Texas 2009 - 81st Regular

Texas House Bill HB2905 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	81R4858 YDB-D
2	2	By: Dukes H.B. No. 2905
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the office of inspector general for the Health and Human
8	8	Services Commission.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 531, Government Code, is amended by
11	11	adding Subchapter R to read as follows:
12	12	SUBCHAPTER R. INSPECTOR GENERAL
13	13	Sec. 531.701. DEFINITIONS. In this subchapter:
14	14	(1) "Fraud" has the meaning assigned by Section
15	15	531.1011.
16	16	(2) "Inspector general" means the inspector general
17	17	appointed under this subchapter.
18	18	(3) "Office" means the Office of Inspector General.
19	19	(4) "Provider" has the meaning assigned by Section
20	20	531.1011.
21	21	(5) "Review" includes an inspection, investigation,
22	22	audit, or similar activity.
23	23	(6) "State funds" or "state money" includes federal
24	24	funds or money received and appropriated by the state or for which
25	25	the state has oversight responsibility.
26	26	Sec. 531.702. REFERENCE IN OTHER LAW. Notwithstanding any
27	27	other provision of law, a reference in law or rule to the
28	28	commission's office of inspector general or the commission's office
29	29	of investigations and enforcement means the Office of Inspector
30	30	General.
31	31	Sec. 531.703. OFFICE OF INSPECTOR GENERAL; ADMINISTRATIVE
32	32	ATTACHMENT. (a) The office of inspector general is responsible
33	33	for:
34	34	(1) the investigation of fraud, waste, and abuse in
35	35	the provision or funding of health or human services by this state;
36	36	(2) the enforcement of state law relating to the
37	37	provision of those services to protect the public; and
38	38	(3) the prevention and detection of crime relating to
39	39	the provision of those services.
40	40	(b) The office is administratively attached to the
41	41	commission. The commission shall provide to the office
42	42	administrative support services from the commission and from health
43	43	and human services agencies.
44	44	Sec. 531.704. SERVICE LEVEL AGREEMENT; FUNDS. (a) The
45	45	commission and the office shall enter into a service level
46	46	agreement that establishes the performance standards and
47	47	deliverables with regard to administrative support by the
48	48	commission.
49	49	(b) The service level agreement must be reviewed at least
50	50	annually to ensure that services and deliverables are provided in
51	51	accordance with the agreement.
52	52	(c) The commission shall request, apply for, and receive for
53	53	the office any appropriations or other money from this state or the
54	54	federal government.
55	55	(d) The commission shall provide to the office for the state
56	56	fiscal biennium beginning September 1, 2009, the same level of
57	57	administrative support the commission provided to the office
58	58	established under former Section 531.102 for the state fiscal
59	59	biennium beginning September 1, 2007. This subsection expires
60	60	January 1, 2012.
61	61	Sec. 531.705. DUTIES OF COMMISSION. (a) The commission
62	62	shall:
63	63	(1) provide administrative assistance to the office;
64	64	and
65	65	(2) coordinate administrative responsibilities with
66	66	the office to avoid unnecessary duplication of duties.
67	67	(b) The commission may not take an action that affects or
68	68	relates to the validity, status, or terms of an interagency
69	69	agreement or a contract to which the office is a party without the
70	70	office's approval.
71	71	Sec. 531.706. INDEPENDENCE OF OFFICE. (a) Except as
72	72	otherwise provided by this chapter, the office and inspector
73	73	general operate independently of the commission.
74	74	(b) The inspector general and the office staff are not
75	75	employees of the commission.
76	76	Sec. 531.707. INSPECTOR GENERAL: APPOINTMENT AND TERM. (a)
77	77	The governor shall appoint an inspector general to serve as
78	78	director of the office.
79	79	(b) The inspector general serves a two-year term that
80	80	expires on February 1 of each odd-numbered year.
81	81	Sec. 531.708. CONFLICT OF INTEREST. (a) The inspector
82	82	general may not serve as an ex officio member on the governing body
83	83	of a governmental entity.
84	84	(b) The inspector general may not have a financial interest
85	85	in the transactions of the office, a health and human services
86	86	agency, or a health or human services provider.
87	87	Sec. 531.709. RULEMAKING BY INSPECTOR GENERAL. (a)
88	88	Notwithstanding Section 531.0055(e) and any other law, the
89	89	inspector general shall adopt the rules necessary to administer the
90	90	functions of the office, including rules to address the imposition
91	91	of sanctions and penalties for violations and due process
92	92	requirements for imposing sanctions and penalties.
93	93	(b) A rule, standard, or form adopted by the executive
94	94	commissioner, the commission, or a health and human services agency
95	95	that is necessary to accomplish the duties of the office is
96	96	considered to also be a rule, standard, or form of the office and
97	97	remains in effect as a rule, standard, or form of the office until
98	98	changed by the inspector general.
99	99	(c) The office may submit proposed rules and adopted rules
100	100	to the commission for publication. The executive commissioner or
101	101	commission may not amend or modify a rule submitted by the office.
102	102	(d) The rules must include standards for the office that
103	103	emphasize:
104	104	(1) coordinating investigative efforts to
105	105	aggressively recover money;
106	106	(2) allocating resources to cases that have the
107	107	strongest supportive evidence and the greatest potential for
108	108	recovery of money; and
109	109	(3) maximizing opportunities for referral of cases to
110	110	the office of the attorney general.
111	111	Sec. 531.710. EMPLOYEES; MEDICAL REVIEW OFFICER; TRAINING.
112	112	(a) The inspector general may employ personnel as necessary to
113	113	implement the duties of the office.
114	114	(b) The inspector general shall employ a physician as the
115	115	medical review officer to perform reviews and provide information
116	116	and consultation as appropriate when the matter at issue involves
117	117	or requires medical expertise.
118	118	(c) The inspector general shall train office personnel to
119	119	pursue priority Medicaid and other health and human services fraud,
120	120	waste, and abuse cases efficiently and as necessary.
121	121	(d) The inspector general may contract with certified
122	122	public accountants, management consultants, or other professional
123	123	experts necessary to enable the inspector general and office
124	124	personnel to independently perform the functions of the inspector
125	125	general's office.
126	126	(e) The inspector general may require employees of health
127	127	and human services agencies to provide assistance to the office in
128	128	connection with the office's duties relating to the investigation
129	129	of fraud, waste, and abuse in the provision of health and human
130	130	services.
131	131	Sec. 531.711. REVIEW AND AUDIT AUTHORITY. (a) The
132	132	inspector general may evaluate any activity or operation of a
133	133	health and human services agency, health or human services
134	134	provider, or person in this state that is related to the
135	135	investigation, detection, or prevention of fraud, waste, and abuse
136	136	or employee misconduct in a state or state-funded health or human
137	137	services program. A review may include an investigation or other
138	138	inquiry into a specific act or allegation of, or a specific
139	139	financial transaction or practice that may involve, impropriety,
140	140	malfeasance, or nonfeasance in the obligation, spending, receipt,
141	141	or other use of state money.
142	142	(b) The executive commissioner, the commission, or a health
143	143	and human services agency of this state may not impair or prohibit
144	144	the inspector general from initiating or completing a review.
145	145	(c) The inspector general may audit and review the use and
146	146	effectiveness of state funds, including contract and grant funds,
147	147	administered by a person or state agency receiving the funds in
148	148	connection with a state or state-funded health or human services
149	149	program.
150	150	Sec. 531.712. INITIATION OF REVIEW. The inspector general
151	151	may initiate a review:
152	152	(1) on the inspector general's own initiative;
153	153	(2) at the request of the commission or executive
154	154	commissioner; or
155	155	(3) based on a complaint from any source concerning a
156	156	matter described by Section 531.711.
157	157	Sec. 531.713. INTEGRITY REVIEW. (a) The office shall
158	158	conduct an integrity review to determine whether there is
159	159	sufficient basis to warrant a full investigation on receipt of any
160	160	complaint of fraud, waste, or abuse of funds in the state Medicaid
161	161	program from any source.
162	162	(b) An integrity review must begin not later than the 30th
163	163	day after the date the office receives a complaint or has reason to
164	164	believe that Medicaid fraud, waste, or abuse has occurred. An
165	165	integrity review shall be completed not later than the 90th day
166	166	after the date the review began.
