AN ACT
1-1 relating to fraud and improper payments under the state Medicaid
1-2 program and other welfare programs and to the creation of a
1-3 criminal offense; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. GENERAL PROVISIONS RELATING TO WELFARE AGENCIES
1-6 SECTION 1.01. COLLECTION OF FOOD STAMP AND FINANCIAL
1-7 ASSISTANCE PAYMENTS MADE IN ERROR. (a) Chapter 22, Human
1-8 Resources Code, is amended by adding Sections 22.0251 through
1-9 22.0254 to read as follows:
1-10 Sec. 22.0251. TIMELY DETERMINATION OF OVERPAYMENTS.
1-11 (a) Subject to the approval of the commissioner of health and
1-12 human services, the department shall:
1-13 (1) determine and record the time taken by the
1-14 department to establish an overpayment claim in the food stamp
1-15 program or the program of financial assistance under Chapter 31;
1-16 (2) set progressive goals for reducing the time
1-17 described by Subdivision (1); and
1-18 (3) adopt a schedule to meet the goals set under
1-19 Subdivision (2).
1-20 (b) The department shall submit to the governor, the
1-21 Legislative Budget Board, and the Health and Human Services
1-22 Commission a semiannual report detailing the department's progress
1-23 in reaching its goals under Subsection (a)(2). The report may be
2-1 consolidated with any other report relating to the same subject
2-2 that the department is required to submit under other law.
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. The report may be consolidated with
2-12 any other report relating to the same subject that the department
2-13 is required to submit under other law.
2-14 Sec. 22.0253. PARTICIPATION IN FEDERAL TAX REFUND OFFSET
2-15 PROGRAM. The department shall participate in the Federal Tax
2-16 Refund Offset Program (FTROP) to attempt to recover benefits
2-17 granted by the department in error under the food stamp program.
2-18 The department shall submit as many claims that meet program
2-19 criteria as possible for offset against income tax returns.
2-20 Sec. 22.0254. PROSECUTION OF FRAUDULENT CLAIMS. (a) The
2-21 department shall keep a record of the dispositions of referrals
2-22 made by the department to a district attorney concerning fraudulent
2-23 claims for benefits under the food stamp program or the program of
2-24 financial assistance under Chapter 31.
2-25 (b) The department may:
3-1 (1) request status information biweekly from the
3-2 appropriate district attorney on each major fraudulent claim
3-3 referred by the department;
3-4 (2) request a written explanation from the appropriate
3-5 district attorney for each case referred in which the district
3-6 attorney declines to prosecute; and
3-7 (3) encourage the creation of a special welfare fraud
3-8 unit in each district attorney's office that serves a municipality
3-9 with a population of more than 250,000, to be financed by amounts
3-10 provided by the department.
3-11 (c) The department by rule may define what constitutes a
3-12 major fraudulent claim under Subsection (b)(1).
3-13 (b) Chapter 22, Human Resources Code, is amended by adding
3-14 Section 22.0291 to read as follows:
3-15 Sec. 22.0291. INFORMATION MATCHING SYSTEM RELATING TO
3-16 IMMIGRANTS AND FOREIGN VISITORS. (a) The department shall,
3-17 through the use of a computerized matching system, compare
3-18 department information relating to applicants for and recipients of
3-19 food stamps and financial assistance under Chapter 31 with
3-20 information obtained from the Department of State of the United
3-21 States and the United States Department of Justice relating to
3-22 immigrants and visitors to the United States for the purpose of
3-23 preventing individuals from unlawfully receiving public assistance
3-24 benefits administered by the department.
3-25 (b) The department may enter into an agreement with the
4-1 Department of State of the United States and the United States
4-2 Department of Justice as necessary to implement this section.
4-3 (c) The department and federal agencies sharing information
4-4 under this section shall protect the confidentiality of the shared
4-5 information in compliance with all existing state and federal
4-6 privacy guidelines.
4-7 (d) The department shall submit to the governor, the
4-8 Legislative Budget Board, and the Health and Human Services
4-9 Commission a semiannual report on the operation and success of the
4-10 information matching system required by this section. The report
4-11 may be consolidated with any other report relating to the same
4-12 subject matter the department is required to submit under other
4-13 law.
4-14 (c) Not later than January 1, 1998, the Texas Department of
4-15 Human Services shall begin operation of the telephone collection
4-16 program required by Section 22.0252, Human Resources Code, as added
4-17 by this section.
4-18 (d) Not later than January 1, 1998, the Texas Department of
4-19 Human Services shall submit the initial reports required by
4-20 Subsection (b), Section 22.0251 and Subsection (d), Section
4-21 22.0291, Human Resources Code, as added by this section.
4-22 (e) Not later than September 1, 1998, the Texas Department
4-23 of Human Services shall submit the initial report required by
4-24 Subsection (b), Section 22.0252, Human Resources Code, as added by
4-25 this section.
5-1 SECTION 1.02. USE OF EARNED FEDERAL FUNDS. Chapter 22,
5-2 Human Resources Code, is amended by adding Section 22.032 to read
5-3 as follows:
5-4 Sec. 22.032. USE OF EARNED FEDERAL FUNDS. Subject to the
5-5 General Appropriations Act, the department may use earned federal
5-6 funds derived from recovery of amounts paid or benefits granted by
5-7 the department as a result of fraud to pay the costs of the
5-8 department's activities relating to preventing fraud.
5-9 SECTION 1.03. PAYMENT OF MEDICAID CLAIMS. (a) Subchapter
5-10 B, Chapter 32, Human Resources Code, is amended by adding Sections
5-11 32.043 and 32.044 to read as follows:
5-12 Sec. 32.043. DUAL MEDICAID AND MEDICARE COVERAGE. (a) At
5-13 least annually the department shall identify each individual
5-14 receiving medical assistance under the medical assistance program
5-15 who is eligible to receive similar assistance under the Medicare
5-16 program.
5-17 (b) The department shall analyze claims submitted for
5-18 payment for a service provided under the medical assistance program
5-19 to an individual identified under Subsection (a) to ensure that
5-20 payment is sought first under the Medicare program to the extent
5-21 allowed by law.
5-22 Sec. 32.044. MISDIRECTED BILLING. To the extent authorized
5-23 by federal law, the department shall develop a procedure for the
5-24 state to:
5-25 (1) match claims for payment for medical assistance
6-1 provided under the medical assistance program against data
6-2 available from other entities, including the Veterans
6-3 Administration and nursing facilities, to determine alternative
6-4 responsibility for payment of the claims; and
6-5 (2) ensure that the appropriate entity bears the cost
6-6 of a claim.
6-7 (b) This section takes effect on the first date that it may
6-8 take effect under Section 39, Article III, Texas Constitution.
6-9 SECTION 1.04. ENHANCED MEDICAID REIMBURSEMENT.
6-10 (a) Subchapter B, Chapter 32, Human Resources Code, is amended by
6-11 adding Section 32.045 to read as follows:
6-12 Sec. 32.045. ENHANCED REIMBURSEMENT. The department shall
6-13 develop a procedure for:
6-14 (1) identifying each service provided under the
6-15 medical assistance program for which the state is eligible to
6-16 receive enhanced reimbursement of costs from the federal
6-17 government; and
6-18 (2) ensuring that the state seeks the highest level of
6-19 federal reimbursement available for each service provided.
6-20 (b) The Texas Department of Health shall identify services
6-21 provided under the state Medicaid program for the period beginning
6-22 December 31, 1989, and ending immediately before the effective date
6-23 of this section for which the state was eligible but did not
6-24 receive enhanced reimbursement of costs at a 90 percent rate from
6-25 the federal government. For that period, the department shall seek
7-1 from the federal government all reimbursements to which the state
7-2 is entitled.
7-3 (c) This section takes effect on the first date that it may
7-4 take effect under Section 39, Article III, Texas Constitution.
7-5 SECTION 1.05. MINIMUM COLLECTION GOAL. (a) Subchapter B,
7-6 Chapter 531, Government Code, is amended by adding Section 531.047
7-7 to read as follows:
7-8 Sec. 531.047. MINIMUM COLLECTION GOAL. (a) Before August
7-9 31 of each year, the commission, after consulting with the Texas
7-10 Department of Human Services, by rule shall set a minimum goal for
7-11 the Texas Department of Human Services that specifies the
7-12 percentage of the amount of benefits granted by the department in
7-13 error under the food stamp program or the program of financial
7-14 assistance under Chapter 31, Human Resources Code, that the
7-15 department should recover. The commission shall set the percentage
7-16 based on comparable recovery rates reported by other states or
7-17 other appropriate factors identified by the commission and the
7-18 department.
7-19 (b) If the department fails to meet the goal set under
7-20 Subsection (a) for the fiscal year, the commissioner shall notify
7-21 the comptroller, and the comptroller shall reduce the department's
7-22 general revenue appropriation by an amount equal to the difference
7-23 between the amount of state funds the department would have
7-24 collected had the department met the goal and the amount of state
7-25 funds the department actually collected.
8-1 (c) The commission, the governor, and the Legislative Budget
8-2 Board shall monitor the department's performance in meeting the
8-3 goal set under this section. The department shall cooperate by
8-4 providing to the commission, the governor, and the Legislative
8-5 Budget Board, on request, information concerning the department's
8-6 collection efforts.
8-7 (b) This section takes effect on the first date that it may
8-8 take effect under Section 39, Article III, Texas Constitution.
8-9 SECTION 1.06. COMMISSION POWERS AND DUTIES RELATING TO
8-10 WELFARE FRAUD. (a) Chapter 531, Government Code, is amended by
8-11 adding Subchapter C to read as follows:
8-12 SUBCHAPTER C. MEDICAID AND OTHER WELFARE FRAUD, ABUSE,
8-13 OR OVERCHARGES
8-14 Sec. 531.101. AWARD FOR REPORTING MEDICAID FRAUD, ABUSE, OR
8-15 OVERCHARGES. (a) The commission may grant an award to an
8-16 individual who reports activity that constitutes fraud or abuse of
8-17 funds in the state Medicaid program or reports overcharges in the
8-18 program if the commission determines that the disclosure results in
8-19 the recovery of an overcharge or in the termination of the
8-20 fraudulent activity or abuse of funds.
8-21 (b) The commission shall determine the amount of an award.
8-22 The award must be equal to not less than 10 percent of the savings
8-23 to this state that result from the individual's disclosure. In
8-24 determining the amount of the award, the commission shall consider
8-25 how important the disclosure is in ensuring the fiscal integrity of
9-1 the program.
9-2 (c) An award under this section is subject to appropriation.
9-3 The award must be paid from money appropriated to or otherwise
9-4 available to the commission, and additional money may not be
9-5 appropriated to the commission for the purpose of paying the award.
9-6 (d) Payment of an award under this section from federal
9-7 funds is subject to the permissible use under federal law of funds
9-8 for this purpose.
9-9 (e) A person who brings an action under Subchapter C,
9-10 Chapter 36, Human Resources Code, is not eligible for an award
9-11 under this section.
9-12 Sec. 531.102. INVESTIGATIONS AND ENFORCEMENT OFFICE.
9-13 (a) The commission, through the commission's office of
9-14 investigations and enforcement, is responsible for the
9-15 investigation of fraud in the provision of health and human
9-16 services and the enforcement of state law relating to the provision
9-17 of those services.
9-18 (b) The commission shall set clear objectives, priorities,
9-19 and performance standards for the office that emphasize:
9-20 (1) coordinating investigative efforts to aggressively
9-21 recover money;
9-22 (2) allocating resources to cases that have the
9-23 strongest supportive evidence and the greatest potential for
9-24 recovery of money; and
9-25 (3) maximizing opportunities for referral of cases to
10-1 the office of the attorney general.
10-2 (c) The commission shall train office staff to enable the
10-3 staff to pursue priority Medicaid and welfare fraud and abuse cases
10-4 as necessary.
10-5 (d) The commission may require employees of health and human
10-6 services agencies to provide assistance to the commission in
10-7 connection with the commission's duties relating to the
10-8 investigation of fraud in the provision of health and human
10-9 services.
10-10 Sec. 531.103. INTERAGENCY COORDINATION. (a) The commission
10-11 and the office of the attorney general shall enter into a
10-12 memorandum of understanding to develop and implement joint written
10-13 procedures for processing cases of suspected fraud, waste, or abuse
10-14 under the state Medicaid program. The memorandum of understanding
10-15 shall require:
10-16 (1) the commission and the office of the attorney
10-17 general to set priorities and guidelines for referring cases to
10-18 appropriate state agencies for investigation to enhance deterrence
10-19 of fraud, waste, or abuse in the program and maximize the
10-20 imposition of penalties, the recovery of money, and the successful
10-21 prosecution of cases;
10-22 (2) the commission to keep detailed records for cases
10-23 processed by the commission or the office of the attorney general,
10-24 including information on the total number of cases processed and,
10-25 for each case:
11-1 (A) the agency and division to which the case is
11-2 referred for investigation;
11-3 (B) the date on which the case is referred; and
11-4 (C) the nature of the suspected fraud, waste, or
11-5 abuse;
11-6 (3) the commission to notify each appropriate division
11-7 of the office of the attorney general of each case referred by the
11-8 commission;
11-9 (4) the office of the attorney general to ensure that
11-10 information relating to each case investigated by that office is
11-11 available to each division of the office with responsibility for
11-12 investigating suspected fraud, waste, or abuse;
11-13 (5) the office of the attorney general to notify the
11-14 commission of each case the attorney general declines to prosecute
11-15 or prosecutes unsuccessfully;
11-16 (6) representatives of the commission and of the
11-17 office of the attorney general to meet not less than quarterly to
11-18 share case information and determine the appropriate agency and
11-19 division to investigate each case; and
11-20 (7) the commission and the office of the attorney
11-21 general to submit information requested by the comptroller about
11-22 each resolved case for the comptroller's use in improving fraud
11-23 detection.
11-24 (b) An exchange of information under this section between
11-25 the office of the attorney general and the commission or a health
12-1 and human services agency does not affect whether the information
12-2 is subject to disclosure under Chapter 552.
12-3 (c) The commission and the office of the attorney general
12-4 shall jointly prepare and submit a semiannual report to the
12-5 governor, lieutenant governor, and speaker of the house of
12-6 representatives concerning the activities of those agencies in
12-7 detecting and preventing fraud, waste, and abuse under the state
12-8 Medicaid program. The report may be consolidated with any other
12-9 report relating to the same subject matter the commission or office
12-10 of the attorney general is required to submit under other law.
