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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 Office of State Inspector General. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle B, Title 4, Government Code, is amended |
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by adding Chapter 422 to read as follows: |
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CHAPTER 422. OFFICE OF STATE INSPECTOR GENERAL |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 422.001. DEFINITIONS. In this chapter: |
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(1) "Covered entity" means a person, entity, or |
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representative that has an employment, agency, contractual, |
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financial, or fiduciary relationship with a state agency that |
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administers or implements state or federally funded programs, and |
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includes a provider. |
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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) "Furnished" refers to items or services provided |
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directly by, or under the direct supervision of, or ordered by a |
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practitioner or other individual (either as an employee or in the |
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individual's own capacity), a covered entity, or other supplier of |
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services, excluding services ordered by one party but billed for |
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and provided by or under the supervision of another. |
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(4) "Hold on payment" means the temporary denial of |
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payment or reimbursement for items or services furnished by a |
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covered entity and includes the temporary denial of reimbursement |
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under a state or federal program for items or services furnished by |
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a specified provider. |
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(5) "Office" means the Office of State Inspector |
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General. |
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(6) "Practitioner" means a physician or other |
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individual licensed under state law to practice the individual's |
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profession. |
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(7) "Program exclusion" means the suspension of a |
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covered entity from being authorized under a state or federal |
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program to request payment for, or reimbursement of, items or |
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services furnished by that specific entity. |
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(8) "Provider" has the meaning assigned by Section |
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531.1011. |
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(9) "State inspector general" means the individual |
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appointed as the state inspector general under this chapter. |
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Sec. 422.002. OFFICE OF STATE INSPECTOR GENERAL. (a) The |
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Office of State Inspector General is an agency of the state. |
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(b) The office operates under the direction and supervision |
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of the state inspector general. |
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(c) The office shall have its principal office and |
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headquarters in Austin, Texas. |
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Sec. 422.003. SUNSET PROVISION. The Office of State |
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Inspector General is subject to Chapter 325 (Texas Sunset Act). |
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Unless continued in existence as provided by that chapter, the |
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office is abolished and this chapter expires September 1, 2019. |
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Sec. 422.004. REFERENCE IN OTHER STATUTES. Notwithstanding |
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any other provision of law, a reference in law or rule to the Health |
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and Human Services Commission's office of investigations and |
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enforcement or the Health and Human Services Commission's office of |
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inspector general means the Office of State Inspector General |
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established under this chapter. |
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[Sections 422.005-422.050 reserved for expansion] |
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SUBCHAPTER B. ADMINISTRATIVE PROVISIONS |
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Sec. 422.051. APPOINTMENT BY GOVERNOR. (a) The governor, |
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with the advice and consent of the senate, shall appoint the state |
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inspector general. |
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(b) The governor shall appoint the state 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) In appointing a person as state inspector general, the |
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governor shall consider, among other things, the person's knowledge |
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of laws, experience in the enforcement of law, honesty, integrity, |
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education, training, and executive ability. |
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Sec. 422.052. ELIGIBILITY. (a) A person is not eligible |
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for appointment as state inspector general if the person or the |
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person's spouse is an employee, officer, or paid consultant of a |
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trade association in a field under the office's jurisdiction. |
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(b) A person who is required to register as a lobbyist under |
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Chapter 305 because of the person's activities for compensation in |
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or on behalf of a profession related to a field under the office's |
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jurisdiction may not serve as state inspector general. |
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(c) A person is not eligible for appointment as state |
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inspector general if the person has a financial interest in a |
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corporation, organization, or association receiving state or |
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federal funds under contract with the state or a political |
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subdivision of the state. |
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Sec. 422.053. TERM. The state inspector general serves a |
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two-year term that expires on February 1 of each odd-numbered year. |
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Sec. 422.054. STATE AGENCY INSPECTORS GENERAL. (a) As |
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necessary to implement this chapter, the state inspector general, |
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in consultation with the office of the governor, may designate |
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state agency inspectors general in state agencies that implement or |
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administer state or federal programs. A state agency inspector |
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general may be colocated with an agency. |
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(b) Each state agency inspector general, whether or not |
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colocated with an agency, is an employee of the office and shall |
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report to the state inspector general. |
