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SECTION 1. Section 531.1011,
Government Code, is amended to read as follows:
Sec. 531.1011. DEFINITIONS.
For purposes of this subchapter:
(1) "Abuse"
means provider practices that are inconsistent with sound fiscal, business,
or medical practices, and result in an unnecessary cost to the Medicaid
program, or in reimbursement for services that are not medically necessary
or that fail to meet professionally recognized standards for health care,
including beneficiary practices that
result in unnecessary cost to the Medicaid program.
(2) "Allegation of
fraud" means an allegation of Medicaid fraud received by the
commission from any source, that has not been verified by the state,
including an allegation based upon fraud hotline complaints, claims mining
data, data analysis processes or patterns identified through provider
audits, civil false claims cases, and law enforcement investigations.
(3) "Credible
allegation of fraud" means an allegation of fraud that has been
verified by the state. An allegation is considered to be credible when the
commission has:
(A) verified that the
allegation has indicia of reliability; and
(B) reviewed all
allegations, facts, and evidence carefully and acts judiciously on a
case-by-case basis.
(4) "Fraud"
means an intentional deception or misrepresentation made by a person with
the knowledge that the deception could result in some unauthorized benefit
to that person or some other person, including any act that constitutes
fraud under applicable federal or state law.
(5) [(2)]
"Furnished" refers to items or services provided directly by, or
under the direct supervision of, or ordered by a practitioner or other
individual (either as an employee or in the individual's own capacity), a
provider, or other supplier of services, excluding services ordered by one
party but billed for and provided by or under the supervision of another.
(6) "Payment
hold" [(3) "Hold on payment"] means the
temporary denial of reimbursement under the Medicaid program for items or
services furnished by a specified provider.
(7) "Physician" includes an individual licensed to
practice medicine in this state, a professional association composed solely
of physicians, a single legal entity authorized to practice medicine owned
by two or more physicians, a nonprofit health corporation certified by the
Texas Medical Board under Chapter 162, Occupations Code, or a partnership
composed solely of physicians.
(8) [(4)]
"Practitioner" means a physician or other individual licensed
under state law to practice the individual's profession.
(9) [(5)]
"Program exclusion" means the suspension of a provider from being
authorized under the Medicaid program to request reimbursement of items or
services furnished by that specific provider.
(10) [(6)]
"Provider" means a person, firm, partnership, corporation,
agency, association, institution, or other entity that was or is approved
by the commission to:
(A) provide medical
assistance under contract or provider agreement with the commission; or
(B) provide third-party
billing vendor services under a contract or provider agreement with the
commission.
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SECTION 1. Section 531.1011,
Government Code, is amended to read as follows:
Sec. 531.1011. DEFINITIONS.
For purposes of this subchapter:
(1) "Abuse"
means:
(A) a practice by a
provider that is inconsistent with sound fiscal, business, or medical
practices and that results in:
(i) an unnecessary cost
to the Medicaid program; or
(ii) the reimbursement of
services that are not medically necessary or that fail to meet
professionally recognized standards for health care; or
(B) a practice by a recipient that results in an unnecessary
cost to the Medicaid program.
(2) "Allegation of
fraud" means an allegation of Medicaid fraud received by the
commission from any source that has not been verified by the state,
including an allegation based on:
(A) a fraud hotline
complaint;
(B) claims data mining;
(C) data analysis
processes; or
(D) a pattern identified
through provider audits, civil false claims cases, or law enforcement
investigations.
(3) "Credible
allegation of fraud" means an allegation of fraud that has been
verified by the state. An allegation is considered to be credible when the
commission has:
(A) verified that the allegation
has indicia of reliability; and
(B) reviewed all
allegations, facts, and evidence carefully and acts judiciously on a
case-by-case basis.
(4) "Fraud"
means an intentional deception or misrepresentation made by a person with
the knowledge that the deception could result in some unauthorized benefit
to that person or some other person, including any act that constitutes
fraud under applicable federal or state law.
(5) [(2)]
"Furnished" refers to items or services provided directly by, or
under the direct supervision of, or ordered by a practitioner or other
individual (either as an employee or in the individual's own capacity), a
provider, or other supplier of services, excluding services ordered by one
party but billed for and provided by or under the supervision of another.
(6) "Payment
hold" [(3) "Hold on payment"] means the
temporary denial of reimbursement under the Medicaid program for items or
services furnished by a specified provider.
(7) [(4)]
"Practitioner" means a physician or other individual licensed
under state law to practice the individual's profession.