167	167	(c) If the findings of an integrity review give the office
168	168	reason to believe that an incident of fraud involving possible
169	169	criminal conduct has occurred in the state Medicaid program, the
170	170	office must take the following action, as appropriate, not later
171	171	than the 30th day after the completion of the integrity review:
172	172	(1) if a provider is suspected of fraud involving
173	173	criminal conduct, the office must refer the case to the state's
174	174	Medicaid fraud control unit, provided that the criminal referral
175	175	does not preclude the office from continuing its investigation of
176	176	the provider or preclude the imposition of appropriate
177	177	administrative or civil sanctions; or
178	178	(2) if there is reason to believe that a recipient of
179	179	funds has defrauded the Medicaid program, the office may conduct a
180	180	full investigation of the suspected fraud.
181	181	Sec. 531.714. ACCESS TO INFORMATION. (a) To further a
182	182	review conducted by the office, the inspector general is entitled
183	183	to full and unrestricted access to all offices, limited-access or
184	184	restricted areas, employees, books, papers, records, documents,
185	185	equipment, computers, databases, systems, accounts, reports,
186	186	vouchers, or other information, including confidential
187	187	information, electronic data, and internal records relevant to the
188	188	functions of the office, maintained by a person, health and human
189	189	services agency, or health or human services provider in connection
190	190	with a state or state-funded health or human services program.
191	191	(b) The inspector general may not access data or other
192	192	information the release of which is restricted under federal law
193	193	unless the appropriate federal agency approves the release to the
194	194	office or its agent.
195	195	Sec. 531.715. COOPERATION REQUIRED. To further a review
196	196	conducted by the inspector general's office, the inspector general
197	197	may require medical or other professional assistance from the
198	198	executive commissioner, the commission, a health and human services
199	199	agency, or an auditor, accountant, or other employee of the
200	200	commission or agency.
201	201	Sec. 531.716. REFERRAL TO STATE MEDICAID FRAUD CONTROL
202	202	UNIT. (a) At the time the office learns or has reason to suspect
203	203	that a health or human services provider's records related to
204	204	participation in the state Medicaid program are being withheld,
205	205	concealed, destroyed, fabricated, or in any way falsified, the
206	206	office shall immediately refer the case to the state's Medicaid
207	207	fraud control unit.
208	208	(b) A criminal referral under Subsection (a) does not
209	209	preclude the office from continuing its investigation of a health
210	210	or human services provider or the imposition of appropriate
211	211	administrative or civil sanctions.
212	212	Sec. 531.717. HOLD ON CLAIM REIMBURSEMENT PAYMENT;
213	213	EXCLUSION FROM PROGRAMS. (a) In addition to other instances
214	214	authorized under state or federal law, the office shall impose
215	215	without prior notice a hold on payment of claims for reimbursement
216	216	submitted by a health or human services provider to compel
217	217	production of records related to participation in the state
218	218	Medicaid program or on request of the state's Medicaid fraud
219	219	control unit, as applicable.
220	220	(b) The office must notify the health or human services
221	221	provider of the hold on payment not later than the fifth working day
222	222	after the date the payment hold is imposed.
223	223	(c) The office shall, in consultation with the state's
224	224	Medicaid fraud control unit, establish guidelines under which holds
225	225	on payment or exclusions from a state or state-funded program:
226	226	(1) may permissively be imposed on a health or human
227	227	services provider; or
228	228	(2) shall automatically be imposed on a provider.
229	229	(d) A health or human services provider subject to a hold on
230	230	payment or excluded from a program under this section is entitled to
231	231	a hearing on the hold or exclusion. A hearing under this subsection
232	232	is a contested case hearing under Chapter 2001. The State Office of
233	233	Administrative Hearings shall conduct the hearing. After the
234	234	hearing, the office, subject to judicial review, shall make a final
235	235	determination. The commission, a health and human services agency,
236	236	and the office of the attorney general are entitled to intervene as
237	237	parties in the contested case.
238	238	Sec. 531.718. REQUEST FOR EXPEDITED HEARING. (a) On timely
239	239	written request by a health or human services provider subject to a
240	240	hold on payment under Section 531.717, other than a hold requested
241	241	by the state's Medicaid fraud control unit, the office shall file a
242	242	request with the State Office of Administrative Hearings for an
243	243	expedited administrative hearing regarding the hold.
244	244	(b) The health or human services provider must request an
245	245	expedited hearing not later than the 10th day after the date the
246	246	provider receives notice from the office under Section 531.717(b).
247	247	Sec. 531.719. INFORMAL RESOLUTION. (a) The inspector
248	248	general shall adopt rules that allow a health or human services
249	249	provider subject to a hold on payment under Section 531.717, other
250	250	than a hold requested by the state's Medicaid fraud control unit, to
251	251	seek an informal resolution of the issues identified by the office
252	252	in the notice provided under that section.
253	253	(b) A health or human services provider must seek an
254	254	informal resolution not later than the 10th day after the date the
255	255	provider receives notice from the office under Section 531.717(b).
256	256	(c) A health or human services provider's decision to seek
257	257	an informal resolution does not extend the time by which the
258	258	provider must request an expedited administrative hearing under
259	259	Section 531.718.
260	260	(d) A hearing initiated under Section 531.717 shall be
261	261	stayed at the office's request until the informal resolution
262	262	process is completed.
263	263	Sec. 531.720. EMPLOYEE REPORTS. The inspector general may
264	264	require employees at the commission or a health and human services
265	265	agency to report to the office information regarding fraud, waste,
266	266	misuse or abuse of funds or resources, corruption, or illegal acts.
267	267	Sec. 531.721. SUBPOENAS. (a) The inspector general may
268	268	issue a subpoena to compel the attendance of a relevant witness or
269	269	the production, for inspection or copying, of relevant evidence in
270	270	connection with a review conducted under this subchapter.
271	271	(b) A subpoena may be served personally or by certified
272	272	mail.
273	273	(c) If a person fails to comply with a subpoena, the
274	274	inspector general, acting through the attorney general, may file
275	275	suit to enforce the subpoena in a district court in this state.
276	276	(d) On finding that good cause exists for issuing the
277	277	subpoena, the court shall order the person to comply with the
278	278	subpoena. The court may hold in contempt a person who fails to obey
279	279	the court order.
280	280	(e) The reimbursement of the expenses of a witness whose
281	281	attendance is compelled under this section is governed by Section
282	282	2001.103.
283	283	Sec. 531.722. INTERNAL AUDITOR. (a) In this section,
284	284	"internal auditor" means a person appointed under Section 2102.006.
285	285	(b) The internal auditor for a health and human services
286	286	agency shall provide the inspector general with a copy of the
287	287	agency's internal audit plan to:
288	288	(1) assist in the coordination of efforts between the
289	289	inspector general and the internal auditor; and
290	290	(2) limit duplication of effort regarding reviews by
291	291	the inspector general and internal auditor.
292	292	(c) The internal auditor shall provide to the inspector
293	293	general all final audit reports concerning audits of any:
294	294	(1) part or division of the agency;
295	295	(2) contract, procurement, or grant; and
296	296	(3) program conducted by the agency.
297	297	Sec. 531.723. COOPERATION WITH LAW ENFORCEMENT OFFICIALS
298	298	AND OTHER ENTITIES. (a) The inspector general may provide
299	299	information and evidence relating to criminal acts to the state
300	300	auditor's office and appropriate law enforcement officials.
301	301	(b) The inspector general may refer matters for further
302	302	civil, criminal, and administrative action to appropriate
303	303	administrative and prosecutorial agencies, including the attorney
304	304	general.
305	305	(c) The inspector general may enter into a memorandum of
306	306	understanding with a law enforcement or prosecutorial agency,
307	307	including the office of the attorney general, to assist in
308	308	conducting a review under this subchapter.
309	309	Sec. 531.724. COOPERATION AND COORDINATION WITH STATE
310	310	AUDITOR. (a) The state auditor may, on request of the inspector
311	311	general, provide appropriate information or other assistance to the
312	312	inspector general or office, as determined by the state auditor.
313	313	(b) The inspector general may meet with the state auditor's
314	314	office to coordinate a review conducted under this subchapter,
315	315	share information, or schedule work plans.
316	316	(c) The state auditor is entitled to access all information
317	317	maintained by the inspector general, including vouchers,
318	318	electronic data, internal records, and information obtained under
319	319	Section 531.714 or subject to Section 531.731.
320	320	(d) Any information obtained or provided by the state
321	321	auditor under this section is confidential and not subject to
322	322	disclosure under Chapter 552.