12-11 (d) The commission and the office of the attorney general
12-12 may not assess or collect investigation and attorney's fees on
12-13 behalf of any state agency unless the office of the attorney
12-14 general or other state agency collects a penalty, restitution, or
12-15 other reimbursement payment to the state.
12-16 (e) The commission shall refer a case of suspected fraud,
12-17 waste, or abuse under the state Medicaid program to the appropriate
12-18 district attorney, county attorney, city attorney, or private
12-19 collection agency if the attorney general fails to act within 30
12-20 days of referral of the case to the office of the attorney general.
12-21 A failure by the attorney general to act within 30 days constitutes
12-22 approval by the attorney general under Section 2107.003.
12-23 (f) The district attorney, county attorney, city attorney,
12-24 or private collection agency may collect and retain costs
12-25 associated with the case and 20 percent of the amount of the
13-1 penalty, restitution, or other reimbursement payment collected.
13-2 Sec. 531.104. ASSISTING INVESTIGATIONS BY ATTORNEY GENERAL.
13-3 (a) The commission and the attorney general shall execute a
13-4 memorandum of understanding under which the commission shall
13-5 provide investigative support as required to the attorney general
13-6 in connection with cases under Subchapter B, Chapter 36, Human
13-7 Resources Code. Under the memorandum of understanding, the
13-8 commission shall assist in performing preliminary investigations
13-9 and ongoing investigations for actions prosecuted by the attorney
13-10 general under Subchapter C, Chapter 36, Human Resources Code.
13-11 (b) The memorandum of understanding must provide that the
13-12 commission is not required to provide investigative support in more
13-13 than 100 open investigations in a fiscal year.
13-14 Sec. 531.105. FRAUD DETECTION TRAINING. (a) The commission
13-15 shall develop and implement a program to provide annual training to
13-16 contractors who process Medicaid claims and appropriate staff of
13-17 the Texas Department of Health and the Texas Department of Human
13-18 Services in identifying potential cases of fraud, waste, or abuse
13-19 under the state Medicaid program. The training provided to the
13-20 contractors and staff must include clear criteria that specify:
13-21 (1) the circumstances under which a person should
13-22 refer a potential case to the commission; and
13-23 (2) the time by which a referral should be made.
13-24 (b) The Texas Department of Health and the Texas Department
13-25 of Human Services, in cooperation with the commission, shall
14-1 periodically set a goal of the number of potential cases of fraud,
14-2 waste, or abuse under the state Medicaid program that each agency
14-3 will attempt to identify and refer to the commission. The
14-4 commission shall include information on the agencies' goals and the
14-5 success of each agency in meeting the agency's goal in the report
14-6 required by Section 531.103(c).
14-7 Sec. 531.106. LEARNING OR NEURAL NETWORK TECHNOLOGY.
14-8 (a) The commission shall use learning or neural network technology
14-9 to identify and deter fraud in the Medicaid program throughout this
14-10 state.
14-11 (b) The commission shall contract with a private or public
14-12 entity to develop and implement the technology. The commission may
14-13 require the entity it contracts with to install and operate the
14-14 technology at locations specified by the commission, including
14-15 commission offices.
14-16 (c) The data used for neural network processing shall be
14-17 maintained as an independent subset for security purposes.
14-18 (d) The commission shall require each health and human
14-19 services agency that performs any aspect of the state Medicaid
14-20 program to participate in the implementation and use of the
14-21 technology.
14-22 (e) The commission shall maintain all information necessary
14-23 to apply the technology to claims data covering a period of at
14-24 least two years.
14-25 (f) The commission shall refer cases identified by the
15-1 technology to the commission's office of investigations and
15-2 enforcement or the office of the attorney general, as appropriate.
15-3 Sec. 531.107. MEDICAID AND PUBLIC ASSISTANCE FRAUD OVERSIGHT
15-4 TASK FORCE. (a) The Medicaid and Public Assistance Fraud
15-5 Oversight Task Force advises and assists the commission and the
15-6 commission's office of investigations and enforcement in improving
15-7 the efficiency of fraud investigations and collections.
15-8 (b) The task force is composed of a representative of the:
15-9 (1) attorney general's office, appointed by the
15-10 attorney general;
15-11 (2) comptroller's office, appointed by the
15-12 comptroller;
15-13 (3) Department of Public Safety, appointed by the
15-14 public safety director;
15-15 (4) state auditor's office, appointed by the state
15-16 auditor;
15-17 (5) commission, appointed by the commissioner of
15-18 health and human services;
15-19 (6) Texas Department of Human Services, appointed by
15-20 the commissioner of human services; and
15-21 (7) Texas Department of Insurance, appointed by the
15-22 commissioner of insurance.
15-23 (c) The comptroller or the comptroller's designee serves as
15-24 the presiding officer of the task force. The task force may elect
15-25 any other necessary officers.
16-1 (d) The task force shall meet at least once each fiscal
16-2 quarter at the call of the presiding officer.
16-3 (e) The appointing agency is responsible for the expenses of
16-4 a member's service on the task force. Members of the task force
16-5 receive no additional compensation for serving on the task force.
16-6 (f) At least once each fiscal quarter, the commission's
16-7 office of investigations and enforcement shall provide to the task
16-8 force:
16-9 (1) information detailing:
16-10 (A) the number of fraud referrals made to the
16-11 office and the origin of each referral;
16-12 (B) the time spent investigating each case;
16-13 (C) the number of cases investigated each month,
16-14 by program and region;
16-15 (D) the dollar value of each fraud case that
16-16 results in a criminal conviction; and
16-17 (E) the number of cases the office rejects and
16-18 the reason for rejection, by region; and
16-19 (2) any additional information the task force
16-20 requires.
16-21 Sec. 531.108. FRAUD PREVENTION. (a) The commission's
16-22 office of investigations and enforcement shall compile and
16-23 disseminate accurate information and statistics relating to:
16-24 (1) fraud prevention; and
16-25 (2) post-fraud referrals received and accepted or
17-1 rejected from the commission's case management system or the case
17-2 management system of a health and human services agency.
17-3 (b) The commission shall:
17-4 (1) aggressively publicize successful fraud
17-5 prosecutions and fraud-prevention programs through all available
17-6 means, including the use of statewide press releases issued in
17-7 coordination with the Texas Department of Human Services; and
17-8 (2) ensure that a toll-free hotline for reporting
17-9 suspected fraud in programs administered by the commission or a
17-10 health and human services agency is maintained and promoted, either
17-11 by the commission or by a health and human services agency.
17-12 (c) The commission shall develop a cost-effective method of
17-13 identifying applicants for public assistance in counties bordering
17-14 other states and in metropolitan areas selected by the commission
17-15 who are already receiving benefits in other states. If
17-16 economically feasible, the commission may develop a computerized
17-17 matching system.
17-18 (d) The commission shall:
17-19 (1) verify automobile information that is used as
17-20 criteria for eligibility; and
17-21 (2) establish a computerized matching system with the
17-22 Texas Department of Criminal Justice to prevent an incarcerated
17-23 individual from illegally receiving public assistance benefits
17-24 administered by the commission.
17-25 (e) The commission shall submit to the governor and
18-1 Legislative Budget Board a semiannual report on the results of
18-2 computerized matching of commission information with information
18-3 from neighboring states, if any, and information from the Texas
18-4 Department of Criminal Justice. The report may be consolidated
18-5 with any other report relating to the same subject matter the
18-6 commission is required to submit under other law.
18-7 (b) Subsection (c), Section 22.028, Human Resources Code, is
18-8 amended to read as follows:
18-9 (c) No later than the first day of each month, the
18-10 department shall send the comptroller a report listing the accounts
18-11 on which enforcement actions or other steps were taken by the
18-12 department in response to the records received from the EBT
18-13 operator under this section, and the action taken by the
18-14 department. The comptroller shall promptly review the report and,
18-15 as appropriate, may solicit the advice of the Medicaid and Public
18-16 Assistance Fraud Oversight Task Force regarding the results of the
18-17 department's enforcement actions.
18-18 (c) Section 531.104, Government Code, as added by this
18-19 section, takes effect only if the transfer of employees of the
18-20 Texas Department of Human Services and the Texas Department of
18-21 Health to the Health and Human Services Commission, as proposed by
18-22 Section 1.07 of this article, or similar legislation, is enacted by
18-23 the 75th Legislature in regular session and becomes law.
18-24 (d) Not later than January 1, 1998, the Health and Human
18-25 Services Commission shall award the contract for the learning or
19-1 neural network technology required by Section 531.106, Government
19-2 Code, as added by this section, and the contractor shall begin
19-3 operations not later than that date. If the commission fails to
19-4 award the contract or the contractor cannot begin operations on or
19-5 before January 1, 1998, the commissioner of health and human
19-6 services shall enter into an interagency agreement with the
19-7 comptroller of public accounts to enable the comptroller to perform
19-8 the duties prescribed by Section 531.106, Government Code. In
19-9 addition to the interagency agreement, the commissioner of health
19-10 and human services and the comptroller shall execute a memorandum
19-11 of understanding to ensure that the comptroller receives all data
19-12 and resources necessary to operate the learning or neural network
19-13 technology system.
19-14 (e) Not later than April 1, 1998, the Health and Human
19-15 Services Commission shall submit the initial report required by
19-16 Subsection (e), Section 531.108, Government Code, as added by this
19-17 section.
19-18 (f) In addition to the substantive changes in law made by
19-19 this section, this section, in adding Section 531.101, Government
19-20 Code, conforms to a change in the law made by Section 1, Chapter
19-21 444, Acts of the 74th Legislature, 1995.
19-22 (g) Section 16G, Article 4413(502), Revised Statutes, as
19-23 added by Section 1, Chapter 444, Acts of the 74th Legislature,
19-24 1995, is repealed.
19-25 (h) To the extent of any conflict, this Act prevails over
20-1 another Act of the 75th Legislature, Regular Session, 1997,
20-2 relating to nonsubstantive additions to and corrections in enacted
20-3 codes.
20-4 (i) Sections 21.0145 and 22.027, Human Resources Code, are
20-5 repealed.
20-6 (j) Sections 531.102 and 531.106, Government Code, as added
20-7 by this section, take effect on the first date that those sections
20-8 may take effect under Section 39, Article III, Texas Constitution.
20-9 SECTION 1.07. CONSOLIDATION OF STAFF. (a) On September 1,
20-10 1997, or an earlier date provided by an interagency agreement with
20-11 the affected agencies:
20-12 (1) all powers, duties, functions, programs, and
20-13 activities performed by or assigned to the Texas Department of
20-14 Human Services' utilization and assessment review function
20-15 immediately before September 1, 1997, are transferred to the Health
20-16 and Human Services Commission;
20-17 (2) all funds, obligations, contracts, property, and
20-18 records of the Texas Department of Human Services' utilization and
20-19 assessment review function are transferred to the Health and Human
20-20 Services Commission; and
20-21 (3) all employees of the Texas Department of Human
20-22 Services responsible for the department's utilization and
20-23 assessment review function become employees of the Health and Human
20-24 Services Commission, to be assigned duties by the commissioner of
20-25 health and human services.
21-1 (b) On September 1, 1997, or an earlier date provided by an
21-2 interagency agreement with the affected agencies:
21-3 (1) all powers, duties, functions, programs, and
21-4 activities performed by or assigned to the Texas Department of
21-5 Health's claims review and analysis group and policy and data
21-6 analysis group immediately before September 1, 1997, are
21-7 transferred to the Health and Human Services Commission;
21-8 (2) all funds, obligations, contracts, property, and
21-9 records of the Texas Department of Health's claims review and
21-10 analysis group and policy and data analysis group are transferred
21-11 to the Health and Human Services Commission; and
21-12 (3) all employees of the Texas Department of Health's
21-13 claims review and analysis group and policy and data analysis group
21-14 become employees of the Health and Human Services Commission, to be
21-15 assigned duties by the commissioner of health and human services.
21-16 (c) A rule or form adopted by the Texas Department of Human
21-17 Services that relates to the utilization and assessment review
21-18 function or by the Texas Department of Health that relates to the
21-19 claims review and analysis group or the policy and data analysis
21-20 group is a rule or form of the Health and Human Services Commission
21-21 and remains in effect until altered by the commission. The
21-22 secretary of state is authorized to adopt rules as necessary to
21-23 expedite the implementation of this subsection.
21-24 (d) The commissioner of health and human services shall
21-25 oversee and assist in the transfer of powers, duties, functions,
22-1 programs, and activities prescribed by Subsections (a) and (b) of
22-2 this section.
22-3 (e) The commissioner of health and human services shall
22-4 determine for each power, duty, function, program, or activity
22-5 scheduled for transfer:
22-6 (1) the relevant agency actions that constitute each
22-7 power, duty, function, program, or activity;
22-8 (2) the relevant records, property, and equipment used
22-9 by a state agency for each power, duty, function, program, or
22-10 activity;
22-11 (3) the state agency employees whose duties directly
22-12 or indirectly involve a power, duty, function, program, or
22-13 activity; and
22-14 (4) state agency funds and obligations that are
22-15 related to the power, duty, function, program, or activity.
22-16 (f) Based on the determinations made under Subsection (e) of
22-17 this section, the commissioner of health and human services shall
22-18 assist the agencies in transferring powers, duties, functions,
22-19 programs, activities, records, equipment, property, funds,
22-20 obligations, and employees in accordance with the transfer
22-21 schedule.
22-22 (g) The commissioner of health and human services shall file
22-23 any federal plan changes required by this section.
22-24 (h) The transfer of powers, duties, functions, programs,
22-25 and activities under this section does not affect or impair any act
23-1 done, any obligation, right, order, license, permit, rule,
23-2 criterion, standard, or requirement existing, any investigation
23-3 begun, or any penalty accrued under former law, and that law
23-4 remains in effect for any action concerning those matters.
23-5 (i) An action brought or proceeding commenced before the
23-6 effective date of this section, including a contested case or a
23-7 remand of an action or proceeding by a reviewing court, is governed
23-8 by the law and rules applicable to the action or proceeding before
23-9 the effective date of this section.
23-10 (j) This section takes effect on the first date that it may
23-11 take effect under Section 39, Article III, Texas Constitution.
