By: Herrero H.B. No. 4665
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the office of inspector general for the Health and Human
  Services Commission.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 531, Government Code, is amended by
  adding Subchapter R to read as follows:
  SUBCHAPTER R.  INSPECTOR GENERAL
         Sec. 531.701.  DEFINITIONS. In this subchapter:
               (1)  "Fraud" has the meaning assigned by Section
  531.1011.
               (2)  "Inspector general" means the inspector general
  appointed under this subchapter.
               (3)  "Office" means the Office of Inspector General.
               (4)  "Provider" has the meaning assigned by Section
  531.1011.
               (5)  "Review" includes an inspection, investigation,
  audit, or similar activity.
               (6)  "State funds" or "state money" includes federal
  funds or money received and appropriated by the state or for which
  the state has oversight responsibility.
         Sec. 531.702.  REFERENCE IN OTHER LAW.  Notwithstanding any
  other provision of law, a reference in law or rule to the
  commission's office of inspector general or the commission's office
  of investigations and enforcement means the Office of Inspector
  General.
         Sec. 531.703.  OFFICE OF INSPECTOR GENERAL; ADMINISTRATIVE
  ATTACHMENT.  (a)  The office of inspector general is responsible
  for:
               (1)  the investigation of fraud, waste, and abuse in
  the provision or funding of health or human services by this state;
               (2)  the enforcement of state law relating to the
  provision of those services to protect the public; and
               (3)  the investigation, prevention and detection of
  crime relating to the provision of those services.
         (b)  The office is part of the single state Medicaid agency
  and is administratively attached to the commission.  The commission
  shall provide to the office administrative support services from
  the commission and from health and human services agencies.
         Sec. 531.704.  SERVICE LEVEL AGREEMENT; FUNDS.  (a)  The
  commission and the office shall enter into a service level
  agreement that establishes the performance standards and
  deliverables with regard to administrative support by the
  commission.
         (b)  The service level agreement must be reviewed at least
  annually to ensure that services and deliverables are provided in
  accordance with the agreement.
         (c)  The commission shall request, apply for, and receive for
  the office any appropriations or other money from this state or the
  federal government, and shall disburse all such funds to the office
  as appropriated.
         (d)  The commission shall provide to the office for the state
  fiscal biennium beginning September 1, 2009, the same level of
  administrative support the commission provided to the office
  established under former Section 531.102 for the state fiscal
  biennium beginning September 1, 2007.  This subsection expires
  January 1, 2012.
         Sec. 531.705.  DUTIES OF COMMISSION.  (a)  The commission
  shall:
               (1)  provide administrative assistance to the office;
  and
               (2)  coordinate administrative responsibilities with
  the office to avoid unnecessary duplication of duties.
         (b)  The commission may not take an action that affects or
  relates to the validity, status, or terms of an interagency
  agreement or a contract to which the office is a party without the
  office's approval.
         Sec. 531.706.  INDEPENDENCE OF OFFICE.  (a)  Except as
  otherwise provided by this chapter, the office and inspector
  general operate independently of the commission.
         (b)  The inspector general, not the executive commissioner,
  supervises the office staff and manages the operations of the
  office.
         (c)  The inspector general shall have operational authority
  over and responsibility for the:
               (1)  management of the daily operations of the office,
  including the organization and management of the office and office
  operating procedures;
               (2)  allocation of resources within the office;
               (3)  personnel and employment policies;
               (4)  contracting, purchasing, and related policies,
  subject to other laws relating to state agency contracting and
  purchasing;
               (5)  information resources systems used by the office;
               (6)  location of office facilities;
               (7)  coordination of office activities with activities
  of other state agencies, including other health and human services
  agencies.
         Sec. 531.707.  INSPECTOR GENERAL; APPOINTMENT AND TERM.  (a)  
  The governor shall appoint an inspector general to serve as
  director of the office.
         (b)  The inspector general reports to the governor and serves
  a two-year term that expires on February 1 of each odd-numbered
  year.
         (c)  The inspector general is a state officer.
         Section 531.708.  CONFLICT OF INTEREST.  (a)  The inspector
  general may not serve as an ex officio member on the governing body
  of a governmental entity.
         (b)  The inspector general may not have a financial interest
  in the transactions of the office, a health and human services
  agency, or a health or human services provider.
         Section 531.709.  RULEMAKING BY INSPECTOR GENERAL.  (a)  
  Notwithstanding Section 531.0055 (e) and any other law, the
  inspector general shall adopt the rules necessary to administer the
  functions of the office, including rules to address the imposition
  of sanctions and penalties for violations and due process
  requirements for imposing sanctions and penalties, as well as rules
  relating to the eligibility of providers and contractors to
  participate in health and human services programs.
         (b)  A rule, standard, or form adopted by the executive
  commissioner, the commission, or a health and human services agency
  that is necessary to accomplish the duties of the office is
  considered to also be a rule, standard, or form of the office and
  remains in effect as a rule, standard, or form of the office until
  changed by the inspector general.
         (c)  The office may submit proposed rules and adopted rules
  to the commission for publication.  The executive commissioner or
  commission may not amend or modify a rule submitted by the office.
         (d)  The rules must include 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.
