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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of the State Office of Inspector General; |
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providing an administrative penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle C, Title 10, Government Code, is |
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amended by adding Chapter 2116 to read as follows: |
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CHAPTER 2116. STATE OFFICE OF INSPECTOR GENERAL |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 2116.001. SHORT TITLE. This chapter may be cited as |
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the Texas Inspector General Act. |
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Sec. 2116.002. PURPOSE. The purpose of this chapter is to |
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establish a full-time program of investigation, audit, and |
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performance review of certain state agencies to deter and identify |
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fraud, waste, abuse, and illegal acts, to provide increased |
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accountability, integrity, and oversight, and to assist in |
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improving agency operations. |
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Sec. 2116.003. APPLICABILITY. This chapter applies to the |
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following state agencies: |
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(1) Texas Education Agency; |
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(2) Texas Higher Education Coordinating Board; |
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(3) Texas Department of Criminal Justice; |
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(4) Texas Youth Commission; |
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(5) Texas Juvenile Probation Commission; |
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(6) Texas Building and Procurement Commission; |
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(7) Texas Workforce Commission; |
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(8) Texas Department of Transportation; |
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(9) Texas Department of Insurance; |
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(10) Health and Human Services Commission; and |
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(11) health and human services agencies listed in |
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Section 531.001(4). |
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Sec. 2116.004. DEFINITIONS. In this chapter: |
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(1) "Agency" means a state agency to which this |
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chapter applies, as provided by Section 2116.003. |
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(2) "Fraud" means an intentional deception or |
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misrepresentation made by a person with the knowledge that the |
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deception could result in some unauthorized benefit to that person |
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or some other person, including any act that constitutes fraud |
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under applicable federal or state law. |
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(3) "Inspector general" means the individual |
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appointed as the inspector general under this chapter. |
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(4) "Office" means the State Office of Inspector |
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General. |
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(5) "Presiding officer" means the presiding officer of |
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the governing body of an agency or the commissioner of an agency if |
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a single commissioner presides over the agency. |
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(6) "Review" includes an audit, inspection, |
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investigation, evaluation, or similar activity. |
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Sec. 2116.005. CREATION OF OFFICE; ADMINISTRATIVE |
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ATTACHMENT TO HEALTH AND HUMAN SERVICES COMMISSION. (a) The State |
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Office of Inspector General is created as an agency of the state. |
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(b) The office is administratively attached to the Health |
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and Human Services Commission but is independent of direction by |
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the commission. The governor, the legislature or a committee of the |
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legislature, the commission, the executive commissioner of the |
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commission, or any authority within the commission may not prevent |
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the inspector general or a deputy inspector general from |
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initiating, performing, or completing an investigation, audit, or |
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review or any other compliance or enforcement activity pursued by |
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the office under this chapter or other law. |
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(c) Except as provided under Section 2116.058(d)(1), the |
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Health and Human Services Commission shall provide facilities and |
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support services to the office that are necessary to enable the |
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inspector general to perform all duties under this chapter and |
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other law, including: |
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(1) sufficient and appropriate office space |
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commensurate with the classification and grade of the inspector |
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general; |
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(2) administrative assistance and support services; |
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(3) health and human services enterprise support |
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services; |
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(4) personnel services; and |
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(5) computer services and support. |
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(d) The Health and Human Services Commission and the office |
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shall execute a service level agreement to establish performance |
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standards regarding facilities and support services described by |
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Subsection (c). The service level agreement shall be reviewed at |
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least annually to ensure that facilities and support services are |
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being provided in accordance with the agreement. |
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Sec. 2116.006. SUNSET PROVISION. The State Office of |
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Inspector General is subject to Chapter 325, Government Code (Texas |
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Sunset Act). Unless continued in existence as provided by that |
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chapter, the office is abolished and this chapter expires September |
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1, 2015. |
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Sec. 2116.007. PUBLIC INTEREST INFORMATION. (a) The |
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office shall prepare information of public interest describing the |
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functions of the office. |
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(b) The office shall make the information available to the |
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public and appropriate state agencies. |
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Sec. 2116.008. RULEMAKING. (a) The inspector general |
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shall adopt rules as necessary to implement this chapter. |
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(b) All agency rules of agencies to which this chapter |
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applies that are necessary to accomplish the duties and functions |
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of the office may be grandfathered and transferred from an agency to |
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the office. |
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Sec. 2116.009. POLICIES AND PROCEDURES. (a) The inspector |
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general shall establish policies and procedures to guide the |
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operation of the office and to ensure that the work and practices of |
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the office are in accordance with commonly used and adopted |
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professional standards related to the fields of investigation and |
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auditing in public administration environments. |
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(b) An investigation, audit, or review conducted by the |
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office must conform to professional standards and best practices |
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for offices of inspectors general. |
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Sec. 2116.010. AGENCY COOPERATION. Each agency to which |
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this chapter applies shall require employees of the agency to |
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provide assistance to the office in connection with the office's |
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duties relating to the investigation of fraud, waste, and abuse. |
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The office is entitled to access to any information maintained by an |
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agency, including internal records, relevant to the functions of |
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the office. |
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[Sections 2116.011-2116.050 reserved for expansion] |
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SUBCHAPTER B. ADMINISTRATIVE PROVISIONS |
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Sec. 2116.051. APPOINTMENT; TERM. (a) The governor, with |
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the advice and consent of the senate, shall appoint the inspector |
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general. An inspector general may, with the advice and consent of |
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the senate, be reappointed by the governor. |
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(b) The governor shall appoint the inspector general |
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without regard to the race, color, disability, sex, religion, age, |
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or national origin of the appointee. |
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(c) The inspector general serves a two-year term that |
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expires on February 1 of each odd-numbered year. |
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(d) If a vacancy occurs during a term, the governor shall |
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appoint a successor for the unexpired term. |
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Sec. 2116.052. QUALIFICATIONS. (a) To be eligible to |
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serve as inspector general, a person must hold at the time of |
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appointment, or must obtain within one year after appointment, |
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certification as a Certified Inspector General by the Association |
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of Inspectors General Institute of Certification. |
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(b) In appointing a person as inspector general, the |
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governor shall consider the person's integrity, leadership |
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capability, and demonstrated ability in investigation, |
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prosecution, management analysis, public administration, criminal |
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justice administration, accounting, auditing, financial analysis, |
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law, and other closely related fields. Professional certifications |
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that are recommended, but not required, include certified fraud |
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examiner, certified public accountant, and certified internal |
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auditor. |
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Sec. 2116.053. BUSINESS INTEREST; SERVICE AS INSPECTOR |
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GENERAL. A person is not eligible for appointment as inspector |
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general or deputy inspector general if the person or the person's |
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spouse: |
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(1) is employed by or participates in the management |
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of a business entity or other organization that holds a license, |
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certificate of authority, or other authorization from an agency or |
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that receives funds from an agency; |
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(2) owns or controls, directly or indirectly, more |
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than a 10 percent interest in a business entity or other |
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organization receiving funds from an agency; or |
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(3) uses or receives a substantial amount of tangible |
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goods or funds from an agency, other than compensation or |
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reimbursement authorized by law. |
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Sec. 2116.054. LOBBYING ACTIVITIES. A person may not serve |
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as inspector general or deputy inspector general if the person is |
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required to register as a lobbyist under Chapter 305 because of the |
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person's activities for compensation related to the operation of an |
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agency. |
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Sec. 2116.055. POLITICAL ACTIVITIES. (a) A former |
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inspector general or deputy inspector general may not hold or be a |
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candidate for elective public office before the second anniversary |
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of the date the person ceases to serve as inspector general or |
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deputy inspector general. |
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(b) An inspector general or deputy inspector general may not |
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serve as an officer of a political party, political subdivision, or |
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political committee, and may not participate in a political |
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campaign for public office, while the person serves as inspector |
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general or deputy inspector general. |
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Sec. 2116.056. TRADE ASSOCIATIONS. (a) In this section, |
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"trade association" means a nonprofit, cooperative, and |
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voluntarily joined association of business or professional |
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competitors designed to assist its members and its industry or |
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profession in dealing with mutual business or professional problems |
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and in promoting their common interest. |
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(b) A person may not serve as inspector general or deputy |
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inspector general if the person has been, within the previous two |
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years: |
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(1) an officer, employee, or paid consultant of a |
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trade association in a field related to an agency to which this |
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chapter applies; or |
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(2) the spouse of an officer, manager, or paid |
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consultant of a trade association in a field related to an agency to |
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which this chapter applies. |
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Sec. 2116.057. GROUNDS FOR REMOVAL. (a) The governor, |
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with the advice and consent of the senate, may remove the inspector |
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general from office as provided by Section 9, Article XV, Texas |
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Constitution. |
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(b) Notwithstanding Subsection (a), the inspector general |
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may be removed from office by either the governor or the senate, |
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acting independently. The inspector general may be removed under |
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this subsection only for cause based on the following grounds: |
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(1) gross misconduct; |
