Texas 2009 - 81st Regular

Texas House Bill HB4307 Compare Versions

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

Old	New	Differences
1	1	By: Crownover H.B. No. 4307
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the creation of the office of inspector within the State
7	7	Auditor's Office and the appointment of deputy inspectors general
8	8	at the Health and Human Services Commission, Texas Youth
9	9	Commission, Texas Department of Criminal Justice, Texas Education
10	10	Agency, and Texas Department of Transportation; providing
11	11	penalties.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 321.001, Government Code, is designated
14	14	as Subchapter A, Chapter 321, Government Code, and a heading is
15	15	added to that subchapter to read as follows:
16	16	SUBCHAPTER A. GENERAL PROVISIONS
17	17	SECTION 2. Sections 321.002 through 321.023, Government
18	18	Code, are designated as Subchapter B, Chapter 321, Government Code,
19	19	and a heading is added to that subchapter to read as follows:
20	20	SUBCHAPTER B. STATE AUDITOR
21	21	SECTION 3. Chapter 321, Government Code, is amended by
22	22	adding Subchapter C to read as follows:
23	23	SUBCHAPTER C. OFFICE OF INSPECTOR GENERAL DIVISION
24	24	Sec. 321.101. DEFINITIONS. In this subchapter:
25	25	(1) "Agency" means a state agency subject to this
26	26	subchapter under Section 321.102.
27	27	(2) "Commission" means the Health and Human Services
28	28	Commission.
29	29	(3) "Division" means the office of inspector general
30	30	division of the state auditor's office.
31	31	(4) "Fraud" means an intentional deception or
32	32	misrepresentation made by a person with the knowledge that the
33	33	deception could result in some unauthorized benefit to that person
34	34	or some other person. The term includes any act that constitutes
35	35	fraud under applicable federal or state law.
36	36	(5) "Furnished," in reference to items or services:
37	37	(A) means items or services provided directly by,
38	38	provided under the direct supervision of, or ordered by:
39	39	(i) a physician or other individual
40	40	licensed under state law to practice the individual's profession,
41	41	either as an employee or in the individual's own capacity;
42	42	(ii) a provider; or
43	43	(iii) another supplier of services; and
44	44	(B) does not include services ordered by one
45	45	party but billed for and provided by or under the supervision of
46	46	another.
47	47	(6) "Hold on payment" means the temporary denial of
48	48	reimbursement under a federal program for items or services
49	49	furnished by a specified provider.
50	50	(7) "Inspector general" means the inspector general
51	51	appointed under Section 321.109.
52	52	(8) "Program exclusion" means the suspension of a
53	53	provider's authorization under a federal program to request
54	54	reimbursement for items or services furnished by that provider.
55	55	(9) "Provider" means a person, firm, partnership,
56	56	corporation, agency, association, institution, or other entity
57	57	that was or is approved by the commission to provide:
58	58	(A) medical assistance under contract or
59	59	provider agreement with the commission; or
60	60	(B) third-party billing vendor services under a
61	61	contract or provider agreement with the commission.
62	62	(10) "Review" includes an audit, inspection,
63	63	investigation, evaluation, or similar activity.
64	64	(11) "State funds" or "state money" includes federal
65	65	funds or money received and appropriated by the state or for which
66	66	the state has oversight responsibility.
67	67	Sec. 321.102. APPLICABILITY. (a) Except as provided by
68	68	Subsections (c) and (d), this subchapter applies only to the:
69	69	(1) Health and Human Services Commission;
70	70	(2) Texas Youth Commission;
71	71	(3) Texas Department of Criminal Justice;
72	72	(4) Texas Education Agency; and
73	73	(5) Texas Department of Transportation.
74	74	(b) A state agency may not establish an office of inspector
75	75	general without specific legislative authorization.
76	76	(c) A health and human services agency as defined by Section
77	77	531.001 is an agency to which this subchapter applies for purposes
78	78	related to the review and investigatory authority of the division.
79	79	(d) A state agency that receives federal stimulus money is
80	80	an agency to which this subchapter applies for purposes of Section
81	81	321.122.
82	82	Sec. 321.103. REFERENCE IN OTHER LAW. (a) Notwithstanding
83	83	any other provision of law, a reference in law or rule to an
84	84	agency's office of inspector general means, for an agency to which
85	85	this subchapter applies, the office of inspector general division
86	86	of the state auditor's office.
87	87	(b) Notwithstanding any other provision of law, a reference
88	88	in law or rule to the commission's office of investigations and
89	89	enforcement or the commission's office of inspector general means
90	90	the office of inspector general division of the state auditor's
91	91	office.
92	92	Sec. 321.104. INTERFERENCE PROHIBITED. The governor, the
93	93	legislature or a committee of the legislature, or a state agency may
94	94	not prevent the inspector general or a deputy inspector general
95	95	from initiating, performing, or completing an investigation,
96	96	audit, review, or any oversight, compliance, or enforcement
97	97	activity pursued by the division under this subchapter or other
98	98	law.
99	99	Sec. 321.105. OFFICE OF INSPECTOR GENERAL. (a) The office
100	100	of inspector general is a division of the state auditor's office.
101	101	(b) The division is governed by the inspector general.
102	102	(c) The division shall have its principal office and
103	103	headquarters in the state auditor's office in Austin.
104	104	Sec. 321.106. INDEPENDENCE OF DIVISION. Except as
105	105	otherwise provided by this subchapter, the division and inspector
106	106	general operate independently of any other agency.
107	107	Sec. 321.107. ADMINISTRATIVE ATTACHMENT. A person
108	108	designated by the inspector general to serve as the deputy
109	109	inspector general for an agency, together with division staff
110	110	assigned to the deputy inspector general, are administratively
111	111	attached to the assigned agency. The assigned agency shall provide
112	112	to the division personnel administrative support services.
113	113	Sec. 321.108. SERVICE LEVEL AGREEMENT. (a) The division
114	114	and each state agency to which this subchapter applies shall enter
115	115	into a service level agreement that establishes the performance
116	116	standards and deliverables with regard to administrative support
117	117	provided to the division by the agency.
118	118	(b) The service level agreement must be reviewed at least
119	119	annually to ensure that services and deliverables are provided in
120	120	accordance with the agreement.
