By Zaffirini S.B. No. 1587
76R4945 KLA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the detection of fraud, waste, and abuse in the state
1-3 Medicaid program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter B, Chapter 32, Human Resources Code,
1-6 is amended by adding Sections 32.0242 and 32.0243 to read as
1-7 follows:
1-8 Sec. 32.0242. VERIFICATION OF CERTAIN INFORMATION. (a) The
1-9 department shall verify the applicant's residential address on
1-10 determination that an applicant is eligible for medical assistance.
1-11 (b) The department may not accept a post office box number
1-12 in lieu of a residential address for an applicant unless the
1-13 applicant provides an alternative physical address at which the
1-14 applicant can be contacted and that can be verified by the
1-15 department.
1-16 Sec. 32.0243. PERIODIC REVIEW OF ELIGIBILITY FOR CERTAIN
1-17 RECIPIENTS. (a) The department, in cooperation with the United
1-18 States Social Security Administration, shall periodically review
1-19 the eligibility of a recipient of medical assistance who is
1-20 eligible on the basis of the recipient's eligibility for
1-21 Supplemental Security Income (SSI) benefits under 42 U.S.C.
1-22 Section 1381 et seq., as amended.
1-23 (b) In reviewing the eligibility of a recipient as required
1-24 by Subsection (a), the department shall ensure that only recipients
2-1 who reside in this state and who continue to be eligible for
2-2 Supplemental Security Income (SSI) benefits under 42 U.S.C.
2-3 Section 1381 et seq., as amended, remain eligible for medical
2-4 assistance.
2-5 SECTION 2. Section 403.026(a), Government Code, as added by
2-6 Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
2-7 is amended to read as follows:
2-8 (a) The comptroller shall conduct a study each biennium to
2-9 determine:
2-10 (1) the number and type of fraudulent claims for
2-11 medical or health care benefits submitted:
2-12 (A) [(1)] under the state Medicaid program;
2-13 (B) [(2)] under group health insurance programs
2-14 administered through the Employees Retirement System of Texas for
2-15 active and retired state employees; or
2-16 (C) [(3)] by or on behalf of a state employee
2-17 and administered by the attorney general under Chapter 501, Labor
2-18 Code; and
2-19 (2) the need for changes to the eligibility system
2-20 used under the state Medicaid program.
2-21 SECTION 3. Section 531.102, Government Code, is amended by
2-22 adding Subsections (e) and (f) to read as follows:
2-23 (e) In setting the priorities for the office as required by
2-24 Subsection (b), the commission shall assign the highest priority
2-25 for investigation of potential fraud to claims submitted for
2-26 reimbursement for:
2-27 (1) outpatient hospital services;
3-1 (2) ancillary services;
3-2 (3) emergency room services; and
3-3 (4) home health care services.
3-4 (f) The commission by rule shall set specific claims
3-5 criteria that, when met, require the office to begin an
3-6 investigation. The claims criteria must be based on a total
3-7 dollar amount or a total number of claims submitted for services to
3-8 a particular recipient during a specified amount of time that
3-9 indicates a high potential for fraud.
3-10 SECTION 4. Subchapter C, Chapter 531, Government Code, is
3-11 amended by adding Sections 531.109, 531.110, and 531.111 to read as
3-12 follows:
3-13 Sec. 531.109. SELECTION AND REVIEW OF CLAIMS. (a) The
3-14 commission shall annually select and review a random, statistically
3-15 valid sample of all claims for reimbursement under the state
3-16 Medicaid program, including the vendor drug program, for potential
3-17 cases of fraud, waste, or abuse.
3-18 (b) In conducting the annual review of claims under
3-19 Subsection (a), the commission must directly contact a recipient by
3-20 telephone or in person, or both, to verify that the services for
3-21 which a claim for reimbursement was submitted by a provider were
3-22 actually provided to the recipient.
3-23 (c) Based on the results of the annual review of claims, the
3-24 commission shall determine the types of claims at which commission
3-25 resources for fraud and abuse detection should be primarily
3-26 directed.
3-27 Sec. 531.110. ELECTRONIC DATA MATCHING PROGRAM. (a) The
4-1 commission shall conduct electronic data matches for a recipient of
4-2 assistance under the state Medicaid program at least quarterly to
4-3 verify the identity, income, employment status, and other factors
4-4 that affect the eligibility of the recipient.
4-5 (b) To verify eligibility of a recipient for assistance
4-6 under the state Medicaid program, the electronic data matching must
4-7 match information provided by the recipient with information
4-8 contained in databases maintained by:
4-9 (1) the Texas Workers' Compensation Commission;
4-10 (2) the Texas Workforce Commission;
4-11 (3) the Texas Department of Criminal Justice;
4-12 (4) the Internal Revenue Service;
4-13 (5) the United States Social Security Administration;
4-14 and
4-15 (6) states that border this state.
