By Maxey H.B. No. 2127
75R2828 KKA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to fraud and improper payments under the state Medicaid
1-3 program and other programs; to the creation of private cause of
1-4 action for false claims for certain government payments; and to the
1-5 creation of a criminal offense; providing penalties.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 ARTICLE 1. GENERAL PROVISIONS RELATING TO WELFARE AGENCIES
1-8 SECTION 1.01. COLLECTION OF FOOD STAMP AND FINANCIAL
1-9 ASSISTANCE PAYMENTS MADE IN ERROR. (a) Chapter 22, Human
1-10 Resources Code, is amended by adding Sections 22.0251-22.0254 to
1-11 read as follows:
1-12 Sec. 22.0251. TIMELY DETERMINATION OF ERRORS. (a) Subject
1-13 to the approval of the commissioner of health and human services,
1-14 the department shall:
1-15 (1) determine and record the elapsed time taken by the
1-16 department to discover an error in making a grant under the food
1-17 stamp program or the program of financial assistance under Chapter
1-18 31;
1-19 (2) set progressive goals for reducing the discovery
1-20 time described by Subdivision (1); and
1-21 (3) adopt a schedule to meet the goals set under
1-22 Subdivision (2).
1-23 (b) Each fiscal quarter, the department shall submit to the
1-24 governor, the Legislative Budget Board, and the Health and Human
2-1 Services Commission a report detailing the department's progress in
2-2 reaching its goals under Subsection (a)(2).
2-3 Sec. 22.0252. TELEPHONE COLLECTION PROGRAM. (a) The
2-4 department shall use the telephone to attempt to collect
2-5 reimbursement from a person who receives a benefit granted in error
2-6 under the food stamp program or the program of financial assistance
2-7 under Chapter 31.
2-8 (b) The department shall submit to the governor, the
2-9 Legislative Budget Board, and the Health and Human Services
2-10 Commission a semiannual report on the operation and success of the
2-11 telephone collection program.
2-12 Sec. 22.0253. PARTICIPATION IN FEDERAL TAX REFUND OFFSET
2-13 PROGRAM. The department shall participate in the Federal Tax
2-14 Refund Offset Program (FTROP) to attempt to recover benefits
2-15 granted by the department in error under the food stamp program.
2-16 The department shall submit as many claims that meet program
2-17 criteria as possible for offset against income tax returns.
2-18 Sec. 22.0254. PROSECUTION OF FRAUDULENT CLAIMS. (a) The
2-19 department shall keep a record of the dispositions of referrals
2-20 made by the department to a district attorney concerning fraudulent
2-21 claims for benefits under the food stamp program or the program of
2-22 financial assistance under Chapter 31.
2-23 (b) The department shall:
2-24 (1) obtain status information biweekly from the
2-25 appropriate district attorney on each major fraudulent claim
2-26 referred by the department;
2-27 (2) request a written explanation from the appropriate
3-1 district attorney for each case referred in which the district
3-2 attorney declines to prosecute; and
3-3 (3) encourage the creation of a special welfare fraud
3-4 unit in each district attorney's office that serves a municipality
3-5 with a population of more than 250,000, to be financed by amounts
3-6 provided by the department.
3-7 (c) A district attorney shall cooperate in providing
3-8 information requested by the department under this section.
3-9 (d) The department by rule shall define what constitutes a
3-10 major fraudulent claim under Subsection (b)(1).
3-11 (b) Chapter 22, Human Resources Code, is amended by adding
3-12 Section 22.0291 to read as follows:
3-13 Sec. 22.0291. EMBASSY INFORMATION MATCHING SYSTEM. (a) The
3-14 department shall, through the use of a computerized matching
3-15 system, compare department information relating to applicants for
3-16 and recipients of food stamps and financial assistance under
3-17 Chapter 31 with information obtained from an embassy relating to
3-18 immigrants and visitors to the United States from the country
3-19 represented by the embassy for the purpose of preventing
3-20 individuals from unlawfully receiving public assistance benefits
3-21 administered by the department.
3-22 (b) In beginning to carry out the duties under this section,
3-23 the department shall share and compare information with the
3-24 embassies that represent countries that have the most citizens
3-25 residing in this state.
3-26 (c) The department may enter into an agreement with an
3-27 embassy as necessary to implement this section.
4-1 (d) The department and embassies sharing information under
4-2 this section shall protect the confidentiality of the shared
4-3 information in compliance with all existing state and federal
4-4 privacy guidelines.
4-5 (e) The department shall submit to the governor, the
4-6 Legislative Budget Board, and the Health and Human Services
4-7 Commission a semiannual report on the operation and success of the
4-8 embassy matching system.
4-9 (c) Not later than January 1, 1998, the Texas Department of
4-10 Human Services shall begin operation of the telephone collection
4-11 program required by Section 22.0252, Human Resources Code, as added
4-12 by this article.
4-13 (d) Not later than January 1, 1998, the Texas Department of
4-14 Human Services shall submit the initial reports required by
4-15 Sections 22.0251(b) and 22.0291(e), Human Resources Code, as added
4-16 by this article.
4-17 (e) Not later than September 1, 1998, the Texas Department
4-18 of Human Services shall submit the initial report required by
4-19 Section 22.0252(b), Human Resources Code, as added by this article.
4-20 SECTION 1.02. PAYMENT OF MEDICAID CLAIMS. (a) Subchapter
4-21 B, Chapter 32, Human Resources Code, is amended by adding Sections
4-22 32.043 and 32.044 to read as follows:
4-23 Sec. 32.043. DUAL MEDICAID AND MEDICARE COVERAGE. (a) At
4-24 least annually the department shall identify each individual
4-25 receiving medical assistance under the medical assistance program
4-26 who is eligible to receive similar assistance under the Medicare
4-27 program.
5-1 (b) The department shall analyze claims submitted for
5-2 payment for a service provided under the medical assistance program
5-3 to an individual identified under Subsection (a) to ensure that
5-4 payment is not made under the medical assistance program if the
5-5 service is covered for the individual under the Medicare program.
5-6 Sec. 32.044. MISDIRECTED BILLING. To the extent authorized
5-7 by federal law, the department shall develop a procedure for:
5-8 (1) matching claims for payment for medical assistance
5-9 provided under the medical assistance program against data
5-10 available from other entities, including the Veterans
5-11 Administration and nursing facilities, to determine alternative
5-12 responsibility for payment of the claims; and
5-13 (2) ensuring that the appropriate entity bears the
5-14 cost of a claim.
5-15 (b) As soon as possible after the effective date of this
5-16 article, the Health and Human Services Commission shall submit an
5-17 amendment to the state's Medicaid plan authorizing the state to
5-18 limit payment under the state Medicaid program of Medicare
5-19 deductible and co-insurance amounts associated with a service for a
5-20 person entitled to receive both Medicaid and Medicare benefits to
5-21 the amount that the state would have paid for the service under the
5-22 state Medicaid program. On receipt of approval of the amendment,
5-23 the commission shall ensure that the payments are limited as
5-24 authorized by the amendment.
5-25 SECTION 1.03. ENHANCED MEDICAID REIMBURSEMENT. (a)
5-26 Subchapter B, Chapter 32, Human Resources Code, is amended by
5-27 adding Section 32.045 to read as follows:
6-1 Sec. 32.045. ENHANCED REIMBURSEMENT. The department shall
6-2 develop a procedure for:
6-3 (1) identifying each service provided under the
6-4 medical assistance program for which the state is eligible to
6-5 receive enhanced reimbursement of costs from the federal
6-6 government; and
6-7 (2) ensuring that the state seeks the highest level of
6-8 federal reimbursement available for each service provided.
6-9 (b) The Texas Department of Health shall identify services
6-10 provided under the state Medicaid program for the period beginning
6-11 December 31, 1989, and ending immediately before the effective date
6-12 of this Act for which the state was eligible but did not receive
6-13 enhanced reimbursement of costs at a 90 percent rate from the
6-14 federal government. For that period, the department shall seek
6-15 from the federal government all reimbursements to which the state
6-16 is entitled.
6-17 SECTION 1.04. MINIMUM COLLECTION GOAL. Subchapter B,
6-18 Chapter 531, Government Code, is amended by adding Section 531.047
6-19 to read as follows:
6-20 Sec. 531.047. MINIMUM COLLECTION GOAL. (a) Before August
6-21 31 of each year, the commission by rule shall set a minimum goal
6-22 for the Texas Department of Human Services that specifies the
6-23 percentage of the amount of benefits granted by the department in
6-24 error under the food stamp program or the program of financial
6-25 assistance under Chapter 31, Human Resources Code, that the
6-26 department should recover. The commission shall set the percentage
6-27 based on comparable recovery rates reported by other states.
7-1 (b) If the department fails to meet the goal set under
7-2 Subsection (a) for the fiscal year, the commissioner shall notify
7-3 the comptroller, and the comptroller shall reduce the department's
7-4 general revenue appropriation by an amount equal to the difference
7-5 between the amount the department would have collected had the
7-6 department met the goal and the amount the department actually
7-7 collected.
7-8 (c) The commission, the governor, and the Legislative Budget
7-9 Board shall monitor the department's performance in meeting the
7-10 goal set under this section. The department shall cooperate by
7-11 providing to the commission, the governor, and the Legislative
7-12 Budget Board, on request, information concerning the department's
7-13 collection efforts.
7-14 SECTION 1.05. COMMISSION POWERS AND DUTIES RELATING TO
7-15 WELFARE FRAUD. (a) Chapter 531, Government Code, is amended by
7-16 adding Subchapter C to read as follows:
7-17 SUBCHAPTER C. MEDICAID AND OTHER WELFARE FRAUD, MISUSE,
7-18 OR OVERCHARGES
7-19 Sec. 531.101. AWARD FOR REPORTING MEDICAID FRAUD, MISUSE, OR
7-20 OVERCHARGES. (a) The commission may grant an award to an
7-21 individual who reports activity that constitutes fraud or misuse of
7-22 funds in the state Medicaid program or reports overcharges in the
7-23 program if the commission determines that the disclosure results in
7-24 the recovery of an overcharge or in the termination of the
7-25 fraudulent activity or misuse of funds.
7-26 (b) The commission shall determine the amount of an award.
7-27 The award must be equal to not less than 10 percent of the savings
8-1 to this state that result from the individual's disclosure. In
8-2 determining the amount of the award, the commission shall consider
8-3 how important the disclosure is in ensuring the fiscal integrity of
8-4 the program.
8-5 (c) An award under this section is subject to appropriation.
8-6 The award must be paid from money appropriated to or otherwise
8-7 available to the commission, and additional money may not be
8-8 appropriated to the commission for the purpose of paying the award.
8-9 (d) Payment of an award under this section from federal
8-10 funds is subject to the permissible use under federal law of funds
8-11 for this purpose.
8-12 (e) A person who brings an action under Subchapter C,
8-13 Chapter 36, Human Resources Code, is not eligible for an award
8-14 under this section.
8-15 Sec. 531.102. INVESTIGATIONS AND ENFORCEMENT OFFICE. (a)
8-16 The commission, through the commission's office of investigations
8-17 and enforcement, is responsible for the investigation of fraud in
8-18 the provision of health and human services and the enforcement of
8-19 state law relating to the provision of those services.
8-20 (b) The commission shall set clear objectives, priorities,
8-21 and performance standards for the office that emphasize:
8-22 (1) coordinating investigative efforts to aggressively
8-23 recover money;
8-24 (2) allocating resources to cases that have the
8-25 strongest supportive evidence and the greatest potential for
8-26 recovery of money; and
8-27 (3) maximizing opportunities for referral of cases to
9-1 the office of the attorney general.
9-2 (c) The commission shall cross-train office staff to enable
9-3 the staff to pursue priority Medicaid and welfare fraud and abuse
9-4 cases as necessary.
9-5 Sec. 531.103. INTERAGENCY COORDINATION. (a) The commission
9-6 and the office of the attorney general shall enter into a
9-7 memorandum of understanding to develop and implement joint written
9-8 procedures for processing cases of suspected fraud, waste, or abuse
9-9 under the state Medicaid program. The memorandum of understanding
9-10 shall require:
9-11 (1) the commission and the office of the attorney
9-12 general to set priorities and guidelines for referring cases to
9-13 appropriate state agencies for investigation to enhance deterrence
9-14 of fraud, waste, or abuse in the program and maximize the
9-15 imposition of penalties, the recovery of money, and the successful
9-16 prosecution of cases;
9-17 (2) the commission to keep detailed records for cases
9-18 processed by the commission or the office of the attorney general,
9-19 including information on the total number of cases processed and,
9-20 for each case:
9-21 (A) the agency and division to which the case is
9-22 referred for investigation;
9-23 (B) the date on which the case is referred; and
9-24 (C) the nature of the suspected fraud, waste, or
9-25 abuse;
9-26 (3) the commission to notify each appropriate division
9-27 of the office of the attorney general of each case referred by the
10-1 commission;
10-2 (4) the office of the attorney general to ensure that
10-3 information relating to each case investigated by that office is
10-4 available to each division of the office with responsibility for
10-5 investigating suspected fraud, waste, or abuse;
10-6 (5) the office of the attorney general to notify the
10-7 commission of each case the attorney general declines to prosecute
10-8 or prosecutes unsuccessfully;
10-9 (6) representatives of the commission and of the
10-10 office of the attorney general to meet not less than quarterly to
10-11 share case information and determine the appropriate agency and
10-12 division to investigate each case; and
10-13 (7) the commission and the office of the attorney
10-14 general to submit information requested by the comptroller about
10-15 each resolved case for the comptroller's use in improving fraud
10-16 detection.
10-17 (b) Not later than December 1 of each year, the commission
10-18 and the office of the attorney general shall jointly prepare and
10-19 submit a report to the governor, lieutenant governor, and speaker
10-20 of the house of representatives concerning the activities of those
10-21 agencies in detecting and preventing fraud, waste, and abuse under
10-22 the state Medicaid program.
10-23 Sec. 531.104. ASSISTING INVESTIGATIONS BY ATTORNEY GENERAL.
10-24 (a) The commission and the attorney general shall execute a
10-25 memorandum of understanding under which the commission shall
10-26 provide investigative support as required to the attorney general
10-27 in connection with cases under Subchapter B, Chapter 36, Human
11-1 Resources Code. Under the memorandum of understanding, the
11-2 commission shall assist in performing preliminary investigations
11-3 and ongoing investigations for actions prosecuted by the attorney
11-4 general under Subchapter C, Chapter 36, Human Resources Code.
11-5 (b) The memorandum of understanding must provide that the
11-6 commission is not required to provide investigative support in more
11-7 than 100 open investigations in a fiscal year.
11-8 Sec. 531.105. FRAUD DETECTION TRAINING. (a) The commission
11-9 shall develop and implement a program to provide annual training to
11-10 contractors who process Medicaid claims and appropriate staff of
11-11 the Texas Department of Health and the Texas Department of Human
11-12 Services in identifying potential cases of fraud, waste, or abuse
11-13 under the state Medicaid program. The training provided to the
11-14 contractors and staff must include clear criteria that specify:
11-15 (1) the circumstances under which a person should
11-16 refer a potential case to the commission; and
11-17 (2) the time by which a referral should be made.
11-18 (b) The Texas Department of Health and the Texas Department
11-19 of Human Services, in cooperation with the commission, shall
11-20 periodically set a goal of the number of potential cases of fraud,
11-21 waste, or abuse under the state Medicaid program that each agency
11-22 will attempt to identify and refer to the commission. The
11-23 commission shall include information on the agencies' goals and the
11-24 success of each agency in meeting the agency's goal in the annual
11-25 report required by Section 531.103(b).
11-26 Sec. 531.106. LEARNING OR NEURAL NETWORK TECHNOLOGY.
11-27 (a) The commission shall use learning or neural network technology
12-1 to identify and deter fraud in the Medicaid program throughout this
12-2 state.
