By Nelson S.B. No. 741 75R3391 KKA-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the consolidation of investigations of fraud in the 1-3 provision of health and human services and other improvements in 1-4 identifying and preventing fraud. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Chapter 531, Government Code, is amended by 1-7 adding Subchapter C to read as follows: 1-8 SUBCHAPTER C. WELFARE FRAUD, MISUSE, OR OVERCHARGES 1-9 Sec. 531.101. AWARD FOR REPORTING MEDICAID FRAUD, MISUSE, OR 1-10 OVERCHARGES. (a) The commission may grant an award to an 1-11 individual who reports activity that constitutes fraud or misuse of 1-12 funds in the state Medicaid program or reports overcharges in the 1-13 program if the commission determines that the disclosure results in 1-14 the recovery of an overcharge or in the termination of the 1-15 fraudulent activity or misuse of funds. 1-16 (b) The commission shall determine the amount of an award. 1-17 The award must be equal to not less than 10 percent of the savings 1-18 to this state that result from the individual's disclosure. In 1-19 determining the amount of the award, the commission shall consider 1-20 how important the disclosure is in ensuring the fiscal integrity of 1-21 the program. 1-22 (c) An award under this section is subject to appropriation. 1-23 The award must be paid from money appropriated to or otherwise 1-24 available to the commission, and additional money may not be 2-1 appropriated to the commission for the purpose of paying the award. 2-2 (d) Payment of an award under this section from federal 2-3 funds is subject to the permissible use under federal law of funds 2-4 for this purpose. 2-5 Sec. 531.102. INVESTIGATIONS AND ENFORCEMENT OFFICE. (a) 2-6 The commission, through the commission's office of investigations 2-7 and enforcement, is responsible for the investigation of fraud in 2-8 the provision of health and human services and the enforcement of 2-9 state law relating to the provision of those services. 2-10 (b) The commission shall set objectives, priorities, and 2-11 performance standards for the office that emphasize: 2-12 (1) coordinating investigative efforts to aggressively 2-13 recover money; 2-14 (2) allocating resources to cases that have the 2-15 strongest supportive evidence and the greatest potential for 2-16 recovery of money; and 2-17 (3) maximizing opportunities for referral of cases to 2-18 the office of the attorney general. 2-19 (c) The commission shall cross-train office staff to enable 2-20 the staff to pursue priority Medicaid and welfare fraud and abuse 2-21 cases as necessary. 2-22 Sec. 531.103. NEURAL NETWORK TECHNOLOGY. (a) The 2-23 commission shall use neural network technology to identify and 2-24 deter fraud in the Medicaid program throughout this state. 2-25 (b) The commission shall contract with a private or public 2-26 entity to develop and implement the technology. 2-27 (c) The commission shall require each health and human 3-1 services agency that performs any aspect of the state Medicaid 3-2 program to participate in the implementation and use of the 3-3 technology. 3-4 (d) The commission shall refer cases identified by the 3-5 technology to the commission's office of investigations and 3-6 enforcement or the office of the attorney general, as appropriate. 3-7 Sec. 531.104. FRAUD AND ABUSE TRAINING. (a) The commission 3-8 shall provide annual training in detecting welfare fraud and abuse 3-9 to: 3-10 (1) personnel in the Texas Department of Health's 3-11 vendor drug bureau and medical appeals section; and 3-12 (2) each contractor who processes Medicaid claims. 3-13 (b) The training required under this section must encourage 3-14 individuals to refer suspicious activities to the office. 3-15 Sec. 531.105. PUBLIC ASSISTANCE FRAUD OVERSIGHT TASK FORCE. 3-16 (a) The Public Assistance Fraud Oversight Task Force advises and 3-17 assists the commission and the commission's office of 3-18 investigations and enforcement in improving the efficiency of fraud 3-19 investigations and collections. 3-20 (b) The task force is composed of a representative of the: 3-21 (1) attorney general's office, appointed by the 3-22 attorney general; 3-23 (2) comptroller's office, appointed by the 3-24 comptroller; 3-25 (3) Department of Public Safety, appointed by the 3-26 public safety director; 3-27 (4) state auditor's office, appointed by the state 4-1 auditor; and 4-2 (5) commission, appointed by the commissioner of 4-3 health and human services. 4-4 (c) The comptroller or the comptroller's designee serves as 4-5 the presiding officer of the task force. The task force may elect 4-6 any other necessary officers. 4-7 (d) The task force shall meet at least once each fiscal 4-8 quarter at the call of the presiding officer. 