(8) [(5)]
"Program exclusion" means the suspension of a provider from being
authorized under the Medicaid program to request reimbursement of items or
services furnished by that specific provider.
(9) [(6)]
"Provider" means a person, firm, partnership, corporation,
agency, association, institution, or other entity that was or is approved
by the commission to:
(A) provide medical
assistance under contract or provider agreement with the commission; or
(B) provide third-party
billing vendor services under a contract or provider agreement with the
commission.
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SECTION 2. Section 531.102,
Government Code, is amended by amending Subsections (f) and (g) and adding
Subsections (l), (m), and (n) to read as follows:
(f)(1) If the commission
receives a complaint of Medicaid fraud or abuse from any source, the office
must conduct a preliminary investigation [an integrity review]
to determine whether there is a sufficient basis to warrant a full
investigation. A preliminary investigation [An integrity review]
must begin not later than the 30th day after the date the commission
receives a complaint or has reason to believe that fraud or abuse has
occurred. A preliminary investigation [An integrity review]
shall be completed not later than the 90th day after it began.
(2) If the findings of a
preliminary investigation [an integrity review] give the office
reason to believe that an incident of fraud or abuse involving possible
criminal conduct has occurred in the Medicaid program, the office must take
the following action, as appropriate, not later than the 30th day after the
completion of the preliminary investigation [integrity review]:
(A) if a provider is
suspected of fraud or abuse involving criminal conduct, the office must
refer the case to the state's Medicaid fraud control unit, provided that
the criminal referral does not preclude the office from continuing its
investigation of the provider, which investigation may lead to the
imposition of appropriate administrative or civil sanctions; or
(B) if there is reason to
believe that a recipient has defrauded the Medicaid program, the office may
conduct a full investigation of the suspected fraud.
(g)(1) Whenever the office learns
or has reason to suspect that a provider's records are being withheld,
concealed, destroyed, fabricated, or in any way falsified, the office shall
immediately refer the case to the state's Medicaid fraud control unit.
However, such criminal referral does not preclude the office from
continuing its investigation of the provider, which investigation may lead
to the imposition of appropriate administrative or civil sanctions.
(2) In addition to other
instances authorized under state or federal law, the office shall impose
without prior notice a payment hold on [payment of] claims
for reimbursement submitted by a provider to compel production of records,
when requested by the state's Medicaid fraud control unit, or upon the
determination that a credible allegation of fraud exists [on receipt
of reliable evidence that the circumstances giving rise to the hold on
payment involve fraud or wilful misrepresentation under the state Medicaid
program in accordance with 42 C.F.R. Section 455.23, as applicable]. The
office must notify the provider of the payment hold [on payment]
in accordance with 42 C.F.R. Section 455.23(b). In addition to the
requirements of 42 C.F.R. Section 455.23(b), the notice of payment hold
provided under this subsection shall also include:
(A) the specific basis
for the hold, including identification of the claims supporting the
allegation at that point in the investigation and a representative sample
of any documents that form the basis of the hold; and
(B) a description of
administrative and judicial due process remedies, including an informal review, a formal administrative
appeal hearing, or both.
(3) On timely written
request by a provider subject to a payment hold [on payment]
under Subdivision (2), other than a hold requested by the state's Medicaid
fraud control unit, the office shall file a request with the State Office
of Administrative Hearings for an expedited administrative hearing
regarding the hold. The provider must request an expedited hearing under
this subdivision not later than the 30th [10th] day after the
date the provider receives notice from the office under Subdivision (2).
Unless otherwise
determined by the administrative law judge for good cause at the
administrative hearing, the state and the subject
provider
shall each be responsible
for
one-half of the costs
charged by the State Office of Administrative Hearings,
for one-half of the costs
for transcribing the hearing, and
for each party's own additional costs related to the administrative hearing, including costs
associated with discovery, depositions, subpoenas, services of process and
witness expenses, preparation for the administrative
hearing, investigation costs,
travel expenses, investigation expenses, and all other costs, including
attorney's fees, associated with the case.
The executive commissioner
and the State Office of Administrative Hearings shall jointly adopt rules
that require a provider, before a hearing, to advance security for the
costs for which the provider is responsible under this subdivision.
(4) Following an
administrative hearing under Subdivision (3), a provider subject to a
payment hold, other than a hold requested by the state's Medicaid fraud
control unit, may appeal a final administrative order by filing a petition
for judicial review in a district court in Travis County.
