75R12507 KKA-D
By Zaffirini, et al. S.B. No. 30
Substitute the following for S.B. No. 30:
By Berlanga C.S.S.B. No. 30
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to fraud and improper payments under the state Medicaid
1-3 program and other welfare programs; to the creation of private
1-4 cause of action for false claims for certain government payments;
1-5 and to the creation of a criminal offense; providing penalties.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 ARTICLE 1. GENERAL PROVISIONS RELATING TO WELFARE AGENCIES
1-8 SECTION 1.01. COLLECTION OF FOOD STAMP AND FINANCIAL
1-9 ASSISTANCE PAYMENTS MADE IN ERROR. (a) Chapter 22, Human
1-10 Resources Code, is amended by adding Sections 22.0251-22.0254 to
1-11 read as follows:
1-12 Sec. 22.0251. TIMELY DETERMINATION OF OVERPAYMENTS.
1-13 (a) Subject to the approval of the commissioner of health and
1-14 human services, the department shall:
1-15 (1) determine and record the time taken by the
1-16 department to establish an overpayment claim in the food stamp
1-17 program or the program of financial assistance under Chapter 31;
1-18 (2) set progressive goals for reducing the time
1-19 described by Subdivision (1); and
1-20 (3) adopt a schedule to meet the goals set under
1-21 Subdivision (2).
1-22 (b) The department shall submit to the governor, the
1-23 Legislative Budget Board, and the Health and Human Services
1-24 Commission a semiannual report detailing the department's progress
2-1 in reaching its goals under Subsection (a)(2). The report may be
2-2 consolidated with any other report relating to the same subject
2-3 that the department is required to submit under other law.
2-4 Sec. 22.0252. TELEPHONE COLLECTION PROGRAM. (a) The
2-5 department shall use the telephone to attempt to collect
2-6 reimbursement from a person who receives a benefit granted in error
2-7 under the food stamp program or the program of financial assistance
2-8 under Chapter 31.
2-9 (b) The department shall submit to the governor, the
2-10 Legislative Budget Board, and the Health and Human Services
2-11 Commission a semiannual report on the operation and success of the
2-12 telephone collection program. The report may be consolidated with
2-13 any other report relating to the same subject that the department
2-14 is required to submit under other law.
2-15 Sec. 22.0253. PARTICIPATION IN FEDERAL TAX REFUND OFFSET
2-16 PROGRAM. The department shall participate in the Federal Tax
2-17 Refund Offset Program (FTROP) to attempt to recover benefits
2-18 granted by the department in error under the food stamp program.
2-19 The department shall submit as many claims that meet program
2-20 criteria as possible for offset against income tax returns.
2-21 Sec. 22.0254. PROSECUTION OF FRAUDULENT CLAIMS. (a) The
2-22 department shall keep a record of the dispositions of referrals
2-23 made by the department to a district attorney concerning fraudulent
2-24 claims for benefits under the food stamp program or the program of
2-25 financial assistance under Chapter 31.
2-26 (b) The department may:
2-27 (1) request status information biweekly from the
3-1 appropriate district attorney on each major fraudulent claim
3-2 referred by the department;
3-3 (2) request a written explanation from the appropriate
3-4 district attorney for each case referred in which the district
3-5 attorney declines to prosecute; and
3-6 (3) encourage the creation of a special welfare fraud
3-7 unit in each district attorney's office that serves a municipality
3-8 with a population of more than 250,000, to be financed by amounts
3-9 provided by the department.
3-10 (c) The department by rule may define what constitutes a
3-11 major fraudulent claim under Subsection (b)(1).
3-12 (b) Chapter 22, Human Resources Code, is amended by adding
3-13 Section 22.0291 to read as follows:
3-14 Sec. 22.0291. INFORMATION MATCHING SYSTEM RELATING TO
3-15 IMMIGRANTS AND FOREIGN VISITORS. (a) The department shall,
3-16 through the use of a computerized matching system, compare
3-17 department information relating to applicants for and recipients of
3-18 food stamps and financial assistance under Chapter 31 with
3-19 information obtained from the Department of State of the United
3-20 States and the United States Department of Justice relating to
3-21 immigrants and visitors to the United States for the purpose of
3-22 preventing individuals from unlawfully receiving public assistance
3-23 benefits administered by the department.
3-24 (b) The department may enter into an agreement with the
3-25 Department of State of the United States and the United States
3-26 Department of Justice as necessary to implement this section.
3-27 (c) The department and federal agencies sharing information
4-1 under this section shall protect the confidentiality of the shared
4-2 information in compliance with all existing state and federal
4-3 privacy guidelines.
4-4 (d) The department shall submit to the governor, the
4-5 Legislative Budget Board, and the Health and Human Services
4-6 Commission a semiannual report on the operation and success of the
4-7 information matching system required by this section. The report
4-8 may be consolidated with any other report relating to the same
4-9 subject matter the department is required to submit under other
4-10 law.
4-11 (c) Not later than January 1, 1998, the Texas Department of
4-12 Human Services shall begin operation of the telephone collection
4-13 program required by Section 22.0252, Human Resources Code, as added
4-14 by this section.
4-15 (d) Not later than January 1, 1998, the Texas Department of
4-16 Human Services shall submit the initial reports required by
4-17 Sections 22.0251(b) and 22.0291(d), Human Resources Code, as added
4-18 by this section.
4-19 (e) Not later than September 1, 1998, the Texas Department
4-20 of Human Services shall submit the initial report required by
4-21 Section 22.0252(b), Human Resources Code, as added by this section.
4-22 SECTION 1.02. USE OF EARNED FEDERAL FUNDS. Chapter 22,
4-23 Human Resources Code, is amended by adding Section 22.032 to read
4-24 as follows:
4-25 Sec. 22.032. USE OF EARNED FEDERAL FUNDS. Subject to the
4-26 General Appropriations Act, the department may use earned federal
4-27 funds derived from recovery of amounts paid or benefits granted by
5-1 the department as a result of fraud to pay the costs of the
5-2 department's activities relating to preventing fraud.
5-3 SECTION 1.03. PAYMENT OF MEDICAID CLAIMS. (a) Subchapter
5-4 B, Chapter 32, Human Resources Code, is amended by adding Sections
5-5 32.043 and 32.044 to read as follows:
5-6 Sec. 32.043. DUAL MEDICAID AND MEDICARE COVERAGE. (a) At
5-7 least annually the department shall identify each individual
5-8 receiving medical assistance under the medical assistance program
5-9 who is eligible to receive similar assistance under the Medicare
5-10 program.
5-11 (b) The department shall analyze claims submitted for
5-12 payment for a service provided under the medical assistance program
5-13 to an individual identified under Subsection (a) to ensure that
5-14 payment is sought first under the Medicare program to the extent
5-15 allowed by law.
5-16 Sec. 32.044. MISDIRECTED BILLING. To the extent authorized
5-17 by federal law, the department shall develop a procedure for the
5-18 state to:
5-19 (1) match claims for payment for medical assistance
5-20 provided under the medical assistance program against data
5-21 available from other entities, including the Veterans
5-22 Administration and nursing facilities, to determine alternative
5-23 responsibility for payment of the claims; and
5-24 (2) ensure that the appropriate entity bears the cost
5-25 of a claim.
5-26 (b) This section takes effect on the first date that it may
5-27 take effect under Section 39, Article III, Texas Constitution.
6-1 SECTION 1.04. ENHANCED MEDICAID REIMBURSEMENT. (a)
6-2 Subchapter B, Chapter 32, Human Resources Code, is amended by
6-3 adding Section 32.045 to read as follows:
6-4 Sec. 32.045. ENHANCED REIMBURSEMENT. The department shall
6-5 develop a procedure for:
6-6 (1) identifying each service provided under the
6-7 medical assistance program for which the state is eligible to
6-8 receive enhanced reimbursement of costs from the federal
6-9 government; and
6-10 (2) ensuring that the state seeks the highest level of
6-11 federal reimbursement available for each service provided.
6-12 (b) The Texas Department of Health shall identify services
6-13 provided under the state Medicaid program for the period beginning
6-14 December 31, 1989, and ending immediately before the effective date
6-15 of this section for which the state was eligible but did not
6-16 receive enhanced reimbursement of costs at a 90 percent rate from
6-17 the federal government. For that period, the department shall seek
6-18 from the federal government all reimbursements to which the state
6-19 is entitled.
6-20 (c) This section takes effect on the first date that it may
6-21 take effect under Section 39, Article III, Texas Constitution.
6-22 SECTION 1.05. MINIMUM COLLECTION GOAL. (a) Subchapter B,
6-23 Chapter 531, Government Code, is amended by adding Section 531.047
6-24 to read as follows:
6-25 Sec. 531.047. MINIMUM COLLECTION GOAL. (a) Before August
6-26 31 of each year, the commission by rule shall set a minimum goal
6-27 for the Texas Department of Human Services that specifies the
7-1 percentage of the amount of benefits granted by the department in
7-2 error under the food stamp program or the program of financial
7-3 assistance under Chapter 31, Human Resources Code, that the
7-4 department should recover. The commission shall set the percentage
7-5 based on comparable recovery rates reported by other states.
7-6 (b) If the department fails to meet the goal set under
7-7 Subsection (a) for the fiscal year, the commissioner shall notify
7-8 the comptroller, and the comptroller shall reduce the department's
7-9 general revenue appropriation by an amount equal to the difference
7-10 between the amount the department would have collected had the
7-11 department met the goal and the amount the department actually
7-12 collected.
7-13 (c) The commission, the governor, and the Legislative Budget
7-14 Board shall monitor the department's performance in meeting the
7-15 goal set under this section. The department shall cooperate by
7-16 providing to the commission, the governor, and the Legislative
7-17 Budget Board, on request, information concerning the department's
7-18 collection efforts.
7-19 (b) This section takes effect on the first date that it may
7-20 take effect under Section 39, Article III, Texas Constitution.
7-21 SECTION 1.06. COMMISSION POWERS AND DUTIES RELATING TO
7-22 WELFARE FRAUD. (a) Chapter 531, Government Code, is amended by
7-23 adding Subchapter C to read as follows:
7-24 SUBCHAPTER C. MEDICAID AND OTHER WELFARE FRAUD, ABUSE,
7-25 OR OVERCHARGES
7-26 Sec. 531.101. AWARD FOR REPORTING MEDICAID FRAUD, ABUSE, OR
7-27 OVERCHARGES. (a) The commission may grant an award to an
8-1 individual who reports activity that constitutes fraud or abuse of
8-2 funds in the state Medicaid program or reports overcharges in the
8-3 program if the commission determines that the disclosure results in
8-4 the recovery of an overcharge or in the termination of the
8-5 fraudulent activity or abuse of funds.
8-6 (b) The commission shall determine the amount of an award.
8-7 The award must be equal to not less than 10 percent of the savings
8-8 to this state that result from the individual's disclosure. In
8-9 determining the amount of the award, the commission shall consider
8-10 how important the disclosure is in ensuring the fiscal integrity of
8-11 the program.
8-12 (c) An award under this section is subject to appropriation.
8-13 The award must be paid from money appropriated to or otherwise
8-14 available to the commission, and additional money may not be
8-15 appropriated to the commission for the purpose of paying the award.
8-16 (d) Payment of an award under this section from federal
8-17 funds is subject to the permissible use under federal law of funds
8-18 for this purpose.
8-19 (e) A person who brings an action under Subchapter C,
8-20 Chapter 36, Human Resources Code, is not eligible for an award
8-21 under this section.
8-22 Sec. 531.102. INVESTIGATIONS AND ENFORCEMENT OFFICE.
8-23 (a) The commission, through the commission's office of
8-24 investigations and enforcement, is responsible for the
8-25 investigation of fraud in the provision of health and human
8-26 services and the enforcement of state law relating to the provision
8-27 of those services.
9-1 (b) The commission shall set clear objectives, priorities,
9-2 and performance standards for the office that emphasize:
9-3 (1) coordinating investigative efforts to aggressively
9-4 recover money;
9-5 (2) allocating resources to cases that have the
9-6 strongest supportive evidence and the greatest potential for
9-7 recovery of money; and
9-8 (3) maximizing opportunities for referral of cases to
9-9 the office of the attorney general.
9-10 (c) The commission shall train office staff to enable the
9-11 staff to pursue priority Medicaid and welfare fraud and abuse cases
9-12 as necessary.
9-13 (d) The commission may require employees of health and human
9-14 services agencies to provide assistance to the commission in
9-15 connection with the commission's duties relating to the
9-16 investigation of fraud in the provision of health and human
9-17 services.
9-18 Sec. 531.103. INTERAGENCY COORDINATION. (a) The commission
9-19 and the office of the attorney general shall enter into a
9-20 memorandum of understanding to develop and implement joint written
9-21 procedures for processing cases of suspected fraud, waste, or abuse
9-22 under the state Medicaid program. The memorandum of understanding
9-23 shall require:
9-24 (1) the commission and the office of the attorney
9-25 general to set priorities and guidelines for referring cases to
9-26 appropriate state agencies for investigation to enhance deterrence
9-27 of fraud, waste, or abuse in the program and maximize the
10-1 imposition of penalties, the recovery of money, and the successful
10-2 prosecution of cases;
10-3 (2) the commission to keep detailed records for cases
10-4 processed by the commission or the office of the attorney general,
10-5 including information on the total number of cases processed and,
10-6 for each case:
10-7 (A) the agency and division to which the case is
10-8 referred for investigation;
10-9 (B) the date on which the case is referred; and
10-10 (C) the nature of the suspected fraud, waste, or
10-11 abuse;
10-12 (3) the commission to notify each appropriate division
10-13 of the office of the attorney general of each case referred by the
10-14 commission;
10-15 (4) the office of the attorney general to ensure that
10-16 information relating to each case investigated by that office is
10-17 available to each division of the office with responsibility for
10-18 investigating suspected fraud, waste, or abuse;
10-19 (5) the office of the attorney general to notify the
10-20 commission of each case the attorney general declines to prosecute
10-21 or prosecutes unsuccessfully;
10-22 (6) representatives of the commission and of the
10-23 office of the attorney general to meet not less than quarterly to
10-24 share case information and determine the appropriate agency and
10-25 division to investigate each case; and
10-26 (7) the commission and the office of the attorney
10-27 general to submit information requested by the comptroller about
11-1 each resolved case for the comptroller's use in improving fraud
11-2 detection.
11-3 (b) An exchange of information under this section between
11-4 the office of the attorney general and the commission or a health
11-5 and human services agency does not affect whether the information
11-6 is subject to disclosure under Chapter 552, Government Code.
11-7 (c) The commission and the office of the attorney general
11-8 shall jointly prepare and submit a semiannual report to the
11-9 governor, lieutenant governor, and speaker of the house of
11-10 representatives concerning the activities of those agencies in
11-11 detecting and preventing fraud, waste, and abuse under the state
11-12 Medicaid program. The report may be consolidated with any other
11-13 report relating to the same subject matter the commission or office
11-14 of the attorney general is required to submit under other law.
11-15 (d) The commission and the office of the attorney general
11-16 may not assess or collect investigation and attorney's fees on
11-17 behalf of any state agency unless the office of the attorney
11-18 general or other state agency collects a penalty, restitution, or
11-19 other reimbursement payment to the state.
11-20 (e) The commission shall refer a case of suspected fraud,
11-21 waste, or abuse under the state Medicaid program to the appropriate
11-22 district attorney, county attorney, city attorney, or private
11-23 collection agency if the attorney general fails to act within 30
11-24 days of referral of the case to the office of the attorney general.
11-25 A failure by the attorney general to act within 30 days constitutes
11-26 approval by the attorney general under Section 2107.003.
11-27 (f) The district attorney, county attorney, city attorney,
12-1 or private collection agency may collect and retain costs
12-2 associated with the case and 20 percent of the amount of the
12-3 penalty, restitution, or other reimbursement payment collected.
12-4 Sec. 531.104. ASSISTING INVESTIGATIONS BY ATTORNEY GENERAL.
12-5 (a) The commission and the attorney general shall execute a
12-6 memorandum of understanding under which the commission shall
12-7 provide investigative support as required to the attorney general
12-8 in connection with cases under Subchapter B, Chapter 36, Human
12-9 Resources Code. Under the memorandum of understanding, the
12-10 commission shall assist in performing preliminary investigations
12-11 and ongoing investigations for actions prosecuted by the attorney
12-12 general under Subchapter C, Chapter 36, Human Resources Code.
12-13 (b) The memorandum of understanding must provide that the
12-14 commission is not required to provide investigative support in more
12-15 than 100 open investigations in a fiscal year.
12-16 Sec. 531.105. FRAUD DETECTION TRAINING. (a) The commission
12-17 shall develop and implement a program to provide annual training to
12-18 contractors who process Medicaid claims and appropriate staff of
12-19 the Texas Department of Health and the Texas Department of Human
12-20 Services in identifying potential cases of fraud, waste, or abuse
12-21 under the state Medicaid program. The training provided to the
12-22 contractors and staff must include clear criteria that specify:
12-23 (1) the circumstances under which a person should
12-24 refer a potential case to the commission; and
12-25 (2) the time by which a referral should be made.