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(c) A state agency shall provide facilities and support |
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services, including suitable office space, furniture, computer |
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equipment, communications equipment, and administrative support, |
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to each state agency inspector general colocated at the agency and |
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the state agency inspector general's staff. |
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(d) The office and each state agency with which a state |
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agency inspector general is colocated shall execute a service level |
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agreement to establish performance standards regarding the |
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facilities and support services provided by the agency. Each |
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service level agreement must be reviewed at least annually to |
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ensure that the facilities and support services are being provided |
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in accordance with the agreement. |
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Sec. 422.055. PEACE OFFICERS. (a) The office may employ |
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and commission peace officers, in a number not to exceed 10 percent |
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of the total number of employees of the office, for the purpose of |
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assisting the state inspector general in carrying out the duties of |
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the office under this chapter or other law. |
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(b) A commissioned peace officer or other designated law |
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enforcement officer employed by the office is not entitled to |
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supplemental benefits from the law enforcement and custodial |
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officer supplemental retirement fund under Title 8. |
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Sec. 422.056. MERIT SYSTEM. (a) The office may establish |
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a merit system for its employees. |
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(b) The merit system may be maintained in conjunction with |
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other state agencies that are required by state or federal law to |
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operate under a merit system. |
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Sec. 422.057. RULEMAKING AUTHORITY. The state inspector |
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general may adopt rules necessary to carry out the duties of the |
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office under this chapter and other law. |
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Sec. 422.058. PUBLIC INPUT INFORMATION AND COMPLAINTS. |
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(a) The office shall develop and implement policies that provide |
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the public a reasonable opportunity to appear before the office and |
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to speak on any issue under the office's jurisdiction. |
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(b) The office shall prepare information of public interest |
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describing the functions of the office and the office's procedures |
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by which complaints are filed with and resolved by the office. The |
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office shall make the information available to the public and |
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appropriate state agencies. |
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(c) The office shall keep an information file about each |
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complaint filed with the office relating to a state agency, license |
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holder, or entity receiving state or federal funds and falling |
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within the jurisdiction of the office. |
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Sec. 422.059. AWARD FOR REPORTING FRAUD, WASTE, ABUSE, OR |
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OVERCHARGES. (a) The office may grant an award to an individual |
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who reports activity that constitutes fraud, waste, or abuse of |
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funds in any state or federal program implemented or administered |
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by a state agency or who reports overcharges in a program if the |
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office determines that the disclosure results in the recovery of an |
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administrative or civil penalty imposed by law. The office may not |
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grant an award to an individual in connection with a report if the |
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office or attorney general had independent knowledge of the |
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activity reported by the individual. |
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(b) The office shall determine the amount of an award |
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granted under this section. An award may not exceed five percent of |
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the amount of the administrative or civil penalty imposed by law |
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that resulted from the individual's disclosure. In determining the |
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amount of an award, the office shall consider how important the |
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disclosure is in ensuring the fiscal integrity of the program. The |
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office may also consider whether the individual participated in the |
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fraud, waste, abuse, or overcharge. |
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(c) A person who brings an action under Subchapter C, |
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Chapter 36, Human Resources Code, is not eligible for an award under |
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this section. |
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[Sections 422.060-422.100 reserved for expansion] |
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SUBCHAPTER C. POWERS AND DUTIES; ENFORCEMENT |
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Sec. 422.101. AUTHORITY. (a) The office is responsible |
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for the audit, detection, investigation, prevention, and review of |
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fraud, waste, and abuse in the provision of health and human |
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services as provided by Section 531.102 and in the state |
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implementation or administration of all state or federally funded |
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programs and the enforcement of state law relating to those |
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programs. |
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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 state inspector general shall set clear objectives, |
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priorities, and performance standards for the office that |
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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 that have the |
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strongest supportive evidence and the greatest potential for |
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recovery of money; and |
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(3) maximizing opportunities for referral of cases to |
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the office of the attorney general in accordance with this chapter. |
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(d) The office shall employ and train office staff to enable |
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the staff to pursue fraud, waste, and abuse cases as necessary. |
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Sec. 422.102. POWERS. The office has all the powers necessary |
