Texas 2009 - 81st Regular

Texas House Bill HB4665 Compare Versions

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

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1	1	By: Herrero H.B. No. 4665
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the office of inspector general for the Health and Human
7	7	Services Commission.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Chapter 531, Government Code, is amended by
10	10	adding Subchapter R to read as follows:
11	11	SUBCHAPTER R. INSPECTOR GENERAL
12	12	Sec. 531.701. DEFINITIONS. In this subchapter:
13	13	(1) "Fraud" has the meaning assigned by Section
14	14	531.1011.
15	15	(2) "Inspector general" means the inspector general
16	16	appointed under this subchapter.
17	17	(3) "Office" means the Office of Inspector General.
18	18	(4) "Provider" has the meaning assigned by Section
19	19	531.1011.
20	20	(5) "Review" includes an inspection, investigation,
21	21	audit, or similar activity.
22	22	(6) "State funds" or "state money" includes federal
23	23	funds or money received and appropriated by the state or for which
24	24	the state has oversight responsibility.
25	25	Sec. 531.702. REFERENCE IN OTHER LAW. Notwithstanding any
26	26	other provision of law, a reference in law or rule to the
27	27	commission's office of inspector general or the commission's office
28	28	of investigations and enforcement means the Office of Inspector
29	29	General.
30	30	Sec. 531.703. OFFICE OF INSPECTOR GENERAL; ADMINISTRATIVE
31	31	ATTACHMENT. (a) The office of inspector general is responsible
32	32	for:
33	33	(1) the investigation of fraud, waste, and abuse in
34	34	the provision or funding of health or human services by this state;
35	35	(2) the enforcement of state law relating to the
36	36	provision of those services to protect the public; and
37	37	(3) the investigation, prevention and detection of
38	38	crime relating to the provision of those services.
39	39	(b) The office is part of the single state Medicaid agency
40	40	and is administratively attached to the commission. The commission
41	41	shall provide to the office administrative support services from
42	42	the commission and from health and human services agencies.
43	43	Sec. 531.704. SERVICE LEVEL AGREEMENT; FUNDS. (a) The
44	44	commission and the office shall enter into a service level
45	45	agreement that establishes the performance standards and
46	46	deliverables with regard to administrative support by the
47	47	commission.
48	48	(b) The service level agreement must be reviewed at least
49	49	annually to ensure that services and deliverables are provided in
50	50	accordance with the agreement.
51	51	(c) The commission shall request, apply for, and receive for
52	52	the office any appropriations or other money from this state or the
53	53	federal government, and shall disburse all such funds to the office
54	54	as appropriated.
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, not the executive commissioner,
75	75	supervises the office staff and manages the operations of the
76	76	office.
77	77	(c) The inspector general shall have operational authority
78	78	over and responsibility for the:
79	79	(1) management of the daily operations of the office,
80	80	including the organization and management of the office and office
81	81	operating procedures;
82	82	(2) allocation of resources within the office;
83	83	(3) personnel and employment policies;
84	84	(4) contracting, purchasing, and related policies,
85	85	subject to other laws relating to state agency contracting and
86	86	purchasing;
87	87	(5) information resources systems used by the office;
88	88	(6) location of office facilities;
89	89	(7) coordination of office activities with activities
90	90	of other state agencies, including other health and human services
91	91	agencies.
92	92	Sec. 531.707. INSPECTOR GENERAL; APPOINTMENT AND TERM. (a)
93	93	The governor shall appoint an inspector general to serve as
94	94	director of the office.
95	95	(b) The inspector general reports to the governor and serves
96	96	a two-year term that expires on February 1 of each odd-numbered
97	97	year.
98	98	(c) The inspector general is a state officer.
99	99	Section 531.708. CONFLICT OF INTEREST. (a) The inspector
100	100	general may not serve as an ex officio member on the governing body
101	101	of a governmental entity.
102	102	(b) The inspector general may not have a financial interest
103	103	in the transactions of the office, a health and human services
104	104	agency, or a health or human services provider.
105	105	Section 531.709. RULEMAKING BY INSPECTOR GENERAL. (a)
106	106	Notwithstanding Section 531.0055 (e) and any other law, the
107	107	inspector general shall adopt the rules necessary to administer the
108	108	functions of the office, including rules to address the imposition
109	109	of sanctions and penalties for violations and due process
110	110	requirements for imposing sanctions and penalties, as well as rules
111	111	relating to the eligibility of providers and contractors to
112	112	participate in health and human services programs.
113	113	(b) A rule, standard, or form adopted by the executive
114	114	commissioner, the commission, or a health and human services agency
115	115	that is necessary to accomplish the duties of the office is
116	116	considered to also be a rule, standard, or form of the office and
117	117	remains in effect as a rule, standard, or form of the office until
118	118	changed by the inspector general.
119	119	(c) The office may submit proposed rules and adopted rules
120	120	to the commission for publication. The executive commissioner or
121	121	commission may not amend or modify a rule submitted by the office.
122	122	(d) The rules must include standards for the office that
123	123	emphasize:
124	124	(1) coordinating investigative efforts to
125	125	aggressively recover money;
126	126	(2) allocating resources to cases that have the
127	127	strongest supportive evidence and the greatest potential for
128	128	recovery of money; and
129	129	(3) maximizing opportunities for referral of cases to
130	130	the office of the attorney general.
131	131	Sec. 531.710. EMPLOYEES; MEDICAL REVIEW OFFICER; TRAINING.
132	132	(a) The inspector general may employ personnel as necessary
133	133	to implement the duties of the office.
134	134	(b) The inspector general shall employ a physician as the
135	135	medical review officer to perform reviews and provide information
136	136	and consultation as appropriate when the matter at issue involves
137	137	or requires medical expertise.
138	138	(c) The inspector general shall train office personnel to
139	139	pursue priority Medicaid and other health and human services fraud,
140	140	waste, and abuse cases efficiently and as necessary.
141	141	(d) The inspector general may contract with certified
142	142	public accountants, management consultants, or other professional
143	143	experts necessary to enable the inspector general and office
144	144	personnel to independently perform the functions of the inspector
145	145	general's office.
146	146	(e) The inspector general may require employees of health
147	147	and human services agencies to provide assistance to the office in
148	148	connection with the office's duties relating to the investigation
149	149	of fraud, waste, and abuse in the provision of health and human
150	150	services.
151	151	Sec. 531.711. REVIEW AUTHORITY. (a) The inspector general
152	152	may review any activity or operation of a health and human services
153	153	agency, health or human services provider, or person in this state
154	154	that is related to the investigation, detection, or prevention of
155	155	fraud, waste, or abuse, or official or employee misconduct, in a
156	156	state or state-funded health or human services program. A review
157	157	may include an inspection, investigation, audit, or other similar
158	158	activity inquiring into a specific act or allegation of, or a
159	159	specific financial transaction or practice that may involve,
160	160	impropriety, malfeasance, or nonfeasance in the obligation,
161	161	spending, receipt, or other use of state money.
162	162	(b) The executive commissioner, the commission, or a health
163	163	and human services agency of this state may not impair, prohibit, or
164	164	attempt to influence the inspector general in initiating,
165	165	conducting, or completing a review.
166	166	(c) The inspector general may conduct reviews, including
167	167	financial or performance audits regarding the use and effectiveness
168	168	of state funds, including contract and grant funds, administered by
169	169	a person or state agency receiving the funds in connection with a
170	170	state or state-funded health or human services program.
171	171	Sec. 531.712. INITIATION OF REVIEW. The inspector general
172	172	may initiate a review:
173	173	(1) on the inspector general's own initiative;
174	174	(2) at the request of the commission or executive
175	175	commissioner; or
176	176	(3) based on a complaint from any source concerning a
177	177	matter described by Section 531.711.
178	178	Sec. 531.713. INTEGRITY REVIEW. (a) The office shall
179	179	conduct an integrity review to determine whether there is
180	180	sufficient basis to warrant a full investigation on receipt of any
181	181	complaint of fraud, waste, or abuse of funds in the state Medicaid
182	182	program from any source.
183	183	(b) An integrity review must begin not later than the 30th
184	184	day after the date the office receives a complaint or has reason to
185	185	believe that Medicaid fraud, waste, or abuse has occurred. An
186	186	integrity review shall be completed not later than the 90th day
187	187	after the date the review began.
188	188	(c) If the findings of an integrity review give the office
189	189	reason to believe that an incident of fraud involving possible
190	190	criminal conduct has occurred in the state Medicaid program, the
191	191	office must take the following action, as appropriate, not later
192	192	than the 30th day after the completion of the integrity review:
193	193	(1) if a provider is suspected of fraud involving
194	194	criminal conduct, the office must refer the case to the state's
195	195	Medicaid fraud control unit, provided that the criminal referral
196	196	does not preclude the office from continuing its investigation of
197	197	the provider or preclude the imposition of appropriate
198	198	administrative or civil sanctions; or
199	199	(2) if there is reason to believe that a recipient of
200	200	funds has defrauded the Medicaid program, the office may conduct a
201	201	full investigation of the suspected fraud.
