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A BILL TO BE ENTITLED
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AN ACT
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relating to the proof required to impose payment holds in certain |
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cases of alleged fraud by Medicaid providers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 531.102(g), Government Code, is amended |
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to read as follows: |
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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) As authorized under state and federal law, and |
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except as provided by Subdivisions (8) and (9), the office shall |
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impose without prior notice a payment hold on claims for |
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reimbursement submitted by a provider only to compel production of |
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records, when requested by the state's Medicaid fraud control unit, |
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or on the determination that a credible allegation of fraud exists, |
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subject to Subsections (l) and (m), as applicable. The payment hold |
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is a serious enforcement tool that the office imposes to mitigate |
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ongoing financial risk to the state. A payment hold imposed under |
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this subdivision takes effect immediately. The office must notify |
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the provider of the payment hold in accordance with 42 C.F.R. |
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Section 455.23(b) and, except as provided by that regulation, not |
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later than the fifth day after the date the office imposes the |
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payment hold. In addition to the requirements of 42 C.F.R. Section |
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455.23(b), the notice of payment hold provided under this |
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subdivision must also include: |
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(A) the specific basis for the hold, including |
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identification of the claims supporting the allegation at that |
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point in the investigation, a representative sample of any |
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documents that form the basis for the hold, and a detailed summary |
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of the office's evidence relating to the allegation; |
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(B) a description of administrative and judicial |
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due process rights and remedies, including the provider's option to |
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seek informal resolution, the provider's right to seek a formal |
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administrative appeal hearing, or that the provider may seek both; |
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and |
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(C) a detailed timeline for the provider to |
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pursue the rights and remedies described in Paragraph (B). |
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(3) On timely written request by a provider subject to |
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a payment hold under Subdivision (2), other than a hold requested by |
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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 not later than |
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the third day after the date the office receives the provider's |
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request. The provider must request an expedited administrative |
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hearing under this subdivision not later than the 10th day after the |
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date the provider receives notice from the office under Subdivision |
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(2). The State Office of Administrative Hearings shall hold the |
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expedited administrative hearing not later than the 45th day after |
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the date the State Office of Administrative Hearings receives the |
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request for the hearing. In a hearing held under this subdivision: |
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(A) the provider and the office are each limited |
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to four hours of testimony, excluding time for responding to |
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questions from the administrative law judge; |
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(B) the provider and the office are each entitled |
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to two continuances under reasonable circumstances; and |
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(C) the office is required to show probable cause |
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that the credible allegation of fraud that is the basis of the |
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payment hold has an indicia of reliability and that continuing to |
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pay the provider presents: |
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(i) an ongoing significant financial risk |
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that [to] the state may lose more than $100,000; or [and] |
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(ii) a threat to the integrity of Medicaid |
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as defined in rules adopted by the executive commissioner, in |
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consultation with the office. |
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(4) The office is responsible for the costs of a |
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hearing held under Subdivision (3), but a provider is responsible |
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for the provider's own costs incurred in preparing for the hearing. |
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(5) In a hearing held under Subdivision (3), the |
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administrative law judge shall decide if the payment hold should |
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continue but may not adjust the amount or percent of the payment |
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hold. Notwithstanding any other law, including Section |
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2001.058(e), the decision of the administrative law judge is final |
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and may not be appealed. |
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(6) The executive commissioner, in consultation with |
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the office, shall adopt rules that allow a provider subject to a |
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payment hold under Subdivision (2), other than a hold requested by |
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the state's Medicaid fraud control unit, to seek an informal |
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resolution of the issues identified by the office in the notice |
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provided under that subdivision. A provider must request an |
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initial informal resolution meeting under this subdivision not |
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later than the deadline prescribed by Subdivision (3) for |
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requesting an expedited administrative hearing. On receipt of a |
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timely request, the office shall decide whether to grant the |
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provider's request for an initial informal resolution meeting, and |
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if the office decides to grant the request, the office shall |
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schedule the initial informal resolution meeting. The office shall |
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give notice to the provider of the time and place of the initial |
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informal resolution meeting. A provider may request a second |
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informal resolution meeting after the date of the initial informal |
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resolution meeting. On receipt of a timely request, the office |
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shall decide whether to grant the provider's request for a second |
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informal resolution meeting, and if the office decides to grant the |
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request, the office shall schedule the second informal resolution |
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meeting. The office shall give notice to the provider of the time |
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and place of the second informal resolution meeting. A provider |
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must have an opportunity to provide additional information before |
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the second informal resolution meeting for consideration by the |
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office. A provider's decision to seek an informal resolution under |
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this subdivision does not extend the time by which the provider must |
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request an expedited administrative hearing under Subdivision (3). |
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The informal resolution process shall run concurrently with the |
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administrative hearing process, and the informal resolution |
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process shall be discontinued once the State Office of |
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Administrative Hearings issues a final determination on the payment |
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hold. |
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(7) The office shall, in consultation with the state's |
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Medicaid fraud control unit, establish guidelines under which |
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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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(7-a) The office shall, in consultation with the |
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state's Medicaid fraud control unit, establish guidelines |
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regarding the imposition of payment holds authorized under |
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Subdivision (2). |
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(8) In accordance with 42 C.F.R. Sections 455.23(e) |
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and (f), on the determination that a credible allegation of fraud |
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exists, the office may find that good cause exists to not impose a |
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payment hold, to not continue a payment hold, to impose a payment |
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hold only in part, or to convert a payment hold imposed in whole to |
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one imposed only in part, if any of the following are applicable: |
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(A) law enforcement officials have specifically |
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requested that a payment hold not be imposed because a payment hold |
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would compromise or jeopardize an investigation; |
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(B) available remedies implemented by the state |
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other than a payment hold would more effectively or quickly protect |
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Medicaid funds; |
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(C) the office determines, based on the |
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submission of written evidence by the provider who is the subject of |
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the payment hold, that the payment hold should be removed; |
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(D) Medicaid recipients' access to items or |
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services would be jeopardized by a full or partial payment hold |
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because the provider who is the subject of the payment hold: |
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(i) is the sole community physician or the |
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sole source of essential specialized services in a community; or |
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(ii) serves a large number of Medicaid |
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recipients within a designated medically underserved area; |
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(E) the attorney general declines to certify that |
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a matter continues to be under investigation; or |
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(F) the office determines that a full or partial |
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payment hold is not in the best interests of Medicaid. |
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(9) The office may not impose a payment hold on claims |
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for reimbursement submitted by a provider for medically necessary |
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services for which the provider has obtained prior authorization |
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from the commission or a contractor of the commission unless the |
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office has evidence that the provider has materially misrepresented |
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documentation relating to those services. |
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SECTION 2. As soon as practicable after the effective date |
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of this Act, the executive commissioner of the Health and Human |
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Services Commission shall adopt the rules required by Section |
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531.102(g)(3)(C)(ii), Government Code, as added by this Act. |
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SECTION 3. 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 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2017. |
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