Texas 2009 - 81st Regular

Texas House Bill HB2938 Compare Versions

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1	1	81R11046 KLA-D
2	2	By: Truitt H.B. No. 2938
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the conduct of investigations, prepayment reviews, and
8	8	payment holds in cases of suspected fraud, waste, or abuse in the
9	9	provision of health and human services.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Sections 531.102(e) and (g), Government Code,
12	12	are amended to read as follows:
13	13	(e) The executive commissioner [commission], in
14	14	consultation with the inspector general, by rule shall set specific
15	15	claims criteria that, when met, require the office to begin an
16	16	investigation. The claims criteria adopted under this subsection
17	17	must be consistent with the criteria adopted under Section
18	18	32.0291(a-1), Human Resources Code.
19	19	(g)(1) Whenever the office learns or has reason to suspect
20	20	that a provider's records are being withheld, concealed, destroyed,
21	21	fabricated, or in any way falsified, the office shall immediately
22	22	refer the case to the state's Medicaid fraud control unit. However,
23	23	such criminal referral does not preclude the office from continuing
24	24	its investigation of the provider, which investigation may lead to
25	25	the imposition of appropriate administrative or civil sanctions.
26	26	(2) In addition to other instances authorized under
27	27	state or federal law, the office shall impose without prior notice a
28	28	hold on payment of claims for reimbursement submitted by a provider
29	29	to compel production of records or when requested by the state's
30	30	Medicaid fraud control unit, as applicable. The office must notify
31	31	the provider of the hold on payment not later than the fifth working
32	32	day after the date the payment hold is imposed. The notice to the
33	33	provider must include:
34	34	(A) an information statement indicating the
35	35	nature of a payment hold;
36	36	(B) a statement of the reason the payment hold is
37	37	being imposed, the provider's suspected violation, and the evidence
38	38	to support that suspicion; and
39	39	(C) a statement that the provider is entitled to
40	40	request a hearing regarding the payment hold or an informal
41	41	resolution of the identified issues, the time within which the
42	42	request must be made, and the procedures and requirements for
43	43	making the request, including that a request for a hearing must be
44	44	in writing.
45	45	(3) On timely written request by a provider subject to
46	46	a hold on payment under Subdivision (2), other than a hold requested
47	47	by the state's Medicaid fraud control unit, the office shall file a
48	48	request with the State Office of Administrative Hearings for an
49	49	expedited administrative hearing regarding the hold. The provider
50	50	must request an expedited hearing under this subdivision not later
51	51	than the 10th day after the date the provider receives notice from
52	52	the office under Subdivision (2). A provider who submits a timely
53	53	request for a hearing under this subdivision must be given notice of
54	54	the following not later than the 30th day before the date the
55	55	hearing is scheduled:
56	56	(A) the date, time, and location of the hearing;
57	57	and
58	58	(B) a list of the provider's rights at the
59	59	hearing, including the right to present witnesses and other
60	60	evidence.
61	61	(3-a) With respect to a provider who timely requests a
62	62	hearing under Subdivision (3):
63	63	(A) if the hearing is not scheduled on or before
64	64	the 60th day after the date of the request, the payment hold is
65	65	automatically terminated on the 60th day after the date of the
66	66	request and may be reinstated only if prima facie evidence of fraud,
67	67	waste, or abuse is presented subsequently at the hearing; and
68	68	(B) if the hearing is held on or before the 60th
69	69	day after the date of the request, the payment hold may be continued
70	70	after the hearing only if the hearing officer determines that prima
71	71	facie evidence of fraud, waste, or abuse was presented at the
72	72	hearing.