121	121	Sec. 321.109. APPOINTMENT. (a) The governor, with the
122	122	advice and consent of the senate, shall appoint an inspector
123	123	general to serve as director of the division.
124	124	(b) The appointment shall be made without regard to race,
125	125	color, disability, sex, religion, age, or national origin.
126	126	(c) In making the appointment, the governor shall consider
127	127	the person's knowledge of laws, experience in the enforcement of
128	128	law, honesty, integrity, education, training, and executive
129	129	ability.
130	130	Sec. 321.110. TERM; VACANCY. (a) The inspector general
131	131	serves a two-year term that expires on February 1 of each
132	132	odd-numbered year.
133	133	(b) The governor shall fill a vacancy in the office of
134	134	inspector general for the unexpired term.
135	135	Sec. 321.111. ELIGIBILITY. (a) A person is not eligible
136	136	for appointment as inspector general or designation as a deputy
137	137	inspector general if the person or the person's spouse:
138	138	(1) is an officer or paid consultant of a business
139	139	entity or other organization that holds a license, certificate of
140	140	authority, or other authorization from an agency to which this
141	141	subchapter applies or that receives funds from an agency to which
142	142	this subchapter applies;
143	143	(2) owns or controls, directly or indirectly, more
144	144	than a 10 percent interest in a business entity or other
145	145	organization receiving funds from an agency to which this
146	146	subchapter applies; or
147	147	(3) uses or receives a substantial amount of tangible
148	148	goods or funds from an agency to which this subchapter applies,
149	149	other than compensation or reimbursement authorized by law.
150	150	(b) A person is not eligible to serve as inspector general
151	151	or deputy inspector general if the person or the person's spouse is
152	152	required to register as a lobbyist under Chapter 305 because of the
153	153	person's or spouse's activities for compensation related to the
154	154	operation of an agency to which this subchapter applies.
155	155	Sec. 321.112. CONFLICT OF INTEREST. (a) The inspector
156	156	general may not serve as an ex officio member on the governing body
157	157	of a governmental entity.
158	158	(b) The inspector general may not have a financial interest
159	159	in the transactions of the division, the state auditor's office, or
160	160	an agency to which this subchapter applies.
161	161	(c) The inspector general and the deputy inspector general
162	162	designated for the commission may not have a financial interest in
163	163	the transactions of a provider.
164	164	Sec. 321.113. REMOVAL. The governor, with the advice and
165	165	consent of the senate, may remove the inspector general from office
166	166	as provided by Section 9, Article XV, Texas Constitution.
167	167	Sec. 321.114. DEPUTY INSPECTORS GENERAL. (a) The
168	168	inspector general, in consultation with the office of the governor
169	169	and as necessary to implement this subchapter, shall designate
170	170	persons to serve as deputy inspectors general for each agency to
171	171	which this subchapter applies.
172	172	(b) A deputy inspector general shall report to and perform
173	173	duties as directed by the inspector general.
174	174	(c) Each agency to which this subchapter applies shall
175	175	provide to the agency's designated deputy inspector general
176	176	facilities and support services, including suitable office space,
177	177	furniture, computer and communications equipment, administrative
178	178	support, and salary and benefits as provided by the General
179	179	Appropriations Act.
180	180	Sec. 321.115. PEACE OFFICERS. (a) The division may employ
181	181	and commission peace officers to assist the inspector general in
182	182	carrying out the duties of the division relating to detection,
183	183	investigation, and prevention of fraud, waste, and abuse in
184	184	programs at an agency to which this subchapter applies or in
185	185	programs receiving state or federal funds that are implemented,
186	186	administered, or overseen by or for the agency.
187	187	(b) A commissioned peace officer or otherwise designated
188	188	law enforcement officer employed by the division is not entitled to
189	189	supplemental benefits from the law enforcement and custodial
190	190	officer supplemental retirement fund unless the officer transfers
191	191	from a position, without a break in service, that qualifies for
192	192	supplemental retirement benefits from the fund.
193	193	Sec. 321.116. EXPERTS. Subject to the availability of
194	194	funds, the inspector general and deputy inspectors general may
195	195	contract with certified public accountants, qualified management
196	196	consultants, or other professional experts as necessary to
197	197	independently perform the functions of the division.
198	198	Sec. 321.117. EMPLOYEES; TRAINING. (a) The inspector
199	199	general may employ personnel as necessary to implement the duties
200	200	of the division.
201	201	(b) The inspector general shall train division personnel to
202	202	pursue, efficiently and as necessary, fraud, waste, and abuse cases
203	203	in programs at an agency to which this subchapter applies or other
204	204	state or federally funded programs implemented, administered, or
205	205	overseen by or for the agency.
206	206	Sec. 321.118. ASSISTANCE BY AGENCY EMPLOYEES. (a) The
207	207	inspector general may require employees of an agency to which this
208	208	subchapter applies to provide assistance to the division in
209	209	connection with the division's duties relating to the investigation
210	210	of fraud, waste, and abuse in the provision of services for programs
211	211	at an agency to which this subchapter applies or state or federally
212	212	funded programs implemented, administered, or overseen by or for
213	213	the agency.
214	214	(b) The inspector general or the deputy inspector general
215	215	for the commission may also require employees of any health and
216	216	human services agency to provide assistance under Subsection (a).
217	217	Sec. 321.119. MERIT SYSTEM. (a) The division may establish
218	218	a merit system for its employees.
219	219	(b) The merit system may be maintained in conjunction with
220	220	other state agencies that are required by federal law to operate
221	221	under a merit system.
222	222	Sec. 321.120. GENERAL RESPONSIBILITIES. (a) The division
223	223	is responsible for the investigation of fraud, waste, and abuse, as
224	224	defined in applicable state and federal law, in the provision or
225	225	funding of services by or for an agency to which this subchapter
226	226	applies or under a program implemented, administered, or overseen
227	227	by or for the agency.
228	228	(b) The division shall set clear objectives, priorities,
229	229	and performance standards for the division that emphasize:
230	230	(1) coordinating investigative efforts to
231	231	aggressively recover money;
232	232	(2) allocating resources to cases that have the
233	233	strongest supportive evidence and the greatest potential for
234	234	recovery of money; and
235	235	(3) maximizing opportunities for referral of cases to
236	236	the office of the attorney general in accordance with this
237	237	subchapter and other applicable law.