         Sec. 531.710.  EMPLOYEES; MEDICAL REVIEW OFFICER; TRAINING.
         (a)  The inspector general may employ personnel as necessary
  to implement the duties of the office.
         (b)  The inspector general shall employ a physician as the
  medical review officer to perform reviews and provide information
  and consultation as appropriate when the matter at issue involves
  or requires medical expertise.
         (c)  The inspector general shall train office personnel to
  pursue priority Medicaid and other health and human services fraud,
  waste, and abuse cases efficiently and as necessary.
         (d)  The inspector general may contract with certified
  public accountants, management consultants, or other professional
  experts necessary to enable the inspector general and office
  personnel to independently perform the functions of the inspector
  general's office.
         (e)  The inspector general may require employees of health
  and human services agencies to provide assistance to the office in
  connection with the office's duties relating to the investigation
  of fraud, waste, and abuse in the provision of health and human
  services.
         Sec. 531.711.  REVIEW AUTHORITY.  (a)  The inspector general
  may review any activity or operation of a health and human services
  agency, health or human services provider, or person in this state
  that is related to the investigation, detection, or prevention of
  fraud, waste, or abuse, or official or employee misconduct, in a
  state or state-funded health or human services program. A review
  may include an inspection, investigation, audit, or other similar
  activity inquiring into a specific act or allegation of, or a
  specific financial transaction or practice that may involve,
  impropriety, malfeasance, or nonfeasance in the obligation,
  spending, receipt, or other use of state money.
         (b)  The executive commissioner, the commission, or a health
  and human services agency of this state may not impair, prohibit, or
  attempt to influence the inspector general in initiating,
  conducting, or completing a review.
         (c)  The inspector general may conduct reviews, including
  financial or performance audits regarding the use and effectiveness
  of state funds, including contract and grant funds, administered by
  a person or state agency receiving the funds in connection with a
  state or state-funded health or human services program.
         Sec. 531.712.  INITIATION OF REVIEW.  The inspector general
  may initiate a review:
               (1)  on the inspector general's own initiative;
               (2)  at the request of the commission or executive
  commissioner; or
               (3)  based on a complaint from any source concerning a
  matter described by Section 531.711.
         Sec. 531.713.  INTEGRITY REVIEW.  (a)  The office shall
  conduct an integrity review to determine whether there is
  sufficient basis to warrant a full investigation on receipt of any
  complaint of fraud, waste, or abuse of funds in the state Medicaid
  program from any source.
         (b)  An integrity review must begin not later than the 30th
  day after the date the office receives a complaint or has reason to
  believe that Medicaid fraud, waste, or abuse has occurred.  An
  integrity review shall be completed not later than the 90th day
  after the date the review began.
         (c)  If the findings of an integrity review give the office
  reason to believe that an incident of fraud involving possible
  criminal conduct has occurred in the state Medicaid program, the
  office must take the following action, as appropriate, not later
  than the 30th day after the completion of the integrity review:
               (1)  if a provider is suspected of fraud 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 or preclude the imposition of appropriate
  administrative or civil sanctions; or
               (2)  if there is reason to believe that a recipient of
  funds has defrauded the Medicaid program, the office may conduct a
  full investigation of the suspected fraud.
         Sec. 531.714.  ACCESS TO INFORMATION.  (a)  To further a
  review conducted by the office, the inspector general is entitled
  to full and unrestricted access to all offices, limited-access or
  restricted areas, employees, books, papers, records, documents,
  equipment, computers, databases, systems, accounts, reports,
  vouchers, or other information, including confidential
  information, electronic data, and internal records relevant to the
  functions of the office, maintained by a person, health and human
  services agency, or health or human services provider in connection
  with a state or state-funded health or human services program.
         (b)  The inspector general may not access data or other
  information the release of which is restricted under federal law
  unless the office is in compliance with all applicable federal
  regulations governing such access.
         Sec. 531.715.  COOPERATION REQUIRED.  To further a review
  conducted by the inspector general's office, the inspector general
  may require medical or other professional assistance from the
  executive commissioner, the commission, a health and human services
  agency, or an auditor, accountant, or other employee of the
  commission or agency.
         Sec. 531.716.  REFERRAL TO STATE MEDICAID FRAUD CONTROL
  UNIT. (a) At the time the office learns or has reason to suspect
  that a health or human services provider 's records related to
  participation in the state Medicaid program 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.
         (b)  A criminal referral under Subsection (a) does not
  preclude the office from continuing its investigation of a health
  or human services provider or the imposition of appropriate
  administrative or civil sanctions.
         Sec. 531.717.  HOLD ON CLAIM REIMBURSEMENT PAYMENT;
  EXCLUSION FROM PROGRAMS.  (a)  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 health or human services provider to compel
  production of records related to participation in the state
  Medicaid program or on request of the state's Medicaid fraud
  control unit, as applicable.
         (b)  The office must notify the health or human services
  provider of the hold on payment not later than the fifth working day
  after the date the payment hold is imposed.
         (c)  The office shall, in consultation with the state 's
  Medicaid fraud control unit, establish guidelines under which holds
  on payment or exclusions from a state or state-funded program:
               (1)  may permissively be imposed on a health or human
  services provider; or
               (2)  shall automatically be imposed on a provider.
