81R11046 KLA-D
 
  By: Truitt H.B. No. 2938
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the conduct of investigations, prepayment reviews, and
  payment holds in cases of suspected fraud, waste, or abuse in the
  provision of health and human services.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 531.102(e) and (g), Government Code,
  are amended to read as follows:
         (e)  The executive commissioner [commission], in
  consultation with the inspector general, by rule shall set specific
  claims criteria that, when met, require the office to begin an
  investigation. The claims criteria adopted under this subsection
  must be consistent with the criteria adopted under Section
  32.0291(a-1), Human Resources Code.
         (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. The notice to the
  provider must include:
                     (A)  an information statement indicating the
  nature of a payment hold;
                     (B)  a statement of the reason the payment hold is
  being imposed, the provider's suspected violation, and the evidence
  to support that suspicion; and
                     (C)  a statement that the provider is entitled to
  request a hearing regarding the payment hold or an informal
  resolution of the identified issues, the time within which the
  request must be made, and the procedures and requirements for
  making the request, including that a request for a hearing must be
  in writing.
               (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). A provider who submits a timely
  request for a hearing under this subdivision must be given notice of
  the following not later than the 30th day before the date the
  hearing is scheduled:
                     (A)  the date, time, and location of the hearing;
  and
                     (B)  a list of the provider's rights at the
  hearing, including the right to present witnesses and other
  evidence.
               (3-a) With respect to a provider who timely requests a
  hearing under Subdivision (3):
                     (A)  if the hearing is not scheduled on or before
  the 60th day after the date of the request, the payment hold is
  automatically terminated on the 60th day after the date of the
  request and may be reinstated only if prima facie evidence of fraud,
  waste, or abuse is presented subsequently at the hearing; and
                     (B)  if the hearing is held on or before the 60th
  day after the date of the request, the payment hold may be continued
  after the hearing only if the hearing officer determines that prima
  facie evidence of fraud, waste, or abuse was presented at the
  hearing.
               (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. The
  period during which the hearing is stayed under this subdivision is
  excluded in computing whether a hearing was scheduled or held not
  later than the 60th day after the hearing was requested for purposes
  of Subdivision (3-a).
               (4-a) With respect to a provider who timely requests an
  informal resolution under Subdivision (4):
                     (A)  if the informal resolution is not completed
  on or before the 60th day after the date of the request, the payment
  hold is automatically terminated on the 60th day after the date of
  the request and may be reinstated only if prima facie evidence of
  fraud, waste, or abuse is subsequently presented at a hearing
  requested and held under Subdivision (3); and
                     (B)  if the informal resolution is completed on or
  before the 60th day after the date of the request, the payment hold
  may be continued after the completion of the informal resolution
  only if the office determines that prima facie evidence of fraud,
  waste, or abuse was presented during the informal resolution
  process.
               (5)  The executive commissioner [office] shall, in
  consultation with the state's Medicaid fraud control unit, adopt
  rules for the office [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.
               (6)  If a payment hold is terminated, either
  automatically or after a hearing or informal review, in accordance
  with Subdivision (3-a) or (4-a), the office shall inform all
  affected claims payors, including Medicaid managed care
  organizations, of the termination not later than the fifth day
  after the date of the termination.
               (7)  A provider in a case in which a payment hold was
  imposed under this subsection who ultimately prevails in a hearing
  or, if the case is appealed, on appeal, or with respect to whom the
  office determines that prima facie evidence of fraud, waste, or
  abuse was not presented during an informal resolution process, is
  entitled to prompt payment of all payments held and interest on
  those payments at a rate equal to the prime rate, as published in
  The Wall Street Journal on the first day of each calendar year that
  is not a Saturday, Sunday, or legal holiday, plus one percent.
         SECTION 2.  Sections 531.103(a) and (b), Government Code,
  are amended to read as follows:
         (a)  The commission, acting through the commission's office
  of inspector general, and the office of the attorney general shall
  enter into a memorandum of understanding to develop and implement
  joint written procedures for processing cases of suspected fraud,
  waste, or abuse, as those terms are defined by state or federal law,
  or other violations of state or federal law under the state Medicaid
  program or other program administered by the commission or a health
  and human services agency, including the financial assistance
  program under Chapter 31, Human Resources Code, a nutritional
  assistance program under Chapter 33, Human Resources Code, and the
  child health plan program. The memorandum of understanding shall
  require:
               (1)  the office of inspector general and the office of
  the attorney general to set priorities and guidelines for referring
  cases to appropriate state agencies for investigation,
  prosecution, or other disposition to enhance deterrence of fraud,
  waste, abuse, or other violations of state or federal law,
  including a violation of Chapter 102, Occupations Code, in the
  programs and maximize the imposition of penalties, the recovery of
  money, and the successful prosecution of cases;
               (1-a)  the office of inspector general to refer each
  case of suspected provider fraud, waste, or abuse to the office of
  the attorney general not later than the 20th business day after the
  date the office of inspector general determines that the existence
  of fraud, waste, or abuse is reasonably indicated;
               (1-b)  the office of the attorney general to take
  appropriate action in response to each case referred to the
  attorney general, which action may include direct initiation of
  prosecution, with the consent of the appropriate local district or
  county attorney, direct initiation of civil litigation, referral to
  an appropriate United States attorney, a district attorney, or a
  county attorney, or referral to a collections agency for initiation
  of civil litigation or other appropriate action;
               (2)  the office of inspector general to keep detailed
  records for cases processed by that office or the office of the