238	238	Sec. 321.121. GENERAL POWERS. The division has all the
239	239	powers necessary or appropriate to carry out its responsibilities
240	240	and functions under this subchapter and other law. In addition to
241	241	performing functions and duties otherwise provided by law, the
242	242	division may:
243	243	(1) provide for coordination between the division and
244	244	special investigative units formed by managed care organizations
245	245	under Section 531.113 or entities with which managed care
246	246	organizations contract under that section;
247	247	(2) audit the use and effectiveness of state or
248	248	federal funds, including contract and grant funds, administered by
249	249	a person or an agency to which this subchapter applies;
250	250	(3) conduct reviews, investigations, and inspections
251	251	relating to the funds described by Subdivision (2);
252	252	(4) recommend policies promoting economical and
253	253	efficient administration of the funds described by Subdivision (2)
254	254	and the prevention and detection of fraud, waste, and abuse in
255	255	administration of those funds; and
256	256	(5) conduct internal affairs investigations in
257	257	instances of fraud, waste, and abuse and in instances of misconduct
258	258	by employees, contractors, subcontractors, and vendors.
259	259	Sec. 321.122. FEDERAL STIMULUS MONEY RESPONSIBILITIES. (a)
260	260	The division has oversight responsibility for any federal stimulus
261	261	funds provided to this state or a state agency by the federal
262	262	government.
263	263	(b) The division shall monitor:
264	264	(1) actions of the federal government related to
265	265	efforts to promote economic recovery by providing federal funds to
266	266	the states; and
267	267	(2) actions of any state agency that receives federal
268	268	stimulus funds to prevent fraud, waste, and abuse in the use of the
269	269	funds.
270	270	(c) The division shall study appropriate provisions of the
271	271	American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5)
272	272	and any subsequent federal economic stimulus legislation that may
273	273	make federal stimulus money available to this state and any federal
274	274	regulations and executive orders connected to the federal
275	275	legislation to:
276	276	(1) determine the extent to which federal stimulus
277	277	money is available for the programs of any state agency;
278	278	(2) provide oversight for the use of federal stimulus
279	279	funds by a state agency that receives the funds; and
280	280	(3) recommend to the legislature any state legislation
281	281	necessary to maximize this state's receipt of federal funds.
282	282	(d) Notwithstanding Section 321.114, the inspector general
283	283	shall appoint a deputy inspector general for an agency to which this
284	284	subchapter applies solely under Section 321.102(d) and this section
285	285	only if the inspector general determines that the agency receives
286	286	enough federal stimulus money to warrant the appointment.
287	287	Sec. 321.123. HEALTH AND HUMAN SERVICES RESPONSIBILITIES.
288	288	The division is responsible for:
289	289	(1) the investigation of fraud, waste, and abuse in
290	290	the provision or funding of health or human services by this state;
291	291	(2) the enforcement of state law relating to the
292	292	provision of those services to protect the public; and
293	293	(3) the prevention and detection of crime relating to
294	294	the provision of those services.
295	295	Sec. 321.124. RULEMAKING BY INSPECTOR GENERAL. (a)
296	296	Notwithstanding Section 531.0055(e) and any other law, the
297	297	inspector general shall adopt the rules necessary to administer the
298	298	functions of the division, including rules to address the
299	299	imposition of sanctions and penalties for violations of state or
300	300	federal law and due process requirements for imposing sanctions and
301	301	penalties.
302	302	(b) A rule, standard, or form adopted by an agency to which
303	303	this subchapter applies that is necessary to accomplish the duties
304	304	of the division is considered to also be a rule, standard, or form
305	305	of the division and remains in effect as a rule, standard, or form
306	306	of the division until changed by the inspector general.
307	307	(c) The rules must include standards for the division that
308	308	emphasize:
309	309	(1) coordinating investigative efforts to
310	310	aggressively recover money;
311	311	(2) allocating resources to cases that have the
312	312	strongest supportive evidence and the greatest potential for
313	313	recovery of money; and
314	314	(3) maximizing opportunities for referral of cases to
315	315	the office of the attorney general.
316	316	Sec. 321.125. STATE AUDITOR AUDITS, INVESTIGATIONS, AND
317	317	ACCESS TO INFORMATION NOT IMPAIRED. This subchapter or other law
318	318	related to the operation of the division does not:
319	319	(1) take precedence over the authority of the state
320	320	auditor to conduct audits under this chapter or other law; or
321	321	(2) prohibit the state auditor from conducting an
322	322	audit, investigation, or other review or from having full and
323	323	complete access to all records and other information, including
324	324	witnesses and electronic data, that the state auditor considers
325	325	necessary for the audit, investigation, or other review.
326	326	Sec. 321.126. EXECUTIVE ORDERS. (a) The governor may issue
327	327	executive orders directing state agencies to implement
328	328	recommendations issued by the division for corrective or remedial
329	329	actions promoting the economical and efficient administration of
330	330	money and the detection of fraud.
331	331	(b) The governor may submit to the lieutenant governor, the
332	332	speaker of the house of representatives, the state auditor, and the
333	333	comptroller a report of the executive orders issued under this
334	334	subchapter and the compliance by state agencies with those orders.
335	335	Sec. 321.127. DEFENSE BY ATTORNEY GENERAL. The attorney
336	336	general shall defend any action brought against the inspector
337	337	general, a deputy inspector general, or an employee or officer of
338	338	the division as a result of that person's official act or omission,
339	339	whether or not the person has terminated service with the division
340	340	at the time the action is instituted.
341	341	Sec. 321.128. INTERAGENCY COORDINATION. (a) The division
342	342	and the attorney general shall enter into a memorandum of
343	343	understanding to develop and implement joint written procedures for
344	344	processing cases of suspected fraud, waste, or abuse, as those
345	345	terms are defined by state or federal law, or other violations of
346	346	state or federal law under programs at an agency to which this
347	347	subchapter applies or in programs receiving state or federal funds
348	348	that are implemented, administered, or overseen by the agency.