         (d)  A health or human services provider subject to a hold on
  payment or excluded from a program under this section is entitled to
  a hearing on the hold or exclusion.  A hearing under this subsection
  is a contested case hearing under Chapter 2001. The State Office of
  Administrative Hearings shall conduct the hearing.  After the
  hearing, the office, subject to judicial review, shall make a final
  determination.  The commission, a health and human services agency,
  and the office of the attorney general are entitled to intervene as
  parties in the contested case.
         Sec. 531.718.  REQUEST FOR EXPEDITED HEARING.  (a)  On timely
  written request by a health or human services provider subject to a
  hold on payment under Section 531.717, 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 Hearing for an
  expedited administrative hearing regarding the hold.
         (b)  The health or human services provider must request an
  expedited hearing not later than the 10th day after the date the
  provider receives notice from the office under Section 531.717(b).
         (c)  The office may enter into a memorandum of understanding
  with the State Office of Administrative Hearings to facilitate the
  docketing and hearing of contested case hearings.
         Sec. 531.719.  INFORMAL RESOLUTION.  (a)  The inspector
  general shall adopt rules that allow a health or human services
  provider subject to a hold on payment under Section 531.717, 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 section.
         (b)  A health or human services provider must seek an
  informal resolution not later than the 10th day after the date the
  provider receives notice from the office under Section 531.717(b).
         (c)  A health or human services provider's decision to seek
  an informal resolution does not extend the time by which the
  provider must request an expedited administrative hearing under
  Section 531.718.
         (d)  A hearing initiated under Section 531.717 shall be
  stayed at the office's request until the informal resolution
  process is completed.
         Sec. 531.720.  EMPLOYEE REPORTS.  The inspector general may
  require employees at the commission or a health and human services
  agency to report to the office information regarding fraud, waste,
  misuse or abuse of funds or resources, corruption, or illegal acts.
         Sec. 531.721.  SUBPOENAS.  (a)  The inspector general may
  issue a subpoena to compel the attendance of a relevant witness or
  the production, for inspection or copying, of relevant evidence in
  connection with a review conducted under this subchapter.
         (b)  A subpoena may be served personally or by certified
  mail.
         (c)  If a person fails to comply with a subpoena, the
  inspector general, acting through the attorney general, may file
  suit to enforce the subpoena in a district court in this state.
         (d)  On finding that good cause exists for issuing the
  subpoena, the court shall order the person to comply with the
  subpoena.  The court may hold in contempt a person who fails to obey
  the court order.
         (e)  The reimbursement of the expenses of a witness whose
  attendance is compelled under this section is governed by Section
  2001.103.
         Sec. 531.722.  INTERNAL AUDITOR.  (a)  In this section,
  "internal auditor" means a person appointed under Section 2102.006.
         (b)  The internal auditor for a health and human services
  agency shall provide the inspector general with a copy of the
  agency's internal audit plan to:
               (1)  assist in the coordination of efforts between the
  inspector general and the internal auditor; and
               (2)  limit duplication of effort regarding reviews by
  the inspector general and internal auditor.
         (c)  The internal auditor shall provide to the inspector
  general all final audit reports concerning audits of any:
               (1)  part or division of the agency;
               (2)  contract, procurement, or grant; and
               (3)  program conducted by the agency.
         Sec. 531.723.  COOPERATION WITH LAW ENFORCEMENT OFFICIALS
  AND OTHER ENTITIES. (a) The inspector general may provide
  information and evidence relating to criminal acts to the state
  auditor's office and appropriate law enforcement officials.
         (b)  The inspector general may refer matters for further
  civil, criminal, and administrative action to appropriate
  administrative and prosecutorial agencies, including the attorney
  general.
         (c)  The inspector general may enter into a memorandum of
  understanding with a law enforcement or prosecutorial agency,
  including the office of the attorney general, to assist in
  conducting a review under this subchapter.
         Sec. 531.724.  COOPERATION AND COORDINATION WITH STATE
  AUDITOR.
         (a)  The state auditor may, on request of the inspector
  general, provide appropriate information or other assistance to the
  inspector general or office, as determined by the state auditor.
         (b)  The inspector general may meet with the state auditor 's
  office to coordinate a review conducted under this subchapter,
  share information, or schedule work plans.
         (c)  The state auditor is entitled to access all information
  maintained by the inspector general, including vouchers,
  electronic data, internal records, and information obtained under
  Section 531.714 or subject to Section 531.731.
         (d)  Any information obtained or provided by the state
  auditor under this section is confidential and not subject to
  disclosure under Chapter 552.
         Sec. 531.725.  PREVENTION.  (a) The inspector general may
  recommend to the commission and executive commissioner policies on:
               (1)  promoting economical and efficient administration
  of state funds administered by an individual or entity that
  received the funds from a health and human services agency; and
               (2)  preventing and detecting fraud, waste, and abuse
  in the administration of those funds.
         (b)  The inspector general may provide training or other
  education regarding the prevention of fraud, waste, or abuse to
  employees of a health and human services agency.  The training or
  education provided must be approved by the presiding officer of the
  agency.
         Sec. 531.726.  RULEMAKING BY EXECUTIVE COMMISSIONER. The
  executive commissioner may adopt rules governing a health and human
  services agency's response to reports and referrals from the
  inspector general on issues identified by the inspector general
  related to the agency or a contractor of the agency.