(5) The executive
commissioner [commission] shall adopt rules that allow a
provider subject to a [hold on] payment hold under
Subdivision (2), other than a hold requested by the state's Medicaid fraud
control unit, to seek an initial
informal resolution of the issues identified by the office in the notice
provided under that subdivision. A provider must request [seek]
an initial informal resolution meeting under this subdivision
not later than the deadline prescribed by Subdivision (3).
On receipt of a timely
request, the office shall schedule an initial informal resolution meeting
not later than the 60th day after the date the office receives the request from the provider, but the office shall
schedule the meeting on a later date as determined by the office if
requested by the provider. The office shall give notice to the provider of
the time and place of the initial informal resolution meeting not later
than the 30th day before the date the initial informal resolution meeting
is to be held. A provider may request a second informal resolution meeting
not later than the 20th day after the date of the initial informal
resolution meeting. On receipt of a timely request, the office shall schedule
a second informal resolution meeting not later than the 45th day after the
date the office receives the request from the
provider, but the office shall schedule the meeting on a later date
as determined by the office if requested by the provider. The office shall
give notice to the provider of the time and place of the second informal
resolution meeting not later than the 20th day before the date the second
informal resolution meeting is to be held. A provider shall have an
opportunity to provide additional information before the second informal
resolution meeting for consideration by the office. A provider's
decision to seek an informal resolution under this subdivision does not
extend the time by which the provider must request an expedited administrative
hearing under Subdivision (3). However, a hearing initiated under
Subdivision (3) shall be stayed [at the office's request] until the
informal resolution process is completed.
(6) [(5)] The
office shall, in consultation with the state's Medicaid fraud control unit,
establish guidelines under which payment holds [on payment]
or program exclusions:
(A) may permissively be
imposed on a provider; or
(B) shall automatically be
imposed on a provider.
(l) The office shall
employ a medical director who is a licensed physician under Subtitle B,
Title 3, Occupations Code, and the rules adopted under that subtitle by the
Texas Medical Board, and who preferably has significant knowledge of the
Medicaid program. The medical director shall ensure that any investigative
findings based on medical necessity or quality of medical care have been
reviewed by a qualified expert as described by the Texas Rules of Evidence
before the office imposes a payment hold or seeks recoupment of an
overpayment, damages, or penalties.
(m) The office shall
employ a dental director who is a licensed dentist under Subtitle D, Title
3, Occupations Code, and the rules adopted under that subtitle by the State
Board of Dental Examiners, and who preferably has significant knowledge of
the Medicaid program. The dental director shall ensure that any
investigative findings based on the necessity of dental services or the
quality of dental care have been reviewed by a qualified expert as
described by the Texas Rules of Evidence before the office imposes a
payment hold or seeks recoupment of an overpayment, damages, or penalties.
(n) To the extent permitted under federal law,
the office, acting through the commission,
shall adopt rules establishing
the criteria for
initiating a full-scale fraud or abuse
investigation, conducting the investigation, collecting evidence, accepting and approving a provider's request to
post a surety bond to secure potential recoupments in lieu of a payment
hold or other asset or payment guarantee, and establishing minimum
training requirements for Medicaid provider fraud or abuse investigators.
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SECTION 2. Section 531.102,
Government Code, is amended by amending Subsections (f) and (g) and adding
Subsections (l), (m), (n), (o), and (p) to read as follows:
(f)(1) If the commission
receives a complaint or allegation
of Medicaid fraud or abuse from any source, the office must conduct a
preliminary investigation as provided by
Section 531.118(c) [an integrity review] to determine
whether there is a sufficient basis to warrant a full
investigation. A preliminary investigation [An integrity review]
must begin not later than the 30th day after the date the commission
receives a complaint or allegation or has reason to believe that fraud or
abuse has occurred. A preliminary investigation [An integrity
review] shall be completed not later than the 90th day after it began.
(2) If the findings of a
preliminary investigation [an integrity review] give the office
reason to believe that an incident of fraud or abuse involving possible
criminal conduct has occurred in the Medicaid program, the office must take
the following action, as appropriate, not later than the 30th day after the
completion of the preliminary investigation [integrity review]:
(A) if a provider is
suspected of fraud or abuse involving criminal conduct, the office must
refer the case to the state's Medicaid fraud control unit, provided that
the criminal referral does not preclude the office from continuing its
investigation of the provider, which investigation may lead to the
imposition of appropriate administrative or civil sanctions; or
(B) if there is reason to
believe that a recipient has defrauded the Medicaid program, the office may
conduct a full investigation of the suspected fraud, subject to Section 531.118(c).