4-9 (e) The appointing agency is responsible for the expenses of 4-10 a member's service on the task force. Members of the task force 4-11 receive no additional compensation for serving on the task force. 4-12 (f) At least once each fiscal quarter, the commission's 4-13 office of investigations and enforcement shall provide to the task 4-14 force: 4-15 (1) information detailing: 4-16 (A) the number of fraud referrals made to the 4-17 office and the origin of each referral; 4-18 (B) the time spent investigating each case; 4-19 (C) the number of cases investigated each month, 4-20 by program and region; 4-21 (D) the dollar value of each fraud case that 4-22 results in a criminal conviction; and 4-23 (E) the number of cases the office rejects and 4-24 the reason for rejection, by region; and 4-25 (2) any additional information the task force 4-26 requires. 4-27 Sec. 531.106. FRAUD PREVENTION. (a) The commission's 5-1 office of investigations and enforcement shall compile and 5-2 disseminate accurate information and statistics relating to: 5-3 (1) fraud prevention; and 5-4 (2) post-fraud referrals received and accepted or 5-5 rejected from the commission's case management system or the case 5-6 management system of a health and human services agency. 5-7 (b) The commission shall: 5-8 (1) aggressively publicize successful fraud 5-9 prosecutions; and 5-10 (2) establish and promote a toll-free hotline for 5-11 reporting suspected fraud in programs administered by the 5-12 commission or a health and human services agency. 5-13 (c) The commission shall develop a cost-effective method of 5-14 identifying applicants for public assistance in counties bordering 5-15 other states and in metropolitan areas selected by the commission 5-16 who are already receiving benefits in other states. If 5-17 economically feasible, the commission may develop a computerized 5-18 matching system. 5-19 (d) The commission shall: 5-20 (1) verify automobile information that is used as 5-21 criteria for eligibility; and 5-22 (2) establish a computerized matching system with the 5-23 Texas Department of Criminal Justice to prevent an incarcerated 5-24 individual from illegally receiving public assistance benefits 5-25 administered by the commission. 5-26 Sec. 531.107. DISPOSITION OF FUNDS. (a) The commission 5-27 shall deposit the state's share of money collected under this 6-1 subchapter in a special account in the state treasury. 6-2 (b) The commission may spend money in the account for the 6-3 administration of this subchapter, subject to the General 6-4 Appropriations Act. 6-5 SECTION 2. (a) On September 1, 1997, or an earlier date 6-6 provided by an interagency agreement with the affected agencies: 6-7 (1) all powers, duties, functions, programs, and 6-8 activities performed by or assigned to the Texas Department of 6-9 Human Services' office of inspector general immediately before 6-10 September 1, 1997, are transferred to the Health and Human Services 6-11 Commission; 6-12 (2) all funds, obligations, contracts, property, and 6-13 records of the Texas Department of Human Services' office of 6-14 inspector general are transferred to the Health and Human Services 6-15 Commission; and 6-16 (3) all employees of the Texas Department of Human 6-17 Services' office of inspector general become employees of the 6-18 Health and Human Services Commission, to be assigned duties by the 6-19 commissioner of health and human services. 6-20 (b) A rule or form adopted by the Texas Department of Human 6-21 Services that relates to the office of inspector general is a rule 6-22 or form of the Health and Human Services Commission and remains in 6-23 effect until altered by the commission. The secretary of state is 6-24 authorized to adopt rules as necessary to expedite the 6-25 implementation of this subsection. 6-26 SECTION 3. (a) On September 1, 1997, or an earlier date 6-27 provided by an interagency agreement with the affected agencies: 7-1 (1) all powers, duties, functions, programs, and 7-2 activities performed by or assigned to the Texas Department of 7-3 Health's policy and analysis group immediately before September 1, 7-4 1997, are transferred to the Health and Human Services Commission; 7-5 (2) all funds, obligations, contracts, property, and 7-6 records of the Texas Department of Health's policy and analysis 7-7 group are transferred to the Health and Human Services Commission; 7-8 and 7-9 (3) all employees of the Texas Department of Health's 7-10 policy and analysis group become employees of the Health and Human 7-11 Services Commission, to be assigned duties by the commissioner of 7-12 health and human services. 7-13 (b) A rule or form adopted by the Texas Department of Health 7-14 that relates to the policy and analysis group is a rule or form of 7-15 the Health and Human Services Commission and remains in effect 7-16 until altered by the commission. The secretary of state is 7-17 authorized to adopt rules as necessary to expedite the 7-18 implementation of this subsection. 