323	323	Sec. 531.725. PREVENTION. (a) The inspector general may
324	324	recommend to the commission and executive commissioner policies on:
325	325	(1) promoting economical and efficient administration
326	326	of state funds administered by an individual or entity that
327	327	received the funds from a health and human services agency; and
328	328	(2) preventing and detecting fraud, waste, and abuse
329	329	in the administration of those funds.
330	330	(b) The inspector general may provide training or other
331	331	education regarding the prevention of fraud, waste, or abuse to
332	332	employees of a health and human services agency. The training or
333	333	education provided must be approved by the presiding officer of the
334	334	agency.
335	335	Sec. 531.726. RULEMAKING BY EXECUTIVE COMMISSIONER. The
336	336	executive commissioner may adopt rules governing a health and human
337	337	services agency's response to reports and referrals from the
338	338	inspector general on issues identified by the inspector general
339	339	related to the agency or a contractor of the agency.
340	340	Sec. 531.727. ALLEGATIONS OF MISCONDUCT AGAINST PRESIDING
341	341	OFFICER. If a review by the inspector general involves allegations
342	342	that a presiding officer of a health and human services agency has
343	343	engaged in misconduct, the inspector general shall report to the
344	344	governor during the review until the report is completed or the
345	345	review is closed without a finding.
346	346	Sec. 531.728. PERIODIC REPORTING TO STATE AUDITOR AND
347	347	EXECUTIVE COMMISSIONER REQUIRED. The inspector general shall
348	348	timely inform the state auditor and the executive commissioner of
349	349	the initiation of a review of a health and human services agency
350	350	program and the ongoing status of each review.
351	351	Sec. 531.729. REPORTING OFFICE FINDINGS. The inspector
352	352	general shall report the findings of any review or investigation
353	353	conducted by the office to:
354	354	(1) the executive commissioner;
355	355	(2) the governor;
356	356	(3) the lieutenant governor;
357	357	(4) the speaker of the house of representatives;
358	358	(5) the state auditor's office; and
359	359	(6) appropriate law enforcement and prosecutorial
360	360	agencies, including the office of the attorney general, if the
361	361	findings suggest the probability of criminal conduct.
362	362	Sec. 531.730. FLAGRANT VIOLATIONS; IMMEDIATE REPORT. The
363	363	inspector general shall immediately report to the executive
364	364	commissioner, the governor's general counsel, and the state auditor
365	365	a particularly serious or flagrant problem relating to the
366	366	administration of a program, operation of a health and human
367	367	services agency, or interference with an inspector general review.
368	368	Sec. 531.731. INFORMATION CONFIDENTIAL. (a) Except as
369	369	provided by this section, Sections 531.103, 531.727 through
370	370	531.730, 531.732, and 531.733, all information and material
371	371	compiled by the inspector general during a review under this
372	372	subchapter is:
373	373	(1) confidential and not subject to disclosure under
374	374	Chapter 552; and
375	375	(2) not subject to disclosure, discovery, subpoena, or
376	376	other means of legal compulsion for release to anyone other than the
377	377	state auditor's office, the commission, or the office or its agents
378	378	involved in the review related to that information or material.
379	379	(b) As the inspector general determines appropriate based
380	380	on evidence sufficient to support an allegation, information
381	381	relating to a review may be disclosed to:
382	382	(1) a law enforcement agency;
383	383	(2) the attorney general's office;
384	384	(3) the state auditor's office; or
385	385	(4) the commission.
386	386	(c) A person that receives information under Subsection (b)
387	387	may not disclose the information except to the extent that
388	388	disclosure is consistent with the authorized purpose for which the
389	389	person first obtained the information.
390	390	Sec. 531.732. DRAFT OF FINAL REVIEW REPORT; AGENCY
391	391	RESPONSE. (a) Except in cases in which the office has determined
392	392	that potential fraud, waste, or abuse exists, the office shall
393	393	provide a draft of the final review report of any investigation,
394	394	audit, or review of the operations of a health and human services
395	395	agency to the presiding officer of the agency before publishing the
396	396	office's final review report.
397	397	(b) The health and human services agency may provide a
398	398	response to the office's draft report in the manner prescribed by
399	399	the office not later than the 10th day after the date the draft
400	400	report is received by the agency. The inspector general by rule
401	401	shall specify the format and requirements of the agency response.
402	402	(c) Notwithstanding Subsection (a), the office may not
403	403	provide a draft report to the presiding officer of the agency if in
404	404	the inspector general's opinion providing the draft report could
405	405	negatively affect any anticipated civil or criminal proceedings.
406	406	(d) The office may include any portion of the agency's
407	407	response in the office's final report.
408	408	Sec. 531.733. FINAL REVIEW REPORTS; AGENCY RESPONSE. (a)
409	409	The inspector general shall prepare a final report for each review
410	410	conducted under this subchapter. The final report must include:
411	411	(1) a summary of the activities performed by the
412	412	inspector general in conducting the review;
413	413	(2) a determination of whether wrongdoing was found;
414	414	and
415	415	(3) a description of any findings of wrongdoing.
416	416	(b) The inspector general's final review reports are
417	417	subject to disclosure under Chapter 552.
418	418	(c) All working papers and other documents related to
419	419	compiling the final review reports remain confidential and are not
420	420	subject to disclosure under Chapter 552.
421	421	(d) Not later than the 60th day after the date the office
422	422	issues a final report that identifies deficiencies or
423	423	inefficiencies in, or recommends corrective measures in the
424	424	operations of, a health and human services agency, the agency shall
425	425	file a response that includes:
426	426	(1) an implementation plan and timeline for
427	427	implementing corrective measures; or
428	428	(2) the agency's rationale for declining to implement
429	429	corrective measures for the identified deficiencies or
430	430	inefficiencies or the office's recommended corrective measures, as
431	431	applicable.
432	432	Sec. 531.734. STATE AUDITOR AUDITS, INVESTIGATIONS, AND
433	433	ACCESS TO INFORMATION NOT IMPAIRED. This subchapter or other law
434	434	related to the operation of the inspector general does not prohibit
435	435	the state auditor from conducting an audit, investigation, or other
436	436	review or from having full and complete access to all records and
437	437	other information, including witnesses and electronic data, that
438	438	the state auditor considers necessary for the audit, investigation,
439	439	or other review.
440	440	Sec. 531.735. AUTHORITY OF STATE AUDITOR TO CONDUCT TIMELY
441	441	AUDITS NOT IMPAIRED. This chapter or other law related to the
442	442	operation of the inspector general does not take precedence over
443	443	the authority of the state auditor to conduct an audit under Chapter
444	444	321 or other law.
445	445	Sec. 531.736. BUDGET. (a) The inspector general shall
446	446	submit a budget in accordance with the reporting requirements of
447	447	the General Appropriations Act.
448	448	(b) The inspector general shall submit to the commission a
449	449	legislative appropriations request and an operating budget in
450	450	accordance with the service level agreement entered into under
451	451	Section 531.704 and applicable law.
452	452	(c) The commission shall submit the office's appropriations
453	453	request and, if required by or under law, operating budget to the
454	454	legislature. The request or budget is not subject to review,
455	455	alteration, or modification by the commission or executive
456	456	commissioner before submission to the legislature.
457	457	Sec. 531.737. COSTS. (a) The inspector general shall
458	458	maintain information regarding the cost of reviews.
459	459	(b) The inspector general may cooperate with appropriate
460	460	administrative and prosecutorial agencies, including the office of
461	461	the attorney general, in recovering costs incurred under this
462	462	subchapter from nongovernmental entities, including contractors or
463	463	individuals involved in:
464	464	(1) violations of applicable state or federal rules or
465	465	statutes;
466	466	(2) abusive or wilful misconduct; or
467	467	(3) violations of a provider contract or program
468	468	policy.
469	469	Sec. 531.738. ADMINISTRATIVE OR CIVIL PENALTY; INJUNCTION.
470	470	(a) The office may:
471	471	(1) act for a health and human services agency in the
472	472	assessment by the office of administrative or civil penalties the
473	473	agency is authorized to assess under applicable law; and
474	474	(2) request that the attorney general obtain an
475	475	injunction to prevent a person from disposing of an asset
476	476	identified by the office as potentially subject to recovery by the
477	477	office due to the person's fraud, waste, or abuse.