349	349	(b) The memorandum of understanding shall require:
350	350	(1) the division and the attorney general to set
351	351	priorities and guidelines for referring cases to appropriate state
352	352	agencies for investigation, prosecution, or other disposition to
353	353	enhance deterrence of fraud, waste, abuse, or other violations of
354	354	state or federal law, including a violation of Chapter 102,
355	355	Occupations Code, in the programs and to maximize the imposition of
356	356	penalties, the recovery of money, and the successful prosecution of
357	357	cases;
358	358	(2) the division to refer each case of suspected
359	359	fraud, waste, or abuse to the attorney general not later than the
360	360	20th business day after the date the division determines that the
361	361	existence of fraud, waste, or abuse is reasonably indicated;
362	362	(3) the attorney general to take appropriate action in
363	363	response to each case referred to the attorney general, which
364	364	action may include direct initiation of prosecution, with the
365	365	consent of the appropriate local district or county attorney,
366	366	direct initiation of civil litigation, referral to an appropriate
367	367	United States attorney, a district attorney, or a county attorney,
368	368	or referral to a collection agency for initiation of civil
369	369	litigation or other appropriate action;
370	370	(4) the division to keep detailed records for cases
371	371	processed by the division or the attorney general, including
372	372	information on the total number of cases processed and, for each
373	373	case:
374	374	(A) the agency to which the case is referred for
375	375	investigation;
376	376	(B) the date on which the case is referred; and
377	377	(C) the nature of the suspected fraud, waste, or
378	378	abuse;
379	379	(5) the division to notify each appropriate unit of
380	380	the office of the attorney general of each case referred by the
381	381	division;
382	382	(6) the attorney general to ensure that information
383	383	relating to each case investigated by the attorney general is
384	384	available to each unit of the attorney general's office with
385	385	responsibility for investigating suspected fraud, waste, or abuse;
386	386	(7) the attorney general to notify the division of
387	387	each case the attorney general declines to prosecute or prosecutes
388	388	unsuccessfully;
389	389	(8) representatives of the division and the attorney
390	390	general to meet not less than quarterly to share case information
391	391	and determine the appropriate agency to investigate each case; and
392	392	(9) the division and the attorney general to submit
393	393	information requested by the comptroller about each resolved case
394	394	for the comptroller's use in improving fraud detection.
395	395	(c) An exchange of information under this section between
396	396	the attorney general and the division or any other state agency does
397	397	not affect whether the information is subject to disclosure under
398	398	Chapter 552.
399	399	(d) With respect to Medicaid fraud, in addition to the
400	400	provisions required by Subsection (b), the memorandum of
401	401	understanding required by this section must also ensure that no
402	402	barriers to direct fraud referrals to the attorney general's
403	403	Medicaid fraud control unit or unreasonable impediments to
404	404	communication between Medicaid agency employees and the Medicaid
405	405	fraud control unit are imposed and must include procedures to
406	406	facilitate the referral of cases directly to the attorney general.
407	407	Sec. 321.129. INFORMATION AND TECHNOLOGY; PUBLIC INTEREST
408	408	INFORMATION AND COMPLAINTS. (a) The division may obtain
409	409	information or technology necessary to enable the division to meet
410	410	its responsibilities under this subchapter or other law.
411	411	(b) The division shall develop and implement policies that
412	412	provide the public a reasonable opportunity to appear before the
413	413	division and to speak on any issue under the division's
414	414	jurisdiction.
415	415	(c) The division shall prepare information of public
416	416	interest describing the functions of the division and the
417	417	division's procedures by which complaints are filed with and
418	418	resolved by the division. The division shall make the information
419	419	available to the public and appropriate state agencies.
420	420	(d) The division shall keep an information file about each
421	421	complaint filed with the division relating to a state agency or
422	422	entity receiving state or federal money and falling under the
423	423	investigatory jurisdiction of the division.
424	424	Sec. 321.130. REVIEW, INVESTIGATION, AND AUDIT AUTHORITY.
425	425	(a) The inspector general may evaluate any activity or operation of
426	426	an agency to which this subchapter applies, a provider, if
427	427	applicable, or a person in this state that is related to the
428	428	investigation, detection, or prevention of fraud, waste, abuse, or
429	429	employee misconduct in a program at an agency to which this
430	430	subchapter applies or in a state or federally funded program
431	431	implemented, administered, or overseen by or for the agency. A
432	432	review may include an investigation or other inquiry into a
433	433	specific act or allegation of, or a specific financial transaction
434	434	or practice that may involve, impropriety, malfeasance, or
435	435	nonfeasance in the obligation, spending, receipt, or other use of
436	436	state or federal money.
437	437	(b) The division shall conduct reviews and inspections to
438	438	protect the public and detect and prevent fraud, waste, and abuse in
439	439	the provision or funding of services or programs described by
440	440	Subsection (a).
441	441	(c) A state agency or the governing body or governing
442	442	officer of a state agency may not impair or prohibit the inspector
443	443	general from initiating or completing a review.
444	444	(d) With respect to an agency to which this subchapter
445	445	applies, the inspector general may audit and review the use and
446	446	effectiveness of state or federal funds, including contract and
447	447	grant funds, administered by a person or agency receiving the funds
448	448	in connection with an agency or state or federally funded program
449	449	implemented, administered, or overseen by or for the agency.
450	450	Sec. 321.131. CLAIMS CRITERIA FOR INVESTIGATIONS. The
451	451	division by rule shall set specific claims criteria that, when met,
452	452	require the division to begin an investigation.
453	453	Sec. 321.132. INITIATION OF REVIEW. The inspector general
454	454	may initiate a review:
455	455	(1) on the inspector general's own initiative;
456	456	(2) at the request of an agency to which this
457	457	subchapter applies or the governing body or governing officer of
458	458	the agency; or
459	459	(3) based on a complaint from any source concerning a
460	460	matter described by Section 321.130.
461	461	Sec. 321.133. INTEGRITY REVIEW FOR MEDICAID PROGRAM. (a)
462	462	The deputy inspector general designated for the commission shall
463	463	conduct an integrity review to determine whether there is
464	464	sufficient basis to warrant a full investigation on receipt of any
465	465	complaint of fraud, waste, or abuse of funds in the state Medicaid
466	466	program from any source.
467	467	(b) An integrity review under this section must begin not
468	468	later than the 30th day after the date the division receives a
469	469	complaint or has reason to believe that Medicaid fraud, waste, or
470	470	abuse has occurred. An integrity review shall be completed not
471	471	later than the 90th day after the date the review began.