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or appropriate to carry out its responsibilities and functions under |
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this chapter and other law. In addition to performing functions and |
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duties otherwise provided by law, the office may: |
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(1) assess administrative penalties authorized by law |
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on behalf of a state agency implementing or administering a state or |
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federal program and retain from amounts collected funds sufficient |
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to cover investigative and collection costs; |
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(2) request that the attorney general obtain an |
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injunction to prevent a person from disposing of an asset |
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identified by the office as potentially subject to recovery by the |
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office due to the person's fraud, waste, or abuse; |
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(3) 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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(4) 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 state agency; |
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(5) conduct reviews, investigations, and inspections |
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relating to the funds described by Subdivision (4); |
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(6) recommend policies promoting economical and |
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efficient administration of the funds described by Subdivision (4) |
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and the prevention and detection of fraud, waste, and abuse in |
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administration of those funds; and |
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(7) conduct internal affairs investigations in |
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instances of fraud, waste, and abuse and in instances of misconduct |
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by employees, contractors, subcontractors, and vendors. |
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Sec. 422.103. EXECUTIVE ORDERS. (a) The governor may |
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issue executive orders directing state agencies to implement |
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recommendations for corrective or remedial actions promoting the |
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economical and efficient administration of funds and the detection |
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of fraud issued by the office under Section 422.102. |
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(b) The governor may submit a report to the lieutenant |
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governor, the speaker of the house of representatives, the state |
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auditor, and the comptroller describing executive orders issued |
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under this section and compliance by state agencies with those |
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orders. |
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Sec. 422.104. CRITERIA FOR INVESTIGATIONS. The office by |
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rule shall set specific criteria, including claims criteria, that, |
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when met, require the office to begin an investigation. |
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Sec. 422.105. INTEGRITY REVIEWS. (a) If the office |
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receives a complaint of fraud, waste, or abuse from any source, the |
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office must conduct an integrity review to determine whether there |
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is sufficient basis to warrant a full investigation. An integrity |
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review must begin not later than the 30th day after the date the |
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office receives a complaint or has reason to believe that fraud, |
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waste, or abuse has occurred. An integrity review must be completed |
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not later than the 90th day after it began. |
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(b) If the findings of an integrity review give the office |
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reason to believe that an incident of fraud, waste, or abuse |
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involving possible criminal conduct has occurred in the |
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administration or implementation of a state or federally funded |
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program, the office must take the following action after the |
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completion of the integrity review: |
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(1) if a covered entity is suspected of fraud, waste, |
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or abuse involving criminal conduct, the office must refer the case |
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to the appropriate state or local official having jurisdiction to |
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prosecute such criminal conduct, provided that the criminal |
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referral does not preclude the office from continuing its |
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investigation of the covered entity, which investigation may lead |
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to the imposition of appropriate administrative or civil sanctions; |
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or |
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(2) if there is reason to believe that a recipient has |
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defrauded a state or federal program, the office may conduct a full |
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investigation of the suspected fraud. |
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Sec. 422.106. WITHHELD, CONCEALED, OR DESTROYED RECORDS. |
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If the office learns or has reason to suspect that a covered |
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entity's records are being withheld, concealed, destroyed, |
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fabricated, or in any way falsified, the office shall immediately |
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refer the case to the appropriate state or local official having |
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jurisdiction to prosecute such criminal conduct. However, such |
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criminal referral does not preclude the office from continuing its |
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investigation of the covered entity, which investigation may lead |
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to the imposition of appropriate administrative or civil sanctions. |
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Sec. 422.107. HOLDS ON PAYMENT. (a) In addition to other |
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instances authorized under state or federal law, the office shall |
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impose, without prior notice, a hold on payment of money owed, or |
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claimed to be owed, to a covered entity, including claims for |
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reimbursement submitted by a provider, to compel production of |
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records or when requested by a state or local official to which a |
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case was referred under Section 422.106, as applicable. The office |
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must notify the covered entity of the hold on payment not later than |
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the fifth working day after the date the payment hold is imposed. |
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(b) On timely written request by a covered entity subject to |
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a hold on payment, except as provided by Subsection (d), the office |
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shall file a request with the State Office of Administrative |