478	478	(b) If the office imposes an administrative or civil penalty
479	479	under Subsection (a) for a health and human services agency:
480	480	(1) the health and human services agency may not
481	481	impose an administrative or civil penalty against the same person
482	482	for the same violation; and
483	483	(2) the office shall impose the penalty under
484	484	applicable rules of the office, this subchapter, and applicable
485	485	laws governing the imposition of a penalty by the health and human
486	486	services agency.
487	487	Sec. 531.739. PEACE OFFICER INVESTIGATORS. (a) An
488	488	investigator assigned to conduct investigations for the office may
489	489	be a commissioned peace officer. The number of commissioned peace
490	490	officers assigned to conduct investigations may not exceed 15
491	491	percent of the office's full-time equivalent positions.
492	492	(b) A commissioned peace officer or otherwise designated
493	493	law enforcement officer employed by the office is not entitled to
494	494	supplemental benefits from the law enforcement and custodial
495	495	officer supplemental retirement fund unless the officer transfers
496	496	from a position, without a break in service, that qualifies for
497	497	supplemental retirement benefits from the fund.
498	498	SECTION 2. Section 531.001, Government Code, is amended by
499	499	adding Subdivision (4-a) to read as follows:
500	500	(4-a) "Office of inspector general" means the office
501	501	of inspector general established under Subchapter R.
502	502	SECTION 3. Section 531.008(c), Government Code, is amended
503	503	to read as follows:
504	504	(c) The executive commissioner shall establish the
505	505	following divisions and offices within the commission:
506	506	(1) the eligibility services division to make
507	507	eligibility determinations for services provided through the
508	508	commission or a health and human services agency related to:
509	509	(A) the child health plan program;
510	510	(B) the financial assistance program under
511	511	Chapter 31, Human Resources Code;
512	512	(C) the medical assistance program under Chapter
513	513	32, Human Resources Code;
514	514	(D) the nutritional assistance programs under
515	515	Chapter 33, Human Resources Code;
516	516	(E) long-term care services, as defined by
517	517	Section 22.0011, Human Resources Code;
518	518	(F) community-based support services identified
519	519	or provided in accordance with Section 531.02481; and
520	520	(G) other health and human services programs, as
521	521	appropriate;
522	522	(2) [the office of inspector general to perform fraud
523	523	and abuse investigation and enforcement functions as provided by
524	524	Subchapter C and other law;
525	525	[(3)] the office of the ombudsman to:
526	526	(A) provide dispute resolution services for the
527	527	commission and the health and human services agencies; and
528	528	(B) perform consumer protection functions
529	529	related to health and human services;
530	530	(3) [(4)] a purchasing division as provided by Section
531	531	531.017; and
532	532	(4) [(5)] an internal audit division to conduct a
533	533	program of internal auditing in accordance with [Government Code,]
534	534	Chapter 2102.
535	535	SECTION 4. Sections 531.103(a), (c), and (d), Government
536	536	Code, are amended to read as follows:
537	537	(a) The [commission, acting through the commission's]
538	538	office of inspector general[,] and the office of the attorney
539	539	general shall enter into a memorandum of understanding to develop
540	540	and implement joint written procedures for processing cases of
541	541	suspected fraud, waste, or abuse, as those terms are defined by
542	542	state or federal law, or other violations of state or federal law
543	543	under the state Medicaid program or other program administered by
544	544	the commission or a health and human services agency, including the
545	545	financial assistance program under Chapter 31, Human Resources
546	546	Code, a nutritional assistance program under Chapter 33, Human
547	547	Resources Code, and the child health plan program. The memorandum
548	548	of understanding shall require:
549	549	(1) the office of inspector general and the office of
550	550	the attorney general to set priorities and guidelines for referring
551	551	cases to appropriate state agencies for investigation,
552	552	prosecution, or other disposition to enhance deterrence of fraud,
553	553	waste, abuse, or other violations of state or federal law,
554	554	including a violation of Chapter 102, Occupations Code, in the
555	555	programs and maximize the imposition of penalties, the recovery of
556	556	money, and the successful prosecution of cases;
557	557	(1-a) the office of inspector general to refer each
558	558	case of suspected provider fraud, waste, or abuse to the office of
559	559	the attorney general not later than the 20th business day after the
560	560	date the office of inspector general determines that the existence
561	561	of fraud, waste, or abuse is reasonably indicated;
562	562	(1-b) the office of the attorney general to take
563	563	appropriate action in response to each case referred to the
564	564	attorney general, which action may include direct initiation of
565	565	prosecution, with the consent of the appropriate local district or
566	566	county attorney, direct initiation of civil litigation, referral to
567	567	an appropriate United States attorney, a district attorney, or a
568	568	county attorney, or referral to a collections agency for initiation
569	569	of civil litigation or other appropriate action;
570	570	(2) the office of inspector general to keep detailed
571	571	records for cases processed by that office or the office of the
572	572	attorney general, including information on the total number of
573	573	cases processed and, for each case:
574	574	(A) the agency and division to which the case is
575	575	referred for investigation;
576	576	(B) the date on which the case is referred; and
577	577	(C) the nature of the suspected fraud, waste, or
578	578	abuse;
579	579	(3) the office of inspector general to notify each
580	580	appropriate division of the office of the attorney general of each
581	581	case referred by the office of inspector general;
582	582	(4) the office of the attorney general to ensure that
583	583	information relating to each case investigated by that office is
584	584	available to each division of the office with responsibility for
585	585	investigating suspected fraud, waste, or abuse;
586	586	(5) the office of the attorney general to notify the
587	587	office of inspector general of each case the attorney general
588	588	declines to prosecute or prosecutes unsuccessfully;
589	589	(6) representatives of the office of inspector general
590	590	and of the office of the attorney general to meet not less than
591	591	quarterly to share case information and determine the appropriate
592	592	agency and division to investigate each case; and
593	593	(7) the office of inspector general and the office of
594	594	the attorney general to submit information requested by the
595	595	comptroller about each resolved case for the comptroller's use in
596	596	improving fraud detection.
597	597	(c) The office of inspector general [commission] and the
598	598	office of the attorney general shall jointly prepare and submit a
599	599	semiannual report to the governor, lieutenant governor, speaker of
600	600	the house of representatives, and comptroller concerning the
601	601	activities of the office of the attorney general and the office of
602	602	inspector general [those agencies] in detecting and preventing
603	603	fraud, waste, and abuse under the state Medicaid program or other
604	604	program administered by the commission or a health and human
605	605	services agency. The report may be consolidated with any other
606	606	report relating to the same subject matter the office of inspector
607	607	general [commission] or office of the attorney general is required
608	608	to submit under other law.
609	609	(d) The office of inspector general [commission] and the
610	610	office of the attorney general may not assess or collect
611	611	investigation and attorney's fees on behalf of any state agency
612	612	unless the office of inspector general, the office of the attorney
613	613	general, or another [other] state agency collects a penalty,
614	614	restitution, or other reimbursement payment to the state.
615	615	SECTION 5. Section 531.1031(a)(2), Government Code, is
616	616	amended to read as follows:
617	617	(2) "Participating agency" means:
618	618	(A) the Medicaid fraud enforcement divisions of
619	619	the office of the attorney general; [and]
620	620	(B) each board or agency with authority to
621	621	license, register, regulate, or certify a health care professional
622	622	or managed care organization that may participate in the state
623	623	Medicaid program; and
624	624	(C) the office of inspector general.
625	625	SECTION 6. Section 531.104(a), Government Code, is amended
626	626	to read as follows:
627	627	(a) The office of inspector general [commission] and the
628	628	attorney general shall execute a memorandum of understanding under
629	629	which the office [commission] shall provide investigative support
630	630	as required to the attorney general in connection with cases under
631	631	Subchapter B, Chapter 36, Human Resources Code. Under the
632	632	memorandum of understanding, the office [commission] shall assist
633	633	in performing preliminary investigations and ongoing
634	634	investigations for actions prosecuted by the attorney general under
635	635	Subchapter C, Chapter 36, Human Resources Code.
636	636	SECTION 7. Section 531.105, Government Code, is amended to
637	637	read as follows:
638	638	Sec. 531.105. FRAUD DETECTION TRAINING. [(a)] The office
639	639	of inspector general [commission] shall develop and implement a
640	640	program to provide annual training to contractors who process
641	641	Medicaid claims and appropriate staff of the health and human
642	642	services agencies [Texas Department of Health and the Texas
643	643	Department of Human Services] in identifying potential cases of
644	644	fraud, waste, or abuse under the state Medicaid program. The
645	645	training provided to the contractors and staff must include clear
646	646	criteria that specify:
647	647	(1) the circumstances under which a person should
648	648	refer a potential case to the office [commission]; and
649	649	(2) the time by which a referral should be made.
