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