202	202	Sec. 531.714. ACCESS TO INFORMATION. (a) To further a
203	203	review conducted by the office, the inspector general is entitled
204	204	to full and unrestricted access to all offices, limited-access or
205	205	restricted areas, employees, books, papers, records, documents,
206	206	equipment, computers, databases, systems, accounts, reports,
207	207	vouchers, or other information, including confidential
208	208	information, electronic data, and internal records relevant to the
209	209	functions of the office, maintained by a person, health and human
210	210	services agency, or health or human services provider in connection
211	211	with a state or state-funded health or human services program.
212	212	(b) The inspector general may not access data or other
213	213	information the release of which is restricted under federal law
214	214	unless the office is in compliance with all applicable federal
215	215	regulations governing such access.
216	216	Sec. 531.715. COOPERATION REQUIRED. To further a review
217	217	conducted by the inspector general's office, the inspector general
218	218	may require medical or other professional assistance from the
219	219	executive commissioner, the commission, a health and human services
220	220	agency, or an auditor, accountant, or other employee of the
221	221	commission or agency.
222	222	Sec. 531.716. REFERRAL TO STATE MEDICAID FRAUD CONTROL
223	223	UNIT. (a) At the time the office learns or has reason to suspect
224	224	that a health or human services provider 's records related to
225	225	participation in the state Medicaid program are being withheld,
226	226	concealed, destroyed, fabricated, or in any way falsified, the
227	227	office shall immediately refer the case to the state's Medicaid
228	228	fraud control unit.
229	229	(b) A criminal referral under Subsection (a) does not
230	230	preclude the office from continuing its investigation of a health
231	231	or human services provider or the imposition of appropriate
232	232	administrative or civil sanctions.
233	233	Sec. 531.717. HOLD ON CLAIM REIMBURSEMENT PAYMENT;
234	234	EXCLUSION FROM PROGRAMS. (a) In addition to other instances
235	235	authorized under state or federal law, the office shall impose
236	236	without prior notice a hold on payment of claims for reimbursement
237	237	submitted by a health or human services provider to compel
238	238	production of records related to participation in the state
239	239	Medicaid program or on request of the state's Medicaid fraud
240	240	control unit, as applicable.
241	241	(b) The office must notify the health or human services
242	242	provider of the hold on payment not later than the fifth working day
243	243	after the date the payment hold is imposed.
244	244	(c) The office shall, in consultation with the state 's
245	245	Medicaid fraud control unit, establish guidelines under which holds
246	246	on payment or exclusions from a state or state-funded program:
247	247	(1) may permissively be imposed on a health or human
248	248	services provider; or
249	249	(2) shall automatically be imposed on a provider.
250	250	(d) A health or human services provider subject to a hold on
251	251	payment or excluded from a program under this section is entitled to
252	252	a hearing on the hold or exclusion. A hearing under this subsection
253	253	is a contested case hearing under Chapter 2001. The State Office of
254	254	Administrative Hearings shall conduct the hearing. After the
255	255	hearing, the office, subject to judicial review, shall make a final
256	256	determination. The commission, a health and human services agency,
257	257	and the office of the attorney general are entitled to intervene as
258	258	parties in the contested case.
259	259	Sec. 531.718. REQUEST FOR EXPEDITED HEARING. (a) On timely
260	260	written request by a health or human services provider subject to a
261	261	hold on payment under Section 531.717, other than a hold requested
262	262	by the state's Medicaid fraud control unit, the office shall file a
263	263	request with the State Office of Administrative Hearing for an
264	264	expedited administrative hearing regarding the hold.
265	265	(b) The health or human services provider must request an
266	266	expedited hearing not later than the 10th day after the date the
267	267	provider receives notice from the office under Section 531.717(b).
268	268	(c) The office may enter into a memorandum of understanding
269	269	with the State Office of Administrative Hearings to facilitate the
270	270	docketing and hearing of contested case hearings.
271	271	Sec. 531.719. INFORMAL RESOLUTION. (a) The inspector
272	272	general shall adopt rules that allow a health or human services
273	273	provider subject to a hold on payment under Section 531.717, other
274	274	than a hold requested by the state's Medicaid fraud control unit, to
275	275	seek an informal resolution of the issues identified by the office
276	276	in the notice provided under that section.
277	277	(b) A health or human services provider must seek an
278	278	informal resolution not later than the 10th day after the date the
279	279	provider receives notice from the office under Section 531.717(b).
280	280	(c) A health or human services provider's decision to seek
281	281	an informal resolution does not extend the time by which the
282	282	provider must request an expedited administrative hearing under
283	283	Section 531.718.
284	284	(d) A hearing initiated under Section 531.717 shall be
285	285	stayed at the office's request until the informal resolution
286	286	process is completed.
287	287	Sec. 531.720. EMPLOYEE REPORTS. The inspector general may
288	288	require employees at the commission or a health and human services
289	289	agency to report to the office information regarding fraud, waste,
290	290	misuse or abuse of funds or resources, corruption, or illegal acts.
291	291	Sec. 531.721. SUBPOENAS. (a) The inspector general may
292	292	issue a subpoena to compel the attendance of a relevant witness or
293	293	the production, for inspection or copying, of relevant evidence in
294	294	connection with a review conducted under this subchapter.
295	295	(b) A subpoena may be served personally or by certified
296	296	mail.
297	297	(c) If a person fails to comply with a subpoena, the
298	298	inspector general, acting through the attorney general, may file
299	299	suit to enforce the subpoena in a district court in this state.
300	300	(d) On finding that good cause exists for issuing the
301	301	subpoena, the court shall order the person to comply with the
302	302	subpoena. The court may hold in contempt a person who fails to obey
303	303	the court order.
304	304	(e) The reimbursement of the expenses of a witness whose
305	305	attendance is compelled under this section is governed by Section
306	306	2001.103.
307	307	Sec. 531.722. INTERNAL AUDITOR. (a) In this section,
308	308	"internal auditor" means a person appointed under Section 2102.006.
309	309	(b) The internal auditor for a health and human services
310	310	agency shall provide the inspector general with a copy of the
311	311	agency's internal audit plan to:
312	312	(1) assist in the coordination of efforts between the
313	313	inspector general and the internal auditor; and
314	314	(2) limit duplication of effort regarding reviews by
315	315	the inspector general and internal auditor.
316	316	(c) The internal auditor shall provide to the inspector
317	317	general all final audit reports concerning audits of any:
318	318	(1) part or division of the agency;
319	319	(2) contract, procurement, or grant; and
320	320	(3) program conducted by the agency.
321	321	Sec. 531.723. COOPERATION WITH LAW ENFORCEMENT OFFICIALS
322	322	AND OTHER ENTITIES. (a) The inspector general may provide
323	323	information and evidence relating to criminal acts to the state
324	324	auditor's office and appropriate law enforcement officials.
325	325	(b) The inspector general may refer matters for further
326	326	civil, criminal, and administrative action to appropriate
327	327	administrative and prosecutorial agencies, including the attorney
328	328	general.
329	329	(c) The inspector general may enter into a memorandum of
330	330	understanding with a law enforcement or prosecutorial agency,
331	331	including the office of the attorney general, to assist in
332	332	conducting a review under this subchapter.
333	333	Sec. 531.724. COOPERATION AND COORDINATION WITH STATE
334	334	AUDITOR.
335	335	(a) The state auditor may, on request of the inspector
336	336	general, provide appropriate information or other assistance to the
337	337	inspector general or office, as determined by the state auditor.
338	338	(b) The inspector general may meet with the state auditor 's
339	339	office to coordinate a review conducted under this subchapter,
340	340	share information, or schedule work plans.
341	341	(c) The state auditor is entitled to access all information
342	342	maintained by the inspector general, including vouchers,
343	343	electronic data, internal records, and information obtained under
344	344	Section 531.714 or subject to Section 531.731.
345	345	(d) Any information obtained or provided by the state
346	346	auditor under this section is confidential and not subject to
347	347	disclosure under Chapter 552.
348	348	Sec. 531.725. PREVENTION. (a) The inspector general may
349	349	recommend to the commission and executive commissioner policies on:
350	350	(1) promoting economical and efficient administration
351	351	of state funds administered by an individual or entity that
352	352	received the funds from a health and human services agency; and
353	353	(2) preventing and detecting fraud, waste, and abuse
354	354	in the administration of those funds.
355	355	(b) The inspector general may provide training or other
356	356	education regarding the prevention of fraud, waste, or abuse to
357	357	employees of a health and human services agency. The training or
358	358	education provided must be approved by the presiding officer of the
359	359	agency.
360	360	Sec. 531.726. RULEMAKING BY EXECUTIVE COMMISSIONER. The
361	361	executive commissioner may adopt rules governing a health and human
362	362	services agency's response to reports and referrals from the
363	363	inspector general on issues identified by the inspector general
364	364	related to the agency or a contractor of the agency.
365	365	Sec. 531.727. ALLEGATIONS OF MISCONDUCT AGAINST PRESIDING
366	366	OFFICER. If a review by the inspector general involves allegations
367	367	that a presiding officer of a health and human services agency has
368	368	engaged in misconduct, the inspector general shall report to the
369	369	governor during the review until the report is completed or the
370	370	review is closed without a finding.