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(2) conviction of a felony; or |
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(3) conviction of a crime of moral turpitude. |
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(c) The governor may remove the inspector general from |
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office under Subsection (b) by notifying the inspector general in |
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writing of the grounds for removal. The governor shall send a copy |
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of the notification of removal to both houses of the legislature. |
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(d) The senate may remove the inspector general from office |
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under Subsection (b) by a two-thirds vote of the senate membership. |
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The secretary of the senate shall notify the inspector general in |
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writing of the grounds for removal and shall send a copy of the |
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notification of removal to the governor and the chief clerk of the |
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house of representatives. |
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Sec. 2116.058. ORGANIZATION; DEPUTY INSPECTORS GENERAL. |
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(a) The inspector general shall establish an organizational |
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structure for the office that is appropriate to carrying out the |
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office's responsibilities and functions. The inspector general has |
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the sole responsibility and discretion for establishing the |
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organization and the methods of administration of the office and |
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for determining the appropriate allocation of office resources. |
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(b) The inspector general shall appoint a deputy inspector |
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general to be colocated at each of the following agencies: |
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(1) Texas Department of Criminal Justice; and |
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(2) Health and Human Services Commission. |
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(c) Except as provided by Subsection (b), the inspector |
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general, at the inspector general's discretion, may: |
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(1) appoint a deputy inspector general to fulfill the |
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functions of the office at an agency to which this chapter applies; |
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(2) appoint a deputy inspector general to more than |
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one agency; and |
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(3) designate an agency to have a deputy inspector |
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general and related office staff colocated at the agency. |
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(d) Each agency designated to have a deputy inspector |
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general and related office staff colocated at the agency shall: |
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(1) provide facilities and support services to the |
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office that are necessary to enable the deputy inspector general to |
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perform all duties under this chapter and other law, including: |
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(A) sufficient and appropriate office space |
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commensurate with the classification and grade of the deputy |
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inspector general; |
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(B) administrative assistance and support |
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services; |
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(C) personnel services; and |
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(D) computer services and support; and |
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(2) execute a service level agreement with the office |
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to establish performance standards regarding facilities and |
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support services described by Subdivision (1). |
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(e) A service level agreement under Subsection (d)(2) must |
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be reviewed at least annually to ensure that facilities and support |
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services are being provided in accordance with the agreement. |
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(f) The inspector general may perform the functions of a |
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deputy inspector general. |
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(g) The inspector general or a deputy inspector general is |
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independent of direction by an agency, or by the presiding officer |
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of the agency, being monitored. An agency, a presiding officer, or |
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any authority within an agency may not prevent the inspector |
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general or a deputy inspector general from initiating, performing, |
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or completing an investigation, audit, or review or any other |
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compliance or enforcement activity pursued by the office under this |
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chapter or other law. |
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Sec. 2116.059. DEFENSE BY ATTORNEY GENERAL. The attorney |
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general shall defend any action brought against the inspector |
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general, a deputy inspector general, or an employee or officer of |
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the office as a result of that person's official act or omission, |
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whether or not the person has terminated service with the office at |
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the time the action is instituted. |
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[Sections 2116.060-2116.100 reserved for expansion] |
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SUBCHAPTER C. PERSONNEL |
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Sec. 2116.101. DEPUTY INSPECTORS GENERAL. (a) Deputy |
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inspectors general report to, and are supervised by, the inspector |
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general. |
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(b) At the discretion of the inspector general, deputy |
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inspectors general may be required to hold at the time of |
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appointment, or be required to obtain within one year after |
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appointment, certification as a Certified Inspector General by the |
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Association of Inspectors General Institute of Certification. |
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(c) In appointing a person as a deputy inspector general, |
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the inspector general shall consider the person's integrity, |
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leadership capability, and demonstrated ability in investigation, |
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prosecution, management analysis, public administration, criminal |
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justice administration, accounting, auditing, financial analysis, |
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law, and other closely related fields. Professional certifications |
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that are recommended, but not required, include certified fraud |
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examiner, certified public accountant, and certified internal |
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auditor. |
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(d) Deputy inspectors general serve at the will of the |
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inspector general. |
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Sec. 2116.102. EMPLOYEES. (a) The inspector general and |
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deputy inspectors general may appoint, employ, promote, and remove |
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assistants, employees, and personnel as necessary to efficiently |
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and effectively administer the office. |
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(b) The inspector general and deputy inspectors general |
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shall train office staff to enable the staff to pursue fraud, waste, |
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and abuse cases, including priority Medicaid and other health and |
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human services fraud, waste, and abuse cases. |
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Sec. 2116.103. EXPERTS. Subject to the availability of |
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funds, the inspector general and deputy inspectors general may |
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contract with certified public accountants, qualified management |
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consultants, or other professional experts as necessary to |
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independently perform the functions of the office. |
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Sec. 2116.104. PEACE OFFICERS. (a) The inspector general |
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and deputy inspectors general may commission and hire commissioned |
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peace officers for the limited purposes of carrying out duties |
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within the scope of authority of the office. |
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(b) Investigators assigned to conduct investigations at the |
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Texas Department of Criminal Justice, Texas Youth Commission, and |
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Texas Juvenile Probation Commission must be commissioned peace |
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officers. Commissioned peace officers assigned to conduct |
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investigations at all other agencies may not exceed 15 percent of |
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the office's full-time equivalent positions in those agencies. |
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(c) A commissioned peace officer or otherwise designated |
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law enforcement officer employed by the office is exempt from and |
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not entitled to supplemental benefits of the Supplemental |
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Retirement Program for Commissioned Peace Officers and Custodial |
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Officers provided under applicable provisions of Title 8 relating |
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to public retirement systems unless the officer transfers from a |
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position, without a break in service, that qualifies for |
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supplemental retirement benefits under that program. |
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[Sections 2116.105-2116.150 reserved for expansion] |
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SUBCHAPTER D. GENERAL POWERS AND DUTIES |
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Sec. 2116.151. AUTHORITY. (a) The office is responsible |
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for investigating and deterring fraud, waste, and abuse, as defined |
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by applicable state and federal law, in the operations of agencies |
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to which this chapter applies. |
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(b) The office may obtain any information or technology |
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necessary to enable the office to meet its responsibilities under |
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this chapter or other law. |
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(c) The inspector general shall set clear objectives, |
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priorities, and performance standards that emphasize: |
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(1) coordinating investigative efforts to |
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aggressively recover money; |
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(2) allocating resources to cases having the strongest |
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supportive evidence and greatest potential for the recovery of |
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money; |
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(3) allocating resources to cases involving the |
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protection of the public and agency clients; |
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(4) maximizing opportunities to refer cases to the |
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office of the attorney general in accordance with this chapter; and |
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(5) protecting state and federal funds. |
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Sec. 2116.152. POWERS. (a) The office has all the powers |
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necessary or appropriate to carry out its responsibilities and |
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functions under this chapter and other law. On its own initiative |
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or on the basis of a complaint or information received from any |
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source, the office may: |
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(1) investigate, audit, or review any activity or |
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operation of an agency for the purpose of detecting or preventing |
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fraud, waste, abuse, or employee misconduct; |
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(2) investigate, audit, or review all activities, |
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records, individuals with contracts, procurements, grants, |
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agreements, and other programmatic and financial arrangements |
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undertaken by an agency and any other function, activity, process, |
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or operation conducted by an agency or any other organization or |
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individual that may be involved with an agency; |
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(3) audit the use and effectiveness of state or |
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federal funds, including contract and grant funds, administered by |
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a person or agency; |
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(4) conduct investigations relating to the funds |
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described by Subdivision (3); |
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(5) recommend policies promoting economical and |
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efficient administration of the funds described by Subdivision (3) |
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and the prevention and detection of fraud and abuse in the |
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administration of those funds; |
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(6) ensure that an agency's internal audit plan has |
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provisions for reviewing and reporting on the economy, efficiency, |
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and effectiveness of the agency's operations and functions; |
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(7) conduct reviews of an agency's performance |
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measurement system; |
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(8) review the reliability and validity of information |
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provided by an agency's performance measures and standards; |
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(9) provide information and evidence relating to |
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criminal acts to appropriate law enforcement officials; |
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(10) investigate, audit, or review any organization or |
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individual that may be involved with an agency, as deemed |
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appropriate; |
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(11) investigate alleged service deficiencies, |
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including deficiencies in the operation and maintenance of |
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facilities; |
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(12) refer matters for civil, criminal, or |
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administrative action to the appropriate administrative and |
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prosecutorial agencies, including the office of the attorney |
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general; |
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(13) conduct joint investigations and projects with |
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other oversight or law enforcement agencies; |
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(14) recommend to agencies remedial actions to correct |
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operating deficiencies and inefficiencies at the agency related to |