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Hearings for an expedited administrative hearing regarding the |
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hold. The covered entity must request an expedited hearing under |
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this subsection not later than the 10th day after the date the |
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covered entity receives notice from the office under Subsection |
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(a). |
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(c) The office shall adopt rules that allow a covered entity |
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subject to a hold on payment, except as provided by Subsection (d), |
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to seek an informal resolution of the issues identified by the |
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office in the notice provided under Subsection (a). A covered |
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entity must seek an informal resolution under this subsection not |
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later than the deadline prescribed by Subsection (b). A covered |
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entity's decision to seek an informal resolution under this |
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subsection does not extend the time by which the covered entity must |
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request an expedited administrative hearing under Subsection (b). |
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However, a hearing initiated under Subsection (b) shall be stayed |
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at the office's request until the informal resolution process is |
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completed. |
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(d) Subsections (b) and (c) do not apply to a covered entity |
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subject to a hold on payment imposed by the office at the request of |
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a state or local official to which a case was referred under Section |
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422.106. |
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Sec. 422.108. GUIDELINES FOR HOLDS ON PAYMENT AND PROGRAM |
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EXCLUSIONS. The office shall establish guidelines under which |
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holds on payment or program exclusions: |
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(1) may permissively be imposed on a covered entity; |
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or |
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(2) shall automatically be imposed on a covered |
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entity. |
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Sec. 422.109. FINAL REPORTS. (a) The office shall prepare |
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a final report on each audit or investigation conducted by the |
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office under this chapter or other law. The final report must |
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include: |
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(1) a summary of the activities performed by the |
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office in conducting the audit or investigation; |
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(2) a statement regarding whether the audit or |
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investigation resulted in a finding of any wrongdoing; and |
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(3) a description of any findings of wrongdoing. |
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(b) A final report on an audit or investigation is subject |
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to required disclosure under Chapter 552. All information and |
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materials compiled during an audit or investigation remain |
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confidential and not subject to required disclosure in accordance |
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with Section 422.111(f). |
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Sec. 422.110. FRAUD PREVENTION. (a) The office shall |
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compile and disseminate accurate information and statistics |
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relating to: |
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(1) fraud prevention; and |
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(2) post-fraud referrals received and accepted or |
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rejected from the office's case management system or the case |
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management system of an agency. |
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(b) The office shall: |
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(1) aggressively publicize successful fraud |
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prosecutions and fraud-prevention programs through all available |
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means, including the use of statewide press releases; and |
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(2) maintain and promote a toll-free hotline for |
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reporting suspected fraud in state or federally funded programs |
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implemented or administered by an agency. |
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Sec. 422.111. ADMINISTRATIVE SUBPOENAS. (a) The office |
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may issue an administrative subpoena in connection with an |
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investigation conducted by the office to compel the attendance of a |
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relevant witness or the production, for inspection or copying, of |
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relevant evidence that is in this state. |
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(b) A subpoena may be served personally or by certified |
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mail. |
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(c) If a person fails to comply with a subpoena, the office, |
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acting through the attorney general, may file suit to enforce the |
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subpoena in a district court in this state. |
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(d) On finding that good cause exists for issuing the |
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subpoena, the court shall order the person to comply with the |
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subpoena. The court may punish a person who fails to obey the court |
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order. |
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(e) The reimbursement of the expenses of a witness whose |
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attendance is compelled under this section is governed by Section |
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2001.103. |
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(f) All information and materials subpoenaed or compiled by |
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the office in connection with an audit or investigation are |
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confidential and not subject to disclosure under Chapter 552 and |
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not subject to disclosure, discovery, subpoena, or other means of |
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legal compulsion for their release to anyone other than the office |
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or its employees or agents involved in the audit or investigation |
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conducted by the office, except that this information may be |
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disclosed to the office of the attorney general, the state |
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auditor's office, and law enforcement agencies. |
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(g) A person who receives information under Subsection (f) |
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may disclose the information only in accordance with that |
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subsection and in a manner that is consistent with the authorized |
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purpose for which the person first received the information. |
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Sec. 422.112. AGENCY COOPERATION. All state agencies shall |