23-12 SECTION 1.08. USE OF PRIVATE COLLECTION AGENTS. (a) With
23-13 assistance from the State Council on Competitive Government and
23-14 subject to approval by the attorney general under Section 2107.003,
23-15 Government Code, the Texas Department of Human Services shall, in
23-16 addition to other methods of collection, use private collection
23-17 agents to collect reimbursements for benefits granted by the
23-18 department in error under the food stamp program or the program of
23-19 financial assistance under Chapter 31, Human Resources Code.
23-20 (b) If approved by the attorney general, the department
23-21 shall ensure that the collection agents are engaged in collection
23-22 work on behalf of the department not later than March 1, 1998. The
23-23 department shall strive to refer approximately 20 percent of the
23-24 department's claims for reimbursement to the collection agents.
23-25 (c) On March 1, 1998, and September 1, 1998, the department
24-1 shall submit a progress report to the governor, the Legislative
24-2 Budget Board, and the Health and Human Services Commission on the
24-3 department's efforts to use private collection agents to collect
24-4 reimbursements for erroneous benefits. On March 1, 1999, the
24-5 department shall submit to the governor, the Legislative Budget
24-6 Board, and the Health and Human Services Commission a final report
24-7 on the success of the private collection effort.
24-8 (d) Unless otherwise directed by the 76th Legislature, the
24-9 department shall evaluate the success of the use of private
24-10 collection agents to collect benefit reimbursements and adjust the
24-11 number of claims referred to the agents, as appropriate.
24-12 SECTION 1.09. EXPEDITED FOOD STAMP DELIVERY; IMPACT ON
24-13 FRAUDULENT CLAIMS. (a) The Texas Department of Human Services
24-14 shall conduct a study to determine the impact of the one-day
24-15 screening and service delivery requirements prescribed by
24-16 Subsection (e), Section 33.002, Human Resources Code, on the level
24-17 of fraud in the food stamp program.
24-18 (b) Not later than January 1, 1999, the department shall
24-19 submit to the governor, the Legislative Budget Board, and the
24-20 Health and Human Services Commission a report on the results of the
24-21 study. The report must include:
24-22 (1) detailed statistics by region on the number of
24-23 fraudulent claims linked to the one-day screening and service
24-24 delivery requirements; and
24-25 (2) recommendations on modifying the one-day screening
25-1 and service delivery requirements, as authorized by Subsection (g),
25-2 Section 33.002, Human Resources Code.
25-3 SECTION 1.10. STUDY ON COLLECTION OF ERRONEOUS FOOD STAMP OR
25-4 FINANCIAL ASSISTANCE BENEFITS THROUGH LIENS OR WAGE GARNISHMENT.
25-5 (a) The Texas Department of Human Services shall conduct a study
25-6 to determine the feasibility of collecting amounts of benefits
25-7 granted by the department in error under the food stamp program or
25-8 the program of financial assistance under Chapter 31, Human
25-9 Resources Code, by the garnishment of wages or the filing of liens
25-10 against property.
25-11 (b) Not later than March 1, 1999, the department shall
25-12 submit to the governor, the Legislative Budget Board, and the
25-13 Health and Human Services Commission a report on the results of the
25-14 study.
25-15 SECTION 1.11. OPERATION RESTORE TRUST. (a) To the extent
25-16 authorized by law, the Health and Human Services Commission and the
25-17 Office of the Attorney General shall cooperate with entities in
25-18 other states that are participating in "Operation Restore Trust"
25-19 and share information regarding service providers excluded from the
25-20 state Medicaid program.
25-21 (b) In this section, "Operation Restore Trust" means the
25-22 federal program directed at detecting health-care fraud primarily
25-23 in home health care, nursing home care, and durable medical
25-24 equipment in certain states.
26-1 ARTICLE 2. MEDICAID SERVICE PROVIDERS
26-2 SECTION 2.01. AUTHORIZATION FOR AMBULANCE SERVICES.
26-3 (a) Section 32.024, Human Resources Code, is amended by adding
26-4 Subsection (t) to read as follows:
26-5 (t) The department by rule shall require a physician,
26-6 nursing facility, health care provider, or other responsible party
26-7 to obtain authorization from the department or a person authorized
26-8 to act on behalf of the department before an ambulance is used to
26-9 transport a recipient of medical assistance under this chapter in
26-10 circumstances not involving an emergency. The rules must provide
26-11 that:
26-12 (1) a request for authorization must be evaluated
26-13 based on the recipient's medical needs and may be granted for a
26-14 length of time appropriate to the recipient's medical condition;
26-15 (2) a response to a request for authorization must be
26-16 made not later than 48 hours after receipt of the request; and
26-17 (3) a person denied payment for services rendered
26-18 because of failure to obtain prior authorization or because a
26-19 request for prior authorization was denied is entitled to appeal
26-20 the denial of payment to the department.
26-21 (b) Not later than January 1, 1998, the Health and Human
26-22 Services Commission and each appropriate health and human services
26-23 agency that operates part of the state Medicaid program shall adopt
26-24 the rules required by Subsection (t), Section 32.024, Human
26-25 Resources Code, as added by this section.
27-1 (c) This section takes effect on the first date that it may
27-2 take effect under Section 39, Article III, Texas Constitution.
27-3 SECTION 2.02. DURABLE MEDICAL EQUIPMENT. (a) Section
27-4 32.024, Human Resources Code, is amended by adding Subsection (u)
27-5 to read as follows:
27-6 (u) The department by rule shall require a health care
27-7 provider who arranges for durable medical equipment for a child who
27-8 receives medical assistance under this chapter to:
27-9 (1) ensure that the child receives the equipment
27-10 prescribed, the equipment fits properly, if applicable, and the
27-11 child or the child's parent or guardian, as appropriate considering
27-12 the age of the child, receives instruction regarding the
27-13 equipment's use; and
27-14 (2) maintain a record of compliance with the
27-15 requirements of Subdivision (1) in an appropriate location.
27-16 (b) Not later than January 1, 1998, the Health and Human
27-17 Services Commission and each appropriate health and human services
27-18 agency that operates part of the state Medicaid program shall adopt
27-19 the rules required by Subsection (u), Section 32.024, Human
27-20 Resources Code, as added by this section.
27-21 (c) This section takes effect on the first date that it may
27-22 take effect under Section 39, Article III, Texas Constitution.
27-23 SECTION 2.03. SURETY BOND. Subchapter B, Chapter 32, Human
27-24 Resources Code, is amended by adding Section 32.0321 to read as
27-25 follows:
28-1 Sec. 32.0321. SURETY BOND. (a) The department by rule may
28-2 require each provider of medical assistance in a provider type that
28-3 has demonstrated significant potential for fraud or abuse to file
28-4 with the department a surety bond in a reasonable amount.
28-5 (b) The bond must be payable to the department to compensate
28-6 the department for damages resulting from or penalties or fines
28-7 imposed in connection with an act of fraud or abuse committed by
28-8 the provider under the medical assistance program.
28-9 SECTION 2.04. CRIMINAL HISTORY INFORMATION. (a) Subchapter
28-10 B, Chapter 32, Human Resources Code, is amended by adding Section
28-11 32.0322 to read as follows:
28-12 Sec. 32.0322. CRIMINAL HISTORY RECORD INFORMATION. (a) The
28-13 department may obtain from any law enforcement or criminal justice
28-14 agency the criminal history record information that relates to a
28-15 provider under the medical assistance program or a person applying
28-16 to enroll as a provider under the medical assistance program.
28-17 (b) The department by rule shall establish criteria for
28-18 revoking a provider's enrollment or denying a person's application
28-19 to enroll as a provider under the medical assistance program based
28-20 on the results of a criminal history check.
28-21 (b) Subchapter F, Chapter 411, Government Code, is amended
28-22 by adding Section 411.132 to read as follows:
28-23 Sec. 411.132. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION;
28-24 AGENCIES OPERATING PART OF MEDICAL ASSISTANCE PROGRAM. (a) The
28-25 Health and Human Services Commission or an agency operating part of
29-1 the medical assistance program under Chapter 32, Human Resources
29-2 Code, is entitled to obtain from the department the criminal
29-3 history record information maintained by the department that
29-4 relates to a provider under the medical assistance program or a
29-5 person applying to enroll as a provider under the medical
29-6 assistance program.
29-7 (b) Criminal history record information obtained by the
29-8 commission or an agency under Subsection (a) may not be released or
29-9 disclosed to any person except in a criminal proceeding, in an
29-10 administrative proceeding, on court order, or with the consent of
29-11 the provider or applicant.
29-12 SECTION 2.05. MANAGED CARE ORGANIZATIONS. (a) Section 16A,
29-13 Article 4413(502), Revised Statutes, is amended by amending
29-14 Subsection (n) and adding Subsections (o) through (t) to read as
29-15 follows:
29-16 (n) A managed care organization that contracts with the
29-17 state to provide or arrange to provide health care benefits or
29-18 services to Medicaid eligible individuals shall:
29-19 (1) report to the commission or the state's Medicaid
29-20 claims administrator, as appropriate, all information required by
29-21 commission rule, including information necessary to set rates,
29-22 detect fraud, neglect, and physical abuse, and ensure quality of
29-23 care;
29-24 (2) not later than 30 days after execution of the
29-25 contract, develop and submit to the operating agency for approval
30-1 by the commission a plan for preventing, detecting, and reporting
30-2 fraud and abuse that:
30-3 (A) conforms to guidelines developed by the
30-4 operating agency with assistance from the commission and the office
30-5 of the attorney general; and
30-6 (B) requires the managed care organization to
30-7 report any known or suspected act of fraud or abuse to the
30-8 operating agency for referral to the commission for investigation;
30-9 (3) include standard provisions developed by the
30-10 operating agency in each contract for ancillary services entered
30-11 into by the managed care organization that affects the delivery of
30-12 or payment for Medicaid services;
30-13 (4) submit to the commission for approval each
30-14 contract for ancillary services entered into by the managed care
30-15 organization that affects the delivery of or payment for Medicaid
30-16 services; and
30-17 (5) submit annual disclosure statements to the
30-18 commission containing information on:
30-19 (A) the financial condition of the managed care
30-20 organization and each of its affiliates; and
30-21 (B) ownership interests in the managed care
30-22 organization or any of its affiliates.
30-23 (o) The operating agency shall require that each contract
30-24 between a managed care organization and the state to provide or
30-25 arrange to provide health care benefits or services to Medicaid
31-1 eligible individuals contain provisions:
31-2 (1) stating that information provided by a managed
31-3 care organization under this section may be used as necessary to
31-4 detect fraud and abuse;
31-5 (2) specifying the responsibilities of the managed
31-6 care organization in reducing fraud and abuse; and
31-7 (3) authorizing specific penalties for failure to
31-8 provide information required by commission rules.
31-9 (p) At least once every three years the operating agency
31-10 shall audit each managed care organization that contracts with the
31-11 state to provide or arrange to provide health care benefits or
31-12 services to Medicaid eligible individuals.
31-13 (q) A managed care organization audited under Subsection (p)
31-14 of this section is responsible for paying the costs of the audit.
31-15 The costs of the audit may be allowed as a credit against premium
31-16 taxes paid by the managed care organization, except as provided by
31-17 Section 2, Article 1.28, Insurance Code.
31-18 (r) The operating agency and the Texas Department of
31-19 Insurance shall enter into a memorandum of understanding to
31-20 coordinate audits of managed care organizations. The memorandum
31-21 shall:
31-22 (1) identify information required in an operating
31-23 agency audit that is not customarily required in a department
31-24 audit;
31-25 (2) encourage the department to include to the extent
32-1 possible information identified under Subdivision (1) of this
32-2 subsection in department audits;
32-3 (3) establish procedures for initiating and
32-4 distributing the findings of audits of a managed care organization;
32-5 (4) identify the records of physicians or Medicaid
32-6 eligible individuals that are served by managed care organizations,
32-7 that are subject to audit; and
32-8 (5) require that operating agency and department
32-9 personnel that audit a managed care organization receive specific
32-10 training in detecting Medicaid fraud and abuse.
32-11 (s) In this section, "operating agency" means the
32-12 appropriate health and human services agency operating part of the
32-13 state Medicaid program.
32-14 (t) This section expires September 1, 2001.
32-15 (b) Section 532.001, Government Code, as added by H.B. No.
32-16 1845 or S.B. No. 898, Acts of the 75th Legislature, Regular
32-17 Session, 1997, relating to nonsubstantive additions to and
32-18 corrections in enacted codes, is amended by adding Subdivision (5)
32-19 to read as follows:
32-20 (5) "Operating agency" means the appropriate health
32-21 and human services agency operating part of the state Medicaid
32-22 program.
32-23 (c) Subchapter B, Chapter 532, Government Code, as added by
32-24 H.B. No. 1845 or S.B. No. 898, Acts of the 75th Legislature,
32-25 Regular Session, 1997, relating to nonsubstantive additions to and
33-1 corrections in enacted codes, is amended by adding Sections 532.112
33-2 and 532.113 to read as follows:
33-3 Sec. 532.112. DUTIES OF MANAGED CARE ORGANIZATION;
33-4 CONTRACTUAL PROVISIONS. (a) A managed care organization that
33-5 contracts with the state to provide or arrange to provide health
33-6 care benefits or services to Medicaid eligible individuals shall:
33-7 (1) report to the commission or the state's Medicaid
33-8 claims administrator, as appropriate, all information required by
33-9 commission rule, including information necessary to set rates,
33-10 detect fraud, neglect, and physical abuse, and ensure quality of
33-11 care;
33-12 (2) not later than 30 days after execution of the
33-13 contract, develop and submit to the operating agency for approval
33-14 by the commission a plan for preventing, detecting, and reporting
33-15 fraud and abuse that:
33-16 (A) conforms to guidelines developed by the
33-17 operating agency with assistance from the commission and the office
33-18 of the attorney general; and
33-19 (B) requires the managed care organization to
33-20 report any known or suspected act of fraud or abuse to the
33-21 operating agency for referral to the commission for investigation;
33-22 (3) include standard provisions developed by the
33-23 operating agency in each contract for ancillary services entered
33-24 into by the managed care organization that affects the delivery of
33-25 or payment for Medicaid services;
34-1 (4) submit to the commission for approval each
34-2 contract for ancillary services entered into by the managed care
34-3 organization that affects the delivery of or payment for Medicaid
34-4 services; and
34-5 (5) submit annual disclosure statements to the
34-6 commission containing information on:
34-7 (A) the financial condition of the managed care
34-8 organization and each of its affiliates; and
34-9 (B) ownership interests in the managed care
34-10 organization or any of its affiliates.