(g)(1) Whenever the office
learns or has reason to suspect that a provider's records are being
withheld, concealed, destroyed, fabricated, or in any way falsified, the
office shall immediately refer the case to the state's Medicaid fraud
control unit. However, such criminal referral does not preclude the office
from continuing its investigation of the provider, which investigation may
lead to the imposition of appropriate administrative or civil sanctions.
(2) In addition to other
instances authorized under state or federal law, the office shall impose
without prior notice a payment hold on [payment of] claims
for reimbursement submitted by a provider to compel production of records,
when requested by the state's Medicaid fraud control unit, or on the
determination that a credible allegation of fraud exists, subject to Subsections (l) and (m), as applicable,
and the criteria adopted under Subsection (n)(3) [on receipt
of reliable evidence that the circumstances giving rise to the hold on
payment involve fraud or wilful misrepresentation under the state Medicaid
program in accordance with 42 C.F.R. Section 455.23, as applicable].
The office must notify the provider of the payment hold [on
payment] in accordance with 42 C.F.R. Section 455.23(b). In
addition to the requirements of 42 C.F.R. Section 455.23(b), the notice of
payment hold provided under this subdivision must also include:
(A) the specific basis
for the hold, including identification of the claims supporting the
allegation at that point in the investigation and a representative sample
of any documents that form the basis for the hold; and
(B) a description of
administrative and judicial due process remedies, including the provider's right to seek informal resolution,
a formal administrative appeal hearing, or both.
(3) On timely written
request by a provider subject to a payment hold [on payment]
under Subdivision (2), other than a hold requested by the state's Medicaid
fraud control unit, the office shall file a request with the State Office
of Administrative Hearings or the appeals
division of the commission, as requested by the provider, for an
expedited administrative hearing regarding the hold. The provider must
request an expedited administrative
hearing under this subdivision not later than the 30th [10th]
day after the date the provider receives notice from the office under
Subdivision (2). Unless otherwise determined by the administrative law
judge for good cause at an expedited
administrative hearing before the State
Office of Administrative Hearings under this subdivision, the state
and the provider shall each be responsible for:
(A) one-half of the costs
charged by the State Office of Administrative Hearings;
(B) one-half of the costs
for transcribing the hearing;
(C) the party's own costs
related to the hearing, including the costs associated with preparation for
the hearing, discovery, depositions, and subpoenas, service of process and
witness expenses, travel expenses, and investigation expenses; and
(D) all other costs
associated with the hearing that are incurred by the party, including
attorney's fees.
(4) The executive
commissioner and the State Office of Administrative Hearings shall jointly
adopt rules that require a provider, before an expedited administrative hearing before
the State Office of Administrative Hearings under Subdivision (3),
to advance security for the costs for which the provider is responsible under
that subdivision.
(5) Following an expedited administrative hearing under
Subdivision (3), a provider subject to a payment hold, other than a hold
requested by the state's Medicaid fraud control unit, may appeal a final
administrative order by filing a petition for judicial review in a district
court in Travis County.
(6) The executive
commissioner [commission] shall adopt rules that allow a
provider subject to a [hold on] payment hold under
Subdivision (2), other than a hold requested by the state's Medicaid fraud
control unit, to seek an informal resolution of the issues identified by
the office in the notice provided under that subdivision. A provider must request
[seek] an initial informal resolution meeting under
this subdivision not later than the deadline prescribed by Subdivision (3) for requesting an expedited administrative hearing.
On receipt of a timely
request, the office shall schedule an initial informal resolution meeting
not later than the 60th day after the date the office receives the request,
but the office shall schedule the meeting on a later date, as determined by
the office, if requested by the provider. The office shall give notice to
the provider of the time and place of the initial informal resolution
meeting not later than the 30th day before the date the meeting is to be
held. A provider may request a second informal resolution meeting not
later than the 20th day after the date of the initial informal resolution
meeting. On receipt of a timely request, the office shall schedule a
second informal resolution meeting not later than the 45th day after the date
the office receives the request, but the office shall schedule the meeting
on a later date, as determined by the office, if requested by the
provider. The office shall give notice to the provider of the time and
place of the second informal resolution meeting not later than the 20th day
before the date the meeting is to be held. A provider must have an
opportunity to provide additional information before the second informal
resolution meeting for consideration by the office. A provider's
decision to seek an informal resolution under this subdivision does not
extend the time by which the provider must request an expedited
administrative hearing under Subdivision (3). However, a hearing initiated
under Subdivision (3) shall be stayed [at the office's request]
until the informal resolution process is completed.