371	371	Sec. 531.728. PERIODIC REPORTING TO STATE AUDITOR AND
372	372	EXECUTIVE COMMISSIONER REQUIRED. The inspector general shall
373	373	timely inform the state auditor and the executive commissioner of
374	374	the initiation of a review of a health and human services agency
375	375	program and the ongoing status of each review.
376	376	Sec. 531.729. REPORTING OFFICE FINDINGS. The inspector
377	377	general shall report the findings of any review or investigation
378	378	conducted by the office to:
379	379	(1) the executive commissioner;
380	380	(2) the governor;
381	381	(3) the lieutenant governor;
382	382	(4) the speaker of the house of representatives;
383	383	(5) the state auditor 's office; and
384	384	(6) appropriate law enforcement and prosecutorial
385	385	agencies, including the office of the attorney general, if the
386	386	findings suggest the probability of criminal conduct.
387	387	Sec. 531.730. FLAGRANT VIOLATIONS; IMMEDIATE REPORT. The
388	388	inspector general shall immediately report to the executive
389	389	commissioner, the governor's general counsel, and the state auditor
390	390	a problem deemed by the inspector general to be particularly
391	391	serious or flagrant, and relating to the administration of a
392	392	program, operation of a health and human services agency, or
393	393	interference with an inspector general review.
394	394	Sec. 531.731. INFORMATION CONFIDENTIAL. (a) Except as
395	395	provided by this section, Sections 531.103, 531.729, and 531.733,
396	396	all information and material compiled or maintained by the
397	397	inspector general during a review under this subchapter is:
398	398	(1) confidential and not subject to disclosure under
399	399	Chapter 552; and
400	400	(2) not subject to disclosure, discovery, subpoena, or
401	401	other means of legal compulsion for release to anyone other than the
402	402	state auditor's office, the commission, or the office or its agents
403	403	involved in the review related to that information or material.
404	404	(b) Subsection (a) applies to information the inspector
405	405	general is required to disclose under Sections 531.727, 531.728,
406	406	531.730, and 531.732.
407	407	(c) As the inspector general determines appropriate based
408	408	on evidence sufficient to support an allegation, information
409	409	relating to a review may be disclosed to:
410	410	(1) a law enforcement agency;
411	411	(2) the attorney general's office;
412	412	(3) the state auditor's office; or
413	413	(4) the commission.; or
414	414	(5) a licensing or regulatory agency.
415	415	(d) A person that receives information under Subsections
416	416	(b) and (c) may not disclose the information except to the extent
417	417	that disclosure is consistent with the authorized purpose for which
418	418	the person first obtained the information.
419	419	Sec. 531.732. DRAFT OF FINAL REPORT; AGENCY RESPONSE.
420	420	(a) Except in cases in which the office has determined that
421	421	potential fraud, waste, or abuse exists, or a criminal violation
422	422	has occurred, the office shall provide a draft of the final report
423	423	of any review of the operations of a health and human services
424	424	agency to the presiding officer of the agency before publishing the
425	425	office's final report.
426	426	(b) The health and human services agency may provide a
427	427	response to the office's draft report in the manner prescribed by
428	428	the office not later than the 10th day after the date the draft
429	429	report is received by the agency. The inspector general by rule
430	430	shall specify the format and requirements of the agency response.
431	431	(c) Notwithstanding Subsection (a), the office may not
432	432	provide a draft report to the presiding officer of the agency if in
433	433	the inspector general's opinion providing the draft report could
434	434	negatively affect any anticipated civil or criminal proceedings.
435	435	(d) The office may include any portion of the agency's
436	436	response in the office's final report.
437	437	Sec. 531.733. FINAL REVIEW REPORTS; AGENCY RESPONSE. (a)
438	438	The inspector general shall prepare a final report for each review
439	439	conducted under this subchapter. The final report must include:
440	440	(1) a summary of the activities performed by the
441	441	inspector general in conducting the review;
442	442	(2) a determination of whether wrongdoing was found;
443	443	and
444	444	(3) a description of any findings of wrongdoing.
445	445	(b) The inspector general's final review reports are
446	446	subject to disclosure under Chapter 552.
447	447	(c) All working papers and other documents related to
448	448	compiling the final review reports remain confidential and are not
449	449	subject to disclosure under Chapter 552.
450	450	(d) Not later than the 60th day after the date the office
451	451	issues a final report that identifies deficiencies or
452	452	inefficiencies in, or recommends corrective measures in the
453	453	operations of, a health and human services agency, the agency shall
454	454	file a response that includes:
455	455	(1) an implementation plan and timeline for
456	456	implementing corrective measures; or
457	457	(2) the agency's rationale for declining to implement
458	458	corrective measures for the identified deficiencies or
459	459	inefficiencies or the office 's recommended corrective measures, as
460	460	applicable.
461	461	Sec. 531.734. STATE AUDITOR AUDITS, INVESTIGATIONS, AND
462	462	ACCESS TO INFORMATION NOT IMPAIRED. This subchapter or other law
463	463	related to the operation of the inspector general does not prohibit
464	464	the state auditor from conducting an audit, investigation, or other
465	465	review or from having full and complete access to all records and
466	466	other information, including witnesses and electronic data, that
467	467	the state auditor considers necessary for the audit, investigation,
468	468	or other review.
469	469	Sec. 531.735. AUTHORITY OF STATE AUDITOR TO CONDUCT TIMELY
470	470	AUDITS NOT IMPAIRED. This chapter or other law related to the
471	471	operation of the inspector general does not take precedence over
472	472	the authority of the state auditor to conduct an audit under Chapter
473	473	321 or other law.
474	474	Sec. 531.736. BUDGET. (a) The inspector general shall
475	475	submit a budget in accordance with the reporting requirements of
476	476	the General Appropriations Act.
477	477	(b) The inspector general shall submit to the commission a
478	478	legislative appropriations request and an operating budget in
479	479	accordance with the service level agreement entered into under
480	480	Section 531.704 and applicable law.
481	481	(c) The commission shall submit the office's appropriations
482	482	request and, if required by or under law, operating budget to the
483	483	legislature. The request or budget is not subject to review,
484	484	alteration, or modification by the commission or executive
485	485	commissioner before submission to the legislature.
486	486	Sec. 531.737. COSTS. (a) The inspector general shall
487	487	maintain information regarding the cost of reviews.
488	488	(b) The inspector general may cooperate with appropriate
489	489	administrative and prosecutorial agencies, including the office of
490	490	the attorney general, in recovering costs incurred under this
491	491	subchapter from nongovernmental entities, including contractors or
492	492	individuals involved in:
493	493	(1) violations of applicable state or federal rules or
494	494	statutes;
495	495	(2) abusive or willful misconduct; or
496	496	(3) violations of a provider contract or program
497	497	policy.
498	498	(c) In criminal cases the inspector general and the Office
499	499	of Attorney General shall cooperate to ensure that all appropriate
500	500	evidence is submitted to the court in all criminal prosecutions
501	501	towards ensuring that restitution is ordered, to include the
502	502	overpayment and the costs incurred under this subchapter, as a
503	503	condition of probation or as a condition of parole.
504	504	Sec. 531.738. ADMINISTRATIVE OR CIVIL PENALTY; INJUNCTION.
505	505	(a) The office may:
506	506	(1) act for a health and human services agency in the
507	507	assessment by the office of administrative or civil penalties the
508	508	agency is authorized to assess under applicable law; and
509	509	(2) request that the attorney general obtain an
510	510	injunction to prevent a person from disposing of an asset
511	511	identified by the office as potentially subject to recovery by the
512	512	office due to the person's fraud, waste, or abuse.
513	513	(b) If the office imposes an administrative or civil penalty
514	514	under Subsection (a) for a health and human services agency:
515	515	(1) the health and human services agency may not
516	516	impose an administrative or civil penalty against the same person
517	517	for the same violation; and
518	518	(2) the office shall impose the penalty under
519	519	applicable rules of the office, this subchapter, and applicable
520	520	laws and rules governing the imposition of a penalty by the health
521	521	and human services agency.
522	522	Sec. 531.739. PEACE OFFICER INVESTIGATORS. (a) An
523	523	investigator assigned to conduct investigations for the office may
524	524	be a commissioned peace officer. The number of commissioned peace
525	525	officers assigned to conduct investigations may not exceed 15
526	526	percent of the office's full-time equivalent positions.
527	527	(b) A commissioned peace officer or otherwise designated
528	528	law enforcement officer employed by the office is not entitled to
529	529	supplemental benefits from the law enforcement and custodial
530	530	officer supplemental retirement fund unless the officer transfers
531	531	from a position, without a break in service, that qualifies for
532	532	supplemental retirement benefits from the fund.
533	533	SECTION 2. Section 531.001, Government Code, is amended by
534	534	adding Subdivision (4-a) to read as follows:
535	535	(4-a) "Office of inspector general" means the office of
536	536	inspector general established under Subchapter R.