650	650	[(b) The Texas Department of Health and the Texas
651	651	Department of Human Services, in cooperation with the commission,
652	652	shall periodically set a goal of the number of potential cases of
653	653	fraud, waste, or abuse under the state Medicaid program that each
654	654	agency will attempt to identify and refer to the commission. The
655	655	commission shall include information on the agencies' goals and the
656	656	success of each agency in meeting the agency's goal in the report
657	657	required by Section 531.103(c).]
658	658	SECTION 8. Sections 531.106(f) and (g), Government Code,
659	659	are amended to read as follows:
660	660	(f) Cases [The commission shall refer cases] identified by
661	661	the technology shall be referred to the [commission's] office of
662	662	inspector general [investigations and enforcement] or the office of
663	663	the attorney general, as appropriate.
664	664	(g) Each month, the learning or neural network technology
665	665	implemented under this section must match bureau of vital
666	666	statistics death records with Medicaid claims filed by a provider.
667	667	If the commission or the office of inspector general determines
668	668	that a provider has filed a claim for services provided to a person
669	669	after the person's date of death, as determined by the bureau of
670	670	vital statistics death records, [the commission shall refer] the
671	671	case shall be referred for investigation to the office of inspector
672	672	general or the office of the attorney general, as appropriate [to
673	673	the commission's office of investigations and enforcement].
674	674	SECTION 9. Section 531.1061, Government Code, is amended to
675	675	read as follows:
676	676	Sec. 531.1061. FRAUD INVESTIGATION TRACKING SYSTEM. (a)
677	677	The office of inspector general [commission] shall use an automated
678	678	fraud investigation tracking system [through the commission's
679	679	office of investigations and enforcement] to monitor the progress
680	680	of an investigation of suspected fraud, waste, abuse, or
681	681	insufficient quality of care under the state Medicaid program.
682	682	(b) For each case of suspected fraud, waste, abuse, or
683	683	insufficient quality of care identified by the learning or neural
684	684	network technology required under Section 531.106, the automated
685	685	fraud investigation tracking system must:
686	686	(1) receive electronically transferred records
687	687	relating to the identified case from the learning or neural network
688	688	technology;
689	689	(2) record the details and monitor the status of an
690	690	investigation of the identified case, including maintaining a
691	691	record of the beginning and completion dates for each phase of the
692	692	case investigation;
693	693	(3) generate documents and reports related to the
694	694	status of the case investigation; and
695	695	(4) generate standard letters to a provider regarding
696	696	the status or outcome of an investigation.
697	697	(c) Each [The commission shall require each] health and
698	698	human services agency that performs any aspect of the state
699	699	Medicaid program shall [to] participate in the implementation and
700	700	use of the automated fraud investigation tracking system as
701	701	directed by the office.
702	702	SECTION 10. Section 531.1062(a), Government Code, is
703	703	amended to read as follows:
704	704	(a) The office of inspector general [commission] shall use
705	705	an automated recovery monitoring system to monitor the collections
706	706	process for a settled case of fraud, waste, abuse, or insufficient
707	707	quality of care under the state Medicaid program.
708	708	SECTION 11. Sections 531.107(a) and (f), Government Code,
709	709	are amended to read as follows:
710	710	(a) The Medicaid and Public Assistance Fraud Oversight Task
711	711	Force advises and assists the [commission and the commission's]
712	712	office of inspector general [investigations and enforcement] in
713	713	improving the efficiency of fraud investigations and collections.
714	714	(f) At least once each fiscal quarter, the [commission's]
715	715	office of inspector general [investigations and enforcement] shall
716	716	provide to the task force:
717	717	(1) information detailing:
718	718	(A) the number of fraud referrals made to the
719	719	office and the origin of each referral;
720	720	(B) the time spent investigating each case;
721	721	(C) the number of cases investigated each month,
722	722	by program and region;
723	723	(D) the dollar value of each fraud case that
724	724	results in a criminal conviction; and
725	725	(E) the number of cases the office rejects and
726	726	the reason for rejection, by region; and
727	727	(2) any additional information the task force
728	728	requires.
729	729	SECTION 12. Sections 531.108 and 531.109, Government Code,
730	730	are amended to read as follows:
731	731	Sec. 531.108. FRAUD PREVENTION. (a) The [commission's]
732	732	office of inspector general [investigations and enforcement] shall
733	733	compile and disseminate accurate information and statistics
734	734	relating to:
735	735	(1) fraud prevention; and
736	736	(2) post-fraud referrals received and accepted or
737	737	rejected from the office's [commission's] case management system or
738	738	the case management system of a health and human services agency.
739	739	(b) The office of inspector general [commission] shall[:
740	740	[(1)] aggressively publicize successful fraud
741	741	prosecutions and fraud-prevention programs through all available
742	742	means, including the use of statewide press releases [issued in
743	743	coordination with the Texas Department of Human Services; and
744	744	[(2) ensure that a toll-free hotline for reporting
745	745	suspected fraud in programs administered by the commission or a
746	746	health and human services agency is maintained and promoted, either
747	747	by the commission or by a health and human services agency].
748	748	(c) The office of inspector general [commission] shall
749	749	develop a cost-effective method of identifying applicants for
750	750	public assistance in counties bordering other states and in
751	751	metropolitan areas selected by the office [commission] who are
752	752	already receiving benefits in other states. If economically
753	753	feasible, the office [commission] may develop a computerized
754	754	matching system.
755	755	(d) The office of inspector general [commission] shall:
756	756	(1) verify automobile information that is used as
757	757	criteria for eligibility; and
758	758	(2) establish a computerized matching system with the
759	759	Texas Department of Criminal Justice to prevent an incarcerated
760	760	individual from illegally receiving public assistance benefits
761	761	administered by the commission.
762	762	(e) The office of inspector general [commission] shall
763	763	submit to the governor and Legislative Budget Board a semiannual
764	764	report on the results of computerized matching of office and
765	765	commission information with information from neighboring states,
766	766	if any, and information from the Texas Department of Criminal
767	767	Justice. The report may be consolidated with any other report
768	768	relating to the same subject matter the office [commission] is
769	769	required to submit under other law.
770	770	Sec. 531.109. SELECTION AND REVIEW OF CLAIMS. (a) The
771	771	office of inspector general [commission] shall annually select and
772	772	review a random, statistically valid sample of all claims for
773	773	reimbursement under the state Medicaid program, including the
774	774	vendor drug program, for potential cases of fraud, waste, or abuse.
775	775	(b) In conducting the annual review of claims under
776	776	Subsection (a), the office of inspector general [commission] may
777	777	directly contact a recipient by telephone or in person, or both, to
778	778	verify that the services for which a claim for reimbursement was
779	779	submitted by a provider were actually provided to the recipient.
780	780	(c) Based on the results of the annual review of claims, the
781	781	office of inspector general and the commission shall determine the
782	782	types of claims at which office and commission resources for fraud,
783	783	waste, and abuse detection should be primarily directed.
784	784	SECTION 13. Sections 531.110(a), (c), (d), (e), and (f),
785	785	Government Code, are amended to read as follows:
786	786	(a) The office of inspector general [commission] shall
787	787	conduct electronic data matches for a recipient of assistance under
788	788	the state Medicaid program at least quarterly to verify the
789	789	identity, income, employment status, and other factors that affect
790	790	the eligibility of the recipient.
791	791	(c) The commission and other health and human services
792	792	agencies [Texas Department of Human Services] shall cooperate with
793	793	the office of inspector general [commission] by providing data or
794	794	any other assistance necessary to conduct the electronic data
795	795	matches required by this section.
796	796	(d) The office of inspector general [commission] may
797	797	contract with a public or private entity to conduct the electronic
798	798	data matches required by this section.
799	799	(e) The office of inspector general [commission], or a
800	800	health and human services agency designated by the office
801	801	[commission], by rule shall establish procedures to verify the
802	802	electronic data matches conducted by the office [commission] under
803	803	this section. Not later than the 20th day after the date the
804	804	electronic data match is verified, the commission and other health
805	805	and human services agencies [Texas Department of Human Services]
806	806	shall remove from eligibility a recipient who is determined to be
807	807	ineligible for assistance under the state Medicaid program.