(7) [(5)] The
office shall, in consultation with the state's Medicaid fraud control unit,
establish guidelines under which payment holds [on payment]
or program exclusions:
(A) may permissively be
imposed on a provider; or
(B) shall automatically be
imposed on a provider.
(l) The office shall
employ a medical director who is a licensed physician under Subtitle B,
Title 3, Occupations Code, and the rules adopted under that subtitle by the
Texas Medical Board, and who preferably has significant knowledge of the
Medicaid program. The medical director shall ensure that any investigative
findings based on medical necessity or the quality of medical care have
been reviewed by a qualified expert as described by the Texas Rules of
Evidence who preferably has knowledge of
Medicaid program rules and requirements before the office imposes a
payment hold or seeks recoupment of an overpayment, damages, or penalties.
(m) The office shall
employ a dental director who is a licensed dentist under Subtitle D, Title
3, Occupations Code, and the rules adopted under that subtitle by the State
Board of Dental Examiners, and who preferably has significant knowledge of
the Medicaid program. The dental director shall ensure that any
investigative findings based on the necessity of dental services or the
quality of dental care have been reviewed by a qualified expert as
described by the Texas Rules of Evidence who
preferably has knowledge of Medicaid program rules and requirements
before the office imposes a payment hold or seeks recoupment of an
overpayment, damages, or penalties.
(n) The executive commissioner shall, in conjunction with the office and in consultation with the state's Medicaid fraud
control unit, adopt rules for the
office that establish:
(1) criteria for
initiating a full fraud or abuse investigation, conducting the
investigation, and collecting evidence;
(2) training requirements
for Medicaid provider fraud or abuse investigators; and
(3) criteria for determining, in accordance with state and federal
law, when good cause exists to:
(A) not impose a payment hold on a provider;
(B) discontinue a payment hold imposed on a provider;
(C) partially discontinue a payment hold imposed on a provider; and
(D) convert a full payment hold imposed on a provider to a partial
payment hold.
(o) In determining what constitutes good cause for purposes of
Subsection (n)(3), the executive commissioner shall consider:
(1) a specific request by a law enforcement agency that the office
not impose a payment hold on a provider or discontinue a payment hold
imposed on a provider;
(2) a determination by the office that other available remedies
implemented by the office or commission could more effectively or quickly
protect Medicaid funds than imposing or continuing a payment hold;
(3) evidence submitted by a provider that convinces the office that
a payment hold should be discontinued or partially imposed;
(4) a determination by the office that a Medicaid recipient's access
to items or services will be jeopardized by the imposition of a payment
hold;
(5) a determination by the office that a payment hold should be
discontinued because the state's Medicaid fraud control unit or a law
enforcement agency declines to cooperate in certifying that the unit or
agency is continuing to investigate the credible allegation of fraud that
is the basis of the payment hold;
(6) a determination by the office that imposing a full or partial
payment hold is not in the best interest of the Medicaid program; and
(7) a determination by the office that a partial payment hold will
ensure that potentially fraudulent claims under the Medicaid program will
not be continued to be paid.
(p) An employee of the office may bring a whistleblower suit in
accordance with Chapter 554.
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SECTION 3. Subchapter C,
Chapter 531, Government Code, is amended by adding Sections 531.118,
531.119, 531.120, 531.1201, and 531.1202 to read as follows:
Sec. 531.118. PRELIMINARY
INVESTIGATIONS OF ALLEGATIONS OF FRAUD OR ABUSE. (a) The commission shall
maintain a record of all allegations of fraud or abuse against a Medicaid provider containing the date the
allegation of fraud or abuse was received or identified and the source of
the allegation, if available. This record shall
remain confidential under Sections 531.1021(g) and (h).
(b) If the commission
receives an allegation of fraud or abuse against a Medicaid provider from any source, the office must conduct a
preliminary investigation of each
allegation of fraud or abuse to determine
whether there is sufficient basis to warrant a full investigation. A
preliminary investigation must begin not later than the 30th day after the
date the commission receives or identifies an allegation of fraud or abuse.
(c) A preliminary
investigation shall consist of a review
of all allegations, facts, and evidence by the commission's office of
inspector general and must result in a
preliminary investigation report documenting the allegations, evidence
reviewed, if available, procedures utilized to conduct the preliminary
investigation, findings of the preliminary investigation, and the office's
determination of whether a full investigation is warranted before the
allegation proceeds to a full investigation.
