Texas 2009 - 81st Regular

Texas Senate Bill SB1542 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Uresti S.B. No. 1542
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the conduct of investigations, prepayment reviews, and
7	7	payment holds in cases of suspected fraud, waste, or abuse in the
8	8	provision of health and human services.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subsections (e) and (g), Section 531.102,
11	11	Government Code, are amended to read as follows:
12	12	(e) The executive commissioner [commission], in
13	13	consultation with the inspector general, by rule shall set specific
14	14	claims criteria that, when met, require the office to begin an
15	15	investigation. The claims criteria adopted under this subsection
16	16	must be consistent with the criteria adopted under Section
17	17	32.0291(a-1), Human Resources Code.
18	18	(g)(1) Whenever the office learns or has reason to suspect
19	19	that a provider's records are being withheld, concealed, destroyed,
20	20	fabricated, or in any way falsified, the office shall immediately
21	21	refer the case to the state's Medicaid fraud control unit. However,
22	22	such criminal referral does not preclude the office from continuing
23	23	its investigation of the provider, which investigation may lead to
24	24	the imposition of appropriate administrative or civil sanctions.
25	25	(2) In addition to other instances authorized under
26	26	state or federal law, the office shall impose without prior notice a
27	27	hold on payment of claims for reimbursement submitted by a provider
28	28	to compel production of records or when requested by the state's
29	29	Medicaid fraud control unit, as applicable. The office must notify
30	30	the provider of the hold on payment not later than the fifth working
31	31	day after the date the payment hold is imposed. The notice to the
32	32	provider must include:
33	33	(A) an information statement indicating the
34	34	nature of a payment hold;
35	35	(B) a statement of the reason the payment hold is
36	36	being imposed, the provider's suspected violation, and the evidence
37	37	to support that suspicion; and
38	38	(C) a statement that the provider is entitled to
39	39	request a hearing regarding the payment hold or an informal
40	40	resolution of the identified issues, the time within which the
41	41	request must be made, and the procedures and requirements for
42	42	making the request, including that a request for a hearing must be
43	43	in writing.
44	44	(3) On timely written request by a provider subject to
45	45	a hold on payment under Subdivision (2), other than a hold requested
46	46	by the state's Medicaid fraud control unit, the office shall file a
47	47	request with the State Office of Administrative Hearings for an
48	48	expedited administrative hearing regarding the hold. The provider
49	49	must request an expedited hearing under this subdivision not later
50	50	than the 10th day after the date the provider receives notice from
51	51	the office under Subdivision (2). A provider who submits a timely
52	52	request for a hearing under this subdivision must be given notice of
53	53	the following not later than the 30th day before the date the
54	54	hearing is scheduled:
55	55	(A) the date, time, and location of the hearing;
56	56	and
57	57	(B) a list of the provider's rights at the
58	58	hearing, including the right to present witnesses and other
59	59	evidence.
60	60	(3-a) With respect to a provider who timely requests a
61	61	hearing under Subdivision (3):
62	62	(A) if the hearing is not scheduled on or before
63	63	the 60th day after the date of the request, the payment hold is
64	64	automatically terminated on the 60th day after the date of the
65	65	request and may be reinstated only if prima facie evidence of fraud,
66	66	waste, or abuse is presented subsequently at the hearing; and
67	67	(B) if the hearing is held on or before the 60th
68	68	day after the date of the request, the payment hold may be continued
69	69	after the hearing only if the hearing officer determines that prima
70	70	facie evidence of fraud, waste, or abuse was presented at the
71	71	hearing.
72	72	(4) The commission shall adopt rules that allow a
73	73	provider subject to a hold on payment under Subdivision (2), other
74	74	than a hold requested by the state's Medicaid fraud control unit, to
75	75	seek an informal resolution of the issues identified by the office
76	76	in the notice provided under that subdivision. A provider must seek
77	77	an informal resolution under this subdivision not later than the
78	78	deadline prescribed by Subdivision (3). A provider's decision to
79	79	seek an informal resolution under this subdivision does not extend
80	80	the time by which the provider must request an expedited
81	81	administrative hearing under Subdivision (3). However, a hearing
82	82	initiated under Subdivision (3) shall be stayed at the office's
83	83	request until the informal resolution process is completed. The
84	84	period during which the hearing is stayed under this subdivision is
85	85	excluded in computing whether a hearing was scheduled or held not
86	86	later than the 60th day after the hearing was requested for purposes
87	87	of Subdivision (3-a).
88	88	(4-a) With respect to a provider who timely requests
89	89	an informal resolution under Subdivision (4):
90	90	(A) if the informal resolution is not completed
91	91	on or before the 60th day after the date of the request, the payment
92	92	hold is automatically terminated on the 60th day after the date of
93	93	the request and may be reinstated only if prima facie evidence of
94	94	fraud, waste, or abuse is subsequently presented at a hearing
95	95	requested and held under Subdivision (3); and
96	96	(B) if the informal resolution is completed on or
97	97	before the 60th day after the date of the request, the payment hold
98	98	may be continued after the completion of the informal resolution
99	99	only if the office determines that prima facie evidence of fraud,
100	100	waste, or abuse was presented during the informal resolution
101	101	process.
