By: Zaffirini S.B. No. 1590
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the prevention, investigation, and prosecution of fraud
1-2 in the workers' compensation program for state employees.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 412, Labor Code, is amended by adding
1-5 Subchapter G to read as follows:
1-6 SUBCHAPTER G. FRAUD INVESTIGATION AND PREVENTION
1-7 REGARDING MEDICAL BENEFITS
1-8 Sec. 412.061. DEFINITIONS. In this subchapter:
1-9 (1) "Fraudulent act" means any act that violates a
1-10 penal law and is committed or attempted to be committed to obtain
1-11 or deny a workers' compensation medical benefit or payment for a
1-12 service provided in conjunction with a medical benefit.
1-13 (2) "Program" means the workers' compensation program
1-14 for state employees administered under Chapter 501.
1-15 Sec. 412.062. CLAIM REVIEW BY OFFICE. (a) The office shall
1-16 conduct periodic reviews of claims for medical benefits as
1-17 necessary to determine the medical necessity and appropriateness of
1-18 the provided services.
1-19 (b) In addition to the periodic reviews under Subsection
1-20 (a), the office shall conduct a claim review on each appropriate
1-21 claim:
1-22 (1) that involves the receipt of psychiatric services;
1-23 or
1-24 (2) in which the use of prescription drugs appears
2-1 inappropriate.
2-2 (c) The office may withhold payments to be made to a health
2-3 care provider who does not provide, in the manner prescribed by
2-4 the board, documentation requested by the office necessary to
2-5 verify a medical service related to a claim.
2-6 (d) The board shall establish criteria that trigger medical
2-7 care coordination based on the date of injury, the amount paid in
2-8 medical benefits, and the existence of treatment patterns
2-9 inappropriate for the condition.
2-10 (e) The office shall implement measures for medical care
2-11 coordination to ensure that injured workers receive appropriate
2-12 treatment for reported injuries.
2-13 Sec. 412.063. CLAIMS AUDIT. (a) The director shall conduct
2-14 an annual audit of claims for medical benefits as provided by this
2-15 section.
2-16 (b) The director shall randomly select claims submitted
2-17 under the program for medical benefits, in a percentage of total
2-18 claims made during the year set by the board as necessary to obtain
2-19 a statistically significant sample, and shall audit the claims to
2-20 determine the validity of the claims. In performing the audit, the
2-21 director shall interview the claimant in person or by telephone to
2-22 ensure that the health care services were received. The audit must
2-23 also include a review of the claimant's medical history and medical
2-24 records.
2-25 (c) The director may contract with a private entity for
2-26 performance of the audit.
3-1 Sec. 412.064. PREPAYMENT AUDIT. The board by rule shall
3-2 require the office to implement a prepayment audit procedure that:
3-3 (1) compares the diagnosis code submitted on the bill
3-4 for health care services to the code for the injured body part; and
3-5 (2) verifies the appropriateness of the diagnosis code
3-6 for the health care services provided.
3-7 Sec. 412.065. TRAINING CLASSES IN FRAUD PREVENTION.
3-8 (a) The director shall implement annual training classes for
3-9 appropriate members of the staffs of state agencies and contractors
3-10 or administering firms who process workers' compensation claims
3-11 submitted under the program for medical benefits to assist those
3-12 persons in identifying potential misrepresentation or fraud in the
3-13 operation of the program.
3-14 (b) The director may contract with the Health and Human
3-15 Services Commission or with a private entity for the operation of
3-16 the training classes.
3-17 Sec. 412.066. ACTION BY OFFICE; COOPERATION REQUIRED.
3-18 (a) If the office determines that a health care provider has
3-19 obtained payments under the program through a fraudulent act, the
3-20 office shall take action against the provider as provided by this
3-21 subchapter. The office shall report any action taken in writing to
3-22 the commission.
3-23 (b) Each state agency and health care provider who
3-24 participates in the program shall, as a condition of that
3-25 participation, cooperate fully in any investigation of a fraudulent
3-26 act that is conducted by the director, including providing to the
4-1 director timely access to patient medical records determined by the
4-2 director to be necessary to conduct an investigation.
4-3 (c) Notwithstanding any other law regarding the
4-4 confidentiality of patient records, the director is entitled to
4-5 access to patient medical records for the limited purpose provided
4-6 by this subchapter and is a "governmental agency" for purposes of
4-7 Section 5.08, Medical Practice Act (Article 4495b, Vernon's Texas
4-8 Civil Statutes). A medical record submitted to the director under
4-9 this subsection is confidential and is not subject to disclosure
4-10 under Chapter 552, Government Code.
4-11 Sec. 412.067. FRAUDULENT ACTS BY CLAIMANTS OR PROVIDERS.
4-12 (a) The director shall investigate each complaint alleging a
4-13 fraudulent act made by a claimant, a health care provider, or a
4-14 state agency regarding a health care provider or claimant who is
4-15 participating in the program.
4-16 (b) If, after initial investigation, the director determines
4-17 that the complaint is unfounded, the director shall terminate the
4-18 investigation. If the director determines that further action is
4-19 warranted, the director shall refer the complaint to the commission
4-20 for appropriate sanctions or administrative action and shall
4-21 provide information regarding the complaint to the commission.
4-22 (c) The commission shall promptly initiate administrative
4-23 proceedings or criminal prosecution on each complaint referred by
4-24 the director and, on a finding of fraud or overpayment, shall
4-25 require restitution to the office in addition to any other penalty
4-26 assessed or action taken.
5-1 Sec. 412.068. REPORTS. (a) The commission shall report to
5-2 the legislature at the beginning of each regular legislative
5-3 session:
5-4 (1) the number of referrals received from the office
5-5 during the biennium;
5-6 (2) the number of prosecutions completed on referrals
5-7 from the office; and
5-8 (3) the total restitution ordered to the office on
5-9 successful prosecutions.
5-10 (b) The office shall report to the legislature at the
5-11 beginning of each regular legislative session:
5-12 (1) the number of referrals made to the commission
5-13 during the biennium;
5-14 (2) the total amount of the fraud or overpayment
5-15 alleged in the cases referred; and
5-16 (3) the total amount collected from restitution orders
5-17 entered after prosecution by the commission.
5-18 SECTION 2. The State Office of Risk Management shall
5-19 implement the training classes required under Section 412.065,
5-20 Labor Code, as added by this Act, not later than January 1, 2000.
5-21 SECTION 3. The risk management board of the State Office of
5-22 Risk Management shall conduct a study regarding the use of fraud
5-23 detection software. The study may include an analysis of the fraud
5-24 detection program used by the Health and Human Services Commission
5-25 under Chapter 22, Human Resources Code, for the detection of fraud
5-26 in the Medicaid program. The risk management board shall report
6-1 the results of its study to the 77th Legislature not later than
6-2 February 1, 2001.
6-3 SECTION 4. This Act takes effect September 1, 1999.
6-4 SECTION 5. The importance of this legislation and the
6-5 crowded condition of the calendars in both houses create an
6-6 emergency and an imperative public necessity that the
6-7 constitutional rule requiring bills to be read on three several
6-8 days in each house be suspended, and this rule is hereby suspended.