808	808	(f) The office of inspector general [commission] shall
809	809	report biennially to the legislature the results of the electronic
810	810	data matching program. The report must include a summary of the
811	811	number of applicants who were removed from eligibility for
812	812	assistance under the state Medicaid program as a result of an
813	813	electronic data match conducted under this section.
814	814	SECTION 14. Section 531.1112, Government Code, is amended
815	815	to read as follows:
816	816	Sec. 531.1112. STUDY CONCERNING INCREASED USE OF TECHNOLOGY
817	817	TO STRENGTHEN FRAUD DETECTION AND DETERRENCE; IMPLEMENTATION. (a)
818	818	The commission and the [commission's] office of inspector general
819	819	shall jointly study the feasibility of increasing the use of
820	820	technology to strengthen the detection and deterrence of fraud in
821	821	the state Medicaid program. The study must include the
822	822	determination of the feasibility of using technology to verify a
823	823	person's citizenship and eligibility for coverage.
824	824	(b) The commission shall implement any methods the
825	825	commission and the [commission's] office of inspector general
826	826	determine are effective at strengthening fraud detection and
827	827	deterrence.
828	828	SECTION 15. Section 531.113, Government Code, is amended to
829	829	read as follows:
830	830	Sec. 531.113. MANAGED CARE ORGANIZATIONS: SPECIAL
831	831	INVESTIGATIVE UNITS OR CONTRACTS. (a) Each managed care
832	832	organization that provides or arranges for the provision of health
833	833	care services to an individual under a government-funded program,
834	834	including the Medicaid program and the child health plan program,
835	835	shall:
836	836	(1) establish and maintain a special investigative
837	837	unit within the managed care organization to investigate fraudulent
838	838	claims and other types of program waste or abuse by recipients and
839	839	service providers; or
840	840	(2) contract with another entity for the investigation
841	841	of fraudulent claims and other types of program waste or abuse by
842	842	recipients and service providers.
843	843	(b) Each managed care organization subject to this section
844	844	shall adopt a plan to prevent and reduce fraud, waste, and abuse and
845	845	annually file that plan with the [commission's] office of inspector
846	846	general for approval. The plan must include:
847	847	(1) a description of the managed care organization's
848	848	procedures for detecting and investigating possible acts of fraud,
849	849	waste, or abuse;
850	850	(2) a description of the managed care organization's
851	851	procedures for the mandatory reporting of possible acts of fraud,
852	852	waste, or abuse to the [commission's] office of inspector general;
853	853	(3) a description of the managed care organization's
854	854	procedures for educating and training personnel to prevent fraud,
855	855	waste, and abuse;
856	856	(4) the name, address, telephone number, and fax
857	857	number of the individual responsible for carrying out the plan;
858	858	(5) a description or chart outlining the
859	859	organizational arrangement of the managed care organization's
860	860	personnel responsible for investigating and reporting possible
861	861	acts of fraud, waste, or abuse;
862	862	(6) a detailed description of the results of
863	863	investigations of fraud, waste, and abuse conducted by the managed
864	864	care organization's special investigative unit or the entity with
865	865	which the managed care organization contracts under Subsection
866	866	(a)(2); and
867	867	(7) provisions for maintaining the confidentiality of
868	868	any patient information relevant to an investigation of fraud,
869	869	waste, or abuse.
870	870	(c) If a managed care organization contracts for the
871	871	investigation of fraudulent claims and other types of program waste
872	872	or abuse by recipients and service providers under Subsection
873	873	(a)(2), the managed care organization shall file with the
874	874	[commission's] office of inspector general:
875	875	(1) a copy of the written contract;
876	876	(2) the names, addresses, telephone numbers, and fax
877	877	numbers of the principals of the entity with which the managed care
878	878	organization has contracted; and
879	879	(3) a description of the qualifications of the
880	880	principals of the entity with which the managed care organization
881	881	has contracted.
882	882	(d) The [commission's] office of inspector general may
883	883	review the records of a managed care organization to determine
884	884	compliance with this section.
885	885	(e) The inspector general [commissioner] shall adopt rules
886	886	as necessary to accomplish the purposes of this section.
887	887	SECTION 16. Sections 531.114(b) and (g), Government Code,
888	888	are amended to read as follows:
889	889	(b) If after an investigation the office of inspector
890	890	general [commission] determines that a person violated Subsection
891	891	(a), the office [commission] shall:
892	892	(1) notify the person of the alleged violation not
893	893	later than the 30th day after the date the office [commission]
894	894	completes the investigation and provide the person with an
895	895	opportunity for a hearing on the matter; or
896	896	(2) refer the matter to the appropriate prosecuting
897	897	attorney for prosecution.
898	898	(g) The inspector general [commission] shall adopt rules as
899	899	necessary to implement this section.
900	900	SECTION 17. Section 533.005(a), Government Code, is amended
901	901	to read as follows:
902	902	(a) A contract between a managed care organization and the
903	903	commission for the organization to provide health care services to
904	904	recipients must contain:
905	905	(1) procedures to ensure accountability to the state
906	906	for the provision of health care services, including procedures for
907	907	financial reporting, quality assurance, utilization review, and
908	908	assurance of contract and subcontract compliance;
909	909	(2) capitation rates that ensure the cost-effective
910	910	provision of quality health care;
911	911	(3) a requirement that the managed care organization
912	912	provide ready access to a person who assists recipients in
913	913	resolving issues relating to enrollment, plan administration,
914	914	education and training, access to services, and grievance
915	915	procedures;
916	916	(4) a requirement that the managed care organization
917	917	provide ready access to a person who assists providers in resolving
918	918	issues relating to payment, plan administration, education and
919	919	training, and grievance procedures;
920	920	(5) a requirement that the managed care organization
921	921	provide information and referral about the availability of
922	922	educational, social, and other community services that could
923	923	benefit a recipient;
924	924	(6) procedures for recipient outreach and education;
925	925	(7) a requirement that the managed care organization
926	926	make payment to a physician or provider for health care services
927	927	rendered to a recipient under a managed care plan not later than the
928	928	45th day after the date a claim for payment is received with
929	929	documentation reasonably necessary for the managed care
930	930	organization to process the claim, or within a period, not to exceed
931	931	60 days, specified by a written agreement between the physician or
932	932	provider and the managed care organization;
933	933	(8) a requirement that the commission, on the date of a
934	934	recipient's enrollment in a managed care plan issued by the managed
935	935	care organization, inform the organization of the recipient's
936	936	Medicaid certification date;
937	937	(9) a requirement that the managed care organization
938	938	comply with Section 533.006 as a condition of contract retention
939	939	and renewal;
940	940	(10) a requirement that the managed care organization
941	941	provide the information required by Section 533.012 and otherwise
942	942	comply and cooperate with the [commission's] office of inspector
943	943	general;
944	944	(11) a requirement that the managed care
945	945	organization's usages of out-of-network providers or groups of
946	946	out-of-network providers may not exceed limits for those usages
947	947	relating to total inpatient admissions, total outpatient services,
948	948	and emergency room admissions determined by the commission;
949	949	(12) if the commission finds that a managed care
950	950	organization has violated Subdivision (11), a requirement that the
951	951	managed care organization reimburse an out-of-network provider for
952	952	health care services at a rate that is equal to the allowable rate
953	953	for those services, as determined under Sections 32.028 and
954	954	32.0281, Human Resources Code;
955	955	(13) a requirement that the organization use advanced
956	956	practice nurses in addition to physicians as primary care providers
957	957	to increase the availability of primary care providers in the
958	958	organization's provider network;
959	959	(14) a requirement that the managed care organization
960	960	reimburse a federally qualified health center or rural health
961	961	clinic for health care services provided to a recipient outside of
962	962	regular business hours, including on a weekend day or holiday, at a
963	963	rate that is equal to the allowable rate for those services as
964	964	determined under Section 32.028, Human Resources Code, if the
965	965	recipient does not have a referral from the recipient's primary
966	966	care physician; and
967	967	(15) a requirement that the managed care organization
968	968	develop, implement, and maintain a system for tracking and
969	969	resolving all provider appeals related to claims payment, including
970	970	a process that will require:
971	971	(A) a tracking mechanism to document the status
972	972	and final disposition of each provider's claims payment appeal;
973	973	(B) the contracting with physicians who are not
974	974	network providers and who are of the same or related specialty as
975	975	the appealing physician to resolve claims disputes related to
976	976	denial on the basis of medical necessity that remain unresolved
977	977	subsequent to a provider appeal; and
978	978	(C) the determination of the physician resolving
979	979	the dispute to be binding on the managed care organization and
980	980	provider.