7-19 SECTION 4. (a) The commissioner of health and human 7-20 services shall oversee and assist in the transfer of powers, 7-21 duties, functions, programs, and activities prescribed by Sections 7-22 2 and 3 of this Act. 7-23 (b) The commissioner of health and human services shall 7-24 determine for each power, duty, function, program, or activity 7-25 scheduled for transfer: 7-26 (1) the relevant agency actions that constitute each 7-27 power, duty, function, program, or activity; 8-1 (2) the relevant records, property, and equipment used 8-2 by a state agency for each power, duty, function, program, or 8-3 activity; 8-4 (3) the state agency employees whose primary duties 8-5 involve a power, duty, function, program, or activity; and 8-6 (4) state agency funds and obligations that are 8-7 related to the power, duty, function, program, or activity. 8-8 (c) Based on the determinations made under Subsection (b) of 8-9 this section, the commissioner of health and human services shall 8-10 assist the agencies in transferring powers, duties, functions, 8-11 programs, activities, records, equipment, property, funds, 8-12 obligations, and employees in accordance with the transfer 8-13 schedule. 8-14 (d) The commissioner of health and human services shall file 8-15 any federal plan changes required by this Act. 8-16 SECTION 5. (a) The transfer of powers, duties, functions, 8-17 programs, and activities under this Act does not affect or impair 8-18 any act done, any obligation, right, order, license, permit, rule, 8-19 criterion, standard, or requirement existing, any investigation 8-20 begun, or any penalty accrued under former law, and that law 8-21 remains in effect for any action concerning those matters. 8-22 (b) An action brought or proceeding commenced before the 8-23 effective date of this Act, including a contested case or a remand 8-24 of an action or proceeding by a reviewing court, is governed by the 8-25 law and rules applicable to the action or proceeding before the 8-26 effective date of this Act. 8-27 SECTION 6. If the Health and Human Services Commission and 9-1 the affected agencies do not complete the transfers required by 9-2 Sections 2 and 3 of this Act on or before September 1, 1997, the 9-3 commissioner of health and human services shall enter into an 9-4 interagency agreement with the comptroller to enable the 9-5 comptroller to contract for or conduct Medicaid investigations with 9-6 the comptroller or other designated staff. In addition to the 9-7 interagency agreement, the commissioner of health and human 9-8 services and the comptroller shall execute a memorandum of 9-9 understanding to ensure that the comptroller has access to all 9-10 necessary staff from health and human service agencies to conduct 9-11 the investigations. 9-12 SECTION 7. Not later than September 1, 1997, the Health and 9-13 Human Services Commission shall award the contract for the neural 9-14 network technology required by Section 531.103, Government Code, as 9-15 added by this Act, and the contractor shall begin operations not 9-16 later than that date. If the commission fails to award the 9-17 contract or the contractor cannot begin operations on or before 9-18 September 1, 1997, the commissioner of health and human services 9-19 shall enter into an interagency agreement with the comptroller to 9-20 enable the comptroller to perform the duties prescribed by Section 9-21 531.103. In addition to the interagency agreement, the 9-22 commissioner of health and human services and the comptroller shall 9-23 execute a memorandum of understanding to ensure that the 9-24 comptroller receives all data and resources necessary to operate 9-25 the neural network technology system. 9-26 SECTION 8. (a) In addition to the substantive changes in 9-27 law made by this Act, Section 1 of this Act, in adding Section 10-1 531.101, Government Code, conforms to changes in the law made by 10-2 Section 1, Chapter 444, Acts of the 74th Legislature, Regular 10-3 Session, 1995. 10-4 (b) Section 1, Chapter 444, Acts of the 74th Legislature, 10-5 Regular Session, 1995, is repealed. 10-6 (c) To the extent of any conflict, this Act prevails over 10-7 another Act of the 75th Legislature, Regular Session, 1997, 10-8 relating to nonsubstantive additions to and corrections in enacted 10-9 codes. 10-10 SECTION 9. Sections 21.0145 and 22.027, Human Resources 10-11 Code, are repealed. 10-12 SECTION 10. The importance of this legislation and the 10-13 crowded condition of the calendars in both houses create an 10-14 emergency and an imperative public necessity that the 10-15 constitutional rule requiring bills to be read on three several 10-16 days in each house be suspended, and this rule is hereby suspended, 10-17 and that this Act take effect and be in force from and after its 10-18 passage, and it is so enacted.