73	73	(4) The commission shall adopt rules that allow a
74	74	provider subject to a hold on payment under Subdivision (2), other
75	75	than a hold requested by the state's Medicaid fraud control unit, to
76	76	seek an informal resolution of the issues identified by the office
77	77	in the notice provided under that subdivision. A provider must seek
78	78	an informal resolution under this subdivision not later than the
79	79	deadline prescribed by Subdivision (3). A provider's decision to
80	80	seek an informal resolution under this subdivision does not extend
81	81	the time by which the provider must request an expedited
82	82	administrative hearing under Subdivision (3). However, a hearing
83	83	initiated under Subdivision (3) shall be stayed at the office's
84	84	request until the informal resolution process is completed. The
85	85	period during which the hearing is stayed under this subdivision is
86	86	excluded in computing whether a hearing was scheduled or held not
87	87	later than the 60th day after the hearing was requested for purposes
88	88	of Subdivision (3-a).
89	89	(4-a) With respect to a provider who timely requests an
90	90	informal resolution under Subdivision (4):
91	91	(A) if the informal resolution is not completed
92	92	on or before the 60th day after the date of the request, the payment
93	93	hold is automatically terminated on the 60th day after the date of
94	94	the request and may be reinstated only if prima facie evidence of
95	95	fraud, waste, or abuse is subsequently presented at a hearing
96	96	requested and held under Subdivision (3); and
97	97	(B) if the informal resolution is completed on or
98	98	before the 60th day after the date of the request, the payment hold
99	99	may be continued after the completion of the informal resolution
100	100	only if the office determines that prima facie evidence of fraud,
101	101	waste, or abuse was presented during the informal resolution
102	102	process.
103	103	(5) The executive commissioner [office] shall, in
104	104	consultation with the state's Medicaid fraud control unit, adopt
105	105	rules for the office [establish guidelines] under which holds on
106	106	payment or program exclusions:
107	107	(A) may permissively be imposed on a provider; or
108	108	(B) shall automatically be imposed on a provider.
109	109	(6) If a payment hold is terminated, either
110	110	automatically or after a hearing or informal review, in accordance
111	111	with Subdivision (3-a) or (4-a), the office shall inform all
112	112	affected claims payors, including Medicaid managed care
113	113	organizations, of the termination not later than the fifth day
114	114	after the date of the termination.
115	115	(7) A provider in a case in which a payment hold was
116	116	imposed under this subsection who ultimately prevails in a hearing
117	117	or, if the case is appealed, on appeal, or with respect to whom the
118	118	office determines that prima facie evidence of fraud, waste, or
119	119	abuse was not presented during an informal resolution process, is
120	120	entitled to prompt payment of all payments held and interest on
121	121	those payments at a rate equal to the prime rate, as published in
122	122	The Wall Street Journal on the first day of each calendar year that
123	123	is not a Saturday, Sunday, or legal holiday, plus one percent.
124	124	SECTION 2. Sections 531.103(a) and (b), Government Code,
125	125	are amended to read as follows:
126	126	(a) The commission, acting through the commission's office
127	127	of inspector general, and the office of the attorney general shall
128	128	enter into a memorandum of understanding to develop and implement
129	129	joint written procedures for processing cases of suspected fraud,
130	130	waste, or abuse, as those terms are defined by state or federal law,
131	131	or other violations of state or federal law under the state Medicaid
132	132	program or other program administered by the commission or a health
133	133	and human services agency, including the financial assistance
134	134	program under Chapter 31, Human Resources Code, a nutritional
135	135	assistance program under Chapter 33, Human Resources Code, and the
136	136	child health plan program. The memorandum of understanding shall
137	137	require:
138	138	(1) the office of inspector general and the office of
139	139	the attorney general to set priorities and guidelines for referring
140	140	cases to appropriate state agencies for investigation,
141	141	prosecution, or other disposition to enhance deterrence of fraud,
142	142	waste, abuse, or other violations of state or federal law,
143	143	including a violation of Chapter 102, Occupations Code, in the
144	144	programs and maximize the imposition of penalties, the recovery of
145	145	money, and the successful prosecution of cases;