12-26 (b) The Texas Department of Health and the Texas Department
12-27 of Human Services, in cooperation with the commission, shall
13-1 periodically set a goal of the number of potential cases of fraud,
13-2 waste, or abuse under the state Medicaid program that each agency
13-3 will attempt to identify and refer to the commission. The
13-4 commission shall include information on the agencies' goals and the
13-5 success of each agency in meeting the agency's goal in the report
13-6 required by Section 531.103(c).
13-7 Sec. 531.106. LEARNING OR NEURAL NETWORK TECHNOLOGY.
13-8 (a) The commission shall use learning or neural network technology
13-9 to identify and deter fraud in the Medicaid program throughout this
13-10 state.
13-11 (b) The commission shall contract with a private or public
13-12 entity to develop and implement the technology. The commission may
13-13 require the entity it contracts with to install and operate the
13-14 technology at locations specified by the commission, including
13-15 commission offices.
13-16 (c) The data used for neural network processing shall be
13-17 maintained as an independent subset for security purposes.
13-18 (d) The commission shall require each health and human
13-19 services agency that performs any aspect of the state Medicaid
13-20 program to participate in the implementation and use of the
13-21 technology.
13-22 (e) The commission shall maintain all information necessary
13-23 to apply the technology to claims data covering a period of at
13-24 least two years.
13-25 (f) The commission shall refer cases identified by the
13-26 technology to the commission's office of investigations and
13-27 enforcement or the office of the attorney general, as appropriate.
14-1 Sec. 531.107. MEDICAID AND PUBLIC ASSISTANCE FRAUD OVERSIGHT
14-2 TASK FORCE. (a) The Medicaid and Public Assistance Fraud
14-3 Oversight Task Force advises and assists the commission and the
14-4 commission's office of investigations and enforcement in improving
14-5 the efficiency of fraud investigations and collections.
14-6 (b) The task force is composed of a representative of the:
14-7 (1) attorney general's office, appointed by the
14-8 attorney general;
14-9 (2) comptroller's office, appointed by the
14-10 comptroller;
14-11 (3) Department of Public Safety, appointed by the
14-12 public safety director;
14-13 (4) state auditor's office, appointed by the state
14-14 auditor;
14-15 (5) commission, appointed by the commissioner of
14-16 health and human services;
14-17 (6) Texas Department of Human Services, appointed by
14-18 the commissioner of human services; and
14-19 (7) Texas Department of Insurance, appointed by the
14-20 commissioner of insurance.
14-21 (c) The comptroller or the comptroller's designee serves as
14-22 the presiding officer of the task force. The task force may elect
14-23 any other necessary officers.
14-24 (d) The task force shall meet at least once each fiscal
14-25 quarter at the call of the presiding officer.
14-26 (e) The appointing agency is responsible for the expenses of
14-27 a member's service on the task force. Members of the task force
15-1 receive no additional compensation for serving on the task force.
15-2 (f) At least once each fiscal quarter, the commission's
15-3 office of investigations and enforcement shall provide to the task
15-4 force:
15-5 (1) information detailing:
15-6 (A) the number of fraud referrals made to the
15-7 office and the origin of each referral;
15-8 (B) the time spent investigating each case;
15-9 (C) the number of cases investigated each month,
15-10 by program and region;
15-11 (D) the dollar value of each fraud case that
15-12 results in a criminal conviction; and
15-13 (E) the number of cases the office rejects and
15-14 the reason for rejection, by region; and
15-15 (2) any additional information the task force
15-16 requires.
15-17 Sec. 531.108. FRAUD PREVENTION. (a) The commission's
15-18 office of investigations and enforcement shall compile and
15-19 disseminate accurate information and statistics relating to:
15-20 (1) fraud prevention; and
15-21 (2) post-fraud referrals received and accepted or
15-22 rejected from the commission's case management system or the case
15-23 management system of a health and human services agency.
15-24 (b) The commission shall:
15-25 (1) aggressively publicize successful fraud
15-26 prosecutions and fraud-prevention programs through all available
15-27 means, including the use of statewide press releases issued in
16-1 coordination with the Texas Department of Human Services; and
16-2 (2) ensure that a toll-free hotline for reporting
16-3 suspected fraud in programs administered by the commission or a
16-4 health and human services agency is maintained and promoted, either
16-5 by the commission or by a health and human services agency.
16-6 (c) The commission shall develop a cost-effective method of
16-7 identifying applicants for public assistance in counties bordering
16-8 other states and in metropolitan areas selected by the commission
16-9 who are already receiving benefits in other states. If
16-10 economically feasible, the commission may develop a computerized
16-11 matching system.
16-12 (d) The commission shall:
16-13 (1) verify automobile information that is used as
16-14 criteria for eligibility; and
16-15 (2) establish a computerized matching system with the
16-16 Texas Department of Criminal Justice to prevent an incarcerated
16-17 individual from illegally receiving public assistance benefits
16-18 administered by the commission.
16-19 (e) The commission shall submit to the governor and
16-20 Legislative Budget Board a semiannual report on the results of
16-21 computerized matching of commission information with information
16-22 from neighboring states, if any, and information from the Texas
16-23 Department of Criminal Justice. The report may be consolidated
16-24 with any other report relating to the same subject matter the
16-25 commission is required to submit under other law.
16-26 Sec. 531.109. DISPOSITION OF FUNDS. (a) The commission
16-27 shall deposit the state's share of money collected under this
17-1 subchapter in a special account in the state treasury.
17-2 (b) The commission may spend money in the account for the
17-3 administration of this subchapter, subject to the General
17-4 Appropriations Act.
17-5 (b) Section 22.028(c), Human Resources Code, is amended to
17-6 read as follows:
17-7 (c) No later than the first day of each month, the
17-8 department shall send the comptroller a report listing the accounts
17-9 on which enforcement actions or other steps were taken by the
17-10 department in response to the records received from the EBT
17-11 operator under this section, and the action taken by the
17-12 department. The comptroller shall promptly review the report and,
17-13 as appropriate, may solicit the advice of the Medicaid and Public
17-14 Assistance Fraud Oversight Task Force regarding the results of the
17-15 department's enforcement actions.
17-16 (c) Section 531.104, Government Code, as added by this
17-17 section, takes effect only if the transfer of employees of the
17-18 Texas Department of Human Services and the Texas Department of
17-19 Health to the Health and Human Services Commission, as proposed by
17-20 Section 1.07 of this article, or similar legislation, is enacted by
17-21 the 75th Legislature in regular session and becomes law.
17-22 (d) Not later than January 1, 1998, the Health and Human
17-23 Services Commission shall award the contract for the learning or
17-24 neural network technology required by Section 531.106, Government
17-25 Code, as added by this section, and the contractor shall begin
17-26 operations not later than that date. If the commission fails to
17-27 award the contract or the contractor cannot begin operations on or
18-1 before January 1, 1998, the commissioner of health and human
18-2 services shall enter into an interagency agreement with the
18-3 comptroller to enable the comptroller to perform the duties
18-4 prescribed by Section 531.106. In addition to the interagency
18-5 agreement, the commissioner of health and human services and the
18-6 comptroller shall execute a memorandum of understanding to ensure
18-7 that the comptroller receives all data and resources necessary to
18-8 operate the learning or neural network technology system.
18-9 (e) Not later than April 1, 1998, the Health and Human
18-10 Services Commission shall submit the initial report required by
18-11 Section 531.108(e), Government Code, as added by this section.
18-12 (f) In addition to the substantive changes in law made by
18-13 this section, this section, in adding Section 531.101, Government
18-14 Code, conforms to a change in the law made by Section 1, Chapter
18-15 444, Acts of the 74th Legislature, Regular Session, 1995.
18-16 (g) Section 16G, Article 4413(502), Revised Statutes, as
18-17 added by Section 1, Chapter 444, Acts of the 74th Legislature,
18-18 Regular Session, 1995, is repealed.
18-19 (h) To the extent of any conflict, this Act prevails over
18-20 another Act of the 75th Legislature, Regular Session, 1997,
18-21 relating to nonsubstantive additions to and corrections in enacted
18-22 codes.
18-23 (i) Sections 21.0145 and 22.027, Human Resources Code, are
18-24 repealed.
18-25 (j) Sections 531.102 and 531.106, Government Code, as added
18-26 by this section, take effect on the first date that those sections
18-27 may take effect under Section 39, Article III, Texas Constitution.
19-1 SECTION 1.07. CONSOLIDATION OF STAFF. (a) On September 1,
19-2 1997, or an earlier date provided by an interagency agreement with
19-3 the affected agencies:
19-4 (1) all powers, duties, functions, programs, and
19-5 activities performed by or assigned to the Texas Department of
19-6 Human Services' utilization and assessment review function
19-7 immediately before September 1, 1997, are transferred to the Health
19-8 and Human Services Commission;
19-9 (2) all funds, obligations, contracts, property, and
19-10 records of the Texas Department of Human Services' utilization and
19-11 assessment review function are transferred to the Health and Human
19-12 Services Commission; and
19-13 (3) all employees of the Texas Department of Human
19-14 Services responsible for the department's utilization and
19-15 assessment review function become employees of the Health and Human
19-16 Services Commission, to be assigned duties by the commissioner of
19-17 health and human services.
19-18 (b) On September 1, 1997, or an earlier date provided by an
19-19 interagency agreement with the affected agencies:
19-20 (1) all powers, duties, functions, programs, and
19-21 activities performed by or assigned to the Texas Department of
19-22 Health's claims review and analysis group and policy and data
19-23 analysis group immediately before September 1, 1997, are
19-24 transferred to the Health and Human Services Commission;
19-25 (2) all funds, obligations, contracts, property, and
19-26 records of the Texas Department of Health's claims review and
19-27 analysis group and policy and data analysis group are transferred
20-1 to the Health and Human Services Commission; and
20-2 (3) all employees of the Texas Department of Health's
20-3 claims review and analysis group and policy and data analysis group
20-4 become employees of the Health and Human Services Commission, to be
20-5 assigned duties by the commissioner of health and human services.
20-6 (c) A rule or form adopted by the Texas Department of Human
20-7 Services that relates to the utilization and assessment review
20-8 function or by the Texas Department of Health that relates to the
20-9 claims review and analysis group or the policy and data analysis
20-10 group is a rule or form of the Health and Human Services Commission
20-11 and remains in effect until altered by the commission. The
20-12 secretary of state is authorized to adopt rules as necessary to
20-13 expedite the implementation of this subsection.
20-14 (d) The commissioner of health and human services shall
20-15 oversee and assist in the transfer of powers, duties, functions,
20-16 programs, and activities prescribed by Subsections (a) and (b) of
20-17 this section.
20-18 (e) The commissioner of health and human services shall
20-19 determine for each power, duty, function, program, or activity
20-20 scheduled for transfer:
20-21 (1) the relevant agency actions that constitute each
20-22 power, duty, function, program, or activity;
20-23 (2) the relevant records, property, and equipment used
20-24 by a state agency for each power, duty, function, program, or
20-25 activity;
20-26 (3) the state agency employees whose duties directly
20-27 or indirectly involve a power, duty, function, program, or
21-1 activity; and
21-2 (4) state agency funds and obligations that are
21-3 related to the power, duty, function, program, or activity.
21-4 (f) Based on the determinations made under Subsection (e) of
21-5 this section, the commissioner of health and human services shall
21-6 assist the agencies in transferring powers, duties, functions,
21-7 programs, activities, records, equipment, property, funds,
21-8 obligations, and employees in accordance with the transfer
21-9 schedule.
21-10 (g) The commissioner of health and human services shall file
21-11 any federal plan changes required by this section.
21-12 (h) The transfer of powers, duties, functions, programs,
21-13 and activities under this section does not affect or impair any act
21-14 done, any obligation, right, order, license, permit, rule,
21-15 criterion, standard, or requirement existing, any investigation
21-16 begun, or any penalty accrued under former law, and that law
21-17 remains in effect for any action concerning those matters.
21-18 (i) An action brought or proceeding commenced before the
21-19 effective date of this section, including a contested case or a
21-20 remand of an action or proceeding by a reviewing court, is governed
21-21 by the law and rules applicable to the action or proceeding before
21-22 the effective date of this section.
21-23 (j) This section takes effect on the first date that it may
21-24 take effect under Section 39, Article III, Texas Constitution.
21-25 SECTION 1.08. USE OF PRIVATE COLLECTION AGENTS. (a) With
21-26 assistance from the Council on Competitive Government and subject
21-27 to approval by the attorney general under Section 2107.003,
22-1 Government Code, the Texas Department of Human Services shall, in
22-2 addition to other methods of collection, use private collection
22-3 agents to collect reimbursements for benefits granted by the
22-4 department in error under the food stamp program or the program of
22-5 financial assistance under Chapter 31, Human Resources Code.
22-6 (b) If approved by the attorney general, the department
22-7 shall ensure that the collection agents are engaged in collection
22-8 work on behalf of the department not later than March 1, 1998. The
22-9 department shall strive to refer approximately 20 percent of the
22-10 department's claims for reimbursement to the collection agents.
22-11 (c) On March 1, 1998, and September 1, 1998, the department
22-12 shall submit a progress report to the governor, the Legislative
22-13 Budget Board, and the Health and Human Services Commission on the
22-14 department's efforts to use private collection agents to collect
22-15 reimbursements for erroneous benefits. On March 1, 1999, the
22-16 department shall submit to the governor, the Legislative Budget
22-17 Board, and the Health and Human Services Commission a final report
22-18 on the success of the private collection effort.
22-19 (d) Unless otherwise directed by the 76th Legislature, the
22-20 department shall evaluate the success of the use of private
22-21 collection agents to collect benefit reimbursements and adjust the
22-22 number of claims referred to the agents, as appropriate.
22-23 SECTION 1.09. EXPEDITED FOOD STAMP DELIVERY; IMPACT ON
22-24 FRAUDULENT CLAIMS. (a) The Texas Department of Human Services
22-25 shall conduct a study to determine the impact of the one-day
22-26 screening and service delivery requirements prescribed by Section
22-27 33.002(e), Human Resources Code, on the level of fraud in the food
23-1 stamp program.
23-2 (b) Not later than January 1, 1999, the department shall
23-3 submit to the governor, the Legislative Budget Board, and the
23-4 Health and Human Services Commission a report on the results of the
23-5 study. The report must include:
23-6 (1) detailed statistics by region on the number of
23-7 fraudulent claims linked to the one-day screening and service
23-8 delivery requirements; and
23-9 (2) recommendations on modifying the one-day screening
23-10 and service delivery requirements, as authorized by Section
23-11 33.002(g), Human Resources Code.
23-12 SECTION 1.10. STUDY ON COLLECTION OF ERRONEOUS FOOD STAMP OR
23-13 FINANCIAL ASSISTANCE BENEFITS THROUGH LIENS OR WAGE GARNISHMENT.
23-14 (a) The Texas Department of Human Services shall conduct a study
23-15 to determine the feasibility of collecting amounts of benefits
23-16 granted by the department in error under the food stamp program or
23-17 the program of financial assistance under Chapter 31, Human
23-18 Resources Code, by the garnishment of wages or the filing of liens
23-19 against property.
23-20 (b) Not later than March 1, 1999, the department shall
23-21 submit to the governor, the Legislative Budget Board, and the
23-22 Health and Human Services Commission a report on the results of the
23-23 study.
23-24 SECTION 1.11. OPERATION RESTORE TRUST. (a) To the extent
23-25 authorized by law, the Health and Human Services Commission and the
23-26 office of the attorney general shall cooperate with entities in
23-27 other states that are participating in "Operation Restore Trust"
24-1 and share information regarding service providers excluded from the
24-2 state Medicaid program.
24-3 (b) In this section, "Operation Restore Trust" means the
24-4 federal program directed at detecting health-care fraud primarily
24-5 in home health care, nursing home care, and durable medical
24-6 equipment in certain states.
24-7 ARTICLE 2. MEDICAID SERVICE PROVIDERS
24-8 SECTION 2.01. AUTHORIZATION FOR AMBULANCE SERVICES. (a)
24-9 Section 32.024, Human Resources Code, is amended by adding
24-10 Subsection (t) to read as follows:
24-11 (t) The department by rule shall require a physician,
24-12 nursing facility, health care provider, or other responsible party
24-13 to obtain authorization from the department or a person authorized
24-14 to act on behalf of the department before an ambulance is used to
24-15 transport a recipient of medical assistance under this chapter in
24-16 circumstances not involving an emergency. The rules must provide
24-17 that:
24-18 (1) a request for authorization must be evaluated
24-19 based on the recipient's medical needs and may be granted for a
24-20 length of time appropriate to the recipient's medical condition;
24-21 (2) a response to a request for authorization must be
24-22 made not later than 48 hours after receipt of the request; and
24-23 (3) a person denied payment for services rendered
24-24 because of failure to obtain prior authorization or because a
24-25 request for prior authorization was denied is entitled to appeal
24-26 the denial of payment to the department.
24-27 (b) Not later than January 1, 1998, the Health and Human
25-1 Services Commission and each appropriate health and human services
25-2 agency that operates part of the state Medicaid program shall adopt
25-3 the rules required by Section 32.024(t), Human Resources Code, as
25-4 added by this section.