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the economical and efficient administration of funds and the |
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prevention and detection of fraud, waste, and abuse in the |
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administration of programs and funds; |
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(15) monitor the implementation of recommendations |
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for compliance made to an agency by the office or another audit |
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agency; |
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(16) provide for coordination between the office and |
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special investigative units formed by managed care organizations |
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under Section 531.113 or entities with which managed care |
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organizations contract under that section; |
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(17) attend any meetings held by an agency; |
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(18) cooperate with appropriate administrative and |
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prosecutorial agencies, including the office of the attorney |
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general, in recovering costs incurred under this chapter and other |
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law from nongovernmental entities, including contractors or |
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individuals involved in: |
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(A) violations of state or federal rules or |
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statutes; or |
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(B) fraudulent, wasteful, abusive, or willful |
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misconduct; |
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(19) request and compel from any department, board, |
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bureau, commission, office, or other agency of the state or any of |
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its political subdivisions such cooperation, assistance, services, |
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and data as will enable the inspector general to carry out the |
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inspector general's functions, duties, and powers under this |
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chapter; |
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(20) impose administrative sanctions authorized under |
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state and federal law and under rules established by the office; |
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(21) assess administrative penalties otherwise |
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authorized by law on behalf of an agency; |
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(22) request that the attorney general obtain an |
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injunction to prevent the disposition or destruction of an asset |
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identified by the office as potentially subject to review or |
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recovery by the office as part of an investigation of fraud, waste, |
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or abuse; |
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(23) review, develop, and recommend legislation, |
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rules, regulations, policies, procedures, and appropriate training |
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and education for the purpose of promoting the economical and |
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efficient administration of program and agency funds, including |
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contract and grant funds, and the prevention and detection of |
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fraud, waste, and abuse in the administration of those funds; |
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(24) conduct internal affairs investigations in |
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instances of fraud, waste, abuse, or misconduct by employees, |
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contractors, subcontractors, or vendors related to an agency; |
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(25) with authority that supersedes any claim of |
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confidentiality or privilege, obtain full and unrestricted access |
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to all agency offices, limited access or restricted areas, |
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employees, records, reports, plans, projections, matters, |
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contracts, memoranda, correspondence, and any other materials, |
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including electronic data of the agency or any person, including |
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contractors, subcontractors, providers, recipients of funds or |
|
benefits, and persons who are regulated by an agency; |
|
(26) administer oaths or affirmations and take |
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testimony deemed to be relevant to an investigation, audit, or |
|
review; |
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(27) communicate with the head of any public entity |
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when necessary for purposes related to the work of the office; |
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(28) require employees of an agency to report to the |
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office information regarding fraud, waste, misuse, corruption, |
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illegal acts, and abuse; |
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(29) recover overpayments and impose sanctions on a |
|
person based on the person's fraud or abuse and may appropriately |
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distribute recovered funds to state and federal agencies; |
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(30) perform data matches with agencies to identify |
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fraud, waste, or abuse; |
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(31) develop rules for the imposition of payment holds |
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on contractors and providers determined to have committed fraud or |
|
abuse in programs administered by an agency; and |
|
(32) develop rules for conducting criminal history |
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background checks on applicants, providers, and contractors |
|
participating in or applying for participation in programs |
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administered by an agency. |
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(b) Failure to comply with a request for cooperation, |
|
assistance, services, or data made under Subsection (a)(19) will |
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subject the requested entity to an administrative penalty of up to |
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$100,000 per violation. The penalty will be paid from the entity's |
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next scheduled biennium allocation directly to the inspector |
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general. Such failure to comply may also constitute a violation |
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under other applicable state law. |
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Sec. 2116.153. GENERAL DUTIES OF INSPECTOR GENERAL. |
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(a) The inspector general shall administer and enforce the powers |
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and duties of the office under this chapter and other law. |
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(b) The inspector general shall maintain information |
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documenting the cost of inspection, audit, and review operations of |
|
the office. |
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(c) The inspector general and deputy inspectors general |
|
shall advise and consult with the presiding officer of an agency, |
|
including consultation regarding: |
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(1) the selection of internal audit topics; |
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(2) the establishment of internal audit priorities; |
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and |
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(3) the findings of each regular or special audit |
|
initiative. |
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(d) The inspector general shall consult with the governor as |
|
necessary to perform the duties of the office. |
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Sec. 2116.154. ALLEGATIONS OF MISCONDUCT AGAINST PRESIDING |
|
OFFICER. If allegations that a presiding officer has engaged in |
|
misconduct result in an investigation by the inspector general or a |
|
deputy inspector general, the inspector general or deputy inspector |
|
general may not inform any personnel of the subject agency of the |
|
investigation until the final report on the investigation is |
|
completed and delivered under Section 2116.201 or the investigation |
|
is closed without a finding, unless the inspector general |
|
determines that disclosure to agency personnel is appropriate. |
|
Sec. 2116.155. INTERAGENCY COORDINATION. (a) The State |
|
Office of Inspector General and the office of the attorney general |
|
shall enter into a memorandum of understanding to develop and |
|
implement joint written procedures for processing cases of |
|
suspected fraud, waste, or abuse, as those terms are defined by |
|
state or federal law, or other violations of state or federal law |
|
under any program administered by an agency, including the state |
|
Medicaid program, the financial assistance program under Chapter |
|
31, Human Resources Code, a nutritional assistance program under |
|
Chapter 33, Human Resources Code, and the child health plan |
|
program. The memorandum of understanding shall require: |
|
(1) the State Office of Inspector General and the |
|
office of the attorney general to set priorities and guidelines for |
|
referring cases to the appropriate state agencies for |
|
investigation, prosecution, or other disposition to enhance |
|
deterrence of fraud, waste, abuse, or other violations of state or |
|
federal law, including a violation of Chapter 102, Occupations |
|
Code, in an agency program and to maximize the imposition of |
|
penalties, the recovery of money, and the successful prosecution of |
|
cases; |
|
(2) the State Office of Inspector General to refer |
|
each case of suspected provider fraud, waste, or abuse to the office |
|
of the attorney general not later than the 20th business day after |
|
the date the State Office of Inspector General determines that the |
|
existence of fraud, waste, or abuse is reasonably indicated; |
|
(3) the office of the attorney general to take |
|
appropriate action in response to each case referred to the |
|
attorney general, which action may include direct initiation of |
|
prosecution, with the consent of the appropriate local district or |
|
county attorney; direct initiation of civil litigation, referral to |
|
an appropriate United States attorney, a district attorney, or a |
|
county attorney; or referral to a collections agency for the |
|
initiation of civil litigation or other appropriate action; |
|
(4) the State Office of Inspector General to keep |
|
detailed records for cases processed by that office or the office of |
|
the attorney general, including information on the total number of |
|
cases processed and, for each case: |
|
(A) the agency and division to which the case is |
|
referred for investigation; |
|
(B) the date on which the case is referred; and |
|
(C) the nature of the suspected fraud, waste, or |
|
abuse; |
|
(5) the State Office of Inspector General to notify |
|
each appropriate division of the office of the attorney general of |
|
each case referred by the State Office of Inspector General; |
|
(6) the office of the attorney general to ensure that |
|
information relating to each case investigated by that office is |
|
available to each division of the office with responsibility for |
|
investigating suspected fraud, waste, or abuse; |
|
(7) the office of the attorney general to notify the |
|
State Office of Inspector General of each case the attorney general |
|
declines to prosecute or prosecutes unsuccessfully; |
|
(8) representatives of the State Office of Inspector |
|
General and of the office of the attorney general to meet not less |
|
than quarterly to share case information related to the |
|
investigation and prosecution of each case; and |
|
(9) the State Office of Inspector General and the |
|
office of the attorney general to submit information requested by |
|
the comptroller about each resolved case for the comptroller's use |
|
in improving fraud detection. |
|
(b) An exchange of information under this section between |
|
the office of the attorney general and the State Office of Inspector |
|
General or an agency does not affect whether the information is |
|
subject to disclosure under Chapter 552. |
|
(c) In addition to the provisions required by Subsection |
|
(a), the memorandum of understanding required by this section must |
|
also ensure that no barriers to direct fraud referrals to the office |
|
of the attorney general's Medicaid fraud control unit or |
|
unreasonable impediments to communication between Medicaid agency |
|
employees and the Medicaid fraud control unit are imposed and must |
|
include procedures to facilitate the referral of cases directly to |
|
the office of the attorney general. |
|
Sec. 2116.156. ASSISTING INVESTIGATIONS BY ATTORNEY |
|
GENERAL. (a) The State Office of Inspector General and the office |
|
of the attorney general shall execute a memorandum of understanding |
|
under which the State Office of Inspector General shall provide |
|
investigative support, as required, to the office of the attorney |
|
general in connection with cases of fraud, waste, or abuse, |
|
including cases under Subchapter B, Chapter 36, Human Resources |
|
Code. Under the memorandum of understanding, the State Office of |
|
Inspector General shall assist in performing investigations for |
|
actions prosecuted by the attorney general, including actions under |
|
Subchapter C, Chapter 36, Human Resources Code. |
|
(b) The memorandum of understanding must specify the type, |
|
scope, and format of the investigative support provided to the |
|
office of the attorney general under this section. |
|
(c) The memorandum of understanding must ensure that no |
|
barriers to direct fraud referrals to the state's Medicaid fraud |
|
control unit by Medicaid agencies or unreasonable impediments to |
|
communication between Medicaid agency employees and the state's |
|
Medicaid fraud control unit will be imposed. |
|
Sec. 2116.157. FRAUD PREVENTION. (a) The office shall |
|
compile and disseminate accurate information and statistics |
|
relating to: |
|
(1) fraud prevention; and |
|
(2) post-fraud referrals received and accepted or |
|
rejected from the office's case management system or the case |
|
management system of an agency. |
|
(b) The office shall: |
|
(1) aggressively publicize successful fraud |
|
prosecutions and fraud-prevention programs through all available |
|
means, including the use of statewide press releases; and |
|
(2) maintain and promote a toll-free hotline for |
|
reporting suspected fraud in programs administered by an agency. |
|
(c) The office shall develop a cost-effective method of |
|
identifying applicants for public assistance in counties bordering |
|
other states and in metropolitan areas selected by the office |
|
who are already receiving benefits in other states. If |
|
economically feasible, the office may develop a computerized |
|
matching system. |
|
(d) The office shall: |
|
(1) verify automobile information that is used as |
|
criteria for eligibility for public assistance; and |
|
(2) establish a computerized matching system with the |
|
Texas Department of Criminal Justice to prevent an incarcerated |
|
individual from illegally receiving public assistance benefits |
|
administered by an agency. |
|
(e) The office shall submit to the governor and the |
|
Legislative Budget Board a semiannual report on the results of |
|
computerized matching of office information with information from |
|
neighboring states, if any, and information from the Texas |
|
Department of Criminal Justice. The report may be consolidated |
|
with any other report relating to the same subject matter that the |
|
office is required to submit under other law. |
|
Sec. 2116.158. SUBPOENAS. (a) The inspector general and |
|
deputy inspectors general may, in connection with an investigation, |
|
audit, or review conducted by the office, issue a subpoena or |
|
request a grand jury subpoena to compel the attendance of a relevant |
|
witness or the production, for inspection, confiscation, or |
|
copying, of relevant evidence, including books, papers, records, |
|
equipment, documents, and electronic data, located in this state. |
|
(b) A subpoena may be served personally or by certified |
|
mail. |
|
(c) If a person fails to comply with a subpoena, the office, |
|
acting through the attorney general, may file suit to enforce the |
|
subpoena in a district court in this state. |
|
(d) On finding that good cause exists for issuing the |
|
subpoena, the court shall order the person to comply with the |
|
subpoena. The court may punish a person who fails to obey the court |
|
order. |
|
(e) The reimbursement of the expenses of a witness whose |
|
attendance is compelled under this section is governed by Section |
|
2001.103. |
|
Sec. 2116.159. FEDERAL FELONY WATCH. The office shall |
|
develop and implement a system to cross-reference data collected |
|
for the programs listed under Section 531.008(c) with the list of |
|
fugitive felons maintained by the federal government. |
|
Sec. 2116.160. ASSESSMENT AND COLLECTION OF CERTAIN FEES |
|
AND COSTS. (a) The Office of State Inspector General and the |
|
office of the attorney general may not assess or collect |
|
investigation and attorney's fees on behalf of any state agency |
|
unless the office of the attorney general or other state agency |
|
collects a penalty, restitution, or other reimbursement payment to |
|
the state. |
|
(b) A district attorney, county attorney, city attorney, or |
|
private collection agency may collect and retain costs associated |
|
with a case referred to the attorney or agency in accordance with |
|
procedures adopted under Section 2116.155 and 20 percent of the |
|
amount of the penalty, restitution, or other reimbursement payment |
|
collected. |
|
[Sections 2116.161-2116.200 reserved for expansion] |
|
SUBCHAPTER E. REPORTS |
|
Sec. 2116.201. FINAL REPORTS. (a) The inspector general |
|
or the deputy inspector general for the subject agency shall |
|
prepare a final report on each investigation, audit, or review |
|
conducted under this chapter. A final report must include: |
|
(1) a summary of the activities performed by the |
|