34-11 (b) The operating agency shall require that each contract
34-12 between a managed care organization and the state to provide or
34-13 arrange to provide health care benefits or services to Medicaid
34-14 eligible individuals contain provisions:
34-15 (1) stating that information provided by a managed
34-16 care organization under this section may be used as necessary to
34-17 detect fraud and abuse;
34-18 (2) specifying the responsibilities of the managed
34-19 care organization in reducing fraud and abuse; and
34-20 (3) authorizing specific penalties for failure to
34-21 provide information required by commission rules.
34-22 Sec. 532.113. AUDITS; MEMORANDUM OF UNDERSTANDING. (a) At
34-23 least once every three years the operating agency shall audit each
34-24 managed care organization that contracts with the state to provide
34-25 or arrange to provide health care benefits or services to Medicaid
35-1 eligible individuals.
35-2 (b) A managed care organization audited under Subsection (a)
35-3 is responsible for paying the costs of the audit. The costs of the
35-4 audit may be allowed as a credit against premium taxes paid by the
35-5 managed care organization, except as provided by Section 2, Article
35-6 1.28, Insurance Code.
35-7 (c) The operating agency and the Texas Department of
35-8 Insurance shall enter into a memorandum of understanding to
35-9 coordinate audits of managed care organizations. The memorandum
35-10 shall:
35-11 (1) identify information required in an operating
35-12 agency audit that is not customarily required in a department
35-13 audit;
35-14 (2) encourage the department to include to the extent
35-15 possible information identified under Subdivision (1) in department
35-16 audits;
35-17 (3) establish procedures for initiating and
35-18 distributing the findings of audits of a managed care organization;
35-19 (4) identify the records of physicians or Medicaid
35-20 eligible individuals that are served by managed care organizations
35-21 that are subject to audit; and
35-22 (5) require that operating agency and department
35-23 personnel that audit a managed care organization receive specific
35-24 training in detecting Medicaid fraud and abuse.
35-25 (d) Not later than November 1, 1997, the Texas Department of
36-1 Health or the appropriate health and human services agency
36-2 operating part of the state Medicaid program shall develop
36-3 guidelines applicable to a managed care organization's plan for
36-4 preventing, detecting, and reporting Medicaid fraud.
36-5 (e) Subdivision (2), Subsection (n), Section 16A, Article
36-6 4413(502), Revised Statutes, as amended by this section, or
36-7 Subdivision (2), Subsection (a), Section 532.112, Government Code,
36-8 as added by this section, depending on which provision takes
36-9 effect, applies only to a managed care organization that enters
36-10 into a contract or renews a contract on or after November 1, 1997,
36-11 with the state to provide or arrange to provide health care
36-12 benefits to Medicaid eligible individuals.
36-13 (f) This section applies only to a contract entered into or
36-14 renewed on or after the effective date of this section. A contract
36-15 entered into or renewed before the effective date of this section
36-16 is governed by the law in effect immediately before the effective
36-17 date of this section, and the former law is continued in effect for
36-18 that purpose.
36-19 (g) A managed care organization that contracts with the
36-20 state to provide or arrange to provide health care benefits to
36-21 Medicaid eligible individuals before the effective date of this
36-22 section is not required by this section to:
36-23 (1) include standard provisions developed by the state
36-24 in a contract for ancillary services executed before the effective
36-25 date of this section;
37-1 (2) submit a contract for ancillary services executed
37-2 before the effective date of this section to the commission for
37-3 approval; or
37-4 (3) modify a contract between the managed care
37-5 organization and the state executed before the effective date of
37-6 this section.
37-7 (h) A managed care organization that renews a contract
37-8 subject to this section after the effective date of this section
37-9 shall include in the renewed contract all provisions required to be
37-10 included by this section.
37-11 (i) Subsection (a) of this section takes effect only if
37-12 neither H.B. No. 1845 nor S.B. No. 898, Acts of the 75th
37-13 Legislature, Regular Session, 1997, relating to nonsubstantive
37-14 additions to and corrections in enacted codes, take effect.
37-15 (j) Subsections (b) and (c) of this section take effect only
37-16 if H.B. No. 1845 or S.B. No. 898, Acts of the 75th Legislature,
37-17 Regular Session, 1997, relating to nonsubstantive additions to and
37-18 corrections in enacted codes, takes effect.
37-19 SECTION 2.06. PILOT PROGRAM; ON-SITE REVIEWS OF PROSPECTIVE
37-20 PROVIDERS. (a) The Health and Human Services Commission by rule
37-21 shall establish a pilot program to reduce fraud by conducting
37-22 random on-site reviews of persons who apply to provide health care
37-23 services under the state Medicaid program before authorizing those
37-24 persons to provide the services.
37-25 (b) The commission shall implement the pilot program
38-1 initially in not more than five or fewer than three urban counties
38-2 selected by the commission. The commission shall select counties
38-3 for the pilot program that:
38-4 (1) offer the greatest potential for achieving a
38-5 reduction of provider fraud; and
38-6 (2) contain established field offices of the
38-7 commission or the Texas Department of Human Services, as
38-8 appropriate.
38-9 (c) At a minimum, the pilot program shall provide for random
38-10 on-site reviews of durable medical equipment providers, home health
38-11 providers, therapists, and laboratories. The commission may
38-12 include other groups of providers in the pilot program.
38-13 (d) The commission shall develop questions to be used during
38-14 an on-site review of a prospective provider to verify that the
38-15 provider has the ability to provide the proposed services.
38-16 (e) The on-site reviews shall be conducted by personnel in
38-17 the appropriate field offices of the commission or the Texas
38-18 Department of Human Services.
38-19 (f) The commission may waive an on-site review of a
38-20 prospective provider if the provider has been subject to a
38-21 comparable review by a certifying body in the preceding year.
38-22 (g) If the pilot program is successful in reducing provider
38-23 fraud in the counties initially selected under Subsection (b) of
38-24 this section, the commission may expand the pilot program to
38-25 include additional counties.
39-1 (h) Not later than January 15, 1999, the commission shall
39-2 submit to the governor and the legislature a report concerning the
39-3 effectiveness of the pilot program that includes:
39-4 (1) the number of applications denied as a result of
39-5 an on-site review; and
39-6 (2) recommendations on expanding the pilot program.
39-7 (i) This section expires September 1, 1999.
39-8 SECTION 2.07. DEVELOPMENT OF NEW PROVIDER CONTRACT. (a) As
39-9 soon as possible after the effective date of this section, the
39-10 Health and Human Services Commission shall develop a new provider
39-11 contract for health care services that contains provisions designed
39-12 to strengthen the commission's ability to prevent provider fraud
39-13 under the state Medicaid program.
39-14 (b) In developing the new provider contract, the commission
39-15 shall solicit suggestions and comments from representatives of
39-16 providers in the state Medicaid program.
39-17 (c) As soon as possible after development of the new
39-18 provider contract, the commission and each agency operating part of
39-19 the state Medicaid program by rule shall require each provider who
39-20 enrolled in the program before completion of the new contract to
39-21 reenroll in the program under the new contract or modify the
39-22 provider's existing contract in accordance with commission or
39-23 agency procedures as necessary to comply with the requirements of
39-24 the new contract. A provider must reenroll in the state Medicaid
39-25 program or make the necessary contract modifications not later than
40-1 September 1, 1999, to retain eligibility to participate in the
40-2 program.
40-3 SECTION 2.08. COMPETITIVE PROCESS FOR OBTAINING DURABLE
40-4 MEDICAL EQUIPMENT. (a) As soon as possible and not later than the
40-5 45th day after the effective date of this section:
40-6 (1) the Texas Department of Health shall develop a
40-7 process for selecting providers of durable medical equipment and
40-8 supplies that encourages competition; and
40-9 (2) the Health and Human Services Commission shall
40-10 submit an amendment to the state's Medicaid plan authorizing
40-11 implementation of the process developed by the Texas Department of
40-12 Health.
40-13 (b) This section takes effect on the first date that it may
40-14 take effect under Section 39, Article III, Texas Constitution.
40-15 SECTION 2.09. REVIEW OF SERVICE PROVIDER BILLING PRACTICES.
40-16 (a) The Texas Department of Health shall conduct an automated
40-17 review of physician, laboratory, radiology, and other health care
40-18 provider services to identify improper billing practices designed
40-19 to inflate a service provider's claim for payment for services
40-20 provided under the state Medicaid program.
40-21 (b) After completing the review required by Subsection (a)
40-22 of this section, the Texas Department of Health shall:
40-23 (1) refer each identified improper billing practice to
40-24 the Health and Human Services Commission's office of investigations
40-25 and enforcement; and
41-1 (2) require the entity that administers the state
41-2 Medicaid program on behalf of the department to modify the entity's
41-3 claims processing and monitoring procedures and computer technology
41-4 as necessary to prevent improper billing by service providers.
41-5 (c) This section takes effect on the first date that it may
41-6 take effect under Section 39, Article III, Texas Constitution.
41-7 ARTICLE 3. ADMINISTRATIVE PENALTIES AND SANCTIONS
41-8 RELATING TO MEDICAID FRAUD
41-9 SECTION 3.01. ADMINISTRATIVE PENALTIES. (a) Section
41-10 32.039, Human Resources Code, is amended to read as follows:
41-11 Sec. 32.039. [CIVIL] DAMAGES AND PENALTIES. (a) In this
41-12 section:
41-13 (1) "Claim"[, "claim"] means an application for
41-14 payment of health care services under Title XIX of the federal
41-15 Social Security Act that is submitted by a person who is under a
41-16 contract or provider agreement with the department.
41-17 (2) "Managed care organization" means any entity or
41-18 person that is authorized or otherwise permitted by law to arrange
41-19 for or provide a managed care plan.
41-20 (3) "Managed care plan" means a plan under which a
41-21 person undertakes to provide, arrange for, pay for, or reimburse
41-22 any part of the cost of any health care service. A part of the
41-23 plan must consist of arranging for or providing health care
41-24 services as distinguished from indemnification against the cost of
41-25 those services on a prepaid basis through insurance or otherwise.
42-1 The term does not include a plan that indemnifies a person for the
42-2 cost of health care services through insurance.
42-3 (b) A person commits a violation if the person:
42-4 (1) presents or causes to be presented to the
42-5 department a claim that contains a statement or representation the
42-6 person knows to be false; or
42-7 (2) is a managed care organization that contracts with
42-8 the department to provide or arrange to provide health care
42-9 benefits or services to individuals eligible for medical assistance
42-10 and:
42-11 (A) fails to provide to an individual a health
42-12 care benefit or service that the organization is required to
42-13 provide under the contract with the department;
42-14 (B) fails to provide to the department
42-15 information required to be provided by law, department rule, or
42-16 contractual provision;
42-17 (C) engages in a fraudulent activity in
42-18 connection with the enrollment in the organization's managed care
42-19 plan of an individual eligible for medical assistance or in
42-20 connection with marketing the organization's services to an
42-21 individual eligible for medical assistance; or
42-22 (D) engages in actions that indicate a pattern
42-23 of:
42-24 (i) wrongful denial of payment for a
42-25 health care benefit or service that the organization is required to
43-1 provide under the contract with the department; or
43-2 (ii) wrongful delay of at least 45 days or
43-3 a longer period specified in the contract with the department, not
43-4 to exceed 60 days, in making payment for a health care benefit or
43-5 service that the organization is required to provide under the
43-6 contract with the department.
43-7 (c) [(b)] A person who commits a violation under Subsection
43-8 (b) [presents or causes to be presented to the department a claim
43-9 that contains a statement or representation the person knows to be
43-10 false] is liable to the department for:
43-11 (1) the amount paid, if any, as a result [because] of
43-12 the violation [false claim] and interest on that amount determined
43-13 at the rate provided by law for legal judgments and accruing from
43-14 the date on which the payment was made; and
43-15 (2) payment of an administrative [a civil] penalty of
43-16 an amount not to exceed twice the amount paid, if any, as a result
43-17 [because] of the violation, plus an amount:
43-18 (A) not less than $5,000 or more than $15,000
43-19 for each violation that results in injury to an elderly person, as
43-20 defined by Section 48.002(1), a disabled person, as defined by
43-21 Section 48.002(8)(A), or a person younger than 18 years of age; or
43-22 (B) not more than $10,000 for each violation
43-23 that does not result in injury to a person described by Paragraph
43-24 (A) [false claim; and]
43-25 [(3) payment of a civil penalty of not more than
44-1 $2,000 for each item or service for which payment was claimed].
44-2 (d) [(c)] Unless the provider submitted information to the
44-3 department for use in preparing a voucher that the provider knew
44-4 was false or failed to correct information that the provider knew
44-5 was false when provided an opportunity to do so, this section does
44-6 not apply to a claim based on the voucher if the department
44-7 calculated and printed the amount of the claim on the voucher and
44-8 then submitted the voucher to the provider for the provider's
44-9 signature. In addition, the provider's signature on the voucher
44-10 does not constitute fraud. The department shall adopt rules that
44-11 establish a grace period during which errors contained in a voucher
44-12 prepared by the department may be corrected without penalty to the
44-13 provider.
44-14 (e) [(d)] In determining the amount of the penalty to be
44-15 assessed under Subsection (c)(2) [Subdivision (3) of Subsection (b)
44-16 of this section], the department shall consider:
44-17 (1) the seriousness of the violation;
44-18 (2) whether the person had previously committed a
44-19 violation [submitted false claims]; and
44-20 (3) the amount necessary to deter the person from
44-21 committing [submitting] future violations [false claims].
44-22 (f) [(e)] If after an examination of the facts the
44-23 department concludes that the person committed a violation [did
44-24 submit a false claim], the department may issue a preliminary
44-25 report stating the facts on which it based its conclusion,
45-1 recommending that an administrative [a civil] penalty under this
45-2 section be imposed and recommending the amount of the proposed
45-3 penalty.
45-4 (g) [(f)] The department shall give written notice of the
45-5 report to the person charged with committing the violation
45-6 [submitting the false claim]. The notice must include a brief
45-7 summary of the facts, a statement of the amount of the recommended
45-8 penalty, and a statement of the person's right to an informal
45-9 review of the alleged violation [false claim], the amount of the
45-10 penalty, or both the alleged violation [false claim] and the amount
45-11 of the penalty.
