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