         Sec. 531.727.  ALLEGATIONS OF MISCONDUCT AGAINST PRESIDING
  OFFICER.  If a review by the inspector general involves allegations
  that a presiding officer of a health and human services agency has
  engaged in misconduct, the inspector general shall report to the
  governor during the review until the report is completed or the
  review is closed without a finding.
         Sec. 531.728.  PERIODIC REPORTING TO STATE AUDITOR AND
  EXECUTIVE COMMISSIONER REQUIRED. The inspector general shall
  timely inform the state auditor and the executive commissioner of
  the initiation of a review of a health and human services agency
  program and the ongoing status of each review.
         Sec. 531.729.  REPORTING OFFICE FINDINGS. The inspector
  general shall report the findings of any review or investigation
  conducted by the office to:
               (1)  the executive commissioner;
               (2)  the governor;
               (3)  the lieutenant governor;
               (4)  the speaker of the house of representatives;
               (5)  the state auditor 's office; and
               (6)  appropriate law enforcement and prosecutorial
  agencies, including the office of the attorney general, if the
  findings suggest the probability of criminal conduct.
         Sec. 531.730.  FLAGRANT VIOLATIONS; IMMEDIATE REPORT.  The
  inspector general shall immediately report to the executive
  commissioner, the governor's general counsel, and the state auditor
  a problem deemed by the inspector general to be particularly
  serious or flagrant, and relating to the administration of a
  program, operation of a health and human services agency, or
  interference with an inspector general review.
         Sec. 531.731.  INFORMATION CONFIDENTIAL.  (a)  Except as
  provided by this section, Sections 531.103, 531.729, and 531.733,
  all information and material compiled or maintained by the
  inspector general during a review under this subchapter is:
               (1)  confidential and not subject to disclosure under
  Chapter 552; and
               (2)  not subject to disclosure, discovery, subpoena, or
  other means of legal compulsion for release to anyone other than the
  state auditor's office, the commission, or the office or its agents
  involved in the review related to that information or material.
         (b)  Subsection (a) applies to information the inspector
  general is required to disclose under Sections 531.727, 531.728,
  531.730, and 531.732.
         (c)  As the inspector general determines appropriate based
  on evidence sufficient to support an allegation, information
  relating to a review may be disclosed to:
               (1)  a law enforcement agency;
               (2)  the attorney general's office;
               (3)  the state auditor's office; or
               (4)  the commission.; or
               (5)  a licensing or regulatory agency.
         (d)  A person that receives information under Subsections
  (b) and (c) may not disclose the information except to the extent
  that disclosure is consistent with the authorized purpose for which
  the person first obtained the information.
         Sec. 531.732.  DRAFT OF FINAL REPORT; AGENCY RESPONSE.
         (a)  Except in cases in which the office has determined that
  potential fraud, waste, or abuse exists, or a criminal violation
  has occurred, the office shall provide a draft of the final report
  of any review of the operations of a health and human services
  agency to the presiding officer of the agency before publishing the
  office's final report.
         (b)  The health and human services agency may provide a
  response to the office's draft report in the manner prescribed by
  the office not later than the 10th day after the date the draft
  report is received by the agency.  The inspector general by rule
  shall specify the format and requirements of the agency response.
         (c)  Notwithstanding Subsection (a), the office may not
  provide a draft report to the presiding officer of the agency if in
  the inspector general's opinion providing the draft report could
  negatively affect any anticipated civil or criminal proceedings.
         (d)  The office may include any portion of the agency's
  response in the office's final report.
         Sec. 531.733.  FINAL REVIEW REPORTS; AGENCY RESPONSE.  (a)  
  The inspector general shall prepare a final report for each review
  conducted under this subchapter.  The final report must include:
               (1)  a summary of the activities performed by the
  inspector general in conducting the review;
               (2)  a determination of whether wrongdoing was found;
  and
               (3)  a description of any findings of wrongdoing.
         (b)  The inspector general's final review reports are
  subject to disclosure under Chapter 552.
         (c)  All working papers and other documents related to
  compiling the final review reports remain confidential and are not
  subject to disclosure under Chapter 552.
         (d)  Not later than the 60th day after the date the office
  issues a final report that identifies deficiencies or
  inefficiencies in, or recommends corrective measures in the
  operations of, a health and human services agency, the agency shall
  file a response that includes:
               (1)  an implementation plan and timeline for
  implementing corrective measures; or
               (2)  the agency's rationale for declining to implement
  corrective measures for the identified deficiencies or
  inefficiencies or the office 's recommended corrective measures, as
  applicable.
         Sec. 531.734.  STATE AUDITOR AUDITS, INVESTIGATIONS, AND
  ACCESS TO INFORMATION NOT IMPAIRED.  This subchapter or other law
  related to the operation of the inspector general does not prohibit
  the state auditor from conducting an audit, investigation, or other
  review or from having full and complete access to all records and
  other information, including witnesses and electronic data, that
  the state auditor considers necessary for the audit, investigation,
  or other review.