office in conducting the investigation, audit, or review; |
|
(2) a statement regarding whether the investigation, |
|
audit, or review resulted in a finding of any wrongdoing; and |
|
(3) a description of any findings of wrongdoing. |
|
(b) Unless otherwise prohibited by this chapter or other |
|
law, the inspector general shall deliver a copy of each final report |
|
to: |
|
(1) the presiding officer of the subject agency; |
|
(2) the governor; |
|
(3) the lieutenant governor; |
|
(4) the speaker of the house of representatives; |
|
(5) appropriate law enforcement and prosecutorial |
|
agencies; and |
|
(6) appropriate licensing or certification agencies. |
|
Sec. 2116.202. AGENCY RESPONSE. (a) Not later than the |
|
60th day after the issuance of any inspector general report that |
|
identifies deficiencies or recommends specified corrective |
|
measures in the operations of an agency, the agency shall file a |
|
response including an implementation plan and timeline for |
|
implementing corrective measures. If the agency elects to decline |
|
implementation of corrective measures for the identified |
|
deficiencies or to implement the inspector general's recommended |
|
corrective measures, the agency response must include rationale for |
|
the declination. |
|
(b) The office shall specify by rule the format and |
|
requirements of an agency response. |
|
(c) An agency to which this chapter applies shall adopt |
|
rules to respond to reports and recommendations from the inspector |
|
general or deputy inspectors general, including sanctions for |
|
agency violations. |
|
Sec. 2116.203. ANNUAL REPORT. (a) The inspector general |
|
shall prepare annually a complete and detailed written report |
|
describing the activities of the office during the fiscal year. The |
|
report shall separately describe each major investigation, audit, |
|
review, fraud prevention effort, and agency assistance effort |
|
completed during the fiscal year. |
|
(b) The annual report must meet the reporting requirements |
|
applicable to financial reporting provided in the General |
|
Appropriations Act. |
|
(c) The inspector general shall deliver a copy of each |
|
annual report to: |
|
(1) the governor; |
|
(2) the lieutenant governor; |
|
(3) the speaker of the house of representatives; |
|
(4) the presiding officer of each house and senate |
|
committee having jurisdiction over an agency to which this chapter |
|
applies; |
|
(5) the presiding officer of each agency to which this |
|
chapter applies; and |
|
(6) the comptroller. |
|
(d) Each agency to which this chapter applies shall post the |
|
annual report on its agency website. |
|
(e) The annual report shall be issued not later than the |
|
60th day after the end of each fiscal year. |
|
Sec. 2116.204. JOINT REPORT WITH ATTORNEY GENERAL. |
|
(a) The State Office of Inspector General and the office of the |
|
attorney general shall jointly prepare and submit a semiannual |
|
report concerning the activities of agencies in detecting and |
|
preventing fraud, waste, and abuse in programs administered by the |
|
agencies. The report may be consolidated with any other report |
|
relating to the same subject matter the State Office of Inspector |
|
General or office of the attorney general is required to submit |
|
under other law. |
|
(b) The inspector general shall deliver a copy of each joint |
|
report to: |
|
(1) the governor; |
|
(2) the lieutenant governor; |
|
(3) the speaker of the house of representatives; |
|
(4) the presiding officer of each house and senate |
|
committee having jurisdiction over an agency to which this chapter |
|
applies; |
|
(5) the presiding officer of each agency to which this |
|
chapter applies; and |
|
(6) the comptroller. |
|
Sec. 2116.205. FLAGRANT VIOLATIONS; IMMEDIATE REPORT. |
|
Unless otherwise prohibited by this chapter or other law, the |
|
inspector general shall immediately report to the presiding officer |
|
of an agency particularly serious or flagrant problems, abuses, or |
|
deficiencies relating to the administration of programs and |
|
operations of the agency or interference with inspector general |
|
operations. |
|
[Sections 2116.206-2116.250 reserved for expansion] |
|
SUBCHAPTER F. PUBLIC RECORDS |
|
Sec. 2116.251. INFORMATION CONFIDENTIAL. (a) Except as |
|
provided by this section and Section 2116.252, all records, |
|
information, and material compiled by the office in connection with |
|
an investigation, audit, or review, including records, |
|
information, and material disclosed under Subsection (b) or |
|
obtained through subpoena, is: |
|
(1) confidential and not subject to disclosure under |
|
Chapter 552 and may not be released except in accordance with this |
|
chapter; and |
|
(2) not subject to disclosure, discovery, subpoena, or |
|
other means of legal compulsion for release to anyone other than the |
|
office or its employees or agents involved in the investigation, |
|
audit, or review. |
|
(b) As the inspector general determines appropriate, |
|
information relating to an investigation, audit, or review may be |
|
disclosed to: |
|
(1) the governor; |
|
(2) the attorney general; |
|
(3) the state auditor's office; |
|
(4) a law enforcement agency; or |
|
(5) a licensing and certification agency. |
|
(c) A person that receives information under Subsection (b) |
|
may not disclose the information except to the extent that |
|
disclosure is consistent with the authorized purpose for which the |
|
person first obtained the information. |
|
(d) The names and identities of individuals making |
|
complaints and identifying information protected by whistleblower |
|
laws or other law may not be disclosed unless required by law or |
|
judicial processes. |
|
(e) The inspector general shall maintain the |
|
confidentiality of any public information made confidential by law |
|
that is obtained from the custodian of the information and is |
|
subject to the same penalties as the custodian of the public |
|
information for violating confidentiality statutes. |
|
(f) The office shall make efforts to protect the privacy of |
|
individuals or employees whenever possible without interfering in |
|
judicial or administrative processes initiated to protect the |
|
public. |
|
Sec. 2116.252. FINAL REPORT DISCLOSURE. (a) A final |
|
report required under Section 2116.201 is subject to disclosure |
|
under Chapter 552. |
|
(b) All working papers and other documents related to |
|
compiling a final report remain confidential and are not subject to |
|
disclosure under Chapter 552. |
|
SECTION 2. Section 20.038, Business & Commerce Code, is |
|
amended to read as follows: |
|
Sec. 20.038. EXEMPTION FROM SECURITY FREEZE. A security |
|
freeze does not apply to a consumer report provided to: |
|
(1) a state or local governmental entity, including a |
|
law enforcement agency or court or private collection agency, if |
|
the entity, agency, or court is acting under a court order, warrant, |
|
subpoena, or administrative subpoena; |
|
(2) a child support agency as defined by Section |
|
101.004, Family Code, acting to investigate or collect child |
|
support payments or acting under Title IV-D of the Social Security |
|
Act (42 U.S.C. Section 651 et seq.); |
|
(3) the State Office of Inspector General [Health and
|
|
Human Services Commission] acting to investigate fraud, waste, or |
|
abuse in state agencies under Chapter 2116, Government Code, or |
|
other law [under Section 531.102, Government Code]; |
|
(4) the comptroller acting to investigate or collect |
|
delinquent sales or franchise taxes; |
|
(5) a tax assessor-collector acting to investigate or |
|
collect delinquent ad valorem taxes; |
|
(6) a person for the purposes of prescreening as |
|
provided by the Fair Credit Reporting Act (15 U.S.C. Section 1681 et |
|
seq.), as amended; |
|
(7) a person with whom the consumer has an account or |
|
contract or to whom the consumer has issued a negotiable |
|
instrument, or the person's subsidiary, affiliate, agent, |
|
assignee, prospective assignee, or private collection agency, for |
|
purposes related to that account, contract, or instrument; |
|
(8) a subsidiary, affiliate, agent, assignee, or |
|
prospective assignee of a person to whom access has been granted |
|
under Section 20.037(b); |
|
(9) a person who administers a credit file monitoring |
|
subscription service to which the consumer has subscribed; |
|
(10) a person for the purpose of providing a consumer |
|
with a copy of the consumer's report on the consumer's request; |
|
(11) a check service or fraud prevention service |
|
company that issues consumer reports: |
|
(A) to prevent or investigate fraud; or |
|
(B) for purposes of approving or processing |
|
negotiable instruments, electronic funds transfers, or similar |
|
methods of payment; |
|
(12) a deposit account information service company |
|
that issues consumer reports related to account closures caused by |
|
fraud, substantial overdrafts, automated teller machine abuses, or |
|
similar negative information regarding a consumer to an inquiring |
|
financial institution for use by the financial institution only in |
|
reviewing a consumer request for a deposit account with that |
|
institution; or |
|
(13) a consumer reporting agency that: |
|
(A) acts only to resell credit information by |
|
assembling and merging information contained in a database of |
|
another consumer reporting agency or multiple consumer reporting |
|
agencies; and |
|
(B) does not maintain a permanent database of |
|
credit information from which new consumer reports are produced. |
|
SECTION 3. Article 2.12, Code of Criminal Procedure, is |
|
amended to read as follows: |
|
Art. 2.12. WHO ARE PEACE OFFICERS. The following are peace |
|
officers: |
|
(1) sheriffs, their deputies, and those reserve |
|
deputies who hold a permanent peace officer license issued under |
|
Chapter 1701, Occupations Code; |
|
(2) constables, deputy constables, and those reserve |
|
deputy constables who hold a permanent peace officer license issued |
|
under Chapter 1701, Occupations Code; |
|
(3) marshals or police officers of an incorporated |
|
city, town, or village, and those reserve municipal police officers |
|
who hold a permanent peace officer license issued under Chapter |
|
1701, Occupations Code; |
|
(4) rangers and officers commissioned by the Public |
|
Safety Commission and the Director of the Department of Public |
|
Safety; |
|
(5) investigators of the district attorneys', criminal |
|
district attorneys', and county attorneys' offices; |
|
(6) law enforcement agents of the Texas Alcoholic |
|
Beverage Commission; |
|
(7) each member of an arson investigating unit |
|
commissioned by a city, a county, or the state; |
|
(8) officers commissioned under Section 37.081, |
|
Education Code, or Subchapter E, Chapter 51, Education Code; |
|
(9) officers commissioned by the General Services |
|
Commission; |
|
(10) law enforcement officers commissioned by the |
|
Parks and Wildlife Commission; |
|
(11) airport police officers commissioned by a city |
|
with a population of more than 1.18 million that operates an airport |
|
that serves commercial air carriers; |
|
(12) airport security personnel commissioned as peace |
|
officers by the governing body of any political subdivision of this |
|
state, other than a city described by Subdivision (11), that |
|
operates an airport that serves commercial air carriers; |
|
(13) municipal park and recreational patrolmen and |
|
security officers; |
|
(14) security officers and investigators commissioned |
|
as peace officers by the comptroller; |
|
(15) officers commissioned by a water control and |
|
improvement district under Section 49.216, Water Code; |
|
(16) officers commissioned by a board of trustees |
|
under Chapter 54, Transportation Code; |
|
(17) investigators commissioned by the Texas State |
|
Board of Medical Examiners; |
|
(18) officers commissioned by the board of managers of |
|
the Dallas County Hospital District, the Tarrant County Hospital |
|
District, or the Bexar County Hospital District under Section |
|
281.057, Health and Safety Code; |
|
(19) county park rangers commissioned under |
|
Subchapter E, Chapter 351, Local Government Code; |
|
(20) investigators employed by the Texas Racing |
|
Commission; |
|
(21) officers commissioned under Chapter 554, |
|
Occupations Code; |
|
(22) officers commissioned by the governing body of a |
|
metropolitan rapid transit authority under Section 451.108, |
|
Transportation Code, or by a regional transportation authority |
|
under Section 452.110, Transportation Code; |
|
(23) investigators commissioned by the attorney |
|
general under Section 402.009, Government Code; |
|
(24) security officers and investigators commissioned |
|
as peace officers under Chapter 466, Government Code; |
|
(25) an officer employed by the Texas Department of |
|
Health under Section 431.2471, Health and Safety Code; |
|
(26) officers appointed by an appellate court under |
|
Subchapter F, Chapter 53, Government Code; |
|
(27) officers commissioned by the state fire marshal |
|
under Chapter 417, Government Code; |
|
(28) an investigator commissioned by the commissioner |
|
of insurance under Article 1.10D, Insurance Code; |
|
(29) apprehension specialists commissioned by the |
|
Texas Youth Commission as officers under Section 61.0931, Human |
|
Resources Code; |
|
(30) officers appointed by the executive director of |
|
the Texas Department of Criminal Justice under Section 493.019, |
|
Government Code; |
|
(31) investigators commissioned by the Commission on |
|
Law Enforcement Officer Standards and Education under Section |
|
1701.160, Occupations Code; |
|
(32) commission investigators commissioned by the |
|
Texas Commission on Private Security under Section 1702.061(f), |
|
Occupations Code; |
|
(33) the fire marshal and any officers, inspectors, or |
|
investigators commissioned by an emergency services district under |
|
Chapter 775, Health and Safety Code; [and] |
|
(34) officers commissioned by the State Board of |
|
Dental Examiners under Section 254.013, Occupations Code, subject |
|
to the limitations imposed by that section; and |
|
(35) investigators commissioned or employed by the |
|
State Office of Inspector General under Chapter 2116, Government |
|
Code. |
|
SECTION 4. Subsection (p), Article 59.06, Code of Criminal |
|
Procedure, is amended to read as follows: |
|
(p) Notwithstanding Subsection (a), and to the extent |
|
necessary to protect the State Office of Inspector General's |
|
[commission's] ability to recover amounts wrongfully obtained by |
|
the owner of the property and associated damages and penalties to |
|
which the State Office of Inspector General [commission] may |
|
otherwise be entitled by law, the attorney representing the state |
|
shall transfer to the State Office of Inspector General, for |
|
appropriate distribution, [Health and Human Services Commission] |
|
all forfeited property defined as contraband under Article |
|
59.01(2)(B)(vii). If the forfeited property consists of property |
|
other than money or negotiable instruments, the attorney |
|
representing the state may, if approved by the State Office of |
|
Inspector General [commission], sell the property and deliver to |
|
the State Office of Inspector General, for appropriate |
|
distribution, [commission] the proceeds from the sale, minus costs |
|
attributable to the sale. The sale must be conducted in a manner |
|
that is reasonably expected to result in receiving the fair market |
|
value for the property. |
|
SECTION 5. Subsection (c), Section 531.008, Government |
|
Code, is amended to read as follows: |
|
(c) The executive commissioner shall establish the |
|
following divisions and offices within the commission: |
|
(1) the eligibility services division to make |
|
eligibility determinations for services provided through the |
|
commission or a health and human services agency related to: |
|
(A) the child health plan program; |
|
(B) the financial assistance program under |
|
Chapter 31, Human Resources Code; |
|
(C) the medical assistance program under Chapter |
|
32, Human Resources Code; |
|
(D) the nutritional assistance programs under |
|
Chapter 33, Human Resources Code; |
|
(E) long-term care services, as defined by |
|
Section 22.0011, Human Resources Code; |
|
(F) community-based support services identified |
|
or provided in accordance with Section 531.02481; and |
|
(G) other health and human services programs, as |
|
appropriate; |
|
(2) [the office of inspector general to perform fraud
|
|
and abuse investigation and enforcement functions as provided by
|
|
Subchapter C and other law;
|
|
[(3)] the office of the ombudsman to: |
|
(A) provide dispute resolution services for the |
|
commission and the health and human services agencies; and |
|
(B) perform consumer protection functions |
|
related to health and human services; |
|
(3) [(4)] a purchasing division as provided by Section |
|
531.017; and |
|
(4) [(5)] an internal audit division to conduct a |
|
program of internal auditing in accordance with [Government Code,] |
|
Chapter 2102. |
|
SECTION 6. Subsections (a) and (b), Section 531.101, |
|
Government Code, are amended to read as follows: |
|
(a) The office [commission] may grant an award to an |
|
individual who reports activity that constitutes fraud or abuse of |
|
funds in the state Medicaid program or reports overcharges in the |
|
program if the office [commission] determines that the disclosure |
|
results in the recovery of an administrative penalty imposed under |
|
Section 32.039, Human Resources Code. The office [commission] may |
|
not grant an award to an individual in connection with a report if |
|
the office [commission] or attorney general had independent |
|
knowledge of the activity reported by the individual. |
|
(b) The office [commission] shall determine the amount of an |
|
award. The award may not exceed five percent of the amount of the |
|
administrative penalty imposed under Section 32.039, Human |
|
Resources Code, that resulted from the individual's disclosure. In |
|
determining the amount of the award, the office [commission] shall |
|
consider how important the disclosure is in ensuring the fiscal |
|
integrity of the program. The office [commission] may also |
|
consider whether the individual participated in the fraud, abuse, |
|
or overcharge. |
|
SECTION 7. Section 531.1011, Government Code, is amended by |
|
adding Subdivision (3-a) to read as follows: |
|
(3-a) "Office" means the State Office of Inspector General. |
|
SECTION 8. Section 531.102, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.102. STATE OFFICE OF INSPECTOR GENERAL. (a) The |
|
office [commission, through the commission's office of inspector
|
|
general,] is responsible for the investigation of fraud and abuse |
|
in the provision of health and human services and the enforcement of |
|
state law relating to the provision of those services. The office |
|
[commission] may obtain any information or technology necessary to |
|
enable the office to meet its responsibilities under this |
|
subchapter, Chapter 2116, or other law. |
|
[(a-1) The governor shall appoint an inspector general to
|
|
serve as director of the office. The inspector general serves a
|
|
one-year term that expires on February 1.] |
|
(b) [The commission, in consultation with the inspector
|
|
general, shall set clear objectives, priorities, and performance
|
|
standards for the office that emphasize:
|
|
[(1) coordinating investigative efforts to
|
|
aggressively recover money;
|
|
[(2) allocating resources to cases that have the
|
|
strongest supportive evidence and the greatest potential for
|
|
recovery of money; and
|
|
[(3) maximizing opportunities for referral of cases to
|
|
the office of the attorney general in accordance with Section
|
|
531.103.