146	146	(1-a) the office of inspector general to refer each
147	147	case of suspected provider fraud, waste, or abuse to the office of
148	148	the attorney general not later than the 20th business day after the
149	149	date the office of inspector general determines that the existence
150	150	of fraud, waste, or abuse is reasonably indicated;
151	151	(1-b) the office of the attorney general to take
152	152	appropriate action in response to each case referred to the
153	153	attorney general, which action may include direct initiation of
154	154	prosecution, with the consent of the appropriate local district or
155	155	county attorney, direct initiation of civil litigation, referral to
156	156	an appropriate United States attorney, a district attorney, or a
157	157	county attorney, or referral to a collections agency for initiation
158	158	of civil litigation or other appropriate action;
159	159	(2) the office of inspector general to keep detailed
160	160	records for cases processed by that office or the office of the
161	161	attorney general, including information on the total number of
162	162	cases processed and, for each case:
163	163	(A) the agency and division to which the case is
164	164	referred for investigation;
165	165	(B) the date on which the case is referred; and
166	166	(C) the nature of the suspected fraud, waste, or
167	167	abuse;
168	168	(3) the office of inspector general to notify each
169	169	appropriate division of the office of the attorney general of each
170	170	case referred by the office of inspector general;
171	171	(4) the office of the attorney general to ensure that
172	172	information relating to each case investigated by that office is
173	173	available to each division of the office with responsibility for
174	174	investigating suspected fraud, waste, or abuse;
175	175	(5) the office of the attorney general to notify the
176	176	office of inspector general of each case the attorney general
177	177	declines to prosecute or prosecutes unsuccessfully;
178	178	(6) representatives of the office of inspector general
179	179	and of the office of the attorney general to meet not less than
180	180	quarterly to share case information and determine the appropriate
181	181	agency and division to investigate each case; [and]
182	182	(7) the office of inspector general and the office of
183	183	the attorney general to submit information requested by the
184	184	comptroller about each resolved case for the comptroller's use in
185	185	improving fraud detection; and
186	186	(8) the office of inspector general and the office of
187	187	the attorney general to develop and implement joint written
188	188	procedures for processing cases of suspected fraud, waste, or
189	189	abuse, which must include:
190	190	(A) procedures for maintaining a chain of custody
191	191	for any records obtained during an investigation and for
192	192	maintaining the confidentiality of the records;
193	193	(B) a procedure by which a provider who is the
194	194	subject of an investigation may make copies of any records taken
195	195	from the provider during the course of the investigation before the
196	196	records are taken or, in lieu of the opportunity to make copies, a
197	197	requirement that the office of inspector general or the office of
198	198	the attorney general, as applicable, make copies of the records
199	199	taken during the course of the investigation and provide those
200	200	copies to the provider not later than the 10th day after the date
201	201	the records are taken; and
202	202	(C) a procedure for returning any original
203	203	records obtained from a provider who is the subject of a case of
204	204	suspected fraud, waste, or abuse not later than the 15th day after
205	205	the final resolution of the case, including all hearings and
206	206	appeals.
207	207	(b) An exchange of information under this section between
208	208	the office of the attorney general and the commission, the office of
209	209	inspector general, or a health and human services agency does not
210	210	affect the confidentiality of the information or whether the
211	211	information is subject to disclosure under Chapter 552.
212	212	SECTION 3. Section 32.0291, Human Resources Code, is
213	213	amended to read as follows:
214	214	Sec. 32.0291. PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
215	215	(a) Notwithstanding any other law and subject to Subsections (a-1)
216	216	and (a-2), the department may:
217	217	(1) perform a prepayment review of a claim for
218	218	reimbursement under the medical assistance program to determine
219	219	whether the claim involves fraud or abuse; and
220	220	(2) as necessary to perform that review, withhold
221	221	payment of the claim for not more than five working days without
222	222	notice to the person submitting the claim.