537	537	SECTION 3. Section 531.008(c), Government Code, is amended
538	538	to read as follows:
539	539	(c) The executive commissioner shall establish the
540	540	following divisions and offices within the commission:
541	541	(1) the eligibility services division to make
542	542	eligibility determinations for services provided through the
543	543	commission or a health and human services agency related to:
544	544	(A) the child health plan program;
545	545	(B) the financial assistance program under
546	546	Chapter 31, Human Resources Code;
547	547	(C) the medical assistance program under Chapter
548	548	32, Human Resources Code;
549	549	(D) the nutritional assistance programs under
550	550	Chapter 33, Human Resources Code;
551	551	(E) long-term care services, as defined by
552	552	Section 22.0011, Human Resources Code;
553	553	(F) community-based support services identified
554	554	or provided in accordance with Section 531.02481; and
555	555	(G) other health and human services programs, as
556	556	appropriate;
557	557	(2) [the office of inspector general to perform fraud
558	558	and abuse investigation and enforcement functions as provided by
559	559	Subchapter C and other law;
560	560	[(3)] the office of the ombudsman to:
561	561	(A) provide dispute resolution services for the
562	562	commission and the health and human services agencies; and
563	563	(B) perform consumer protection functions
564	564	related to health and human services;
565	565	(3) [(4)] a purchasing division as provided by Section
566	566	531.017; and
567	567	(4) [(5)] an internal audit division to conduct a
568	568	program of internal auditing in accordance with [Government Code,]
569	569	Chapter 2102.
570	570	SECTION 4. Sections 531.103(a), (c), and (d), Government
571	571	Code, are amended to read as follows:
572	572	(a) The [commission, acting through the commission's]
573	573	office of inspector general[,] and the office of the attorney
574	574	general shall enter into a memorandum of understanding to develop
575	575	and implement joint written procedures for processing cases of
576	576	suspected fraud, waste, or abuse, as those terms are defined by
577	577	state or federal law, or other violations of state or federal law
578	578	under the state Medicaid program or other program administered by
579	579	the commission or a health and human services agency, including the
580	580	financial assistance program under Chapter 31, Human Resources
581	581	Code, a nutritional assistance program under Chapter 33, Human
582	582	Resources Code, and the child health plan program. The memorandum
583	583	of understanding shall require:
584	584	(1) the office of inspector general and the office of
585	585	the attorney general to set priorities and guidelines for referring
586	586	cases to appropriate state agencies for investigation,
587	587	prosecution, or other disposition to enhance deterrence of fraud,
588	588	waste, abuse, or other violations of state or federal law,
589	589	including a violation of Chapter 102, Occupations Code, in the
590	590	programs and maximize the imposition of penalties, the recovery of
591	591	money, and the successful prosecution of cases;
592	592	(1-a) the office of inspector general to refer each
593	593	case of suspected provider fraud, waste, or abuse to the office of
594	594	the attorney general not later than the 20th business day after the
595	595	date the office of inspector general determines that the existence
596	596	of fraud, waste, or abuse is reasonably indicated;
597	597	(1-b) the office of the attorney general to take
598	598	appropriate action in response to each case referred to the
599	599	attorney general, which action may include direct initiation of
600	600	prosecution, with the consent of the appropriate local district or
601	601	county attorney, direct initiation of civil litigation, referral to
602	602	an appropriate United States attorney, a district attorney, or a
603	603	county attorney, or referral to a collections agency for initiation
604	604	of civil litigation or other appropriate action;
605	605	(2) the office of inspector general to keep detailed
606	606	records for cases processed by that office or the office of the
607	607	attorney general, including information on the total number of
608	608	cases processed and, for each case:
609	609	(A) the agency and division to which the case is
610	610	referred for investigation;
611	611	(B) the date on which the case is referred; and
612	612	(C) the nature of the suspected fraud, waste, or
613	613	abuse;
614	614	(3) the office of inspector general to notify each
615	615	appropriate division of the office of the attorney general of each
616	616	case referred by the office of inspector general;
617	617	(4) the office of the attorney general to ensure that
618	618	information relating to each case investigated by that office is
619	619	available to each division of the office with responsibility for
620	620	investigating suspected fraud, waste, or abuse;
621	621	(5) the office of the attorney general to notify the
622	622	office of inspector general of each case the attorney general
623	623	declines to prosecute or prosecutes unsuccessfully;
624	624	(6) representatives of the office of inspector general
625	625	and of the office of the attorney general to meet not less than
626	626	quarterly to share case information and determine the appropriate
627	627	agency and division to investigate each case; and
628	628	(7) the office of inspector general and the office of
629	629	the attorney general to submit information requested by the
630	630	comptroller about each resolved case for the comptroller's use in
631	631	improving fraud detection.
632	632	(c) The office of inspector general [commission] and the
633	633	office of the attorney general shall jointly prepare and submit a
634	634	semiannual report to the governor, lieutenant governor, speaker of
635	635	the house of representatives, and comptroller concerning the
636	636	activities of the office of the attorney general and the office of
637	637	inspector general [those agencies] in detecting and preventing
638	638	fraud, waste, and abuse under the state Medicaid program or other
639	639	program administered by the commission or a health and human
640	640	services agency. The report may be consolidated with any other
641	641	report relating to the same subject matter the office of inspector
642	642	general [commission] or office of the attorney general is required
643	643	to submit under other law.
644	644	(d) The office of inspector general [commission] and the
645	645	office of the attorney general may not assess or collect
646	646	investigation and attorney's fees on behalf of any state agency
647	647	unless the office of inspector general, the office of the attorney
648	648	general, or another [other] state agency collects a penalty,
649	649	restitution, or other reimbursement payment to the state.
650	650	SECTION 5. Section 531.1031(a)(2), Government Code, is
651	651	amended to read as follows:
652	652	(2) "Participating agency" means:
653	653	(A) the Medicaid fraud enforcement divisions of
654	654	the office of the attorney general; [and]
655	655	(B) each board or agency with authority to
656	656	license, register, regulate, or certify a health care professional
657	657	or managed care organization that may participate in the state
658	658	Medicaid program; and
659	659	(C) the office of inspector general.
660	660	SECTION 6. Section 531.104(a), Government Code, is amended
661	661	to read as follows:
662	662	(a) The office of inspector general [commission] and the
663	663	attorney general shall execute a memorandum of understanding under
664	664	which the office [commission] shall provide investigative support
665	665	as required to the attorney general in connection with cases under
666	666	Subchapter B, Chapter 36, Human Resources Code. Under the
667	667	memorandum of understanding, the office [commission] shall assist
668	668	in performing preliminary investigations and ongoing
669	669	investigations for actions prosecuted by the attorney general under
670	670	Subchapter C, Chapter 36, Human Resources Code.
671	671	SECTION 7. Section 531.105, Government Code, is amended to
672	672	read as follows:
673	673	Sec. 531.105. FRAUD DETECTION TRAINING. [(a)] The office
674	674	of inspector general [commission] shall develop and implement a
675	675	program to provide annual training to contractors who process
676	676	Medicaid claims and appropriate staff of the health and human
677	677	services agencies [Texas Department of Health and the Texas
678	678	Department of Human Services] in identifying potential cases of
679	679	fraud, waste, or abuse under the state Medicaid program. The
680	680	training provided to the contractors and staff must include clear
681	681	criteria that specify:
682	682	(1) the circumstances under which a person should
683	683	refer a potential case to the office [commission]; and
684	684	(2) the time by which a referral should be made.
685	685	[(b) The Texas Department of Health and the Texas Department
686	686	of Human Services, in cooperation with the commission, shall
687	687	periodically set a goal of the number of potential cases of fraud,
688	688	waste, or abuse under the state Medicaid program that each agency
689	689	will attempt to identify and refer to the commission. The
690	690	commission shall include information on the agencies' goals and the
691	691	success of each agency in meeting the agency's goal in the report
692	692	required by Section 531.103(c).]
693	693	SECTION 8. Sections 531.106(f) and (g), Government Code,
694	694	are amended to read as follows:
695	695	(f) Cases [The commission shall refer cases] identified by
696	696	the technology shall be referred to the [commission's] office of
697	697	inspector general [investigations and enforcement] or the office of
698	698	the attorney general, as appropriate.
699	699	(g) Each month, the learning or neural network technology
700	700	implemented under this section must match bureau of vital
701	701	statistics death records with Medicaid claims filed by a provider.
702	702	If the commission or the office of inspector general determines
703	703	that a provider has filed a claim for services provided to a person
704	704	after the person 's date of death, as determined by the bureau of
705	705	vital statistics death records, [the commission shall refer] the
706	706	case shall be referred for investigation to the office of inspector
707	707	general or the office of the attorney general, as appropriate [to
708	708	the commission 's office of investigations and enforcement].
709	709	SECTION 9. Section 531.1061, Government Code, is amended to
710	710	read as follows:
711	711	Sec. 531.1061. FRAUD INVESTIGATION TRACKING SYSTEM. (a)
712	712	The office of inspector general [commission] shall use an automated
713	713	fraud investigation tracking system [through the commission's
714	714	office of investigations and enforcement] to monitor the progress
715	715	of an investigation of suspected fraud, waste, abuse, or
716	716	insufficient quality of care under the state Medicaid program.