25-5 (c) This section takes effect on the first date that it may
25-6 take effect under Section 39, Article III, Texas Constitution.
25-7 SECTION 2.02. DURABLE MEDICAL EQUIPMENT. (a) Section
25-8 32.024, Human Resources Code, is amended by adding Subsection (u)
25-9 to read as follows:
25-10 (u) The department by rule shall require a health care
25-11 provider who arranges for durable medical equipment for a child who
25-12 receives medical assistance under this chapter to:
25-13 (1) ensure that the child receives the equipment
25-14 prescribed, the equipment fits properly, if applicable, and the
25-15 child or the child's parent or guardian, as appropriate considering
25-16 the age of the child, receives instruction regarding the
25-17 equipment's use; and
25-18 (2) maintain a record of compliance with the
25-19 requirements of Subdivision (1) in an appropriate location.
25-20 (b) Not later than January 1, 1998, the Health and Human
25-21 Services Commission and each appropriate health and human services
25-22 agency that operates part of the state Medicaid program shall adopt
25-23 the rules required by Section 32.024(u), Human Resources Code, as
25-24 added by this section.
25-25 (c) This section takes effect on the first date that it may
25-26 take effect under Section 39, Article III, Texas Constitution.
25-27 SECTION 2.03. SURETY BOND. Subchapter B, Chapter 32, Human
26-1 Resources Code, is amended by adding Section 32.0321 to read as
26-2 follows:
26-3 Sec. 32.0321. SURETY BOND. (a) The department by rule may
26-4 require each provider of medical assistance in a provider type that
26-5 has demonstrated significant potential for fraud or abuse to file
26-6 with the department a surety bond in a reasonable amount.
26-7 (b) The bond must be payable to the department to compensate
26-8 the department for damages resulting from or penalties or fines
26-9 imposed in connection with an act of fraud or abuse committed by
26-10 the provider under the medical assistance program.
26-11 SECTION 2.04. CRIMINAL HISTORY INFORMATION. (a) Subchapter
26-12 B, Chapter 32, Human Resources Code, is amended by adding Section
26-13 32.0322 to read as follows:
26-14 Sec. 32.0322. CRIMINAL HISTORY RECORD INFORMATION. (a) The
26-15 department may obtain from any law enforcement or criminal justice
26-16 agency the criminal history record information that relates to a
26-17 provider under the medical assistance program or a person applying
26-18 to enroll as a provider under the medical assistance program.
26-19 (b) The department by rule shall establish criteria for
26-20 revoking a provider's enrollment or denying a person's application
26-21 to enroll as a provider under the medical assistance program based
26-22 on the results of a criminal history check.
26-23 (b) Subchapter F, Chapter 411, Government Code, is amended
26-24 by adding Section 411.132 to read as follows:
26-25 Sec. 411.132. ACCESS TO CRIMINAL HISTORY RECORD INFORMATION;
26-26 AGENCIES OPERATING PART OF MEDICAL ASSISTANCE PROGRAM. (a) The
26-27 Health and Human Services Commission or an agency operating part of
27-1 the medical assistance program under Chapter 32, Human Resources
27-2 Code, is entitled to obtain from the department the criminal
27-3 history record information maintained by the department that
27-4 relates to a provider under the medical assistance program or a
27-5 person applying to enroll as a provider under the medical
27-6 assistance program.
27-7 (b) Criminal history record information obtained by the
27-8 commission or an agency under Subsection (a) may not be released or
27-9 disclosed to any person except in a criminal proceeding, in an
27-10 administrative proceeding, on court order, or with the consent of
27-11 the provider or applicant.
27-12 SECTION 2.05. MANAGED CARE ORGANIZATIONS. (a) Section 16A,
27-13 Article 4413(502), Revised Statutes, is amended by amending
27-14 Subsection (n) and adding Subsections (o)-(t) to read as follows:
27-15 (n) A managed care organization that contracts with the
27-16 state to provide or arrange to provide health care benefits or
27-17 services to Medicaid eligible individuals shall:
27-18 (1) report to the commission or the state's Medicaid
27-19 claims administrator, as appropriate, all information required by
27-20 commission rule, including information necessary to set rates,
27-21 detect fraud, neglect, and physical abuse, and ensure quality of
27-22 care;
27-23 (2) not later than 30 days after execution of the
27-24 contract, develop and submit to the operating agency for approval
27-25 by the commission a plan for preventing, detecting, and reporting
27-26 fraud and abuse that:
27-27 (A) conforms to guidelines developed by the
28-1 operating agency with assistance from the commission and the office
28-2 of the attorney general; and
28-3 (B) requires the managed care organization to
28-4 report any known or suspected act of fraud or abuse to the
28-5 operating agency for referral to the commission for investigation;
28-6 (3) include standard provisions developed by the
28-7 operating agency in each subcontract entered into by the managed
28-8 care organization that affects the delivery of or payment for
28-9 Medicaid services;
28-10 (4) submit to the commission for approval each
28-11 subcontract entered into by the managed care organization that
28-12 affects the delivery of or payment for Medicaid services; and
28-13 (5) submit annual disclosure statements to the
28-14 commission containing information on:
28-15 (A) the financial condition of the managed care
28-16 organization and each of its affiliates; and
28-17 (B) ownership interests in the managed care
28-18 organization or any of its affiliates.
28-19 (o) The operating agency shall require that each contract
28-20 between a managed care organization and the state to provide or
28-21 arrange to provide health care benefits or services to Medicaid
28-22 eligible individuals contain provisions:
28-23 (1) stating that information provided by a managed
28-24 care organization under this section may be used as necessary to
28-25 detect fraud and abuse;
28-26 (2) specifying the responsibilities of the managed
28-27 care organization in reducing fraud and abuse; and
29-1 (3) authorizing specific penalties for failure to
29-2 provide information required by commission rules.
29-3 (p) At least once every three years the operating agency
29-4 shall audit each managed care organization that contracts with the
29-5 state to provide or arrange to provide health care benefits or
29-6 services to Medicaid eligible individuals.
29-7 (q) A managed care organization audited under Subsection
29-8 (p) of this section is responsible for paying the costs of the
29-9 audit. The costs of the audit may be allowed as a credit against
29-10 premium taxes paid by the managed care organization, except as
29-11 provided by Section 2, Article 1.28, Insurance Code.
29-12 (r) The operating agency and the Texas Department of
29-13 Insurance shall enter into a memorandum of understanding to
29-14 coordinate audits of managed care organizations. The memorandum
29-15 shall:
29-16 (1) identify information required in an operating
29-17 agency audit that is not customarily required in a department
29-18 audit;
29-19 (2) encourage the department to include to the extent
29-20 possible information identified under Subdivision (1) of this
29-21 subsection in department audits;
29-22 (3) establish procedures for initiating and
29-23 distributing the findings of audits of a managed care organization;
29-24 (4) identify the records of physicians or Medicaid
29-25 eligible individuals that are served by managed care organizations,
29-26 that are subject to audit; and
29-27 (5) require that operating agency and department
30-1 personnel that audit a managed care organization receive specific
30-2 training in detecting Medicaid fraud and abuse.
30-3 (s) In this section, "operating agency" means the
30-4 appropriate health and human services agency operating part of the
30-5 state Medicaid program.
30-6 (t) This section expires September 1, 2001.
30-7 (b) Section 532.001, Government Code, as added by H.B. No.
30-8 1845 or S.B. No. 898, Acts of the 75th Legislature, Regular
30-9 Session, 1997, relating to nonsubstantive additions to and
30-10 corrections in enacted codes, is amended by adding Subdivision (5)
30-11 to read as follows:
30-12 (5) "Operating agency" means the appropriate health
30-13 and human services agency operating part of the state Medicaid
30-14 program.
30-15 (c) Subchapter B, Chapter 532, Government Code, as added by
30-16 H.B. No. 1845 or S.B. No. 898, Acts of the 75th Legislature,
30-17 Regular Session, 1997, relating to nonsubstantive additions to and
30-18 corrections in enacted codes, is amended by adding Sections 532.112
30-19 and 532.113 to read as follows:
30-20 Sec. 532.112. DUTIES OF MANAGED CARE ORGANIZATION;
30-21 CONTRACTUAL PROVISIONS. (a) A managed care organization that
30-22 contracts with the state to provide or arrange to provide health
30-23 care benefits or services to Medicaid eligible individuals shall:
30-24 (1) report to the commission or the state's Medicaid
30-25 claims administrator, as appropriate, all information required by
30-26 commission rule, including information necessary to set rates,
30-27 detect fraud, neglect, and physical abuse, and ensure quality of
31-1 care;
31-2 (2) not later than 30 days after execution of the
31-3 contract, develop and submit to the operating agency for approval
31-4 by the commission a plan for preventing, detecting, and reporting
31-5 fraud and abuse that:
31-6 (A) conforms to guidelines developed by the
31-7 operating agency with assistance from the commission and the office
31-8 of the attorney general; and
31-9 (B) requires the managed care organization to
31-10 report any known or suspected act of fraud or abuse to the
31-11 operating agency for referral to the commission for investigation;
31-12 (3) include standard provisions developed by the
31-13 operating agency in each subcontract entered into by the managed
31-14 care organization that affects the delivery of or payment for
31-15 Medicaid services;
31-16 (4) submit to the commission for approval each
31-17 subcontract entered into by the managed care organization that
31-18 affects the delivery of or payment for Medicaid services; and
31-19 (5) submit annual disclosure statements to the
31-20 commission containing information on:
31-21 (A) the financial condition of the managed care
31-22 organization and each of its affiliates; and
31-23 (B) ownership interests in the managed care
31-24 organization or any of its affiliates.
31-25 (b) The operating agency shall require that each contract
31-26 between a managed care organization and the state to provide or
31-27 arrange to provide health care benefits or services to Medicaid
32-1 eligible individuals contain provisions:
32-2 (1) stating that information provided by a managed
32-3 care organization under this section may be used as necessary to
32-4 detect fraud and abuse;
32-5 (2) specifying the responsibilities of the managed
32-6 care organization in reducing fraud and abuse; and
32-7 (3) authorizing specific penalties for failure to
32-8 provide information required by commission rules.
32-9 Sec. 532.113. AUDITS; MEMORANDUM OF UNDERSTANDING. (a) At
32-10 least once every three years the operating agency shall audit each
32-11 managed care organization that contracts with the state to provide
32-12 or arrange to provide health care benefits or services to Medicaid
32-13 eligible individuals.
32-14 (b) A managed care organization audited under Subsection (a)
32-15 is responsible for paying the costs of the audit. The costs of the
32-16 audit may be allowed as a credit against premium taxes paid by the
32-17 managed care organization, except as provided by Section 2, Article
32-18 1.28, Insurance Code.
32-19 (c) The operating agency and the Texas Department of
32-20 Insurance shall enter into a memorandum of understanding to
32-21 coordinate audits of managed care organizations. The memorandum
32-22 shall:
32-23 (1) identify information required in an operating
32-24 agency audit that is not customarily required in a department
32-25 audit;
32-26 (2) encourage the department to include to the extent
32-27 possible information identified under Subdivision (1) in department
33-1 audits;
33-2 (3) establish procedures for initiating and
33-3 distributing the findings of audits of a managed care organization;
33-4 (4) identify the records of physicians or Medicaid
33-5 eligible individuals that are served by managed care organizations
33-6 that are subject to audit; and
33-7 (5) require that operating agency and department
33-8 personnel that audit a managed care organization receive specific
33-9 training in detecting Medicaid fraud and abuse.
33-10 (d) Not later than November 1, 1997, the Texas Department of
33-11 Health or the appropriate health and human services agency
33-12 operating part of the state Medicaid program shall develop
33-13 guidelines applicable to a managed care organization's plan for
33-14 preventing, detecting, and reporting Medicaid fraud.
33-15 (e) Section 16A(n)(2), Article 4413(502), Revised Statutes,
33-16 as amended by this section, or Section 532.112(a)(2), Government
33-17 Code, as added by this section, depending on which provision takes
33-18 effect, applies only to a managed care organization that enters
33-19 into a contract or renews a contract on or after November 1, 1997,
33-20 with the state to provide or arrange to provide health care
33-21 benefits to Medicaid eligible individuals.
33-22 (f) This section applies only to a contract entered into or
33-23 renewed on or after the effective date of this section. A contract
33-24 entered into or renewed before the effective date of this section
33-25 is governed by the law in effect immediately before the effective
33-26 date of this section, and the former law is continued in effect for
33-27 that purpose.
34-1 (g) A managed care organization that contracts with the
34-2 state to provide or arrange to provide health care benefits to
34-3 Medicaid eligible individuals before the effective date of this
34-4 section is not required by this section to:
34-5 (1) include standard provisions developed by the state
34-6 in a subcontract executed before the effective date of this
34-7 section;
34-8 (2) submit a subcontract executed before the effective
34-9 date of this section to the commission for approval; or
34-10 (3) modify a contract between the managed care
34-11 organization and the state executed before the effective date of
34-12 this section.
34-13 (h) A managed care organization that renews a contract or
34-14 subcontract subject to this section after the effective date of
34-15 this section shall include in the renewed contract or subcontract
34-16 all provisions required to be included by this section.
34-17 (i) Subsection (a) of this section takes effect only if
34-18 neither H.B. No. 1845 nor S.B. No. 898, Acts of the 75th
34-19 Legislature, Regular Session, 1997, relating to nonsubstantive
34-20 additions to and corrections in enacted codes, take effect.
34-21 (j) Subsections (b) and (c) of this section take effect only
34-22 if H.B. No. 1845 or S.B. No. 898, Acts of the 75th Legislature,
34-23 Regular Session, 1997, relating to nonsubstantive additions to and
34-24 corrections in enacted codes, takes effect.
34-25 SECTION 2.06. PILOT PROGRAM; ON-SITE REVIEWS OF PROSPECTIVE
34-26 PROVIDERS. (a) The Health and Human Services Commission by rule
34-27 shall establish a pilot program to reduce fraud by conducting
35-1 random on-site reviews of persons who apply to provide health care
35-2 services under the state Medicaid program before authorizing those
35-3 persons to provide the services.
35-4 (b) The commission shall implement the pilot program
35-5 initially in not more than five or fewer than three urban counties
35-6 selected by the commission. The commission shall select counties
35-7 for the pilot program that:
35-8 (1) offer the greatest potential for achieving a
35-9 reduction of provider fraud; and
35-10 (2) contain established field offices of the
35-11 commission or the Texas Department of Human Services, as
35-12 appropriate.
35-13 (c) At a minimum, the pilot program shall provide for random
35-14 on-site reviews of durable medical equipment providers, home health
35-15 providers, therapists, and laboratories. The commission may
35-16 include other groups of providers in the pilot program.
35-17 (d) The commission shall develop questions to be used during
35-18 an on-site review of a prospective provider to verify that the
35-19 provider has the ability to provide the proposed services.
35-20 (e) The on-site reviews shall be conducted by personnel in
35-21 the appropriate field offices of the commission or the Texas
35-22 Department of Human Services.
35-23 (f) The commission may waive an on-site review of a
35-24 prospective provider if the provider has been subject to a
35-25 comparable review by a certifying body in the preceding year.
35-26 (g) If the pilot program is successful in reducing provider
35-27 fraud in the counties initially selected under Subsection (b) of
36-1 this section, the commission may expand the pilot program to
36-2 include additional counties.
36-3 (h) Not later than January 15, 1999, the commission shall
36-4 submit to the governor and the legislature a report concerning the
36-5 effectiveness of the pilot program that includes:
36-6 (1) the number of applications denied as a result of
36-7 an on-site review; and
36-8 (2) recommendations on expanding the pilot program.
36-9 (i) This section expires September 1, 1999.
36-10 SECTION 2.07. DEVELOPMENT OF NEW PROVIDER CONTRACT. (a) As
36-11 soon as possible after the effective date of this section, the
36-12 Health and Human Services Commission shall develop a new provider
36-13 contract for health care services that contains provisions designed
36-14 to strengthen the commission's ability to prevent provider fraud
36-15 under the state Medicaid program.
36-16 (b) In developing the new provider contract, the commission
36-17 shall solicit suggestions and comments from representatives of
36-18 providers in the state Medicaid program.
36-19 (c) As soon as possible after development of the new
36-20 provider contract, the commission and each agency operating part of
36-21 the state Medicaid program by rule shall require each provider who
36-22 enrolled in the program before completion of the new contract to
36-23 reenroll in the program under the new contract or modify the
36-24 provider's existing contract in accordance with commission or
36-25 agency procedures as necessary to comply with the requirements of
36-26 the new contract. A provider must reenroll in the state Medicaid
36-27 program or make the necessary contract modifications not later than
37-1 September 1, 1999, to retain eligibility to participate in the
37-2 program.
37-3 SECTION 2.08. COMPETITIVE PROCESS FOR OBTAINING DURABLE
37-4 MEDICAL EQUIPMENT. (a) As soon as possible and not later than the
37-5 45th day after the effective date of this section:
37-6 (1) the Texas Department of Health shall develop a
37-7 process for selecting providers of durable medical equipment and
37-8 supplies that encourages competition; and
37-9 (2) the Health and Human Services Commission shall
37-10 submit an amendment to the state's Medicaid plan authorizing
37-11 implementation of the process developed by the Texas Department of
37-12 Health.