         Sec. 531.735.  AUTHORITY OF STATE AUDITOR TO CONDUCT TIMELY
  AUDITS NOT IMPAIRED.  This chapter or other law related to the
  operation of the inspector general does not take precedence over
  the authority of the state auditor to conduct an audit under Chapter
  321 or other law.
         Sec. 531.736.  BUDGET.  (a)  The inspector general shall
  submit a budget in accordance with the reporting requirements of
  the General Appropriations Act.
         (b)  The inspector general shall submit to the commission a
  legislative appropriations request and an operating budget in
  accordance with the service level agreement entered into under
  Section 531.704 and applicable law.
         (c)  The commission shall submit the office's appropriations
  request and, if required by or under law, operating budget to the
  legislature.  The request or budget is not subject to review,
  alteration, or modification by the commission or executive
  commissioner before submission to the legislature.
         Sec. 531.737.  COSTS.  (a)  The inspector general shall
  maintain information regarding the cost of reviews.
         (b)  The inspector general may cooperate with appropriate
  administrative and prosecutorial agencies, including the office of
  the attorney general, in recovering costs incurred under this
  subchapter from nongovernmental entities, including contractors or
  individuals involved in:
               (1)  violations of applicable state or federal rules or
  statutes;
               (2)  abusive or willful misconduct; or
               (3)  violations of a provider contract or program
  policy.
         (c)  In criminal cases the inspector general and the Office
  of Attorney General shall cooperate to ensure that all appropriate
  evidence is submitted to the court in all criminal prosecutions
  towards ensuring that restitution is ordered, to include the
  overpayment and the costs incurred under this subchapter, as a
  condition of probation or as a condition of parole.
         Sec. 531.738.  ADMINISTRATIVE OR CIVIL PENALTY; INJUNCTION.
         (a)  The office may:
               (1)  act for a health and human services agency in the
  assessment by the office of administrative or civil penalties the
  agency is authorized to assess under applicable law; and
               (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, waste, or abuse.
         (b)  If the office imposes an administrative or civil penalty
  under Subsection (a) for a health and human services agency:
               (1)  the health and human services agency may not
  impose an administrative or civil penalty against the same person
  for the same violation; and
               (2)  the office shall impose the penalty under
  applicable rules of the office, this subchapter, and applicable
  laws and rules governing the imposition of a penalty by the health
  and human services agency.
         Sec. 531.739.  PEACE OFFICER INVESTIGATORS.  (a)  An
  investigator assigned to conduct investigations for the office may
  be a commissioned peace officer.  The number of commissioned peace
  officers assigned to conduct investigations may not exceed 15
  percent of the office's full-time equivalent positions.
         (b)  A commissioned peace officer or otherwise designated
  law enforcement officer employed by the office is not entitled to
  supplemental benefits from the law enforcement and custodial
  officer supplemental retirement fund unless the officer transfers
  from a position, without a break in service, that qualifies for
  supplemental retirement benefits from the fund.
         SECTION 2.  Section 531.001, Government Code, is amended by
  adding Subdivision (4-a) to read as follows:
         (4-a)  "Office of inspector general" means the office of
  inspector general established under Subchapter R.
         SECTION 3.  Section 531.008(c), 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 4.  Sections 531.103(a), (c), and (d), 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.
         (c)  The office of inspector general [commission] and the
  office of the attorney general shall jointly prepare and submit a
  semiannual report to the governor, lieutenant governor, speaker of
  the house of representatives, and comptroller concerning the
  activities of the office of the attorney general and the office of
  inspector general [those agencies] in detecting and preventing
  fraud, waste, and abuse under the state Medicaid program or other
  program administered by the commission or a health and human
  services agency. The report may be consolidated with any other
  report relating to the same subject matter the office of inspector
  general [commission] or office of the attorney general is required
  to submit under other law.
         (d)  The office of inspector general [commission] and the
  office of the attorney general may not assess or collect
  investigation and attorney's fees on behalf of any state agency
  unless the office of inspector general, the office of the attorney
  general, or another [other] state agency collects a penalty,
  restitution, or other reimbursement payment to the state.
         SECTION 5.  Section 531.1031(a)(2), Government Code, is
  amended to read as follows:
               (2)  "Participating agency" means:
                     (A)  the Medicaid fraud enforcement divisions of
  the office of the attorney general; [and]
                     (B)  each board or agency with authority to
  license, register, regulate, or certify a health care professional
  or managed care organization that may participate in the state
  Medicaid program; and
                     (C)  the office of inspector general.
         SECTION 6.  Section 531.104(a), Government Code, is amended
  to read as follows:
         (a)  The office of inspector general [commission] and the
  attorney general shall execute a memorandum of understanding under
  which the office [commission] shall provide investigative support
  as required to the attorney general in connection with cases under
  Subchapter B, Chapter 36, Human Resources Code.  Under the
  memorandum of understanding, the office [commission] shall assist
  in performing preliminary investigations and ongoing
  investigations for actions prosecuted by the attorney general under
  Subchapter C, Chapter 36, Human Resources Code.