472	472	(c) If the findings of an integrity review give the division
473	473	reason to believe that an incident of fraud involving possible
474	474	criminal conduct has occurred in the state Medicaid program, the
475	475	division must take the following action, as appropriate, not later
476	476	than the 30th day after the completion of the integrity review:
477	477	(1) if a provider is suspected of fraud involving
478	478	criminal conduct, the division must refer the case to the state's
479	479	Medicaid fraud control unit, provided that the criminal referral
480	480	does not preclude the division from continuing its investigation of
481	481	the provider or preclude the imposition of appropriate
482	482	administrative or civil sanctions; or
483	483	(2) if there is reason to believe that a recipient of
484	484	funds has defrauded the Medicaid program, the division may conduct
485	485	a full investigation of the suspected fraud.
486	486	Sec. 321.134. ACCESS TO INFORMATION. (a) To further a
487	487	review conducted by the division, the inspector general or a deputy
488	488	inspector general is entitled to access all books, records,
489	489	accounts, documents, reports, vouchers, databases, systems, or
490	490	other information, including confidential information, electronic
491	491	data, and internal records relevant to the functions of the
492	492	division that are maintained by or for a person, state agency, or
493	493	provider, if applicable, in connection with an agency to which this
494	494	subchapter applies or a state or federally funded program
495	495	implemented, administered, or overseen by or for the agency.
496	496	(b) The inspector general or deputy inspector general may
497	497	not access data or other information the release of which is
498	498	restricted under federal law unless the appropriate federal agency
499	499	approves the release to the division or its agent.
500	500	Sec. 321.135. COOPERATION REQUIRED. To further a review
501	501	conducted by the division, the inspector general or deputy
502	502	inspector general may require medical or other professional
503	503	assistance from an agency to which this subchapter applies or an
504	504	auditor, accountant, or other employee of the agency.
505	505	Sec. 321.136. REFERRAL TO STATE MEDICAID FRAUD CONTROL
506	506	UNIT. (a) At the time the division learns or has reason to suspect
507	507	that a health or human services provider's records related to
508	508	participation in the state Medicaid program are being withheld,
509	509	concealed, destroyed, fabricated, or in any way falsified, the
510	510	division shall immediately refer the case to the state's Medicaid
511	511	fraud control unit.
512	512	(b) A criminal referral under Subsection (a) does not
513	513	preclude the division from continuing its investigation of a health
514	514	or human services provider or the imposition of appropriate
515	515	administrative or civil sanctions.
516	516	Sec. 321.137. HOLD ON CLAIM REIMBURSEMENT PAYMENT;
517	517	EXCLUSION FROM PROGRAMS. (a) In addition to other instances
518	518	authorized under state or federal law, the division shall impose
519	519	without prior notice a hold on payment of claims for reimbursement
520	520	submitted by a health or human services provider to compel
521	521	production of records related to participation in the state
522	522	Medicaid program or on request of the state's Medicaid fraud
523	523	control unit, as applicable.
524	524	(b) The division must notify the health or human services
525	525	provider of the hold on payment not later than the fifth working day
526	526	after the date the payment hold is imposed.
527	527	(c) The division shall, in consultation with the state's
528	528	Medicaid fraud control unit, establish guidelines under which holds
529	529	on payment or exclusions from a health and human services program:
530	530	(1) may permissively be imposed on a health or human
531	531	services provider; or
532	532	(2) shall automatically be imposed on a provider.
533	533	(d) A health or human services provider subject to a hold on
534	534	payment or excluded from a program under this section is entitled to
535	535	a hearing on the hold or exclusion. A hearing under this subsection
536	536	is a contested case hearing under Chapter 2001. The State Office of
537	537	Administrative Hearings shall conduct the hearing. After the
538	538	hearing, the division, subject to judicial review, shall make a
539	539	final determination. The commission, a health and human services
540	540	agency, and the attorney general are entitled to intervene as
541	541	parties in the contested case.
542	542	Sec. 321.138. REQUEST FOR EXPEDITED HEARING. (a) On timely
543	543	written request by a health or human services provider subject to a
544	544	hold on payment under Section 321.137, other than a hold requested
545	545	by the state's Medicaid fraud control unit, the division shall file
546	546	a request with the State Office of Administrative Hearings for an
547	547	expedited administrative hearing regarding the hold.
548	548	(b) The health or human services provider must request an
549	549	expedited hearing not later than the 10th day after the date the
550	550	provider receives notice from the division under Section
551	551	321.137(b).
552	552	Sec. 321.139. INFORMAL RESOLUTION. (a) The inspector
553	553	general shall adopt rules that allow a health or human services
554	554	provider subject to a hold on payment under Section 321.137, other
555	555	than a hold requested by the state's Medicaid fraud control unit, to
556	556	seek an informal resolution of the issues identified by the
557	557	division in the notice provided under that section.
558	558	(b) A health or human services provider that seeks an
559	559	informal resolution must do so not later than the 10th day after the
560	560	date the provider receives notice from the division under Section
561	561	321.137(b).
562	562	(c) A health or human services provider's decision to seek
563	563	an informal resolution does not extend the time by which the
564	564	provider must request an expedited administrative hearing under
565	565	Section 321.138.
566	566	(d) A hearing initiated under Section 321.137 shall be
567	567	stayed at the division's request until the informal resolution
568	568	process is completed.
569	569	Sec. 321.140. EMPLOYEE REPORTS. The inspector general may
570	570	require employees at an agency to which this subchapter applies to
571	571	report to the division information regarding fraud, waste, misuse
572	572	or abuse of funds or resources, corruption, or illegal acts.
573	573	Sec. 321.141. SUBPOENAS. (a) The inspector general may
574	574	issue a subpoena to compel the attendance of a relevant witness at a
575	575	hearing or deposition under this subchapter or to compel the
576	576	production, for inspection or copying, of relevant materials in
577	577	connection with a review, hearing, or deposition conducted under
578	578	this subchapter.
579	579	(b) A subpoena may be served personally or by certified
580	580	mail.
581	581	(c) If a person fails to comply with a subpoena, the
582	582	inspector general, acting through the attorney general, may file
583	583	suit to enforce the subpoena in a district court in this state.
584	584	(d) On finding that good cause exists for issuing the
585	585	subpoena, the court shall order the person to comply with the
586	586	subpoena. The court may hold in contempt a person who fails to obey
587	587	the court order.