37-13 (b) This section takes effect on the first date that it may
37-14 take effect under Section 39, Article III, Texas Constitution.
37-15 SECTION 2.09. REVIEW OF SERVICE PROVIDER BILLING PRACTICES.
37-16 (a) The Texas Department of Health shall conduct an automated
37-17 review of physician, laboratory, radiology, and other health care
37-18 provider services to identify improper billing practices designed
37-19 to inflate a service provider's claim for payment for services
37-20 provided under the state Medicaid program.
37-21 (b) After completing the review required by Subsection (a)
37-22 of this section, the Texas Department of Health shall:
37-23 (1) refer each identified improper billing practice to
37-24 the Health and Human Services Commission's office of investigations
37-25 and enforcement; and
37-26 (2) require the entity that administers the state
37-27 Medicaid program on behalf of the department to modify the entity's
38-1 claims processing and monitoring procedures and computer technology
38-2 as necessary to prevent improper billing by service providers.
38-3 (c) This section takes effect on the first date that it may
38-4 take effect under Section 39, Article III, Texas Constitution.
38-5 ARTICLE 3. ADMINISTRATIVE PENALTIES AND SANCTIONS
38-6 RELATING TO MEDICAID FRAUD
38-7 SECTION 3.01. ADMINISTRATIVE PENALTIES. (a) Section
38-8 32.039, Human Resources Code, is amended to read as follows:
38-9 Sec. 32.039. [CIVIL] DAMAGES AND PENALTIES. (a) In this
38-10 section:
38-11 (1) "Claim" [, "claim"] means an application for
38-12 payment of health care services under Title XIX of the federal
38-13 Social Security Act that is submitted by a person who is under a
38-14 contract or provider agreement with the department.
38-15 (2) "Managed care organization" means any entity or
38-16 person that is authorized or otherwise permitted by law to arrange
38-17 for or provide a managed care plan.
38-18 (3) "Managed care plan" means a plan under which a
38-19 person undertakes to provide, arrange for, pay for, or reimburse
38-20 any part of the cost of any health care service. A part of the
38-21 plan must consist of arranging for or providing health care
38-22 services as distinguished from indemnification against the cost of
38-23 those services on a prepaid basis through insurance or otherwise.
38-24 The term does not include a plan that indemnifies a person for the
38-25 cost of health care services through insurance.
38-26 (b) A person commits a violation if the person:
38-27 (1) presents or causes to be presented to the
39-1 department a claim that contains a statement or representation the
39-2 person knows to be false; or
39-3 (2) is a managed care organization that contracts with
39-4 the department to provide or arrange to provide health care
39-5 benefits or services to individuals eligible for medical assistance
39-6 and:
39-7 (A) fails to provide to an individual a health
39-8 care benefit or service that the organization is required to
39-9 provide under the contract with the department;
39-10 (B) fails to provide to the department
39-11 information required to be provided by law, department rule, or
39-12 contractual provision;
39-13 (C) engages in a fraudulent activity in
39-14 connection with the enrollment in the organization's managed care
39-15 plan of an individual eligible for medical assistance or in
39-16 connection with marketing the organization's services to an
39-17 individual eligible for medical assistance; or
39-18 (D) engages in actions that indicate a pattern
39-19 of:
39-20 (i) wrongful denial of payment for a
39-21 health care benefit or service that the organization is required to
39-22 provide under the contract with the department; or
39-23 (ii) wrongful delay of at least 45 days or
39-24 a longer period specified in the contract with the department, not
39-25 to exceed 60 days, in making payment for a health care benefit or
39-26 service that the organization is required to provide under the
39-27 contract with the department.
40-1 (c) [(b)] A person who commits a violation under Subsection
40-2 (b) [presents or causes to be presented to the department a claim
40-3 that contains a statement or representation the person knows to be
40-4 false] is liable to the department for:
40-5 (1) the amount paid, if any, as a result [because] of
40-6 the violation [false claim] and interest on that amount determined
40-7 at the rate provided by law for legal judgments and accruing from
40-8 the date on which the payment was made; and
40-9 (2) payment of an administrative [a civil] penalty of
40-10 an amount not to exceed twice the amount paid, if any, as a result
40-11 [because] of the violation, plus an amount:
40-12 (A) not less than $5,000 or more than $15,000
40-13 for each violation that results in injury to an elderly person, as
40-14 defined by Section 48.002(1), a disabled person, as defined by
40-15 Section 48.002(8)(A), or a person younger than 18 years of age; or
40-16 (B) not more than $10,000 for each violation
40-17 that does not result in injury to a person described by Paragraph
40-18 (A) [false claim; and]
40-19 [(3) payment of a civil penalty of not more than
40-20 $2,000 for each item or service for which payment was claimed].
40-21 (d) [(c)] Unless the provider submitted information to the
40-22 department for use in preparing a voucher that the provider knew
40-23 was false or failed to correct information that the provider knew
40-24 was false when provided an opportunity to do so, this section does
40-25 not apply to a claim based on the voucher if the department
40-26 calculated and printed the amount of the claim on the voucher and
40-27 then submitted the voucher to the provider for the provider's
41-1 signature. In addition, the provider's signature on the voucher
41-2 does not constitute fraud. The department shall adopt rules that
41-3 establish a grace period during which errors contained in a voucher
41-4 prepared by the department may be corrected without penalty to the
41-5 provider.
41-6 (e) [(d)] In determining the amount of the penalty to be
41-7 assessed under Subsection (c)(2) [Subdivision (3) of Subsection (b)
41-8 of this section], the department shall consider:
41-9 (1) the seriousness of the violation;
41-10 (2) whether the person had previously committed a
41-11 violation [submitted false claims]; and
41-12 (3) the amount necessary to deter the person from
41-13 committing [submitting] future violations [false claims].
41-14 (f) [(e)] If after an examination of the facts the
41-15 department concludes that the person committed a violation [did
41-16 submit a false claim], the department may issue a preliminary
41-17 report stating the facts on which it based its conclusion,
41-18 recommending that an administrative [a civil] penalty under this
41-19 section be imposed and recommending the amount of the proposed
41-20 penalty.
41-21 (g) [(f)] The department shall give written notice of the
41-22 report to the person charged with committing the violation
41-23 [submitting the false claim]. The notice must include a brief
41-24 summary of the facts, a statement of the amount of the recommended
41-25 penalty, and a statement of the person's right to an informal
41-26 review of the alleged violation [false claim], the amount of the
41-27 penalty, or both the alleged violation [false claim] and the amount
42-1 of the penalty.
42-2 (h) [(g)] Not later than the 10th day after the date on
42-3 which the person charged with committing the violation [submitting
42-4 the false claim] receives the notice, the person may either give
42-5 the department written consent to the report, including the
42-6 recommended penalty, or make a written request for an informal
42-7 review by the department.
42-8 (i) [(h)] If the person charged with committing the
42-9 violation [submitting the false claim] consents to the penalty
42-10 recommended by the department or fails to timely request an
42-11 informal review, the department shall assess the penalty. The
42-12 department shall give the person written notice of its action. The
42-13 person shall pay the penalty not later than the 30th day after the
42-14 date on which the person receives the notice.
42-15 (j) [(i)] If the person charged with committing the
42-16 violation [submitting a false claim] requests an informal review as
42-17 provided by Subsection (h) [(g) of this section], the department
42-18 shall conduct the review. The department shall give the person
42-19 written notice of the results of the review.
42-20 (k) [(j)] Not later than the 10th day after the date on
42-21 which the person charged with committing the violation [submitting
42-22 the false claim] receives the notice prescribed by Subsection (j)
42-23 [(i) of this section], the person may make to the department a
42-24 written request for a hearing. The hearing must be conducted in
42-25 accordance with Chapter 2001, Government Code.
42-26 (l) [(k)] If, after informal review, a person who has been
42-27 ordered to pay a penalty fails to request a formal hearing in a
43-1 timely manner, the department shall assess the penalty. The
43-2 department shall give the person written notice of its action. The
43-3 person shall pay the penalty not later than the 30th day after the
43-4 date on which the person receives the notice.
43-5 (m) Within 30 days after the date on which the board's order
43-6 issued after a hearing under Subsection (k) becomes final as
43-7 provided by Section 2001.144, Government Code, the person shall:
43-8 (1) pay the amount of the penalty;
43-9 (2) pay the amount of the penalty and file a petition
43-10 for judicial review contesting the occurrence of the violation, the
43-11 amount of the penalty, or both the occurrence of the violation and
43-12 the amount of the penalty; or
43-13 (3) without paying the amount of the penalty, file a
43-14 petition for judicial review contesting the occurrence of the
43-15 violation, the amount of the penalty, or both the occurrence of the
43-16 violation and the amount of the penalty.
43-17 (n) A person who acts under Subsection (m)(3) within the
43-18 30-day period may:
43-19 (1) stay enforcement of the penalty by:
43-20 (A) paying the amount of the penalty to the
43-21 court for placement in an escrow account; or
43-22 (B) giving to the court a supersedeas bond that
43-23 is approved by the court for the amount of the penalty and that is
43-24 effective until all judicial review of the department's order is
43-25 final; or
43-26 (2) request the court to stay enforcement of the
43-27 penalty by:
44-1 (A) filing with the court a sworn affidavit of
44-2 the person stating that the person is financially unable to pay the
44-3 amount of the penalty and is financially unable to give the
44-4 supersedeas bond; and
44-5 (B) giving a copy of the affidavit to the
44-6 commissioner by certified mail.
44-7 (o) If the commissioner receives a copy of an affidavit
44-8 under Subsection (n)(2), the commissioner may file with the court,
44-9 within five days after the date the copy is received, a contest to
44-10 the affidavit. The court shall hold a hearing on the facts alleged
44-11 in the affidavit as soon as practicable and shall stay the
44-12 enforcement of the penalty on finding that the alleged facts are
44-13 true. The person who files an affidavit has the burden of proving
44-14 that the person is financially unable to pay the amount of the
44-15 penalty and to give a supersedeas bond.
44-16 (p) [(l) Except as provided by Subsection (m) of this
44-17 section, not later than 30 days after the date on which the
44-18 department issues a final decision after a hearing under Subsection
44-19 (j) of this section, a person who has been ordered to pay a penalty
44-20 under this section shall pay the penalty in full.]
44-21 [(m) If the person seeks judicial review of either the fact
44-22 of the submission of a false claim or the amount of the penalty or
44-23 of both the fact of the submission and the amount of the penalty,
44-24 the person shall forward the amount of the penalty to the
44-25 department for placement in an escrow account or, instead of
44-26 payment into an escrow account, post with the department a
44-27 supersedeas bond in a form approved by the department for the
45-1 amount of the penalty. The bond must be effective until all
45-2 judicial review of the order or decision is final.]
45-3 [(n) Failure to forward the money to or to post the bond
45-4 with the department within the period provided by Subsection (l) or
45-5 (m) of this section results in a waiver of all legal rights to
45-6 judicial review.] If the person charged does not pay the amount of
45-7 the penalty and the enforcement of the penalty is not stayed [fails
45-8 to forward the money or post the bond within the period provided by
45-9 Subsection (h), (k), (l), or (m) of this section], the department
45-10 may forward the matter to the attorney general for enforcement of
45-11 the penalty and interest as provided by law for legal judgments.
45-12 An action to enforce a penalty order under this section must be
45-13 initiated in a court of competent jurisdiction in Travis County or
45-14 in the county in [from] which the violation [false claim] was
45-15 committed [submitted].
45-16 (q) [(o)] Judicial review of a department order or review
45-17 under this section assessing a penalty is under the substantial
45-18 evidence rule. A suit may be initiated by filing a petition with a
45-19 district court in Travis County, as provided by Subchapter G,
45-20 Chapter 2001, Government Code.
45-21 (r) [(p)] If a penalty is reduced or not assessed, the
45-22 department shall remit to the person the appropriate amount plus
45-23 accrued interest if the penalty has been paid or shall execute a
45-24 release of the bond if a supersedeas bond has been posted. The
45-25 accrued interest on amounts remitted by the department under this
45-26 subsection shall be paid at a rate equal to the rate provided by
45-27 law for legal judgments and shall be paid for the period beginning
46-1 on the date the penalty is paid to the department under this
46-2 section and ending on the date the penalty is remitted.
46-3 (s) [(q)] A damage, cost, or penalty collected under this
46-4 section is not an allowable expense in a claim or cost report that
46-5 is or could be used to determine a rate or payment under the
46-6 medical assistance program.
46-7 (t) [(r)] All funds collected under this section shall be
46-8 deposited in the State Treasury to the credit of the General
46-9 Revenue Fund.
46-10 (u) A person found liable for a violation under Subsection
46-11 (c) that resulted in injury to an elderly person, as defined by
46-12 Section 48.002(1), a disabled person, as defined by Section
46-13 48.002(8)(A), or a person younger than 18 years of age may not
46-14 provide or arrange to provide health care services under the
46-15 medical assistance program for a period of 10 years. The
46-16 department by rule may provide for a period of ineligibility longer
46-17 than 10 years. The period of ineligibility begins on the date on
46-18 which the determination that the person is liable becomes final.
46-19 This subsection does not apply to a person who operates a nursing
46-20 facility.
46-21 (v) A person found liable for a violation under Subsection
46-22 (c) that did not result in injury to an elderly person, as defined
46-23 by Section 48.002(1), a disabled person, as defined by Section
46-24 48.002(8)(A), or a person younger than 18 years of age may not
46-25 provide or arrange to provide health care services under the
46-26 medical assistance program for a period of three years. The
46-27 department by rule may provide for a period of ineligibility longer
47-1 than three years. The period of ineligibility begins on the date
47-2 on which the determination that the person is liable becomes final.
47-3 This subsection does not apply to a person who operates a nursing
47-4 facility.
47-5 (b) The change in law made by this section applies only to a
47-6 violation committed on or after the effective date of this section.
47-7 For purposes of this subsection, a violation is committed on or
47-8 after the effective date of this section only if each element of
47-9 the violation occurs on or after that date. A violation committed
47-10 before the effective date of this section is covered by the law in
47-11 effect when the violation was committed, and the former law is
47-12 continued in effect for that purpose.
47-13 SECTION 3.02. SANCTIONS APPLICABLE TO VENDOR DRUG PROGRAM.
47-14 Subchapter B, Chapter 32, Human Resources Code, is amended by
47-15 adding Section 32.046 to read as follows:
47-16 Sec. 32.046. VENDOR DRUG PROGRAM; SANCTIONS AND PENALTIES.
47-17 (a) The department shall adopt rules governing sanctions and
47-18 penalties that apply to a provider in the vendor drug program who
47-19 submits an improper claim for reimbursement under the program.
47-20 (b) The department shall notify each provider in the vendor
47-21 drug program that the provider is subject to sanctions and
47-22 penalties for submitting an improper claim.
47-23 SECTION 3.03. PROHIBITION OF CERTAIN PERSONS CONVICTED OF
47-24 FRAUD. Subchapter B, Chapter 32, Human Resources Code, is amended
47-25 by adding Section 32.047 to read as follows:
47-26 Sec. 32.047. PROHIBITION OF CERTAIN HEALTH CARE SERVICE
47-27 PROVIDERS. A person is permanently prohibited from providing or
48-1 arranging to provide health care services under the medical
48-2 assistance program if:
48-3 (1) the person is convicted of an offense arising from
48-4 a fraudulent act under the program; and
48-5 (2) the person's fraudulent act results in injury to
48-6 an elderly person, as defined by Section 48.002(1), a disabled
48-7 person, as defined by Section 48.002(8)(A), or a person younger
48-8 than 18 years of age.
48-9 SECTION 3.04. DEDUCTIONS FROM LOTTERY WINNINGS. (a)
48-10 Sections 466.407(a) and (c), Government Code, are amended to read
48-11 as follows:
48-12 (a) The executive director shall deduct the amount of a
48-13 delinquent tax or other money from the winnings of a person who has
48-14 been finally determined to be:
48-15 (1) delinquent in the payment of a tax or other money
48-16 collected by the comptroller[, the state treasurer,] or the Texas
48-17 Alcoholic Beverage Commission;
48-18 (2) delinquent in making child support payments
48-19 administered or collected by the attorney general;
48-20 (3) delinquent in reimbursing the Texas Department of
48-21 Human Services for a benefit granted in error under the food stamp
48-22 program or the program of financial assistance under Chapter 31,
48-23 Human Resources Code;
48-24 (4) in default on a loan made under Chapter 52,
48-25 Education Code; or
48-26 (5) [(4)] in default on a loan guaranteed under
48-27 Chapter 57, Education Code.
49-1 (c) The attorney general, comptroller, [state treasurer,]
49-2 Texas Alcoholic Beverage Commission, Texas Department of Human
49-3 Services, Texas Higher Education Coordinating Board, and Texas
49-4 Guaranteed Student Loan Corporation shall each provide the
49-5 executive director with a report of persons who have been finally
49-6 determined to be delinquent in the payment of a tax or other money
49-7 collected by the agency. The commission shall adopt rules
49-8 regarding the form and frequency of reports under this subsection.