4-16 (c) The Texas Department of Human Services shall cooperate
4-17 with the commission by providing data or any other assistance
4-18 necessary to conduct the electronic data matches required by this
4-19 section.
4-20 (d) The commission may contract with a public or private
4-21 entity to conduct the electronic data matches required by this
4-22 section.
4-23 (e) The commission by rule shall establish procedures to
4-24 verify the electronic data matches conducted under this section.
4-25 Not later than the 20th day after the date the electronic data
4-26 match is verified, the Texas Department of Human Services shall
4-27 remove from eligibility a recipient who is determined to be
5-1 ineligible for assistance under the state Medicaid program.
5-2 (f) The commission shall report biennially to the
5-3 legislature the results of the electronic data matching program.
5-4 The report must include a summary of the number of applicants who
5-5 were removed from eligibility for assistance under the state
5-6 Medicaid program as a result of an electronic data match conducted
5-7 under this section.
5-8 Sec. 531.111. FRAUD DETECTION TECHNOLOGY. The commission
5-9 may contract with a contractor who specializes in developing
5-10 technology capable of identifying patterns of fraud exhibited by
5-11 Medicaid recipients to:
5-12 (1) develop and implement the fraud detection
5-13 technology; and
5-14 (2) determine if a pattern of fraud by Medicaid
5-15 recipients is present in the recipients' eligibility files
5-16 maintained by the Texas Department of Human Services.
5-17 SECTION 5. The Health and Human Services Commission, in
5-18 cooperation with the office of inspector general of the Texas
5-19 Department of Human Services, shall study and consider for
5-20 implementation fraud detection technology or any other technology
5-21 that can identify information in the eligibility file of a Medicaid
5-22 recipient that indicates potential fraud and the need for further
5-23 investigation.
5-24 SECTION 6. (a) Not later than December 31, 1999, the Texas
5-25 Department of Health shall contract with a contractor who
5-26 specializes in Medicaid claims payment systems to perform tests on
5-27 a Medicaid claims payment system considered for implementation by
6-1 the department to:
6-2 (1) ensure the smooth and timely payment of claims;
6-3 (2) ensure accuracy of claims payments; and
6-4 (3) reveal inconsistencies in the payment system.
6-5 (b) The contract under Subsection (a) must require the
6-6 contractor to perform initial tests on a new Medicaid claims
6-7 payment system before implementation and to perform subsequent
6-8 tests on the system before implementation of any future change to
6-9 the operation of the system.
6-10 SECTION 7. (a) Not later than January 1, 2000, the Texas
6-11 Department of Human Services shall develop a Medicaid eligibility
6-12 confirmation letter that is not easily duplicated. The department
6-13 shall begin using the confirmation letter in place of the Medicaid
6-14 eligibility confirmation letter used on the effective date of this
6-15 Act to reduce fraudulent use of duplicate letters to receive
6-16 assistance under the state Medicaid program. The confirmation
6-17 letter developed under this subsection must be used until a
6-18 permanent system for eligibility confirmation is implemented as
6-19 required by this section.
6-20 (b) The Texas Department of Human Services shall identify
6-21 and consider for implementation alternative methods, including
6-22 electronic methods, to the method used by a recipient to prove
6-23 eligibility under the state Medicaid program to a provider on the
6-24 effective date of this Act. In identifying alternative methods,
6-25 the department shall consider the methods for proving eligibility
6-26 implemented by other states.
6-27 (c) Not later than September 1, 2000, the Texas Department
7-1 of Human Services shall implement a permanent system for Medicaid
7-2 eligibility confirmation for use by a recipient to prove
7-3 eligibility under the state Medicaid program to a provider. The
7-4 system must be designed to reduce the potential for fraudulent
7-5 claims of eligibility.
7-6 SECTION 8. If before implementing any provision of this Act
7-7 a state agency determines that a waiver or authorization from a
7-8 federal agency is necessary for implementation of that provision,
7-9 the agency affected by the provision shall request the waiver or
7-10 authorization and may delay implementing that provision until the
7-11 waiver or authorization is granted.
7-12 SECTION 9. This Act takes effect September 1, 1999.
7-13 SECTION 10. The importance of this legislation and the
7-14 crowded condition of the calendars in both houses create an
7-15 emergency and an imperative public necessity that the
7-16 constitutional rule requiring bills to be read on three several
7-17 days in each house be suspended, and this rule is hereby suspended.