By Zaffirini                                     S.B. No. 801

      75R7068 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.  MEDICAID AND OTHER WELFARE FRAUD, MISUSE,

 1-9                               OR OVERCHARGES

1-10           Sec. 531.101.  AWARD FOR REPORTING MEDICAID FRAUD, MISUSE, OR

1-11     OVERCHARGES.  (a)  The commission may grant an award to an

1-12     individual who reports activity that constitutes fraud or misuse of

1-13     funds in the state Medicaid program or reports overcharges in the

1-14     program if the commission determines that the disclosure results in

1-15     the recovery of an overcharge or in the termination of the

1-16     fraudulent activity or misuse of funds.

1-17           (b)  The commission shall determine the amount of an award.

1-18     The award must be equal to not less than 10 percent of the  savings

1-19     to this state that result from the individual's disclosure.  In

1-20     determining the amount of the award, the commission shall consider

1-21     how important the disclosure is in ensuring the fiscal integrity of

1-22     the program.

1-23           (c)  An award under this section is subject to appropriation.

1-24     The award must be paid from money appropriated to or otherwise

 2-1     available to the commission, and additional money may not be

 2-2     appropriated to the commission for the purpose of paying the award.

 2-3           (d)  Payment of an award under this section from federal

 2-4     funds is subject to the permissible use under federal law of funds

 2-5     for this purpose.

 2-6           Sec. 531.102.  INVESTIGATIONS AND ENFORCEMENT OFFICE.  (a)

 2-7     The commission, through the commission's office of investigations

 2-8     and enforcement, is responsible for the investigation of fraud in

 2-9     the provision of health and human services and the enforcement of

2-10     state law relating to the provision of those services.

2-11           (b)  The commission shall set clear objectives, priorities,

2-12     and performance standards for the office that emphasize:

2-13                 (1)  coordinating investigative efforts to aggressively

2-14     recover money;

2-15                 (2)  allocating resources to cases that have the

2-16     strongest supportive evidence and the greatest potential for

2-17     recovery of money; and

2-18                 (3)  maximizing opportunities for referral of cases to

2-19     the office of the attorney general.

2-20           (c)  The commission shall cross-train office staff to enable

2-21     the staff to pursue priority Medicaid and welfare fraud and abuse

2-22     cases as necessary.

2-23           Sec. 531.103.  LEARNING OR NEURAL NETWORK TECHNOLOGY.

2-24     (a)  The commission shall use learning or neural network technology

2-25     to identify and deter fraud in the Medicaid program throughout this

2-26     state.

2-27           (b)  The commission shall contract with a private or public

 3-1     entity to develop and implement the technology.

 3-2           (c)  The technology must be capable of operating

 3-3     independently from other computer systems.

 3-4           (d)  The commission shall require each health and human

 3-5     services agency that performs any aspect of the state Medicaid

 3-6     program to participate in the implementation and use of the

 3-7     technology.

 3-8           (e)  The commission shall maintain all information necessary

 3-9     to apply the technology to claims data covering a period of at

3-10     least two years.

3-11           (f)  The commission shall refer cases identified by the

3-12     technology to the commission's office of investigations and

3-13     enforcement or the office of the  attorney general, as appropriate.

3-14           Sec. 531.104.  FRAUD AND ABUSE TRAINING.  (a)  The commission

3-15     shall provide annual training in detecting welfare fraud and abuse

3-16     to:

3-17                 (1)  personnel in the Texas Department of Health's

3-18     vendor drug bureau and medical appeals section; and

3-19                 (2)  each contractor who processes Medicaid claims.

3-20           (b)  The training required under this section must encourage

3-21     individuals to refer suspicious activities to the office.

3-22           Sec. 531.105.  PUBLIC ASSISTANCE FRAUD OVERSIGHT TASK FORCE.

3-23     (a)  The Public Assistance Fraud Oversight Task Force advises and

3-24     assists the commission and the commission's office of

3-25     investigations and enforcement in improving the efficiency of fraud

3-26     investigations and collections.

3-27           (b)  The task force is composed of a representative of the:

 4-1                 (1)  attorney general's office, appointed by the

 4-2     attorney general;

 4-3                 (2)  comptroller's office, appointed by the

 4-4     comptroller;

 4-5                 (3)  Department of Public Safety, appointed by the

 4-6     public safety director;

 4-7                 (4)  state auditor's office, appointed by the state

 4-8     auditor; and

 4-9                 (5)  commission, appointed by the commissioner of

4-10     health and human services.

4-11           (c)  The comptroller or the comptroller's designee serves as

4-12     the presiding officer of the task force.  The task force may elect

4-13     any other necessary officers.

4-14           (d)  The task force shall meet at least once each fiscal

4-15     quarter at the call of the presiding officer.