49-9 (b) The Texas Department of Human Services shall take all
49-10 action necessary to implement the change in law made by this
49-11 section not later than January 1, 1998. The department may not
49-12 seek recovery through lottery prize deduction of an amount of a
49-13 benefit granted in error to a person under the food stamp program
49-14 or the program of financial assistance under Chapter 31, Human
49-15 Resources Code, before September 1, 1997.
49-16 (c) The executive director of the Texas Lottery Commission
49-17 is not required under Section 466.407, Government Code, as amended
49-18 by this section, to deduct from lottery prizes erroneous amounts
49-19 granted to lottery winners by the Texas Department of Human
49-20 Services until the department provides to the commission all
49-21 necessary information and reports required for implementation of
49-22 that section.
49-23 ARTICLE 4. CIVIL REMEDIES RELATING TO MEDICAID FRAUD
49-24 AND CREATION OF CRIMINAL OFFENSE
49-25 SECTION 4.01. REDESIGNATION. (a) Chapter 36, Human
49-26 Resources Code, is amended by designating Sections 36.001, 36.002,
49-27 36.007, 36.008, 36.009, 36.010, 36.011, and 36.012 as Subchapter A,
50-1 renumbering Sections 36.007, 36.008, 36.009, 36.010, 36.011, and
50-2 36.012 as Sections 36.003, 36.004, 36.005, 36.006, 36.007, and
50-3 36.008, respectively, and adding a subchapter heading to read as
50-4 follows:
50-5 SUBCHAPTER A. GENERAL PROVISIONS
50-6 (b) Chapter 36, Human Resources Code, is amended by
50-7 designating Sections 36.003, 36.004, 36.005, and 36.006 as
50-8 Subchapter B, renumbering those sections as Sections 36.051,
50-9 36.052, 36.053, and 36.054, respectively, and adding a subchapter
50-10 heading to read as follows:
50-11 SUBCHAPTER B. ACTION BY ATTORNEY GENERAL
50-12 SECTION 4.02. DEFINITIONS. Section 36.001, Human Resources
50-13 Code, is amended by amending Subdivisions (5)-(11) and adding
50-14 Subdivision (12) to read as follows:
50-15 (5) "Managed care organization" has the meaning
50-16 assigned by Section 32.039(a).
50-17 (6) "Medicaid program" means the state Medicaid
50-18 program.
50-19 (7) [(6)] "Medicaid recipient" means an individual on
50-20 whose behalf a person claims or receives a payment from the
50-21 Medicaid program or a fiscal agent, without regard to whether the
50-22 individual was eligible for benefits under the Medicaid program.
50-23 (8) [(7)] "Physician" means a physician licensed to
50-24 practice medicine in this state.
50-25 (9) [(8)] "Provider" means a person who participates
50-26 in or who has applied to participate in the Medicaid program as a
50-27 supplier of a product or service and includes:
51-1 (A) a management company that manages, operates,
51-2 or controls another provider;
51-3 (B) a person, including a medical vendor, that
51-4 provides a product or service to a provider or to a fiscal agent;
51-5 [and]
51-6 (C) an employee of a provider; and
51-7 (D) a managed care organization.
51-8 (10) [(9)] "Service" includes care or treatment of a
51-9 Medicaid recipient.
51-10 (11) [(10)] "Signed" means to have affixed a signature
51-11 directly or indirectly by means of handwriting, typewriting,
51-12 signature stamp, computer impulse, or other means recognized by
51-13 law.
51-14 (12) [(11)] "Unlawful act" means an act declared to be
51-15 unlawful under Section 36.002.
51-16 SECTION 4.03. UNLAWFUL ACTS RELATING TO MANAGED CARE
51-17 ORGANIZATION. Section 36.002, Human Resources Code, is amended to
51-18 read as follows:
51-19 Sec. 36.002. UNLAWFUL ACTS. A person commits an unlawful
51-20 act if the person:
51-21 (1) knowingly or intentionally makes or causes to be
51-22 made a false statement or misrepresentation of a material fact:
51-23 (A) on an application for a contract, benefit,
51-24 or payment under the Medicaid program; or
51-25 (B) that is intended to be used to determine a
51-26 person's eligibility for a benefit or payment under the Medicaid
51-27 program;
52-1 (2) knowingly or intentionally conceals or fails to
52-2 disclose an event:
52-3 (A) that the person knows affects the initial or
52-4 continued right to a benefit or payment under the Medicaid program
52-5 of:
52-6 (i) the person; or
52-7 (ii) another person on whose behalf the
52-8 person has applied for a benefit or payment or is receiving a
52-9 benefit or payment; and
52-10 (B) to permit a person to receive a benefit or
52-11 payment that is not authorized or that is greater than the payment
52-12 or benefit that is authorized;
52-13 (3) knowingly or intentionally applies for and
52-14 receives a benefit or payment on behalf of another person under the
52-15 Medicaid program and converts any part of the benefit or payment to
52-16 a use other than for the benefit of the person on whose behalf it
52-17 was received;
52-18 (4) knowingly or intentionally makes, causes to be
52-19 made, induces, or seeks to induce the making of a false statement
52-20 or misrepresentation of material fact concerning:
52-21 (A) the conditions or operation of a facility in
52-22 order that the facility may qualify for certification or
52-23 recertification required by the Medicaid program, including
52-24 certification or recertification as:
52-25 (i) a hospital;
52-26 (ii) a nursing facility or skilled nursing
52-27 facility;
53-1 (iii) a hospice;
53-2 (iv) an intermediate care facility for the
53-3 mentally retarded;
53-4 (v) a personal care facility; or
53-5 (vi) a home health agency; or
53-6 (B) information required to be provided by a
53-7 federal or state law, rule, regulation, or provider agreement
53-8 pertaining to the Medicaid program;
53-9 (5) except as authorized under the Medicaid program,
53-10 knowingly or intentionally charges, solicits, accepts, or receives,
53-11 in addition to an amount paid under the Medicaid program, a gift,
53-12 money, a donation, or other consideration as a condition to the
53-13 provision of a service or continued service to a Medicaid recipient
53-14 if the cost of the service provided to the Medicaid recipient is
53-15 paid for, in whole or in part, under the Medicaid program;
53-16 (6) knowingly or intentionally presents or causes to
53-17 be presented a claim for payment under the Medicaid program for a
53-18 product provided or a service rendered by a person who:
53-19 (A) is not licensed to provide the product or
53-20 render the service, if a license is required; or
53-21 (B) is not licensed in the manner claimed;
53-22 (7) knowingly or intentionally makes a claim under the
53-23 Medicaid program for:
53-24 (A) a service or product that has not been
53-25 approved or acquiesced in by a treating physician or health care
53-26 practitioner;
53-27 (B) a service or product that is substantially
54-1 inadequate or inappropriate when compared to generally recognized
54-2 standards within the particular discipline or within the health
54-3 care industry; or
54-4 (C) a product that has been adulterated,
54-5 debased, mislabeled, or that is otherwise inappropriate;
54-6 (8) makes a claim under the Medicaid program and
54-7 knowingly or intentionally fails to indicate the type of license
54-8 and the identification number of the licensed health care provider
54-9 who actually provided the service; [or]
54-10 (9) knowingly or intentionally enters into an
54-11 agreement, combination, or conspiracy to defraud the state by
54-12 obtaining or aiding another person in obtaining an unauthorized
54-13 payment or benefit from the Medicaid program or a fiscal agent; or
54-14 (10) is a managed care organization that contracts
54-15 with the Health and Human Services Commission or other state agency
54-16 to provide or arrange to provide health care benefits or services
54-17 to individuals eligible under the Medicaid program and knowingly or
54-18 intentionally:
54-19 (A) fails to provide to an individual a health
54-20 care benefit or service that the organization is required to
54-21 provide under the contract;
54-22 (B) fails to provide to the commission or
54-23 appropriate state agency information required to be provided by
54-24 law, commission or agency rule, or contractual provision;
54-25 (C) engages in a fraudulent activity in
54-26 connection with the enrollment of an individual eligible under the
54-27 Medicaid program in the organization's managed care plan or in
55-1 connection with marketing the organization's services to an
55-2 individual eligible under the Medicaid program; or
55-3 (D) obstructs an investigation by the attorney
55-4 general of an alleged unlawful act under this section.
55-5 SECTION 4.04. APPLICABLE PENALTIES AND CONFORMING AMENDMENT.
55-6 Section 36.004, Human Resources Code, as renumbered by this article
55-7 as Section 36.052, is amended by amending Subsections (a) and (e)
55-8 to read as follows:
55-9 (a) Except as provided by Subsection (c), a person who
55-10 commits an unlawful act is liable to the state for:
55-11 (1) restitution of the value of any payment or
55-12 monetary or in-kind benefit provided under the Medicaid program,
55-13 directly or indirectly, as a result of the unlawful act;
55-14 (2) interest on the value of the payment or benefit
55-15 described by Subdivision (1) at the prejudgment interest rate in
55-16 effect on the day the payment or benefit was received or paid, for
55-17 the period from the date the benefit was received or paid to the
55-18 date that restitution is paid to the state;
55-19 (3) a civil penalty of:
55-20 (A) not less than $5,000 or more than $15,000
55-21 for each unlawful act committed by the person that results in
55-22 injury to an elderly person, as defined by Section 48.002(1), a
55-23 disabled person, as defined by Section 48.002(8)(A), or a person
55-24 younger than 18 years of age; or
55-25 (B) not less than $1,000 or more than $10,000
55-26 for each unlawful act committed by the person that does not result
55-27 in injury to a person described by Paragraph (A); and
56-1 (4) two times the value of the payment or benefit
56-2 described by Subdivision (1).
56-3 (e) The attorney general may:
56-4 (1) bring an action for civil remedies under this
56-5 section together with a suit for injunctive relief under Section
56-6 36.051 [36.003]; or
56-7 (2) institute an action for civil remedies
56-8 independently of an action for injunctive relief.
56-9 SECTION 4.05. CONFORMING AMENDMENT. Section 36.005, Human
56-10 Resources Code, as renumbered by this article as Section 36.053, is
56-11 amended by amending Subsection (b) to read as follows:
56-12 (b) In investigating an unlawful act, the attorney general
56-13 may:
56-14 (1) require the person to file on a prescribed form a
56-15 statement in writing, under oath or affirmation, as to all the
56-16 facts and circumstances concerning the alleged unlawful act and
56-17 other information considered necessary by the attorney general;
56-18 (2) examine under oath a person in connection with the
56-19 alleged unlawful act; and
56-20 (3) execute in writing and serve on the person a civil
56-21 investigative demand requiring the person to produce the
56-22 documentary material and permit inspection and copying of the
56-23 material under Section 36.054 [36.006].
56-24 SECTION 4.06. ADDITIONAL SANCTIONS FOR MEDICAID FRAUD.
56-25 Section 36.009, Human Resources Code, as renumbered by this article
56-26 as Section 36.005, is amended to read as follows:
56-27 Sec. 36.005 [36.009]. SUSPENSION OR REVOCATION OF AGREEMENT;
57-1 PROFESSIONAL DISCIPLINE. (a) The commissioner of human services,
57-2 the commissioner of public health, the commissioner of mental
57-3 health and mental retardation, the executive director of the
57-4 Department of Protective and Regulatory Services, or the executive
57-5 director of another state health care regulatory agency:
57-6 (1) shall suspend or revoke:
57-7 (A) a provider agreement between the department
57-8 or agency and a person, other than a person who operates a nursing
57-9 facility, found liable under Section 36.052; and
57-10 (B) a permit, license, or certification granted
57-11 by the department or agency to a person, other than a person who
57-12 operates a nursing facility, found liable under Section 36.052; and
57-13 (2) may suspend or revoke:
57-14 (A) [(1)] a provider agreement between the
57-15 department or agency and a person who operates a nursing facility
57-16 found liable under Section 36.052 [36.004]; or
57-17 (B) [(2)] a permit, license, or certification
57-18 granted by the department or agency to a person who operates a
57-19 nursing facility found liable under Section 36.052 [36.004].
57-20 (b) A person found liable under Section 36.052 for an
57-21 unlawful act may not provide or arrange to provide health care
57-22 services under the Medicaid program for a period of 10 years. The
57-23 board of a state agency that operates part of the Medicaid program
57-24 may by rule provide for a period of ineligibility longer than 10
57-25 years. The period of ineligibility begins on the date on which the
57-26 determination that the person is liable becomes final. This
57-27 section does not apply to a person who operates a nursing facility.
58-1 (c) A person licensed by a state regulatory agency who
58-2 commits an unlawful act is subject to professional discipline under
58-3 the applicable licensing law or rules adopted under that law.
58-4 (d) For purposes of this section, a person is considered to
58-5 have been found liable under Section 36.052 if the person is found
58-6 liable in an action brought under Subchapter C.
58-7 SECTION 4.07. AUTHORITY OF ATTORNEY GENERAL. (a)
58-8 Subchapter B, Chapter 36, Human Resources Code, as designated by
58-9 this article, is amended by adding Section 36.055 to read as
58-10 follows:
58-11 Sec. 36.055. ATTORNEY GENERAL AS RELATOR IN FEDERAL ACTION.
58-12 To the extent permitted by 31 U.S.C. Sections 3729-3733, the
58-13 attorney general may bring an action as relator under 31 U.S.C.
58-14 Section 3730 with respect to an act in connection with the Medicaid
58-15 program for which a person may be held liable under 31 U.S.C.
58-16 Section 3729. The attorney general may contract with a private
58-17 attorney to represent the state under this section.
58-18 (b) The office of the attorney general shall develop
58-19 strategies to increase state recoveries under 31 U.S.C. Sections
58-20 3729-3733. The office shall report the results of the office's
58-21 effort to the legislature not later than September 1, 1998.
58-22 SECTION 4.08. CIVIL ACTION BY PRIVATE PERSON FOR MEDICAID
58-23 FRAUD. Chapter 36, Human Resources Code, is amended by adding
58-24 Subchapter C to read as follows:
58-25 SUBCHAPTER C. ACTION BY PRIVATE PERSONS
58-26 Sec. 36.101. ACTION BY PRIVATE PERSON AUTHORIZED. (a) A
58-27 person may bring a civil action for a violation of Section 36.002
59-1 for the person and for the state. The action shall be brought in
59-2 the name of the state.
59-3 (b) In an action brought under this subchapter, a person who
59-4 violates Section 36.002 is liable as provided by Section 36.052.
59-5 Sec. 36.102. INITIATION OF ACTION. (a) A person bringing
59-6 an action under this subchapter shall serve a copy of the petition
59-7 and a written disclosure of substantially all material evidence and
59-8 information the person possesses on the attorney general in
59-9 compliance with the Texas Rules of Civil Procedure.
59-10 (b) The petition shall be filed in camera and shall remain
59-11 under seal until at least the 60th day after the date the petition
59-12 is filed. The petition may not be served on the defendant until
59-13 the court orders service on the defendant.
59-14 (c) The state may elect to intervene and proceed with the
59-15 action not later than the 60th day after the date the attorney
59-16 general receives the petition and the material evidence and
59-17 information.
59-18 (d) The state may, for good cause shown, move the court to
59-19 extend the time during which the petition remains under seal under
59-20 Subsection (b). A motion under this subsection may be supported by
59-21 affidavits or other submissions in camera.
59-22 (e) An action under this subchapter may be dismissed before
59-23 the end of the period prescribed by Subsection (b), as extended as
59-24 provided by Subsection (d), if applicable, only if the court and
59-25 the attorney general consent in writing to the dismissal and state
59-26 their reasons for consenting.
59-27 Sec. 36.103. ANSWER BY DEFENDANT. A defendant is not
60-1 required to file an answer to a petition filed under this
60-2 subchapter until the 20th day after the date the petition is
60-3 unsealed and served on the defendant in compliance with the Texas
60-4 Rules of Civil Procedure.
60-5 Sec. 36.104. STATE'S DECISION TO CONTINUE ACTION. Not
60-6 later than the last day of the period prescribed by Section
60-7 36.102(b), as extended as provided by Section 36.102(d), if
60-8 applicable, the state shall:
60-9 (1) proceed with the action; or
60-10 (2) notify the court that the state declines to take
60-11 over the action.
60-12 Sec. 36.105. REPRESENTATION OF STATE BY PRIVATE ATTORNEY.
60-13 The attorney general may contract with a private attorney to
60-14 represent the state in an action under this subchapter with which
60-15 the state elects to proceed.
60-16 Sec. 36.106. INTERVENTION BY OTHER PARTIES PROHIBITED. A
60-17 person other than the state may not intervene or bring a related
60-18 action based on the facts underlying a pending action brought under
60-19 this subchapter.
60-20 Sec. 36.107. RIGHTS OF PARTIES IF STATE CONTINUES ACTION.
60-21 (a) If the state proceeds with the action, the state has the
60-22 primary responsibility for prosecuting the action and is not bound
60-23 by an act of the person bringing the action. The person bringing
60-24 the action has the right to continue as a party to the action,
60-25 subject to the limitations set forth by this section.
60-26 (b) The state may dismiss the action notwithstanding the
60-27 objections of the person bringing the action if:
61-1 (1) the attorney general notifies the person that the
61-2 state has filed a motion to dismiss; and
61-3 (2) the court provides the person with an opportunity
61-4 for a hearing on the motion.