981	981	SECTION 18. Section 533.012(c), Government Code, is amended
982	982	to read as follows:
983	983	(c) The [commission's] office of inspector general
984	984	[investigations and enforcement] shall review the information
985	985	submitted under this section as appropriate in the investigation of
986	986	fraud in the Medicaid managed care program.
987	987	SECTION 19. Section 21.014(b), Human Resources Code, is
988	988	amended to read as follows:
989	989	(b) The [person employed by the department as] inspector
990	990	general appointed under Subchapter R, Chapter 531, Government Code,
991	991	shall make reports to and consult with the agency director
992	992	[chairman of the board] regarding:
993	993	(1) the selection of internal audit topics;
994	994	(2) the establishment of internal audit priorities;
995	995	and
996	996	(3) the findings of each regular or special internal
997	997	audit initiative.
998	998	SECTION 20. Section 32.003, Human Resources Code, is
999	999	amended by adding Subdivision (5) to read as follows:
1000	1000	(5) "Office of inspector general" means the office of
1001	1001	inspector general established under Subchapter R, Chapter 531,
1002	1002	Government Code.
1003	1003	SECTION 21. Section 32.0291, Human Resources Code, is
1004	1004	amended to read as follows:
1005	1005	Sec. 32.0291. PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
1006	1006	(a) Notwithstanding any other law, the office of inspector general
1007	1007	or department may:
1008	1008	(1) perform a prepayment review of a claim for
1009	1009	reimbursement under the medical assistance program to determine
1010	1010	whether the claim involves fraud, waste, or abuse; and
1011	1011	(2) as necessary to perform that review, withhold
1012	1012	payment of the claim for not more than five working days without
1013	1013	notice to the person submitting the claim.
1014	1014	(b) Notwithstanding any other law, the office of inspector
1015	1015	general [department] may impose a postpayment hold on payment of
1016	1016	future claims submitted by a provider if the office [department]
1017	1017	has reliable evidence that the provider has committed fraud, waste,
1018	1018	abuse, or wilful misrepresentation regarding a claim for
1019	1019	reimbursement under the medical assistance program. The office
1020	1020	[department] must notify the provider of the postpayment hold not
1021	1021	later than the fifth working day after the date the hold is imposed.
1022	1022	(c) On timely written request by a provider subject to a
1023	1023	postpayment hold under Subsection (b), the office of inspector
1024	1024	general [department] shall file a request with the State Office of
1025	1025	Administrative Hearings for an expedited administrative hearing
1026	1026	regarding the hold. The provider must request an expedited hearing
1027	1027	under this subsection not later than the 10th day after the date the
1028	1028	provider receives notice from the office of inspector general
1029	1029	[department] under Subsection (b). The office of inspector general
1030	1030	[department] shall discontinue the hold unless the office
1031	1031	[department] makes a prima facie showing at the hearing that the
1032	1032	evidence relied on by the office of inspector general [department]
1033	1033	in imposing the hold is relevant, credible, and material to the
1034	1034	issue of fraud, waste, abuse, or wilful misrepresentation.
1035	1035	(d) The inspector general [department] shall adopt rules
1036	1036	that allow a provider subject to a postpayment hold under
1037	1037	Subsection (b) to seek an informal resolution of the issues
1038	1038	identified by the office of inspector general [department] in the
1039	1039	notice provided under that subsection. A provider must seek an
1040	1040	informal resolution under this subsection not later than the
1041	1041	deadline prescribed by Subsection (c). A provider's decision to
1042	1042	seek an informal resolution under this subsection does not extend
1043	1043	the time by which the provider must request an expedited
1044	1044	administrative hearing under Subsection (c). However, a hearing
1045	1045	initiated under Subsection (c) shall be stayed at the office's
1046	1046	[department's] request until the informal resolution process is
1047	1047	completed.
1048	1048	SECTION 22. Section 32.032, Human Resources Code, is
1049	1049	amended to read as follows:
1050	1050	Sec. 32.032. PREVENTION AND DETECTION OF FRAUD, WASTE, AND
1051	1051	ABUSE. The inspector general [department] shall adopt reasonable
1052	1052	rules for minimizing the opportunity for fraud, waste, and abuse,
1053	1053	for establishing and maintaining methods for detecting and
1054	1054	identifying situations in which a question of fraud, waste, or
1055	1055	abuse in the program may exist, and for referring cases where fraud,
1056	1056	waste, or abuse appears to exist to the appropriate law enforcement
1057	1057	agencies for prosecution.
1058	1058	SECTION 23. Sections 32.0321(a) through (d), Human
1059	1059	Resources Code, are amended to read as follows:
1060	1060	(a) The office of inspector general [department] by rule may
1061	1061	recommend to the department and the department by rule may require
1062	1062	that each provider of medical assistance in a provider type that has
1063	1063	demonstrated significant potential for fraud, waste, or abuse to
1064	1064	file with the department a surety bond in a reasonable amount. The
1065	1065	office and the department by rule shall each require a provider of
1066	1066	medical assistance to file with the department a surety bond in a
1067	1067	reasonable amount if the office [department] identifies a pattern
1068	1068	of suspected fraud, waste, or abuse involving criminal conduct
1069	1069	relating to the provider's services under the medical assistance
1070	1070	program that indicates the need for protection against potential
1071	1071	future acts of fraud, waste, or abuse.
1072	1072	(b) The bond under Subsection (a) must be payable to the
1073	1073	department to compensate the department for damages resulting from
1074	1074	or penalties or fines imposed in connection with an act of fraud,
1075	1075	waste, or abuse committed by the provider under the medical
1076	1076	assistance program.
1077	1077	(c) Subject to Subsection (d) or (e), the office of
1078	1078	inspector general and the department by rule may require each
1079	1079	provider of medical assistance that establishes a resident's trust
1080	1080	fund account to post a surety bond to secure the account. The bond
1081	1081	must be payable to the department to compensate residents of the
1082	1082	bonded provider for trust funds that are lost, stolen, or otherwise
1083	1083	unaccounted for if the provider does not repay any deficiency in a
1084	1084	resident's trust fund account to the person legally entitled to
1085	1085	receive the funds.
1086	1086	(d) The office of inspector general and the department may
1087	1087	not require the amount of a surety bond posted for a single facility
1088	1088	provider under Subsection (c) to exceed the average of the total
1089	1089	average monthly balance of all the provider's resident trust fund
1090	1090	accounts for the 12-month period preceding the bond issuance or
1091	1091	renewal date.
1092	1092	SECTION 24. Section 32.0322(a), Human Resources Code, is
1093	1093	amended to read as follows:
1094	1094	(a) The office of inspector general and the department may
1095	1095	obtain from any law enforcement or criminal justice agency the
1096	1096	criminal history record information that relates to a provider
1097	1097	under the medical assistance program or a person applying to enroll
1098	1098	as a provider under the medical assistance program.
1099	1099	SECTION 25. Section 32.070(d), Human Resources Code, is
1100	1100	amended to read as follows:
1101	1101	(d) This section does not apply to a computerized audit
1102	1102	conducted using the Medicaid Fraud Detection Audit System or an
1103	1103	audit or investigation of fraud, waste, and abuse conducted by the
1104	1104	Medicaid fraud control unit of the office of the attorney general,
1105	1105	the office of the state auditor, the office of [the] inspector
1106	1106	general, or the Office of Inspector General in the United States
1107	1107	Department of Health and Human Services.
1108	1108	SECTION 26. Section 33.015(e), Human Resources Code, is
1109	1109	amended to read as follows:
1110	1110	(e) The department shall require a person exempted under
1111	1111	this section from making a personal appearance at department
1112	1112	offices to provide verification of the person's entitlement to the
1113	1113	exemption on initial eligibility certification and on each
1114	1114	subsequent periodic eligibility recertification. If the person
1115	1115	does not provide verification and the department considers the
1116	1116	verification necessary to protect the integrity of the food stamp
1117	1117	program, the department shall initiate a fraud referral to the
1118	1118	[department's] office of inspector general established under
1119	1119	Subchapter R, Chapter 531, Government Code.