         SECTION 7.  Section 531.105, Government Code, is amended to
  read as follows:
         Sec. 531.105.  FRAUD DETECTION TRAINING.  [(a)]  The office
  of inspector general [commission] shall develop and implement a
  program to provide annual training to contractors who process
  Medicaid claims and appropriate staff of the health and human
  services agencies [Texas Department of Health and the Texas
  Department of Human Services] in identifying potential cases of
  fraud, waste, or abuse under the state Medicaid program.  The
  training provided to the contractors and staff must include clear
  criteria that specify:
               (1)  the circumstances under which a person should
  refer a potential case to the office [commission]; and
               (2)  the time by which a referral should be made.
         [(b) The Texas Department of Health and the Texas Department
  of Human Services, in cooperation with the 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 commission.   The
  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 531.103(c).]
         SECTION 8.  Sections 531.106(f) and (g), Government Code,
  are amended to read as follows:
         (f)  Cases [The commission shall refer cases] identified by
  the technology shall be referred to the [commission's] office of
  inspector general [investigations and enforcement] or the office of
  the attorney general, 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 commission or the office of inspector general 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 commission shall refer] the
  case shall be referred for investigation to the office of inspector
  general or the office of the attorney general, as appropriate [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 of inspector general [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)  Each [The commission shall require each] health and
  human services agency that performs any aspect of the state
  Medicaid program shall [to] participate in the implementation and
  use of the automated fraud investigation tracking system as
  directed by the office.
         SECTION 10.  Section 531.1062(a), Government Code, is
  amended to read as follows:
         (a)  The office of inspector general [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.  Sections 531.107(a) and (f), 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 inspector general [investigations and enforcement] in
  improving the efficiency of fraud investigations and collections.
         (f)  At least once each fiscal quarter, the [commission's]
  office of inspector general [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.  Sections 531.108 and 531.109, Government Code,
  are amended to read as follows:
         Sec. 531.108.  FRAUD PREVENTION.  (a)  The [commission's]
  office of inspector general [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 office 's [commission's] case management system
  or the case management system of a health and human services agency.
         (b)  The office of inspector general [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 of inspector general [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.
         (d)  The office of inspector general [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.
         (e)  The office of inspector general [commission] shall
  submit to the governor and Legislative Budget Board a semiannual
  report on the results of computerized matching of office and
  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.
         Sec. 531.109.  SELECTION AND REVIEW OF CLAIMS.  (a)  The
  office of inspector general [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 of inspector general [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 of inspector general and the commission shall determine the
  types of claims at which office and commission resources for fraud,
  waste, and abuse detection should be primarily directed.
         SECTION 13.  Sections 531.110(a), (c), (d), (e), and (f),
  Government Code, are amended to read as follows:
         (a)  The office of inspector general [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 of inspector general [commission] by providing data or
  any other assistance necessary to conduct the electronic data
  matches required by this section.
         (d)  The office of inspector general [commission] may
  contract with a public or private entity to conduct the electronic
  data matches required by this section.
         (e)  The office of inspector general [commission], or a
  health and human services agency designated by the office 
  [commission], by rule shall establish procedures to verify the
  electronic data matches conducted by the office [commission] under
  this section. Not later than the 20th day after the date the
  electronic data match is verified, the commission 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 of inspector general [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 14.  Section 531.1112, Government Code, is amended
  to read as follows:
         Sec. 531.1112.  STUDY CONCERNING INCREASED USE OF TECHNOLOGY
  TO STRENGTHEN FRAUD DETECTION AND DETERRENCE; IMPLEMENTATION.  (a)  
  The commission and the [commission's] office of inspector general
  shall jointly study the feasibility of increasing the use of
  technology to strengthen the detection and deterrence of fraud in
  the state Medicaid program.  The study must include the
  determination of the feasibility of using technology to verify a
  person 's citizenship and eligibility for coverage.
         (b)  The commission shall implement any methods the
  commission and the [commission's] office of inspector general
  determine are effective at strengthening fraud detection and
  deterrence.
         SECTION 15.  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 inspector general [commissioner] shall adopt rules
  as necessary to accomplish the purposes of this section.
         SECTION 16.  Sections 531.114(b) and (g), Government Code,
  are amended to read as follows:
         (b)  If after an investigation the office of inspector
  general [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 inspector general [commission] shall adopt rules as
  necessary to implement this section.
         SECTION 17.  Section 533.005(a), 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 [commission's] office of inspector
  general;
               (11)  a requirement that the managed care
  organization's usages of out-of-network providers or groups of
  out-of-network providers may not exceed limits for those usages
  relating to total inpatient admissions, total outpatient services,
  and emergency room admissions determined by the commission;
               (12)  if the commission finds that a managed care
  organization has violated Subdivision (11), a requirement that the
  managed care organization reimburse an out-of-network provider for
  health care services at a rate that is equal to the allowable rate
  for those services, as determined under Sections 32.028 and
  32.0281, Human Resources Code;
               (13)  a requirement that the organization use advanced
  practice nurses in addition to physicians as primary care providers
  to increase the availability of primary care providers in the
  organization 's provider network;
               (14)  a requirement that the managed care organization
  reimburse the state for any overpayments resulting from fraud,
  waste or abuse in the Medicaid program, the child health plan
  program, or another government funded program.
               (15)  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
               (16)  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 18.  Section 533.012(c), Government Code, is amended
  to read as follows:
         (c)  The [commission's] office of 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.