45-12 (h) [(g)] Not later than the 10th day after the date on
45-13 which the person charged with committing the violation [submitting
45-14 the false claim] receives the notice, the person may either give
45-15 the department written consent to the report, including the
45-16 recommended penalty, or make a written request for an informal
45-17 review by the department.
45-18 (i) [(h)] If the person charged with committing the
45-19 violation [submitting the false claim] consents to the penalty
45-20 recommended by the department or fails to timely request an
45-21 informal review, the department shall assess the penalty. The
45-22 department shall give the person written notice of its action. The
45-23 person shall pay the penalty not later than the 30th day after the
45-24 date on which the person receives the notice.
45-25 (j) [(i)] If the person charged with committing the
46-1 violation [submitting a false claim] requests an informal review as
46-2 provided by Subsection (h) [(g) of this section], the department
46-3 shall conduct the review. The department shall give the person
46-4 written notice of the results of the review.
46-5 (k) [(j)] Not later than the 10th day after the date on
46-6 which the person charged with committing the violation [submitting
46-7 the false claim] receives the notice prescribed by Subsection (j)
46-8 [(i) of this section], the person may make to the department a
46-9 written request for a hearing. The hearing must be conducted in
46-10 accordance with Chapter 2001, Government Code.
46-11 (l) [(k)] If, after informal review, a person who has been
46-12 ordered to pay a penalty fails to request a formal hearing in a
46-13 timely manner, the department shall assess the penalty. The
46-14 department shall give the person written notice of its action. The
46-15 person shall pay the penalty not later than the 30th day after the
46-16 date on which the person receives the notice.
46-17 (m) Within 30 days after the date on which the board's order
46-18 issued after a hearing under Subsection (k) becomes final as
46-19 provided by Section 2001.144, Government Code, the person shall:
46-20 (1) pay the amount of the penalty;
46-21 (2) pay the amount of the penalty and file a petition
46-22 for judicial review contesting the occurrence of the violation, the
46-23 amount of the penalty, or both the occurrence of the violation and
46-24 the amount of the penalty; or
46-25 (3) without paying the amount of the penalty, file a
47-1 petition for judicial review contesting the occurrence of the
47-2 violation, the amount of the penalty, or both the occurrence of the
47-3 violation and the amount of the penalty.
47-4 (n) A person who acts under Subsection (m)(3) within the
47-5 30-day period may:
47-6 (1) stay enforcement of the penalty by:
47-7 (A) paying the amount of the penalty to the
47-8 court for placement in an escrow account; or
47-9 (B) giving to the court a supersedeas bond that
47-10 is approved by the court for the amount of the penalty and that is
47-11 effective until all judicial review of the department's order is
47-12 final; or
47-13 (2) request the court to stay enforcement of the
47-14 penalty by:
47-15 (A) filing with the court a sworn affidavit of
47-16 the person stating that the person is financially unable to pay the
47-17 amount of the penalty and is financially unable to give the
47-18 supersedeas bond; and
47-19 (B) giving a copy of the affidavit to the
47-20 commissioner by certified mail.
47-21 (o) If the commissioner receives a copy of an affidavit
47-22 under Subsection (n)(2), the commissioner may file with the court,
47-23 within five days after the date the copy is received, a contest to
47-24 the affidavit. The court shall hold a hearing on the facts alleged
47-25 in the affidavit as soon as practicable and shall stay the
48-1 enforcement of the penalty on finding that the alleged facts are
48-2 true. The person who files an affidavit has the burden of proving
48-3 that the person is financially unable to pay the amount of the
48-4 penalty and to give a supersedeas bond.
48-5 (p) [(l) Except as provided by Subsection (m) of this
48-6 section, not later than 30 days after the date on which the
48-7 department issues a final decision after a hearing under Subsection
48-8 (j) of this section, a person who has been ordered to pay a penalty
48-9 under this section shall pay the penalty in full.]
48-10 [(m) If the person seeks judicial review of either the fact
48-11 of the submission of a false claim or the amount of the penalty or
48-12 of both the fact of the submission and the amount of the penalty,
48-13 the person shall forward the amount of the penalty to the
48-14 department for placement in an escrow account or, instead of
48-15 payment into an escrow account, post with the department a
48-16 supersedeas bond in a form approved by the department for the
48-17 amount of the penalty. The bond must be effective until all
48-18 judicial review of the order or decision is final.]
48-19 [(n) Failure to forward the money to or to post the bond
48-20 with the department within the period provided by Subsection (l) or
48-21 (m) of this section results in a waiver of all legal rights to
48-22 judicial review.] If the person charged does not pay the amount of
48-23 the penalty and the enforcement of the penalty is not stayed [fails
48-24 to forward the money or post the bond within the period provided by
48-25 Subsection (h), (k), (l), or (m) of this section], the department
49-1 may forward the matter to the attorney general for enforcement of
49-2 the penalty and interest as provided by law for legal judgments.
49-3 An action to enforce a penalty order under this section must be
49-4 initiated in a court of competent jurisdiction in Travis County or
49-5 in the county in [from] which the violation [false claim] was
49-6 committed [submitted].
49-7 (q) [(o)] Judicial review of a department order or review
49-8 under this section assessing a penalty is under the substantial
49-9 evidence rule. A suit may be initiated by filing a petition with a
49-10 district court in Travis County, as provided by Subchapter G,
49-11 Chapter 2001, Government Code.
49-12 (r) [(p)] If a penalty is reduced or not assessed, the
49-13 department shall remit to the person the appropriate amount plus
49-14 accrued interest if the penalty has been paid or shall execute a
49-15 release of the bond if a supersedeas bond has been posted. The
49-16 accrued interest on amounts remitted by the department under this
49-17 subsection shall be paid at a rate equal to the rate provided by
49-18 law for legal judgments and shall be paid for the period beginning
49-19 on the date the penalty is paid to the department under this
49-20 section and ending on the date the penalty is remitted.
49-21 (s) [(q)] A damage, cost, or penalty collected under this
49-22 section is not an allowable expense in a claim or cost report that
49-23 is or could be used to determine a rate or payment under the
49-24 medical assistance program.
49-25 (t) [(r)] All funds collected under this section shall be
50-1 deposited in the State Treasury to the credit of the General
50-2 Revenue Fund.
50-3 (u) A person found liable for a violation under Subsection
50-4 (c) that resulted in injury to an elderly person, as defined by
50-5 Section 48.002(1), a disabled person, as defined by Section
50-6 48.002(8)(A), or a person younger than 18 years of age may not
50-7 provide or arrange to provide health care services under the
50-8 medical assistance program for a period of 10 years. The
50-9 department by rule may provide for a period of ineligibility longer
50-10 than 10 years. The period of ineligibility begins on the date on
50-11 which the determination that the person is liable becomes final.
50-12 This subsection does not apply to a person who operates a nursing
50-13 facility or an ICF-MR facility.
50-14 (v) A person found liable for a violation under Subsection
50-15 (c) that did not result in injury to an elderly person, as defined
50-16 by Section 48.002(1), a disabled person, as defined by Section
50-17 48.002(8)(A), or a person younger than 18 years of age may not
50-18 provide or arrange to provide health care services under the
50-19 medical assistance program for a period of three years. The
50-20 department by rule may provide for a period of ineligibility longer
50-21 than three years. The period of ineligibility begins on the date
50-22 on which the determination that the person is liable becomes final.
50-23 This subsection does not apply to a person who operates a nursing
50-24 facility or an ICF-MR facility.
50-25 (b) The change in law made by this section applies only to a
51-1 violation committed on or after the effective date of this section.
51-2 For purposes of this subsection, a violation is committed on or
51-3 after the effective date of this section only if each element of
51-4 the violation occurs on or after that date. A violation committed
51-5 before the effective date of this section is covered by the law in
51-6 effect when the violation was committed, and the former law is
51-7 continued in effect for that purpose.
51-8 SECTION 3.02. SANCTIONS APPLICABLE TO VENDOR DRUG PROGRAM.
51-9 Subchapter B, Chapter 32, Human Resources Code, is amended by
51-10 adding Section 32.046 to read as follows:
51-11 Sec. 32.046. VENDOR DRUG PROGRAM; SANCTIONS AND PENALTIES.
51-12 (a) The department shall adopt rules governing sanctions and
51-13 penalties that apply to a provider in the vendor drug program who
51-14 submits an improper claim for reimbursement under the program.
51-15 (b) The department shall notify each provider in the vendor
51-16 drug program that the provider is subject to sanctions and
51-17 penalties for submitting an improper claim.
51-18 SECTION 3.03. PROHIBITION OF CERTAIN PERSONS CONVICTED OF
51-19 FRAUD. Subchapter B, Chapter 32, Human Resources Code, is amended
51-20 by adding Section 32.047 to read as follows:
51-21 Sec. 32.047. PROHIBITION OF CERTAIN HEALTH CARE SERVICE
51-22 PROVIDERS. A person is permanently prohibited from providing or
51-23 arranging to provide health care services under the medical
51-24 assistance program if:
51-25 (1) the person is convicted of an offense arising from
52-1 a fraudulent act under the program; and
52-2 (2) the person's fraudulent act results in injury to
52-3 an elderly person, as defined by Section 48.002(1), a disabled
52-4 person, as defined by Section 48.002(8)(A), or a person younger
52-5 than 18 years of age.
52-6 SECTION 3.04. DEDUCTIONS FROM LOTTERY WINNINGS.
52-7 (a) Subsections (a) and (c), Section 466.407, Government Code, are
52-8 amended to read as follows:
52-9 (a) The executive director shall deduct the amount of a
52-10 delinquent tax or other money from the winnings of a person who has
52-11 been finally determined to be:
52-12 (1) delinquent in the payment of a tax or other money
52-13 collected by the comptroller[, the state treasurer,] or the Texas
52-14 Alcoholic Beverage Commission;
52-15 (2) delinquent in making child support payments
52-16 administered or collected by the attorney general;
52-17 (3) delinquent in reimbursing the Texas Department of
52-18 Human Services for a benefit granted in error under the food stamp
52-19 program or the program of financial assistance under Chapter 31,
52-20 Human Resources Code;
52-21 (4) in default on a loan made under Chapter 52,
52-22 Education Code; or
52-23 (5) [(4)] in default on a loan guaranteed under
52-24 Chapter 57, Education Code.
52-25 (c) The attorney general, comptroller, [state treasurer,]
53-1 Texas Alcoholic Beverage Commission, Texas Department of Human
53-2 Services, Texas Higher Education Coordinating Board, and Texas
53-3 Guaranteed Student Loan Corporation shall each provide the
53-4 executive director with a report of persons who have been finally
53-5 determined to be delinquent in the payment of a tax or other money
53-6 collected by the agency. The commission shall adopt rules
53-7 regarding the form and frequency of reports under this subsection.
53-8 (b) The Texas Department of Human Services shall take all
53-9 action necessary to implement the change in law made by this
53-10 section not later than January 1, 1998. The department may not
53-11 seek recovery through lottery prize deduction of an amount of a
53-12 benefit granted in error to a person under the food stamp program
53-13 or the program of financial assistance under Chapter 31, Human
53-14 Resources Code, before September 1, 1997.
53-15 (c) The executive director of the Texas Lottery Commission
53-16 is not required under Section 466.407, Government Code, as amended
53-17 by this section, to deduct from lottery prizes erroneous amounts
53-18 granted to lottery winners by the Texas Department of Human
53-19 Services until the department provides to the commission all
53-20 necessary information and reports required for implementation of
53-21 that section.
53-22 ARTICLE 4. CIVIL REMEDIES RELATING TO MEDICAID FRAUD
53-23 AND CREATION OF CRIMINAL OFFENSE
53-24 SECTION 4.01. REDESIGNATION. (a) Chapter 36, Human
53-25 Resources Code, is amended by designating Sections 36.001, 36.002,
54-1 36.007, 36.008, 36.009, 36.010, 36.011, and 36.012 as Subchapter A,
54-2 renumbering Sections 36.007, 36.008, 36.009, 36.010, 36.011, and
54-3 36.012 as Sections 36.003, 36.004, 36.005, 36.006, 36.007, and
54-4 36.008, respectively, and adding a subchapter heading to read as
54-5 follows:
54-6 SUBCHAPTER A. GENERAL PROVISIONS
54-7 (b) Chapter 36, Human Resources Code, is amended by
54-8 designating Sections 36.003, 36.004, 36.005, and 36.006 as
54-9 Subchapter B, renumbering those sections as Sections 36.051,
54-10 36.052, 36.053, and 36.054, respectively, and adding a subchapter
54-11 heading to read as follows:
54-12 SUBCHAPTER B. ACTION BY ATTORNEY GENERAL
54-13 SECTION 4.02. DEFINITIONS. Section 36.001, Human Resources
54-14 Code, is amended by amending Subdivisions (5) through (11) and
54-15 adding Subdivision (12) to read as follows:
54-16 (5) "Managed care organization" has the meaning
54-17 assigned by Section 32.039(a).
54-18 (6) "Medicaid program" means the state Medicaid
54-19 program.
54-20 (7) [(6)] "Medicaid recipient" means an individual on
54-21 whose behalf a person claims or receives a payment from the
54-22 Medicaid program or a fiscal agent, without regard to whether the
54-23 individual was eligible for benefits under the Medicaid program.
54-24 (8) [(7)] "Physician" means a physician licensed to
54-25 practice medicine in this state.
55-1 (9) [(8)] "Provider" means a person who participates
55-2 in or who has applied to participate in the Medicaid program as a
55-3 supplier of a product or service and includes:
55-4 (A) a management company that manages, operates,
55-5 or controls another provider;
55-6 (B) a person, including a medical vendor, that
55-7 provides a product or service to a provider or to a fiscal agent;
55-8 [and]
55-9 (C) an employee of a provider; and
55-10 (D) a managed care organization.
55-11 (10) [(9)] "Service" includes care or treatment of a
55-12 Medicaid recipient.
55-13 (11) [(10)] "Signed" means to have affixed a signature
55-14 directly or indirectly by means of handwriting, typewriting,
55-15 signature stamp, computer impulse, or other means recognized by
55-16 law.
55-17 (12) [(11)] "Unlawful act" means an act declared to be
55-18 unlawful under Section 36.002.