|
|
[(c) The commission shall train office staff to enable the
|
|
staff to pursue priority Medicaid and other health and human
|
|
services fraud and abuse cases as necessary.
|
|
[(d)] The commission shall [may] require employees of |
|
health and human services agencies to provide assistance to the |
|
office in connection with the office's duties relating to the |
|
investigation of fraud, waste, and abuse in the provision of health |
|
and human services. The office is entitled to access to any |
|
information maintained by a health and human services agency, |
|
including internal records, relevant to the functions of the |
|
office. |
|
(c) [(e)] The [commission, in consultation with the] |
|
inspector general[,] by rule shall set specific claims criteria |
|
that, when met, require the office to begin an investigation. |
|
(d)(1) [(f)(1)] If the inspector general, the commission, |
|
or any health and human services agency receives a complaint of |
|
Medicaid fraud, waste, or abuse from any source, the office must |
|
conduct an integrity review to determine whether there is |
|
sufficient basis to warrant a full investigation. The commission |
|
or any health and human services agency shall immediately forward |
|
to the office a complaint received by the commission or any health |
|
and human services agency under this subdivision. An integrity |
|
review must begin not later than the 30th day after the date the |
|
inspector general [commission] receives a complaint directly or |
|
from any health and human services agency or has reason to believe |
|
that fraud, waste, or abuse has occurred. An integrity review shall |
|
be completed not later than the 90th day after it began. |
|
(2) If the findings of an integrity review give the |
|
office reason to believe that an incident of fraud or abuse |
|
involving possible criminal conduct has occurred in the Medicaid |
|
program, the office must take the following action, as appropriate, |
|
not later than the 30th day after the completion of the integrity |
|
review: |
|
(A) if a provider is suspected of fraud or abuse |
|
involving criminal conduct, the office must refer the case to the |
|
state's Medicaid fraud control unit, provided that the criminal |
|
referral does not preclude the office from continuing its |
|
investigation of the provider, which investigation may lead to the |
|
imposition of appropriate administrative or civil sanctions; or |
|
(B) if there is reason to believe that a |
|
recipient has defrauded the Medicaid program, the inspector general |
|
[office] may conduct a full investigation of the suspected fraud. |
|
(e)(1) [(g)(1)] Whenever the office learns or has reason to |
|
suspect that a provider's records are being withheld, concealed, |
|
destroyed, fabricated, or in any way falsified, the office shall |
|
immediately refer the case to the state's Medicaid fraud control |
|
unit. However, such criminal referral does not preclude the office |
|
from continuing its investigation of the provider, which |
|
investigation may lead to the imposition of appropriate |
|
administrative or civil sanctions. |
|
(2) In addition to other instances authorized under |
|
state or federal law, the office shall impose without prior notice a |
|
hold on payment of claims for reimbursement submitted by a provider |
|
to compel production of records or when requested by the state's |
|
Medicaid fraud control unit, as applicable. The office must notify |
|
the provider of the hold on payment not later than the fifth working |
|
day after the date the payment hold is imposed. |
|
(3) On timely written request by a provider subject to |
|
a hold on payment under Subdivision (2), other than a hold requested |
|
by the state's Medicaid fraud control unit, the office shall file a |
|
request with the State Office of Administrative Hearings for an |
|
expedited administrative hearing regarding the hold. The provider |
|
must request an expedited hearing under this subdivision not later |
|
than the 10th day after the date the provider receives notice from |
|
the office under Subdivision (2). |
|
(4) The inspector general [commission] shall adopt |
|
rules that allow a provider subject to a hold on payment under |
|
Subdivision (2), other than a hold requested by the state's |
|
Medicaid fraud control unit, to seek an informal resolution of the |
|
issues identified by the office in the notice provided under that |
|
subdivision. A provider must seek an informal resolution under |
|
this subdivision not later than the deadline prescribed by |
|
Subdivision (3). A provider's decision to seek an informal |
|
resolution under this subdivision does not extend the time by which |
|
the provider must request an expedited administrative hearing under |
|
Subdivision (3). However, a hearing initiated under Subdivision |
|
(3) shall be stayed at the office's request until the informal |
|
resolution process is completed. |
|
(5) The inspector general [office] shall, in |
|
consultation with the state's Medicaid fraud control unit, |
|
establish guidelines under which holds on payment or program |
|
exclusions: |
|
(A) may permissively be imposed on a provider; or |
|
(B) shall automatically be imposed on a provider. |
|
(f) [(h) In addition to performing functions and duties
|
|
otherwise provided by law, the office may:
|
|
[(1) assess administrative penalties otherwise
|
|
authorized by law on behalf of the commission or a health and human
|
|
services agency;
|
|
[(2) request that the attorney general obtain an
|
|
injunction to prevent a person from disposing of an asset
|
|
identified by the office as potentially subject to recovery by the
|
|
office due to the person's fraud or abuse;
|
|
[(3) provide for coordination between the office and
|
|
special investigative units formed by managed care organizations
|
|
under Section 531.113 or entities with which managed care
|
|
organizations contract under that section;
|
|
[(4) audit the use and effectiveness of state or
|
|
federal funds, including contract and grant funds, administered by
|
|
a person or state agency receiving the funds from a health and human
|
|
services agency;
|
|
[(5) conduct investigations relating to the funds
|
|
described by Subdivision (4); and
|
|
[(6) recommend policies promoting economical and
|
|
efficient administration of the funds described by Subdivision (4)
|
|
and the prevention and detection of fraud and abuse in
|
|
administration of those funds.
|
|
[(i)] Notwithstanding any other provision of law, a |
|
reference in law or rule to the commission's office of |
|
investigations and enforcement or the commission's office of |
|
inspector general means the State Office of Inspector General |
|
[office of inspector general] established under Chapter 2116 [this
|
|
section]. |
|
[(j) The office shall prepare a final report on each audit
|
|
or investigation conducted under this section. The final report
|
|
must include:
|
|
[(1) a summary of the activities performed by the
|
|
office in conducting the audit or investigation;
|
|
[(2) a statement regarding whether the audit or
|
|
investigation resulted in a finding of any wrongdoing; and
|
|
[(3)a description of any findings of wrongdoing.
|
|
[(k) A final report on an audit or investigation is subject
|
|
to required disclosure under Chapter 552. All information and
|
|
materials compiled during the audit or investigation remain
|
|
confidential and not subject to required disclosure in accordance
|
|
with Section 531.1021(g).] |
|
SECTION 9. Section 531.105, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.105. FRAUD DETECTION TRAINING. (a) The office |
|
[commission] shall develop and implement a program to provide |
|
annual training to contractors who process Medicaid claims and |
|
appropriate staff of health or human services agencies [the Texas
|
|
Department of Health and the Texas Department of Human Services] in |
|
identifying potential cases of fraud, waste, or abuse under the |
|
state Medicaid program. The training provided to the contractors |
|
and staff must include clear criteria that specify: |
|
(1) the circumstances under which a person should |
|
refer a potential case to the office [commission]; and |
|
(2) the time by which a referral should be made. |
|
(b) The [Texas] Department of State Health Services and the |
|
[Texas] Department of Aging and Disability [Human] Services, in |
|
cooperation with the office [commission], shall periodically set a |
|
goal of the number of potential cases of fraud, waste, or abuse |
|
under the state Medicaid program that each agency will attempt to |
|
identify and refer to the office [commission]. The office |
|
[commission] shall include information on the agencies' goals and |
|
the success of each agency in meeting the agency's goal in the |
|
report required by Section 2116.204 [531.103(c)]. |
|
SECTION 10. Subsections (a), (b), and (d) through (g), |
|
Section 531.106, Government Code, are amended to read as follows: |
|
(a) The office [commission] shall use learning or neural |
|
network technology to identify and deter fraud in the Medicaid |
|
program throughout this state. |
|
(b) The office [commission] shall contract with a private or |
|
public entity to develop and implement the technology. The office |
|
[commission] may require the entity it contracts with to install |
|
and operate the technology at locations specified by the office |
|
[commission], including State Office of Inspector General |
|
[commission] offices. |
|
(d) The office [commission] shall require each health and |
|
human services agency that performs any aspect of the state |
|
Medicaid program to participate in the implementation and use of |
|
the technology. |
|
(e) The office [commission] shall maintain all information |
|
necessary to apply the technology to claims data covering a period |
|
of at least two years. |
|
(f) The office [commission] shall investigate [refer] cases |
|
identified by the technology and shall refer cases to the |
|
[commission's office of investigations and enforcement or the] |
|
office of the attorney general for prosecution, as appropriate. |
|
(g) Each month, the learning or neural network technology |
|
implemented under this section must match bureau of vital |
|
statistics death records with Medicaid claims filed by a provider. |
|
If the office [commission] determines that a provider has filed a |
|
claim for services provided to a person after the person's date of |
|
death, as determined by the bureau of vital statistics death |
|
records, the office [commission] shall investigate [refer] the case |
|
[for investigation to the commission's office of investigations and
|
|
enforcement]. |
|
SECTION 11. Section 531.1061, Government Code, is amended |
|
to read as follows: |
|
Sec. 531.1061. FRAUD INVESTIGATION TRACKING SYSTEM. |
|
(a) The office [commission] shall use an automated fraud |
|
investigation tracking system [through the commission's office of
|
|
investigations and enforcement] to monitor the progress of an |
|
investigation of suspected fraud, waste, abuse, or insufficient |
|
quality of care under the state Medicaid program. |
|
(b) For each case of suspected fraud, waste, abuse, or |
|
insufficient quality of care identified by the learning or neural |
|
network technology required under Section 531.106, the automated |
|
fraud investigation tracking system must: |
|
(1) receive electronically transferred records |
|
relating to the identified case from the learning or neural network |
|
technology; |
|
(2) record the details and monitor the status of an |
|
investigation of the identified case, including maintaining a |
|
record of the beginning and completion dates for each phase of the |
|
case investigation; |
|
(3) generate documents and reports related to the |
|
status of the case investigation; and |
|
(4) generate standard letters to a provider regarding |
|
the status or outcome of an investigation. |
|
(c) The office [commission] shall require each health and |
|
human services agency that performs any aspect of the state |
|
Medicaid program to participate in the implementation and use of |
|
the automated fraud investigation tracking system. |
|
SECTION 12. Subsection (a), Section 531.1062, Government |
|
Code, is amended to read as follows: |
|
(a) The office [commission] shall use an automated recovery |
|
monitoring system to monitor the collections process for a settled |
|
case of fraud, waste, abuse, or insufficient quality of care under |
|
the state Medicaid program. |
|
SECTION 13. Subsections (a), (b), and (f), Section 531.107, |
|
Government Code, are amended to read as follows: |
|
(a) The Medicaid and Public Assistance Fraud Oversight Task |
|
Force advises and assists the office [commission and the
|
|
commission's office of investigations and enforcement] in |
|
improving the efficiency of fraud investigations and collections. |
|
(b) The task force is composed of a representative of the: |
|
(1) attorney general's office, appointed by the |
|
attorney general; |
|
(2) comptroller's office, appointed by the |
|
comptroller; |
|
(3) Department of Public Safety, appointed by the |
|
public safety director; |
|
(4) state auditor's office, appointed by the state |
|
auditor; |
|
(5) State Office of Inspector General, appointed by |
|
the inspector general [commission, appointed by the commissioner of
|
|
health and human services]; |
|
(6) [Texas] Department of Aging and Disability [Human] |
|
Services, appointed by the commissioner of aging and disability |
|
[human] services; |
|
(7) Texas Department of Insurance, appointed by the |
|
commissioner of insurance; and |
|
(8) [Texas] Department of State Health Services, |
|
appointed by the commissioner of state [public] health services. |
|
(f) At least once each fiscal quarter, the office |
|
[commission's office of investigations and enforcement] shall |
|
provide to the task force: |
|
(1) information detailing: |
|
(A) the number of fraud referrals made to the |
|
office and the origin of each referral; |
|
(B) the time spent investigating each case; |
|
(C) the number of cases investigated each month, |
|
by program and region; |
|
(D) the dollar value of each fraud case that |
|
results in a criminal conviction; and |
|
(E) the number of cases the office rejects and |
|
the reason for rejection, by region; and |