717	717	(b) For each case of suspected fraud, waste, abuse, or
718	718	insufficient quality of care identified by the learning or neural
719	719	network technology required under Section 531.106, the automated
720	720	fraud investigation tracking system must:
721	721	(1) receive electronically transferred records
722	722	relating to the identified case from the learning or neural network
723	723	technology;
724	724	(2) record the details and monitor the status of an
725	725	investigation of the identified case, including maintaining a
726	726	record of the beginning and completion dates for each phase of the
727	727	case investigation;
728	728	(3) generate documents and reports related to the
729	729	status of the case investigation; and
730	730	(4) generate standard letters to a provider regarding
731	731	the status or outcome of an investigation.
732	732	(c) Each [The commission shall require each] health and
733	733	human services agency that performs any aspect of the state
734	734	Medicaid program shall [to] participate in the implementation and
735	735	use of the automated fraud investigation tracking system as
736	736	directed by the office.
737	737	SECTION 10. Section 531.1062(a), Government Code, is
738	738	amended to read as follows:
739	739	(a) The office of inspector general [commission] shall use
740	740	an automated recovery monitoring system to monitor the collections
741	741	process for a settled case of fraud, waste, abuse, or insufficient
742	742	quality of care under the state Medicaid program.
743	743	SECTION 11. Sections 531.107(a) and (f), Government Code,
744	744	are amended to read as follows:
745	745	(a) The Medicaid and Public Assistance Fraud Oversight Task
746	746	Force advises and assists the [commission and the commission's]
747	747	office of inspector general [investigations and enforcement] in
748	748	improving the efficiency of fraud investigations and collections.
749	749	(f) At least once each fiscal quarter, the [commission's]
750	750	office of inspector general [investigations and enforcement] shall
751	751	provide to the task force:
752	752	(1) information detailing:
753	753	(A) the number of fraud referrals made to the
754	754	office and the origin of each referral;
755	755	(B) the time spent investigating each case;
756	756	(C) the number of cases investigated each month,
757	757	by program and region;
758	758	(D) the dollar value of each fraud case that
759	759	results in a criminal conviction; and
760	760	(E) the number of cases the office rejects and
761	761	the reason for rejection, by region; and
762	762	(2) any additional information the task force
763	763	requires.
764	764	SECTION 12. Sections 531.108 and 531.109, Government Code,
765	765	are amended to read as follows:
766	766	Sec. 531.108. FRAUD PREVENTION. (a) The [commission's]
767	767	office of inspector general [investigations and enforcement] shall
768	768	compile and disseminate accurate information and statistics
769	769	relating to:
770	770	(1) fraud prevention; and
771	771	(2) post-fraud referrals received and accepted or
772	772	rejected from the office 's [commission's] case management system
773	773	or the case management system of a health and human services agency.
774	774	(b) The office of inspector general [commission] shall[:
775	775	[(1)] aggressively publicize successful fraud prosecutions
776	776	and fraud-prevention programs through all available means,
777	777	including the use of statewide press releases [issued in
778	778	coordination with the Texas Department of Human Services; and
779	779	[(2) ensure that a toll-free hotline for reporting
780	780	suspected fraud in programs administered by the commission or a
781	781	health and human services agency is maintained and promoted, either
782	782	by the commission or by a health and human services agency].
783	783	(c) The office of inspector general [commission] shall
784	784	develop a cost-effective method of identifying applicants for
785	785	public assistance in counties bordering other states and in
786	786	metropolitan areas selected by the office [commission] who are
787	787	already receiving benefits in other states. If economically
788	788	feasible, the office [commission] may develop a computerized
789	789	matching system.
790	790	(d) The office of inspector general [commission] shall:
791	791	(1) verify automobile information that is used as
792	792	criteria for eligibility; and
793	793	(2) establish a computerized matching system with the
794	794	Texas Department of Criminal Justice to prevent an incarcerated
795	795	individual from illegally receiving public assistance benefits
796	796	administered by the commission.
797	797	(e) The office of inspector general [commission] shall
798	798	submit to the governor and Legislative Budget Board a semiannual
799	799	report on the results of computerized matching of office and
800	800	commission information with information from neighboring states,
801	801	if any, and information from the Texas Department of Criminal
802	802	Justice. The report may be consolidated with any other report
803	803	relating to the same subject matter the office [commission] is
804	804	required to submit under other law.
805	805	Sec. 531.109. SELECTION AND REVIEW OF CLAIMS. (a) The
806	806	office of inspector general [commission] shall annually select and
807	807	review a random, statistically valid sample of all claims for
808	808	reimbursement under the state Medicaid program, including the
809	809	vendor drug program, for potential cases of fraud, waste, or abuse.
810	810	(b) In conducting the annual review of claims under
811	811	Subsection (a), the office of inspector general [commission] may
812	812	directly contact a recipient by telephone or in person, or both, to
813	813	verify that the services for which a claim for reimbursement was
814	814	submitted by a provider were actually provided to the recipient.
815	815	(c) Based on the results of the annual review of claims, the
816	816	office of inspector general and the commission shall determine the
817	817	types of claims at which office and commission resources for fraud,
818	818	waste, and abuse detection should be primarily directed.
819	819	SECTION 13. Sections 531.110(a), (c), (d), (e), and (f),
820	820	Government Code, are amended to read as follows:
821	821	(a) The office of inspector general [commission] shall
822	822	conduct electronic data matches for a recipient of assistance under
823	823	the state Medicaid program at least quarterly to verify the
824	824	identity, income, employment status, and other factors that affect
825	825	the eligibility of the recipient.
826	826	(c) The commission and other health and human services
827	827	agencies [Texas Department of Human Services] shall cooperate with
828	828	the office of inspector general [commission] by providing data or
829	829	any other assistance necessary to conduct the electronic data
830	830	matches required by this section.
831	831	(d) The office of inspector general [commission] may
832	832	contract with a public or private entity to conduct the electronic
833	833	data matches required by this section.
834	834	(e) The office of inspector general [commission], or a
835	835	health and human services agency designated by the office
836	836	[commission], by rule shall establish procedures to verify the
837	837	electronic data matches conducted by the office [commission] under
838	838	this section. Not later than the 20th day after the date the
839	839	electronic data match is verified, the commission and other health
840	840	and human services agencies [Texas Department of Human Services]
841	841	shall remove from eligibility a recipient who is determined to be
842	842	ineligible for assistance under the state Medicaid program.
843	843	(f) The office of inspector general [commission] shall
844	844	report biennially to the legislature the results of the electronic
845	845	data matching program. The report must include a summary of the
846	846	number of applicants who were removed from eligibility for
847	847	assistance under the state Medicaid program as a result of an
848	848	electronic data match conducted under this section.
849	849	SECTION 14. Section 531.1112, Government Code, is amended
850	850	to read as follows:
851	851	Sec. 531.1112. STUDY CONCERNING INCREASED USE OF TECHNOLOGY
852	852	TO STRENGTHEN FRAUD DETECTION AND DETERRENCE; IMPLEMENTATION. (a)
853	853	The commission and the [commission's] office of inspector general
854	854	shall jointly study the feasibility of increasing the use of
855	855	technology to strengthen the detection and deterrence of fraud in
856	856	the state Medicaid program. The study must include the
857	857	determination of the feasibility of using technology to verify a
858	858	person 's citizenship and eligibility for coverage.
859	859	(b) The commission shall implement any methods the
860	860	commission and the [commission's] office of inspector general
861	861	determine are effective at strengthening fraud detection and
862	862	deterrence.
863	863	SECTION 15. Section 531.113, Government Code, is amended to
864	864	read as follows:
865	865	Sec. 531.113. MANAGED CARE ORGANIZATIONS: SPECIAL
866	866	INVESTIGATIVE UNITS OR CONTRACTS. (a) Each managed care
867	867	organization that provides or arranges for the provision of health
868	868	care services to an individual under a government-funded program,
869	869	including the Medicaid program and the child health plan program,
870	870	shall:
871	871	(1) establish and maintain a special investigative
872	872	unit within the managed care organization to investigate fraudulent
873	873	claims and other types of program waste or abuse by recipients and
874	874	service providers; or
875	875	(2) contract with another entity for the investigation
876	876	of fraudulent claims and other types of program waste or abuse by
877	877	recipients and service providers.
878	878	(b) Each managed care organization subject to this section
879	879	shall adopt a plan to prevent and reduce fraud, waste, and abuse and
880	880	annually file that plan with the [commission's] office of inspector
881	881	general for approval. The plan must include:
882	882	(1) a description of the managed care organization 's
883	883	procedures for detecting and investigating possible acts of fraud,
884	884	waste, or abuse;
885	885	(2) a description of the managed care organization 's
886	886	procedures for the mandatory reporting of possible acts of fraud,
887	887	waste, or abuse to the [commission's] office of inspector general;
888	888	(3) a description of the managed care organization 's
889	889	procedures for educating and training personnel to prevent fraud,
890	890	waste, and abuse;
891	891	(4) the name, address, telephone number, and fax
892	892	number of the individual responsible for carrying out the plan;
893	893	(5) a description or chart outlining the
894	894	organizational arrangement of the managed care organization 's
895	895	personnel responsible for investigating and reporting possible
896	896	acts of fraud, waste, or abuse;
897	897	(6) a detailed description of the results of
898	898	investigations of fraud, waste, and abuse conducted by the managed
899	899	care organization 's special investigative unit or the entity with
900	900	which the managed care organization contracts under Subsection
901	901	(a)(2); and
902	902	(7) provisions for maintaining the confidentiality of
903	903	any patient information relevant to an investigation of fraud,
904	904	waste, or abuse.