12-3 (b) The commission shall contract with a private or public
12-4 entity to develop and implement the technology.
12-5 (c) The technology must be capable of operating
12-6 independently from other computer systems.
12-7 (d) The commission shall require each health and human
12-8 services agency that performs any aspect of the state Medicaid
12-9 program to participate in the implementation and use of the
12-10 technology.
12-11 (e) The commission shall maintain all information necessary
12-12 to apply the technology to claims data covering a period of at
12-13 least two years.
12-14 (f) The commission shall refer cases identified by the
12-15 technology to the commission's office of investigations and
12-16 enforcement or the office of the attorney general, as appropriate.
12-17 Sec. 531.107. PUBLIC ASSISTANCE FRAUD OVERSIGHT TASK FORCE.
12-18 (a) The Public Assistance Fraud Oversight Task Force advises and
12-19 assists the commission and the commission's office of
12-20 investigations and enforcement in improving the efficiency of fraud
12-21 investigations and collections.
12-22 (b) The task force is composed of a representative of the:
12-23 (1) attorney general's office, appointed by the
12-24 attorney general;
12-25 (2) comptroller's office, appointed by the
12-26 comptroller;
12-27 (3) Department of Public Safety, appointed by the
13-1 public safety director;
13-2 (4) state auditor's office, appointed by the state
13-3 auditor; and
13-4 (5) commission, appointed by the commissioner of
13-5 health and human services.
13-6 (c) The comptroller or the comptroller's designee serves as
13-7 the presiding officer of the task force. The task force may elect
13-8 any other necessary officers.
13-9 (d) The task force shall meet at least once each fiscal
13-10 quarter at the call of the presiding officer.
13-11 (e) The appointing agency is responsible for the expenses of
13-12 a member's service on the task force. Members of the task force
13-13 receive no additional compensation for serving on the task force.
13-14 (f) At least once each fiscal quarter, the commission's
13-15 office of investigations and enforcement shall provide to the task
13-16 force:
13-17 (1) information detailing:
13-18 (A) the number of fraud referrals made to the
13-19 office and the origin of each referral;
13-20 (B) the time spent investigating each case;
13-21 (C) the number of cases investigated each month,
13-22 by program and region;
13-23 (D) the dollar value of each fraud case that
13-24 results in a criminal conviction; and
13-25 (E) the number of cases the office rejects and
13-26 the reason for rejection, by region; and
13-27 (2) any additional information the task force
14-1 requires.
14-2 Sec. 531.108. FRAUD PREVENTION. (a) The commission's
14-3 office of investigations and enforcement shall compile and
14-4 disseminate accurate information and statistics relating to:
14-5 (1) fraud prevention; and
14-6 (2) post-fraud referrals received and accepted or
14-7 rejected from the commission's case management system or the case
14-8 management system of a health and human services agency.
14-9 (b) The commission shall:
14-10 (1) aggressively publicize successful fraud
14-11 prosecutions and fraud-prevention programs through all available
14-12 means, including the use of statewide press releases issued in
14-13 coordination with the Texas Department of Human Services; and
14-14 (2) establish and promote a toll-free hotline for
14-15 reporting suspected fraud in programs administered by the
14-16 commission or a health and human services agency.
14-17 (c) The commission shall develop a cost-effective method of
14-18 identifying applicants for public assistance in counties bordering
14-19 other states and in metropolitan areas selected by the commission
14-20 who are already receiving benefits in other states. If
14-21 economically feasible, the commission may develop a computerized
14-22 matching system.
14-23 (d) The commission shall:
14-24 (1) verify automobile information that is used as
14-25 criteria for eligibility; and
14-26 (2) establish a computerized matching system with the
14-27 Texas Department of Criminal Justice to prevent an incarcerated
15-1 individual from illegally receiving public assistance benefits
15-2 administered by the commission.
15-3 (e) The commission shall submit to the governor, the
15-4 Legislative Budget Board, and the Health Human Services Commission
15-5 a semiannual report on the results of computerized matching of
15-6 commission information with information from neighboring states, if
15-7 any, and information from the Texas Department of Criminal Justice.
15-8 Sec. 531.109. DISPOSITION OF FUNDS. (a) The commission
15-9 shall deposit the state's share of money collected under this
15-10 subchapter in a special account in the state treasury.
15-11 (b) The commission may spend money in the account for the
15-12 administration of this subchapter, subject to the General
15-13 Appropriations Act.
15-14 (b) Section 531.104, Government Code, as added by this
15-15 article, takes effect only if the transfer of employees of the
15-16 Texas Department of Human Services and the Texas Department of
15-17 Health to the Health and Human Services Commission, as proposed by
15-18 Section 1.06 of this article, or similar legislation, is enacted by
15-19 the 75th Legislature in regular session and becomes law.
15-20 (c) Not later than September 1, 1997, the Health and Human
15-21 Services Commission shall award the contract for the learning or
15-22 neural network technology required by Section 531.106, Government
15-23 Code, as added by this article, and the contractor shall begin
15-24 operations not later than that date. If the commission fails to
15-25 award the contract or the contractor cannot begin operations on or
15-26 before September 1, 1997, the commissioner of health and human
15-27 services shall enter into an interagency agreement with the
16-1 comptroller to enable the comptroller to perform the duties
16-2 prescribed by Section 531.106. In addition to the interagency
16-3 agreement, the commissioner of health and human services and the
16-4 comptroller shall execute a memorandum of understanding to ensure
16-5 that the comptroller receives all data and resources necessary to
16-6 operate the learning or neural network technology system.
16-7 (d) Not later than September 1, 1997, the Health and Human
16-8 Services Commission shall submit the initial report required by
16-9 Section 531.108(e), Government Code, as added by this article.
16-10 (e) In addition to the substantive changes in law made by
16-11 this article, this article, in adding Section 531.101, Government
16-12 Code, conforms to a change in the law made by Section 1, Chapter
16-13 444, Acts of the 74th Legislature, Regular Session, 1995.
16-14 (f) Section 16G, Article 4413(502), Revised Statutes, as
16-15 added by Section 1, Chapter 444, Acts of the 74th Legislature,
16-16 Regular Session, 1995, is repealed.
16-17 (g) To the extent of any conflict, this Act prevails over
16-18 another Act of the 75th Legislature, Regular Session, 1997,
16-19 relating to nonsubstantive additions to and corrections in enacted
16-20 codes.
16-21 (h) Sections 21.0145 and 22.027, Human Resources Code, are
16-22 repealed.
16-23 SECTION 1.06. CONSOLIDATION OF INVESTIGATIONS STAFF. (a)
16-24 On September 1, 1997, or an earlier date provided by an interagency
16-25 agreement with the affected agencies:
16-26 (1) all powers, duties, functions, programs, and
16-27 activities performed by or assigned to the Texas Department of
17-1 Human Services' office of inspector general immediately before
17-2 September 1, 1997, are transferred to the Health and Human Services
17-3 Commission;
17-4 (2) all funds, obligations, contracts, property, and
17-5 records of the Texas Department of Human Services' office of
17-6 inspector general are transferred to the Health and Human Services
17-7 Commission; and
17-8 (3) all employees of the Texas Department of Human
17-9 Services' office of inspector general become employees of the
17-10 Health and Human Services Commission, to be assigned duties by the
17-11 commissioner of health and human services.
17-12 (b) On September 1, 1997, or an earlier date provided by an
17-13 interagency agreement with the affected agencies:
17-14 (1) all powers, duties, functions, programs, and
17-15 activities performed by or assigned to the Texas Department of
17-16 Health's policy and analysis group immediately before September 1,
17-17 1997, are transferred to the Health and Human Services Commission;
17-18 (2) all funds, obligations, contracts, property, and
17-19 records of the Texas Department of Health's policy and analysis
17-20 group are transferred to the Health and Human Services Commission;
17-21 and
17-22 (3) all employees of the Texas Department of Health's
17-23 policy and analysis group become employees of the Health and Human
17-24 Services Commission, to be assigned duties by the commissioner of
17-25 health and human services.
17-26 (c) A rule or form adopted by the Texas Department of Human
17-27 Services that relates to the office of inspector general or by the
18-1 Texas Department of Health that relates to the policy and analysis
18-2 group is a rule or form of the Health and Human Services Commission
18-3 and remains in effect until altered by the commission. The
18-4 secretary of state is authorized to adopt rules as necessary to
18-5 expedite the implementation of this subsection.
18-6 (d) The commissioner of health and human services shall
18-7 oversee and assist in the transfer of powers, duties, functions,
18-8 programs, and activities prescribed by Subsections (a) and (b) of
18-9 this section.
18-10 (e) The commissioner of health and human services shall
18-11 determine for each power, duty, function, program, or activity
18-12 scheduled for transfer:
18-13 (1) the relevant agency actions that constitute each
18-14 power, duty, function, program, or activity;
18-15 (2) the relevant records, property, and equipment used
18-16 by a state agency for each power, duty, function, program, or
18-17 activity;
18-18 (3) the state agency employees whose primary duties
18-19 involve a power, duty, function, program, or activity; and
18-20 (4) state agency funds and obligations that are
18-21 related to the power, duty, function, program, or activity.
18-22 (f) Based on the determinations made under Subsection (e) of
18-23 this section, the commissioner of health and human services shall
18-24 assist the agencies in transferring powers, duties, functions,
18-25 programs, activities, records, equipment, property, funds,
18-26 obligations, and employees in accordance with the transfer
18-27 schedule.
19-1 (g) The commissioner of health and human services shall file
19-2 any federal plan changes required by this section.
19-3 (h) The transfer of powers, duties, functions, programs,
19-4 and activities under this section does not affect or impair any act
19-5 done, any obligation, right, order, license, permit, rule,
19-6 criterion, standard, or requirement existing, any investigation
19-7 begun, or any penalty accrued under former law, and that law
19-8 remains in effect for any action concerning those matters.
19-9 (i) An action brought or proceeding commenced before the
19-10 effective date of this Act, including a contested case or a remand
19-11 of an action or proceeding by a reviewing court, is governed by the
19-12 law and rules applicable to the action or proceeding before the
19-13 effective date of this Act.
19-14 SECTION 1.07. CONTINGENT INTERAGENCY AGREEMENT RELATING TO
19-15 INVESTIGATIONS STAFF. If the Health and Human Services Commission
19-16 and the affected agencies do not complete the transfers required by
19-17 Section 1.06 of this article on or before September 1, 1997, the
19-18 commissioner of health and human services shall enter into an
19-19 interagency agreement with the comptroller to enable the
19-20 comptroller to contract for or conduct Medicaid investigations with
19-21 the comptroller or other designated staff. In addition to the
19-22 interagency agreement, the commissioner of health and human
19-23 services and the comptroller shall execute a memorandum of
19-24 understanding to ensure that the comptroller has access to all
19-25 necessary staff from health and human service agencies to conduct
19-26 the investigations.
19-27 SECTION 1.08. USE OF PRIVATE COLLECTION AGENTS. (a) With
20-1 assistance from the Council on Competitive Government, the Texas
20-2 Department of Human Services shall, in addition to other methods of
20-3 collection, use private collection agents to collect reimbursements
20-4 for benefits granted by the department in error under the food
20-5 stamp program or the program of financial assistance under Chapter
20-6 31, Human Resources Code.
20-7 (b) The department shall ensure that the collection agents
20-8 are engaged in collection work on behalf of the department not
20-9 later than March 1, 1998. The department shall strive to refer
20-10 approximately 20 percent of the department's claims for
20-11 reimbursement to the collection agents.
20-12 (c) On March 1, 1998, and September 1, 1998, the department
20-13 shall submit a progress report to the governor, the Legislative
20-14 Budget Board, and the Health and Human Services Commission on the
20-15 department's efforts to use private collection agents to collect
20-16 reimbursements for erroneous benefits. On March 1, 1999, the
20-17 department shall submit to the governor, the Legislative Budget
20-18 Board, and the Health and Human Services Commission a final report
20-19 on the success of the private collection effort.
20-20 (d) Unless otherwise directed by the 76th Legislature, the
20-21 department shall evaluate the success of the use of private
20-22 collection agents to collect benefit reimbursements and adjust the
20-23 number of claims referred to the agents, as appropriate.
20-24 SECTION 1.09. EXPEDITED FOOD STAMP DELIVERY; IMPACT ON
20-25 FRAUDULENT CLAIMS. (a) The Texas Department of Human Services
20-26 shall conduct a study to determine the impact of the one-day
20-27 screening and service delivery requirements prescribed by Section
21-1 33.002(e), Human Resources Code, on the level of fraud in the food
21-2 stamp program.
21-3 (b) Not later than January 1, 1998, the department shall
21-4 submit to the governor, the Legislative Budget Board, and the
21-5 Health and Human Services Commission a report on the results of the
21-6 study. The report must include:
21-7 (1) detailed statistics by region on the number of
21-8 fraudulent claims linked to the one-day screening and service
21-9 delivery requirements; and
21-10 (2) recommendations on modifying the one-day screening
21-11 and service delivery requirements, as authorized by Section
21-12 33.002(g), Human Resources Code.
21-13 SECTION 1.10. STUDY ON COLLECTION OF ERRONEOUS FOOD STAMP OR
21-14 FINANCIAL ASSISTANCE BENEFITS THROUGH LIENS OR WAGE GARNISHMENT.
21-15 (a) The Texas Department of Human Services shall conduct a study
21-16 to determine the feasibility of collecting amounts of benefits
21-17 granted by the department in error under the food stamp program or
21-18 the program of financial assistance under Chapter 31, Human
21-19 Resources Code, by the garnishment of wages or the filing of liens
21-20 against property.
21-21 (b) Not later than March 1, 1998, the department shall
21-22 submit to the governor, the Legislative Budget Board, and the
21-23 Health and Human Services Commission a report on the results of the
21-24 study.
21-25 SECTION 1.11. OPERATION RESTORE TRUST. (a) To the extent
21-26 authorized by law, the Health and Human Services Commission and the
21-27 office of the attorney general shall cooperate with entities in
22-1 other states that are participating in "Operation Restore Trust"
22-2 and share information regarding service providers excluded from the
22-3 state Medicaid program.
22-4 (b) In this section, "Operation Restore Trust" means the
22-5 federal program directed at detecting health-care fraud primarily
22-6 in home health care, nursing home care, and durable medical
22-7 equipment in certain states.
22-8 ARTICLE 2. MEDICAID SERVICE PROVIDERS
22-9 SECTION 2.01. AUTHORIZATION FOR AMBULANCE SERVICES. (a)
22-10 Section 32.024, Human Resources Code, is amended by adding
22-11 Subsection (t) to read as follows:
22-12 (t) The department by rule shall require a physician,
22-13 nursing facility, or other health care provider to obtain
22-14 authorization from the department or a person authorized to act on
22-15 behalf of the department before an ambulance is used to transport a
22-16 recipient of medical assistance under this chapter in circumstances
22-17 not involving an emergency. The rules must provide that:
22-18 (1) a response to a request for authorization must be
22-19 made not later than 48 hours after receipt of the request; and
22-20 (2) a person denied payment for services rendered
22-21 because of failure to obtain prior authorization is entitled to
22-22 appeal the denial to the department.
22-23 (b) Not later than January 1, 1998, the Health and Human
22-24 Services Commission and each appropriate health and human services
22-25 agency that operates part of the state Medicaid program shall adopt
22-26 the rules required by Section 32.024(t), Human Resources Code, as
22-27 added by this article.