588	588	(e) The reimbursement of the expenses of a witness whose
589	589	attendance is compelled under this section is governed by Section
590	590	2001.103.
591	591	Sec. 321.142. INTERNAL AUDITOR. (a) In this section,
592	592	"internal auditor" means a person appointed under Section 2102.006.
593	593	(b) The internal auditor for an agency to which this
594	594	subchapter applies shall provide the inspector general with a copy
595	595	of the agency's internal audit plan to:
596	596	(1) assist in the coordination of efforts between the
597	597	inspector general and the internal auditor; and
598	598	(2) limit duplication of effort regarding reviews by
599	599	the inspector general and internal auditor.
600	600	(c) The internal auditor shall provide to the inspector
601	601	general all final audit reports concerning audits of any:
602	602	(1) part of the agency;
603	603	(2) contract, procurement, or grant; and
604	604	(3) program conducted by the agency.
605	605	Sec. 321.143. COOPERATION WITH LAW ENFORCEMENT OFFICIALS
606	606	AND OTHER ENTITIES. (a) The inspector general may provide
607	607	information and evidence relating to criminal acts to the state
608	608	auditor's office and appropriate law enforcement officials.
609	609	(b) The inspector general may refer matters for further
610	610	civil, criminal, and administrative action to appropriate
611	611	administrative and prosecutorial agencies, including the attorney
612	612	general.
613	613	(c) The inspector general may enter into a memorandum of
614	614	understanding with a law enforcement or prosecutorial agency,
615	615	including the attorney general, to assist in conducting a review
616	616	under this subchapter.
617	617	Sec. 321.144. COOPERATION AND COORDINATION WITH STATE
618	618	AUDITOR. (a) The state auditor may, on request of the inspector
619	619	general, provide appropriate information or other assistance to the
620	620	inspector general or division, as determined by the state auditor.
621	621	(b) The inspector general may meet with the state auditor to
622	622	coordinate a review conducted under this subchapter, share
623	623	information, or schedule work plans.
624	624	(c) The state auditor is entitled to access all information
625	625	maintained by the inspector general, including vouchers,
626	626	electronic data, internal records, and information obtained under
627	627	Section 321.134 or subject to Section 321.152.
628	628	(d) Any information obtained or provided by the state
629	629	auditor under this section is confidential and not subject to
630	630	disclosure under Chapter 552.
631	631	Sec. 321.145. PREVENTION. (a) The inspector general may
632	632	recommend to an agency to which this subchapter applies or the
633	633	presiding officer of the agency policies on:
634	634	(1) promoting economical and efficient administration
635	635	of state or federal funds administered by an individual or entity
636	636	that received the funds from a state agency; and
637	637	(2) preventing and detecting fraud, waste, and abuse
638	638	in the administration of those funds.
639	639	(b) The inspector general may provide training or other
640	640	education regarding the prevention of fraud, waste, and abuse to
641	641	employees of a state agency. The training or education provided
642	642	must be approved by the presiding officer of the agency.
643	643	Sec. 321.146. AWARD FOR REPORTING FRAUD, WASTE, ABUSE, OR
644	644	OVERCHARGES. (a) If the division determines that the report
645	645	results in the recovery of an administrative or civil penalty
646	646	imposed by law, the division may grant an award to an individual who
647	647	reports:
648	648	(1) activity that constitutes fraud, waste, or abuse
649	649	of money related to any agency programs or in programs receiving
650	650	state or federal funds that are implemented, administered, or
651	651	overseen by the agency; or
652	652	(2) overcharges in a program described by Subdivision
653	653	(1).
654	654	(b) The division may not grant an award to an individual in
655	655	connection with a report if the division or attorney general had
656	656	independent knowledge of the activity reported by the individual.
657	657	(c) The division shall determine the amount of an award
658	658	granted under this section. The amount may not exceed five percent
659	659	of the amount of the administrative or civil penalty imposed by law
660	660	that resulted from the individual's report.
661	661	(d) In determining the amount of an award granted under this
662	662	section, the division:
663	663	(1) shall consider the importance of the report in
664	664	ensuring the fiscal integrity of the program; and
665	665	(2) may consider whether the individual participated
666	666	in the reported fraud, waste, abuse, or overcharge.
667	667	(e) A person who brings an action under Subchapter C,
668	668	Chapter 36, Human Resources Code, is not eligible for an award under
669	669	this section.
670	670	Sec. 321.147. RULEMAKING BY PRESIDING OFFICER OF AGENCY.
671	671	The presiding officer of an agency may adopt rules governing the
672	672	agency's response to reports and referrals from the inspector
673	673	general on issues identified by the inspector general related to
674	674	the agency or a contractor of the agency.
675	675	Sec. 321.148. ALLEGATIONS OF MISCONDUCT AGAINST PRESIDING
676	676	OFFICER. If a review by the inspector general involves allegations
677	677	that a presiding officer of an agency has engaged in misconduct, the
678	678	inspector general shall report to the governor during the review
679	679	until the report is completed or the review is closed without a
680	680	finding.
681	681	Sec. 321.149. PERIODIC REPORTING REQUIRED. The inspector
682	682	general shall timely inform the governor, the attorney general, the
683	683	state auditor, and the presiding officer of the relevant agency of
684	684	the initiation of a review of an agency program and the ongoing
685	685	status of the review.
686	686	Sec. 321.150. REPORTING DIVISION FINDINGS. The inspector
687	687	general shall report the findings of the division in connection
688	688	with a review conducted under this subchapter to:
689	689	(1) the presiding officer of the agency;
690	690	(2) the governor;
691	691	(3) the lieutenant governor;
692	692	(4) the speaker of the house of representatives;
693	693	(5) the comptroller;
694	694	(6) the state auditor; and
695	695	(7) the attorney general.
696	696	Sec. 321.151. FLAGRANT VIOLATIONS; IMMEDIATE REPORT. The
697	697	inspector general shall immediately report to the presiding officer
698	698	of the agency associated with the review, the governor's general
699	699	counsel, and the state auditor a particularly serious or flagrant
700	700	problem relating to the administration of a program, operation of
701	701	the agency, or interference with an inspector general review.