905	905	(c) If a managed care organization contracts for the
906	906	investigation of fraudulent claims and other types of program waste
907	907	or abuse by recipients and service providers under Subsection
908	908	(a)(2), the managed care organization shall file with the
909	909	[commission's] office of inspector general:
910	910	(1) a copy of the written contract;
911	911	(2) the names, addresses, telephone numbers, and fax
912	912	numbers of the principals of the entity with which the managed care
913	913	organization has contracted; and
914	914	(3) a description of the qualifications of the
915	915	principals of the entity with which the managed care organization
916	916	has contracted.
917	917	(d) The [commission's] office of inspector general may
918	918	review the records of a managed care organization to determine
919	919	compliance with this section.
920	920	(e) The inspector general [commissioner] shall adopt rules
921	921	as necessary to accomplish the purposes of this section.
922	922	SECTION 16. Sections 531.114(b) and (g), Government Code,
923	923	are amended to read as follows:
924	924	(b) If after an investigation the office of inspector
925	925	general [commission] determines that a person violated Subsection
926	926	(a), the office [commission] shall:
927	927	(1) notify the person of the alleged violation not
928	928	later than the 30th day after the date the office [commission]
929	929	completes the investigation and provide the person with an
930	930	opportunity for a hearing on the matter; or
931	931	(2) refer the matter to the appropriate prosecuting
932	932	attorney for prosecution.
933	933	(g) The inspector general [commission] shall adopt rules as
934	934	necessary to implement this section.
935	935	SECTION 17. Section 533.005(a), Government Code, is amended
936	936	to read as follows:
937	937	(a) A contract between a managed care organization and the
938	938	commission for the organization to provide health care services to
939	939	recipients must contain:
940	940	(1) procedures to ensure accountability to the state
941	941	for the provision of health care services, including procedures for
942	942	financial reporting, quality assurance, utilization review, and
943	943	assurance of contract and subcontract compliance;
944	944	(2) capitation rates that ensure the cost-effective
945	945	provision of quality health care;
946	946	(3) a requirement that the managed care organization
947	947	provide ready access to a person who assists recipients in
948	948	resolving issues relating to enrollment, plan administration,
949	949	education and training, access to services, and grievance
950	950	procedures;
951	951	(4) a requirement that the managed care organization
952	952	provide ready access to a person who assists providers in resolving
953	953	issues relating to payment, plan administration, education and
954	954	training, and grievance procedures;
955	955	(5) a requirement that the managed care organization
956	956	provide information and referral about the availability of
957	957	educational, social, and other community services that could
958	958	benefit a recipient;
959	959	(6) procedures for recipient outreach and education;
960	960	(7) a requirement that the managed care organization
961	961	make payment to a physician or provider for health care services
962	962	rendered to a recipient under a managed care plan not later than the
963	963	45th day after the date a claim for payment is received with
964	964	documentation reasonably necessary for the managed care
965	965	organization to process the claim, or within a period, not to exceed
966	966	60 days, specified by a written agreement between the physician or
967	967	provider and the managed care organization;
968	968	(8) a requirement that the commission, on the date of a
969	969	recipient 's enrollment in a managed care plan issued by the managed
970	970	care organization, inform the organization of the recipient 's
971	971	Medicaid certification date;
972	972	(9) a requirement that the managed care organization
973	973	comply with Section 533.006 as a condition of contract retention
974	974	and renewal;
975	975	(10) a requirement that the managed care organization
976	976	provide the information required by Section 533.012 and otherwise
977	977	comply and cooperate with the [commission's] office of inspector
978	978	general;
979	979	(11) a requirement that the managed care
980	980	organization's usages of out-of-network providers or groups of
981	981	out-of-network providers may not exceed limits for those usages
982	982	relating to total inpatient admissions, total outpatient services,
983	983	and emergency room admissions determined by the commission;
984	984	(12) if the commission finds that a managed care
985	985	organization has violated Subdivision (11), a requirement that the
986	986	managed care organization reimburse an out-of-network provider for
987	987	health care services at a rate that is equal to the allowable rate
988	988	for those services, as determined under Sections 32.028 and
989	989	32.0281, Human Resources Code;
990	990	(13) a requirement that the organization use advanced
991	991	practice nurses in addition to physicians as primary care providers
992	992	to increase the availability of primary care providers in the
993	993	organization 's provider network;
994	994	(14) a requirement that the managed care organization
995	995	reimburse the state for any overpayments resulting from fraud,
996	996	waste or abuse in the Medicaid program, the child health plan
997	997	program, or another government funded program.
998	998	(15) a requirement that the managed care organization
999	999	reimburse a federally qualified health center or rural health
1000	1000	clinic for health care services provided to a recipient outside of
1001	1001	regular business hours, including on a weekend day or holiday, at a
1002	1002	rate that is equal to the allowable rate for those services as
1003	1003	determined under Section 32.028, Human Resources Code, if the
1004	1004	recipient does not have a referral from the recipient 's primary
1005	1005	care physician; and
1006	1006	(16) a requirement that the managed care organization
1007	1007	develop, implement, and maintain a system for tracking and
1008	1008	resolving all provider appeals related to claims payment, including
1009	1009	a process that will require:
1010	1010	(A) a tracking mechanism to document the status
1011	1011	and final disposition of each provider 's claims payment appeal;
1012	1012	(B) the contracting with physicians who are not
1013	1013	network providers and who are of the same or related specialty as
1014	1014	the appealing physician to resolve claims disputes related to
1015	1015	denial on the basis of medical necessity that remain unresolved
1016	1016	subsequent to a provider appeal; and
1017	1017	(C) the determination of the physician resolving
1018	1018	the dispute to be binding on the managed care organization and
1019	1019	provider.
1020	1020	SECTION 18. Section 533.012(c), Government Code, is amended
1021	1021	to read as follows:
1022	1022	(c) The [commission's] office of inspector general
1023	1023	[investigations and enforcement] shall review the information
1024	1024	submitted under this section as appropriate in the investigation of
1025	1025	fraud in the Medicaid managed care program.
1026	1026	SECTION 19. Section 21.014(b), Human Resources Code, is
1027	1027	amended to read as follows:
1028	1028	(b) The [person employed by the department as] inspector
1029	1029	general appointed under Subchapter R, Chapter 531, Government Code,
1030	1030	shall make reports to and consult with the agency director
1031	1031	[chairman of the board] regarding:
1032	1032	(1) the selection of internal audit topics;
1033	1033	(2) the establishment of internal audit priorities;
1034	1034	and
1035	1035	(3) the findings of each regular or special internal
1036	1036	audit initiative.
1037	1037	SECTION 20. Section 32.003, Human Resources Code, is
1038	1038	amended by adding Subdivision (5) to read as follows:
1039	1039	(5) "Office of inspector general" means the office of
1040	1040	inspector general established under Subchapter R, Chapter 531,
1041	1041	Government Code.
1042	1042	SECTION 21. Section 32.0291, Human Resources Code, is
1043	1043	amended to read as follows:
1044	1044	Sec. 32.0291. PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
1045	1045	(a) Notwithstanding any other law, the office of inspector
1046	1046	general or department may:
1047	1047	(1) perform a prepayment review of a claim for
1048	1048	reimbursement under the medical assistance program to determine
1049	1049	whether the claim involves fraud, waste, or abuse; and
1050	1050	(2) as necessary to perform that review, withhold
1051	1051	payment of the claim for not more than five working days without
1052	1052	notice to the person submitting the claim.
1053	1053	(b) Notwithstanding any other law, the office of inspector
1054	1054	general [department] may impose a postpayment hold on payment of
1055	1055	future claims submitted by a provider if the office [department]
1056	1056	has prima facie evidence that the provider has committed fraud,
1057	1057	waste, abuse, or wilful misrepresentation regarding a claim for
1058	1058	reimbursement or cost report under the medical assistance program.
1059	1059	The office [department] must notify the provider of the postpayment
1060	1060	hold not later than the fifth working day after the date the hold is
1061	1061	imposed.
1062	1062	(c) On timely written request by a provider subject to a
1063	1063	postpayment hold under Subsection (b), the office of inspector
1064	1064	general [department] shall file a request with the State Office of
1065	1065	Administrative Hearings for an expedited administrative hearing
1066	1066	regarding the hold. The provider must request an expedited hearing
1067	1067	under this subsection not later than the 10th day after the date the
1068	1068	provider receives notice from the office of inspector general
1069	1069	[department] under Subsection (b). The office of inspector general
1070	1070	[department] shall discontinue the hold unless the office
1071	1071	[department] makes a prima facie showing at the hearing that the
1072	1072	evidence relied on by the office of inspector general [department]
1073	1073	in imposing the hold is relevant, credible, and material to the
1074	1074	issue of fraud, waste, abuse, or wilful misrepresentation.