         SECTION 19.  Section 21.014(b), Human Resources Code, is
  amended to read as follows:
         (b)  The [person employed by the department as] inspector
  general appointed under Subchapter R, Chapter 531, Government Code,
  shall make reports to and consult with the agency director
  [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 20.  Section 32.003, Human Resources Code, is
  amended by adding Subdivision (5) to read as follows:
               (5)  "Office of inspector general" means the office of
  inspector general established under Subchapter R, Chapter 531,
  Government Code.
         SECTION 21.  Section 32.0291, Human Resources Code, is
  amended to read as follows:
         Sec. 32.0291.  PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
         (a)  Notwithstanding any other law, the office of inspector
  general or department may:
               (1)  perform a prepayment review of a claim for
  reimbursement under the medical assistance program to determine
  whether the claim involves fraud, waste, or abuse; and
               (2)  as necessary to perform that review, withhold
  payment of the claim for not more than five working days without
  notice to the person submitting the claim.
         (b)  Notwithstanding any other law, the office of inspector
  general [department] may impose a postpayment hold on payment of
  future claims submitted by a provider if the office [department]
  has prima facie evidence that the provider has committed fraud,
  waste, abuse, or wilful misrepresentation regarding a claim for
  reimbursement or cost report under the medical assistance program.
  The office [department] must notify the provider of the postpayment
  hold not later than the fifth working day after the date the hold is
  imposed.
         (c)  On timely written request by a provider subject to a
  postpayment hold under Subsection (b), the office of inspector
  general [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 of inspector general
  [department] under Subsection (b). The office of inspector general
  [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 of inspector general [department]
  in imposing the hold is relevant, credible, and material to the
  issue of fraud, waste, abuse, or wilful misrepresentation.
         (d)  The inspector general [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 of inspector general [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 22.  Section 32.032, Human Resources Code, is
  amended to read as follows:
         Sec. 32.032.  PREVENTION AND DETECTION OF FRAUD, WASTE, AND
  ABUSE. The inspector general [department] shall adopt reasonable
  rules for minimizing the opportunity for fraud, waste, and abuse,
  for establishing and maintaining methods for detecting and
  identifying situations in which a question of fraud, waste, or
  abuse in the program may exist, and for referring cases where fraud,
  waste, or abuse appears to exist to the appropriate law enforcement
  agencies for prosecution.
         SECTION 23.  Sections 32.0321(a) through (d), Human
  Resources Code, are amended to read as follows:
         (a)  The office of inspector general [department] by rule may
  recommend to the department and the department by rule may require
  that each provider of medical assistance in a provider type that has
  demonstrated significant potential for fraud, waste, or abuse to
  file with the department a surety bond in a reasonable amount. The
  office and the department by rule shall each require a provider of
  medical assistance to file with the department a surety bond in a
  reasonable amount if the office [department] identifies a pattern
  of suspected fraud, waste, or abuse involving criminal conduct
  relating to the provider 's services under the medical assistance
  program that indicates the need for protection against potential
  future acts of fraud, waste, or abuse.
         (b)  The bond under Subsection (a) must be payable to the
  department to compensate the department for damages resulting from
  or penalties or fines imposed in connection with an act of fraud,
  waste, or abuse committed by the provider under the medical
  assistance program.
         (c)  Subject to Subsection (d) or (e), the office of
  inspector general and the department by rule may require each
  provider of medical assistance that establishes a resident's trust
  fund account to post a surety bond to secure the account. The bond
  must be payable to the department to compensate residents of the
  bonded provider for trust funds that are lost, stolen, or otherwise
  unaccounted for if the provider does not repay any deficiency in a
  resident 's trust fund account to the person legally entitled to
  receive the funds.
         (d)  The office of inspector general and the department may
  not require the amount of a surety bond posted for a single facility
  provider under Subsection (c) to exceed the average of the total
  average monthly balance of all the provider 's resident trust fund
  accounts for the 12-month period preceding the bond issuance or
  renewal date.
         SECTION 24.  Section 32.0322(a), Human Resources Code, is
  amended to read as follows:
         (a)  The office of inspector general 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.
         SECTION 25.  Section 32.070(d), 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, waste, and abuse conducted by the
  Medicaid fraud control unit of the office of the attorney general,
  the office of the state auditor, the office of [the] inspector
  general, or the Office of Inspector General in the United States
  Department of Health and Human Services.
         SECTION 26.  Section 33.015(e), 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
  [department's] office of inspector general established under
  Subchapter R, Chapter 531, Government Code.
         SECTION 27.  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 Medical
  Board;
               (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 Department of State
  Health Services 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 Section 701.104, Insurance Code;
               (29)  apprehension specialists and inspectors general
  commissioned by the Texas Youth Commission as officers under
  Sections 61.0451 and 61.0931, Human Resources Code;
               (30)  officers appointed by the inspector general 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 Private Security Board 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;
               (34)  officers commissioned by the State Board of
  Dental Examiners under Section 254.013, Occupations Code, subject
  to the limitations imposed by that section; [and]
               (35)  investigators commissioned by the Texas Juvenile
  Probation Commission as officers under Section 141.055, Human
  Resources Code; and
               (36)  officers commissioned by the office of inspector
  general established under Subchapter R, Chapter 531, Government
  Code.