23-1 SECTION 2.02. DURABLE MEDICAL EQUIPMENT. (a) Section
23-2 32.024, Human Resources Code, is amended by adding Subsection (u)
23-3 to read as follows:
23-4 (u) The department by rule shall require a health care
23-5 provider who prescribes durable medical equipment for a child who
23-6 receives medical assistance under this chapter to certify that the
23-7 child received the equipment prescribed, the equipment fit
23-8 properly, if applicable, and the child received instruction
23-9 regarding the equipment's use. The department shall develop a form
23-10 for a health care provider's use in making this certification. The
23-11 form must be:
23-12 (1) signed by the health care provider and the child's
23-13 parent or guardian; and
23-14 (2) submitted to the department before payment is made
23-15 by the department for the equipment, unless a person seeking
23-16 payment demonstrates good cause for payment to be made before the
23-17 form is received.
23-18 (b) Not later than January 1, 1998, the Health and Human
23-19 Services Commission and each appropriate health and human services
23-20 agency that operates part of the state Medicaid program shall adopt
23-21 the rules required by Section 32.024(u), Human Resources Code, as
23-22 added by this article.
23-23 SECTION 2.03. SURETY BOND. Subchapter B, Chapter 32, Human
23-24 Resources Code, is amended by adding Section 32.0321 to read as
23-25 follows:
23-26 Sec. 32.0321. SURETY BOND. (a) The department by rule may
23-27 require each provider of medical assistance in a provider group
24-1 that has demonstrated significant potential for fraud or abuse to
24-2 file with the department a surety bond in a reasonable amount.
24-3 (b) The bond must be payable to the department to compensate
24-4 the department for damages resulting from or penalties or fines
24-5 imposed in connection with an act of fraud or abuse committed by
24-6 the provider under the medical assistance program.
24-7 SECTION 2.04. CRIMINAL HISTORY INFORMATION. (a) Subchapter
24-8 B, Chapter 32, Human Resources Code, is amended by adding Section
24-9 32.0322 to read as follows:
24-10 Sec. 32.0322. CRIMINAL HISTORY RECORD INFORMATION. (a) The
24-11 department may obtain from any law enforcement or criminal justice
24-12 agency the criminal history record information that relates to a
24-13 provider under the medical assistance program or a person applying
24-14 to enroll as a provider under the medical assistance program.
24-15 (b) The department by rule shall establish criteria for
24-16 revoking a provider's enrollment or denying a person's application
24-17 to enroll as a provider under the medical assistance program based
24-18 on the results of a criminal history check.
24-19 (b) Subchapter F, Chapter 411, Government Code, is amended
24-20 by adding Section 411.132 to read as follows:
24-21 Sec. 411.132. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION;
24-22 AGENCIES OPERATING PART OF MEDICAL ASSISTANCE PROGRAM. (a) The
24-23 Health and Human Services Commission or an agency operating part of
24-24 the medical assistance program under Chapter 32, Human Resources
24-25 Code, is entitled to obtain from the department the criminal
24-26 history record information maintained by the department that
24-27 relates to a provider under the medical assistance program or a
25-1 person applying to enroll as a provider under the medical
25-2 assistance program.
25-3 (b) Criminal history record information obtained by the
25-4 commission or an agency under Subsection (a) may not be released or
25-5 disclosed to any person except in a criminal proceeding, in an
25-6 administrative proceeding, on court order, or with the consent of
25-7 the provider or applicant.
25-8 SECTION 2.05. DIRECTOR AND OFFICER LIABILITY. (a)
25-9 Subchapter B, Chapter 32, Human Resources Code, is amended by
25-10 adding Section 32.0323 to read as follows:
25-11 Sec. 32.0323. LIABILITY OF DIRECTORS AND OFFICERS OF
25-12 CORPORATIONS. (a) If a corporation that provides medical
25-13 assistance is found liable to the state for damages, penalties, or
25-14 fines resulting from an act of fraud or abuse committed by the
25-15 corporation under the medical assistance program, each director or
25-16 officer of the corporation is liable for the amount owed to the
25-17 state.
25-18 (b) The director or officer is liable in the same manner and
25-19 to the same extent as if the director or officer were a partner and
25-20 the corporation were a partnership.
25-21 (c) A director or officer is not liable for an amount owed
25-22 to the department if the director or officer shows that the amount
25-23 owed resulted from an act of the corporation that occurred:
25-24 (1) over the objection of the director or officer; or
25-25 (2) without the knowledge of the director or officer,
25-26 unless the exercise of reasonable diligence by the director or
25-27 officer would have revealed the intention of the corporation to
26-1 commit the act.
26-2 (d) The department shall include a reference to the
26-3 liability of a director or officer under this section in an
26-4 agreement between the department and a corporation for the
26-5 provision of medical assistance under the medical assistance
26-6 program.
26-7 (b) Section 32.0323, Human Resources Code, as added by this
26-8 article, applies only to an act of fraud or abuse committed by a
26-9 corporation on or after the effective date of this Act.
26-10 SECTION 2.06. MANAGED CARE ORGANIZATIONS. (a) Section 16A,
26-11 Article 4413(502), Revised Statutes, is amended by amending
26-12 Subsection (n) and adding Subsections (o)-(s) to read as follows:
26-13 (n) A managed care organization that contracts with the
26-14 commission to provide or arrange to provide health care benefits or
26-15 services to Medicaid eligible individuals shall:
26-16 (1) report to the commission or the state's Medicaid
26-17 claims administrator, as appropriate, all information required by
26-18 commission rule, including information necessary to set rates,
26-19 detect fraud, and ensure quality of care;
26-20 (2) not later than 30 days after execution of the
26-21 contract, develop and submit to the commission for approval a plan
26-22 for preventing, detecting, and reporting fraud and abuse that:
26-23 (A) conforms to guidelines developed by the
26-24 commission;
26-25 (B) requires the managed care organization to
26-26 report any known or suspected act of fraud or abuse to the
26-27 commission for investigation; and
27-1 (C) provides that the managed care organization
27-2 may not conduct an investigation of an act reported to the
27-3 commission under Paragraph (B);
27-4 (3) include standard provisions developed by the
27-5 commission in each subcontract entered into by the managed care
27-6 organization that affects the delivery of or payment for Medicaid
27-7 services;
27-8 (4) submit to the commission for approval each
27-9 subcontract entered into by the managed care organization that
27-10 affects the delivery of or payment for Medicaid services; and
27-11 (5) submit annual disclosure statements to the
27-12 commission containing information on:
27-13 (A) the financial condition of the managed care
27-14 organization and each of its affiliates; and
27-15 (B) ownership interests in the managed care
27-16 organization or any of its affiliates.
27-17 (o) The commission shall require that each contract between
27-18 a managed care organization and the commission to provide or
27-19 arrange to provide health care benefits or services to Medicaid
27-20 eligible individuals contains provisions:
27-21 (1) stating that information provided by a managed
27-22 care organization under this section may be used by the commission
27-23 as necessary to detect fraud and abuse;
27-24 (2) specifying the responsibilities of the managed
27-25 care organization in reducing fraud and abuse; and
27-26 (3) authorizing specific penalties for failure to
27-27 provide information required by commission rules.
28-1 (p) At least once every three years the commission shall
28-2 audit each managed care organization that contracts with the
28-3 commission to provide or arrange to provide health care benefits or
28-4 services to Medicaid eligible individuals.
28-5 (q) A managed care organization audited by the commission
28-6 under Subsection (p) of this section is responsible for paying the
28-7 costs of the commission audit. The costs of the audit may be
28-8 allowed as a credit against premium taxes paid by the managed care
28-9 organization, except as provided by Section 2, Article 1.28,
28-10 Insurance Code.
28-11 (r) The commission and the Texas Department of Insurance
28-12 shall enter into a memorandum of understanding to coordinate audits
28-13 of managed care organizations conducted by the commission and the
28-14 department. The memorandum shall:
28-15 (1) identify information required in a commission
28-16 audit that is not customarily required in a department audit;
28-17 (2) encourage the department to include to the extent
28-18 possible information identified under Subdivision (1) of this
28-19 subsection in department audits;
28-20 (3) establish procedures for initiating and
28-21 distributing the findings of audits of a managed care organization;
28-22 (4) identify the records of physicians or Medicaid
28-23 eligible individuals that are served by managed care organizations,
28-24 that are subject to audit; and
28-25 (5) require that commission and department personnel
28-26 that audit a managed care organization receive specific training in
28-27 detecting Medicaid fraud and abuse.
29-1 (s) This section expires September 1, 2001.
29-2 (b) Subchapter B, Chapter 532, Government Code, as added by
29-3 the Act of the 75th Legislature, Regular Session, 1997, relating to
29-4 nonsubstantive additions to and corrections in enacted codes, is
29-5 amended by adding Sections 532.112 and 532.113 to read as follows:
29-6 Sec. 532.112. DUTIES OF MANAGED CARE ORGANIZATION;
29-7 CONTRACTUAL PROVISIONS. (a) A managed care organization that
29-8 contracts with the commission to provide or arrange to provide
29-9 health care benefits or services to Medicaid eligible individuals
29-10 shall:
29-11 (1) report to the commission or the state's Medicaid
29-12 claims administrator, as appropriate, all information required by
29-13 commission rule, including information necessary to set rates,
29-14 detect fraud, and ensure quality of care;
29-15 (2) not later than 30 days after execution of the
29-16 contract, develop and submit to the commission for approval a plan
29-17 for preventing, detecting, and reporting fraud and abuse that:
29-18 (A) conforms to guidelines developed by the
29-19 commission;
29-20 (B) requires the managed care organization to
29-21 report any known or suspected act of fraud or abuse to the
29-22 commission for investigation; and
29-23 (C) provides that the managed care organization
29-24 may not conduct an investigation of an act reported to the
29-25 commission under Paragraph (B);
29-26 (3) include standard provisions developed by the
29-27 commission in each subcontract entered into by the managed care
30-1 organization that affects the delivery of or payment for Medicaid
30-2 services;
30-3 (4) submit to the commission for approval each
30-4 subcontract entered into by the managed care organization that
30-5 affects the delivery of or payment for Medicaid services; and
30-6 (5) submit annual disclosure statements to the
30-7 commission containing information on:
30-8 (A) the financial condition of the managed care
30-9 organization and each of its affiliates; and
30-10 (B) ownership interests in the managed care
30-11 organization or any of its affiliates.
30-12 (b) The commission shall require that each contract between
30-13 a managed care organization and the commission to provide or
30-14 arrange to provide health care benefits or services to Medicaid
30-15 eligible individuals contains provisions:
30-16 (1) stating that information provided by a managed
30-17 care organization under this section may be used by the commission
30-18 as necessary to detect fraud and abuse;
30-19 (2) specifying the responsibilities of the managed
30-20 care organization in reducing fraud and abuse; and
30-21 (3) authorizing specific penalties for failure to
30-22 provide information required by commission rules.
30-23 Sec. 532.113. AUDITS; MEMORANDUM OF UNDERSTANDING. (a) At
30-24 least once every three years the commission shall audit each
30-25 managed care organization that contracts with the commission to
30-26 provide or arrange to provide health care benefits or services to
30-27 Medicaid eligible individuals.
31-1 (b) A managed care organization audited by the commission
31-2 under Subsection (a) is responsible for paying the costs of the
31-3 commission audit. The costs of the audit may be allowed as a
31-4 credit against premium taxes paid by the managed care organization,
31-5 except as provided by Section 2, Article 1.28, Insurance Code.
31-6 (c) The commission and the Texas Department of Insurance
31-7 shall enter into a memorandum of understanding to coordinate audits
31-8 of managed care organizations conducted by the commission and the
31-9 department. The memorandum shall:
31-10 (1) identify information required in a commission
31-11 audit that is not customarily required in a department audit;
31-12 (2) encourage the department to include to the extent
31-13 possible information identified under Subdivision (1) in department
31-14 audits;
31-15 (3) establish procedures for initiating and
31-16 distributing the findings of audits of a managed care organization;
31-17 (4) identify the records of physicians or Medicaid
31-18 eligible individuals that are served by managed care organizations
31-19 that are subject to audit; and
31-20 (5) require that commission and department personnel
31-21 that audit a managed care organization receive specific training in
31-22 detecting Medicaid fraud and abuse.
31-23 (c) Not later than November 1, 1997, the Health and Human
31-24 Services Commission shall develop guidelines applicable to a
31-25 managed care organization's plan for preventing, detecting, and
31-26 reporting Medicaid fraud.
31-27 (d) Section 16A(n)(2), Article 4413(502), Revised Statutes,
32-1 as amended by this section, or Section 532.112(a)(2), Government
32-2 Code, as added by this section, depending on which provision takes
32-3 effect, applies only to a managed care organization that enters
32-4 into a contract or renews a contract on or after November 1, 1997,
32-5 with the Health and Human Services Commission to provide or arrange
32-6 to provide health care benefits to Medicaid eligible individuals.
32-7 (e) This section applies only to a contract entered into or
32-8 renewed on or after the effective date of this section. A contract
32-9 entered into or renewed before the effective date of this section
32-10 is governed by the law in effect immediately before the effective
32-11 date of this section, and the former law is continued in effect for
32-12 that purpose.
32-13 (f) A managed care organization that contracts with the
32-14 Health and Human Services Commission to provide or arrange to
32-15 provide health care benefits to Medicaid eligible individuals
32-16 before the effective date of this section is not required by this
32-17 section to:
32-18 (1) include standard provisions developed by the
32-19 commission in a subcontract executed before the effective date of
32-20 this section;
32-21 (2) submit a subcontract executed before the effective
32-22 date of this section to the commission for approval; or
32-23 (3) modify a contract between the managed care
32-24 organization and the commission executed before the effective date
32-25 of this section.
32-26 (g) A managed care organization that renews a contract or
32-27 subcontract subject to this section after the effective date of
33-1 this section shall include in the renewed contract or subcontract
33-2 all provisions required to be included by this section.
33-3 (h) Subsection (a) of this section takes effect only if the
33-4 Act of the 75th Legislature, Regular Session, 1997, relating to
33-5 nonsubstantive additions to and corrections in enacted codes, does
33-6 not take effect.
33-7 (i) Subsection (b) of this section takes effect only if the
33-8 Act of the 75th Legislature, Regular Session, 1997, relating to
33-9 nonsubstantive additions to and corrections in enacted codes, takes
33-10 effect.
33-11 SECTION 2.07. PILOT PROGRAM; ON-SITE REVIEWS OF PROSPECTIVE
33-12 PROVIDERS. (a) The Health and Human Services Commission by rule
33-13 shall establish a pilot program to reduce fraud by conducting
33-14 on-site reviews of persons who apply to provide health care
33-15 services under the state Medicaid program before authorizing those
33-16 persons to provide the services.
33-17 (b) The commission shall implement the pilot program
33-18 initially in not more than five or fewer than three urban counties
33-19 selected by the commission. The commission shall select counties
33-20 for the pilot program that:
33-21 (1) offer the greatest potential for achieving a
33-22 reduction of provider fraud; and
33-23 (2) contain established field offices of the
33-24 commission or the Texas Department of Human Services, as
33-25 appropriate.
33-26 (c) At a minimum, the pilot program shall provide for
33-27 on-site reviews of durable medical equipment providers, home health
34-1 providers, therapists, and laboratories. The commission may
34-2 include other groups of providers in the pilot program.
34-3 (d) The commission shall develop questions to be used during
34-4 an on-site review of a prospective provider to verify that the
34-5 provider has the ability to provide the proposed services.
34-6 (e) The on-site reviews shall be conducted by personnel in
34-7 the appropriate field offices of the commission or the Texas
34-8 Department of Human Services.
34-9 (f) If the pilot program is successful in reducing provider
34-10 fraud in the counties initially selected under Subsection (b) of
34-11 this section, the commission may expand the pilot program to
34-12 include additional counties.
34-13 (g) Not later than January 15, 1999, the commission shall
34-14 submit to the governor and the legislature a report concerning the
34-15 effectiveness of the pilot program that includes:
34-16 (1) the number of applications denied as a result of
34-17 an on-site review; and
34-18 (2) recommendations on expanding the pilot program.
34-19 (h) This section expires September 1, 1999.