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provide assistance, as needed, to the office in connection with the |
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office's duties relating to the investigation of fraud, waste, and |
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abuse in the implementation or administration of state or federally |
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funded programs. The office is entitled to access to any |
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information maintained by a state agency or any covered entity, |
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including internal records, relevant to the functions of the |
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office. |
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Sec. 422.113. INTERAGENCY COORDINATION. (a) The Office of |
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State Inspector General and the office of the attorney general |
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shall enter into a memorandum of understanding to develop and |
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implement joint written procedures for processing cases of |
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suspected fraud, waste, or abuse, as those terms are defined by |
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state or federal law, or other violations of state or federal law |
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under any state or federally funded program implemented or |
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administered by a state agency. |
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(b) The memorandum of understanding shall require: |
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(1) the Office of State Inspector General and the |
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office of the attorney general to set priorities and guidelines for |
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referring cases to appropriate state agencies for investigation, |
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prosecution, or other disposition to enhance deterrence of fraud, |
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waste, abuse, or other violations of state or federal law, |
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including a violation of Chapter 102, Occupations Code, in the |
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programs and to maximize the imposition of penalties, the recovery |
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of money, and the successful prosecution of cases; |
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(2) the Office of State Inspector General to refer |
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each case of suspected fraud, waste, or abuse to the office of the |
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attorney general not later than the 20th business day after the date |
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the Office of State Inspector General determines that the existence |
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of fraud, waste, or abuse is reasonably indicated; |
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(3) the office of the attorney general to take |
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appropriate action in response to each case referred to the |
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attorney general, which action may include direct initiation of |
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prosecution, with the consent of the appropriate local district or |
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county attorney, direct initiation of civil litigation, referral to |
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an appropriate United States attorney, a district attorney, or a |
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county attorney, or referral to a collection agency for initiation |
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of civil litigation or other appropriate action; |
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(4) the Office of State Inspector General to keep |
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detailed records for cases processed by that office or the office of |
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the attorney general, including information on the total number of |
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cases processed and, for each case: |
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(A) the agency and division to which the case is |
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referred for investigation; |
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(B) the date on which the case is referred; and |
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(C) the nature of the suspected fraud, waste, or |
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abuse; |
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(5) the Office of State Inspector General to notify |
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each appropriate division of the office of the attorney general of |
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each case referred by the Office of State Inspector General; |
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(6) the office of the attorney general to ensure that |
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information relating to each case investigated by that office is |
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available to each division of the office with responsibility for |
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investigating suspected fraud, waste, or abuse; |
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(7) the office of the attorney general to notify the |
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Office of State Inspector General of each case the attorney general |
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declines to prosecute or prosecutes unsuccessfully; |
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(8) representatives of the Office of State Inspector |
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General and of the office of the attorney general to meet not less |
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than quarterly to share case information and determine the |
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appropriate agency and division to investigate each case; and |
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(9) the Office of State Inspector General and the |
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office of the attorney general to submit information requested by |
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the comptroller about each resolved case for the comptroller's use |
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in improving fraud detection. |
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(c) An exchange of information under this section between |
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the office of the attorney general and the Office of State Inspector |
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General or any other state agency does not affect whether the |
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information is subject to disclosure under Chapter 552. |
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(d) With respect to Medicaid fraud, in addition to the |
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provisions required by Subsection (b), the memorandum of |
|
understanding required by this section must also ensure that no |
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barriers to direct fraud referrals to the office of the attorney |
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general's Medicaid fraud control unit or unreasonable impediments |
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to communication between Medicaid agency employees and the Medicaid |
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fraud control unit are imposed, and must include procedures to |
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facilitate the referral of cases directly to the office of the |
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attorney general. |
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Sec. 422.114. SEMIANNUAL REPORT. The Office of State |
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Inspector General and the office of the attorney general shall |
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jointly prepare and submit a semiannual report to the governor, |
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lieutenant governor, speaker of the house of representatives, and |
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comptroller concerning the activities of those offices in detecting |
