1-1     By:  Zaffirini, Carona                                  S.B. No. 11
 1-2           (In the Senate - Filed November 9, 1998; January 26, 1999,
 1-3     read first time and referred to Committee on Human Services;
 1-4     March 4, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 5, Nays 0; March 4, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 11                 By:  Zaffirini
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the mental state applicable to certain violations under
1-11     the state Medicaid program.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Subsection (a), Section 32.039, Human Resources
1-14     Code, is amended by adding Subdivision (4) to read as follows:
1-15                 (4)  A person "should know" or "should have known"
1-16     information to be false if the person acts in deliberate ignorance
1-17     of the truth or falsity of the information or in reckless disregard
1-18     of the truth or falsity of the information, and proof of the
1-19     person's specific intent to defraud is not required.
1-20           SECTION 2.  Subsections (b) and (d), Section 32.039, Human
1-21     Resources Code, are amended to read as follows:
1-22           (b)  A person commits a violation if the person:
1-23                 (1)  presents or causes to be presented to the
1-24     department a claim that contains a statement or representation the
1-25     person knows or should know to be false; or
1-26                 (2)  is a managed care organization that contracts with
1-27     the department to provide or arrange to provide health care
1-28     benefits or services to individuals eligible for medical assistance
1-29     and:
1-30                       (A)  fails to provide to an individual a health
1-31     care benefit or service that the organization is required to
1-32     provide under the contract with the department;
1-33                       (B)  fails to provide to the department
1-34     information required to be provided by law, department rule, or
1-35     contractual provision;
1-36                       (C)  engages in a fraudulent activity in
1-37     connection with the enrollment in the organization's managed care
1-38     plan of an individual eligible for medical assistance or in
1-39     connection with marketing the organization's services to an
1-40     individual eligible for medical assistance; or
1-41                       (D)  engages in actions that indicate a pattern
1-42     of:
1-43                             (i)  wrongful denial of payment for a
1-44     health care benefit or service that the organization is required to
1-45     provide under the contract with the department; or
1-46                             (ii)  wrongful delay of at least 45 days or
1-47     a longer period specified in the contract with the department, not
1-48     to exceed 60 days, in making payment for a health care benefit or
1-49     service that the organization is required to provide under the
1-50     contract with the department.
1-51           (d)  Unless the provider submitted information to the
1-52     department for use in preparing a voucher that the provider knew or
1-53     should have known was false or failed to correct information that
1-54     the provider knew or should have known was false when provided an
1-55     opportunity to do so, this section does not apply to a claim based
1-56     on the voucher if the department calculated and printed the amount
1-57     of the claim on the voucher and then submitted the voucher to the
1-58     provider for the provider's signature.  In addition, the provider's
1-59     signature on the voucher does not constitute fraud.  The department
1-60     shall adopt rules that establish a grace period during which errors
1-61     contained in a voucher prepared by the department may be corrected
1-62     without penalty to the provider.
1-63           SECTION 3.  The change in law made by Section 2 of this Act
1-64     applies only to a violation committed on or after the effective
 2-1     date of this Act.  For purposes of this section, a violation is
 2-2     committed on or after the effective date of this Act only if each
 2-3     element of the violation occurs on or after that date.  A violation
 2-4     committed before the effective date of this Act is covered by the
 2-5     law in effect when the violation was committed, and the former law
 2-6     is continued in effect for that purpose.
 2-7           SECTION 4.  This Act takes effect September 1, 1999.
 2-8           SECTION 5.  The importance of this legislation and the
 2-9     crowded condition of the calendars in both houses create an
2-10     emergency and an imperative public necessity that the
2-11     constitutional rule requiring bills to be read on three several
2-12     days in each house be suspended, and this rule is hereby suspended.
2-13                                  * * * * *