34-20 SECTION 2.08. DEVELOPMENT OF NEW PROVIDER CONTRACT. (a) As
34-21 soon as possible after the effective date of this section, the
34-22 Health and Human Services Commission shall develop a new provider
34-23 contract for health care services that contains provisions designed
34-24 to strengthen the commission's ability to prevent provider fraud
34-25 under the state Medicaid program.
34-26 (b) In developing the new provider contract, the commission
34-27 shall solicit suggestions and comments from representatives of
35-1 providers in the state Medicaid program.
35-2 (c) As soon as possible after development of the new
35-3 provider contract, the commission and each agency operating part
35-4 of the state Medicaid program by rule shall require each provider
35-5 who enrolled in the program before the effective date of this Act
35-6 to reenroll in the program under the new contract. A provider must
35-7 reenroll in the state Medicaid program not later than September 1,
35-8 1999, to retain eligibility to participate in the program.
35-9 SECTION 2.09. PREFERRED VENDOR FOR DURABLE MEDICAL
35-10 EQUIPMENT. As soon as possible after the effective date of this
35-11 section, the Health and Human Services Commission shall submit an
35-12 amendment to the state's Medicaid plan authorizing the Texas
35-13 Department of Health to select and use a preferred vendor for the
35-14 delivery of durable medical equipment and supplies.
35-15 SECTION 2.10. REVIEW OF SERVICE PROVIDER BILLING PRACTICES.
35-16 (a) The Texas Department of Health shall conduct an automated
35-17 review of physician, laboratory, and radiology services to
35-18 identify improper billing practices designed to inflate a service
35-19 provider's claim for payment for services provided under the state
35-20 Medicaid program.
35-21 (b) After completing the review required by Subsection (a)
35-22 of this section, the Texas Department of Health shall require the
35-23 entity that administers the state Medicaid program on behalf of the
35-24 department to modify the entity's claims processing and monitoring
35-25 procedures and computer technology as necessary to prevent improper
35-26 billing by service providers.
36-1 ARTICLE 3. ADMINISTRATIVE PENALTIES AND SANCTIONS
36-2 RELATING TO MEDICAID FRAUD
36-3 SECTION 3.01. ADMINISTRATIVE PENALTIES. (a) Section
36-4 32.039, Human Resources Code, is amended to read as follows:
36-5 Sec. 32.039. [CIVIL] DAMAGES AND PENALTIES. (a) In this
36-6 section:
36-7 (1) "Claim" [, "claim"] means an application for
36-8 payment of health care services under Title XIX of the federal
36-9 Social Security Act that is submitted by a person who is under a
36-10 contract or provider agreement with the department.
36-11 (2) "Managed care organization" means any entity or
36-12 person that is authorized or otherwise permitted by law to arrange
36-13 for or provide a managed care plan.
36-14 (3) "Managed care plan" means a plan under which a
36-15 person undertakes to provide, arrange for, pay for, or reimburse
36-16 any part of the cost of any health care service. A part of the
36-17 plan must consist of arranging for or providing health care
36-18 services as distinguished from indemnification against the cost of
36-19 those services on a prepaid basis through insurance or otherwise.
36-20 The term does not include a plan that indemnifies a person for the
36-21 cost of health care services through insurance.
36-22 (b) A person commits a violation if the person:
36-23 (1) presents or causes to be presented to the
36-24 department a claim that contains a statement or representation the
36-25 person knows to be false; or
36-26 (2) is a managed care organization that contracts with
36-27 the department to provide or arrange to provide health care
37-1 benefits or services to individuals eligible for medical assistance
37-2 and:
37-3 (A) fails to provide to an individual a
37-4 medically necessary health care benefit or service that the
37-5 organization is required to provide under the contract with the
37-6 department;
37-7 (B) fails to provide to the department
37-8 information required to be provided by law, department rule, or
37-9 contractual provision; or
37-10 (C) engages in a fraudulent activity in
37-11 connection with the enrollment in the organization's managed care
37-12 plan of an individual eligible for medical assistance or in
37-13 connection with marketing the organization's services to an
37-14 individual eligible for medical assistance.
37-15 (c) [(b)] A person who commits a violation under Subsection
37-16 (b) [presents or causes to be presented to the department a claim
37-17 that contains a statement or representation the person knows to be
37-18 false] is liable to the department for:
37-19 (1) the amount paid, if any, as a result [because] of
37-20 the violation [false claim] and interest on that amount determined
37-21 at the rate provided by law for legal judgments and accruing from
37-22 the date on which the payment was made; and
37-23 (2) payment of an administrative [a civil] penalty of
37-24 an amount not to exceed twice the amount paid, if any, as a result
37-25 [because] of the violation, plus an amount:
37-26 (A) not less than $5,000 or more than $15,000
37-27 for each violation that results in injury to a person younger than
38-1 18 years of age; or
38-2 (B) not more than $10,000 for each violation
38-3 that does not result in injury to a person younger than 18 years of
38-4 age [false claim; and]
38-5 [(3) payment of a civil penalty of not more than
38-6 $2,000 for each item or service for which payment was claimed].
38-7 (d) [(c)] Unless the provider submitted information to the
38-8 department for use in preparing a voucher that the provider knew
38-9 was false or failed to correct information that the provider knew
38-10 was false when provided an opportunity to do so, this section does
38-11 not apply to a claim based on the voucher if the department
38-12 calculated and printed the amount of the claim on the voucher and
38-13 then submitted the voucher to the provider for the provider's
38-14 signature. In addition, the provider's signature on the voucher
38-15 does not constitute fraud. The department shall adopt rules that
38-16 establish a grace period during which errors contained in a voucher
38-17 prepared by the department may be corrected without penalty to the
38-18 provider.
38-19 (e) [(d)] In determining the amount of the penalty to be
38-20 assessed under Subsection (c)(2) [Subdivision (3) of Subsection (b)
38-21 of this section], the department shall consider:
38-22 (1) the seriousness of the violation;
38-23 (2) whether the person had previously committed a
38-24 violation [submitted false claims]; and
38-25 (3) the amount necessary to deter the person from
38-26 committing [submitting] future violations [false claims].
38-27 (f) [(e)] If after an examination of the facts the
39-1 department concludes that the person committed a violation [did
39-2 submit a false claim], the department may issue a preliminary
39-3 report stating the facts on which it based its conclusion,
39-4 recommending that an administrative [a civil] penalty under this
39-5 section be imposed and recommending the amount of the proposed
39-6 penalty.
39-7 (g) [(f)] The department shall give written notice of the
39-8 report to the person charged with committing the violation
39-9 [submitting the false claim]. The notice must include a brief
39-10 summary of the facts, a statement of the amount of the recommended
39-11 penalty, and a statement of the person's right to an informal
39-12 review of the alleged violation [false claim], the amount of the
39-13 penalty, or both the alleged violation [false claim] and the amount
39-14 of the penalty.
39-15 (h) [(g)] Not later than the 10th day after the date on
39-16 which the person charged with committing the violation [submitting
39-17 the false claim] receives the notice, the person may either give
39-18 the department written consent to the report, including the
39-19 recommended penalty, or make a written request for an informal
39-20 review by the department.
39-21 (i) [(h)] If the person charged with committing the
39-22 violation [submitting the false claim] consents to the penalty
39-23 recommended by the department or fails to timely request an
39-24 informal review, the department shall assess the penalty. The
39-25 department shall give the person written notice of its action. The
39-26 person shall pay the penalty not later than the 30th day after the
39-27 date on which the person receives the notice.
40-1 (j) [(i)] If the person charged with committing the
40-2 violation [submitting a false claim] requests an informal review as
40-3 provided by Subsection (h) [(g) of this section], the department
40-4 shall conduct the review. The department shall give the person
40-5 written notice of the results of the review.
40-6 (k) [(j)] Not later than the 10th day after the date on
40-7 which the person charged with committing the violation [submitting
40-8 the false claim] receives the notice prescribed by Subsection (j)
40-9 [(i) of this section], the person may make to the department a
40-10 written request for a hearing. The hearing must be conducted in
40-11 accordance with Chapter 2001, Government Code.
40-12 (l) [(k)] If, after informal review, a person who has been
40-13 ordered to pay a penalty fails to request a formal hearing in a
40-14 timely manner, the department shall assess the penalty. The
40-15 department shall give the person written notice of its action. The
40-16 person shall pay the penalty not later than the 30th day after the
40-17 date on which the person receives the notice.
40-18 (m) Within 30 days after the date on which the board's order
40-19 issued after a hearing under Subsection (k) becomes final as
40-20 provided by Section 2001.144, Government Code, the person shall:
40-21 (1) pay the amount of the penalty;
40-22 (2) pay the amount of the penalty and file a petition
40-23 for judicial review contesting the occurrence of the violation, the
40-24 amount of the penalty, or both the occurrence of the violation and
40-25 the amount of the penalty; or
40-26 (3) without paying the amount of the penalty, file a
40-27 petition for judicial review contesting the occurrence of the
41-1 violation, the amount of the penalty, or both the occurrence of the
41-2 violation and the amount of the penalty.
41-3 (n) A person who acts under Subsection (m)(3) within the
41-4 30-day period may:
41-5 (1) stay enforcement of the penalty by:
41-6 (A) paying the amount of the penalty to the
41-7 court for placement in an escrow account; or
41-8 (B) giving to the court a supersedeas bond that
41-9 is approved by the court for the amount of the penalty and that is
41-10 effective until all judicial review of the department's order is
41-11 final; or
41-12 (2) request the court to stay enforcement of the
41-13 penalty by:
41-14 (A) filing with the court a sworn affidavit of
41-15 the person stating that the person is financially unable to pay the
41-16 amount of the penalty and is financially unable to give the
41-17 supersedeas bond; and
41-18 (B) giving a copy of the affidavit to the
41-19 commissioner by certified mail.
41-20 (o) If the commissioner receives a copy of an affidavit
41-21 under Subsection (n)(2), the commissioner may file with the court,
41-22 within five days after the date the copy is received, a contest to
41-23 the affidavit. The court shall hold a hearing on the facts alleged
41-24 in the affidavit as soon as practicable and shall stay the
41-25 enforcement of the penalty on finding that the alleged facts are
41-26 true. The person who files an affidavit has the burden of proving
41-27 that the person is financially unable to pay the amount of the
42-1 penalty and to give a supersedeas bond.
42-2 (p) [(l) Except as provided by Subsection (m) of this
42-3 section, not later than 30 days after the date on which the
42-4 department issues a final decision after a hearing under Subsection
42-5 (j) of this section, a person who has been ordered to pay a penalty
42-6 under this section shall pay the penalty in full.]
42-7 [(m) If the person seeks judicial review of either the fact
42-8 of the submission of a false claim or the amount of the penalty or
42-9 of both the fact of the submission and the amount of the penalty,
42-10 the person shall forward the amount of the penalty to the
42-11 department for placement in an escrow account or, instead of
42-12 payment into an escrow account, post with the department a
42-13 supersedeas bond in a form approved by the department for the
42-14 amount of the penalty. The bond must be effective until all
42-15 judicial review of the order or decision is final.]
42-16 [(n) Failure to forward the money to or to post the bond
42-17 with the department within the period provided by Subsection (l) or
42-18 (m) of this section results in a waiver of all legal rights to
42-19 judicial review.] If the person charged does not pay the amount of
42-20 the penalty and the enforcement of the penalty is not stayed [fails
42-21 to forward the money or post the bond within the period provided by
42-22 Subsection (h), (k), (l), or (m) of this section], the department
42-23 may forward the matter to the attorney general for enforcement of
42-24 the penalty and interest as provided by law for legal judgments.
42-25 An action to enforce a penalty order under this section must be
42-26 initiated in a court of competent jurisdiction in Travis County or
42-27 in the county in [from] which the violation [false claim] was
43-1 committed [submitted].
43-2 (q) [(o)] Judicial review of a department order or review
43-3 under this section assessing a penalty is under the substantial
43-4 evidence rule. A suit may be initiated by filing a petition with a
43-5 district court in Travis County, as provided by Subchapter G,
43-6 Chapter 2001, Government Code.
43-7 (r) [(p)] If a penalty is reduced or not assessed, the
43-8 department shall remit to the person the appropriate amount plus
43-9 accrued interest if the penalty has been paid or shall execute a
43-10 release of the bond if a supersedeas bond has been posted. The
43-11 accrued interest on amounts remitted by the department under this
43-12 subsection shall be paid at a rate equal to the rate provided by
43-13 law for legal judgments and shall be paid for the period beginning
43-14 on the date the penalty is paid to the department under this
43-15 section and ending on the date the penalty is remitted.
43-16 (s) [(q)] A damage, cost, or penalty collected under this
43-17 section is not an allowable expense in a claim or cost report that
43-18 is or could be used to determine a rate or payment under the
43-19 medical assistance program.
43-20 (t) [(r)] All funds collected under this section shall be
43-21 deposited in the State Treasury to the credit of the General
43-22 Revenue Fund.
43-23 (u) A person found liable for a violation under Subsection
43-24 (c) that resulted in injury to a person younger than 18 years of
43-25 age may not provide or arrange to provide health care services
43-26 under the medical assistance program for a period of 10 years. The
43-27 department by rule may provide for a period of ineligibility longer
44-1 than 10 years. The period of ineligibility begins on the date on
44-2 which the determination that the person is liable becomes final.
44-3 (v) A person found liable for a violation under Subsection
44-4 (c) that did not result in injury to a person younger than 18 years
44-5 of age may not provide or arrange to provide health care services
44-6 under the medical assistance program for a period of three years.
44-7 The department by rule may provide for a period of ineligibility
44-8 longer than three years. The period of ineligibility begins on the
44-9 date on which the determination that the person is liable becomes
44-10 final. This subsection does not apply to a person who operates a
44-11 nursing facility.
44-12 (b) The change in law made by this section applies only to a
44-13 violation committed on or after the effective date of this section.
44-14 For purposes of this subsection, a violation is committed on or
44-15 after the effective date of this section only if each element of
44-16 the violation occurs on or after that date. A violation committed
44-17 before the effective date of this section is covered by the law in
44-18 effect when the violation was committed, and the former law is
44-19 continued in effect for that purpose.
44-20 SECTION 3.02. SANCTIONS APPLICABLE TO VENDOR DRUG PROGRAM.
44-21 Subchapter B, Chapter 32, Human Resources Code, is amended by
44-22 adding Section 32.046 to read as follows:
44-23 Sec. 32.046. VENDOR DRUG PROGRAM; SANCTIONS AND PENALTIES.
44-24 (a) The department shall adopt rules governing sanctions and
44-25 penalties that apply to a provider in the vendor drug program who
44-26 submits an improper claim for reimbursement under the program.
44-27 (b) The department shall notify each provider in the vendor
45-1 drug program that the provider is subject to sanctions and
45-2 penalties for submitting an improper claim.
45-3 SECTION 3.03. PROHIBITION OF CERTAIN PERSONS CONVICTED OF
45-4 FRAUD. Subchapter B, Chapter 32, Human Resources Code, is amended
45-5 by adding Section 32.047 to read as follows:
45-6 Sec. 32.047. PROHIBITION OF CERTAIN HEALTH CARE SERVICE
45-7 PROVIDERS. A person is permanently prohibited from providing or
45-8 arranging to provide health care services under the medical
45-9 assistance program if:
45-10 (1) the person is convicted of an offense arising from
45-11 a fraudulent act under the program; and
45-12 (2) the person's fraudulent act results in injury to a
45-13 person younger than 18 years of age.