55-19 SECTION 4.03. UNLAWFUL ACTS RELATING TO MANAGED CARE
55-20 ORGANIZATION. Section 36.002, Human Resources Code, is amended to
55-21 read as follows:
55-22 Sec. 36.002. UNLAWFUL ACTS. A person commits an unlawful
55-23 act if the person:
55-24 (1) knowingly or intentionally makes or causes to be
55-25 made a false statement or misrepresentation of a material fact:
56-1 (A) on an application for a contract, benefit,
56-2 or payment under the Medicaid program; or
56-3 (B) that is intended to be used to determine a
56-4 person's eligibility for a benefit or payment under the Medicaid
56-5 program;
56-6 (2) knowingly or intentionally conceals or fails to
56-7 disclose an event:
56-8 (A) that the person knows affects the initial or
56-9 continued right to a benefit or payment under the Medicaid program
56-10 of:
56-11 (i) the person; or
56-12 (ii) another person on whose behalf the
56-13 person has applied for a benefit or payment or is receiving a
56-14 benefit or payment; and
56-15 (B) to permit a person to receive a benefit or
56-16 payment that is not authorized or that is greater than the payment
56-17 or benefit that is authorized;
56-18 (3) knowingly or intentionally applies for and
56-19 receives a benefit or payment on behalf of another person under the
56-20 Medicaid program and converts any part of the benefit or payment to
56-21 a use other than for the benefit of the person on whose behalf it
56-22 was received;
56-23 (4) knowingly or intentionally makes, causes to be
56-24 made, induces, or seeks to induce the making of a false statement
56-25 or misrepresentation of material fact concerning:
57-1 (A) the conditions or operation of a facility in
57-2 order that the facility may qualify for certification or
57-3 recertification required by the Medicaid program, including
57-4 certification or recertification as:
57-5 (i) a hospital;
57-6 (ii) a nursing facility or skilled nursing
57-7 facility;
57-8 (iii) a hospice;
57-9 (iv) an intermediate care facility for the
57-10 mentally retarded;
57-11 (v) a personal care facility; or
57-12 (vi) a home health agency; or
57-13 (B) information required to be provided by a
57-14 federal or state law, rule, regulation, or provider agreement
57-15 pertaining to the Medicaid program;
57-16 (5) except as authorized under the Medicaid program,
57-17 knowingly or intentionally charges, solicits, accepts, or receives,
57-18 in addition to an amount paid under the Medicaid program, a gift,
57-19 money, a donation, or other consideration as a condition to the
57-20 provision of a service or continued service to a Medicaid recipient
57-21 if the cost of the service provided to the Medicaid recipient is
57-22 paid for, in whole or in part, under the Medicaid program;
57-23 (6) knowingly or intentionally presents or causes to
57-24 be presented a claim for payment under the Medicaid program for a
57-25 product provided or a service rendered by a person who:
58-1 (A) is not licensed to provide the product or
58-2 render the service, if a license is required; or
58-3 (B) is not licensed in the manner claimed;
58-4 (7) knowingly or intentionally makes a claim under the
58-5 Medicaid program for:
58-6 (A) a service or product that has not been
58-7 approved or acquiesced in by a treating physician or health care
58-8 practitioner;
58-9 (B) a service or product that is substantially
58-10 inadequate or inappropriate when compared to generally recognized
58-11 standards within the particular discipline or within the health
58-12 care industry; or
58-13 (C) a product that has been adulterated,
58-14 debased, mislabeled, or that is otherwise inappropriate;
58-15 (8) makes a claim under the Medicaid program and
58-16 knowingly or intentionally fails to indicate the type of license
58-17 and the identification number of the licensed health care provider
58-18 who actually provided the service; [or]
58-19 (9) knowingly or intentionally enters into an
58-20 agreement, combination, or conspiracy to defraud the state by
58-21 obtaining or aiding another person in obtaining an unauthorized
58-22 payment or benefit from the Medicaid program or a fiscal agent; or
58-23 (10) is a managed care organization that contracts
58-24 with the Health and Human Services Commission or other state agency
58-25 to provide or arrange to provide health care benefits or services
59-1 to individuals eligible under the Medicaid program and knowingly or
59-2 intentionally:
59-3 (A) fails to provide to an individual a health
59-4 care benefit or service that the organization is required to
59-5 provide under the contract;
59-6 (B) fails to provide to the commission or
59-7 appropriate state agency information required to be provided by
59-8 law, commission or agency rule, or contractual provision;
59-9 (C) engages in a fraudulent activity in
59-10 connection with the enrollment of an individual eligible under the
59-11 Medicaid program in the organization's managed care plan or in
59-12 connection with marketing the organization's services to an
59-13 individual eligible under the Medicaid program; or
59-14 (D) obstructs an investigation by the attorney
59-15 general of an alleged unlawful act under this section.
59-16 SECTION 4.04. APPLICABLE PENALTIES AND CONFORMING AMENDMENT.
59-17 Section 36.004, Human Resources Code, as renumbered by this article
59-18 as Section 36.052, is amended by amending Subsections (a) and (e)
59-19 to read as follows:
59-20 (a) Except as provided by Subsection (c), a person who
59-21 commits an unlawful act is liable to the state for:
59-22 (1) restitution of the value of any payment or
59-23 monetary or in-kind benefit provided under the Medicaid program,
59-24 directly or indirectly, as a result of the unlawful act;
59-25 (2) interest on the value of the payment or benefit
60-1 described by Subdivision (1) at the prejudgment interest rate in
60-2 effect on the day the payment or benefit was received or paid, for
60-3 the period from the date the benefit was received or paid to the
60-4 date that restitution is paid to the state;
60-5 (3) a civil penalty of:
60-6 (A) not less than $5,000 or more than $15,000
60-7 for each unlawful act committed by the person that results in
60-8 injury to an elderly person, as defined by Section 48.002(1), a
60-9 disabled person, as defined by Section 48.002(8)(A), or a person
60-10 younger than 18 years of age; or
60-11 (B) not less than $1,000 or more than $10,000
60-12 for each unlawful act committed by the person that does not result
60-13 in injury to a person described by Paragraph (A); and
60-14 (4) two times the value of the payment or benefit
60-15 described by Subdivision (1).
60-16 (e) The attorney general may:
60-17 (1) bring an action for civil remedies under this
60-18 section together with a suit for injunctive relief under Section
60-19 36.051 [36.003]; or
60-20 (2) institute an action for civil remedies
60-21 independently of an action for injunctive relief.
60-22 SECTION 4.05. CONFORMING AMENDMENT. Section 36.005, Human
60-23 Resources Code, as renumbered by this article as Section 36.053, is
60-24 amended by amending Subsection (b) to read as follows:
60-25 (b) In investigating an unlawful act, the attorney general
61-1 may:
61-2 (1) require the person to file on a prescribed form a
61-3 statement in writing, under oath or affirmation, as to all the
61-4 facts and circumstances concerning the alleged unlawful act and
61-5 other information considered necessary by the attorney general;
61-6 (2) examine under oath a person in connection with the
61-7 alleged unlawful act; and
61-8 (3) execute in writing and serve on the person a civil
61-9 investigative demand requiring the person to produce the
61-10 documentary material and permit inspection and copying of the
61-11 material under Section 36.054 [36.006].
61-12 SECTION 4.06. ADDITIONAL SANCTIONS FOR MEDICAID FRAUD.
61-13 Section 36.009, Human Resources Code, as renumbered by this article
61-14 as Section 36.005, is amended to read as follows:
61-15 Sec. 36.005 [36.009]. SUSPENSION OR REVOCATION OF AGREEMENT;
61-16 PROFESSIONAL DISCIPLINE. (a) The commissioner of human services,
61-17 the commissioner of public health, the commissioner of mental
61-18 health and mental retardation, the executive director of the
61-19 Department of Protective and Regulatory Services, or the executive
61-20 director of another state health care regulatory agency:
61-21 (1) shall suspend or revoke:
61-22 (A) a provider agreement between the department
61-23 or agency and a person, other than a person who operates a nursing
61-24 facility or an ICF-MR facility, found liable under Section 36.052;
61-25 and
62-1 (B) a permit, license, or certification granted
62-2 by the department or agency to a person, other than a person who
62-3 operates a nursing facility or an ICF-MR facility, found liable
62-4 under Section 36.052; and
62-5 (2) may suspend or revoke:
62-6 (A) [(1)] a provider agreement between the
62-7 department or agency and a person who operates a nursing facility
62-8 or an ICF-MR facility and who is found liable under Section 36.052
62-9 [36.004]; or
62-10 (B) [(2)] a permit, license, or certification
62-11 granted by the department or agency to a person who operates a
62-12 nursing facility or an ICF-MR facility and who is found liable
62-13 under Section 36.052 [36.004].
62-14 (b) A person found liable under Section 36.052 for an
62-15 unlawful act may not provide or arrange to provide health care
62-16 services under the Medicaid program for a period of 10 years. The
62-17 board of a state agency that operates part of the Medicaid program
62-18 may by rule provide for a period of ineligibility longer than 10
62-19 years. The period of ineligibility begins on the date on which the
62-20 determination that the person is liable becomes final. This
62-21 subsection does not apply to a person who operates a nursing
62-22 facility or an ICF-MR facility.
62-23 (c) A person licensed by a state regulatory agency who
62-24 commits an unlawful act is subject to professional discipline under
62-25 the applicable licensing law or rules adopted under that law.
63-1 (d) For purposes of this section, a person is considered to
63-2 have been found liable under Section 36.052 if the person is found
63-3 liable in an action brought under Subchapter C.
63-4 SECTION 4.07. AUTHORITY OF ATTORNEY GENERAL.
63-5 (a) Subchapter B, Chapter 36, Human Resources Code, as designated
63-6 by this article, is amended by adding Section 36.055 to read as
63-7 follows:
63-8 Sec. 36.055. ATTORNEY GENERAL AS RELATOR IN FEDERAL ACTION.
63-9 To the extent permitted by 31 U.S.C. Sections 3729-3733, the
63-10 attorney general may bring an action as relator under 31 U.S.C.
63-11 Section 3730 with respect to an act in connection with the Medicaid
63-12 program for which a person may be held liable under 31 U.S.C.
63-13 Section 3729. The attorney general may contract with a private
63-14 attorney to represent the state under this section.
63-15 (b) The Office of the Attorney General shall develop
63-16 strategies to increase state recoveries under 31 U.S.C. Sections
63-17 3729 through 3733. The office shall report the results of the
63-18 office's effort to the legislature not later than September 1,
63-19 1998.
63-20 SECTION 4.08. CIVIL ACTION BY PRIVATE PERSON FOR MEDICAID
63-21 FRAUD. Chapter 36, Human Resources Code, is amended by adding
63-22 Subchapter C to read as follows:
63-23 SUBCHAPTER C. ACTION BY PRIVATE PERSONS
63-24 Sec. 36.101. ACTION BY PRIVATE PERSON AUTHORIZED. (a) A
63-25 person may bring a civil action for a violation of Section 36.002
64-1 for the person and for the state. The action shall be brought in
64-2 the name of the person and of the state.
64-3 (b) In an action brought under this subchapter, a person who
64-4 violates Section 36.002 is liable as provided by Section 36.052.
64-5 Sec. 36.102. INITIATION OF ACTION. (a) A person bringing
64-6 an action under this subchapter shall serve a copy of the petition
64-7 and a written disclosure of substantially all material evidence and
64-8 information the person possesses on the attorney general in
64-9 compliance with the Texas Rules of Civil Procedure.
64-10 (b) The petition shall be filed in camera and shall remain
64-11 under seal until at least the 60th day after the date the petition
64-12 is filed. The petition may not be served on the defendant until
64-13 the court orders service on the defendant.
64-14 (c) The state may elect to intervene and proceed with the
64-15 action not later than the 60th day after the date the attorney
64-16 general receives the petition and the material evidence and
64-17 information.
64-18 (d) The state may, for good cause shown, move the court to
64-19 extend the time during which the petition remains under seal under
64-20 Subsection (b). A motion under this subsection may be supported by
64-21 affidavits or other submissions in camera.
64-22 (e) An action under this subchapter may be dismissed before
64-23 the end of the period prescribed by Subsection (b), as extended as
64-24 provided by Subsection (d), if applicable, only if the court and
64-25 the attorney general consent in writing to the dismissal and state
65-1 their reasons for consenting.
65-2 Sec. 36.103. ANSWER BY DEFENDANT. A defendant is not
65-3 required to file an answer to a petition filed under this
65-4 subchapter until the 20th day after the date the petition is
65-5 unsealed and served on the defendant in compliance with the Texas
65-6 Rules of Civil Procedure.
65-7 Sec. 36.104. CONTINUATION OR DISMISSAL OF ACTION BASED ON
65-8 STATE DECISION. (a) Not later than the last day of the period
65-9 prescribed by Section 36.102(c), the state shall:
65-10 (1) proceed with the action; or
65-11 (2) notify the court that the state declines to take
65-12 over the action.
65-13 (b) If the state declines to take over the action, the court
65-14 shall dismiss the action.
65-15 Sec. 36.105. REPRESENTATION OF STATE BY PRIVATE ATTORNEY.
65-16 The attorney general may contract with a private attorney to
65-17 represent the state in an action under this subchapter with which
65-18 the state elects to proceed.
65-19 Sec. 36.106. INTERVENTION BY OTHER PARTIES PROHIBITED. A
65-20 person other than the state may not intervene or bring a related
65-21 action based on the facts underlying a pending action brought under
65-22 this subchapter.
65-23 Sec. 36.107. RIGHTS OF PARTIES IF STATE CONTINUES ACTION.
65-24 (a) If the state proceeds with the action, the state has the
65-25 primary responsibility for prosecuting the action and is not bound
66-1 by an act of the person bringing the action. The person bringing
66-2 the action has the right to continue as a party to the action,
66-3 subject to the limitations set forth by this section.
66-4 (b) The state may dismiss the action notwithstanding the
66-5 objections of the person bringing the action if:
66-6 (1) the attorney general notifies the person that the
66-7 state has filed a motion to dismiss; and
66-8 (2) the court provides the person with an opportunity
66-9 for a hearing on the motion.
66-10 (c) The state may settle the action with the defendant
66-11 notwithstanding the objections of the person bringing the action if
66-12 the court determines, after a hearing, that the proposed settlement
66-13 is fair, adequate, and reasonable under all the circumstances. On
66-14 a showing of good cause, the hearing may be held in camera.
