board of a state agency operating part of the Medicaid program to provide, by rule, for a period of ineligibility longer than 10 years. Establishes that this period begins on the date on which final determination of liability is made. Makes conforming change. SECTION 5. Requires the Health and Human Services Commission or other state agency that determines that a federal waiver is necessary for implementation to request this waiver and delay implementation until granted. SECTION 6. Subsection (a) establishes that the change in law made by this Act applies only to a violation committed on or after the effective date, and that this applies only if each element of the violation occurs on or after that date. Subsection (b) establishes that a violation committed before the effective date is covered by the law in effect when the violation was committed, and that is continued in effect for this purpose. SECTION 7. Effective date: September 1, 1997. SECTION 8. Emergency clause.