223	223	(a-1) The executive commissioner of the Health and Human
224	224	Services Commission shall adopt rules governing the conduct of a
225	225	prepayment review of a claim for reimbursement from a medical
226	226	assistance provider authorized by Subsection (a). The rules must:
227	227	(1) specify actions that must be taken by the
228	228	department, or an appropriate person with whom the department
229	229	contracts, to educate the provider and remedy irregular coding or
230	230	claims filing issues before conducting a prepayment review;
231	231	(2) outline the mechanism by which a specific provider
232	232	is identified for a prepayment review;
233	233	(3) define the criteria, consistent with the criteria
234	234	adopted under Section 531.102(e), Government Code, used to
235	235	determine whether a prepayment review will be imposed, including
236	236	the evidentiary threshold, such as prima facie evidence, that is
237	237	required before imposition of that review;
238	238	(4) prescribe the maximum number of days a provider
239	239	may be placed on prepayment review status;
240	240	(5) require periodic reevaluation of the necessity of
241	241	continuing a prepayment review after the review action is initially
242	242	imposed;
243	243	(6) establish procedures affording due process to a
244	244	provider placed on prepayment review status, including notice
245	245	requirements, an opportunity for a hearing, and an appeals process;
246	246	and
247	247	(7) provide opportunities for provider education
248	248	while providers are on prepayment review status.
249	249	(a-2) The department may not perform a random prepayment
250	250	review of a claim for reimbursement under the medical assistance
251	251	program to determine whether the claim involves fraud or abuse. The
252	252	department may only perform a prepayment review of the claims of a
253	253	provider who meets the criteria adopted under Subsection (a-1)(3)
254	254	for imposition of a prepayment review.
255	255	(b) Notwithstanding any other law and subject to Section
256	256	531.102(g), Government Code, the department may impose a
257	257	postpayment hold on payment of future claims submitted by a
258	258	provider if the department has reliable evidence that the provider
259	259	has committed fraud or wilful misrepresentation regarding a claim
260	260	for reimbursement under the medical assistance program. [The
261	261	department must notify the provider of the postpayment hold not
262	262	later than the fifth working day after the date the hold is
263	263	imposed.]
264	264	(c) A postpayment hold authorized by this section is
265	265	governed by the requirements and procedures specified for payment
266	266	holds under Section 531.102, Government Code. [On timely written
267	267	request by a provider subject to a postpayment hold under
268	268	Subsection (b), the department shall file a request with the State
269	269	Office of Administrative Hearings for an expedited administrative
270	270	hearing regarding the hold. The provider must request an expedited
271	271	hearing under this subsection not later than the 10th day after the
272	272	date the provider receives notice from the department under
273	273	Subsection (b). The department shall discontinue the hold unless
274	274	the department makes a prima facie showing at the hearing that the
275	275	evidence relied on by the department in imposing the hold is
276	276	relevant, credible, and material to the issue of fraud or wilful
277	277	misrepresentation.
278	278	[(d) The department shall adopt rules that allow a provider
279	279	subject to a postpayment hold under Subsection (b) to seek an
280	280	informal resolution of the issues identified by the department in
281	281	the notice provided under that subsection. A provider must seek an
282	282	informal resolution under this subsection not later than the
283	283	deadline prescribed by Subsection (c). A provider's decision to
284	284	seek an informal resolution under this subsection does not extend
285	285	the time by which the provider must request an expedited
286	286	administrative hearing under Subsection (c). However, a hearing
287	287	initiated under Subsection (c) shall be stayed at the department's
288	288	request until the informal resolution process is completed.]
289	289	SECTION 4. The executive commissioner of the Health and
290	290	Human Services Commission shall adopt the rules required by Section
291	291	32.0291(a-1), Human Resources Code, as added by this Act, not later
292	292	than November 1, 2009.
293	293	SECTION 5. If before implementing any provision of this Act
294	294	a state agency determines that a waiver or authorization from a
295	295	federal agency is necessary for implementation of that provision,
296	296	the agency affected by the provision shall request the waiver or
297	297	authorization and may delay implementing that provision until the
298	298	waiver or authorization is granted.
299	299	SECTION 6. This Act takes effect September 1, 2009.