702	702	Sec. 321.152. INFORMATION CONFIDENTIAL. (a) Except as
703	703	provided by this subchapter, all information and material compiled
704	704	by the inspector general during a review under this subchapter is:
705	705	(1) confidential and not subject to disclosure under
706	706	Chapter 552; and
707	707	(2) not subject to disclosure, discovery, subpoena, or
708	708	other means of legal compulsion for release to anyone other than the
709	709	state auditor's office, the agency that is the subject of a review,
710	710	or the division or its agents involved in the review related to that
711	711	information or material.
712	712	(b) As the inspector general determines appropriate,
713	713	information relating to a review may be disclosed to:
714	714	(1) a law enforcement agency;
715	715	(2) the attorney general;
716	716	(3) the state auditor; or
717	717	(4) the agency that is the subject of a review.
718	718	(c) A person that receives information under Subsection (b)
719	719	may not disclose the information except to the extent that
720	720	disclosure is consistent with the authorized purpose for which the
721	721	person received the information.
722	722	Sec. 321.153. DRAFT OF FINAL REVIEW REPORT; AGENCY
723	723	RESPONSE. (a) Except in cases in which the division has determined
724	724	that potential fraud, waste, or abuse exists, the division shall
725	725	provide a draft of the final review report of any investigation,
726	726	audit, or review of the operations of an agency to the presiding
727	727	officer of the agency before publishing the division's final review
728	728	report.
729	729	(b) The agency director may provide a response to the
730	730	division's draft report in the manner prescribed by the division
731	731	not later than the 10th day after the date the draft report is
732	732	received by the agency. The inspector general by rule shall specify
733	733	the format of and requirements for the agency response.
734	734	(c) Notwithstanding Subsection (a), the division may not
735	735	provide a draft report to the presiding officer of the agency if in
736	736	the inspector general's opinion providing the draft report could
737	737	negatively affect any anticipated civil or criminal proceedings.
738	738	(d) The division may include any portion of the agency's
739	739	response in the division's final report.
740	740	Sec. 321.154. FINAL REVIEW REPORTS; AGENCY RESPONSE. (a)
741	741	The inspector general shall prepare a final report for each review
742	742	conducted under this subchapter. The final report must include:
743	743	(1) a summary of the activities performed by the
744	744	inspector general in conducting the review;
745	745	(2) a determination of whether wrongdoing was found;
746	746	and
747	747	(3) a description of any findings of wrongdoing.
748	748	(b) The inspector general's final review reports are
749	749	subject to disclosure under Chapter 552.
750	750	(c) All working papers and other documents related to
751	751	compiling the final review reports remain confidential and are not
752	752	subject to disclosure under Chapter 552.
753	753	(d) Not later than the 60th day after the date the division
754	754	issues a final report that identifies deficiencies or
755	755	inefficiencies in, or recommends corrective measures in the
756	756	operations of, an agency, the agency shall file a response that
757	757	includes:
758	758	(1) an implementation plan and timeline for
759	759	implementing corrective measures; or
760	760	(2) the agency's rationale for declining to implement
761	761	corrective measures for the identified deficiencies or
762	762	inefficiencies or the division's recommended corrective measures,
763	763	as applicable.
764	764	Sec. 321.155. COSTS. (a) The inspector general shall
765	765	maintain information regarding the cost of reviews.
766	766	(b) The inspector general may cooperate with appropriate
767	767	administrative and prosecutorial agencies, including the attorney
768	768	general, in recovering costs incurred under this subchapter from
769	769	nongovernmental entities, including contractors or individuals
770	770	involved in:
771	771	(1) violations of applicable state or federal rules or
772	772	statutes;
773	773	(2) abusive or wilful misconduct; or
774	774	(3) violations of a provider contract or program
775	775	policy.
776	776	Sec. 321.156. SEMIANNUAL REPORT. The division and the
777	777	attorney general shall jointly prepare and submit a semiannual
778	778	report to the governor, the lieutenant governor, the speaker of the
779	779	house of representatives, the state auditor, the comptroller, and
780	780	each member of the legislature concerning the activities of the
781	781	division and the attorney general in detecting and preventing
782	782	fraud, waste, and abuse under any agency programs or in programs
783	783	receiving state or federal funds that are implemented,
784	784	administered, or overseen by a state agency that is reviewed by the
785	785	division under this subchapter. The report may be consolidated
786	786	with any other report relating to the same subject matter the
787	787	division or the attorney general is required to submit under other
788	788	law.
789	789	Sec. 321.157. ADMINISTRATIVE OR CIVIL PENALTY; INJUNCTION.
790	790	(a) The division may:
791	791	(1) act for an agency to which this subchapter
792	792	applies, including a health and human services agency, in the
793	793	assessment by the division of administrative or civil penalties the
794	794	agency is authorized to assess under applicable law; and
795	795	(2) request that the attorney general obtain an
796	796	injunction to prevent a person from disposing of an asset
797	797	identified by the division as potentially subject to recovery by
798	798	the division due to the person's fraud, waste, or abuse.
799	799	(b) If the division imposes an administrative or civil
800	800	penalty under Subsection (a) for an agency:
801	801	(1) the agency may not impose an administrative or
802	802	civil penalty against the same person for the same violation; and
803	803	(2) the division shall impose the penalty under
804	804	applicable rules of the division, this subchapter, and applicable
805	805	laws governing the imposition of a penalty by the agency.
806	806	SECTION 4. The following sections of the Government Code
807	807	are repealed:
808	808	(1) Section 531.102;
809	809	(2) Section 531.1021; and
810	810	(3) Section 531.103.
811	811	SECTION 5. (a) The repeal by this Act of Section 531.102,
812	812	Government Code, does not affect the validity of a complaint,
813	813	investigation, or other proceeding initiated under that section
814	814	before the effective date of this Act. A complaint, investigation,
815	815	or other proceeding initiated under that section is continued in
816	816	accordance with the changes in law made by this Act.
817	817	(b) The repeal by this Act of Section 531.1021, Government
818	818	Code, does not affect the validity of a subpoena issued under that
819	819	section before the effective date of this Act. A subpoena issued
820	820	under that section before the effective date of this Act is governed
821	821	by the law that existed when the subpoena was issued, and the former
822	822	law is continued in effect for that purpose.