66-15 (d) On a showing by the state that unrestricted
66-16 participation during the course of the litigation by the person
66-17 bringing the action would interfere with or unduly delay the
66-18 state's prosecution of the case, or would be repetitious,
66-19 irrelevant, or for purposes of harassment, the court may impose
66-20 limitations on the person's participation, including:
66-21 (1) limiting the number of witnesses the person may
66-22 call;
66-23 (2) limiting the length of the testimony of witnesses
66-24 called by the person;
66-25 (3) limiting the person's cross-examination of
67-1 witnesses; or
67-2 (4) otherwise limiting the participation by the person
67-3 in the litigation.
67-4 (e) On a showing by the defendant that unrestricted
67-5 participation during the course of the litigation by the person
67-6 bringing the action would be for purposes of harassment or would
67-7 cause the defendant undue burden or unnecessary expense, the court
67-8 may limit the participation by the person in the litigation.
67-9 Sec. 36.108. STAY OF CERTAIN DISCOVERY. (a) On a showing
67-10 by the state that certain actions of discovery by the person
67-11 bringing the action would interfere with the state's investigation
67-12 or prosecution of a criminal or civil matter arising out of the
67-13 same facts, the court may stay the discovery for a period not to
67-14 exceed 60 days.
67-15 (b) The court shall hear a motion to stay discovery under
67-16 this section in camera.
67-17 (c) The court may extend the period prescribed by Subsection
67-18 (a) on a further showing in camera that the state has pursued the
67-19 criminal or civil investigation or proceedings with reasonable
67-20 diligence and that any proposed discovery in the civil action will
67-21 interfere with the ongoing criminal or civil investigation or
67-22 proceedings.
67-23 Sec. 36.109. PURSUIT OF ALTERNATE REMEDY BY STATE.
67-24 (a) Notwithstanding Section 36.101, the state may elect to pursue
67-25 the state's claim through any alternate remedy available to the
68-1 state, including any administrative proceeding to determine an
68-2 administrative penalty. If an alternate remedy is pursued in
68-3 another proceeding, the person bringing the action has the same
68-4 rights in the other proceeding as the person would have had if the
68-5 action had continued under this subchapter.
68-6 (b) A finding of fact or conclusion of law made in the other
68-7 proceeding that has become final is conclusive on all parties to an
68-8 action under this subchapter. For purposes of this subsection, a
68-9 finding or conclusion is final if:
68-10 (1) the finding or conclusion has been finally
68-11 determined on appeal to the appropriate court;
68-12 (2) no appeal has been filed with respect to the
68-13 finding or conclusion and all time for filing an appeal has
68-14 expired; or
68-15 (3) the finding or conclusion is not subject to
68-16 judicial review.
68-17 Sec. 36.110. AWARD TO PRIVATE PLAINTIFF. (a) If the state
68-18 proceeds with an action under this subchapter, the person bringing
68-19 the action is entitled, except as provided by Subsection (b), to
68-20 receive at least 10 percent but not more than 25 percent of the
68-21 proceeds of the action, depending on the extent to which the person
68-22 substantially contributed to the prosecution of the action.
68-23 (b) If the court finds that the action is based primarily on
68-24 disclosures of specific information, other than information
68-25 provided by the person bringing the action, relating to allegations
69-1 or transactions in a criminal or civil hearing, in a legislative or
69-2 administrative report, hearing, audit, or investigation, or from
69-3 the news media, the court may award the amount the court considers
69-4 appropriate but not more than seven percent of the proceeds of the
69-5 action. The court shall consider the significance of the
69-6 information and the role of the person bringing the action in
69-7 advancing the case to litigation.
69-8 (c) A payment to a person under this section shall be made
69-9 from the proceeds of the action. A person receiving a payment
69-10 under this section is also entitled to receive an amount for
69-11 reasonable expenses that the court finds to have been necessarily
69-12 incurred, plus reasonable attorney's fees and costs. Expenses,
69-13 fees, and costs shall be awarded against the defendant.
69-14 (d) In this section, "proceeds of the action" includes
69-15 proceeds of a settlement of the action.
69-16 Sec. 36.111. REDUCTION OF AWARD. (a) If the court finds
69-17 that the action was brought by a person who planned and initiated
69-18 the violation of Section 36.002 on which the action was brought,
69-19 the court may, to the extent the court considers appropriate,
69-20 reduce the share of the proceeds of the action the person would
69-21 otherwise receive under Section 36.110, taking into account the
69-22 person's role in advancing the case to litigation and any relevant
69-23 circumstances pertaining to the violation.
69-24 (b) If the person bringing the action is convicted of
69-25 criminal conduct arising from the person's role in the violation of
70-1 Section 36.002, the court shall dismiss the person from the civil
70-2 action and the person may not receive any share of the proceeds of
70-3 the action. A dismissal under this subsection does not prejudice
70-4 the right of the state to continue the action.
70-5 Sec. 36.112. AWARD TO DEFENDANT FOR FRIVOLOUS ACTION.
70-6 Chapter 105, Civil Practice and Remedies Code, applies in an action
70-7 under this subchapter with which the state proceeds.
70-8 Sec. 36.113. CERTAIN ACTIONS BARRED. (a) A person may not
70-9 bring an action under this subchapter that is based on allegations
70-10 or transactions that are the subject of a civil suit or an
70-11 administrative penalty proceeding in which the state is already a
70-12 party.
70-13 (b) A person may not bring an action under this subchapter
70-14 that is based on the public disclosure of allegations or
70-15 transactions in a criminal or civil hearing, in a legislative or
70-16 administrative report, hearing, audit, or investigation, or from
70-17 the news media, unless the person bringing the action is an
70-18 original source of the information. In this subsection, "original
70-19 source" means an individual who has direct and independent
70-20 knowledge of the information on which the allegations are based and
70-21 has voluntarily provided the information to the state before filing
70-22 an action under this subchapter that is based on the information.
70-23 Sec. 36.114. STATE NOT LIABLE FOR CERTAIN EXPENSES. The
70-24 state is not liable for expenses that a person incurs in bringing
70-25 an action under this subchapter.
71-1 Sec. 36.115. RETALIATION BY EMPLOYER AGAINST PERSON BRINGING
71-2 SUIT PROHIBITED. (a) A person who is discharged, demoted,
71-3 suspended, threatened, harassed, or in any other manner
71-4 discriminated against in the terms of employment by the person's
71-5 employer because of a lawful act taken by the person in furtherance
71-6 of an action under this subchapter, including investigation for,
71-7 initiation of, testimony for, or assistance in an action filed or
71-8 to be filed under this subchapter, is entitled to:
71-9 (1) reinstatement with the same seniority status the
71-10 person would have had but for the discrimination; and
71-11 (2) not less than two times the amount of back pay,
71-12 interest on the back pay, and compensation for any special damages
71-13 sustained as a result of the discrimination, including litigation
71-14 costs and reasonable attorney's fees.
71-15 (b) A person may bring an action in the appropriate district
71-16 court for the relief provided in this section.
71-17 Sec. 36.116. SOVEREIGN IMMUNITY NOT WAIVED. Except as
71-18 provided by Section 36.112, this subchapter does not waive
71-19 sovereign immunity.
71-20 Sec. 36.117. ATTORNEY GENERAL COMPENSATION. The office of
71-21 the attorney general may retain a reasonable portion of recoveries
71-22 under this subchapter, not to exceed amounts specified in the
71-23 General Appropriations Act, for the administration of this
71-24 subchapter.
71-25 SECTION 4.09. CRIMINAL OFFENSE AND REVOCATION OF CERTAIN
72-1 LICENSES. Chapter 36, Human Resources Code, is amended by adding
72-2 Subchapter D to read as follows:
72-3 SUBCHAPTER D. CRIMINAL PENALTIES AND REVOCATION OF CERTAIN
72-4 OCCUPATIONAL LICENSES
72-5 Sec. 36.131. CRIMINAL OFFENSE. (a) A person commits an
72-6 offense if the person commits an unlawful act under Section 36.002.
72-7 (b) An offense under this section is:
72-8 (1) a Class C misdemeanor if the value of any payment
72-9 or monetary or in-kind benefit provided under the Medicaid program,
72-10 directly or indirectly, as a result of the unlawful act is less
72-11 than $50;
72-12 (2) a Class B misdemeanor if the value of any payment
72-13 or monetary or in-kind benefit provided under the Medicaid program,
72-14 directly or indirectly, as a result of the unlawful act is $50 or
72-15 more but less than $500;
72-16 (3) a Class A misdemeanor if the value of any payment
72-17 or monetary or in-kind benefit provided under the Medicaid program,
72-18 directly or indirectly, as a result of the unlawful act is $500 or
72-19 more but less than $1,500;
72-20 (4) a state jail felony if the value of any payment or
72-21 monetary or in-kind benefit provided under the Medicaid program,
72-22 directly or indirectly, as a result of the unlawful act is $1,500
72-23 or more but less than $20,000;
72-24 (5) a felony of the third degree if the value of any
72-25 payment or monetary or in-kind benefit provided under the Medicaid
73-1 program, directly or indirectly, as a result of the unlawful act is
73-2 $20,000 or more but less than $100,000;
73-3 (6) a felony of the second degree if the value of any
73-4 payment or monetary or in-kind benefit provided under the Medicaid
73-5 program, directly or indirectly, as a result of the unlawful act is
73-6 $100,000 or more but less than $200,000; or
73-7 (7) a felony of the first degree if the value of any
73-8 payment or monetary or in-kind benefit provided under the Medicaid
73-9 program, directly or indirectly, as a result of the unlawful act is
73-10 $200,000 or more.
73-11 (c) If conduct constituting an offense under this section
73-12 also constitutes an offense under another provision of law,
73-13 including a provision in the Penal Code, the actor may be
73-14 prosecuted under either this section or the other provision.
73-15 (d) When multiple payments or monetary or in-kind benefits
73-16 are provided under the Medicaid program as a result of one scheme
73-17 or continuing course of conduct, the conduct may be considered as
73-18 one offense and the amounts of the payments or monetary or in-kind
73-19 benefits aggregated in determining the grade of the offense.
73-20 Sec. 36.132. REVOCATION OF LICENSES. (a) In this section:
73-21 (1) "License" means a license, certificate,
73-22 registration, permit, or other authorization that:
73-23 (A) is issued by a licensing authority;
73-24 (B) is subject before expiration to suspension,
73-25 revocation, forfeiture, or termination by an issuing licensing
74-1 authority; and
74-2 (C) must be obtained before a person may
74-3 practice or engage in a particular business, occupation, or
74-4 profession.
74-5 (2) "Licensing authority" means:
74-6 (A) the Texas State Board of Medical Examiners;
74-7 (B) the State Board of Dental Examiners;
74-8 (C) the Texas State Board of Examiners of
74-9 Psychologists;
74-10 (D) the Texas State Board of Social Worker
74-11 Examiners;
74-12 (E) the Board of Nurse Examiners;
74-13 (F) the Board of Vocational Nurse Examiners;
74-14 (G) the Texas Board of Physical Therapy
74-15 Examiners;
74-16 (H) the Texas Board of Occupational Therapy
74-17 Examiners; or
74-18 (I) another state agency authorized to regulate
74-19 a provider who receives or is eligible to receive payment for a
74-20 health care service under the Medicaid program.
74-21 (b) A licensing authority shall revoke a license issued by
74-22 the authority to a person if the person is convicted of a felony
74-23 under Section 36.131. In revoking the license, the licensing
74-24 authority shall comply with all procedures generally applicable to
74-25 the licensing authority in revoking licenses.
75-1 SECTION 4.10. APPLICATION. (a) The changes in law made by
75-2 this article apply only to a violation committed on or after the
75-3 effective date of this article. For purposes of this section, a
75-4 violation is committed on or after the effective date of this
75-5 article only if each element of the violation occurs on or after
75-6 that date.
75-7 (b) A violation committed before the effective date of this
75-8 article is covered by the law in effect when the violation was
75-9 committed, and the former law is continued in effect for this
75-10 purpose.
75-11 ARTICLE 5. SUSPENSION OF LICENSES
75-12 SECTION 5.01. SUSPENSION OF LICENSES. (a) Subtitle B,
75-13 Title 2, Human Resources Code, is amended by adding Chapter 23 to
75-14 read as follows:
75-15 CHAPTER 23. SUSPENSION OF DRIVER'S OR RECREATIONAL
75-16 LICENSE FOR FAILURE TO REIMBURSE DEPARTMENT
75-17 Sec. 23.001. DEFINITIONS. In this chapter:
75-18 (1) "License" means a license, certificate,
75-19 registration, permit, or other authorization that:
75-20 (A) is issued by a licensing authority;
75-21 (B) is subject before expiration to suspension,
75-22 revocation, forfeiture, or termination by an issuing licensing
75-23 authority; and
75-24 (C) a person must obtain to:
75-25 (i) operate a motor vehicle; or
76-1 (ii) engage in a recreational activity,
76-2 including hunting and fishing, for which a license or permit is
76-3 required.
76-4 (2) "Order suspending a license" means an order issued
76-5 by the department directing a licensing authority to suspend a
76-6 license.
76-7 Sec. 23.002. LICENSING AUTHORITIES SUBJECT TO CHAPTER. In
76-8 this chapter, "licensing authority" means:
76-9 (1) the Parks and Wildlife Department; and
76-10 (2) the Department of Public Safety of the State of
76-11 Texas.
76-12 Sec. 23.003. SUSPENSION OF LICENSE. The department may
76-13 issue an order suspending a license as provided by this chapter of
76-14 a person who, after notice:
76-15 (1) has failed to reimburse the department for an
76-16 amount in excess of $250 granted in error to the person under the
76-17 food stamp program or the program of financial assistance under
76-18 Chapter 31;
76-19 (2) has been provided an opportunity to make payments
76-20 toward the amount owed under a repayment schedule; and
76-21 (3) has failed to comply with the repayment schedule.
76-22 Sec. 23.004. INITIATION OF PROCEEDING. (a) The department
76-23 may initiate a proceeding to suspend a person's license by filing a
76-24 petition with the department's hearings division.
76-25 (b) The proceeding shall be conducted by the department's
77-1 hearings division. The proceeding is a contested case under
77-2 Chapter 2001, Government Code, except that Section 2001.054 does
77-3 not apply.