45-14 SECTION 3.04. DEDUCTIONS FROM LOTTERY WINNINGS. (a)
45-15 Sections 466.407(a) and (c), Government Code, are amended to read
45-16 as follows:
45-17 (a) The executive director shall deduct the amount of a
45-18 delinquent tax or other money from the winnings of a person who has
45-19 been finally determined to be:
45-20 (1) delinquent in the payment of a tax or other money
45-21 collected by the comptroller[, the state treasurer,] or the Texas
45-22 Alcoholic Beverage Commission;
45-23 (2) delinquent in making child support payments
45-24 administered or collected by the attorney general;
45-25 (3) delinquent in reimbursing the Texas Department of
45-26 Human Services for a benefit granted in error under the food stamp
45-27 program or the program of financial assistance under Chapter 31,
46-1 Human Resources Code;
46-2 (4) in default on a loan made under Chapter 52,
46-3 Education Code; or
46-4 (5) [(4)] in default on a loan guaranteed under
46-5 Chapter 57, Education Code.
46-6 (c) The attorney general, comptroller, [state treasurer,]
46-7 Texas Alcoholic Beverage Commission, Texas Department of Human
46-8 Services, Texas Higher Education Coordinating Board, and Texas
46-9 Guaranteed Student Loan Corporation shall each provide the
46-10 executive director with a report of persons who have been finally
46-11 determined to be delinquent in the payment of a tax or other money
46-12 collected by the agency. The commission shall adopt rules
46-13 regarding the form and frequency of reports under this subsection.
46-14 (b) The Texas Department of Human Services shall take all
46-15 action necessary to implement the change in law made by this
46-16 section not later than January 1, 1998. The department may not
46-17 seek recovery through lottery prize deduction of an amount of a
46-18 benefit granted in error to a person under the food stamp program
46-19 or the program of financial assistance under Chapter 31, Human
46-20 Resources Code, before September 1, 1997.
46-21 (c) The executive director of the Texas Lottery Commission
46-22 is not required under Section 466.407, Government Code, as amended
46-23 by this section, to deduct from lottery prizes erroneous amounts
46-24 granted to lottery winners by the Texas Department of Human
46-25 Services until the department provides to the commission all
46-26 necessary information and reports required for implementation of
46-27 that section.
47-1 ARTICLE 4. CIVIL REMEDIES RELATING TO MEDICAID FRAUD
47-2 AND CREATION OF CRIMINAL OFFENSE
47-3 SECTION 4.01. REDESIGNATION. (a) Chapter 36, Human
47-4 Resources Code, is amended by designating Sections 36.001, 36.002,
47-5 36.007, 36.008, 36.009, 36.010, 36.011, and 36.012 as Subchapter A,
47-6 renumbering Sections 36.007, 36.008, 36.009, 36.010, 36.011, and
47-7 36.012 as Sections 36.003, 36.004, 36.005, 36.006, 36.007, and
47-8 36.008, respectively, and adding a subchapter heading to read as
47-9 follows:
47-10 SUBCHAPTER A. GENERAL PROVISIONS
47-11 (b) Chapter 36, Human Resources Code, is amended by
47-12 designating Sections 36.003, 36.004, 36.005, and 36.006 as
47-13 Subchapter B, renumbering those sections as Sections 36.051,
47-14 36.052, 36.053, and 36.054, respectively, and adding a subchapter
47-15 heading to read as follows:
47-16 SUBCHAPTER B. ACTION BY ATTORNEY GENERAL
47-17 SECTION 4.02. DEFINITIONS. Section 36.001, Human Resources
47-18 Code, is amended by amending Subdivisions (5)-(11) and adding
47-19 Subdivision (12) to read as follows:
47-20 (5) "Managed care organization" has the meaning
47-21 assigned by Section 32.039(a).
47-22 (6) "Medicaid program" means the state Medicaid
47-23 program.
47-24 (7) [(6)] "Medicaid recipient" means an individual on
47-25 whose behalf a person claims or receives a payment from the
47-26 Medicaid program or a fiscal agent, without regard to whether the
47-27 individual was eligible for benefits under the Medicaid program.
48-1 (8) [(7)] "Physician" means a physician licensed to
48-2 practice medicine in this state.
48-3 (9) [(8)] "Provider" means a person who participates
48-4 in or who has applied to participate in the Medicaid program as a
48-5 supplier of a product or service and includes:
48-6 (A) a management company that manages, operates,
48-7 or controls another provider;
48-8 (B) a person, including a medical vendor, that
48-9 provides a product or service to a provider or to a fiscal agent;
48-10 [and]
48-11 (C) an employee of a provider; and
48-12 (D) a managed care organization.
48-13 (10) [(9)] "Service" includes care or treatment of a
48-14 Medicaid recipient.
48-15 (11) [(10)] "Signed" means to have affixed a signature
48-16 directly or indirectly by means of handwriting, typewriting,
48-17 signature stamp, computer impulse, or other means recognized by
48-18 law.
48-19 (12) [(11)] "Unlawful act" means an act declared to be
48-20 unlawful under Section 36.002.
48-21 SECTION 4.03. UNLAWFUL ACTS RELATING TO MANAGED CARE
48-22 ORGANIZATION. Section 36.002, Human Resources Code, is amended to
48-23 read as follows:
48-24 Sec. 36.002. UNLAWFUL ACTS. A person commits an unlawful
48-25 act if the person:
48-26 (1) knowingly or intentionally makes or causes to be
48-27 made a false statement or misrepresentation of a material fact:
49-1 (A) on an application for a contract, benefit,
49-2 or payment under the Medicaid program; or
49-3 (B) that is intended to be used to determine a
49-4 person's eligibility for a benefit or payment under the Medicaid
49-5 program;
49-6 (2) knowingly or intentionally conceals or fails to
49-7 disclose an event:
49-8 (A) that the person knows affects the initial or
49-9 continued right to a benefit or payment under the Medicaid program
49-10 of:
49-11 (i) the person; or
49-12 (ii) another person on whose behalf the
49-13 person has applied for a benefit or payment or is receiving a
49-14 benefit or payment; and
49-15 (B) to permit a person to receive a benefit or
49-16 payment that is not authorized or that is greater than the payment
49-17 or benefit that is authorized;
49-18 (3) knowingly or intentionally applies for and
49-19 receives a benefit or payment on behalf of another person under the
49-20 Medicaid program and converts any part of the benefit or payment to
49-21 a use other than for the benefit of the person on whose behalf it
49-22 was received;
49-23 (4) knowingly or intentionally makes, causes to be
49-24 made, induces, or seeks to induce the making of a false statement
49-25 or misrepresentation of material fact concerning:
49-26 (A) the conditions or operation of a facility in
49-27 order that the facility may qualify for certification or
50-1 recertification required by the Medicaid program, including
50-2 certification or recertification as:
50-3 (i) a hospital;
50-4 (ii) a nursing facility or skilled nursing
50-5 facility;
50-6 (iii) a hospice;
50-7 (iv) an intermediate care facility for the
50-8 mentally retarded;
50-9 (v) a personal care facility; or
50-10 (vi) a home health agency; or
50-11 (B) information required to be provided by a
50-12 federal or state law, rule, regulation, or provider agreement
50-13 pertaining to the Medicaid program;
50-14 (5) except as authorized under the Medicaid program,
50-15 knowingly or intentionally charges, solicits, accepts, or receives,
50-16 in addition to an amount paid under the Medicaid program, a gift,
50-17 money, a donation, or other consideration as a condition to the
50-18 provision of a service or continued service to a Medicaid recipient
50-19 if the cost of the service provided to the Medicaid recipient is
50-20 paid for, in whole or in part, under the Medicaid program;
50-21 (6) knowingly or intentionally presents or causes to
50-22 be presented a claim for payment under the Medicaid program for a
50-23 product provided or a service rendered by a person who:
50-24 (A) is not licensed to provide the product or
50-25 render the service, if a license is required; or
50-26 (B) is not licensed in the manner claimed;
50-27 (7) knowingly or intentionally makes a claim under the
51-1 Medicaid program for:
51-2 (A) a service or product that has not been
51-3 approved or acquiesced in by a treating physician or health care
51-4 practitioner;
51-5 (B) a service or product that is substantially
51-6 inadequate or inappropriate when compared to generally recognized
51-7 standards within the particular discipline or within the health
51-8 care industry; or
51-9 (C) a product that has been adulterated,
51-10 debased, mislabeled, or that is otherwise inappropriate;
51-11 (8) makes a claim under the Medicaid program and
51-12 knowingly or intentionally fails to indicate the type of license
51-13 and the identification number of the licensed health care provider
51-14 who actually provided the service; [or]
51-15 (9) knowingly or intentionally enters into an
51-16 agreement, combination, or conspiracy to defraud the state by
51-17 obtaining or aiding another person in obtaining an unauthorized
51-18 payment or benefit from the Medicaid program or a fiscal agent; or
51-19 (10) is a managed care organization that contracts
51-20 with the Health and Human Services Commission or other state agency
51-21 to provide or arrange to provide health care benefits or services
51-22 to individuals eligible under the Medicaid program and knowingly or
51-23 intentionally:
51-24 (A) fails to provide to an individual a
51-25 medically necessary health care benefit or service that the
51-26 organization is required to provide under the contract;
51-27 (B) fails to provide to the commission or
52-1 appropriate state agency information required to be provided by
52-2 law, commission or agency rule, or contractual provision;
52-3 (C) engages in a fraudulent activity in
52-4 connection with the enrollment of an individual eligible under the
52-5 Medicaid program in the organization's managed care plan or in
52-6 connection with marketing the organization's services to an
52-7 individual eligible under the Medicaid program; or
52-8 (D) obstructs an investigation by the attorney
52-9 general of an alleged unlawful act under this section.
52-10 SECTION 4.04. APPLICABLE PENALTIES AND CONFORMING AMENDMENT.
52-11 Section 36.004, Human Resources Code, as renumbered by this article
52-12 as Section 36.052, is amended by amending Subsections (a) and (e)
52-13 to read as follows:
52-14 (a) Except as provided by Subsection (c), a person who
52-15 commits an unlawful act is liable to the state for:
52-16 (1) restitution of the value of any payment or
52-17 monetary or in-kind benefit provided under the Medicaid program,
52-18 directly or indirectly, as a result of the unlawful act;
52-19 (2) interest on the value of the payment or benefit
52-20 described by Subdivision (1) at the prejudgment interest rate in
52-21 effect on the day the payment or benefit was received or paid, for
52-22 the period from the date the benefit was received or paid to the
52-23 date that restitution is paid to the state;
52-24 (3) a civil penalty of:
52-25 (A) not less than $5,000 or more than $15,000
52-26 for each unlawful act committed by the person that results in
52-27 injury to a person younger than 18 years of age; or
53-1 (B) not less than $1,000 or more than $10,000
53-2 for each unlawful act committed by the person that does not result
53-3 in injury to a person younger than 18 years of age; and
53-4 (4) two times the value of the payment or benefit
53-5 described by Subdivision (1).
53-6 (e) The attorney general may:
53-7 (1) bring an action for civil remedies under this
53-8 section together with a suit for injunctive relief under Section
53-9 36.051 [36.003]; or
53-10 (2) institute an action for civil remedies
53-11 independently of an action for injunctive relief.
53-12 SECTION 4.05. CONFORMING AMENDMENT. Section 36.005, Human
53-13 Resources Code, as renumbered by this Act as Section 36.053, is
53-14 amended by amending Subsection (b) to read as follows:
53-15 (b) In investigating an unlawful act, the attorney general
53-16 may:
53-17 (1) require the person to file on a prescribed form a
53-18 statement in writing, under oath or affirmation, as to all the
53-19 facts and circumstances concerning the alleged unlawful act and
53-20 other information considered necessary by the attorney general;
53-21 (2) examine under oath a person in connection with the
53-22 alleged unlawful act; and
53-23 (3) execute in writing and serve on the person a civil
53-24 investigative demand requiring the person to produce the
53-25 documentary material and permit inspection and copying of the
53-26 material under Section 36.054 [36.006].
53-27 SECTION 4.06. ADDITIONAL SANCTIONS FOR MEDICAID FRAUD.
54-1 Section 36.009, Human Resources Code, as renumbered by this article
54-2 as Section 36.005, is amended to read as follows:
54-3 Sec. 36.005 [36.009]. SUSPENSION OR REVOCATION OF AGREEMENT;
54-4 PROFESSIONAL DISCIPLINE. (a) The commissioner of human services,
54-5 the commissioner of public health, the commissioner of mental
54-6 health and mental retardation, the executive director of the
54-7 Department of Protective and Regulatory Services, or the executive
54-8 director of another state health care regulatory agency:
54-9 (1) shall suspend or revoke:
54-10 (A) a provider agreement between the department
54-11 or agency and a person, including a person who operates a nursing
54-12 facility, found liable under Section 36.052 for an unlawful act
54-13 that resulted in injury to a person younger than 18 years of age;
54-14 (B) a provider agreement between the department
54-15 or agency and a person, other than a person who operates a nursing
54-16 facility, found liable under Section 36.052 for an unlawful act
54-17 that did not result in injury to a person younger than 18 years of
54-18 age;
54-19 (C) a permit, license, or certification granted
54-20 by the department or agency to a person, including a person who
54-21 operates a nursing facility, found liable under Section 36.052 for
54-22 an unlawful act that resulted in injury to a person younger than 18
54-23 years of age; and
54-24 (D) a permit, license, or certification granted
54-25 by the department or agency to a person, other than a person who
54-26 operates a nursing facility, found liable under Section 36.052 for
54-27 an unlawful act that did not result in injury to a person younger
55-1 than 18 years of age; and
55-2 (2) may suspend or revoke:
55-3 (A) [(1)] a provider agreement between the
55-4 department or agency and a person who operates a nursing facility
55-5 found liable under Section 36.052 for an unlawful act that did not
55-6 result in injury to a person younger than 18 years of age [36.004];
55-7 or
55-8 (B) [(2)] a permit, license, or certification
55-9 granted by the department or agency to a person who operates a
55-10 nursing facility found liable under Section 36.052 for an unlawful
55-11 act that did not result in injury to a person younger than 18 years
55-12 of age [36.004].
55-13 (b) A person found liable under Section 36.052 for an
55-14 unlawful act may not provide or arrange to provide health care
55-15 services under the Medicaid program for a period of 10 years. The
55-16 board of a state agency that operates part of the Medicaid program
55-17 may by rule provide for a period of ineligibility longer than 10
55-18 years. The period of ineligibility begins on the date on which the
55-19 determination that the person is liable becomes final. This
55-20 section does not apply to a person who operates a nursing facility,
55-21 unless the person was found liable for an unlawful act that
55-22 resulted in injury to a person younger than 18 years of age.
55-23 (c) A person licensed by a state regulatory agency who
55-24 commits an unlawful act is subject to professional discipline under
55-25 the applicable licensing law or rules adopted under that law.
55-26 (d) For purposes of this section, a person is considered to
55-27 have been found liable under Section 36.052 if the person is found
56-1 liable in an action brought under Subchapter C.
56-2 SECTION 4.07. USE OF MONEY RECOVERED. Section 36.012, Human
56-3 Resources Code, as renumbered by this article as Section 36.008, is
56-4 amended to read as follows:
56-5 Sec. 36.008 [36.012]. USE OF MONEY RECOVERED. (a) The
56-6 attorney general may retain a reasonable portion of money recovered
56-7 under this chapter, not to exceed amounts specified in the General
56-8 Appropriations Act, for the administration of this chapter.
56-9 (b) The legislature, in appropriating money recovered under
56-10 this chapter, shall consider the requirements of the attorney
56-11 general and other affected state agencies in investigating Medicaid
56-12 fraud and enforcing this chapter.
56-13 SECTION 4.08. AUTHORITY OF ATTORNEY GENERAL. (a)
56-14 Subchapter B, Chapter 36, Human Resources Code, as designated by
56-15 this Act, is amended by adding Section 36.055 to read as follows:
56-16 Sec. 36.055. ATTORNEY GENERAL AS RELATOR IN FEDERAL ACTION.