(d) If the Medicaid fraud
control unit or other law enforcement agency accepts a fraud referral from
the office for investigation, a payment hold based upon a credible
allegation of fraud may be continued until such time as that investigation
and any associated enforcement proceedings are completed, or until the
Medicaid fraud control unit, other law enforcement agency, or other
prosecuting authorities determine that there is insufficient evidence of
fraud by the provider.
(e) If the Medicaid fraud
control unit or any other law enforcement agency declines to accept the
fraud referral for investigation, a payment hold based upon a credible
allegation of fraud must be discontinued unless the commission has
alternative federal or state authority by which it may impose a payment
hold or unless the office makes a fraud referral to another law enforcement
agency.
(f) On a quarterly basis,
the office must request a certification from the state's Medicaid fraud
control unit or other law enforcement agency that any matter accepted on the basis
of a credible allegation of fraud referral continues to be under
investigation and that the continuation of the payment hold is warranted.
Sec. 531.119. WEBSITE
POSTING. The office shall post on its publicly available website a description
in plain English of, and a video explaining, the processes and procedures that
the office uses to determine whether to impose a payment hold on a provider
under this subchapter.
Sec. 531.120. INFORMAL
RESOLUTION OF PROPOSED OVERPAYMENTS.
(a) The commission or the
commission's office of inspector general must provide a provider with
written notice of intent to recover any
proposed overpayment or debt amount and any related damages or penalties
arising out of a fraud or abuse investigation. The notice shall include
the specific basis for
overpayment,
a description of facts and
supporting evidence,
a representative sample of
any documents that form the basis of the overpayment,
extrapolation methodology,
calculation of the
overpayment amount,
damages and penalties, if
applicable, and
a description of
administrative and judicial due process remedies, including the provider's
right to request informal resolution meetings under this section, a formal
administrative appeal hearing, or both.
(b) A provider must
request an initial informal resolution meeting under this section not later
than the 30th day after the date the provider receives notice under
Subsection (a). On receipt of a timely request, the office shall schedule
an initial informal resolution meeting not later than the 60th day after
the date the office receives the request from the provider, but the office
shall schedule the meeting on a later date as determined by the office if
requested by the provider. The office shall give notice to the provider of
the time and place of the initial informal resolution meeting not later
than the 30th day before the date the initial informal resolution meeting
is to be held.
A provider may request a
second informal resolution meeting not later than the 20th day after the
date of the initial informal resolution meeting. On receipt of a timely
request, the office shall schedule a second informal resolution meeting not
later than the 45th day after the date the office receives the request from
the provider, but the office shall schedule the meeting on a later date as
determined by the office if requested by the provider. The office shall
give notice to the provider of the time and place of the second informal
resolution meeting not later than the 20th day before the date the second
informal resolution meeting is to be held. A provider shall have an
opportunity to provide additional information before the second informal
resolution meeting for consideration by the office.
Sec. 531.1201. RECOUPMENT
OF OVERPAYMENTS OR RECOUPMENT OF DEBT; APPEALS. (a) A provider must
request an appeal under this section not later than the 15th day after the
date the provider is notified that the commission or the commission's
office of inspector general will seek to recover an overpayment or debt
from the provider.
On receipt of a timely
written request by a provider who is the subject of a recoupment of
overpayment or recoupment of debt arising out of a fraud or abuse
investigation, the office of inspector general shall file a docketing
request with the State Office of Administrative Hearings or the Health and
Human Services Commission appeals division, as requested by the provider,
for an administrative hearing regarding the
proposed recoupment amount and any associated damages or penalties.
The office shall file the docketing request
under this section not later than 60 days after the provider's request for
an administrative hearing or not later than 60 days after the completion of
the informal resolution process, if applicable.
(See Subsection (b)
below.)
Unless otherwise
determined by the administrative law judge at the administrative hearing
under this subsection for good cause, the state and the subject provider shall each be responsible
for
one-half of the costs
charged by the State Office of Administrative Hearings,
for one-half of the costs
for transcribing the hearing, and
for each party's own additional costs related to the administrative
hearing, including costs associated with discovery, depositions, subpoenas,
services of process and witness expenses, preparation for the
administrative hearing, investigation costs,
travel expenses, investigation expenses, and
all other costs, including
attorney's fees, associated with the case.
The executive commissioner
and the State Office of Administrative Hearings shall jointly adopt rules
that require a provider, before a hearing, to advance security for the
costs for which the provider is responsible under this subsection.
(b) Following an administrative hearing under Subsection (a), a
provider who is the subject of a recoupment of overpayment or recoupment of
debt arising out of a fraud or abuse investigation may appeal a final
administrative order by filing a petition for judicial review in a district
court in Travis County.