|
(2) any additional information the task force |
|
requires. |
|
SECTION 14. Section 531.109, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.109. SELECTION AND REVIEW OF CLAIMS. (a) The |
|
office [commission] shall annually select and review a random, |
|
statistically valid sample of all claims for reimbursement under |
|
the state Medicaid program, including the vendor drug program, for |
|
potential cases of fraud, waste, or abuse. |
|
(b) In conducting the annual review of claims under |
|
Subsection (a), the office [commission] may directly contact a |
|
recipient by telephone or in person, or both, to verify that the |
|
services for which a claim for reimbursement was submitted by a |
|
provider were actually provided to the recipient. |
|
(c) Based on the results of the annual review of claims, the |
|
office and the commission shall determine the types of claims at |
|
which the office and commission resources for fraud, waste, and |
|
abuse detection should be primarily directed. |
|
SECTION 15. Subsections (a) and (c) through (f), Section |
|
531.110, Government Code, are amended to read as follows: |
|
(a) The office [commission] shall conduct electronic data |
|
matches for a recipient of assistance under the state Medicaid |
|
program at least quarterly to verify the identity, income, |
|
employment status, and other factors that affect the eligibility of |
|
the recipient. |
|
(c) The commission and the [Texas] Department of Aging and |
|
Disability [Human] Services shall cooperate with the office |
|
[commission] by providing data or any other assistance necessary to |
|
conduct the electronic data matches required by this section. |
|
(d) The office [commission] may contract with a public or |
|
private entity to conduct the electronic data matches required by |
|
this section. |
|
(e) The office [commission], or a health and human services |
|
agency designated by the office [commission], by rule shall |
|
establish procedures to verify the electronic data matches |
|
conducted by the office [commission] under this section. Not later |
|
than the 20th day after the date the electronic data match is |
|
verified, the commission or the [Texas] Department of Aging and |
|
Disability [Human] Services shall remove from eligibility a |
|
recipient who is determined to be ineligible for assistance under |
|
the state Medicaid program. |
|
(f) The office [commission] shall report biennially to the |
|
legislature the results of the electronic data matching program. |
|
The report must include a summary of the number of applicants who |
|
were removed from eligibility for assistance under the state |
|
Medicaid program as a result of an electronic data match conducted |
|
under this section. |
|
SECTION 16. Section 531.111, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.111. FRAUD DETECTION TECHNOLOGY. The office |
|
[commission] may contract with a contractor who specializes in |
|
developing technology capable of identifying patterns of fraud |
|
exhibited by Medicaid recipients to: |
|
(1) develop and implement the fraud detection |
|
technology; and |
|
(2) determine if a pattern of fraud by Medicaid |
|
recipients is present in the recipients' eligibility files |
|
maintained by the commission or the [Texas] Department of Aging and |
|
Disability [Human] Services. |
|
SECTION 17. Section 531.113, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.113. MANAGED CARE ORGANIZATIONS: SPECIAL |
|
INVESTIGATIVE UNITS OR CONTRACTS. (a) Each managed care |
|
organization that provides or arranges for the provision of health |
|
care services to an individual under a government-funded program, |
|
including the Medicaid program and the child health plan program, |
|
shall: |
|
(1) establish and maintain a special investigative |
|
unit within the managed care organization to investigate fraudulent |
|
claims and other types of program waste or abuse by recipients and |
|
service providers; or |
|
(2) contract with another entity for the investigation |
|
of fraudulent claims and other types of program waste or abuse by |
|
recipients and service providers. |
|
(b) Each managed care organization subject to this section |
|
shall adopt a plan to prevent and reduce fraud, waste, and abuse and |
|
annually file that plan with the [commission's] office [of
|
|
inspector general] for approval. The plan must include: |
|
(1) a description of the managed care organization's |
|
procedures for detecting and investigating possible acts of fraud, |
|
waste, or abuse; |
|
(2) a description of the managed care organization's |
|
procedures for the mandatory reporting of possible acts of fraud, |
|
waste, or abuse to the [commission's] office [of inspector
|
|
general]; |
|
(3) a description of the managed care organization's |
|
procedures for educating and training personnel to prevent fraud, |
|
waste, and abuse; |
|
(4) the name, address, telephone number, and fax |
|
number of the individual responsible for carrying out the plan; |
|
(5) a description or chart outlining the |
|
organizational arrangement of the managed care organization's |
|
personnel responsible for investigating and reporting possible |
|
acts of fraud, waste, or abuse; |
|
(6) a detailed description of the results of |
|
investigations of fraud, waste, and abuse conducted by the managed |
|
care organization's special investigative unit or the entity with |
|
which the managed care organization contracts under Subsection |
|
(a)(2); and |
|
(7) provisions for maintaining the confidentiality of |
|
any patient information relevant to an investigation of fraud, |
|
waste, or abuse. |
|
(c) If a managed care organization contracts for the |
|
investigation of fraudulent claims and other types of program waste |
|
or abuse by recipients and service providers under Subsection |
|
(a)(2), the managed care organization shall file with the |
|
[commission's] office [of inspector general]: |
|
(1) a copy of the written contract; |
|
(2) the names, addresses, telephone numbers, and fax |
|
numbers of the principals of the entity with which the managed care |
|
organization has contracted; and |
|
(3) a description of the qualifications of the |
|
principals of the entity with which the managed care organization |
|
has contracted. |
|
(d) The [commission's] office [of inspector general] may |
|
review the records of a managed care organization to determine |
|
compliance with this section. |
|
(e) The office [commissioner] shall adopt rules as |
|
necessary to accomplish the purposes of this section. |
|
SECTION 18. Subsections (b) and (g), Section 531.114, |
|
Government Code, are amended to read as follows: |
|
(b) If after an investigation the office [commission] |
|
determines that a person violated Subsection (a), the office |
|
[commission] shall: |
|
(1) notify the person of the alleged violation not |
|
later than the 30th day after the date the office [commission] |
|
completes the investigation and provide the person with an |
|
opportunity for a hearing on the matter; or |
|
(2) refer the matter to the appropriate prosecuting |
|
attorney for prosecution. |
|
(g) The office [commission] shall adopt rules as necessary |
|
to implement this section. |
|
SECTION 19. Subsection (a), Section 533.005, Government |
|
Code, is amended to read as follows: |
|
(a) A contract between a managed care organization and the |
|
commission for the organization to provide health care services to |
|
recipients must contain: |
|
(1) procedures to ensure accountability to the state |
|
for the provision of health care services, including procedures for |
|
financial reporting, quality assurance, utilization review, and |
|
assurance of contract and subcontract compliance; |
|
(2) capitation rates that ensure the cost-effective |
|
provision of quality health care; |
|
(3) a requirement that the managed care organization |
|
provide ready access to a person who assists recipients in |
|
resolving issues relating to enrollment, plan administration, |
|
education and training, access to services, and grievance |
|
procedures; |
|
(4) a requirement that the managed care organization |
|
provide ready access to a person who assists providers in resolving |
|
issues relating to payment, plan administration, education and |
|
training, and grievance procedures; |
|
(5) a requirement that the managed care organization |
|
provide information and referral about the availability of |
|
educational, social, and other community services that could |
|
benefit a recipient; |
|
(6) procedures for recipient outreach and education; |
|
(7) a requirement that the managed care organization |
|
make payment to a physician or provider for health care services |
|
rendered to a recipient under a managed care plan not later than the |
|
45th day after the date a claim for payment is received with |
|
documentation reasonably necessary for the managed care |
|
organization to process the claim, or within a period, not to exceed |
|
60 days, specified by a written agreement between the physician or |
|
provider and the managed care organization; |
|
(8) a requirement that the commission, on the date of a |
|
recipient's enrollment in a managed care plan issued by the managed |
|
care organization, inform the organization of the recipient's |
|
Medicaid certification date; |
|
(9) a requirement that the managed care organization |
|
comply with Section 533.006 as a condition of contract retention |
|
and renewal; |
|
(10) a requirement that the managed care organization |
|
provide the information required by Section 533.012 and otherwise |
|
comply and cooperate with the State Office of Inspector General |
|
[commission's office of inspector general]; |
|
(11) a requirement that the managed care |
|
organization's usages of out-of-network providers or groups of |
|
out-of-network providers may not exceed limits for those usages |
|
relating to total inpatient admissions, total outpatient services, |
|
and emergency room admissions determined by the commission; |
|
(12) if the commission finds that a managed care |
|
organization has violated Subdivision (11), a requirement that the |
|
managed care organization reimburse an out-of-network provider for |
|
health care services at a rate that is equal to the allowable rate |
|
for those services, as determined under Sections 32.028 and |
|
32.0281, Human Resources Code; |
|
(13) a requirement that the organization use advanced |
|
practice nurses in addition to physicians as primary care providers |
|
to increase the availability of primary care providers in the |
|
organization's provider network; |
|
(14) a requirement that the managed care organization |
|
reimburse a federally qualified health center or rural health |
|
clinic for health care services provided to a recipient outside of |
|
regular business hours, including on a weekend day or holiday, at a |
|
rate that is equal to the allowable rate for those services as |
|
determined under Section 32.028, Human Resources Code, if the |
|
recipient does not have a referral from the recipient's primary |
|
care physician; and |
|
(15) a requirement that the managed care organization |
|
develop, implement, and maintain a system for tracking and |
|
resolving all provider appeals related to claims payment, including |
|
a process that will require: |
|
(A) a tracking mechanism to document the status |
|
and final disposition of each provider's claims payment appeal; |
|
(B) the contracting with physicians who are not |
|
network providers and who are of the same or related specialty as |
|
the appealing physician to resolve claims disputes related to |
|
denial on the basis of medical necessity that remain unresolved |
|
subsequent to a provider appeal; and |
|
(C) the determination of the physician resolving |
|
the dispute to be binding on the managed care organization and |
|
provider. |
|
SECTION 20. Subsections (a), (b), (c), and (e), Section |
|
533.012, Government Code, are amended to read as follows: |
|
(a) Each managed care organization contracting with the |
|
commission under this chapter shall submit to the commission and to |
|
the State Office of Inspector General: |
|
(1) a description of any financial or other business |
|
relationship between the organization and any subcontractor |
|
providing health care services under the contract; |
|
(2) a copy of each type of contract between the |
|
organization and a subcontractor relating to the delivery of or |
|
payment for health care services; |
|
(3) a description of the fraud control program used by |
|
any subcontractor that delivers health care services; and |
|
(4) a description and breakdown of all funds paid to |
|
the managed care organization, including a health maintenance |
|
organization, primary care case management, and an exclusive |
|
provider organization, necessary for the commission and the |
|
inspector general to determine the actual cost of administering the |
|
managed care plan. |
|
(b) The information submitted under this section must be |
|
submitted in the form required by the commission and the inspector |
|
general and be updated as required by the commission. |
|
(c) The State Office of Inspector General [commission's
|
|
office of investigations and enforcement] shall review the |
|
information submitted under this section as appropriate in the |
|
investigation of fraud in the Medicaid managed care program. The |
|
comptroller may review the information in connection with the |
|
health care fraud study conducted by the comptroller. |
|
(e) Information submitted to the commission and the State |
|
Office of Inspector General under Subsection (a)(1) is confidential |
|
and not subject to disclosure under Chapter 552[, Government Code]. |
|
SECTION 21. Subsection (b), Section 2054.376, Government |
|
Code, is amended to read as follows: |
|
(b) This subchapter does not apply to: |
|
(1) the Department of Public Safety's use for criminal |
|
justice or homeland security purposes of a federal database or |
|
network; |
|
(2) a Texas equivalent of a database or network |
|
described by Subdivision (1) that is managed by the Department of |
|
Public Safety; |
|
(3) the uniform statewide accounting system, as that |
|
term is used in Subchapter C, Chapter 2101; |
|
(4) the state treasury cash and treasury management |
|
system; [or] |
|