56-17 To the extent permitted by 31 U.S.C. Sections 3729-3733, the
56-18 attorney general may bring an action as relator under 31 U.S.C.
56-19 Section 3730 with respect to an act in connection with the Medicaid
56-20 program for which a person may be held liable under 31 U.S.C.
56-21 Section 3729. The attorney general may contract with a private
56-22 attorney to represent the state under this section.
56-23 (b) The office of the attorney general shall develop
56-24 strategies to increase state recoveries under 31 U.S.C. Sections
56-25 3729-3733. The office shall report the results of the office's
56-26 effort to the legislature not later than September 1, 1998.
56-27 SECTION 4.09. CIVIL ACTION BY PRIVATE PERSON FOR MEDICAID
57-1 FRAUD. Chapter 36, Human Resources Code, is amended by adding
57-2 Subchapter C to read as follows:
57-3 SUBCHAPTER C. ACTION BY PRIVATE PERSONS
57-4 Sec. 36.101. ACTION BY PRIVATE PERSON AUTHORIZED. (a) A
57-5 person may bring a civil action for a violation of Section 36.002
57-6 for the person and for the state. The action shall be brought in
57-7 the name of the state.
57-8 (b) In an action brought under this subchapter, a person who
57-9 violates Section 36.002 is liable as provided by Section 36.052.
57-10 Sec. 36.102. INITIATION OF ACTION. (a) A person bringing
57-11 an action under this subchapter shall serve a copy of the petition
57-12 and a written disclosure of substantially all material evidence and
57-13 information the person possesses on the attorney general in
57-14 compliance with the Texas Rules of Civil Procedure.
57-15 (b) The petition shall be filed in camera and shall remain
57-16 under seal until at least the 60th day after the date the petition
57-17 is filed. The petition may not be served on the defendant until
57-18 the court orders service on the defendant.
57-19 (c) The state may elect to intervene and proceed with the
57-20 action not later than the 60th day after the date the attorney
57-21 general receives the petition and the material evidence and
57-22 information.
57-23 (d) The state may, for good cause shown, move the court to
57-24 extend the time during which the petition remains under seal under
57-25 Subsection (b). A motion under this subsection may be supported by
57-26 affidavits or other submissions in camera.
57-27 (e) An action under this subchapter may be dismissed before
58-1 the end of the period prescribed by Subsection (b), as extended as
58-2 provided by Subsection (d), if applicable, only if the court and
58-3 the attorney general consent in writing to the dismissal and state
58-4 their reasons for consenting.
58-5 Sec. 36.103. ANSWER BY DEFENDANT. A defendant is not
58-6 required to file an answer to a petition filed under this
58-7 subchapter until the 20th day after the date the petition is
58-8 unsealed and served on the defendant in compliance with the Texas
58-9 Rules of Civil Procedure.
58-10 Sec. 36.104. STATE'S DECISION TO CONTINUE ACTION. Not
58-11 later than the last day of the period prescribed by Section
58-12 36.102(b), as extended as provided by Section 36.102(d), if
58-13 applicable, the state shall:
58-14 (1) proceed with the action; or
58-15 (2) notify the court that the state declines to take
58-16 over the action.
58-17 Sec. 36.105. REPRESENTATION OF STATE BY PRIVATE ATTORNEY.
58-18 The attorney general may contract with a private attorney to
58-19 represent the state in an action under this subchapter with which
58-20 the state elects to proceed.
58-21 Sec. 36.106. INTERVENTION BY OTHER PARTIES PROHIBITED. A
58-22 person other than the state may not intervene or bring a related
58-23 action based on the facts underlying a pending action brought under
58-24 this subchapter.
58-25 Sec. 36.107. RIGHTS OF PARTIES IF STATE CONTINUES ACTION.
58-26 (a) If the state proceeds with the action, the state has the
58-27 primary responsibility for prosecuting the action and is not bound
59-1 by an act of the person bringing the action. The person bringing
59-2 the action has the right to continue as a party to the action,
59-3 subject to the limitations set forth by this section.
59-4 (b) The state may dismiss the action notwithstanding the
59-5 objections of the person bringing the action if:
59-6 (1) the attorney general notifies the person that the
59-7 state has filed a motion to dismiss; and
59-8 (2) the court provides the person with an opportunity
59-9 for a hearing on the motion.
59-10 (c) The state may settle the action with the defendant
59-11 notwithstanding the objections of the person bringing the action if
59-12 the court determines, after a hearing, that the proposed settlement
59-13 is fair, adequate, and reasonable under all the circumstances. On
59-14 a showing of good cause, the hearing may be held in camera.
59-15 (d) On a showing by the state that unrestricted
59-16 participation during the course of the litigation by the person
59-17 bringing the action would interfere with or unduly delay the
59-18 state's prosecution of the case, or would be repetitious,
59-19 irrelevant, or for purposes of harassment, the court may impose
59-20 limitations on the person's participation, including:
59-21 (1) limiting the number of witnesses the person may
59-22 call;
59-23 (2) limiting the length of the testimony of witnesses
59-24 called by the person;
59-25 (3) limiting the person's cross-examination of
59-26 witnesses; or
59-27 (4) otherwise limiting the participation by the person
60-1 in the litigation.
60-2 (e) On a showing by the defendant that unrestricted
60-3 participation during the course of the litigation by the person
60-4 bringing the action would be for purposes of harassment or would
60-5 cause the defendant undue burden or unnecessary expense, the court
60-6 may limit the participation by the person in the litigation.
60-7 Sec. 36.108. RIGHTS OF PARTIES IF STATE DOES NOT CONTINUE
60-8 ACTION. (a) If the state elects not to proceed with the action,
60-9 the person bringing the action has the right to conduct the action.
60-10 (b) If the state requests pleadings and deposition
60-11 transcripts, the parties shall serve the attorney general with
60-12 copies of all pleadings filed in the action and shall make
60-13 available to the attorney general copies of all deposition
60-14 transcripts.
60-15 (c) The court, without limiting the status and rights of the
60-16 person bringing the action, may permit the state to intervene at a
60-17 later date on a showing of good cause.
60-18 Sec. 36.109. STAY OF CERTAIN DISCOVERY. (a) Regardless of
60-19 whether the state proceeds with the action, on a showing by the
60-20 state that certain actions of discovery by the person bringing the
60-21 action would interfere with the state's investigation or
60-22 prosecution of a criminal or civil matter arising out of the same
60-23 facts, the court may stay the discovery for a period not to exceed
60-24 60 days.
60-25 (b) The court shall hear a motion to stay discovery under
60-26 this section in camera.
60-27 (c) The court may extend the period prescribed by Subsection
61-1 (a) on a further showing in camera that the state has pursued the
61-2 criminal or civil investigation or proceedings with reasonable
61-3 diligence and that any proposed discovery in the civil action will
61-4 interfere with the ongoing criminal or civil investigation or
61-5 proceedings.
61-6 Sec. 36.110. PURSUIT OF ALTERNATE REMEDY BY STATE. (a)
61-7 Notwithstanding Section 36.101, the state may elect to pursue the
61-8 state's claim through any alternate remedy available to the state,
61-9 including any administrative proceeding to determine an
61-10 administrative penalty. If an alternate remedy is pursued in
61-11 another proceeding, the person bringing the action has the same
61-12 rights in the other proceeding as the person would have had if the
61-13 action had continued under this subchapter.
61-14 (b) A finding of fact or conclusion of law made in the other
61-15 proceeding that has become final is conclusive on all parties to an
61-16 action under this subchapter. For purposes of this subsection, a
61-17 finding or conclusion is final if:
61-18 (1) the finding or conclusion has been finally
61-19 determined on appeal to the appropriate court;
61-20 (2) no appeal has been filed with respect to the
61-21 finding or conclusion and all time for filing an appeal has
61-22 expired; or
61-23 (3) the finding or conclusion is not subject to
61-24 judicial review.
61-25 Sec. 36.111. AWARD TO PRIVATE PLAINTIFF. (a) If the state
61-26 proceeds with an action under this subchapter, the person bringing
61-27 the action is entitled, except as provided by Subsection (b), to
62-1 receive at least 10 percent but not more than 25 percent of the
62-2 proceeds of the action, depending on the extent to which the person
62-3 substantially contributed to the prosecution of the action.
62-4 (b) If the court finds that the action is based primarily on
62-5 disclosures of specific information, other than information
62-6 provided by the person bringing the action, relating to allegations
62-7 or transactions in a criminal or civil hearing, in a legislative or
62-8 administrative report, hearing, audit, or investigation, or from
62-9 the news media, the court may award the amount the court considers
62-10 appropriate but not more than seven percent of the proceeds of the
62-11 action. The court shall consider the significance of the
62-12 information and the role of the person bringing the action in
62-13 advancing the case to litigation.
62-14 (c) If the state does not proceed with an action under this
62-15 subchapter, the person bringing the action or settling the claim is
62-16 entitled to receive an amount that the court decides is reasonable
62-17 for collecting the civil penalty and damages. The amount may not
62-18 be less than 25 percent or more than 30 percent of the proceeds of
62-19 the action.
62-20 (d) A payment to a person under this section shall be made
62-21 from the proceeds of the action. A person receiving a payment
62-22 under this section is also entitled to receive an amount for
62-23 reasonable expenses that the court finds to have been necessarily
62-24 incurred, plus reasonable attorney's fees and costs. Expenses,
62-25 fees, and costs shall be awarded against the defendant.
62-26 (e) In this section, "proceeds of the action" includes
62-27 proceeds of a settlement of the action.
63-1 Sec. 36.112. REDUCTION OF AWARD. (a) Regardless of whether
63-2 the state proceeds with the action, if the court finds that the
63-3 action was brought by a person who planned and initiated the
63-4 violation of Section 36.002 on which the action was brought, the
63-5 court may, to the extent the court considers appropriate, reduce
63-6 the share of the proceeds of the action the person would otherwise
63-7 receive under Section 36.111, taking into account the person's role
63-8 in advancing the case to litigation and any relevant circumstances
63-9 pertaining to the violation.
63-10 (b) If the person bringing the action is convicted of
63-11 criminal conduct arising from the person's role in the violation of
63-12 Section 36.002, the court shall dismiss the person from the civil
63-13 action and the person may not receive any share of the proceeds of
63-14 the action. A dismissal under this subsection does not prejudice
63-15 the right of the state to continue the action.
63-16 Sec. 36.113. AWARD TO DEFENDANT FOR FRIVOLOUS ACTION OR
63-17 ACTION BROUGHT FOR PURPOSES OF HARASSMENT. (a) If the state does
63-18 not proceed with the action and the person bringing the action
63-19 conducts the action, the court may award to the defendant the
63-20 defendant's reasonable attorney's fees and expenses if:
63-21 (1) the defendant prevails in the action; and
63-22 (2) the court finds that the claim of the person
63-23 bringing the action was clearly frivolous, clearly vexatious, or
63-24 brought primarily for purposes of harassment.
63-25 (b) Chapter 105, Civil Practice and Remedies Code, applies
63-26 in an action under this subchapter with which the state proceeds.
63-27 Sec. 36.114. CERTAIN ACTIONS BARRED. (a) A person may not
64-1 bring an action under this subchapter that is based on allegations
64-2 or transactions that are the subject of a civil suit or an
64-3 administrative penalty proceeding in which the state is already a
64-4 party.
64-5 (b) A person may not bring an action under this subchapter
64-6 that is based on the public disclosure of allegations or
64-7 transactions in a criminal or civil hearing, in a legislative or
64-8 administrative report, hearing, audit, or investigation, or from
64-9 the news media, unless the person bringing the action is an
64-10 original source of the information. In this subsection, "original
64-11 source" means an individual who has direct and independent
64-12 knowledge of the information on which the allegations are based and
64-13 has voluntarily provided the information to the state before filing
64-14 an action under this subchapter that is based on the information.
64-15 Sec. 36.115. STATE NOT LIABLE FOR CERTAIN EXPENSES. The
64-16 state is not liable for expenses that a person incurs in bringing
64-17 an action under this section.
64-18 Sec. 36.116. RETALIATION BY EMPLOYER AGAINST PERSON BRINGING
64-19 SUIT PROHIBITED. (a) A person who is discharged, demoted,
64-20 suspended, threatened, harassed, or in any other manner
64-21 discriminated against in the terms of employment by the person's
64-22 employer because of a lawful act taken by the person in furtherance
64-23 of an action under this subchapter, including investigation for,
64-24 initiation of, testimony for, or assistance in an action filed or
64-25 to be filed under this subchapter, is entitled to:
64-26 (1) reinstatement with the same seniority status the
64-27 person would have had but for the discrimination; and
65-1 (2) not less than two times the amount of back pay,
65-2 interest on the back pay, and compensation for any special damages
65-3 sustained as a result of the discrimination, including litigation
65-4 costs and reasonable attorney's fees.
65-5 (b) A person may bring an action in the appropriate district
65-6 court for the relief provided in this section.
65-7 SECTION 4.10. CRIMINAL OFFENSE AND REVOCATION OF CERTAIN
65-8 LICENSES. (a) Chapter 36, Human Resources Code, is amended by
65-9 adding Subchapter D to read as follows:
65-10 SUBCHAPTER D. CRIMINAL PENALTIES
65-11 Sec. 36.131. CRIMINAL OFFENSE. (a) A person commits an
65-12 offense if the person commits an unlawful act under Section 36.002.
65-13 (b) An offense under this section is:
65-14 (1) a Class C misdemeanor if the value of any payment
65-15 or monetary or in-kind benefit provided under the Medicaid program,
65-16 directly or indirectly, as a result of the unlawful act is less
65-17 than $50;
65-18 (2) a Class B misdemeanor if the value of any payment
65-19 or monetary or in-kind benefit provided under the Medicaid program,
65-20 directly or indirectly, as a result of the unlawful act is $50 or
65-21 more but less than $500;
65-22 (3) a Class A misdemeanor if the value of any payment
65-23 or monetary or in-kind benefit provided under the Medicaid program,
65-24 directly or indirectly, as a result of the unlawful act is $500 or
65-25 more but less than $1,500;
65-26 (4) a state jail felony if the value of any payment or
65-27 monetary or in-kind benefit provided under the Medicaid program,
66-1 directly or indirectly, as a result of the unlawful act is $1,500
66-2 or more but less than $20,000;
66-3 (5) a felony of the third degree if the value of any
66-4 payment or monetary or in-kind benefit provided under the Medicaid
66-5 program, directly or indirectly, as a result of the unlawful act is
66-6 $20,000 or more but less than $100,000;
66-7 (6) a felony of the second degree if the value of any
66-8 payment or monetary or in-kind benefit provided under the Medicaid
66-9 program, directly or indirectly, as a result of the unlawful act is
66-10 $100,000 or more but less than $200,000; or
66-11 (7) a felony of the first degree if the value of any
66-12 payment or monetary or in-kind benefit provided under the Medicaid
66-13 program, directly or indirectly, as a result of the unlawful act is
66-14 $200,000 or more.
66-15 (c) If conduct constituting an offense under this section
66-16 also constitutes an offense under another provision, the actor may
66-17 be prosecuted under either section.
66-18 (b) Section 4.01(b), Medical Practice Act (Article 4495b,
66-19 Vernon's Texas Civil Statutes), is amended to read as follows:
66-20 (b) On proof that a practitioner of medicine has been
66-21 initially convicted of a felony or the initial finding of the trier
66-22 of fact of guilt of a felony under Chapter 481, Health and Safety
66-23 Code, Section 485.033, Health and Safety Code, Chapter 483, Health
66-24 and Safety Code, Section 36.131, Human Resources Code, or the
66-25 Federal Comprehensive Drug Abuse Prevention and Control Act of
66-26 1970, 21 U.S.C.A. Section 801 et seq. (Public Law 91-513), the
66-27 board shall suspend the practitioner's license. On the
67-1 practitioner's final conviction for such a felony offense, the
67-2 board shall revoke the practitioner's license.