61-5 (c) The state may settle the action with the defendant
61-6 notwithstanding the objections of the person bringing the action if
61-7 the court determines, after a hearing, that the proposed settlement
61-8 is fair, adequate, and reasonable under all the circumstances. On
61-9 a showing of good cause, the hearing may be held in camera.
61-10 (d) On a showing by the state that unrestricted
61-11 participation during the course of the litigation by the person
61-12 bringing the action would interfere with or unduly delay the
61-13 state's prosecution of the case, or would be repetitious,
61-14 irrelevant, or for purposes of harassment, the court may impose
61-15 limitations on the person's participation, including:
61-16 (1) limiting the number of witnesses the person may
61-17 call;
61-18 (2) limiting the length of the testimony of witnesses
61-19 called by the person;
61-20 (3) limiting the person's cross-examination of
61-21 witnesses; or
61-22 (4) otherwise limiting the participation by the person
61-23 in the litigation.
61-24 (e) On a showing by the defendant that unrestricted
61-25 participation during the course of the litigation by the person
61-26 bringing the action would be for purposes of harassment or would
61-27 cause the defendant undue burden or unnecessary expense, the court
62-1 may limit the participation by the person in the litigation.
62-2 Sec. 36.108. RIGHTS OF PARTIES IF STATE DOES NOT CONTINUE
62-3 ACTION. (a) If the state elects not to proceed with the action,
62-4 the person bringing the action has the right to conduct the action.
62-5 (b) If the state requests pleadings and deposition
62-6 transcripts, the parties shall serve the attorney general with
62-7 copies of all pleadings filed in the action and shall make
62-8 available to the attorney general copies of all deposition
62-9 transcripts.
62-10 (c) The court, without limiting the status and rights of the
62-11 person bringing the action, may permit the state to intervene at a
62-12 later date on a showing of good cause.
62-13 Sec. 36.109. STAY OF CERTAIN DISCOVERY. (a) Regardless of
62-14 whether the state proceeds with the action, on a showing by the
62-15 state that certain actions of discovery by the person bringing the
62-16 action would interfere with the state's investigation or
62-17 prosecution of a criminal or civil matter arising out of the same
62-18 facts, the court may stay the discovery for a period not to exceed
62-19 60 days.
62-20 (b) The court shall hear a motion to stay discovery under
62-21 this section in camera.
62-22 (c) The court may extend the period prescribed by Subsection
62-23 (a) on a further showing in camera that the state has pursued the
62-24 criminal or civil investigation or proceedings with reasonable
62-25 diligence and that any proposed discovery in the civil action will
62-26 interfere with the ongoing criminal or civil investigation or
62-27 proceedings.
63-1 Sec. 36.110. PURSUIT OF ALTERNATE REMEDY BY STATE. (a)
63-2 Notwithstanding Section 36.101, the state may elect to pursue the
63-3 state's claim through any alternate remedy available to the state,
63-4 including any administrative proceeding to determine an
63-5 administrative penalty. If an alternate remedy is pursued in
63-6 another proceeding, the person bringing the action has the same
63-7 rights in the other proceeding as the person would have had if the
63-8 action had continued under this subchapter.
63-9 (b) A finding of fact or conclusion of law made in the other
63-10 proceeding that has become final is conclusive on all parties to an
63-11 action under this subchapter. For purposes of this subsection, a
63-12 finding or conclusion is final if:
63-13 (1) the finding or conclusion has been finally
63-14 determined on appeal to the appropriate court;
63-15 (2) no appeal has been filed with respect to the
63-16 finding or conclusion and all time for filing an appeal has
63-17 expired; or
63-18 (3) the finding or conclusion is not subject to
63-19 judicial review.
63-20 Sec. 36.111. AWARD TO PRIVATE PLAINTIFF. (a) If the state
63-21 proceeds with an action under this subchapter, the person bringing
63-22 the action is entitled, except as provided by Subsection (b), to
63-23 receive at least 10 percent but not more than 25 percent of the
63-24 proceeds of the action, depending on the extent to which the person
63-25 substantially contributed to the prosecution of the action.
63-26 (b) If the court finds that the action is based primarily on
63-27 disclosures of specific information, other than information
64-1 provided by the person bringing the action, relating to allegations
64-2 or transactions in a criminal or civil hearing, in a legislative or
64-3 administrative report, hearing, audit, or investigation, or from
64-4 the news media, the court may award the amount the court considers
64-5 appropriate but not more than seven percent of the proceeds of the
64-6 action. The court shall consider the significance of the
64-7 information and the role of the person bringing the action in
64-8 advancing the case to litigation.
64-9 (c) If the state does not proceed with an action under this
64-10 subchapter, the person bringing the action or settling the claim is
64-11 entitled to receive an amount that the court decides is reasonable
64-12 for collecting the civil penalty and damages. The amount may not
64-13 be less than 25 percent or more than 30 percent of the proceeds of
64-14 the action.
64-15 (d) A payment to a person under this section shall be made
64-16 from the proceeds of the action. A person receiving a payment
64-17 under this section is also entitled to receive an amount for
64-18 reasonable expenses that the court finds to have been necessarily
64-19 incurred, plus reasonable attorney's fees and costs. Expenses,
64-20 fees, and costs shall be awarded against the defendant.
64-21 (e) In this section, "proceeds of the action" includes
64-22 proceeds of a settlement of the action.
64-23 Sec. 36.112. REDUCTION OF AWARD. (a) Regardless of whether
64-24 the state proceeds with the action, if the court finds that the
64-25 action was brought by a person who planned and initiated the
64-26 violation of Section 36.002 on which the action was brought, the
64-27 court may, to the extent the court considers appropriate, reduce
65-1 the share of the proceeds of the action the person would otherwise
65-2 receive under Section 36.111, taking into account the person's role
65-3 in advancing the case to litigation and any relevant circumstances
65-4 pertaining to the violation.
65-5 (b) If the person bringing the action is convicted of
65-6 criminal conduct arising from the person's role in the violation of
65-7 Section 36.002, the court shall dismiss the person from the civil
65-8 action and the person may not receive any share of the proceeds of
65-9 the action. A dismissal under this subsection does not prejudice
65-10 the right of the state to continue the action.
65-11 Sec. 36.113. AWARD TO DEFENDANT FOR FRIVOLOUS ACTION OR
65-12 ACTION BROUGHT FOR PURPOSES OF HARASSMENT. (a) If the state does
65-13 not proceed with the action and the person bringing the action
65-14 conducts the action, the court may award to the defendant the
65-15 defendant's reasonable attorney's fees and expenses if:
65-16 (1) the defendant prevails in the action; and
65-17 (2) the court finds that the claim of the person
65-18 bringing the action was clearly frivolous, clearly vexatious, or
65-19 brought primarily for purposes of harassment.
65-20 (b) A court finding under Subsection (a)(2) constitutes a
65-21 finding that the person's attorney is in violation of Section
65-22 10.001, Civil Practice and Remedies Code, and the attorney is
65-23 liable, in addition to the person bringing the action, for an award
65-24 made under Subsection (a).
65-25 (c) Chapter 105, Civil Practice and Remedies Code, applies
65-26 in an action under this subchapter with which the state proceeds.
65-27 Sec. 36.114. CERTAIN ACTIONS BARRED. (a) A person may not
66-1 bring an action under this subchapter that is based on allegations
66-2 or transactions that are the subject of a civil suit or an
66-3 administrative penalty proceeding in which the state is already a
66-4 party.
66-5 (b) A person may not bring an action under this subchapter
66-6 that is based on the public disclosure of allegations or
66-7 transactions in a criminal or civil hearing, in a legislative or
66-8 administrative report, hearing, audit, or investigation, or from
66-9 the news media, unless the person bringing the action is an
66-10 original source of the information. In this subsection, "original
66-11 source" means an individual who has direct and independent
66-12 knowledge of the information on which the allegations are based and
66-13 has voluntarily provided the information to the state before filing
66-14 an action under this subchapter that is based on the information.
66-15 Sec. 36.115. STATE NOT LIABLE FOR CERTAIN EXPENSES. The
66-16 state is not liable for expenses that a person incurs in bringing
66-17 an action under this section.
66-18 Sec. 36.116. RETALIATION BY EMPLOYER AGAINST PERSON BRINGING
66-19 SUIT PROHIBITED. (a) A person who is discharged, demoted,
66-20 suspended, threatened, harassed, or in any other manner
66-21 discriminated against in the terms of employment by the person's
66-22 employer because of a lawful act taken by the person in furtherance
66-23 of an action under this subchapter, including investigation for,
66-24 initiation of, testimony for, or assistance in an action filed or
66-25 to be filed under this subchapter, is entitled to:
66-26 (1) reinstatement with the same seniority status the
66-27 person would have had but for the discrimination; and
67-1 (2) not less than two times the amount of back pay,
67-2 interest on the back pay, and compensation for any special damages
67-3 sustained as a result of the discrimination, including litigation
67-4 costs and reasonable attorney's fees.
67-5 (b) A person may bring an action in the appropriate district
67-6 court for the relief provided in this section.
67-7 Sec. 36.117. SOVEREIGN IMMUNITY NOT WAIVED. Except as
67-8 provided by Section 36.113(c), this subchapter does not waive
67-9 sovereign immunity.
67-10 Sec. 36.118. ATTORNEY GENERAL COMPENSATION. The office of
67-11 the attorney general may retain a reasonable portion of recoveries
67-12 under this subchapter, not to exceed amounts specified in the
67-13 General Appropriations Act, for the administration of this
67-14 subchapter.
67-15 SECTION 4.09. CRIMINAL OFFENSE AND REVOCATION OF CERTAIN
67-16 LICENSES. Chapter 36, Human Resources Code, is amended by adding
67-17 Subchapter D to read as follows:
67-18 SUBCHAPTER D. CRIMINAL PENALTIES AND REVOCATION OF CERTAIN
67-19 OCCUPATIONAL LICENSES
67-20 Sec. 36.131. CRIMINAL OFFENSE. (a) A person commits an
67-21 offense if the person commits an unlawful act under Section 36.002.
67-22 (b) An offense under this section is:
67-23 (1) a Class C misdemeanor if the value of any payment
67-24 or monetary or in-kind benefit provided under the Medicaid program,
67-25 directly or indirectly, as a result of the unlawful act is less
67-26 than $50;
67-27 (2) a Class B misdemeanor if the value of any payment
68-1 or monetary or in-kind benefit provided under the Medicaid program,
68-2 directly or indirectly, as a result of the unlawful act is $50 or
68-3 more but less than $500;
68-4 (3) a Class A misdemeanor if the value of any payment
68-5 or monetary or in-kind benefit provided under the Medicaid program,
68-6 directly or indirectly, as a result of the unlawful act is $500 or
68-7 more but less than $1,500;
68-8 (4) a state jail felony if the value of any payment or
68-9 monetary or in-kind benefit provided under the Medicaid program,
68-10 directly or indirectly, as a result of the unlawful act is $1,500
68-11 or more but less than $20,000;
68-12 (5) a felony of the third degree if the value of any
68-13 payment or monetary or in-kind benefit provided under the Medicaid
68-14 program, directly or indirectly, as a result of the unlawful act is
68-15 $20,000 or more but less than $100,000;
68-16 (6) a felony of the second degree if the value of any
68-17 payment or monetary or in-kind benefit provided under the Medicaid
68-18 program, directly or indirectly, as a result of the unlawful act is
68-19 $100,000 or more but less than $200,000; or
68-20 (7) a felony of the first degree if the value of any
68-21 payment or monetary or in-kind benefit provided under the Medicaid
68-22 program, directly or indirectly, as a result of the unlawful act is
68-23 $200,000 or more.
68-24 (c) If conduct constituting an offense under this section
68-25 also constitutes an offense under another provision of law,
68-26 including a provision in the Penal Code, the actor may be
68-27 prosecuted under either this section or the other provision.
69-1 (d) When multiple payments or monetary or in-kind benefits
69-2 are provided under the Medicaid program as a result of one scheme
69-3 or continuing course of conduct, the conduct may be considered as
69-4 one offense and the amounts of the payments or monetary or in-kind
69-5 benefits aggregated in determining the grade of the offense.
69-6 Sec. 36.132. REVOCATION OF LICENSES. (a) In this section:
69-7 (1) "License" means a license, certificate,
69-8 registration, permit, or other authorization that:
69-9 (A) is issued by a licensing authority;
69-10 (B) is subject before expiration to suspension,
69-11 revocation, forfeiture, or termination by an issuing licensing
69-12 authority; and
69-13 (C) must be obtained before a person may
69-14 practice or engage in a particular business, occupation, or
69-15 profession.
69-16 (2) "Licensing authority" means:
69-17 (A) the Texas State Board of Medical Examiners;
69-18 (B) the State Board of Dental Examiners;
69-19 (C) the Texas State Board of Examiners of
69-20 Psychologists;
69-21 (D) the Texas State Board of Social Worker
69-22 Examiners;
69-23 (E) the Board of Nurse Examiners;
69-24 (F) the Board of Vocational Nurse Examiners;
69-25 (G) the Texas Board of Physical Therapy
69-26 Examiners;
69-27 (H) the Texas Board of Occupational Therapy
70-1 Examiners; or
70-2 (I) another state agency authorized to regulate
70-3 a provider who receives or is eligible to receive payment for a
70-4 health care service under the Medicaid program.
70-5 (b) A licensing authority shall revoke a license issued by
70-6 the authority to a person if the person is convicted of a felony
70-7 under Section 36.131. In revoking the license, the licensing
70-8 authority shall comply with all procedures generally applicable to
70-9 the licensing authority in revoking licenses.
70-10 SECTION 4.10. APPLICATION. (a) The changes in law made by
70-11 this article apply only to a violation committed on or after the
70-12 effective date of this article. For purposes of this section, a
70-13 violation is committed on or after the effective date of this
70-14 article only if each element of the violation occurs on or after
70-15 that date.
70-16 (b) A violation committed before the effective date of this
70-17 article is covered by the law in effect when the violation was
70-18 committed, and the former law is continued in effect for this
70-19 purpose.
70-20 ARTICLE 5. SUSPENSION OF LICENSES
70-21 SECTION 5.01. SUSPENSION OF LICENSES. (a) Subtitle B,
70-22 Title 2, Human Resources Code, is amended by adding Chapter 23 to
70-23 read as follows:
70-24 CHAPTER 23. SUSPENSION OF DRIVER'S OR RECREATIONAL
70-25 LICENSE FOR FAILURE TO REIMBURSE DEPARTMENT
70-26 Sec. 23.001. DEFINITIONS. In this chapter:
70-27 (1) "License" means a license, certificate,
71-1 registration, permit, or other authorization that:
71-2 (A) is issued by a licensing authority;
71-3 (B) is subject before expiration to suspension,
71-4 revocation, forfeiture, or termination by an issuing licensing
71-5 authority; and
71-6 (C) a person must obtain to:
71-7 (i) operate a motor vehicle; or
71-8 (ii) engage in a recreational activity,
71-9 including hunting and fishing, for which a license or permit is
71-10 required.
71-11 (2) "Order suspending a license" means an order issued
71-12 by the department directing a licensing authority to suspend a
71-13 license.
71-14 Sec. 23.002. LICENSING AUTHORITIES SUBJECT TO CHAPTER. In
71-15 this chapter, "licensing authority" means:
71-16 (1) the Parks and Wildlife Department; and
71-17 (2) the Department of Public Safety of the State of
71-18 Texas.
71-19 Sec. 23.003. SUSPENSION OF LICENSE. The department may
71-20 issue an order suspending a license as provided by this chapter of
71-21 a person who, after notice:
71-22 (1) has failed to reimburse the department for an
71-23 amount in excess of $250 granted in error to the person under the
71-24 food stamp program or the program of financial assistance under
71-25 Chapter 31;
71-26 (2) has been provided an opportunity to make payments
71-27 toward the amount owed under a repayment schedule; and
72-1 (3) has failed to comply with the repayment schedule.
72-2 Sec. 23.004. INITIATION OF PROCEEDING. (a) The department
72-3 may initiate a proceeding to suspend a person's license by filing a
72-4 petition with the department's hearings division.
72-5 (b) The proceeding shall be conducted by the department's
72-6 hearings division. The proceeding is a contested case under
72-7 Chapter 2001, Government Code, except that Section 2001.054 does
72-8 not apply.
72-9 (c) The commissioner shall render a final decision in the
72-10 proceeding.
72-11 Sec. 23.005. CONTENTS OF PETITION. A petition under this
72-12 chapter must state that license suspension is authorized under
72-13 Section 23.003 and allege:
72-14 (1) the name and, if known, social security number of
72-15 the person;
72-16 (2) the type of license the person is believed to hold
72-17 and the name of the licensing authority; and
72-18 (3) the amount owed to the department.
72-19 Sec. 23.006. NOTICE. (a) On initiating a proceeding under
72-20 Section 23.004, the department shall give the person named in the
72-21 petition:
72-22 (1) notice of the person's right to a hearing before
72-23 the hearings division of the department;
72-24 (2) notice of the deadline for requesting a hearing;
72-25 and
72-26 (3) a form requesting a hearing.