77-4 (c) The commissioner or the commissioner's designated
77-5 representative shall render a final decision in the proceeding.
77-6 Sec. 23.005. CONTENTS OF PETITION. A petition under this
77-7 chapter must state that license suspension is authorized under
77-8 Section 23.003 and allege:
77-9 (1) the name and, if known, social security number of
77-10 the person;
77-11 (2) the type of license the person is believed to hold
77-12 and the name of the licensing authority; and
77-13 (3) the amount owed to the department.
77-14 Sec. 23.006. NOTICE. (a) On initiating a proceeding under
77-15 Section 23.004, the department shall give the person named in the
77-16 petition:
77-17 (1) notice of the person's right to a hearing before
77-18 the hearings division of the department;
77-19 (2) notice of the deadline for requesting a hearing;
77-20 and
77-21 (3) a form requesting a hearing.
77-22 (b) Notice under this section may be served as in civil
77-23 cases generally.
77-24 (c) The notice must state that an order suspending a license
77-25 shall be rendered on the 60th day after the date of service of the
78-1 notice unless by that date:
78-2 (1) the person pays the amount owed to the department;
78-3 (2) the person presents evidence of a payment history
78-4 satisfactory to the department in compliance with a reasonable
78-5 repayment schedule; or
78-6 (3) the person appears at a hearing before the
78-7 hearings division and shows that the request for suspension should
78-8 be denied or stayed.
78-9 Sec. 23.007. HEARING ON PETITION TO SUSPEND LICENSE. (a) A
78-10 request for a hearing and motion to stay suspension must be filed
78-11 with the department not later than the 20th day after the date of
78-12 service of the notice under Section 23.006.
78-13 (b) If a request for a hearing is filed, the hearings
78-14 division of the department shall:
78-15 (1) promptly schedule a hearing;
78-16 (2) notify the person and an appropriate
78-17 representative of the department of the date, time, and location of
78-18 the hearing; and
78-19 (3) stay suspension pending the hearing.
78-20 Sec. 23.008. ORDER SUSPENDING LICENSE. (a) On making the
78-21 findings required by Section 23.003, the department shall render an
78-22 order suspending a license.
78-23 (b) The department may stay an order suspending a license
78-24 conditioned on the person's compliance with a reasonable repayment
78-25 schedule that is incorporated in the order. An order suspending a
79-1 license with a stay of the suspension may not be served on the
79-2 licensing authority unless the stay is revoked as provided by this
79-3 chapter.
79-4 (c) A final order suspending a license rendered by the
79-5 department shall be forwarded to the appropriate licensing
79-6 authority.
79-7 (d) If the department renders an order suspending a license,
79-8 the person may also be ordered not to engage in the licensed
79-9 activity.
79-10 (e) If the department finds that the petition for suspension
79-11 should be denied, the petition shall be dismissed without
79-12 prejudice, and an order suspending a license may not be rendered.
79-13 Sec. 23.009. DEFAULT ORDER. The department shall consider
79-14 the allegations of the petition for suspension to be admitted and
79-15 shall render an order suspending a license if the person fails to:
79-16 (1) respond to a notice issued under Section 23.006;
79-17 (2) request a hearing; or
79-18 (3) appear at a hearing.
79-19 Sec. 23.010. REVIEW OF FINAL ADMINISTRATIVE ORDER. An order
79-20 issued by the department under this chapter is a final agency
79-21 decision and is subject to review as provided by Chapter 2001,
79-22 Government Code.
79-23 Sec. 23.011. ACTION BY LICENSING AUTHORITY. (a) On receipt
79-24 of a final order suspending a license, the licensing authority
79-25 shall immediately determine if the authority has issued a license
80-1 to the person named on the order and, if a license has been issued:
80-2 (1) record the suspension of the license in the
80-3 licensing authority's records;
80-4 (2) report the suspension as appropriate; and
80-5 (3) demand surrender of the suspended license if
80-6 required by law for other cases in which a license is suspended.
80-7 (b) A licensing authority shall implement the terms of a
80-8 final order suspending a license without additional review or
80-9 hearing. The authority may provide notice as appropriate to the
80-10 license holder or to others concerned with the license.
80-11 (c) A licensing authority may not modify, remand, reverse,
80-12 vacate, or stay an order suspending a license issued under this
80-13 chapter and may not review, vacate, or reconsider the terms of a
80-14 final order suspending a license.
80-15 (d) A person who is the subject of a final order suspending
80-16 a license is not entitled to a refund for any fee or deposit paid
80-17 to the licensing authority.
80-18 (e) A person who continues to engage in the licensed
80-19 activity after the implementation of the order suspending a license
80-20 by the licensing authority is liable for the same civil and
80-21 criminal penalties provided for engaging in the licensed activity
80-22 without a license or while a license is suspended that apply to any
80-23 other license holder of that licensing authority.
80-24 (f) A licensing authority is exempt from liability to a
80-25 license holder for any act authorized under this chapter performed
81-1 by the authority.
81-2 (g) Except as provided by this chapter, an order suspending
81-3 a license or dismissing a petition for the suspension of a license
81-4 does not affect the power of a licensing authority to grant, deny,
81-5 suspend, revoke, terminate, or renew a license.
81-6 (h) The denial or suspension of a driver's license under
81-7 this chapter is governed by this chapter and not by Subtitle B,
81-8 Title 7, Transportation Code.
81-9 Sec. 23.012. MOTION TO REVOKE STAY. (a) The department may
81-10 file a motion with the department's hearings division to revoke the
81-11 stay of an order suspending a license if the person does not comply
81-12 with the terms of a reasonable repayment plan entered into by the
81-13 person.
81-14 (b) Notice to the person of a motion to revoke stay under
81-15 this section may be given by personal service or by mail to the
81-16 address provided by the person, if any, in the order suspending a
81-17 license. The notice must include a notice of hearing before the
81-18 hearings division. The notice must be provided to the person not
81-19 less than 10 days before the date of the hearing.
81-20 (c) A motion to revoke stay must allege the manner in which
81-21 the person failed to comply with the repayment plan.
81-22 (d) If the department finds that the person is not in
81-23 compliance with the terms of the repayment plan, the department
81-24 shall revoke the stay of the order suspending a license and render
81-25 a final order suspending a license.
82-1 Sec. 23.013. VACATING OR STAYING ORDER SUSPENDING A LICENSE.
82-2 (a) The department may render an order vacating or staying an
82-3 order suspending a license if the person has paid all amounts owed
82-4 to the department or has established a satisfactory payment record.
82-5 (b) The department shall promptly deliver an order vacating
82-6 or staying an order suspending a license to the appropriate
82-7 licensing authority.
82-8 (c) On receipt of an order vacating or staying an order
82-9 suspending a license, the licensing authority shall promptly
82-10 reinstate and return the affected license to the person if the
82-11 person is otherwise qualified for the license.
82-12 (d) An order rendered under this section does not affect the
82-13 right of the department to any other remedy provided by law,
82-14 including the right to seek relief under this chapter. An order
82-15 rendered under this section does not affect the power of a
82-16 licensing authority to grant, deny, suspend, revoke, terminate, or
82-17 renew a license as otherwise provided by law.
82-18 Sec. 23.014. FEE BY LICENSING AUTHORITY. A licensing
82-19 authority may charge a fee to a person who is the subject of an
82-20 order suspending a license in an amount sufficient to recover the
82-21 administrative costs incurred by the authority under this chapter.
82-22 Sec. 23.015. COOPERATION BETWEEN LICENSING AUTHORITIES AND
82-23 DEPARTMENT. (a) The department may request from each licensing
82-24 authority the name, address, social security number, license
82-25 renewal date, and other identifying information for each individual
83-1 who holds, applies for, or renews a license issued by the
83-2 authority.
83-3 (b) A licensing authority shall provide the requested
83-4 information in the manner agreed to by the department and the
83-5 licensing authority.
83-6 (c) The department may enter into a cooperative agreement
83-7 with a licensing authority to administer this chapter in a
83-8 cost-effective manner.
83-9 (d) The department may adopt a reasonable implementation
83-10 schedule for the requirements of this section.
83-11 Sec. 23.016. RULES, FORMS, AND PROCEDURES. The department
83-12 by rule shall prescribe forms and procedures for the implementation
83-13 of this chapter.
83-14 (b) The Texas Department of Human Services shall take all
83-15 action necessary to implement the change in law made by this
83-16 article not later than January 1, 1998. The department may not
83-17 suspend a license because of a person's failure to reimburse the
83-18 department for a benefit granted in error under the food stamp
83-19 program or the program of financial assistance under Chapter 31,
83-20 Human Resources Code, before September 1, 1997.
83-21 ARTICLE 6. MEASUREMENT OF FRAUD
83-22 SECTION 6.01. HEALTH CARE FRAUD STUDY. (a) Subchapter B,
83-23 Chapter 403, Government Code, is amended by adding Section 403.026
83-24 to read as follows:
83-25 Sec. 403.026. HEALTH CARE FRAUD STUDY. (a) The comptroller
84-1 shall conduct a study each biennium to determine the number and
84-2 type of fraudulent claims for medical or health care benefits
84-3 submitted:
84-4 (1) under the state Medicaid program;
84-5 (2) under group health insurance programs administered
84-6 through the Employees Retirement System of Texas for active and
84-7 retired state employees; or
84-8 (3) by or on behalf of a state employee and
84-9 administered by the attorney general under Chapter 501, Labor Code.
84-10 (b) A state agency that administers a program identified by
84-11 Subsection (a) shall cooperate with the comptroller and provide any
84-12 information required by the comptroller in connection with the
84-13 study. A state agency may enter into a memorandum of understanding
84-14 with the comptroller regarding the use and confidentiality of the
84-15 information provided. This subsection does not require a state
84-16 agency to provide confidential information if release of the
84-17 information is prohibited by law.
84-18 (c) The comptroller shall report the results of the study to
84-19 each state agency that administers a program included in the study
84-20 so that the agency may modify its fraud control procedures as
84-21 necessary.
84-22 (b) The comptroller of public accounts shall complete the
84-23 initial study required by Section 403.026, Government Code, as
84-24 added by this section, not later than December 1, 1998.
84-25 SECTION 6.02. COMPILATION OF STATISTICS. (a) Subchapter B,
85-1 Chapter 531, Government Code, is amended by adding Section 531.0215
85-2 to read as follows:
85-3 Sec. 531.0215. COMPILATION OF STATISTICS RELATING TO FRAUD.
85-4 The commission and each health and human services agency that
85-5 administers a part of the state Medicaid program shall maintain
85-6 statistics on the number, type, and disposition of fraudulent
85-7 claims for benefits submitted under the part of the program the
85-8 agency administers.
85-9 (b) Subchapter C, Chapter 501, Labor Code, is amended by
85-10 adding Section 501.0431 to read as follows:
85-11 Sec. 501.0431. COMPILATION OF STATISTICS RELATING TO FRAUD.
85-12 The director shall maintain statistics on the number, type, and
85-13 disposition of fraudulent claims for medical benefits under this
85-14 chapter.
85-15 (c) Subsection (a), Section 17, Texas Employees Uniform
85-16 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
85-17 Insurance Code), is amended to read as follows:
85-18 (a) The trustee shall:
85-19 (1) make a continuing study of the operation and
85-20 administration of this Act, including surveys and reports of group
85-21 coverages and benefits available to employees and on the experience
85-22 thereof; and
85-23 (2) maintain statistics on the number, type, and
85-24 disposition of fraudulent claims for benefits under this Act.
86-1 ARTICLE 7. MISCELLANEOUS PROVISIONS
86-2 Sec. 7.01. THEFT BY GOVERNMENT CONTRACTOR. (a) Subsection
86-3 (f), Section 31.03, Penal Code, is amended to read as follows:
86-4 (f) An offense described for purposes of punishment by
86-5 Subsections (e)(1)-(6) is increased to the next higher category of
86-6 offense if it is shown on the trial of the offense that:
86-7 (1) the actor was a public servant at the time of the
86-8 offense[;] and
86-9 [(2)] the property appropriated came into the actor's
86-10 custody, possession, or control by virtue of his status as a public
86-11 servant; or
86-12 (2) the actor was in a contractual relationship with
86-13 government at the time of the offense and the property appropriated
86-14 came into the actor's custody, possession, or control by virtue of
86-15 the contractual relationship.
86-16 (b) The changes in law made by this section apply only to an
86-17 offense committed on or after the effective date of this section.
86-18 For purposes of this section, an offense is committed before the
86-19 effective date of this section if any element of the offense occurs
86-20 before that date.
86-21 (c) An offense committed before the effective date of this
86-22 section is covered by the law in effect at the time the offense was
86-23 committed.
86-24 ARTICLE 8. WAIVERS; EFFECTIVE DATE; EMERGENCY
86-25 SECTION 8.01. WAIVERS. If before implementing any provision
87-1 of this Act, a state agency determines that a waiver or
87-2 authorization from a federal agency is necessary for implementation
87-3 of that provision, the agency affected by the provision shall
87-4 request the waiver or authorization and may delay implementing that
87-5 provision until the waiver or authorization is granted.
87-6 SECTION 8.02. EFFECTIVE DATE. Except as otherwise provided
87-7 by this Act, this Act takes effect September 1, 1997.
87-8 SECTION 8.03. EMERGENCY. The importance of this legislation
87-9 and the crowded condition of the calendars in both houses create an
87-10 emergency and an imperative public necessity that the
87-11 constitutional rule requiring bills to be read on three several
87-12 days in each house be suspended, and this rule is hereby suspended,
87-13 and that this Act take effect and be in force according to its
87-14 terms, and it is so enacted.
S.B. No. 30
________________________________ ________________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 30 passed the Senate on
April 17, 1997, by the following vote: Yeas 31, Nays 0;
May 26, 1997, Senate refused to concur in House amendments and
requested appointment of Conference Committee; May 29, 1997, House
granted request of the Senate; May 31, 1997, Senate adopted
Conference Committee Report by the following vote: Yeas 30,
Nays 0.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 30 passed the House, with
amendments, on May 23, 1997, by the following vote: Yeas 127,
Nays 0, one present not voting; May 29, 1997, House granted request
of the Senate for appointment of Conference Committee;
June 1, 1997, House adopted Conference Committee Report by the
following vote: Yeas 144, Nays 0, one present not voting.
_______________________________
Chief Clerk of the House
Approved:
________________________________
Date
________________________________
Governor