(5) a database or network managed by the comptroller |
|
to: |
|
(A) collect and process multiple types of taxes |
|
imposed by the state; or |
|
(B) manage or administer fiscal, financial, |
|
revenue, and expenditure activities of the state under Chapter 403 |
|
and Chapter 404; |
|
(6) the State Office of Inspector General's use for |
|
criminal justice and statutorily mandated confidentiality purposes |
|
of a federal or state database or network; or |
|
(7) the Health and Human Services Commission's use for |
|
criminal justice and statutorily mandated confidentiality purposes |
|
of a federal or state database or network. |
|
SECTION 22. Section 21.014, Human Resources Code, is |
|
amended to read as follows: |
|
Sec. 21.014. AUDITS. [(a)] The financial transactions of |
|
the department are subject to audit by the state auditor in |
|
accordance with Chapter 321, Government Code. |
|
[(b) The person employed by the department as inspector
|
|
general shall make reports to and consult with the chairman of the
|
|
board regarding:
|
|
[(1)the selection of internal audit topics;
|
|
[(2) the establishment of internal audit priorities;
|
|
and
|
|
[(3) the findings of each regular or special internal
|
|
audit initiative.] |
|
SECTION 23. Section 32.003, Human Resources Code, is |
|
amended by adding Subdivision (5) to read as follows: |
|
(5) "Office" means the State Office of Inspector |
|
General. |
|
SECTION 24. Section 32.0291, Human Resources Code, is |
|
amended to read as follows: |
|
Sec. 32.0291. PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS. |
|
(a) Notwithstanding any other law, the office or department may: |
|
(1) perform a prepayment review of a claim for |
|
reimbursement under the medical assistance program to determine |
|
whether the claim involves fraud, waste, or abuse; and |
|
(2) as necessary to perform that review, withhold |
|
payment of the claim for not more than five working days without |
|
notice to the person submitting the claim. |
|
(b) Notwithstanding any other law, the office [department] |
|
may impose a postpayment hold on payment of future claims submitted |
|
by a provider if the office [department] has reliable evidence that |
|
the provider has committed fraud, waste, abuse, or wilful |
|
misrepresentation regarding a claim for reimbursement under the |
|
medical assistance program. The office [department] must notify |
|
the provider of the postpayment hold not later than the fifth |
|
working day after the date the hold is imposed. |
|
(c) On timely written request by a provider subject to a |
|
postpayment hold under Subsection (b), the office [department] |
|
shall file a request with the State Office of Administrative |
|
Hearings for an expedited administrative hearing regarding the |
|
hold. The provider must request an expedited hearing under this |
|
subsection not later than the 10th day after the date the provider |
|
receives notice from the department under Subsection (b). The |
|
office [department] shall discontinue the hold unless the office |
|
[department] makes a prima facie showing at the hearing that the |
|
evidence relied on by the office [department] in imposing the hold |
|
is relevant, credible, and material to the issue of fraud, waste, |
|
abuse, or wilful misrepresentation. |
|
(d) The office [department] shall adopt rules that allow a |
|
provider subject to a postpayment hold under Subsection (b) to seek |
|
an informal resolution of the issues identified by the office |
|
[department] in the notice provided under that subsection. A |
|
provider must seek an informal resolution under this subsection not |
|
later than the deadline prescribed by Subsection (c). A provider's |
|
decision to seek an informal resolution under this subsection does |
|
not extend the time by which the provider must request an expedited |
|
administrative hearing under Subsection (c). However, a hearing |
|
initiated under Subsection (c) shall be stayed at the office's |
|
[department's] request until the informal resolution process is |
|
completed. |
|
SECTION 25. Section 32.032, Human Resources Code, is |
|
amended to read as follows: |
|
Sec. 32.032. PREVENTION AND DETECTION OF FRAUD, WASTE, AND |
|
ABUSE. The office [department] shall adopt reasonable rules for |
|
minimizing the opportunity for fraud, waste, and abuse, for |
|
establishing and maintaining methods for detecting and identifying |
|
situations in which a question of fraud or abuse in the program may |
|
exist, and for referring cases where fraud or abuse appears to exist |
|
to the appropriate law enforcement agencies for prosecution. |
|
SECTION 26. Subsections (a) through (d), Section 32.0321, |
|
Human Resources Code, are amended to read as follows: |
|
(a) On the recommendation of the office, the [The] |
|
department by rule may require that each provider of medical |
|
assistance in a provider type that has demonstrated significant |
|
potential for fraud, waste, or abuse [to] file with the department a |
|
surety bond in a reasonable amount. The office and the department |
|
by rule shall require a provider of medical assistance to file with |
|
the department a surety bond in a reasonable amount if the office |
|
[department] identifies a pattern of suspected fraud, waste, or |
|
abuse involving criminal conduct relating to the provider's |
|
services under the medical assistance program that indicates the |
|
need for protection against potential future acts of fraud, waste, |
|
or abuse. |
|
(b) The bond under Subsection (a) must be payable to the |
|
department to compensate the department for damages resulting from |
|
or penalties or fines imposed in connection with an act of fraud or |
|
abuse committed by the provider under the medical assistance |
|
program. |
|
(c) Subject to Subsection (d) or (e), the office and the |
|
department by rule may require each provider of medical assistance |
|
that establishes a resident's trust fund account to post a surety |
|
bond to secure the account. The bond must be payable to the |
|
department to compensate residents of the bonded provider for trust |
|
funds that are lost, stolen, or otherwise unaccounted for if the |
|
provider does not repay any deficiency in a resident's trust fund |
|
account to the person legally entitled to receive the funds. |
|
(d) The office and the department may not require the amount |
|
of a surety bond posted for a single facility provider under |
|
Subsection (c) to exceed the average of the total average monthly |
|
balance of all the provider's resident trust fund accounts for the |
|
12-month period preceding the bond issuance or renewal date. |
|
SECTION 27. Section 32.0322, Human Resources Code, is |
|
amended to read as follows: |
|
Sec. 32.0322. CRIMINAL HISTORY RECORD INFORMATION. |
|
(a) The office [department] may obtain from any law enforcement or |
|
criminal justice agency the criminal history record information |
|
that relates to a provider under the medical assistance program or a |
|
person applying to enroll as a provider under the medical |
|
assistance program. |
|
(b) The office [department] by rule shall establish |
|
criteria for revoking a provider's enrollment or denying a person's |
|
application to enroll as a provider under the medical assistance |
|
program based on the results of a criminal history check. |
|
SECTION 28. Subsections (d) through (h), Section 32.033, |
|
Human Resources Code, are amended to read as follows: |
|
(d) A separate and distinct cause of action in favor of the |
|
state is hereby created, and the office [department] may, without |
|
written consent, take direct civil action in any court of competent |
|
jurisdiction. A suit brought under this section need not be |
|
ancillary to or dependent upon any other action. |
|
(e) The office's [department's] right of recovery is limited |
|
to the amount of the cost of medical care services paid by the |
|
department. Other subrogation rights granted under this section |
|
are limited to the cost of the services provided. |
|
(f) The inspector general [commissioner] may waive the |
|
office's [department's] right of recovery in whole or in part when |
|
the inspector general [commissioner] finds that enforcement would |
|
tend to defeat the purpose of public assistance. |
|
(g) The office [department] may designate an agent to |
|
collect funds the office [department] has a right to recover from |
|
third parties under this section. The department shall use any |
|
funds collected to pay costs of administering the medical |
|
assistance program. |
|
(h) The office [department] may adopt rules for the |
|
enforcement of its right of recovery. |
|
SECTION 29. Subsections (c) through (l), (n) through (r), |
|
and (u) through (x), Section 32.039, Human Resources Code, are |
|
amended to read as follows: |
|
(c) A person who commits a violation under Subsection (b) is |
|
liable to the department, as assessed by the office, for: |
|
(1) the amount paid, if any, as a result of the |
|
violation and interest on that amount determined at the rate |
|
provided by law for legal judgments and accruing from the date on |
|
which the payment was made; and |
|
(2) payment of an administrative penalty of an amount |
|
not to exceed twice the amount paid, if any, as a result of the |
|
violation, plus an amount: |
|
(A) not less than $5,000 or more than $15,000 for |
|
each violation that results in injury to an elderly person, as |
|
defined by Section 48.002(1), a disabled person, as defined by |
|
Section 48.002(8)(A), or a person younger than 18 years of age; or |
|
(B) not more than $10,000 for each violation that |
|
does not result in injury to a person described by Paragraph (A). |
|
(d) Unless the provider submitted information to the |
|
department for use in preparing a voucher that the provider knew or |
|
should have known was false or failed to correct information that |
|
the provider knew or should have known was false when provided an |
|
opportunity to do so, this section does not apply to a claim based |
|
on the voucher if the department calculated and printed the amount |
|
of the claim on the voucher and then submitted the voucher to the |
|
provider for the provider's signature. In addition, the provider's |
|
signature on the voucher does not constitute fraud. The office |
|
[department] shall adopt rules that establish a grace period during |
|
which errors contained in a voucher prepared by the department may |
|
be corrected without penalty to the provider. |
|
(e) In determining the amount of the penalty to be assessed |
|
under Subsection (c)(2), the office [department] shall consider: |
|
(1) the seriousness of the violation; |
|
(2) whether the person had previously committed a |
|
violation; and |
|
(3) the amount necessary to deter the person from |
|
committing future violations. |
|
(f) If after an examination of the facts the office |
|
[department] concludes that the person committed a violation, the |
|
office [department] may issue a preliminary report stating the |
|
facts on which it based its conclusion, recommending that an |
|
administrative penalty under this section be imposed and |
|
recommending the amount of the proposed penalty. |
|
(g) The office [department] shall give written notice of the |
|
report to the person charged with committing the violation. The |
|
notice must include a brief summary of the facts, a statement of the |
|
amount of the recommended penalty, and a statement of the person's |
|
right to an informal review of the alleged violation, the amount of |
|
the penalty, or both the alleged violation and the amount of the |
|
penalty. |
|
(h) Not later than the 10th day after the date on which the |
|
person charged with committing the violation receives the notice, |
|
the person may either give the office [department] written consent |
|
to the report, including the recommended penalty, or make a written |
|
request for an informal review by the office [department]. |
|
(i) If the person charged with committing the violation |
|
consents to the penalty recommended by the office [department] or |
|
fails to timely request an informal review, the office [department] |
|
shall assess the penalty. The office [department] shall give the |
|
person written notice of its action. The person shall pay the |
|
penalty not later than the 30th day after the date on which the |
|
person receives the notice. |
|
(j) If the person charged with committing the violation |
|
requests an informal review as provided by Subsection (h), the |
|
office [department] shall conduct the review. The office |
|
[department] shall give the person written notice of the results of |
|
the review. |
|
(k) Not later than the 10th day after the date on which the |
|
person charged with committing the violation receives the notice |
|
prescribed by Subsection (j), the person may make to the office |
|
[department] a written request for a hearing. The hearing must be |
|
conducted in accordance with Chapter 2001, Government Code. |
|
(l) If, after informal review, a person who has been ordered |
|
to pay a penalty fails to request a formal hearing in a timely |
|
manner, the office [department] shall assess the penalty. The |
|
office [department] shall give the person written notice of its |
|
action. The person shall pay the penalty not later than the 30th |
|
day after the date on which the person receives the notice. |
|
(n) A person who acts under Subsection (m)(3) within the |
|
30-day period may: |
|
(1) stay enforcement of the penalty by: |
|
(A) paying the amount of the penalty to the court |
|
for placement in an escrow account; or |
|
(B) giving to the court a supersedeas bond that |
|
is approved by the court for the amount of the penalty and that is |
|
effective until all judicial review of the office's [department's] |
|
order is final; or |
|
(2) request the court to stay enforcement of the |
|
penalty by: |
|
(A) filing with the court a sworn affidavit of |
|
the person stating that the person is financially unable to pay the |
|
amount of the penalty and is financially unable to give the |
|
supersedeas bond; and |
|
(B) giving a copy of the affidavit to the office |
|
[commissioner] by certified mail. |
|
(o) If the office [commissioner] receives a copy of an |
|
affidavit under Subsection (n)(2), the office [commissioner] may |
|
file with the court, within five days after the date the copy is |