102	102	(5) The executive commissioner [office] shall, in
103	103	consultation with the state's Medicaid fraud control unit, adopt
104	104	rules for the office [establish guidelines] under which holds on
105	105	payment or program exclusions:
106	106	(A) may permissively be imposed on a provider; or
107	107	(B) shall automatically be imposed on a provider.
108	108	(6) If a payment hold is terminated, either
109	109	automatically or after a hearing or informal review, in accordance
110	110	with Subdivision (3-a) or (4-a), the office shall inform all
111	111	affected claims payors, including Medicaid managed care
112	112	organizations, of the termination not later than the fifth day
113	113	after the date of the termination.
114	114	(7) A provider in a case in which a payment hold was
115	115	imposed under this subsection who ultimately prevails in a hearing
116	116	or, if the case is appealed, on appeal, or with respect to whom the
117	117	office determines that prima facie evidence of fraud, waste, or
118	118	abuse was not presented during an informal resolution process, is
119	119	entitled to prompt payment of all payments held and interest on
120	120	those payments at a rate equal to the prime rate, as published in
121	121	The Wall Street Journal on the first day of each calendar year that
122	122	is not a Saturday, Sunday, or legal holiday, plus one percent.
123	123	SECTION 2. Subsections (a) and (b), Section 531.103,
124	124	Government Code, are amended to read as follows:
125	125	(a) The commission, acting through the commission's office
126	126	of inspector general, and the office of the attorney general shall
127	127	enter into a memorandum of understanding to develop and implement
128	128	joint written procedures for processing cases of suspected fraud,
129	129	waste, or abuse, as those terms are defined by state or federal law,
130	130	or other violations of state or federal law under the state Medicaid
131	131	program or other program administered by the commission or a health
132	132	and human services agency, including the financial assistance
133	133	program under Chapter 31, Human Resources Code, a nutritional
134	134	assistance program under Chapter 33, Human Resources Code, and the
135	135	child health plan program. The memorandum of understanding shall
136	136	require:
137	137	(1) the office of inspector general and the office of
138	138	the attorney general to set priorities and guidelines for referring
139	139	cases to appropriate state agencies for investigation,
140	140	prosecution, or other disposition to enhance deterrence of fraud,
141	141	waste, abuse, or other violations of state or federal law,
142	142	including a violation of Chapter 102, Occupations Code, in the
143	143	programs and maximize the imposition of penalties, the recovery of
144	144	money, and the successful prosecution of cases;
145	145	(1-a) the office of inspector general to refer each
146	146	case of suspected provider fraud, waste, or abuse to the office of
147	147	the attorney general not later than the 20th business day after the
148	148	date the office of inspector general determines that the existence
149	149	of fraud, waste, or abuse is reasonably indicated;
150	150	(1-b) the office of the attorney general to take
151	151	appropriate action in response to each case referred to the
152	152	attorney general, which action may include direct initiation of
153	153	prosecution, with the consent of the appropriate local district or
154	154	county attorney, direct initiation of civil litigation, referral to
155	155	an appropriate United States attorney, a district attorney, or a
156	156	county attorney, or referral to a collections agency for initiation
157	157	of civil litigation or other appropriate action;
158	158	(2) the office of inspector general to keep detailed
159	159	records for cases processed by that office or the office of the
160	160	attorney general, including information on the total number of
161	161	cases processed and, for each case:
162	162	(A) the agency and division to which the case is
163	163	referred for investigation;
164	164	(B) the date on which the case is referred; and
165	165	(C) the nature of the suspected fraud, waste, or
166	166	abuse;
167	167	(3) the office of inspector general to notify each
168	168	appropriate division of the office of the attorney general of each
169	169	case referred by the office of inspector general;
170	170	(4) the office of the attorney general to ensure that
171	171	information relating to each case investigated by that office is
172	172	available to each division of the office with responsibility for
173	173	investigating suspected fraud, waste, or abuse;
174	174	(5) the office of the attorney general to notify the
175	175	office of inspector general of each case the attorney general
176	176	declines to prosecute or prosecutes unsuccessfully;
177	177	(6) representatives of the office of inspector general
178	178	and of the office of the attorney general to meet not less than
179	179	quarterly to share case information and determine the appropriate
180	180	agency and division to investigate each case; [and]
181	181	(7) the office of inspector general and the office of
182	182	the attorney general to submit information requested by the
183	183	comptroller about each resolved case for the comptroller's use in
184	184	improving fraud detection; and
185	185	(8) the office of inspector general and the office of
186	186	the attorney general to develop and implement joint written
187	187	procedures for processing cases of suspected fraud, waste, or
188	188	abuse, which must include:
189	189	(A) procedures for maintaining a chain of custody
190	190	for any records obtained during an investigation and for
191	191	maintaining the confidentiality of the records;
192	192	(B) a procedure by which a provider who is the
193	193	subject of an investigation may make copies of any records taken
194	194	from the provider during the course of the investigation before the
195	195	records are taken or, in lieu of the opportunity to make copies, a
196	196	requirement that the office of inspector general or the office of
197	197	the attorney general, as applicable, make copies of the records
198	198	taken during the course of the investigation and provide those
199	199	copies to the provider not later than the 10th day after the date
200	200	the records are taken; and
201	201	(C) a procedure for returning any original
202	202	records obtained from a provider who is the subject of a case of
203	203	suspected fraud, waste, or abuse not later than the 15th day after
204	204	the final resolution of the case, including all hearings and
205	205	appeals.