         SECTION 28.  Sections 531.102 and 531.1021, Government Code,
  are repealed.
         SECTION 29.  Section 411.086, Government Code, is amended to
  read as follows:
         Sec. 411.083.  DISSEMINATION OF CRIMINAL HISTORY RECORD
  INFORMATION.  (a)  Criminal history record information maintained
  by the department is confidential information for the use of the
  department and, except as provided by this subchapter, may not be
  disseminated by the department.
         (b)  The department shall grant access to criminal history
  record information to:
               (1)  criminal justice agencies;
               (2)  noncriminal justice agencies authorized by
  federal statute or executive order or by state statute to receive
  criminal history record information;
               (3)  the person who is the subject of the criminal
  history record information;
               (4)  a person working on a research or statistical
  project that:
                     (A)  is funded in whole or in part by state funds;
  or
                     (B)  meets the requirements of Part 22, Title 28,
  Code of Federal Regulations, and is approved by the department;
               (5)  an individual or an agency that has a specific
  agreement with a criminal justice agency to provide services
  required for the administration of criminal justice under that
  agreement, if the agreement:
                     (A)  specifically authorizes access to
  information;
                     (B)  limits the use of information to the purposes
  for which it is given;
                     (C)  ensures the security and confidentiality of
  the information; and
                     (D)  provides for sanctions if a requirement
  imposed under Paragraph (A), (B), or (C) is violated;
               (6)  an individual or an agency that has a specific
  agreement with a noncriminal justice agency to provide services
  related to the use of criminal history record information
  disseminated under this subchapter, if the agreement:
                     (A)  specifically authorizes access to
  information;
                     (B)  limits the use of information to the purposes
  for which it is given;
                     (C)  ensures the security and confidentiality of
  the information; and
                     (D)  provides for sanctions if a requirement
  imposed under Paragraph (A), (B), or (C) is violated;
               (7)  a county or district clerk's office; [and]
               (8)  the Office of Court Administration of the Texas
  Judicial System; and
               (9)  officers commissioned by the office of inspector
  general established under Subchapter R, Chapter 531, Government
  Code.
         (c)  The department may disseminate criminal history record
  information under Subsection (b)(1) only for a criminal justice
  purpose.  The department may disseminate criminal history record
  information under Subsection (b)(2) only for a purpose specified in
  the statute or order.  The department may disseminate criminal
  history record information under Subsection (b)(4), (5), or (6)
  only for a purpose approved by the department and only under rules
  adopted by the department.  The department may disseminate criminal
  history record information under Subsection (b)(7) only to the
  extent necessary for a county or district clerk to perform a duty
  imposed by law to collect and report criminal court disposition
  information.  Criminal history record information disseminated to a
  clerk under Subsection (b)(7) may be used by the clerk only to
  ensure that information reported by the clerk to the department is
  accurate and complete.  The dissemination of information to a clerk
  under Subsection (b)(7) does not affect the authority of the clerk
  to disclose or use information submitted by the clerk to the
  department.  The department may disseminate criminal history record
  information under Subsection (b)(8) only to the extent necessary
  for the office of court administration to perform a duty imposed by
  law to compile court statistics or prepare reports.  The office of
  court administration may disclose criminal history record
  information obtained from the department under Subsection (b)(8) in
  a statistic compiled by the office or a report prepared by the
  office, but only in a manner that does not identify the person who
  is the subject of the information.
         (d)  The department is not required to release or disclose
  criminal history record information to any person that is not in
  compliance with rules adopted by the department under this
  subchapter or rules adopted by the Federal Bureau of Investigation
  that relate to the dissemination or use of criminal history record
  information.
         SECTION 30.  (a)  The repeal 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 continued in
  accordance with the changes in law made 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.
         SECTION 31.  (a)  The person serving as inspector general
  under Section 531.102(a-1), Government Code, on the effective date
  of this Act shall serve as the inspector general appointed under
  Subchapter R, Chapter 531, Government Code, as added by this Act,
  until February 1, 2011, and may be reappointed under Subchapter R,
  Chapter 531, if the person has the qualifications required under
  that subchapter.
         (b)  Not later than February 1, 2011, the governor shall
  appoint an inspector general for the Office of Inspector General
  under Subchapter R, Chapter 531, Government Code, as added by this
  Act, to a term expiring February 1, 2013.
         SECTION 32.  On the effective date of this Act:
               (1)  all functions, activities, employees, rules,
  forms, money, property, contracts, memorandums of understanding,
  records, and obligations of the office of inspector general under
  Section 531.102(a-1), Government Code, become functions,
  activities, employees, rules, forms, money, property, contracts,
  memorandums of understanding, records, and obligations of the
  Office of Inspector General established under Subchapter R, Chapter
  531, Government Code, as added by this Act, without a change in
  status; and
               (2)  all money appropriated or budgeted for the office
  of inspector general under Section 531.102(a-1), Government Code,
  including money for providing administrative support, is
  considered appropriated for the use of the Office of Inspector
  General established under Subchapter R, Chapter 531, Government
  Code, as added by this Act.
         SECTION 33.  If before implementing any provision of this
  Act a state office or agency determines that a waiver or
  authorization from a federal agency is necessary for implementation
  of that provision, the office or 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 34.  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, 2009.