67-3 SECTION 4.11. APPLICATION. (a) The changes in law made by
67-4 this article apply only to a violation committed on or after the
67-5 effective date of this article. For purposes of this section, a
67-6 violation is committed on or after the effective date of this
67-7 article only if each element of the violation occurs on or after
67-8 that date.
67-9 (b) A violation committed before the effective date of this
67-10 article is covered by the law in effect when the violation was
67-11 committed, and the former law is continued in effect for this
67-12 purpose.
67-13 ARTICLE 5. SUSPENSION OF LICENSES
67-14 SECTION 5.01. SUSPENSION OF LICENSES. (a) Subtitle B,
67-15 Title 2, Human Resources Code, is amended by adding Chapter 23 to
67-16 read as follows:
67-17 CHAPTER 23. SUSPENSION OF LICENSE FOR FAILURE
67-18 TO REIMBURSE DEPARTMENT
67-19 Sec. 23.001. DEFINITIONS. In this chapter:
67-20 (1) "License" means a license, certificate,
67-21 registration, permit, or other authorization that:
67-22 (A) is issued by a licensing authority;
67-23 (B) is subject before expiration to suspension,
67-24 revocation, forfeiture, or termination by an issuing licensing
67-25 authority; and
67-26 (C) a person must obtain to:
67-27 (i) operate a motor vehicle; or
68-1 (ii) engage in a recreational activity,
68-2 including hunting and fishing, for which a license or permit is
68-3 required.
68-4 (2) "Order suspending a license" means an order issued
68-5 by the department directing a licensing authority to suspend a
68-6 license.
68-7 Sec. 23.002. LICENSING AUTHORITIES SUBJECT TO CHAPTER. In
68-8 this chapter, "licensing authority" means:
68-9 (1) the Parks and Wildlife Department; and
68-10 (2) the Department of Public Safety of the State of
68-11 Texas.
68-12 Sec. 23.003. SUSPENSION OF LICENSE. The department may
68-13 issue an order suspending a license as provided by this chapter of
68-14 a person who, after notice:
68-15 (1) has failed to reimburse the department for an
68-16 amount in excess of $250 granted in error to the person under the
68-17 food stamp program or the program of financial assistance under
68-18 Chapter 31;
68-19 (2) has been provided an opportunity to make payments
68-20 toward the amount owed under a repayment schedule; and
68-21 (3) has failed to comply with the repayment schedule.
68-22 Sec. 23.004. INITIATION OF PROCEEDING. (a) The department
68-23 may initiate a proceeding to suspend a person's license by filing a
68-24 petition with the department's hearings division.
68-25 (b) The proceeding shall be conducted by the department's
68-26 hearings division. The proceeding is a contested case under
68-27 Chapter 2001, Government Code, except that Section 2001.054 does
69-1 not apply.
69-2 (c) The commissioner shall render a final decision in the
69-3 proceeding.
69-4 Sec. 23.005. CONTENTS OF PETITION. A petition under this
69-5 chapter must state that license suspension is authorized under
69-6 Section 23.003 and allege:
69-7 (1) the name and, if known, social security number of
69-8 the person;
69-9 (2) the type of license the person is believed to hold
69-10 and the name of the licensing authority; and
69-11 (3) the amount owed to the department.
69-12 Sec. 23.006. NOTICE. (a) On initiating a proceeding under
69-13 Section 23.004, the department shall give the person named in the
69-14 petition:
69-15 (1) notice of the person's right to a hearing before
69-16 the hearings division of the department;
69-17 (2) notice of the deadline for requesting a hearing;
69-18 and
69-19 (3) a form requesting a hearing.
69-20 (b) Notice under this section may be served as in civil
69-21 cases generally.
69-22 (c) The notice must state that an order suspending a license
69-23 shall be rendered on the 60th day after the date of service of the
69-24 notice unless by that date:
69-25 (1) the person pays the amount owed to the department;
69-26 (2) the person presents evidence of a payment history
69-27 satisfactory to the department in compliance with a reasonable
70-1 repayment schedule; or
70-2 (3) the person appears at a hearing before the
70-3 hearings division and shows that the request for suspension should
70-4 be denied or stayed.
70-5 Sec. 23.007. HEARING ON PETITION TO SUSPEND LICENSE. (a) A
70-6 request for a hearing and motion to stay suspension must be filed
70-7 with the department not later than the 20th day after the date of
70-8 service of the notice under Section 23.006.
70-9 (b) If a request for a hearing is filed, the hearings
70-10 division of the department shall:
70-11 (1) promptly schedule a hearing;
70-12 (2) notify the person and an appropriate
70-13 representative of the department of the date, time, and location of
70-14 the hearing; and
70-15 (3) stay suspension pending the hearing.
70-16 Sec. 23.008. ORDER SUSPENDING LICENSE. (a) On making the
70-17 findings required by Section 23.003, the department shall render an
70-18 order suspending a license.
70-19 (b) The department may stay an order suspending a license
70-20 conditioned on the person's compliance with a reasonable repayment
70-21 schedule that is incorporated in the order. An order suspending a
70-22 license with a stay of the suspension may not be served on the
70-23 licensing authority unless the stay is revoked as provided by this
70-24 chapter.
70-25 (c) A final order suspending a license rendered by the
70-26 department shall be forwarded to the appropriate licensing
70-27 authority.
71-1 (d) If the department renders an order suspending a license,
71-2 the person may also be ordered not to engage in the licensed
71-3 activity.
71-4 (e) If the department finds that the petition for suspension
71-5 should be denied, the petition shall be dismissed without
71-6 prejudice, and an order suspending a license may not be rendered.
71-7 Sec. 23.009. DEFAULT ORDER. The department shall consider
71-8 the allegations of the petition for suspension to be admitted and
71-9 shall render an order suspending a license if the person fails to:
71-10 (1) respond to a notice issued under Section 23.006;
71-11 (2) request a hearing; or
71-12 (3) appear at a hearing.
71-13 Sec. 23.010. REVIEW OF FINAL ADMINISTRATIVE ORDER. An order
71-14 issued by the department under this chapter is a final agency
71-15 decision and is subject to review as provided by Chapter 2001,
71-16 Government Code.
71-17 Sec. 23.011. ACTION BY LICENSING AUTHORITY. (a) On receipt
71-18 of a final order suspending a license, the licensing authority
71-19 shall immediately determine if the authority has issued a license
71-20 to the person named on the order and, if a license has been issued:
71-21 (1) record the suspension of the license in the
71-22 licensing authority's records;
71-23 (2) report the suspension as appropriate; and
71-24 (3) demand surrender of the suspended license if
71-25 required by law for other cases in which a license is suspended.
71-26 (b) A licensing authority shall implement the terms of a
71-27 final order suspending a license without additional review or
72-1 hearing. The authority may provide notice as appropriate to the
72-2 license holder or to others concerned with the license.
72-3 (c) A licensing authority may not modify, remand, reverse,
72-4 vacate, or stay an order suspending a license issued under this
72-5 chapter and may not review, vacate, or reconsider the terms of a
72-6 final order suspending a license.
72-7 (d) A person who is the subject of a final order suspending
72-8 a license is not entitled to a refund for any fee or deposit paid
72-9 to the licensing authority.
72-10 (e) A person who continues to engage in the licensed
72-11 activity after the implementation of the order suspending a license
72-12 by the licensing authority is liable for the same civil and
72-13 criminal penalties provided for engaging in the licensed activity
72-14 without a license or while a license is suspended that apply to
72-15 any other license holder of that licensing authority.
72-16 (f) A licensing authority is exempt from liability to a
72-17 license holder for any act authorized under this chapter performed
72-18 by the authority.
72-19 (g) Except as provided by this chapter, an order suspending
72-20 a license or dismissing a petition for the suspension of a license
72-21 does not affect the power of a licensing authority to grant, deny,
72-22 suspend, revoke, terminate, or renew a license.
72-23 (h) The denial or suspension of a driver's license under
72-24 this chapter is governed by this chapter and not by Subtitle B,
72-25 Title 7, Transportation Code.
72-26 Sec. 23.012. MOTION TO REVOKE STAY. (a) The department may
72-27 file a motion with the department's hearings division to revoke the
73-1 stay of an order suspending a license if the person does not comply
73-2 with the terms of a reasonable repayment plan entered into by the
73-3 person.
73-4 (b) Notice to the person of a motion to revoke stay under
73-5 this section may be given by personal service or by mail to the
73-6 address provided by the person, if any, in the order suspending a
73-7 license. The notice must include a notice of hearing before the
73-8 hearings division. The notice must be provided to the person not
73-9 less than 10 days before the date of the hearing.
73-10 (c) A motion to revoke stay must allege the manner in which
73-11 the person failed to comply with the repayment plan.
73-12 (d) If the department finds that the person is not in
73-13 compliance with the terms of the repayment plan, the department
73-14 shall revoke the stay of the order suspending a license and render
73-15 a final order suspending a license.
73-16 Sec. 23.013. VACATING OR STAYING ORDER SUSPENDING A LICENSE.
73-17 (a) The department may render an order vacating or staying an
73-18 order suspending a license if the person has paid all amounts owed
73-19 to the department or has established a satisfactory payment record.
73-20 (b) The department shall promptly deliver an order vacating
73-21 or staying an order suspending a license to the appropriate
73-22 licensing authority.
73-23 (c) On receipt of an order vacating or staying an order
73-24 suspending a license, the licensing authority shall promptly
73-25 reinstate and return the affected license to the person if the
73-26 person is otherwise qualified for the license.
73-27 (d) An order rendered under this section does not affect the
74-1 right of the department to any other remedy provided by law,
74-2 including the right to seek relief under this chapter. An order
74-3 rendered under this section does not affect the power of a
74-4 licensing authority to grant, deny, suspend, revoke, terminate, or
74-5 renew a license as otherwise provided by law.
74-6 Sec. 23.014. FEE BY LICENSING AUTHORITY. A licensing
74-7 authority may charge a fee to a person who is the subject of an
74-8 order suspending a license in an amount sufficient to recover the
74-9 administrative costs incurred by the authority under this chapter.
74-10 Sec. 23.015. COOPERATION BETWEEN LICENSING AUTHORITIES AND
74-11 DEPARTMENT. (a) The department may request from each licensing
74-12 authority the name, address, social security number, license
74-13 renewal date, and other identifying information for each individual
74-14 who holds, applies for, or renews a license issued by the
74-15 authority.
74-16 (b) A licensing authority shall provide the requested
74-17 information in the manner agreed to by the department and the
74-18 licensing authority.
74-19 (c) The department may enter into a cooperative agreement
74-20 with a licensing authority to administer this chapter in a
74-21 cost-effective manner.
74-22 (d) The department may adopt a reasonable implementation
74-23 schedule for the requirements of this section.
74-24 Sec. 23.016. RULES, FORMS, AND PROCEDURES. The department
74-25 by rule shall prescribe forms and procedures for the implementation
74-26 of this chapter.
74-27 (b) The Texas Department of Human Services shall take all
75-1 action necessary to implement the change in law made by this
75-2 article not later than January 1, 1998. The department may not
75-3 suspend a license because of a person's failure to reimburse the
75-4 department for a benefit granted in error under the food stamp
75-5 program or the program of financial assistance under Chapter 31,
75-6 Human Resources Code, before September 1, 1997.
75-7 ARTICLE 6. MEASUREMENT OF FRAUD
75-8 SECTION 6.01. HEALTH CARE FRAUD STUDY. (a) Subchapter B,
75-9 Chapter 403, Government Code, is amended by adding Section 403.026
75-10 to read as follows:
75-11 Sec. 403.026. HEALTH CARE FRAUD STUDY. (a) The comptroller
75-12 shall conduct a study each biennium to determine the number and
75-13 type of fraudulent claims for medical or health care benefits
75-14 submitted:
75-15 (1) under the state Medicaid program;
75-16 (2) under group health insurance programs administered
75-17 through the Employees Retirement System of Texas for active and
75-18 retired state employees; or
75-19 (3) by or on behalf of a state employee and
75-20 administered by the attorney general under Chapter 501, Labor Code.
75-21 (b) A state agency that administers a program identified by
75-22 Subsection (a) shall cooperate with the comptroller and provide any
75-23 information required by the comptroller in connection with the
75-24 study. A state agency may enter into a memorandum of understanding
75-25 with the comptroller regarding the use and confidentiality of the
75-26 information provided. This subsection does not require a state
75-27 agency to provide confidential information if release of the
76-1 information is prohibited by law.
76-2 (c) The comptroller shall report the results of the study to
76-3 each state agency that administers a program included in the study
76-4 so that the agency may modify its fraud control procedures as
76-5 necessary.
76-6 (b) The comptroller of public accounts shall complete the
76-7 initial study required by Section 403.026, Government Code, as
76-8 added by this section, not later than December 1, 1998.
76-9 SECTION 6.02. COMPILATION OF STATISTICS. (a) Subchapter B,
76-10 Chapter 531, Government Code, is amended by adding Section 531.0215
76-11 to read as follows:
76-12 Sec. 531.0215. COMPILATION OF STATISTICS RELATING TO FRAUD.
76-13 The commission and each health and human services agency that
76-14 administers a part of the state Medicaid program shall maintain
76-15 statistics on the number, type, and disposition of fraudulent
76-16 claims for benefits submitted under the part of the program the
76-17 agency administers.
76-18 (b) Subchapter C, Chapter 501, Labor Code, is amended by
76-19 adding Section 501.0431 to read as follows:
76-20 Sec. 501.0431. COMPILATION OF STATISTICS RELATING TO FRAUD.
76-21 The director shall maintain statistics on the number, type, and
76-22 disposition of fraudulent claims for medical benefits under this
76-23 chapter.
76-24 (c) Section 17(a), Texas Employees Uniform Group Insurance
76-25 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is
76-26 amended to read as follows:
76-27 (a) The trustee shall:
77-1 (1) make a continuing study of the operation and
77-2 administration of this Act, including surveys and reports of group
77-3 coverages and benefits available to employees and on the experience
77-4 thereof; and
77-5 (2) maintain statistics on the number, type, and
77-6 disposition of fraudulent claims for benefits under this Act.
77-7 ARTICLE 7. GENERAL FALSE CLAIMS
77-8 SECTION 7.01. GENERAL FALSE CLAIMS ACT. (a) Subtitle F,
77-9 Title 10, Government Code, is amended by adding Chapter 2259 to
77-10 read as follows:
77-11 CHAPTER 2259. FALSE CLAIMS
77-12 SUBCHAPTER A. GENERAL PROVISIONS
77-13 Sec. 2259.001. DEFINITIONS. In this chapter:
77-14 (1) "Claim" means a claim for money, property, or
77-15 services made to:
77-16 (A) an employee, officer, or agent of a
77-17 governmental entity; or
77-18 (B) a government contractor, if a portion of the
77-19 money, property, or services claimed was or is to be provided by a
77-20 governmental entity.
77-21 (2) "Government contractor" means a person who
77-22 receives money from a governmental entity to provide goods or a
77-23 service, acting within the course and scope of the person's
77-24 obligation to the governmental entity. The term includes a
77-25 contractor, grantee, or other recipient of money without regard to
77-26 whether the contractor, grantee, or recipient is under contract to
77-27 the governmental entity.
78-1 (3) "Governmental entity" means:
78-2 (A) the state;
78-3 (B) a local governmental entity;
78-4 (C) a board, commission, department, office, or
78-5 other agency in the executive branch of state government, including
78-6 an institution of higher education as defined by Section 61.003,
78-7 Education Code;
78-8 (D) the legislature or a legislative agency; or
78-9 (E) the supreme court, the court of criminal
78-10 appeals, a court of appeals, or the State Bar of Texas or another
78-11 judicial agency having statewide jurisdiction.