72-27 (b) Notice under this section may be served as in civil
73-1 cases generally.
73-2 (c) The notice must state that an order suspending a license
73-3 shall be rendered on the 60th day after the date of service of the
73-4 notice unless by that date:
73-5 (1) the person pays the amount owed to the department;
73-6 (2) the person presents evidence of a payment history
73-7 satisfactory to the department in compliance with a reasonable
73-8 repayment schedule; or
73-9 (3) the person appears at a hearing before the
73-10 hearings division and shows that the request for suspension should
73-11 be denied or stayed.
73-12 Sec. 23.007. HEARING ON PETITION TO SUSPEND LICENSE. (a) A
73-13 request for a hearing and motion to stay suspension must be filed
73-14 with the department not later than the 20th day after the date of
73-15 service of the notice under Section 23.006.
73-16 (b) If a request for a hearing is filed, the hearings
73-17 division of the department shall:
73-18 (1) promptly schedule a hearing;
73-19 (2) notify the person and an appropriate
73-20 representative of the department of the date, time, and location of
73-21 the hearing; and
73-22 (3) stay suspension pending the hearing.
73-23 Sec. 23.008. ORDER SUSPENDING LICENSE. (a) On making the
73-24 findings required by Section 23.003, the department shall render an
73-25 order suspending a license.
73-26 (b) The department may stay an order suspending a license
73-27 conditioned on the person's compliance with a reasonable repayment
74-1 schedule that is incorporated in the order. An order suspending a
74-2 license with a stay of the suspension may not be served on the
74-3 licensing authority unless the stay is revoked as provided by this
74-4 chapter.
74-5 (c) A final order suspending a license rendered by the
74-6 department shall be forwarded to the appropriate licensing
74-7 authority.
74-8 (d) If the department renders an order suspending a license,
74-9 the person may also be ordered not to engage in the licensed
74-10 activity.
74-11 (e) If the department finds that the petition for suspension
74-12 should be denied, the petition shall be dismissed without
74-13 prejudice, and an order suspending a license may not be rendered.
74-14 Sec. 23.009. DEFAULT ORDER. The department shall consider
74-15 the allegations of the petition for suspension to be admitted and
74-16 shall render an order suspending a license if the person fails to:
74-17 (1) respond to a notice issued under Section 23.006;
74-18 (2) request a hearing; or
74-19 (3) appear at a hearing.
74-20 Sec. 23.010. REVIEW OF FINAL ADMINISTRATIVE ORDER. An order
74-21 issued by the department under this chapter is a final agency
74-22 decision and is subject to review as provided by Chapter 2001,
74-23 Government Code.
74-24 Sec. 23.011. ACTION BY LICENSING AUTHORITY. (a) On receipt
74-25 of a final order suspending a license, the licensing authority
74-26 shall immediately determine if the authority has issued a license
74-27 to the person named on the order and, if a license has been issued:
75-1 (1) record the suspension of the license in the
75-2 licensing authority's records;
75-3 (2) report the suspension as appropriate; and
75-4 (3) demand surrender of the suspended license if
75-5 required by law for other cases in which a license is suspended.
75-6 (b) A licensing authority shall implement the terms of a
75-7 final order suspending a license without additional review or
75-8 hearing. The authority may provide notice as appropriate to the
75-9 license holder or to others concerned with the license.
75-10 (c) A licensing authority may not modify, remand, reverse,
75-11 vacate, or stay an order suspending a license issued under this
75-12 chapter and may not review, vacate, or reconsider the terms of a
75-13 final order suspending a license.
75-14 (d) A person who is the subject of a final order suspending
75-15 a license is not entitled to a refund for any fee or deposit paid
75-16 to the licensing authority.
75-17 (e) A person who continues to engage in the licensed
75-18 activity after the implementation of the order suspending a license
75-19 by the licensing authority is liable for the same civil and
75-20 criminal penalties provided for engaging in the licensed activity
75-21 without a license or while a license is suspended that apply to
75-22 any other license holder of that licensing authority.
75-23 (f) A licensing authority is exempt from liability to a
75-24 license holder for any act authorized under this chapter performed
75-25 by the authority.
75-26 (g) Except as provided by this chapter, an order suspending
75-27 a license or dismissing a petition for the suspension of a license
76-1 does not affect the power of a licensing authority to grant, deny,
76-2 suspend, revoke, terminate, or renew a license.
76-3 (h) The denial or suspension of a driver's license under
76-4 this chapter is governed by this chapter and not by Subtitle B,
76-5 Title 7, Transportation Code.
76-6 Sec. 23.012. MOTION TO REVOKE STAY. (a) The department may
76-7 file a motion with the department's hearings division to revoke the
76-8 stay of an order suspending a license if the person does not comply
76-9 with the terms of a reasonable repayment plan entered into by the
76-10 person.
76-11 (b) Notice to the person of a motion to revoke stay under
76-12 this section may be given by personal service or by mail to the
76-13 address provided by the person, if any, in the order suspending a
76-14 license. The notice must include a notice of hearing before the
76-15 hearings division. The notice must be provided to the person not
76-16 less than 10 days before the date of the hearing.
76-17 (c) A motion to revoke stay must allege the manner in which
76-18 the person failed to comply with the repayment plan.
76-19 (d) If the department finds that the person is not in
76-20 compliance with the terms of the repayment plan, the department
76-21 shall revoke the stay of the order suspending a license and render
76-22 a final order suspending a license.
76-23 Sec. 23.013. VACATING OR STAYING ORDER SUSPENDING A LICENSE.
76-24 (a) The department may render an order vacating or staying an
76-25 order suspending a license if the person has paid all amounts owed
76-26 to the department or has established a satisfactory payment record.
76-27 (b) The department shall promptly deliver an order vacating
77-1 or staying an order suspending a license to the appropriate
77-2 licensing authority.
77-3 (c) On receipt of an order vacating or staying an order
77-4 suspending a license, the licensing authority shall promptly
77-5 reinstate and return the affected license to the person if the
77-6 person is otherwise qualified for the license.
77-7 (d) An order rendered under this section does not affect the
77-8 right of the department to any other remedy provided by law,
77-9 including the right to seek relief under this chapter. An order
77-10 rendered under this section does not affect the power of a
77-11 licensing authority to grant, deny, suspend, revoke, terminate, or
77-12 renew a license as otherwise provided by law.
77-13 Sec. 23.014. FEE BY LICENSING AUTHORITY. A licensing
77-14 authority may charge a fee to a person who is the subject of an
77-15 order suspending a license in an amount sufficient to recover the
77-16 administrative costs incurred by the authority under this chapter.
77-17 Sec. 23.015. COOPERATION BETWEEN LICENSING AUTHORITIES AND
77-18 DEPARTMENT. (a) The department may request from each licensing
77-19 authority the name, address, social security number, license
77-20 renewal date, and other identifying information for each individual
77-21 who holds, applies for, or renews a license issued by the
77-22 authority.
77-23 (b) A licensing authority shall provide the requested
77-24 information in the manner agreed to by the department and the
77-25 licensing authority.
77-26 (c) The department may enter into a cooperative agreement
77-27 with a licensing authority to administer this chapter in a
78-1 cost-effective manner.
78-2 (d) The department may adopt a reasonable implementation
78-3 schedule for the requirements of this section.
78-4 Sec. 23.016. RULES, FORMS, AND PROCEDURES. The department
78-5 by rule shall prescribe forms and procedures for the implementation
78-6 of this chapter.
78-7 (b) The Texas Department of Human Services shall take all
78-8 action necessary to implement the change in law made by this
78-9 article not later than January 1, 1998. The department may not
78-10 suspend a license because of a person's failure to reimburse the
78-11 department for a benefit granted in error under the food stamp
78-12 program or the program of financial assistance under Chapter 31,
78-13 Human Resources Code, before September 1, 1997.
78-14 ARTICLE 6. MEASUREMENT OF FRAUD
78-15 SECTION 6.01. HEALTH CARE FRAUD STUDY. (a) Subchapter B,
78-16 Chapter 403, Government Code, is amended by adding Section 403.026
78-17 to read as follows:
78-18 Sec. 403.026. HEALTH CARE FRAUD STUDY. (a) The comptroller
78-19 shall conduct a study each biennium to determine the number and
78-20 type of fraudulent claims for medical or health care benefits
78-21 submitted:
78-22 (1) under the state Medicaid program;
78-23 (2) under group health insurance programs administered
78-24 through the Employees Retirement System of Texas for active and
78-25 retired state employees; or
78-26 (3) by or on behalf of a state employee and
78-27 administered by the attorney general under Chapter 501, Labor Code.
79-1 (b) A state agency that administers a program identified by
79-2 Subsection (a) shall cooperate with the comptroller and provide any
79-3 information required by the comptroller in connection with the
79-4 study. A state agency may enter into a memorandum of understanding
79-5 with the comptroller regarding the use and confidentiality of the
79-6 information provided. This subsection does not require a state
79-7 agency to provide confidential information if release of the
79-8 information is prohibited by law.
79-9 (c) The comptroller shall report the results of the study to
79-10 each state agency that administers a program included in the study
79-11 so that the agency may modify its fraud control procedures as
79-12 necessary.
79-13 (b) The comptroller of public accounts shall complete the
79-14 initial study required by Section 403.026, Government Code, as
79-15 added by this section, not later than December 1, 1998.
79-16 SECTION 6.02. COMPILATION OF STATISTICS. (a) Subchapter B,
79-17 Chapter 531, Government Code, is amended by adding Section 531.0215
79-18 to read as follows:
79-19 Sec. 531.0215. COMPILATION OF STATISTICS RELATING TO FRAUD.
79-20 The commission and each health and human services agency that
79-21 administers a part of the state Medicaid program shall maintain
79-22 statistics on the number, type, and disposition of fraudulent
79-23 claims for benefits submitted under the part of the program the
79-24 agency administers.
79-25 (b) Subchapter C, Chapter 501, Labor Code, is amended by
79-26 adding Section 501.0431 to read as follows:
79-27 Sec. 501.0431. COMPILATION OF STATISTICS RELATING TO FRAUD.
80-1 The director shall maintain statistics on the number, type, and
80-2 disposition of fraudulent claims for medical benefits under this
80-3 chapter.
80-4 (c) Section 17(a), Texas Employees Uniform Group Insurance
80-5 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is
80-6 amended to read as follows:
80-7 (a) The trustee shall:
80-8 (1) make a continuing study of the operation and
80-9 administration of this Act, including surveys and reports of group
80-10 coverages and benefits available to employees and on the experience
80-11 thereof; and
80-12 (2) maintain statistics on the number, type, and
80-13 disposition of fraudulent claims for benefits under this Act.
80-14 ARTICLE 7. GENERAL FALSE CLAIMS
80-15 SECTION 7.01. GENERAL FALSE CLAIMS ACT. (a) Subtitle F,
80-16 Title 10, Government Code, is amended by adding Chapter 2259 to
80-17 read as follows:
80-18 CHAPTER 2259. FALSE CLAIMS
80-19 SUBCHAPTER A. GENERAL PROVISIONS
80-20 Sec. 2259.001. DEFINITIONS. In this chapter:
80-21 (1) "Claim" means a claim for money, property, or
80-22 services made to:
80-23 (A) an employee, officer, or agent of a
80-24 governmental entity; or
80-25 (B) a government contractor, if a portion of the
80-26 money, property, or services claimed was or is to be provided by a
80-27 governmental entity.
81-1 (2) "Government contractor" means a person who
81-2 receives money from a governmental entity to provide goods or a
81-3 service, acting within the course and scope of the person's
81-4 obligation to the governmental entity. The term includes a
81-5 contractor, grantee, or other recipient of money without regard to
81-6 whether the contractor, grantee, or recipient is under contract to
81-7 the governmental entity.
81-8 (3) "Governmental entity" means:
81-9 (A) the state;
81-10 (B) a local governmental entity;
81-11 (C) a board, commission, department, office, or
81-12 other agency in the executive branch of state government, including
81-13 an institution of higher education as defined by Section 61.003,
81-14 Education Code;
81-15 (D) the legislature or a legislative agency; or
81-16 (E) the supreme court, the court of criminal
81-17 appeals, a court of appeals, or the State Bar of Texas or another
81-18 judicial agency having statewide jurisdiction.
81-19 (4) "Local governmental entity" means:
81-20 (A) a municipality, county, public school
81-21 district, or special-purpose district or authority; or
81-22 (B) a court that receives any part of its
81-23 funding from a municipality or county.
81-24 (5) "Managing official" means an appointed or elected
81-25 official responsible for the management or oversight of a
81-26 governmental entity. In the case of the legislature, the term
81-27 means the speaker of the house of representatives or the lieutenant
82-1 governor. In the case of a court, the term means any judge or
82-2 justice of the court.
82-3 (6) "Prosecuting authority" means the attorney for a
82-4 local governmental entity or another local government official
82-5 charged with investigating, filing, and conducting civil legal
82-6 proceedings on behalf of a local governmental entity.
82-7 Sec. 2259.002. PROHIBITED ACTS. A person may not:
82-8 (1) present to an officer, employee, or agent of a
82-9 governmental entity or government contractor a false claim for
82-10 payment or approval;
82-11 (2) make or use a false record or statement to obtain
82-12 payment or approval of a false claim by a governmental entity or
82-13 government contractor;
82-14 (3) conspire to defraud a governmental entity or
82-15 government contractor by obtaining the payment or approval of a
82-16 false claim;
82-17 (4) deliver to a governmental entity or government
82-18 contractor less property than the amount of property for which the
82-19 person receives a receipt;
82-20 (5) make or deliver a receipt that falsely represents
82-21 the amount of property delivered that is to be used by a
82-22 governmental entity or government contractor;
82-23 (6) buy or accept as a pledge of an obligation or debt
82-24 public property from a person who may not sell or pledge the
82-25 property;
82-26 (7) make or use a false record or statement to
82-27 conceal, avoid, or decrease an obligation to pay or transmit money
83-1 or property to a governmental entity or government contractor;
83-2 (8) accept the benefits from a false claim made by any
83-3 person; or
83-4 (9) cause an act described by Subdivisions (1) through
83-5 (8) to be committed by another person.
83-6 Sec. 2259.003. REPRESENTATION OF STATE BY PRIVATE ATTORNEY.
83-7 The attorney general may contract with a private attorney to
83-8 represent the state in an action under this chapter.
83-9 Sec. 2259.004. SOVEREIGN IMMUNITY. (a) Except as provided
83-10 by Subsection (b), this chapter does not waive sovereign immunity.
83-11 (b) Chapter 105, Civil Practice and Remedies Code, applies
83-12 in an action brought or prosecuted by the state under this chapter.
83-13 (Sections 2259.005-2259.010 reserved for expansion
83-14 SUBCHAPTER B. LIABILITY FOR VIOLATIONS
83-15 Sec. 2259.011. LIABILITY FOR KNOWING VIOLATION. (a) A
83-16 court that finds that a person knowingly violated Section 2259.002
83-17 shall award the affected governmental entity:
83-18 (1) the actual damages sustained by the governmental
83-19 entity because of the violation;
83-20 (2) exemplary damages equal to two times the amount of
83-21 actual damages; and
83-22 (3) attorney's fees and costs incurred by the
83-23 governmental entity to recover the damages and penalty.
83-24 (b) The court may reduce the amount of exemplary damages
83-25 awarded under Subsection (a)(2) to an amount not less than the
83-26 amount of actual damages if the person who knowingly violated
83-27 Section 2259.002:
84-1 (1) furnished an official of the governmental entity
84-2 responsible for investigating false claims violations with all
84-3 information known to the person about the violation not later than
84-4 the 30th day after the official requested the information; and
84-5 (2) otherwise fully cooperated with any investigation
84-6 by the governmental entity.
84-7 (c) A person knowingly violates Section 2259.002 if the
84-8 person:
84-9 (1) acts with actual knowledge of the facts that
84-10 constitute the violation;
84-11 (2) acts in deliberate ignorance or reckless disregard
84-12 of those facts or the truth or falsity of those facts; or
84-13 (3) acts without actual knowledge of the facts that
84-14 constitute the violation and, after the violation, learns the facts
84-15 that constitute the violation and fails to take action to mitigate
84-16 or rectify the violation.
84-17 Sec. 2259.012. CIVIL PENALTY. In addition to amounts
84-18 awarded under Section 2259.011, the court may award to the affected
84-19 governmental entity a civil penalty of not more than $10,000 for
84-20 each false claim unless the person who knowingly violated Section
84-21 2259.002 cooperated in the investigation as described by Sections
84-22 2259.011(b)(1) and (2).
84-23 Sec. 2259.013. LIABILITY JOINT AND SEVERAL; PROPORTIONATE
84-24 RESPONSIBILITY INAPPLICABLE. Liability under this subchapter is
84-25 joint and several for a violation described by Section
84-26 2259.011(c)(1) or (3) committed by more than one person.
84-27 Sec. 2259.014. EXCEPTIONS. A court may not award exemplary
85-1 damages and attorney's fees and costs under Section 2259.011 or a
85-2 civil penalty under Section 2259.012 against a person if the total
85-3 actual damages resulting from all violations for which damages are
85-4 being assessed against the person in the case is less than $500.