|
received, a contest to the affidavit. The court shall hold a |
|
hearing on the facts alleged in the affidavit as soon as practicable |
|
and shall stay the enforcement of the penalty on finding that the |
|
alleged facts are true. The person who files an affidavit has the |
|
burden of proving that the person is financially unable to pay the |
|
amount of the penalty and to give a supersedeas bond. |
|
(p) If the person charged does not pay the amount of the |
|
penalty and the enforcement of the penalty is not stayed, the office |
|
[department] may forward the matter to the attorney general for |
|
enforcement of the penalty and interest as provided by law for legal |
|
judgments. An action to enforce a penalty order under this section |
|
must be initiated in a court of competent jurisdiction in Travis |
|
County or in the county in which the violation was committed. |
|
(q) Judicial review of a State Office of Inspector General |
|
[department] order or review under this section assessing a penalty |
|
is under the substantial evidence rule. A suit may be initiated by |
|
filing a petition with a district court in Travis County, as |
|
provided by Subchapter G, Chapter 2001, Government Code. |
|
(r) If a penalty is reduced or not assessed, the office |
|
[department] shall remit to the person the appropriate amount plus |
|
accrued interest if the penalty has been paid or shall execute a |
|
release of the bond if a supersedeas bond has been posted. The |
|
accrued interest on amounts remitted by the office [department] |
|
under this subsection shall be paid at a rate equal to the rate |
|
provided by law for legal judgments and shall be paid for the period |
|
beginning on the date the penalty is paid to the office [department] |
|
under this section and ending on the date the penalty is remitted. |
|
(u) Except as provided by Subsection (w), a person found |
|
liable for a violation under Subsection (c) that resulted in injury |
|
to an elderly person, as defined by Section 48.002(a)(1), a |
|
disabled person, as defined by Section 48.002(a)(8)(A), or a person |
|
younger than 18 years of age may not provide or arrange to provide |
|
health care services under the medical assistance program for a |
|
period of 10 years. The office [department] by rule may provide for |
|
a period of ineligibility longer than 10 years. The period of |
|
ineligibility begins on the date on which the determination that |
|
the person is liable becomes final. |
|
(v) Except as provided by Subsection (w), a person found |
|
liable for a violation under Subsection (c) that did not result in |
|
injury to an elderly person, as defined by Section 48.002(a)(1), a |
|
disabled person, as defined by Section 48.002(a)(8)(A), or a person |
|
younger than 18 years of age may not provide or arrange to provide |
|
health care services under the medical assistance program for a |
|
period of three years. The office [department] by rule may provide |
|
for a period of ineligibility longer than three years. The period |
|
of ineligibility begins on the date on which the determination that |
|
the person is liable becomes final. |
|
(w) The office [department] by rule may prescribe criteria |
|
under which a person described by Subsection (u) or (v) is not |
|
prohibited from providing or arranging to provide health care |
|
services under the medical assistance program. The criteria may |
|
include consideration of: |
|
(1) the person's knowledge of the violation; |
|
(2) the likelihood that education provided to the |
|
person would be sufficient to prevent future violations; |
|
(3) the potential impact on availability of services |
|
in the community served by the person; and |
|
(4) any other reasonable factor identified by the |
|
office [department]. |
|
(x) Subsections (b)(1-b) through (1-f) do not prohibit a |
|
person from engaging in: |
|
(1) generally accepted business practices, as |
|
determined by office [department] rule, including: |
|
(A) conducting a marketing campaign; |
|
(B) providing token items of minimal value that |
|
advertise the person's trade name; and |
|
(C) providing complimentary refreshments at an |
|
informational meeting promoting the person's goods or services; |
|
(2) the provision of a value-added service if the |
|
person is a managed care organization; or |
|
(3) other conduct specifically authorized by law, |
|
including conduct authorized by federal safe harbor regulations (42 |
|
C.F.R. Section 1001.952). |
|
SECTION 30. Subsection (d), Section 32.070, Human Resources |
|
Code, is amended to read as follows: |
|
(d) This section does not apply to a computerized audit |
|
conducted using the Medicaid Fraud Detection Audit System or an |
|
audit or investigation of fraud and abuse conducted by the Medicaid |
|
fraud control unit of the office of the attorney general, the office |
|
of the state auditor, the State Office of Inspector General [office
|
|
of the inspector general], or the Office of Inspector General in the |
|
United States Department of Health and Human Services. |
|
SECTION 31. Subsection (e), Section 33.015, Human Resources |
|
Code, is amended to read as follows: |
|
(e) The department shall require a person exempted under |
|
this section from making a personal appearance at department |
|
offices to provide verification of the person's entitlement to the |
|
exemption on initial eligibility certification and on each |
|
subsequent periodic eligibility recertification. If the person |
|
does not provide verification and the department considers the |
|
verification necessary to protect the integrity of the food stamp |
|
program, the department shall initiate a fraud referral to the |
|
State Office of Inspector General [department's office of inspector
|
|
general]. |
|
SECTION 32. The following sections of the Government Code |
|
are repealed: |
|
(1) Section 531.1021; |
|
(2) Section 531.103; |
|
(3) Section 531.104; |
|
(4) Section 531.108; and |
|
(5) Section 531.115. |
|
SECTION 33. (a) The State Office of Inspector General |
|
under Chapter 2116, Government Code, as added by this Act, is |
|
created on the effective date of this Act. |
|
(b) If this Act takes immediate effect, then on September 1, |
|
2007: |
|
(1) the office of inspector general of the Health and |
|
Human Services Commission created under Section 531.102, |
|
Government Code, as that section existed before amendment by this |
|
Act, is abolished; |
|
(2) all powers, duties, obligations, rights, |
|
contracts, records, personal property, unspent appropriations, |
|
state and federal funds, including overhead costs, support costs, |
|
and lease or colocation costs, of the office of inspector general of |
|
the Health and Human Services Commission are transferred, as |
|
consistent with this Act, to the State Office of Inspector General; |
|
and |
|
(3) all personnel and assets currently assigned to the |
|
office of inspector general of the Health and Human Services |
|
Commission or substantially engaged in the performance of the |
|
functions of that office are transferred, as consistent with this |
|
Act, to the State Office of Inspector General. |
|
(c) If this Act takes effect September 1, 2007, then on |
|
December 1, 2007: |
|
(1) the office of inspector general of the Health and |
|
Human Services Commission created under Section 531.102, |
|
Government Code, as that section existed before amendment by this |
|
Act, is abolished; |
|
(2) all powers, duties, obligations, rights, |
|
contracts, records, personal property, unspent appropriations, |
|
state and federal funds, including overhead costs, support costs, |
|
and lease or colocation costs, of the office of inspector general of |
|
the Health and Human Services Commission are transferred, as |
|
consistent with this Act, to the State Office of Inspector General; |
|
and |
|
(3) all personnel and assets currently assigned to the |
|
office of inspector general of the Health and Human Services |
|
Commission or substantially engaged in the performance of the |
|
functions of that office are transferred, as consistent with this |
|
Act, to the State Office of Inspector General. |
|
(d) In this section, "personnel and assets currently |
|
assigned" means all personnel and full-time equivalent employees |
|
assigned to or supporting the function being transferred within the |
|
most recent biennial period, regardless of whether the positions |
|
were filled or vacant on October 31, 2006, plus any additional |
|
full-time equivalent employees assigned to or approved for the |
|
function before the date of transfer, and all inventory, documents, |
|
records, and equipment, including computer equipment, assigned as |
|
of October 31, 2006, to the function or personnel being transferred |
|
or in the possession of personnel being transferred, plus any |
|
additional inventory, documents, records, and equipment, including |
|
computer equipment, assigned to or approved for the function or |
|
personnel before the date of transfer. |
|
(e) Funds transferred under this section for salaries must |
|
be at the classification and salary levels obtaining on the |
|
effective date of this Act, including any increases in salary or |
|
benefits due. |
|
SECTION 34. (a) All future federal funding to be allocated |
|
to the office of inspector general of the Health and Human Services |
|
Commission, including drawing funds and transferring funds, shall |
|
be renegotiated by the inspector general for reallocation to the |
|
State Office of Inspector General. The inspector general shall |
|
submit any necessary waiver request or other required |
|
authorization. |
|
(b) For the purpose of federal single state agency funding |
|
requirements, any funds related to the office of inspector general |
|
of the Health and Human Services Commission that cannot be |
|
appropriated directly to the State Office of Inspector General |
|
shall be transferred from the appropriate agency to the State |
|
Office of Inspector General without alteration. |
|
SECTION 35. (a) The Health and Human Services Commission |
|
shall take all action necessary to provide for the orderly transfer |
|
of the responsibilities of the commission's office of inspector |
|
general to the State Office of Inspector General. |
|
(b) An inventory of personnel, equipment, documents, |
|
records, and assets to be transferred shall be accomplished jointly |
|
by the Health and Human Services Commission and the inspector |
|
general. On approval of the inspector general and the executive |
|
commissioner of the Health and Human Services Commission, the |
|
completed inventory shall be submitted to all affected agencies. |
|
(c) The inspector general and the Health and Human Services |
|
Commission shall adopt rules requiring that all transfers from the |
|
commission to the State Office of Inspector General be completed in |
|
accordance with this Act. In the event a transfer is not completed |
|
on the date specified, all possible efforts shall be made to |
|
promptly conclude the transfer. |
|
(d) A rule or form adopted by the office of inspector |
|
general of the Health and Human Services Commission is a rule or |
|
form of the State Office of Inspector General and remains in effect |
|
until changed by the State Office of Inspector General. |
|
(e) A reference in law or administrative rule to the office |
|
of inspector general of the Health and Human Services Commission |
|
means the State Office of Inspector General. |
|
SECTION 36. (a) Not later than the 30th day after the |
|
effective date of this Act, the governor shall appoint an inspector |
|
general under Chapter 2116, Government Code, as added by this Act, |
|
to an initial term expiring February 1, 2009. |
|
(b) The term of the person appointed as inspector general |
|
under Section 531.102, Government Code, as that section existed |
|
before amendment by this Act, expires on the date the office of |
|
inspector general of the Health and Human Services Commission is |
|
abolished under this Act. |
|
(c) This section does not prohibit a person described by |
|
Subsection (b) of this section from being appointed as inspector |
|
general under Chapter 2116, Government Code, as added by this Act, |
|
if the person has the qualifications required under that chapter. |
|
SECTION 37. (a) The amendment by this Act of Section |
|
531.102, Government Code, does not affect the validity of a |
|
complaint, investigation, or other proceeding initiated under that |
|
section before the effective date of this Act. A complaint, |
|
investigation, or other proceeding initiated under that section is |
|
transferred without change to the State Office of Inspector General |
|
created under Chapter 2116, Government Code, as added by this Act. |
|
(b) The repeal by this Act of Section 531.1021, Government |
|
Code, does not affect the validity of a subpoena issued under that |
|
section before the effective date of this Act. A subpoena issued |
|
under that section before the effective date of this Act is governed |
|
by the law that existed when the subpoena was issued, and the former |
|
law is continued in effect for that purpose. |
|
(c) The abolition by this Act of the office of inspector |
|
general of the Health and Human Services Commission created under |
|
Section 531.102, Government Code, as that section existed before |
|
amendment by this Act, does not affect the validity of an action |
|
taken by that office before it is abolished. |
|
SECTION 38. The inspector general shall submit the first |
|
annual report under Section 2116.203, Government Code, as added by |
|
this Act, not later than November 1, 2008. |
|
SECTION 39. If before implementing any provision of this |
|
Act a state agency determines that a waiver or authorization from a |
|
federal agency is necessary for implementation of that provision, |
|
the agency affected by the provision shall request the waiver or |
|
authorization and may delay implementing that provision until the |
|
waiver or authorization is granted. |
|
SECTION 40. This Act takes effect immediately if it |
|
receives a vote of two-thirds of all the members elected to each |
|
house, as provided by Section 39, Article III, Texas Constitution. |
|
If this Act does not receive the vote necessary for immediate |
|
effect, this Act takes effect September 1, 2007. |