78-12 (4) "Local governmental entity" means:
78-13 (A) a municipality, county, public school
78-14 district, or special-purpose district or authority; or
78-15 (B) a court that receives any part of its
78-16 funding from a municipality or county.
78-17 (5) "Managing official" means an appointed or elected
78-18 official responsible for the management or oversight of a
78-19 governmental entity. In the case of the legislature, the term
78-20 means the speaker of the house of representatives or the lieutenant
78-21 governor. In the case of a court, the term means any judge or
78-22 justice of the court.
78-23 (6) "Prosecuting authority" means the attorney for a
78-24 local governmental entity or another local government official
78-25 charged with investigating, filing, and conducting civil legal
78-26 proceedings on behalf of a local governmental entity.
78-27 Sec. 2259.002. PROHIBITED ACTS. A person may not:
79-1 (1) present to an officer, employee, or agent of a
79-2 governmental entity or government contractor a false claim for
79-3 payment or approval;
79-4 (2) make or use a false record or statement to obtain
79-5 payment or approval of a false claim by a governmental entity or
79-6 government contractor;
79-7 (3) conspire to defraud a governmental entity or
79-8 government contractor by obtaining the payment or approval of a
79-9 false claim;
79-10 (4) deliver to a governmental entity or government
79-11 contractor less property than the amount of property for which the
79-12 person receives a receipt;
79-13 (5) make or deliver a receipt that falsely represents
79-14 the amount of property delivered that is to be used by a
79-15 governmental entity or government contractor;
79-16 (6) buy or accept as a pledge of an obligation or debt
79-17 public property from a person who may not sell or pledge the
79-18 property;
79-19 (7) make or use a false record or statement to
79-20 conceal, avoid, or decrease an obligation to pay or transmit money
79-21 or property to a governmental entity or government contractor;
79-22 (8) accept the benefits from a false claim made by any
79-23 person; or
79-24 (9) cause an act described by Subdivisions (1) through
79-25 (8) to be committed by another person.
79-26 (Sections 2259.003-2259.010 reserved for expansion
79-27 SUBCHAPTER B. LIABILITY FOR VIOLATIONS
80-1 Sec. 2259.011. LIABILITY FOR KNOWING VIOLATION. (a) A
80-2 court that finds that a person knowingly violated Section 2259.002
80-3 shall award the affected governmental entity:
80-4 (1) the actual damages sustained by the governmental
80-5 entity because of the violation;
80-6 (2) exemplary damages equal to two times the amount of
80-7 actual damages; and
80-8 (3) attorney's fees and costs incurred by the
80-9 governmental entity to recover the damages and penalty.
80-10 (b) The court may reduce the amount of exemplary damages
80-11 awarded under Subsection (a)(2) to an amount not less than the
80-12 amount of actual damages if the person who knowingly violated
80-13 Section 2259.002:
80-14 (1) furnished an official of the governmental entity
80-15 responsible for investigating false claims violations with all
80-16 information known to the person about the violation not later than
80-17 the 30th day after the official requested the information; and
80-18 (2) otherwise fully cooperated with any investigation
80-19 by the governmental entity.
80-20 (c) A person knowingly violates Section 2259.002 if the
80-21 person:
80-22 (1) acts with actual knowledge of the facts that
80-23 constitute the violation;
80-24 (2) acts in deliberate ignorance or reckless disregard
80-25 of those facts or the truth or falsity of those facts; or
80-26 (3) acts without actual knowledge of the facts that
80-27 constitute the violation and, after the violation, learns the facts
81-1 that constitute the violation and fails to take action to mitigate
81-2 or rectify the violation.
81-3 Sec. 2259.012. CIVIL PENALTY. In addition to amounts
81-4 awarded under Section 2259.011, the court may award to the affected
81-5 governmental entity a civil penalty of not more than $10,000 for
81-6 each false claim unless the person who knowingly violated Section
81-7 2259.002 cooperated in the investigation as described by Sections
81-8 2259.011(b)(1) and (2).
81-9 Sec. 2259.013. LIABILITY JOINT AND SEVERAL; PROPORTIONATE
81-10 RESPONSIBILITY INAPPLICABLE. Liability under this subchapter is
81-11 joint and several for a violation committed by more than one
81-12 person. Chapter 33, Civil Practice and Remedies Code, does not
81-13 apply to an action brought under this chapter.
81-14 Sec. 2259.014. EXCEPTIONS. A court may not award exemplary
81-15 damages and attorney's fees and costs under Section 2259.011 or a
81-16 civil penalty under Section 2259.012 against a person if the total
81-17 actual damages resulting from all violations for which damages are
81-18 being assessed against the person in the case is less than $500.
81-19 Sec. 2259.015. DEPOSIT OF MONEY. (a) Money collected on
81-20 behalf of a governmental entity shall be deposited to the credit of
81-21 the general revenue fund of the state or of the local governmental
81-22 entity, as appropriate.
81-23 (b) If the action is brought in the names of both the state
81-24 and one or more local governmental entities, the court shall
81-25 apportion the award of damages, exemplary damages, and any civil
81-26 penalty among the state and those local entities on the basis of
81-27 the loss incurred. Attorney's fees and costs shall be awarded to
82-1 the entity that incurred the fees and costs.
82-2 Sec. 2259.016. LIMITATIONS. (a) Subject to Subsection (b),
82-3 an action under this subchapter must be brought not later than the
82-4 third anniversary of the date on which the violation was discovered
82-5 by:
82-6 (1) the attorney general or prosecuting authority; or
82-7 (2) a managing official of the affected governmental
82-8 entity, other than a managing official who participated in the
82-9 violation.
82-10 (b) An action under this subchapter may not be brought after
82-11 the 10th anniversary of the date on which the violation was
82-12 committed.
82-13 Sec. 2259.017. APPLICATION OF LAW GOVERNING EXEMPLARY
82-14 DAMAGES. Chapter 41, Civil Practice and Remedies Code, does not
82-15 apply to exemplary damages awarded under Section 2259.011 or to the
82-16 civil penalty awarded under Section 2259.012.
82-17 (Sections 2259.018-2259.020 reserved for expansion
82-18 SUBCHAPTER C. ATTORNEY GENERAL ACTION
82-19 Sec. 2259.021. ATTORNEY GENERAL INVESTIGATION. (a) The
82-20 attorney general shall investigate alleged violations of Section
82-21 2259.002 involving state funds.
82-22 (b) If the attorney general finds that a person has violated
82-23 Section 2259.002, the attorney general may bring an action under
82-24 Subchapter B against the person.
82-25 Sec. 2259.022. AFFECTED LOCAL GOVERNMENTAL ENTITY. (a) If
82-26 the attorney general brings an action under Subchapter B on a claim
82-27 that involves local government funds as well as state funds, the
83-1 attorney general shall provide a copy of the complaint to the
83-2 appropriate prosecuting authority.
83-3 (b) The attorney general shall mail the complaint to the
83-4 prosecuting authority by certified mail, return receipt requested,
83-5 not later than the date on which the complaint is filed.
83-6 (c) The prosecuting authority may intervene in an action
83-7 brought by the attorney general under this subchapter not later
83-8 than the 60th day after the date the prosecuting authority receives
83-9 the copy of the complaint. The court may permit the prosecuting
83-10 authority to intervene after that date for good cause.
83-11 (Sections 2259.023-2259.030 reserved for expansion
83-12 SUBCHAPTER D. ACTION BROUGHT BY PROSECUTING AUTHORITY
83-13 Sec. 2259.031. PROSECUTING AUTHORITY INVESTIGATION. (a) A
83-14 prosecuting authority shall investigate alleged violations of
83-15 Section 2259.002 involving funds belonging to a local governmental
83-16 entity.
83-17 (b) If the prosecuting authority finds that a person has
83-18 violated Section 2259.002, the prosecuting authority may bring an
83-19 action under Subchapter B against the person.
83-20 Sec. 2259.032. ATTORNEY GENERAL. (a) If the prosecuting
83-21 authority brings an action under Subchapter B on a claim that
83-22 involves state funds as well as local government funds, the
83-23 prosecuting authority shall provide a copy of the complaint to the
83-24 attorney general.
83-25 (b) The prosecuting authority shall mail the complaint to
83-26 the attorney general by certified mail, return receipt requested,
83-27 not later than the date on which the complaint is filed.
84-1 (c) Not later than the 60th day after the date the attorney
84-2 general receives the copy of the complaint, the attorney general
84-3 shall:
84-4 (1) notify the court that the attorney general intends
84-5 to proceed with the action and assume primary responsibility for
84-6 conducting the action; or
84-7 (2) notify the court that the attorney general
84-8 declines to assume primary responsibility for conducting the
84-9 action.
84-10 (d) If the attorney general assumes primary responsibility
84-11 for conducting the action, the prosecuting authority may continue
84-12 as a party in the action. If the attorney general declines to
84-13 assume primary responsibility for conducting the action, the
84-14 prosecuting authority may continue to conduct the action.
84-15 (Sections 2259.033-2259.040 reserved for expansion
84-16 SUBCHAPTER E. PRIVATE CAUSE OF ACTION
84-17 Sec. 2259.041. PRIVATE ACTION. A person may bring a civil
84-18 action in a district court in this state for a violation of Section
84-19 2259.002 in the name of the person and the name of the state, the
84-20 name of a local government, or both the state and the local
84-21 government, as appropriate.
84-22 Sec. 2259.042. SERVICE OF PETITION. (a) A person who
84-23 brings an action under this subchapter shall serve a copy of the
84-24 petition in the action on:
84-25 (1) the attorney general, if the claim involves state
84-26 funds; and
84-27 (2) the prosecuting authority of the local government,
85-1 if the claim involves local government funds.
85-2 (b) Service under this section shall be made in the manner
85-3 provided by Rule 21a, Texas Rules of Civil Procedure.
85-4 Sec. 2259.043. INTERVENTION. (a) In an action involving
85-5 only state funds, the attorney general may assume responsibility
85-6 for prosecution of the action by entering an appearance not later
85-7 than the 60th day after the date the attorney general receives
85-8 service of the petition under Section 2259.042.
85-9 (b) In an action involving only local government funds, the
85-10 prosecuting authority may assume responsibility for prosecution of
85-11 the action by entering an appearance not later than the 60th day
85-12 after the date the prosecuting authority receives service of the
85-13 petition under Section 2259.042.
85-14 (c) In an action involving state and local government funds,
85-15 the attorney general may assume primary responsibility for
85-16 prosecution of the action by entering an appearance not later than
85-17 the 60th day after the date the attorney general receives service
85-18 of the petition under Section 2259.042.
85-19 (d) If the attorney general assumes primary responsibility
85-20 for prosecution of the action under Subsection (c), the prosecuting
85-21 authority may, not later than the 60th day after the date the
85-22 prosecuting authority receives service of the petition under
85-23 Section 2259.042, enter an appearance and proceed as a party in the
85-24 action.
85-25 (e) If the attorney general does not assume primary
85-26 responsibility for prosecution of the action under Subsection (c),
85-27 the prosecuting authority may assume responsibility for prosecution
86-1 of the action not later than the 30th day after the last date the
86-2 attorney general may enter an appearance under this section.
86-3 Sec. 2259.044. AWARD TO PRIVATE PARTY IF GOVERNMENT
86-4 PROSECUTES ACTION. (a) If the attorney general or the prosecuting
86-5 authority assumes responsibility for prosecution of the action
86-6 under Section 2259.043 and the action is settled or the court
86-7 enters a judgment for the state or the local government, the court
86-8 shall award a reasonable portion of the settlement or judgment to
86-9 the person who commenced the action under this subchapter.
86-10 (b) In determining the amount to award a person under this
86-11 section, the court shall consider the value of any information or
86-12 evidence disclosed by the person. An award of 10 percent of the
86-13 settlement or judgment is presumed to be reasonable.
86-14 Sec. 2259.045. AWARD TO PRIVATE PARTY IF GOVERNMENT DOES
86-15 NOT PROSECUTE ACTION. (a) If the attorney general or the
86-16 prosecuting authority does not assume responsibility for
86-17 prosecution of the action under Section 2259.043 and the action is
86-18 settled or the court enters a judgment for the state or the local
86-19 government, the court shall award to the person who prosecuted the
86-20 action under this subchapter:
86-21 (1) a reasonable portion of the settlement or
86-22 judgment; and
86-23 (2) reasonable expenses incurred by the person in
86-24 prosecuting the action.
86-25 (b) In determining the amount to award a person under
86-26 Subsection (a), the court shall consider the value of the person's
86-27 prosecution of the action. An award of 25 percent of the
87-1 settlement or judgment is presumed to be reasonable.
87-2 (Sections 2259.046-2259.050 reserved for expansion
87-3 SUBCHAPTER F. INTERFERENCE WITH DISCLOSURE BY EMPLOYEES
87-4 Sec. 2259.051. RIGHT TO DISCLOSE INFORMATION AND PARTICIPATE
87-5 IN ACTION. A person is entitled to:
87-6 (1) disclose information relevant to an alleged
87-7 violation of Section 2259.002 to a governmental entity, a
87-8 prosecuting authority, the attorney general, or a law enforcement
87-9 agency;
87-10 (2) assist, at the request of the attorney general or
87-11 a prosecuting authority, in the investigation of an alleged
87-12 violation of Section 2259.002; or
87-13 (3) testify or otherwise participate, at the request
87-14 of the attorney general or a prosecuting authority, in the
87-15 furtherance of an action filed or to be filed under this chapter.
87-16 Sec. 2259.052. PROHIBITED CONDUCT BY EMPLOYER. (a) An
87-17 employer may not:
87-18 (1) adopt or enforce a rule or policy that prevents an
87-19 employee from exercising the employee's rights under Section
87-20 2259.051; or
87-21 (2) discriminate against an employee, including
87-22 discharging, demoting, suspending, threatening, harassing, or
87-23 denying promotion to the employee, because the employee has
87-24 exercised the employee's rights under Section 2259.051.
87-25 (b) An employer who violates Subsection (a) is liable to the
87-26 employee for:
87-27 (1) actual damages, including damages for lost wages;
88-1 (2) reinstatement to employment with the seniority
88-2 status, if applicable, that the employee would have had in the
88-3 absence of the discrimination;
88-4 (3) exemplary damages equal to not less than two times
88-5 the amount of lost wages; and
88-6 (4) attorney's fees and costs.
88-7 (c) An employee may not recover under Subsection (b) unless:
88-8 (1) the employee exercised the employee's rights under
88-9 Section 2259.051; and
88-10 (2) to the extent the employee participated in the
88-11 violation of Section 2259.002, the employee participated in
88-12 response to harassment, threats of termination or demotion, or
88-13 other coercion by the employer.
88-14 (b) This section applies only to an action commenced on or
88-15 after the effective date of this section without regard to whether
88-16 the act on which the action is based occurred before, on, or after
88-17 that date. An action commenced before the effective date of this
88-18 section is governed by the law applicable to the action immediately
88-19 before the effective date of this section, and that law is
88-20 continued in effect for that purpose.
88-21 ARTICLE 8. WAIVERS; EFFECTIVE DATE; EMERGENCY
88-22 SECTION 8.01. WAIVERS. If before implementing any provision
88-23 of this Act, a state agency determines that a waiver or
88-24 authorization from a federal agency is necessary for implementation
88-25 of that provision, the agency affected by the provision shall
88-26 request the waiver or authorization and may delay implementing that
88-27 provision until the waiver or authorization is granted.
89-1 SECTION 8.02. EFFECTIVE DATE. Except as otherwise provided
89-2 by this Act, this Act takes effect September 1, 1997.
89-3 SECTION 8.03. EMERGENCY. The importance of this legislation
89-4 and the crowded condition of the calendars in both houses create an
89-5 emergency and an imperative public necessity that the
89-6 constitutional rule requiring bills to be read on three several
89-7 days in each house be suspended, and this rule is hereby suspended.