823	823	SECTION 6. (a) The person serving as inspector general
824	824	under Section 531.102(a-1), Government Code, on the effective date
825	825	of this Act shall serve as the inspector general appointed under
826	826	Subchapter C, Chapter 321, Government Code, as added by this Act,
827	827	until February 1, 2011, and may be reappointed under Subchapter C,
828	828	Chapter 321 if the person has the qualifications required under
829	829	that chapter.
830	830	(b) A person serving on the effective date of this Act as
831	831	inspector general for a state agency subject to Subchapter C,
832	832	Chapter 321, Government Code, as added by this Act, shall serve as
833	833	the deputy inspector general designated for the agency under
834	834	Subchapter C, Chapter 321, Government Code, as added by this Act,
835	835	unless and until replaced by the inspector general.
836	836	(c) Not later than February 1, 2011, the governor shall
837	837	appoint an inspector general for the office of inspector general
838	838	division of the state auditor's office established under Subchapter
839	839	C, Chapter 321, Government Code, as added by this Act, to a term
840	840	expiring February 1, 2013.
841	841	SECTION 7. A contract or proceeding primarily related to a
842	842	function transferred to the office of inspector general division of
843	843	the state auditor's office established under this Act is
844	844	transferred to the division. The transfer does not affect the
845	845	status of a proceeding or the validity of a contract.
846	846	SECTION 8. (a) All personnel and assets currently assigned
847	847	to the inspector general of a state agency subject to Subchapter C,
848	848	Chapter 321, Government Code, as added by this Act, by operation of
849	849	Section 321.102(a) or (c), Government Code, shall be promptly
850	850	transferred to the office of inspector general division established
851	851	under Subchapter C, Chapter 321 along with any equipment,
852	852	documents, and records currently assigned to or used by the
853	853	inspector general of that agency. Inventory of personnel,
854	854	equipment, documents, records, and assets to be transferred under
855	855	this section shall be accomplished jointly by the transferring
856	856	agency and the inspector general serving under Subchapter C,
857	857	Chapter 321. All funds previously appropriated or used, from any
858	858	source, by the transferring agency in support of the transferred
859	859	functions, personnel, equipment, documents, records, or assets
860	860	shall also be contemporaneously transferred to the division.
861	861	(b) For purposes of this section, "currently assigned"
862	862	means:
863	863	(1) all personnel and vacant full-time equivalent
864	864	positions assigned to or supporting a transferred function at any
865	865	time during the state fiscal biennium beginning September 1, 2007;
866	866	and
867	867	(2) all inventory and equipment assigned to a
868	868	transferred function or transferring personnel or that was in the
869	869	possession of transferring personnel on or at any time after
870	870	October 31, 2008.
871	871	(c) All state and federal funding, including funding for
872	872	overhead costs, support costs, and lease or colocation lease costs,
873	873	for the functions to be transferred to the office of inspector
874	874	general division of the state auditor's office established under
875	875	Subchapter C, Chapter 321, Government Code, as added by this Act,
876	876	shall be reallocated to the division.
877	877	(d) For purposes of federal single state agency funding
878	878	requirements, any federal funds for an agency subject to Subchapter
879	879	C, Chapter 321, Government Code, as added by this Act, that may not
880	880	be appropriated directly to the office of inspector general
881	881	division shall be transferred from the single state agency
882	882	receiving the funds to the office of inspector general division
883	883	established under Subchapter C, Chapter 321 if the funds are
884	884	intended for a function performed by the division.
885	885	SECTION 9. On the effective date of this Act:
886	886	(1) all functions, activities, employees, rules,
887	887	forms, money, property, contracts, memorandums of understanding,
888	888	records, and obligations of a previously established office of
889	889	inspector general of an agency subject to Subchapter C, Chapter
890	890	321, Government Code, as added by this Act, by operation of Section
891	891	321.102(a) or (c), Government Code, become functions, activities,
892	892	employees, rules, forms, money, property, contracts, memorandums
893	893	of understanding, records, and obligations of the office of
894	894	inspector general division of the state auditor's office
895	895	established under Subchapter C, Chapter 321, without a change in
896	896	status; and
897	897	(2) all money appropriated or budgeted for the
898	898	operations of a previously established office of inspector general
899	899	at an agency subject to Subchapter C, Chapter 321, Government Code,
900	900	as added by this Act, by operation of Section 321.102(a) or (c),
901	901	Government Code, including money for providing administrative
902	902	support, is considered appropriated for the use of the office of
903	903	inspector general division established under Subchapter C, Chapter
904	904	321.
905	905	SECTION 10. (a) Each agency subject to Subchapter C,
906	906	Chapter 321, Government Code, as added by this Act, by operation of
907	907	Section 321.102(a) or (c), Government Code, shall take all action
908	908	necessary to provide for the orderly transfer of the assets and
909	909	responsibilities of any previously established office of inspector
910	910	general for that agency to the office of inspector general division
911	911	of the state auditor's office established under Subchapter C,
912	912	Chapter 321.
913	913	(b) A rule or form adopted by a previously established
914	914	office of inspector general of an agency subject to Subchapter C,
915	915	Chapter 321, Government Code, as added by this Act, by operation of
916	916	Section 321.102(a) or (c), Government Code, is a rule or form of the
917	917	office of inspector general division of the state auditor's office
918	918	established under Subchapter C, Chapter 321 and remains in effect
919	919	until changed by the inspector general.
920	920	(c) A reference in law or administrative rule to a
921	921	previously established office of inspector general of an agency
922	922	subject to Subchapter C, Chapter 321, Government Code, as added by
923	923	this Act, by operation of Section 321.102(a) or (c), Government
924	924	Code, means the office of inspector general division established
925	925	under Subchapter C, Chapter 321.
926	926	SECTION 11. If before implementing any provision of this
927	927	Act a state agency determines that a waiver or authorization from a
928	928	federal agency is necessary for implementation of that provision,
929	929	the agency affected by the provision shall request the waiver or
930	930	authorization and may delay implementing that provision until the
931	931	waiver or authorization is granted.
932	932	SECTION 12. This Act takes effect immediately if it
933	933	receives a vote of two-thirds of all the members elected to each
934	934	house, as provided by Section 39, Article III, Texas Constitution.
935	935	If this Act does not receive the vote necessary for immediate
936	936	effect, this Act takes effect September 1, 2009.