Honorable Pete Gallego, Chair, House Committee on Criminal Jurisprudence
FROM:
John S O'Brien, Director, Legislative Budget Board
IN RE:
SB688 by Nichols (Relating to the investigation, prosecution, and punishment of criminal Medicaid fraud and certain other offenses related to Medicaid fraud; providing penalties.), As Engrossed
The provisions of the bill that are the subject of this analysis would create new punishment or enhance existing punishment for criminal offenses. The bill would amend the Penal Code by creating felony punishment for the offense of Medicaid fraud based on the number of fraudulent claims submitted under the Medicaid program. Under the provisions of the bill, the offense of Medicaid fraud would be punishable as a felony of the third degree if the defendant submitted more than 25 but fewer than 50 fraudulent claims, and it would be punishable as a felony of the second degree if the defendant submitted 50 or more fraudulent claims. The bill would also amend the Penal Code by enhancing the punishment prescribed for the offense of Medicaid fraud to the next highest category of offense if it is shown that the actor was a provider or high managerial agent. The offense of Medicaid fraud is currently punishable at various levels, misdemeanor and felony, with the level of punishment increasing in severity based on the monetary amount of the payment provided or claimed.
The bill would also amend the Penal Code by including the offense of Medicaid fraud in the list of offenses for which the engaging in organized criminal activity provision is applied. The bill would also add Medicaid fraud to the list of offenses and limitations periods provided in the Code of Criminal Procedure.
A felony of the third degree is punishable by confinement in prison for a term from 2 to 10 years and, in addition to confinement, an optional fine not to exceed $10,000. A felony of the second degree is punishable by confinement in prison for a term from 2 to 20 years and, in addition to confinement, an optional fine not to exceed $10,000. A felony of the first degree is punishable by confinement in prison for life or a term from 5 to 99 years and, in addition to confinement, an optional fine not to exceed $10,000.
Expanding the list of behaviors for which a penalty is applied for any criminal offense or increasing the penalty for any criminal offense is expected to result in increased demands upon the correctional resources of counties or of the State due to longer terms of probation, or longer terms of confinement in county jail, state jail or prison. When an offense is changed from a misdemeanor to a felony, there is a transfer of the burden of confinement of convicted offenders from the counties to the State. In the case of this bill, the impact on correctional populations would depend on how many persons would be prosecuted under the provisions of the bill, and the extent to which punishment would be enhanced under the proposed statute compared to existing statute for the offense of Medicaid fraud. In fiscal year 2010, less than 5 people were arrested and less than 5 of those arrested in fiscal year 2010 were convicted for the offense of Medicaid fraud. For this analysis, it is assumed the number of offenders convicted under this statute would not result in a significant impact on the programs and workload of state corrections agencies or on the demand for resources and services of those agencies.