1-1 By: Zaffirini S.B. No. 1587
1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read
1-3 first time and referred to Committee on Human Services;
1-4 April 6, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 5, Nays 0; April 6, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1587 By: Zaffirini
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the detection of fraud, waste, and abuse in the state
1-11 Medicaid program.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subchapter B, Chapter 32, Human Resources Code,
1-14 is amended by adding Sections 32.0242 and 32.0243 to read as
1-15 follows:
1-16 Sec. 32.0242. VERIFICATION OF CERTAIN INFORMATION. To the
1-17 extent possible, the department shall verify an applicant's
1-18 residential address at the time the application for medical
1-19 assistance is filed.
1-20 Sec. 32.0243. PERIODIC REVIEW OF ELIGIBILITY FOR CERTAIN
1-21 RECIPIENTS. (a) The department, in cooperation with the United
1-22 States Social Security Administration, shall periodically review
1-23 the eligibility of a recipient of medical assistance who is
1-24 eligible on the basis of the recipient's eligibility for
1-25 Supplemental Security Income (SSI) benefits under 42 U.S.C. Section
1-26 1381 et seq., as amended.
1-27 (b) In reviewing the eligibility of a recipient as required
1-28 by Subsection (a), the department shall ensure that only recipients
1-29 who reside in this state and who continue to be eligible for
1-30 Supplemental Security Income (SSI) benefits under 42 U.S.C. Section
1-31 1381 et seq., as amended, remain eligible for medical assistance.
1-32 SECTION 2. Subsection (a), Section 403.026, Government Code,
1-33 as added by Chapter 1153, Acts of the 75th Legislature, Regular
1-34 Session, 1997, is amended to read as follows:
1-35 (a) The comptroller, in consultation with the state
1-36 auditor's office, shall conduct a study each biennium to determine:
1-37 (1) the number and type of potential fraudulent claims
1-38 for medical or health care benefits submitted:
1-39 (A) [(1)] under the state Medicaid program;
1-40 (B) [(2)] under group health insurance programs
1-41 administered through the Employees Retirement System of Texas for
1-42 active and retired state employees; or
1-43 (C) [(3)] by or on behalf of a state employee
1-44 and administered by the attorney general under Chapter 501, Labor
1-45 Code; and
1-46 (2) the need for changes to the eligibility system
1-47 used under the state Medicaid program.
1-48 SECTION 3. Section 531.102, Government Code, is amended by
1-49 adding Subsection (e) to read as follows:
1-50 (e) The commission by rule shall set specific claims
1-51 criteria that, when met, require the office to begin an
1-52 investigation. The claims criteria must be based on a total dollar
1-53 amount or a total number of claims submitted for services to a
1-54 particular recipient during a specified amount of time that
1-55 indicates a high potential for fraud.
1-56 SECTION 4. Subchapter C, Chapter 531, Government Code, is
1-57 amended by adding Sections 531.109, 531.110, and 531.111 to read as
1-58 follows:
1-59 Sec. 531.109. SELECTION AND REVIEW OF CLAIMS. (a) The
1-60 commission shall annually select and review a random, statistically
1-61 valid sample of all claims for reimbursement under the state
1-62 Medicaid program, including the vendor drug program, for potential
1-63 cases of fraud, waste, or abuse.
1-64 (b) In conducting the annual review of claims under
2-1 Subsection (a), the commission may directly contact a recipient by
2-2 telephone or in person, or both, to verify that the services for
2-3 which a claim for reimbursement was submitted by a provider were
2-4 actually provided to the recipient.
2-5 (c) Based on the results of the annual review of claims, the
2-6 commission shall determine the types of claims at which commission
2-7 resources for fraud and abuse detection should be primarily
2-8 directed.
2-9 Sec. 531.110. ELECTRONIC DATA MATCHING PROGRAM. (a) The
2-10 commission shall conduct electronic data matches for a recipient of
2-11 assistance under the state Medicaid program at least quarterly to
2-12 verify the identity, income, employment status, and other factors
2-13 that affect the eligibility of the recipient.
2-14 (b) To verify eligibility of a recipient for assistance
2-15 under the state Medicaid program, the electronic data matching must
2-16 match information provided by the recipient with information
2-17 contained in databases maintained by appropriate federal and state
2-18 agencies.
2-19 (c) The Texas Department of Human Services shall cooperate
2-20 with the commission by providing data or any other assistance
2-21 necessary to conduct the electronic data matches required by this
2-22 section.
2-23 (d) The commission may contract with a public or private
2-24 entity to conduct the electronic data matches required by this
2-25 section.
2-26 (e) The commission, or a health and human services agency
2-27 designated by the commission, by rule shall establish procedures to
2-28 verify the electronic data matches conducted by the commission
2-29 under this section. Not later than the 20th day after the date the
2-30 electronic data match is verified, the Texas Department of Human
2-31 Services shall remove from eligibility a recipient who is
2-32 determined to be ineligible for assistance under the state Medicaid
2-33 program.