4-16           (e)  The appointing agency is responsible for the expenses of

4-17     a member's service on the task force.  Members of the task force

4-18     receive no additional compensation for serving on the task force.

4-19           (f)  At least once each fiscal quarter, the commission's

4-20     office of investigations and enforcement shall provide to the task

4-21     force:

4-22                 (1)  information detailing:

4-23                       (A)  the number of fraud referrals made to the

4-24     office and the origin of each referral;

4-25                       (B)  the time spent investigating each case;

4-26                       (C)  the number of cases investigated each month,

4-27     by program and region;

 5-1                       (D)  the dollar value of each fraud case that

 5-2     results in a criminal conviction; and

 5-3                       (E)  the number of cases the office rejects and

 5-4     the reason for rejection, by region; and

 5-5                 (2)  any additional information the task force

 5-6     requires.

 5-7           Sec. 531.106.  FRAUD PREVENTION.  (a)  The commission's

 5-8     office of investigations and enforcement shall compile and

 5-9     disseminate accurate information and statistics relating to:

5-10                 (1)  fraud prevention; and

5-11                 (2)  post-fraud referrals received and accepted or

5-12     rejected from the commission's case management system or the case

5-13     management system of a health and human services agency.

5-14           (b)  The commission shall:

5-15                 (1)  aggressively publicize successful fraud

5-16     prosecutions; and

5-17                 (2)  establish and promote a toll-free hotline for

5-18     reporting suspected fraud in programs administered by the

5-19     commission or a health and human services agency.

5-20           (c)  The commission shall develop a cost-effective method of

5-21     identifying applicants for public assistance in counties bordering

5-22     other states and in metropolitan areas selected by the commission

5-23     who are already receiving benefits in other states.  If

5-24     economically feasible, the commission may develop a computerized

5-25     matching system.

5-26           (d)  The commission shall:

5-27                 (1)  verify automobile information that is used as

 6-1     criteria for eligibility; and

 6-2                 (2)  establish a computerized matching system with the

 6-3     Texas Department of Criminal Justice to prevent an incarcerated

 6-4     individual from illegally receiving public assistance benefits

 6-5     administered by the commission.

 6-6           Sec. 531.107.  DISPOSITION OF FUNDS.  (a)  The commission

 6-7     shall deposit the state's share of money collected under this

 6-8     subchapter in a special account in the state treasury.

 6-9           (b)  The commission may spend money in the account for the

6-10     administration of this subchapter, subject to the General

6-11     Appropriations Act.

6-12           SECTION 2.  (a)  On September 1, 1997, or an earlier date

6-13     provided by an interagency agreement with the affected agencies:

6-14                 (1)  all powers, duties, functions, programs, and

6-15     activities performed by or assigned to the Texas Department of

6-16     Human Services' office of inspector general immediately before

6-17     September 1, 1997, are transferred to the Health and Human Services

6-18     Commission;

6-19                 (2)  all funds, obligations, contracts, property, and

6-20     records of the Texas Department of Human Services' office of

6-21     inspector general are transferred to the Health and Human Services

6-22     Commission; and

6-23                 (3)  all employees of the Texas Department of Human

6-24     Services' office of inspector general become employees of the

6-25     Health and Human Services Commission, to be assigned duties by the

6-26     commissioner of health and human services.

6-27           (b)  A rule or form adopted by the Texas Department of Human

 7-1     Services that relates to the office of inspector general is a rule

 7-2     or form of the Health and Human Services Commission and remains in

 7-3     effect until altered by the commission.  The secretary of state is

 7-4     authorized to adopt rules as necessary to expedite the

 7-5     implementation of this subsection.

 7-6           SECTION 3.  (a)  On September 1, 1997, or an earlier date

 7-7     provided by an interagency agreement with the affected agencies:

 7-8                 (1)  all powers, duties, functions, programs, and

 7-9     activities performed by or assigned to the Texas Department of

7-10     Health's policy and analysis group immediately before September 1,

7-11     1997, are transferred to the Health and Human Services Commission;

7-12                 (2)  all funds, obligations, contracts, property, and

7-13     records of the Texas Department of Health's policy and analysis

7-14     group are transferred to the Health and Human Services Commission;

7-15     and

7-16                 (3)  all employees of the Texas Department of Health's

7-17     policy and analysis group become employees of the Health and Human

7-18     Services Commission, to be assigned duties by the commissioner of

7-19     health and human services.

7-20           (b)  A rule or form adopted by the Texas Department of Health

7-21     that relates to the policy and analysis group is a rule or form of

7-22     the Health and Human Services Commission and remains in effect

7-23     until altered by the commission.  The secretary of state is

7-24     authorized to adopt rules as necessary to expedite the

7-25     implementation of this subsection.