Sec. 531.1202. PRESENCE
OF NEUTRAL THIRD PARTY AT INFORMAL RESOLUTION MEETINGS. The commission
shall employ a person whose salary is paid by the commission and who is
independent of the commission's office of inspector general to attend the
informal resolution meetings held under Sections 531.102(g)(5) and
531.120(b) as a neutral third-party observer. The person shall report to
the executive commissioner on the proceedings and outcome of each informal
resolution meeting.
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SECTION 3. Subchapter C,
Chapter 531, Government Code, is amended by adding Sections 531.118,
531.119, 531.120, 531.1201, and 531.1202 to read as follows:
Sec. 531.118. PRELIMINARY
INVESTIGATIONS OF ALLEGATIONS OF FRAUD OR ABUSE AND FRAUD REFERRALS. (a) The commission shall maintain a
record of all allegations of fraud or abuse against a provider containing
the date each allegation was received
or identified and the source of the allegation, if available. The record is confidential under Section 531.1021(g)
and is subject to Section 531.1021(h).
(b) If the commission
receives an allegation of fraud or abuse against a provider from any
source, the commission's office of inspector general shall conduct a
preliminary investigation of the allegation as
provided by Section 531.102(f)(1).
(c) In conducting a preliminary investigation, the office must review the allegations of
fraud or abuse and all facts and evidence relating to the allegation and
must prepare a preliminary
investigation report before the allegation of fraud or abuse may proceed to
a full investigation. The preliminary investigation report must document
the allegation, the evidence reviewed, if available, the procedures used to
conduct the preliminary investigation, the findings of the preliminary
investigation, and the office's determination of whether a full
investigation is warranted.
(d) If the state's Medicaid fraud control unit or any
other law enforcement agency accepts a fraud referral from the office for
investigation, a payment hold based on a credible allegation of fraud may
be continued until:
(1) that investigation
and any associated enforcement proceedings are complete; or
(2) the state's Medicaid fraud control unit, another
law enforcement agency, or other prosecuting authorities determine that
there is insufficient evidence of fraud by the provider.
(e) If the state's Medicaid fraud control unit or any
other law enforcement agency declines to accept a fraud referral from the office for investigation, a payment
hold based on a credible allegation of fraud must be discontinued unless
the commission has alternative federal or state authority under which it
may impose a payment hold or the office makes a fraud referral to another
law enforcement agency.
(f) On a quarterly basis,
the office must request a certification from the state's Medicaid fraud
control unit and other law enforcement
agencies as to whether each matter accepted
by the unit or agency on the basis of a credible allegation of fraud
referral continues to be under investigation and that the continuation of
the payment hold is warranted.
Sec. 531.119. WEBSITE
POSTING. The commission's office of inspector general shall post on its
publicly available website a description in plain English of, and a video
explaining, the processes and procedures the office uses to determine
whether to impose a payment hold on a provider under this subchapter.
Sec. 531.120. NOTICE AND
INFORMAL RESOLUTION OF PROPOSED RECOUPMENT OF OVERPAYMENT OR DEBT.
(a) The commission or the
commission's office of inspector general shall provide a provider with
written notice of any proposed recoupment of
an overpayment or debt and any damages or penalties relating to a proposed
recoupment of an overpayment or debt arising out of a fraud or abuse
investigation. The notice must include:
(1) the specific basis
for the overpayment or debt;
(2) a description of
facts and supporting evidence;
(3) a representative
sample of any documents that form the basis for the overpayment or debt;
(4) the extrapolation
methodology;
(5) the calculation of
the overpayment or debt amount;
(6) the amount of damages
and penalties, if applicable; and
(7) a description of
administrative and judicial due process remedies, including the provider's
right to seek informal resolution, a
formal administrative appeal hearing, or both.
(b) The executive commissioner shall adopt rules that allow a
provider who is the subject of a proposed recoupment of an overpayment or
debt to seek informal resolution of the issues identified in the notice
provided under Subsection (a).
(c) The rules adopted under Subsection (b) must require a
provider who seeks informal resolution of the
issues identified in the notice provided under Subsection (a) to
request an initial informal resolution meeting not later than the 30th day
after the date the provider receives the notice. On receipt of a timely
request, the office shall schedule the initial informal resolution meeting
not later than the 60th day after the date the office receives the request,
but the office shall schedule the meeting on a later date, as determined by
the office, if requested by the provider. The office shall give notice to
the provider of the time and place of the initial informal resolution
meeting not later than the 30th day before the date the meeting is to be
held.