2-34 (f) The commission shall report biennially to the
2-35 legislature the results of the electronic data matching program.
2-36 The report must include a summary of the number of applicants who
2-37 were removed from eligibility for assistance under the state
2-38 Medicaid program as a result of an electronic data match conducted
2-39 under this section.
2-40 Sec. 531.111. FRAUD DETECTION TECHNOLOGY. The commission
2-41 may contract with a contractor who specializes in developing
2-42 technology capable of identifying patterns of fraud exhibited by
2-43 Medicaid recipients to:
2-44 (1) develop and implement the fraud detection
2-45 technology; and
2-46 (2) determine if a pattern of fraud by Medicaid
2-47 recipients is present in the recipients' eligibility files
2-48 maintained by the Texas Department of Human Services.
2-49 SECTION 5. The Health and Human Services Commission, in
2-50 cooperation with the office of inspector general of the Texas
2-51 Department of Human Services, shall study and consider for
2-52 implementation fraud detection technology or any other technology
2-53 that can identify information in the eligibility file of a Medicaid
2-54 recipient that indicates potential fraud and the need for further
2-55 investigation.
2-56 SECTION 6. (a) Not later than December 31, 2000, the Texas
2-57 Department of Health shall contract with a contractor who
2-58 specializes in Medicaid claims payment systems to perform tests on
2-59 the Medicaid claims payment system to:
2-60 (1) ensure the smooth and timely payment of claims;
2-61 (2) ensure accuracy of claims payments; and
2-62 (3) reveal inconsistencies in the payment system.
2-63 (b) The contract under Subsection (a) of this section must
2-64 require the contractor to perform independent tests on any
2-65 replacements for or enhancements to the Medicaid claims payment
2-66 system for which federal funds for enhancement have been requested.
2-67 The tests must be conducted before implementation of the
2-68 replacements or enhancements.
2-69 SECTION 7. (a) Not later than October 1, 2000, the Texas
3-1 Department of Human Services shall develop a Medicaid eligibility
3-2 confirmation letter that is not easily duplicated. The department
3-3 shall begin using the confirmation letter in place of the Medicaid
3-4 eligibility confirmation letter used on the effective date of this
3-5 Act to reduce fraudulent use of duplicate letters to receive
3-6 assistance under the state Medicaid program. The confirmation
3-7 letter developed under this subsection must be used until a
3-8 permanent system for eligibility confirmation is implemented.
3-9 (b) The interagency task force on electronic benefits
3-10 transfers shall conduct a study to identify and consider for
3-11 implementation alternative methods, including electronic methods,
3-12 for use by a recipient to prove eligibility under the state
3-13 Medicaid program to a provider. In identifying alternative
3-14 methods, the task force shall consider the methods for proving
3-15 eligibility implemented by other states.
3-16 (c) Not later than September 1, 2000, the interagency task
3-17 force on electronic benefits transfers shall report the results of
3-18 the study conducted under Subsection (b) of this section to the
3-19 governor, the lieutenant governor, the speaker of the house of
3-20 representatives, and the standing committees of the senate and
3-21 house of representatives with primary jurisdiction over human
3-22 services. The report must make a recommendation regarding the
3-23 implementation of a permanent system for Medicaid eligibility
3-24 confirmation for use by a recipient to prove eligibility under the
3-25 state Medicaid program to a provider. The recommended system must
3-26 be designed to reduce the potential for fraudulent claims of
3-27 eligibility.
3-28 (d) The Health and Human Services Commission shall submit a
3-29 biennial report to the legislature regarding the effectiveness of
3-30 any alternative method for proof of eligibility under the state
3-31 Medicaid program implemented by the Texas Department of Human
3-32 Services in reducing incidences of fraudulent claims of eligibility
3-33 under the state Medicaid program.
3-34 SECTION 8. Not later than October 1, 2000, the Texas
3-35 Department of Human Services shall begin the first review of
3-36 eligibility for recipients of medical assistance required by
3-37 Section 32.0243, Human Resources Code, as added by this Act.
3-38 SECTION 9. If before implementing any provision of this Act
3-39 a state agency determines that a waiver or authorization from a
3-40 federal agency is necessary for implementation of that provision,
3-41 the agency affected by the provision shall request the waiver or
3-42 authorization and may delay implementing that provision until the
3-43 waiver or authorization is granted.
3-44 SECTION 10. This Act takes effect September 1, 1999.
3-45 SECTION 11. The importance of this legislation and the
3-46 crowded condition of the calendars in both houses create an
3-47 emergency and an imperative public necessity that the
3-48 constitutional rule requiring bills to be read on three several
3-49 days in each house be suspended, and this rule is hereby suspended.
3-50 * * * * *