7-26           SECTION 4.  (a)  The commissioner of health and human

7-27     services shall oversee and assist in the transfer of powers,

 8-1     duties, functions,  programs, and activities prescribed by Sections

 8-2     2 and 3 of this Act.

 8-3           (b)  The commissioner of health and human services shall

 8-4     determine for each power, duty, function, program, or activity

 8-5     scheduled for transfer:

 8-6                 (1)  the relevant agency actions that constitute each

 8-7     power, duty, function, program, or activity;

 8-8                 (2)  the relevant records, property, and equipment used

 8-9     by a state agency for each power, duty, function, program, or

8-10     activity;

8-11                 (3)  the state agency employees whose primary duties

8-12     involve a power, duty, function, program, or activity; and

8-13                 (4)  state agency funds and obligations that are

8-14     related to the power, duty, function, program, or activity.

8-15           (c)  Based on the determinations made under Subsection (b) of

8-16     this section, the commissioner of health and human services shall

8-17     assist the agencies in transferring powers, duties, functions,

8-18     programs, activities, records, equipment, property, funds,

8-19     obligations, and employees in accordance with the transfer

8-20     schedule.

8-21           (d)  The commissioner of health and human services shall file

8-22     any federal plan changes required by this Act.

8-23           SECTION 5.  (a)  The transfer of  powers, duties, functions,

8-24     programs, and activities under this Act does not affect or impair

8-25     any act done, any obligation, right, order, license, permit, rule,

8-26     criterion, standard, or requirement existing, any investigation

8-27     begun, or any penalty accrued under former law, and that law

 9-1     remains in effect for any action concerning those matters.

 9-2           (b)  An action brought or proceeding commenced before the

 9-3     effective date of this Act, including a contested case or a remand

 9-4     of an action or proceeding by a reviewing court, is governed by the

 9-5     law and rules applicable to the action or proceeding before the

 9-6     effective date of this Act.

 9-7           SECTION 6.  If the Health and Human Services Commission and

 9-8     the affected agencies do not complete the transfers required by

 9-9     Sections 2 and 3 of this Act on or before September 1, 1997, the

9-10     commissioner of health and human services shall enter into an

9-11     interagency agreement with the comptroller to enable the

9-12     comptroller to contract for or conduct Medicaid investigations with

9-13     the comptroller or other designated staff.  In addition to the

9-14     interagency agreement, the commissioner of health and human

9-15     services and the comptroller shall execute a memorandum of

9-16     understanding to ensure that the comptroller has access to all

9-17     necessary staff from health and human service agencies to conduct

9-18     the investigations.

9-19           SECTION 7.  Not later than September 1, 1997, the Health and

9-20     Human Services Commission shall award the contract for the learning

9-21     or neural network technology required by Section 531.103,

9-22     Government Code, as added by this Act, and the contractor shall

9-23     begin operations not later than that date.  If the commission fails

9-24     to award the contract or the contractor cannot begin operations on

9-25     or before September 1, 1997, the commissioner of health and human

9-26     services shall enter into an interagency agreement with the

9-27     comptroller to enable the comptroller to perform the duties

 10-1    prescribed by Section 531.103.  In addition to the interagency

 10-2    agreement, the commissioner of health and human services and the

 10-3    comptroller shall execute a memorandum of understanding to ensure

 10-4    that the comptroller receives all data and resources necessary to

 10-5    operate the learning or neural network technology system.

 10-6          SECTION 8.  (a)  In addition to the substantive changes in

 10-7    law made by this Act, Section 1 of this Act, in adding Section

 10-8    531.101, Government Code, conforms to changes in the law made by

 10-9    Section 1, Chapter 444, Acts of the 74th Legislature, Regular

10-10    Session, 1995.

10-11          (b)  Section 16G, Article 4413(502), Revised Statutes, as

10-12    added by Section 1, Chapter 444, Acts of the 74th Legislature,

10-13    Regular Session, 1995, is repealed.

10-14          (c)  To the extent of any conflict, this Act prevails over

10-15    another Act of the 75th Legislature, Regular Session, 1997,

10-16    relating to nonsubstantive additions to and corrections in enacted

10-17    codes.

10-18          SECTION 9.  Sections 21.0145 and 22.027, Human Resources

10-19    Code, are repealed.

10-20          SECTION 10.  The importance of this legislation and the

10-21    crowded condition of the calendars in both houses create an

10-22    emergency and an imperative public necessity that the

10-23    constitutional rule requiring bills to be read on three several

10-24    days in each house be suspended, and this rule is hereby suspended,

10-25    and that this Act take effect and be in force from and after its

10-26    passage, and it is so enacted.