85-5 Sec. 2259.015. DEPOSIT OF MONEY. (a) Money collected on
85-6 behalf of a governmental entity shall be deposited to the credit of
85-7 the general revenue fund of the state or of the local governmental
85-8 entity, as appropriate.
85-9 (b) If the action is brought in the names of both the state
85-10 and one or more local governmental entities, the court shall
85-11 apportion the award of damages, exemplary damages, and any civil
85-12 penalty among the state and those local entities on the basis of
85-13 the loss incurred. Attorney's fees and costs shall be awarded to
85-14 the entity that incurred the fees and costs.
85-15 Sec. 2259.016. LIMITATIONS. (a) Subject to Subsection (b),
85-16 an action under this subchapter must be brought not later than the
85-17 third anniversary of the date on which the violation was discovered
85-18 by:
85-19 (1) the attorney general or prosecuting authority; or
85-20 (2) a managing official of the affected governmental
85-21 entity, other than a managing official who participated in the
85-22 violation.
85-23 (b) An action under this subchapter may not be brought after
85-24 the 10th anniversary of the date on which the violation was
85-25 committed.
85-26 Sec. 2259.017. APPLICATION OF LAW GOVERNING EXEMPLARY
85-27 DAMAGES. Chapter 41, Civil Practice and Remedies Code, does not
86-1 apply to exemplary damages awarded under Section 2259.011 or to the
86-2 civil penalty awarded under Section 2259.012.
86-3 (Sections 2259.018-2259.020 reserved for expansion
86-4 SUBCHAPTER C. ATTORNEY GENERAL ACTION
86-5 Sec. 2259.021. ATTORNEY GENERAL INVESTIGATION. (a) The
86-6 attorney general shall investigate alleged violations of Section
86-7 2259.002 involving state funds.
86-8 (b) If the attorney general finds that a person has violated
86-9 Section 2259.002, the attorney general may bring an action under
86-10 Subchapter B against the person.
86-11 Sec. 2259.022. AFFECTED LOCAL GOVERNMENTAL ENTITY. (a) If
86-12 the attorney general brings an action under Subchapter B on a claim
86-13 that involves local government funds as well as state funds, the
86-14 attorney general shall provide a copy of the complaint to the
86-15 appropriate prosecuting authority.
86-16 (b) The attorney general shall mail the complaint to the
86-17 prosecuting authority by certified mail, return receipt requested,
86-18 not later than the date on which the complaint is filed.
86-19 (c) The prosecuting authority may intervene in an action
86-20 brought by the attorney general under this subchapter not later
86-21 than the 60th day after the date the prosecuting authority receives
86-22 the copy of the complaint. The court may permit the prosecuting
86-23 authority to intervene after that date for good cause.
86-24 (Sections 2259.023-2259.030 reserved for expansion
86-25 SUBCHAPTER D. ACTION BROUGHT BY PROSECUTING AUTHORITY
86-26 Sec. 2259.031. PROSECUTING AUTHORITY INVESTIGATION. (a) A
86-27 prosecuting authority shall investigate alleged violations of
87-1 Section 2259.002 involving funds belonging to a local governmental
87-2 entity.
87-3 (b) If the prosecuting authority finds that a person has
87-4 violated Section 2259.002, the prosecuting authority may bring an
87-5 action under Subchapter B against the person.
87-6 Sec. 2259.032. ATTORNEY GENERAL. (a) If the prosecuting
87-7 authority brings an action under Subchapter B on a claim that
87-8 involves state funds as well as local government funds, the
87-9 prosecuting authority shall provide a copy of the complaint to the
87-10 attorney general.
87-11 (b) The prosecuting authority shall mail the complaint to
87-12 the attorney general by certified mail, return receipt requested,
87-13 not later than the date on which the complaint is filed.
87-14 (c) Not later than the 60th day after the date the attorney
87-15 general receives the copy of the complaint, the attorney general
87-16 shall:
87-17 (1) notify the court that the attorney general intends
87-18 to proceed with the action and assume primary responsibility for
87-19 conducting the action; or
87-20 (2) notify the court that the attorney general
87-21 declines to assume primary responsibility for conducting the
87-22 action.
87-23 (d) If the attorney general assumes primary responsibility
87-24 for conducting the action, the prosecuting authority may continue
87-25 as a party in the action. If the attorney general declines to
87-26 assume primary responsibility for conducting the action, the
87-27 prosecuting authority may continue to conduct the action.
88-1 (Sections 2259.033-2259.040 reserved for expansion
88-2 SUBCHAPTER E. PRIVATE CAUSE OF ACTION
88-3 Sec. 2259.041. PRIVATE ACTION. A person may bring a civil
88-4 action in a district court in this state for a violation of Section
88-5 2259.002 in the name of the person and the name of the state, the
88-6 name of a local government, or both the state and the local
88-7 government, as appropriate.
88-8 Sec. 2259.042. SERVICE OF PETITION. (a) A person who
88-9 brings an action under this subchapter shall serve a copy of the
88-10 petition in the action on:
88-11 (1) the attorney general, if the claim involves state
88-12 funds; and
88-13 (2) the prosecuting authority of the local government,
88-14 if the claim involves local government funds.
88-15 (b) Service under this section shall be made in the manner
88-16 provided by Rule 21a, Texas Rules of Civil Procedure.
88-17 Sec. 2259.043. INTERVENTION. (a) In an action involving
88-18 only state funds, the attorney general may assume responsibility
88-19 for prosecution of the action by entering an appearance not later
88-20 than the 60th day after the date the attorney general receives
88-21 service of the petition under Section 2259.042.
88-22 (b) In an action involving only local government funds, the
88-23 prosecuting authority may assume responsibility for prosecution of
88-24 the action by entering an appearance not later than the 60th day
88-25 after the date the prosecuting authority receives service of the
88-26 petition under Section 2259.042.
88-27 (c) In an action involving state and local government funds,
89-1 the attorney general may assume primary responsibility for
89-2 prosecution of the action by entering an appearance not later than
89-3 the 60th day after the date the attorney general receives service
89-4 of the petition under Section 2259.042.
89-5 (d) If the attorney general assumes primary responsibility
89-6 for prosecution of the action under Subsection (c), the prosecuting
89-7 authority may, not later than the 60th day after the date the
89-8 prosecuting authority receives service of the petition under
89-9 Section 2259.042, enter an appearance and proceed as a party in the
89-10 action.
89-11 (e) If the attorney general does not assume primary
89-12 responsibility for prosecution of the action under Subsection (c),
89-13 the prosecuting authority may assume responsibility for prosecution
89-14 of the action not later than the 30th day after the last date the
89-15 attorney general may enter an appearance under this section.
89-16 Sec. 2259.044. RIGHTS OF PARTIES IF GOVERNMENT PROSECUTES
89-17 ACTION. (a) If the attorney general or the prosecuting authority
89-18 assumes responsibility for prosecuting the action, the attorney
89-19 general or prosecuting authority, as appropriate, has the primary
89-20 responsibility for prosecuting the action and is not bound by an
89-21 act of the person commencing the action. If both the attorney
89-22 general and the prosecuting authority enter appearances in the
89-23 action, the attorney general has primary responsibility for
89-24 prosecuting the action and is the only party authorized to take the
89-25 actions described in Subsections (b), (c), and (d). The person
89-26 commencing the action has the right to continue as a party to the
89-27 action, subject to the limitations set forth by this section.
90-1 (b) The attorney general or prosecuting authority, as
90-2 appropriate, may dismiss the action notwithstanding the objections
90-3 of the person commencing the action if:
90-4 (1) the attorney general or prosecuting authority
90-5 notifies the person that the government has filed a motion to
90-6 dismiss; and
90-7 (2) the court provides the person with an opportunity
90-8 for a hearing on the motion.
90-9 (c) The attorney general or prosecuting authority, as
90-10 appropriate, may settle the action with the defendant
90-11 notwithstanding the objections of the person commencing the action
90-12 if the court determines, after a hearing, that the proposed
90-13 settlement is fair, adequate, and reasonable under all the
90-14 circumstances. On a showing of good cause, the hearing may be held
90-15 in camera.
90-16 (d) On a showing by the attorney general or prosecuting
90-17 authority, as appropriate, that unrestricted participation during
90-18 the course of the litigation by the person commencing the action
90-19 would interfere with or unduly delay the government's prosecution
90-20 of the case, or would be repetitious, irrelevant, or for purposes
90-21 of harassment, the court may impose limitations on the person's
90-22 participation, including:
90-23 (1) limiting the number of witnesses the person may
90-24 call;
90-25 (2) limiting the length of the testimony of witnesses
90-26 called by the person;
90-27 (3) limiting the person's cross-examination of
91-1 witnesses; or
91-2 (4) otherwise limiting the participation by the person
91-3 in the litigation.
91-4 (e) On a showing by the defendant that unrestricted
91-5 participation during the course of the litigation by the person
91-6 commencing the action would be for purposes of harassment or would
91-7 cause the defendant undue burden or unnecessary expense, the court
91-8 may limit the participation by the person in the litigation.
91-9 Sec. 2259.045. AWARD TO PRIVATE PARTY IF GOVERNMENT
91-10 PROSECUTES ACTION. (a) If the attorney general or the prosecuting
91-11 authority assumes responsibility for prosecution of the action
91-12 under Section 2259.043 and the action is settled or the court
91-13 enters a judgment for the state or the local government, the court,
91-14 except as provided by Subsection (c), shall award at least 10
91-15 percent but not more than 25 percent of the settlement or judgment
91-16 to the person who commenced the action under this subchapter.
91-17 (b) In determining the amount to award a person under this
91-18 section, the court shall consider the value of any information or
91-19 evidence disclosed by the person.
91-20 (c) If the court finds that the action is based primarily on
91-21 disclosures of specific information, other than information
91-22 provided by the person commencing the action, relating to
91-23 allegations or transactions in a criminal or civil hearing, in a
91-24 legislative or administrative report, hearing, audit, or
91-25 investigation, or from the news media, the court may award the
91-26 amount the court considers appropriate but not more than seven
91-27 percent of the settlement or judgment. The court shall consider
92-1 the significance of the information and the role of the person
92-2 commencing the action in advancing the case to litigation.
92-3 Sec. 2259.046. AWARD TO PRIVATE PARTY IF GOVERNMENT DOES
92-4 NOT PROSECUTE ACTION. (a) If the attorney general or the
92-5 prosecuting authority does not assume responsibility for
92-6 prosecution of the action under Section 2259.043 and the action is
92-7 settled or the court enters a judgment for the state or the local
92-8 government, the court shall award to the person who prosecuted the
92-9 action under this subchapter:
92-10 (1) at least 25 percent but not more than 30 percent
92-11 of the settlement or judgment; and
92-12 (2) reasonable expenses incurred by the person in
92-13 prosecuting the action.
92-14 (b) In determining the amount to award a person under
92-15 Subsection (a), the court shall consider the value of the person's
92-16 prosecution of the action.
92-17 Sec. 2259.047. REDUCTION OF AWARD. (a) Regardless of
92-18 whether the attorney general or the prosecuting authority assumes
92-19 responsibility for the prosecution of the action under Section
92-20 2259.043, if the court finds that the action was commenced by a
92-21 person who planned and initiated the violation of Section 2259.002
92-22 on which the action was brought, the court may, to the extent the
92-23 court considers appropriate, reduce the share of the settlement or
92-24 judgment the person would otherwise receive, taking into account
92-25 the person's role in advancing the case to litigation and any
92-26 relevant circumstances pertaining to the violation.
92-27 (b) If the person commencing the action is convicted of
93-1 criminal conduct arising from the person's role in the violation of
93-2 Section 2259.002, the court shall dismiss the person from the civil
93-3 action and the person may not receive any share of the settlement
93-4 or judgment. A dismissal under this subsection does not prejudice
93-5 the right of the attorney general or the prosecuting authority to
93-6 continue the action.
93-7 Sec. 2259.048. AWARD TO DEFENDANT FOR FRIVOLOUS ACTION OR
93-8 ACTION BROUGHT FOR PURPOSES OF HARASSMENT. (a) If the attorney
93-9 general or the prosecuting authority does not assume responsibility
93-10 for prosecution of the action and the person commencing the action
93-11 prosecutes the action, the court may award to the defendant the
93-12 defendant's reasonable attorney's fees and expenses if:
93-13 (1) the defendant prevails in the action; and
93-14 (2) the court finds that the claim of the person
93-15 commencing the action was clearly frivolous, clearly vexatious, or
93-16 brought primarily for purposes of harassment.
93-17 (b) A court finding under Subsection (a)(2) constitutes a
93-18 finding that the person's attorney is in violation of Section
93-19 10.001, Civil Practice and Remedies Code, and the attorney is
93-20 liable, in addition to the person commencing the action, for an
93-21 award made under Subsection (a).
93-22 Sec. 2259.049. CERTAIN ACTIONS BARRED. (a) A person may
93-23 not bring an action under this subchapter that is based on
93-24 allegations or transactions that are the subject of a civil suit or
93-25 an administrative penalty proceeding in which the state or a local
93-26 governmental entity is already a party.
93-27 (b) A person may not bring an action under this subchapter
94-1 that is based on the public disclosure of allegations or
94-2 transactions in a criminal or civil hearing, in a legislative or
94-3 administrative report, hearing, audit, or investigation, or from
94-4 the news media, unless the person bringing the action is an
94-5 original source of the information. In this subsection, "original
94-6 source" means an individual who has direct and independent
94-7 knowledge of the information on which the allegations are based and
94-8 has voluntarily provided the information to the state before filing
94-9 an action under this subchapter that is based on the information.
94-10 (Section 2259.050 reserved for expansion
94-11 SUBCHAPTER F. INTERFERENCE WITH DISCLOSURE BY EMPLOYEES
94-12 Sec. 2259.051. RIGHT TO DISCLOSE INFORMATION AND PARTICIPATE
94-13 IN ACTION. A person is entitled to:
94-14 (1) disclose information relevant to an alleged
94-15 violation of Section 2259.002 to a governmental entity, a
94-16 prosecuting authority, the attorney general, or a law enforcement
94-17 agency;
94-18 (2) assist, at the request of the attorney general or
94-19 a prosecuting authority, in the investigation of an alleged
94-20 violation of Section 2259.002; or
94-21 (3) testify or otherwise participate, at the request
94-22 of the attorney general or a prosecuting authority, in the
94-23 furtherance of an action filed or to be filed under this chapter.
94-24 Sec. 2259.052. PROHIBITED CONDUCT BY EMPLOYER. (a) An
94-25 employer may not:
94-26 (1) adopt or enforce a rule or policy that prevents an
94-27 employee from exercising the employee's rights under Section
95-1 2259.051; or
95-2 (2) retaliate against an employee because the employee
95-3 has exercised the employee's rights under Section 2259.051.
95-4 (b) An employer who violates Subsection (a) is liable to the
95-5 employee for:
95-6 (1) actual damages, including damages for lost wages;
95-7 (2) reinstatement to employment with the seniority
95-8 status, if applicable, that the employee would have had in the
95-9 absence of the retaliation;
95-10 (3) exemplary damages equal to not less than two times
95-11 the amount of lost wages; and
95-12 (4) attorney's fees and costs.
95-13 (c) An employee may not recover under Subsection (b) unless:
95-14 (1) the employee exercised the employee's rights under
95-15 Section 2259.051;
95-16 (2) if the employee seeks recovery as a result of
95-17 retaliation, the employee establishes by a preponderance of the
95-18 evidence in a court proceeding brought under this section that but
95-19 for the exercise of the employee's rights under Section 2259.051
95-20 the retaliation would not have occurred; and
95-21 (3) to the extent the employee participated in the
95-22 violation of Section 2259.002, the employee participated in
95-23 response to harassment, threats of termination or demotion, or
95-24 other coercion by the employer.
95-25 (d) This section does not apply to an employer who is
95-26 subject to Chapter 554, Government Code.
95-27 (b) This section applies only to an action commenced on or
96-1 after the effective date of this section without regard to whether
96-2 the act on which the action is based occurred before, on, or after
96-3 that date. An action commenced before the effective date of this
96-4 section is governed by the law applicable to the action immediately
96-5 before the effective date of this section, and that law is
96-6 continued in effect for that purpose.
96-7 ARTICLE 8. WAIVERS; EFFECTIVE DATE; EMERGENCY
96-8 SECTION 8.01. WAIVERS. If before implementing any provision
96-9 of this Act, a state agency determines that a waiver or
96-10 authorization from a federal agency is necessary for implementation
96-11 of that provision, the agency affected by the provision shall
96-12 request the waiver or authorization and may delay implementing that
96-13 provision until the waiver or authorization is granted.
96-14 SECTION 8.02. EFFECTIVE DATE. Except as otherwise provided
96-15 by this Act, this Act takes effect September 1, 1997.
96-16 SECTION 8.03. EMERGENCY. The importance of this legislation
96-17 and the crowded condition of the calendars in both houses create an
96-18 emergency and an imperative public necessity that the
96-19 constitutional rule requiring bills to be read on three several
96-20 days in each house be suspended, and this rule is hereby suspended,
96-21 and that this Act take effect and be in force according to its
96-22 terms, and it is so enacted.