  attorney general, including information on the total number of
  cases processed and, for each case:
                     (A)  the agency and division to which the case is
  referred for investigation;
                     (B)  the date on which the case is referred; and
                     (C)  the nature of the suspected fraud, waste, or
  abuse;
               (3)  the office of inspector general to notify each
  appropriate division of the office of the attorney general of each
  case referred by the office of inspector general;
               (4)  the office of the attorney general to ensure that
  information relating to each case investigated by that office is
  available to each division of the office with responsibility for
  investigating suspected fraud, waste, or abuse;
               (5)  the office of the attorney general to notify the
  office of inspector general of each case the attorney general
  declines to prosecute or prosecutes unsuccessfully;
               (6)  representatives of the office of inspector general
  and of the office of the attorney general to meet not less than
  quarterly to share case information and determine the appropriate
  agency and division to investigate each case; [and]
               (7)  the office of inspector general and the office of
  the attorney general to submit information requested by the
  comptroller about each resolved case for the comptroller's use in
  improving fraud detection; and
               (8)  the office of inspector general and the office of
  the attorney general to develop and implement joint written
  procedures for processing cases of suspected fraud, waste, or
  abuse, which must include:
                     (A)  procedures for maintaining a chain of custody
  for any records obtained during an investigation and for
  maintaining the confidentiality of the records;
                     (B)  a procedure by which a provider who is the
  subject of an investigation may make copies of any records taken
  from the provider during the course of the investigation before the
  records are taken or, in lieu of the opportunity to make copies, a
  requirement that the office of inspector general or the office of
  the attorney general, as applicable, make copies of the records
  taken during the course of the investigation and provide those
  copies to the provider not later than the 10th day after the date
  the records are taken; and
                     (C)  a procedure for returning any original
  records obtained from a provider who is the subject of a case of
  suspected fraud, waste, or abuse not later than the 15th day after
  the final resolution of the case, including all hearings and
  appeals.
         (b)  An exchange of information under this section between
  the office of the attorney general and the commission, the office of
  inspector general, or a health and human services agency does not
  affect the confidentiality of the information or whether the
  information is subject to disclosure under Chapter 552.
         SECTION 3.  Section 32.0291, Human Resources Code, is
  amended to read as follows:
         Sec. 32.0291.  PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
  (a)  Notwithstanding any other law and subject to Subsections (a-1)
  and (a-2), the department may:
               (1)  perform a prepayment review of a claim for
  reimbursement under the medical assistance program to determine
  whether the claim involves fraud 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.
         (a-1)  The executive commissioner of the Health and Human
  Services Commission shall adopt rules governing the conduct of a
  prepayment review of a claim for reimbursement from a medical
  assistance provider authorized by Subsection (a). The rules must:
               (1)  specify actions that must be taken by the
  department, or an appropriate person with whom the department
  contracts, to educate the provider and remedy irregular coding or
  claims filing issues before conducting a prepayment review;
               (2)  outline the mechanism by which a specific provider
  is identified for a prepayment review;
               (3)  define the criteria, consistent with the criteria
  adopted under Section 531.102(e), Government Code, used to
  determine whether a prepayment review will be imposed, including
  the evidentiary threshold, such as prima facie evidence, that is
  required before imposition of that review;
               (4)  prescribe the maximum number of days a provider
  may be placed on prepayment review status;
               (5)  require periodic reevaluation of the necessity of
  continuing a prepayment review after the review action is initially
  imposed;
               (6)  establish procedures affording due process to a
  provider placed on prepayment review status, including notice
  requirements, an opportunity for a hearing, and an appeals process;
  and
               (7)  provide opportunities for provider education
  while providers are on prepayment review status.
         (a-2)  The department may not perform a random prepayment
  review of a claim for reimbursement under the medical assistance
  program to determine whether the claim involves fraud or abuse. The
  department may only perform a prepayment review of the claims of a
  provider who meets the criteria adopted under Subsection (a-1)(3)
  for imposition of a prepayment review.
         (b)  Notwithstanding any other law and subject to Section
  531.102(g), Government Code, the department may impose a
  postpayment hold on payment of future claims submitted by a
  provider if the department has reliable evidence that the provider
  has committed fraud or wilful misrepresentation regarding a claim
  for reimbursement under the medical assistance program.  [The
  department must notify the provider of the postpayment hold not
  later than the fifth working day after the date the hold is
  imposed.]
         (c)  A postpayment hold authorized by this section is
  governed by the requirements and procedures specified for payment
  holds under Section 531.102, Government Code. [On timely written
  request by a provider subject to a postpayment hold under
  Subsection (b), the department shall file a request with the State
  Office of Administrative Hearings for an expedited administrative
  hearing regarding the hold. The provider must request an expedited
  hearing under this subsection not later than the 10th day after the
  date the provider receives notice from the department under
  Subsection (b). The department shall discontinue the hold unless
  the department makes a prima facie showing at the hearing that the
  evidence relied on by the department in imposing the hold is
  relevant, credible, and material to the issue of fraud or wilful
  misrepresentation.
         [(d)     The 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 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 department's
  request until the informal resolution process is completed.]
         SECTION 4.  The executive commissioner of the Health and
  Human Services Commission shall adopt the rules required by Section
  32.0291(a-1), Human Resources Code, as added by this Act, not later
  than November 1, 2009.
         SECTION 5.  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 6.  This Act takes effect September 1, 2009.