1120	1120	SECTION 27. Article 2.12, Code of Criminal Procedure, is
1121	1121	amended to read as follows:
1122	1122	Art. 2.12. WHO ARE PEACE OFFICERS. The following are peace
1123	1123	officers:
1124	1124	(1) sheriffs, their deputies, and those reserve
1125	1125	deputies who hold a permanent peace officer license issued under
1126	1126	Chapter 1701, Occupations Code;
1127	1127	(2) constables, deputy constables, and those reserve
1128	1128	deputy constables who hold a permanent peace officer license issued
1129	1129	under Chapter 1701, Occupations Code;
1130	1130	(3) marshals or police officers of an incorporated
1131	1131	city, town, or village, and those reserve municipal police officers
1132	1132	who hold a permanent peace officer license issued under Chapter
1133	1133	1701, Occupations Code;
1134	1134	(4) rangers and officers commissioned by the Public
1135	1135	Safety Commission and the Director of the Department of Public
1136	1136	Safety;
1137	1137	(5) investigators of the district attorneys', criminal
1138	1138	district attorneys', and county attorneys' offices;
1139	1139	(6) law enforcement agents of the Texas Alcoholic
1140	1140	Beverage Commission;
1141	1141	(7) each member of an arson investigating unit
1142	1142	commissioned by a city, a county, or the state;
1143	1143	(8) officers commissioned under Section 37.081,
1144	1144	Education Code, or Subchapter E, Chapter 51, Education Code;
1145	1145	(9) officers commissioned by the General Services
1146	1146	Commission;
1147	1147	(10) law enforcement officers commissioned by the
1148	1148	Parks and Wildlife Commission;
1149	1149	(11) airport police officers commissioned by a city
1150	1150	with a population of more than 1.18 million that operates an airport
1151	1151	that serves commercial air carriers;
1152	1152	(12) airport security personnel commissioned as peace
1153	1153	officers by the governing body of any political subdivision of this
1154	1154	state, other than a city described by Subdivision (11), that
1155	1155	operates an airport that serves commercial air carriers;
1156	1156	(13) municipal park and recreational patrolmen and
1157	1157	security officers;
1158	1158	(14) security officers and investigators commissioned
1159	1159	as peace officers by the comptroller;
1160	1160	(15) officers commissioned by a water control and
1161	1161	improvement district under Section 49.216, Water Code;
1162	1162	(16) officers commissioned by a board of trustees
1163	1163	under Chapter 54, Transportation Code;
1164	1164	(17) investigators commissioned by the Texas Medical
1165	1165	Board;
1166	1166	(18) officers commissioned by the board of managers of
1167	1167	the Dallas County Hospital District, the Tarrant County Hospital
1168	1168	District, or the Bexar County Hospital District under Section
1169	1169	281.057, Health and Safety Code;
1170	1170	(19) county park rangers commissioned under
1171	1171	Subchapter E, Chapter 351, Local Government Code;
1172	1172	(20) investigators employed by the Texas Racing
1173	1173	Commission;
1174	1174	(21) officers commissioned under Chapter 554,
1175	1175	Occupations Code;
1176	1176	(22) officers commissioned by the governing body of a
1177	1177	metropolitan rapid transit authority under Section 451.108,
1178	1178	Transportation Code, or by a regional transportation authority
1179	1179	under Section 452.110, Transportation Code;
1180	1180	(23) investigators commissioned by the attorney
1181	1181	general under Section 402.009, Government Code;
1182	1182	(24) security officers and investigators commissioned
1183	1183	as peace officers under Chapter 466, Government Code;
1184	1184	(25) an officer employed by the Department of State
1185	1185	Health Services under Section 431.2471, Health and Safety Code;
1186	1186	(26) officers appointed by an appellate court under
1187	1187	Subchapter F, Chapter 53, Government Code;
1188	1188	(27) officers commissioned by the state fire marshal
1189	1189	under Chapter 417, Government Code;
1190	1190	(28) an investigator commissioned by the commissioner
1191	1191	of insurance under Section 701.104, Insurance Code;
1192	1192	(29) apprehension specialists and inspectors general
1193	1193	commissioned by the Texas Youth Commission as officers under
1194	1194	Sections 61.0451 and 61.0931, Human Resources Code;
1195	1195	(30) officers appointed by the inspector general of
1196	1196	the Texas Department of Criminal Justice under Section 493.019,
1197	1197	Government Code;
1198	1198	(31) investigators commissioned by the Commission on
1199	1199	Law Enforcement Officer Standards and Education under Section
1200	1200	1701.160, Occupations Code;
1201	1201	(32) commission investigators commissioned by the
1202	1202	Texas Private Security Board under Section 1702.061(f),
1203	1203	Occupations Code;
1204	1204	(33) the fire marshal and any officers, inspectors, or
1205	1205	investigators commissioned by an emergency services district under
1206	1206	Chapter 775, Health and Safety Code;
1207	1207	(34) officers commissioned by the State Board of
1208	1208	Dental Examiners under Section 254.013, Occupations Code, subject
1209	1209	to the limitations imposed by that section; [and]
1210	1210	(35) investigators commissioned by the Texas Juvenile
1211	1211	Probation Commission as officers under Section 141.055, Human
1212	1212	Resources Code; and
1213	1213	(36) officers commissioned by the office of inspector
1214	1214	general established under Subchapter R, Chapter 531, Government
1215	1215	Code.
1216	1216	SECTION 28. Sections 531.102 and 531.1021, Government Code,
1217	1217	are repealed.
1218	1218	SECTION 29. (a) The repeal by this Act of Section 531.102,
1219	1219	Government Code, does not affect the validity of a complaint,
1220	1220	investigation, or other proceeding initiated under that section
1221	1221	before the effective date of this Act. A complaint, investigation,
1222	1222	or other proceeding initiated under that section is continued in
1223	1223	accordance with the changes in law made by this Act.
1224	1224	(b) The repeal by this Act of Section 531.1021, Government
1225	1225	Code, does not affect the validity of a subpoena issued under that
1226	1226	section before the effective date of this Act. A subpoena issued
1227	1227	under that section before the effective date of this Act is governed
1228	1228	by the law that existed when the subpoena was issued, and the former
1229	1229	law is continued in effect for that purpose.
1230	1230	SECTION 30. (a) The person serving as inspector general
1231	1231	under Section 531.102(a-1), Government Code, on the effective date
1232	1232	of this Act shall serve as the inspector general appointed under
1233	1233	Subchapter R, Chapter 531, Government Code, as added by this Act,
1234	1234	until February 1, 2011, and may be reappointed under Subchapter R,
1235	1235	Chapter 531, if the person has the qualifications required under
1236	1236	that subchapter.
1237	1237	(b) Not later than February 1, 2011, the governor shall
1238	1238	appoint an inspector general for the Office of Inspector General
1239	1239	under Subchapter R, Chapter 531, Government Code, as added by this
1240	1240	Act, to a term expiring February 1, 2013.
1241	1241	SECTION 31. On the effective date of this Act:
1242	1242	(1) all functions, activities, employees, rules,
1243	1243	forms, money, property, contracts, memorandums of understanding,
1244	1244	records, and obligations of the office of inspector general under
1245	1245	Section 531.102(a-1), Government Code, become functions,
1246	1246	activities, employees, rules, forms, money, property, contracts,
1247	1247	memorandums of understanding, records, and obligations of the
1248	1248	Office of Inspector General established under Subchapter R, Chapter
1249	1249	531, Government Code, as added by this Act, without a change in
1250	1250	status; and
1251	1251	(2) all money appropriated or budgeted for the office
1252	1252	of inspector general under Section 531.102(a-1), Government Code,
1253	1253	including money for providing administrative support, is
1254	1254	considered appropriated for the use of the Office of Inspector
1255	1255	General established under Subchapter R, Chapter 531, Government
1256	1256	Code, as added by this Act.
1257	1257	SECTION 32. If before implementing any provision of this
1258	1258	Act a state office or agency determines that a waiver or
1259	1259	authorization from a federal agency is necessary for implementation
1260	1260	of that provision, the office or agency affected by the provision
1261	1261	shall request the waiver or authorization and may delay
1262	1262	implementing that provision until the waiver or authorization is
1263	1263	granted.
1264	1264	SECTION 33. This Act takes effect immediately if it
1265	1265	receives a vote of two-thirds of all the members elected to each
1266	1266	house, as provided by Section 39, Article III, Texas Constitution.
1267	1267	If this Act does not receive the vote necessary for immediate
1268	1268	effect, this Act takes effect September 1, 2009.