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and preventing fraud, waste, and abuse under any state or federally |
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funded program implemented or administered by a state agency that |
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is reviewed by the Office of State Inspector General under this |
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chapter. The report may be consolidated with any other report |
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relating to the same subject matter the Office of State Inspector |
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General or office of the attorney general is required to submit |
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under other law. |
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Sec. 422.115. ASSESSMENT AND COLLECTION OF CERTAIN FEES AND |
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COSTS. (a) The Office of State Inspector General and the office of |
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the attorney general may not assess or collect investigation and |
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attorney's fees on behalf of any state agency unless the office of |
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the attorney general or other state agency collects a penalty, |
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restitution, or other reimbursement payment to the state. |
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(b) A district attorney, county attorney, city attorney, or |
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private collection agency may collect and retain costs associated |
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with a case referred to the attorney or agency in accordance with |
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procedures adopted under Section 422.113 and 20 percent of the |
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amount of the penalty, restitution, or other reimbursement payment |
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collected. |
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Sec. 422.116. ASSISTING INVESTIGATIONS BY ATTORNEY |
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GENERAL. (a) The Office of State Inspector General and the |
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attorney general shall execute a memorandum of understanding under |
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which the Office of State Inspector General shall provide |
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investigative support as required to the attorney general in |
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connection with cases under Subchapter B, Chapter 36, Human |
|
Resources Code. Under the memorandum of understanding, the Office |
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of State Inspector General shall assist in performing preliminary |
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investigations and ongoing investigations for actions prosecuted |
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by the attorney general under Subchapter C, Chapter 36, Human |
|
Resources Code. |
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(b) The memorandum of understanding must specify the type, |
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scope, and format of the investigative support provided to the |
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attorney general under this section. |
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(c) With respect to Medicaid fraud, the memorandum of |
|
understanding must ensure that no barriers to direct fraud |
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referrals to the state's Medicaid fraud control unit by Medicaid |
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agencies or unreasonable impediments to communication between |
|
Medicaid agency employees and the state's Medicaid fraud control |
|
unit will be imposed. |
|
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 Office of State Inspector General [Health and
|
|
Human Services Commission] acting to investigate fraud, waste, or |
|
abuse in state agencies under Chapter 422, 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) officers commissioned by the Office of State |
|
Inspector General under Chapter 422, Government Code. |
|
SECTION 4. 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 5. Section 531.1011, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.1011. DEFINITIONS. For purposes of this |
|
subchapter: |
|
(1) "Fraud" has the meaning assigned by Section |
|
422.001 [means an intentional deception or misrepresentation made
|
|
by a person with the knowledge that the deception could result in
|
|
some unauthorized benefit to that person or some other person,
|
|
including any act that constitutes fraud under applicable federal
|
|
or state law]. |
|
(2) "Office" means the Office of State Inspector |
|
General ["Furnished" refers to items or services provided directly
|
|
by, or under the direct supervision of, or ordered by a practitioner
|
|
or other individual (either as an employee or in the individual's
|
|
own capacity), a provider, or other supplier of services, excluding
|
|
services ordered by one party but billed for and provided by or
|
|
under the supervision of another]. |
|
(3) ["Hold on payment" means the temporary denial of
|
|
reimbursement under the Medicaid program for items or services
|
|
furnished by a specified provider.
|
|
[(4) "Practitioner" means a physician or other
|
|
individual licensed under state law to practice the individual's
|
|
profession.
|
|
[(5) "Program exclusion" means the suspension of a
|
|
provider from being authorized under the Medicaid program to
|
|
request reimbursement of items or services furnished by that
|
|
specific provider.
|
|
[(6)] "Provider" means a person, firm, partnership, |
|
corporation, agency, association, institution, or other entity |
|
that was or is approved by the commission to: |
|
(A) provide medical assistance under contract or |
|
provider agreement with the commission; or |
|
(B) provide third-party billing vendor services |
|
under a contract or provider agreement with the commission. |
|
SECTION 6. Section 531.102, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.102. OFFICE OF STATE INSPECTOR GENERAL. [(a)] The |
|
office [commission, through the commission's office of inspector
|
|
general,] is responsible for the investigation of fraud, waste, and |
|
abuse in the provision of health and human services and the |
|
enforcement of state law relating to the provision of those |
|
services. [The commission may obtain any information or technology
|
|
necessary to enable the office to meet its responsibilities under
|
|
this subchapter 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 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 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.
|
|
[(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.
|
|
[(f)(1) If the commission receives a complaint of Medicaid
|
|
fraud or abuse from any source, the office must conduct an integrity
|
|
review to determine whether there is sufficient basis to warrant a
|
|
full investigation. An integrity review must begin not later than
|
|
the 30th day after the date the commission receives a complaint or
|
|
has reason to believe that fraud 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 office may
|
|
conduct a full investigation of the suspected fraud.
|
|
[(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 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 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.
|
|
[(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 means the office of inspector
|
|
general established under 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 7. 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 the commission and other health and 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 commission and other health and human services |
|
agencies [The Texas Department of Health and the Texas Department
|
|
of 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 422.114 |
|
[531.103(c)]. |
|
SECTION 8. 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 Office of State 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 9. 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 10. 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 11. 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 [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) Office of State Inspector General, appointed by |
|
the state 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 [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 12. Section 531.108, Government Code, is amended to |
|
read as follows: |
|
Sec. 531.108. FRAUD PREVENTION. (a) [The commission's
|
|
office of investigations and enforcement 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 commission's case management system or the case
|
|
management system of a health and human services agency.
