By: Zaffirini S.B. No. 1587
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the detection of fraud, waste, and abuse in the state
1-2 Medicaid program.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter B, Chapter 32, Human Resources Code,
1-5 is amended by adding Sections 32.0242 and 32.0243 to read as
1-6 follows:
1-7 Sec. 32.0242. VERIFICATION OF CERTAIN INFORMATION. To the
1-8 extent possible, the department shall verify an applicant's
1-9 residential address at the time the application for medical
1-10 assistance is filed.
1-11 Sec. 32.0243. PERIODIC REVIEW OF ELIGIBILITY FOR CERTAIN
1-12 RECIPIENTS. (a) The department, in cooperation with the United
1-13 States Social Security Administration, shall periodically review
1-14 the eligibility of a recipient of medical assistance who is
1-15 eligible on the basis of the recipient's eligibility for
1-16 Supplemental Security Income (SSI) benefits under 42 U.S.C. Section
1-17 1381 et seq., as amended.
1-18 (b) In reviewing the eligibility of a recipient as required
1-19 by Subsection (a), the department shall ensure that only recipients
1-20 who reside in this state and who continue to be eligible for
1-21 Supplemental Security Income (SSI) benefits under 42 U.S.C. Section
1-22 1381 et seq., as amended, remain eligible for medical assistance.
1-23 SECTION 2. Subsection (a), Section 403.026, Government Code,
1-24 as added by Chapter 1153, Acts of the 75th Legislature, Regular
2-1 Session, 1997, is amended to read as follows:
2-2 (a) The comptroller, in consultation with the state
2-3 auditor's office, shall conduct a study each biennium to determine:
2-4 (1) the number and type of potential fraudulent claims
2-5 for medical or health care benefits submitted:
2-6 (A) [(1)] under the state Medicaid program;
2-7 (B) [(2)] under group health insurance programs
2-8 administered through the Employees Retirement System of Texas for
2-9 active and retired state employees; or
2-10 (C) [(3)] by or on behalf of a state employee
2-11 and administered by the attorney general under Chapter 501, Labor
2-12 Code; and
2-13 (2) the need for changes to the eligibility system
2-14 used under the state Medicaid program.
2-15 SECTION 3. Section 531.102, Government Code, is amended by
2-16 adding Subsection (e) to read as follows:
2-17 (e) The commission by rule shall set specific claims
2-18 criteria that, when met, require the office to begin an
2-19 investigation. The claims criteria must be based on a total dollar
2-20 amount or a total number of claims submitted for services to a
2-21 particular recipient during a specified amount of time that
2-22 indicates a high potential for fraud.
2-23 SECTION 4. Subchapter C, Chapter 531, Government Code, is
2-24 amended by adding Sections 531.109, 531.110, and 531.111 to read as
2-25 follows:
2-26 Sec. 531.109. SELECTION AND REVIEW OF CLAIMS. (a) The
3-1 commission shall annually select and review a random, statistically
3-2 valid sample of all claims for reimbursement under the state
3-3 Medicaid program, including the vendor drug program, for potential
3-4 cases of fraud, waste, or abuse.
3-5 (b) In conducting the annual review of claims under
3-6 Subsection (a), the commission may directly contact a recipient by
3-7 telephone or in person, or both, to verify that the services for
3-8 which a claim for reimbursement was submitted by a provider were
3-9 actually provided to the recipient.
3-10 (c) Based on the results of the annual review of claims, the
3-11 commission shall determine the types of claims at which commission
3-12 resources for fraud and abuse detection should be primarily
3-13 directed.
3-14 Sec. 531.110. ELECTRONIC DATA MATCHING PROGRAM. (a) The
3-15 commission shall conduct electronic data matches for a recipient of
3-16 assistance under the state Medicaid program at least quarterly to
3-17 verify the identity, income, employment status, and other factors
3-18 that affect the eligibility of the recipient.
3-19 (b) To verify eligibility of a recipient for assistance
3-20 under the state Medicaid program, the electronic data matching must
3-21 match information provided by the recipient with information
3-22 contained in databases maintained by appropriate federal and state
3-23 agencies.
3-24 (c) The Texas Department of Human Services shall cooperate
3-25 with the commission by providing data or any other assistance
3-26 necessary to conduct the electronic data matches required by this
4-1 section.
4-2 (d) The commission may contract with a public or private
4-3 entity to conduct the electronic data matches required by this
4-4 section.
4-5 (e) The commission, or a health and human services agency
4-6 designated by the commission, by rule shall establish procedures to
4-7 verify the electronic data matches conducted by the commission
4-8 under this section. Not later than the 20th day after the date the
4-9 electronic data match is verified, the Texas Department of Human
4-10 Services shall remove from eligibility a recipient who is
4-11 determined to be ineligible for assistance under the state Medicaid
4-12 program.