1075	1075	(d) The inspector general [department] shall adopt rules
1076	1076	that allow a provider subject to a postpayment hold under
1077	1077	Subsection (b) to seek an informal resolution of the issues
1078	1078	identified by the office of inspector general [department] in the
1079	1079	notice provided under that subsection. A provider must seek an
1080	1080	informal resolution under this subsection not later than the
1081	1081	deadline prescribed by Subsection (c). A provider's decision to
1082	1082	seek an informal resolution under this subsection does not extend
1083	1083	the time by which the provider must request an expedited
1084	1084	administrative hearing under Subsection (c). However, a hearing
1085	1085	initiated under Subsection (c) shall be stayed at the office 's
1086	1086	[department's] request until the informal resolution process is
1087	1087	completed.
1088	1088	SECTION 22. Section 32.032, Human Resources Code, is
1089	1089	amended to read as follows:
1090	1090	Sec. 32.032. PREVENTION AND DETECTION OF FRAUD, WASTE, AND
1091	1091	ABUSE. The inspector general [department] shall adopt reasonable
1092	1092	rules for minimizing the opportunity for fraud, waste, and abuse,
1093	1093	for establishing and maintaining methods for detecting and
1094	1094	identifying situations in which a question of fraud, waste, or
1095	1095	abuse in the program may exist, and for referring cases where fraud,
1096	1096	waste, or abuse appears to exist to the appropriate law enforcement
1097	1097	agencies for prosecution.
1098	1098	SECTION 23. Sections 32.0321(a) through (d), Human
1099	1099	Resources Code, are amended to read as follows:
1100	1100	(a) The office of inspector general [department] by rule may
1101	1101	recommend to the department and the department by rule may require
1102	1102	that each provider of medical assistance in a provider type that has
1103	1103	demonstrated significant potential for fraud, waste, or abuse to
1104	1104	file with the department a surety bond in a reasonable amount. The
1105	1105	office and the department by rule shall each require a provider of
1106	1106	medical assistance to file with the department a surety bond in a
1107	1107	reasonable amount if the office [department] identifies a pattern
1108	1108	of suspected fraud, waste, or abuse involving criminal conduct
1109	1109	relating to the provider 's services under the medical assistance
1110	1110	program that indicates the need for protection against potential
1111	1111	future acts of fraud, waste, or abuse.
1112	1112	(b) The bond under Subsection (a) must be payable to the
1113	1113	department to compensate the department for damages resulting from
1114	1114	or penalties or fines imposed in connection with an act of fraud,
1115	1115	waste, or abuse committed by the provider under the medical
1116	1116	assistance program.
1117	1117	(c) Subject to Subsection (d) or (e), the office of
1118	1118	inspector general and the department by rule may require each
1119	1119	provider of medical assistance that establishes a resident's trust
1120	1120	fund account to post a surety bond to secure the account. The bond
1121	1121	must be payable to the department to compensate residents of the
1122	1122	bonded provider for trust funds that are lost, stolen, or otherwise
1123	1123	unaccounted for if the provider does not repay any deficiency in a
1124	1124	resident 's trust fund account to the person legally entitled to
1125	1125	receive the funds.
1126	1126	(d) The office of inspector general and the department may
1127	1127	not require the amount of a surety bond posted for a single facility
1128	1128	provider under Subsection (c) to exceed the average of the total
1129	1129	average monthly balance of all the provider 's resident trust fund
1130	1130	accounts for the 12-month period preceding the bond issuance or
1131	1131	renewal date.
1132	1132	SECTION 24. Section 32.0322(a), Human Resources Code, is
1133	1133	amended to read as follows:
1134	1134	(a) The office of inspector general and the department may
1135	1135	obtain from any law enforcement or criminal justice agency the
1136	1136	criminal history record information that relates to a provider
1137	1137	under the medical assistance program or a person applying to enroll
1138	1138	as a provider under the medical assistance program.
1139	1139	SECTION 25. Section 32.070(d), Human Resources Code, is
1140	1140	amended to read as follows:
1141	1141	(d) This section does not apply to a computerized audit
1142	1142	conducted using the Medicaid Fraud Detection Audit System or an
1143	1143	audit or investigation of fraud, waste, and abuse conducted by the
1144	1144	Medicaid fraud control unit of the office of the attorney general,
1145	1145	the office of the state auditor, the office of [the] inspector
1146	1146	general, or the Office of Inspector General in the United States
1147	1147	Department of Health and Human Services.
1148	1148	SECTION 26. Section 33.015(e), Human Resources Code, is
1149	1149	amended to read as follows:
1150	1150	(e) The department shall require a person exempted under
1151	1151	this section from making a personal appearance at department
1152	1152	offices to provide verification of the person 's entitlement to the
1153	1153	exemption on initial eligibility certification and on each
1154	1154	subsequent periodic eligibility recertification. If the person
1155	1155	does not provide verification and the department considers the
1156	1156	verification necessary to protect the integrity of the food stamp
1157	1157	program, the department shall initiate a fraud referral to the
1158	1158	[department's] office of inspector general established under
1159	1159	Subchapter R, Chapter 531, Government Code.
1160	1160	SECTION 27. Article 2.12, Code of Criminal Procedure, is
1161	1161	amended to read as follows:
1162	1162	Art. 2.12. WHO ARE PEACE OFFICERS. The following are peace
1163	1163	officers:
1164	1164	(1) sheriffs, their deputies, and those reserve
1165	1165	deputies who hold a permanent peace officer license issued under
1166	1166	Chapter 1701, Occupations Code;
1167	1167	(2) constables, deputy constables, and those reserve
1168	1168	deputy constables who hold a permanent peace officer license issued
1169	1169	under Chapter 1701, Occupations Code;
1170	1170	(3) marshals or police officers of an incorporated
1171	1171	city, town, or village, and those reserve municipal police officers
1172	1172	who hold a permanent peace officer license issued under Chapter
1173	1173	1701, Occupations Code;
1174	1174	(4) rangers and officers commissioned by the Public
1175	1175	Safety Commission and the Director of the Department of Public
1176	1176	Safety;
1177	1177	(5) investigators of the district attorneys', criminal
1178	1178	district attorneys', and county attorneys' offices;
1179	1179	(6) law enforcement agents of the Texas Alcoholic
1180	1180	Beverage Commission;
1181	1181	(7) each member of an arson investigating unit
1182	1182	commissioned by a city, a county, or the state;
1183	1183	(8) officers commissioned under Section 37.081,
1184	1184	Education Code, or Subchapter E, Chapter 51, Education Code;
1185	1185	(9) officers commissioned by the General Services
1186	1186	Commission;
1187	1187	(10) law enforcement officers commissioned by the
1188	1188	Parks and Wildlife Commission;
1189	1189	(11) airport police officers commissioned by a city
1190	1190	with a population of more than 1.18 million that operates an airport
1191	1191	that serves commercial air carriers;
1192	1192	(12) airport security personnel commissioned as peace
1193	1193	officers by the governing body of any political subdivision of this
1194	1194	state, other than a city described by Subdivision (11), that
1195	1195	operates an airport that serves commercial air carriers;
1196	1196	(13) municipal park and recreational patrolmen and
1197	1197	security officers;
1198	1198	(14) security officers and investigators commissioned
1199	1199	as peace officers by the comptroller;
1200	1200	(15) officers commissioned by a water control and
1201	1201	improvement district under Section 49.216, Water Code;
1202	1202	(16) officers commissioned by a board of trustees
1203	1203	under Chapter 54, Transportation Code;
1204	1204	(17) investigators commissioned by the Texas Medical
1205	1205	Board;
1206	1206	(18) officers commissioned by the board of managers of
1207	1207	the Dallas County Hospital District, the Tarrant County Hospital
1208	1208	District, or the Bexar County Hospital District under Section
1209	1209	281.057, Health and Safety Code;
1210	1210	(19) county park rangers commissioned under
1211	1211	Subchapter E, Chapter 351, Local Government Code;
1212	1212	(20) investigators employed by the Texas Racing
1213	1213	Commission;
1214	1214	(21) officers commissioned under Chapter 554,
1215	1215	Occupations Code;
1216	1216	(22) officers commissioned by the governing body of a
1217	1217	metropolitan rapid transit authority under Section 451.108,
1218	1218	Transportation Code, or by a regional transportation authority
1219	1219	under Section 452.110, Transportation Code;
1220	1220	(23) investigators commissioned by the attorney
1221	1221	general under Section 402.009, Government Code;
1222	1222	(24) security officers and investigators commissioned
1223	1223	as peace officers under Chapter 466, Government Code;
1224	1224	(25) an officer employed by the Department of State
1225	1225	Health Services under Section 431.2471, Health and Safety Code;
1226	1226	(26) officers appointed by an appellate court under
1227	1227	Subchapter F, Chapter 53, Government Code;
1228	1228	(27) officers commissioned by the state fire marshal
1229	1229	under Chapter 417, Government Code;
1230	1230	(28) an investigator commissioned by the commissioner
1231	1231	of insurance under Section 701.104, Insurance Code;
1232	1232	(29) apprehension specialists and inspectors general
1233	1233	commissioned by the Texas Youth Commission as officers under
1234	1234	Sections 61.0451 and 61.0931, Human Resources Code;
1235	1235	(30) officers appointed by the inspector general of
1236	1236	the Texas Department of Criminal Justice under Section 493.019,
1237	1237	Government Code;
1238	1238	(31) investigators commissioned by the Commission on
1239	1239	Law Enforcement Officer Standards and Education under Section
1240	1240	1701.160, Occupations Code;
1241	1241	(32) commission investigators commissioned by the
1242	1242	Texas Private Security Board under Section 1702.061(f),
1243	1243	Occupations Code;
1244	1244	(33) the fire marshal and any officers, inspectors, or
1245	1245	investigators commissioned by an emergency services district under
1246	1246	Chapter 775, Health and Safety Code;
1247	1247	(34) officers commissioned by the State Board of
1248	1248	Dental Examiners under Section 254.013, Occupations Code, subject
1249	1249	to the limitations imposed by that section; [and]
1250	1250	(35) investigators commissioned by the Texas Juvenile
1251	1251	Probation Commission as officers under Section 141.055, Human
1252	1252	Resources Code; and
1253	1253	(36) officers commissioned by the office of inspector
1254	1254	general established under Subchapter R, Chapter 531, Government
1255	1255	Code.