|
|
[(b)The commission shall:
|
|
[(1) aggressively publicize successful fraud
|
|
prosecutions and fraud-prevention programs through all available
|
|
means, including the use of statewide press releases issued in
|
|
coordination with the Texas Department of Human Services; and
|
|
[(2) ensure that a toll-free hotline for reporting
|
|
suspected fraud in programs administered by the commission or a
|
|
health and human services agency is maintained and promoted, either
|
|
by the commission or by a health and human services agency.
|
|
[(c)] The office [commission] 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 [commission] who are already receiving |
|
benefits in other states. If economically feasible, the office |
|
[commission] may develop a computerized matching system. |
|
(b) [(d)] The office [commission] shall: |
|
(1) verify automobile information that is used as |
|
criteria for eligibility; 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 the commission. |
|
(c) [(e)] The office [commission] shall submit to the |
|
governor and Legislative Budget Board a semiannual report on the |
|
results of computerized matching of office [commission] |
|
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 the office [commission] is required to submit |
|
under other law. |
|
SECTION 13. 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 [commission] shall determine the types of claims at which |
|
office [commission] resources for fraud, waste, and abuse detection |
|
should be primarily directed. |
|
SECTION 14. 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 other health and human services |
|
agencies [Texas Department of 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 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 and other health and human services agencies [Texas
|
|
Department of 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 15. 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 and other health and human services |
|
agencies [Texas Department of Human Services]. |
|
SECTION 16. 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 17. 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 18. 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 Office [commission's office] of State |
|
Inspector General [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 19. 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 Office of State |
|
Inspector General [commission]: |
|
(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 office [commission] 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 Office of State Inspector |
|
General [commission] and be updated as required by the office |
|
[commission]. |
|
(c) The Office [commission's office] of State Inspector |
|
General [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 Office of State Inspector |
|
General [commission] under Subsection (a)(1) is confidential and |
|
not subject to disclosure under Chapter 552[, Government Code]. |
|
SECTION 20. 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; or |
|
(6) the Office of State Inspector General's use, for |
|
criminal justice and statutorily mandated confidentiality |
|
purposes, of a federal or state database or network. |
|
SECTION 21. Subsection (b), Section 21.014, Human Resources |
|
Code, is amended to read as follows: |
|
(b) The state [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 22. Section 32.003, Human Resources Code, is |
|
amended by adding Subdivision (3-a) to read as follows: |
|
(3-a) "Inspector general's office" means the Office of |
|
State Inspector General. |
|
SECTION 23. Section 32.0291, Human Resources Code, is |
|
amended to read as follows: |
|
Sec. 32.0291. PREPAYMENT REVIEWS AND POST PAYMENT HOLDS. |
|
(a) Notwithstanding any other law, the inspector general's office |
|
[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 inspector general's |
|
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 inspector general's |
|
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 office [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 inspector general's 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 24. Section 32.032, Human Resources Code, is |
|
amended to read as follows: |
|
Sec. 32.032. PREVENTION AND DETECTION OF FRAUD AND ABUSE. |
|
The inspector general's office [department] shall adopt reasonable |
|
rules for minimizing the opportunity for fraud 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 25. Subsections (a) through (d), Section 32.0321, |
|
Human Resources Code, are amended to read as follows: |
|
(a) The inspector general's office [department] by rule may |
|
require each provider of medical assistance in a provider type that |
|
has demonstrated significant potential for fraud or abuse to |
|
file with the office [department] a surety bond in a reasonable |
|
amount. The office [department] by rule shall require a provider of |
|
medical assistance to file with the office [department] a surety |
|
bond in a reasonable amount if the office [department] identifies a |
|
pattern of suspected fraud 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 or abuse. |
|
(b) The bond under Subsection (a) must be payable to the |
|
inspector general's office [department] to compensate the office |
|
[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 inspector |
|
general's office [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 office [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 inspector general's office [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 26. Section 32.0322, Human Resources Code, is |
|
amended to read as follows: |
|