4-13 (f) The commission shall report biennially to the
4-14 legislature the results of the electronic data matching program.
4-15 The report must include a summary of the number of applicants who
4-16 were removed from eligibility for assistance under the state
4-17 Medicaid program as a result of an electronic data match conducted
4-18 under this section.
4-19 Sec. 531.111. FRAUD DETECTION TECHNOLOGY. The commission
4-20 may contract with a contractor who specializes in developing
4-21 technology capable of identifying patterns of fraud exhibited by
4-22 Medicaid recipients to:
4-23 (1) develop and implement the fraud detection
4-24 technology; and
4-25 (2) determine if a pattern of fraud by Medicaid
4-26 recipients is present in the recipients' eligibility files
5-1 maintained by the Texas Department of Human Services.
5-2 SECTION 5. The Health and Human Services Commission, in
5-3 cooperation with the office of inspector general of the Texas
5-4 Department of Human Services, shall study and consider for
5-5 implementation fraud detection technology or any other technology
5-6 that can identify information in the eligibility file of a Medicaid
5-7 recipient that indicates potential fraud and the need for further
5-8 investigation.
5-9 SECTION 6. (a) Not later than December 31, 2000, the Texas
5-10 Department of Health shall contract with a contractor who
5-11 specializes in Medicaid claims payment systems to perform tests on
5-12 the Medicaid claims payment system to:
5-13 (1) ensure the smooth and timely payment of claims;
5-14 (2) ensure accuracy of claims payments; and
5-15 (3) reveal inconsistencies in the payment system.
5-16 (b) The contract under Subsection (a) of this section must
5-17 require the contractor to perform independent tests on any
5-18 replacements for or enhancements to the Medicaid claims payment
5-19 system for which federal funds for enhancement have been requested.
5-20 The tests must be conducted before implementation of the
5-21 replacements or enhancements.
5-22 SECTION 7. (a) Not later than October 1, 2000, the Texas
5-23 Department of Human Services shall develop a Medicaid eligibility
5-24 confirmation letter that is not easily duplicated. The department
5-25 shall begin using the confirmation letter in place of the Medicaid
5-26 eligibility confirmation letter used on the effective date of this
6-1 Act to reduce fraudulent use of duplicate letters to receive
6-2 assistance under the state Medicaid program. The confirmation
6-3 letter developed under this subsection must be used until a
6-4 permanent system for eligibility confirmation is implemented.
6-5 (b) The interagency task force on electronic benefits
6-6 transfers shall conduct a study to identify and consider for
6-7 implementation alternative methods, including electronic methods,
6-8 for use by a recipient to prove eligibility under the state
6-9 Medicaid program to a provider. In identifying alternative
6-10 methods, the task force shall consider the methods for proving
6-11 eligibility implemented by other states.
6-12 (c) Not later than September 1, 2000, the interagency task
6-13 force on electronic benefits transfers shall report the results of
6-14 the study conducted under Subsection (b) of this section to the
6-15 governor, the lieutenant governor, the speaker of the house of
6-16 representatives, and the standing committees of the senate and
6-17 house of representatives with primary jurisdiction over human
6-18 services. The report must make a recommendation regarding the
6-19 implementation of a permanent system for Medicaid eligibility
6-20 confirmation for use by a recipient to prove eligibility under the
6-21 state Medicaid program to a provider. The recommended system must
6-22 be designed to reduce the potential for fraudulent claims of
6-23 eligibility.
6-24 (d) The Health and Human Services Commission shall submit a
6-25 biennial report to the legislature regarding the effectiveness of
6-26 any alternative method for proof of eligibility under the state
7-1 Medicaid program implemented by the Texas Department of Human
7-2 Services in reducing incidences of fraudulent claims of eligibility
7-3 under the state Medicaid program.
7-4 SECTION 8. Not later than October 1, 2000, the Texas
7-5 Department of Human Services shall begin the first review of
7-6 eligibility for recipients of medical assistance required by
7-7 Section 32.0243, Human Resources Code, as added by this Act.
7-8 SECTION 9. If before implementing any provision of this Act
7-9 a state agency determines that a waiver or authorization from a
7-10 federal agency is necessary for implementation of that provision,
7-11 the agency affected by the provision shall request the waiver or
7-12 authorization and may delay implementing that provision until the
7-13 waiver or authorization is granted.
7-14 SECTION 10. This Act takes effect September 1, 1999.
7-15 SECTION 11. The importance of this legislation and the
7-16 crowded condition of the calendars in both houses create an
7-17 emergency and an imperative public necessity that the
7-18 constitutional rule requiring bills to be read on three several
7-19 days in each house be suspended, and this rule is hereby suspended.