1256	1256	SECTION 28. Sections 531.102 and 531.1021, Government Code,
1257	1257	are repealed.
1258	1258	SECTION 29. Section 411.086, Government Code, is amended to
1259	1259	read as follows:
1260	1260	Sec. 411.083. DISSEMINATION OF CRIMINAL HISTORY RECORD
1261	1261	INFORMATION. (a) Criminal history record information maintained
1262	1262	by the department is confidential information for the use of the
1263	1263	department and, except as provided by this subchapter, may not be
1264	1264	disseminated by the department.
1265	1265	(b) The department shall grant access to criminal history
1266	1266	record information to:
1267	1267	(1) criminal justice agencies;
1268	1268	(2) noncriminal justice agencies authorized by
1269	1269	federal statute or executive order or by state statute to receive
1270	1270	criminal history record information;
1271	1271	(3) the person who is the subject of the criminal
1272	1272	history record information;
1273	1273	(4) a person working on a research or statistical
1274	1274	project that:
1275	1275	(A) is funded in whole or in part by state funds;
1276	1276	or
1277	1277	(B) meets the requirements of Part 22, Title 28,
1278	1278	Code of Federal Regulations, and is approved by the department;
1279	1279	(5) an individual or an agency that has a specific
1280	1280	agreement with a criminal justice agency to provide services
1281	1281	required for the administration of criminal justice under that
1282	1282	agreement, if the agreement:
1283	1283	(A) specifically authorizes access to
1284	1284	information;
1285	1285	(B) limits the use of information to the purposes
1286	1286	for which it is given;
1287	1287	(C) ensures the security and confidentiality of
1288	1288	the information; and
1289	1289	(D) provides for sanctions if a requirement
1290	1290	imposed under Paragraph (A), (B), or (C) is violated;
1291	1291	(6) an individual or an agency that has a specific
1292	1292	agreement with a noncriminal justice agency to provide services
1293	1293	related to the use of criminal history record information
1294	1294	disseminated under this subchapter, if the agreement:
1295	1295	(A) specifically authorizes access to
1296	1296	information;
1297	1297	(B) limits the use of information to the purposes
1298	1298	for which it is given;
1299	1299	(C) ensures the security and confidentiality of
1300	1300	the information; and
1301	1301	(D) provides for sanctions if a requirement
1302	1302	imposed under Paragraph (A), (B), or (C) is violated;
1303	1303	(7) a county or district clerk's office; [and]
1304	1304	(8) the Office of Court Administration of the Texas
1305	1305	Judicial System; and
1306	1306	(9) officers commissioned by the office of inspector
1307	1307	general established under Subchapter R, Chapter 531, Government
1308	1308	Code.
1309	1309	(c) The department may disseminate criminal history record
1310	1310	information under Subsection (b)(1) only for a criminal justice
1311	1311	purpose. The department may disseminate criminal history record
1312	1312	information under Subsection (b)(2) only for a purpose specified in
1313	1313	the statute or order. The department may disseminate criminal
1314	1314	history record information under Subsection (b)(4), (5), or (6)
1315	1315	only for a purpose approved by the department and only under rules
1316	1316	adopted by the department. The department may disseminate criminal
1317	1317	history record information under Subsection (b)(7) only to the
1318	1318	extent necessary for a county or district clerk to perform a duty
1319	1319	imposed by law to collect and report criminal court disposition
1320	1320	information. Criminal history record information disseminated to a
1321	1321	clerk under Subsection (b)(7) may be used by the clerk only to
1322	1322	ensure that information reported by the clerk to the department is
1323	1323	accurate and complete. The dissemination of information to a clerk
1324	1324	under Subsection (b)(7) does not affect the authority of the clerk
1325	1325	to disclose or use information submitted by the clerk to the
1326	1326	department. The department may disseminate criminal history record
1327	1327	information under Subsection (b)(8) only to the extent necessary
1328	1328	for the office of court administration to perform a duty imposed by
1329	1329	law to compile court statistics or prepare reports. The office of
1330	1330	court administration may disclose criminal history record
1331	1331	information obtained from the department under Subsection (b)(8) in
1332	1332	a statistic compiled by the office or a report prepared by the
1333	1333	office, but only in a manner that does not identify the person who
1334	1334	is the subject of the information.
1335	1335	(d) The department is not required to release or disclose
1336	1336	criminal history record information to any person that is not in
1337	1337	compliance with rules adopted by the department under this
1338	1338	subchapter or rules adopted by the Federal Bureau of Investigation
1339	1339	that relate to the dissemination or use of criminal history record
1340	1340	information.
1341	1341	SECTION 30. (a) The repeal by this Act of Section 531.102,
1342	1342	Government Code, does not affect the validity of a complaint,
1343	1343	investigation, or other proceeding initiated under that section
1344	1344	before the effective date of this Act. A complaint, investigation,
1345	1345	or other proceeding initiated under that section is continued in
1346	1346	accordance with the changes in law made by this Act.
1347	1347	(b) The repeal by this Act of Section 531.1021, Government
1348	1348	Code, does not affect the validity of a subpoena issued under that
1349	1349	section before the effective date of this Act. A subpoena issued
1350	1350	under that section before the effective date of this Act is governed
1351	1351	by the law that existed when the subpoena was issued, and the former
1352	1352	law is continued in effect for that purpose.
1353	1353	SECTION 31. (a) The person serving as inspector general
1354	1354	under Section 531.102(a-1), Government Code, on the effective date
1355	1355	of this Act shall serve as the inspector general appointed under
1356	1356	Subchapter R, Chapter 531, Government Code, as added by this Act,
1357	1357	until February 1, 2011, and may be reappointed under Subchapter R,
1358	1358	Chapter 531, if the person has the qualifications required under
1359	1359	that subchapter.
1360	1360	(b) Not later than February 1, 2011, the governor shall
1361	1361	appoint an inspector general for the Office of Inspector General
1362	1362	under Subchapter R, Chapter 531, Government Code, as added by this
1363	1363	Act, to a term expiring February 1, 2013.
1364	1364	SECTION 32. On the effective date of this Act:
1365	1365	(1) all functions, activities, employees, rules,
1366	1366	forms, money, property, contracts, memorandums of understanding,
1367	1367	records, and obligations of the office of inspector general under
1368	1368	Section 531.102(a-1), Government Code, become functions,
1369	1369	activities, employees, rules, forms, money, property, contracts,
1370	1370	memorandums of understanding, records, and obligations of the
1371	1371	Office of Inspector General established under Subchapter R, Chapter
1372	1372	531, Government Code, as added by this Act, without a change in
1373	1373	status; and
1374	1374	(2) all money appropriated or budgeted for the office
1375	1375	of inspector general under Section 531.102(a-1), Government Code,
1376	1376	including money for providing administrative support, is
1377	1377	considered appropriated for the use of the Office of Inspector
1378	1378	General established under Subchapter R, Chapter 531, Government
1379	1379	Code, as added by this Act.
1380	1380	SECTION 33. If before implementing any provision of this
1381	1381	Act a state office or agency determines that a waiver or
1382	1382	authorization from a federal agency is necessary for implementation
1383	1383	of that provision, the office or agency affected by the provision
1384	1384	shall request the waiver or authorization and may delay
1385	1385	implementing that provision until the waiver or authorization is
1386	1386	granted.
1387	1387	SECTION 34. This Act takes effect immediately if it
1388	1388	receives a vote of two-thirds of all the members elected to each
1389	1389	house, as provided by Section 39, Article III, Texas Constitution.
1390	1390	If this Act does not receive the vote necessary for immediate
1391	1391	effect, this Act takes effect September 1, 2009.