Sec. 32.0322. CRIMINAL HISTORY RECORD INFORMATION. |
|
(a) The inspector general's office and the 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 inspector general's 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 27. 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 inspector general's office [of the
|
|
inspector general], or the Office of Inspector General in the |
|
United States Department of Health and Human Services. |
|
SECTION 28. 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 |
|
Office [department's office] of State Inspector General [inspector
|
|
general]. |
|
SECTION 29. The following sections of the Government Code |
|
are repealed: |
|
(1) Section 531.101; |
|
(2) Section 531.1021; |
|
(3) Section 531.103; and |
|
(4) Section 531.104. |
|
SECTION 30. (a) The Office of State Inspector General |
|
under Chapter 422, Government Code, as added by this Act, is created |
|
on the effective date of this Act. |
|
(b) On January 1, 2008, 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. |
|
(c) Not later than January 1, 2008: |
|
(1) 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 shall be transferred, as |
|
consistent with this Act, to the Office of State Inspector General; |
|
(2) all personnel, vacant full-time equivalent |
|
positions, and assets assigned, as of the effective date of this |
|
Act, to the office of inspector general of the Health and Human |
|
Services Commission or engaged in the performance of the functions |
|
of that office shall be transferred, as consistent with this Act, to |
|
the Office of State Inspector General; |
|
(3) each state agency for which a state agency |
|
inspector general is designated by the state inspector general on |
|
or before October 1, 2007, shall transfer to the Office of State |
|
Inspector General, as consistent with this Act, all personnel, |
|
vacant full-time equivalent positions, and assets engaged in the |
|
performance of or the support of agency functions relating to the |
|
detection, investigation, and prevention of fraud, waste, and abuse |
|
in the implementation or administration of state or federally |
|
funded programs; |
|
(4) all state and federal funding, including funding |
|
for overhead costs, support costs, and lease or colocation lease |
|
costs, for the functions to be transferred to the Office of State |
|
Inspector General shall be reallocated to that office; and |
|
(5) for purposes of federal single state agency |
|
funding requirements, any federal funds that may not be |
|
appropriated directly to the Office of State Inspector General |
|
shall be transferred from the single state agency receiving the |
|
funds to the Office of State Inspector General if the funds are |
|
intended for a function performed by that office. |
|
(d) 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 state inspector general for reallocation to the |
|
Office of State Inspector General. |
|
(e) A state agency for which a state agency inspector |
|
general is designated by the state inspector general after October |
|
1, 2007, shall within 90 days after the designation transfer to the |
|
Office of State Inspector General, as consistent with this Act, all |
|
personnel, vacant full-time equivalent positions, and assets |
|
engaged in the performance of or the support of agency functions |
|
relating to the detection, investigation, and prevention of fraud, |
|
waste, and abuse in the implementation or administration of state |
|
or federally funded programs. |
|
SECTION 31. (a) The Health and Human Services Commission |
|
shall take all action necessary to provide for the orderly transfer |
|
of the assets and responsibilities of the commission's office of |
|
inspector general to the Office of State Inspector General. In the |
|
event a transfer is not completed by the date required under this |
|
Act, all possible efforts shall be made to promptly conclude the |
|
transfer. |
|
(b) 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 Office of State Inspector General and remains in effect |
|
until changed by the Office of State Inspector General. |
|
(c) A reference in law or administrative rule to the office |
|
of inspector general of the Health and Human Services Commission |
|
means the Office of State Inspector General. |
|
SECTION 32. (a) The amendment by this Act of Section |
|
531.102, Government Code, does not affect the entitlement of the |
|
person appointed as inspector general under Subsection (a-1) of |
|
that section to serve out the remainder of the person's term and |
|
carry out the functions of state inspector general in the same |
|
manner as a state inspector general appointed under Chapter 422, |
|
Government Code, as added by this Act, for the remainder of the |
|
person's term. |
|
(b) This section does not prohibit a person described by |
|
Subsection (a) of this section from being appointed under Chapter |
|
422, Government Code, as added by this Act, if the person has the |
|
qualifications required under that chapter. |
|
(c) As soon as possible after the term of the inspector |
|
general under Section 531.102, Government Code, expires or after |
|
the office of inspector general otherwise becomes vacant at an |
|
earlier date, the governor shall appoint a state inspector general |
|
under Chapter 422, Government Code, as added by this Act, to an |
|
initial term expiring February 1, 2009. |
|
SECTION 33. (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 Office of State Inspector General |
|
created under Chapter 422, 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 34. 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 35. 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. |