(d) The rules adopted under Subsection (b) must allow a
provider to request a second informal resolution meeting not later than the
20th day after the date of the initial informal resolution meeting. On
receipt of a timely request, the office shall schedule a second informal
resolution meeting not later than the 45th day after the date the office
receives the request, but the office shall schedule the meeting on a later
date, as determined by the office, if requested by the provider. The
office shall give notice to the provider of the time and place of the
second informal resolution meeting not later than the 20th day before the
date the meeting is to be held. A provider must have an opportunity to
provide additional information before the second informal resolution
meeting for consideration by the office.
(e) Not later than the 60th day after the date of the initial
informal resolution meeting or, if a second informal resolution meeting is
requested by the provider, after the second informal resolution meeting, or
on a later date at the request of a provider, the commission or the office
shall provide the provider with written notice of the commission's or
office's final determination of whether the commission or office will seek
to recoup an overpayment or debt from the provider.
(f) If a provider does not request an informal resolution meeting
under this section, not later than the 60th day after the date the provider
receives the notice under Subsection (a), the commission or the office
shall provide the provider with written notice of the commission's or
office's final determination of whether the commission or office will seek
to recoup an overpayment or debt from the provider.
(g) Nothing in this section shall be construed to require a provider
to request an informal resolution meeting under this section before
requesting an appeal under Section 531.1201 of the commission's or office's
final determination to recoup an overpayment or debt from the provider.
Sec. 531.1201. APPEAL OF
DETERMINATION TO RECOUP OVERPAYMENT OR DEBT. (a) If, after a final determination, the commission or the commission's
office of inspector general seeks to recoup from a provider an overpayment
or debt arising out of a fraud or abuse investigation in an amount that is
less than $1 million, the provider may appeal the determination not
later than the 15th day after the date the provider receives the notice
under Section 531.120(e) or (f), as applicable,
by requesting in writing that the commission or office set an
administrative hearing on the determination. On receipt of a timely
written request for an administrative hearing
from the provider under this section,
the commission or the office shall file a docketing request with the
State Office of Administrative Hearings or the appeals division of the
commission, as requested by the provider, for an administrative hearing on the final determination to recoup the
overpayment or debt and any associated damages and penalties.
(b) If, after a final determination, the commission or the
commission's office of inspector general seeks to recoup an overpayment or
debt arising out of a fraud or abuse investigation in an amount of $1
million or more from a provider, the provider may appeal the determination
not later than the 15th day after the date the provider receives the notice
under Section 531.120(e) or (f), as applicable, by:
(1) requesting in writing that the commission or office file a
docketing request with the State Office of Administrative Hearings for an
administrative hearing on the final determination to recoup an overpayment
or debt and any associated damages and penalties; or
(2) filing a petition to appeal the final determination to recoup an
overpayment or debt and any associated damages and penalties in a district
court in Travis County.
(c) If a provider requests that the commission or office set an
administrative hearing under Subsection (b)(1), the provider may not appeal
any administrative order issued by an administrative law judge relating to
the commission's or office's final determination to recoup an overpayment
or debt and any associated damages and penalties from the provider in a
district court.
(d) Unless otherwise
determined by the administrative law judge for good cause, at any administrative hearing under this section
before the State Office of Administrative Hearings, the state and
the provider shall each be responsible for:
(1) one-half of the costs
charged by the State Office of Administrative Hearings;
(2) one-half of the costs
for transcribing the hearing;
(3) the party's own costs
related to the hearing, including the costs associated with preparation for
the hearing, discovery, depositions, and subpoenas, service of process and
witness expenses, travel expenses, and investigation expenses; and
(4) all other costs associated
with the hearing that are incurred by
the party, including attorney's fees.
(e) The executive
commissioner and the State Office of Administrative Hearings shall jointly
adopt rules that require a provider, before an administrative hearing under
this section before the State Office of
Administrative Hearings, to advance security for the costs for which
the provider is responsible under Subsection (d).
(See Subsection (b)
above.)
Sec. 531.1202. PRESENCE
OF NEUTRAL THIRD PARTY AT INFORMAL RESOLUTION MEETINGS. The commission
shall employ a person whose salary is paid by the commission and who is
independent of the commission's office of inspector general to attend the
informal resolution meetings held under Sections 531.102(g)(6) and 531.120(c)
and (d) as a neutral third-party observer. The person shall report to the
executive commissioner on the proceedings and outcome of each informal
resolution meeting.
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