206	206	(b) An exchange of information under this section between
207	207	the office of the attorney general and the commission, the office of
208	208	inspector general, or a health and human services agency does not
209	209	affect the confidentiality of the information or whether the
210	210	information is subject to disclosure under Chapter 552.
211	211	SECTION 3. Section 32.0291, Human Resources Code, is
212	212	amended to read as follows:
213	213	Sec. 32.0291. PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
214	214	(a) Notwithstanding any other law and subject to Subsections (a-1)
215	215	and (a-2), the department may:
216	216	(1) perform a prepayment review of a claim for
217	217	reimbursement under the medical assistance program to determine
218	218	whether the claim involves fraud or abuse; and
219	219	(2) as necessary to perform that review, withhold
220	220	payment of the claim for not more than five working days without
221	221	notice to the person submitting the claim.
222	222	(a-1) The executive commissioner of the Health and Human
223	223	Services Commission shall adopt rules governing the conduct of a
224	224	prepayment review of a claim for reimbursement from a medical
225	225	assistance provider authorized by Subsection (a). The rules must:
226	226	(1) specify actions that must be taken by the
227	227	department, or an appropriate person with whom the department
228	228	contracts, to educate the provider and remedy irregular coding or
229	229	claims filing issues before conducting a prepayment review;
230	230	(2) outline the mechanism by which a specific provider
231	231	is identified for a prepayment review;
232	232	(3) define the criteria, consistent with the criteria
233	233	adopted under Section 531.102(e), Government Code, used to
234	234	determine whether a prepayment review will be imposed, including
235	235	the evidentiary threshold, such as prima facie evidence, that is
236	236	required before imposition of that review;
237	237	(4) prescribe the maximum number of days a provider
238	238	may be placed on prepayment review status;
239	239	(5) require periodic reevaluation of the necessity of
240	240	continuing a prepayment review after the review action is initially
241	241	imposed;
242	242	(6) establish procedures affording due process to a
243	243	provider placed on prepayment review status, including notice
244	244	requirements, an opportunity for a hearing, and an appeals process;
245	245	and
246	246	(7) provide opportunities for provider education
247	247	while providers are on prepayment review status.
248	248	(a-2) The department may not perform a random prepayment
249	249	review of a claim for reimbursement under the medical assistance
250	250	program to determine whether the claim involves fraud or abuse. The
251	251	department may only perform a prepayment review of the claims of a
252	252	provider who meets the criteria adopted under Subsection (a-1)(3)
253	253	for imposition of a prepayment review.
254	254	(b) Notwithstanding any other law and subject to Section
255	255	531.102(g), Government Code, the department may impose a
256	256	postpayment hold on payment of future claims submitted by a
257	257	provider if the department has reliable evidence that the provider
258	258	has committed fraud or wilful misrepresentation regarding a claim
259	259	for reimbursement under the medical assistance program. [The
260	260	department must notify the provider of the postpayment hold not
261	261	later than the fifth working day after the date the hold is
262	262	imposed.]
263	263	(c) A postpayment hold authorized by this section is
264	264	governed by the requirements and procedures specified for payment
265	265	holds under Section 531.102, Government Code [On timely written
266	266	request by a provider subject to a postpayment hold under
267	267	Subsection (b), the department shall file a request with the State
268	268	Office of Administrative Hearings for an expedited administrative
269	269	hearing regarding the hold. The provider must request an expedited
270	270	hearing under this subsection not later than the 10th day after the
271	271	date the provider receives notice from the department under
272	272	Subsection (b). The department shall discontinue the hold unless
273	273	the department makes a prima facie showing at the hearing that the
274	274	evidence relied on by the department in imposing the hold is
275	275	relevant, credible, and material to the issue of fraud or wilful
276	276	misrepresentation.
277	277	[(d) The department shall adopt rules that allow a provider
278	278	subject to a postpayment hold under Subsection (b) to seek an
279	279	informal resolution of the issues identified by the department in
280	280	the notice provided under that subsection. A provider must seek an
281	281	informal resolution under this subsection not later than the
282	282	deadline prescribed by Subsection (c). A provider's decision to
283	283	seek an informal resolution under this subsection does not extend
284	284	the time by which the provider must request an expedited
285	285	administrative hearing under Subsection (c). However, a hearing
286	286	initiated under Subsection (c) shall be stayed at the department's
287	287	request until the informal resolution process is completed].
288	288	SECTION 4. The executive commissioner of the Health and
289	289	Human Services Commission shall adopt the rules required by
290	290	Subsection (a-1), Section 32.0291, Human Resources Code, as added
291	291	by this Act, not later than November 1, 2009.
292	292	SECTION 5. If before implementing any provision of this Act
293	293	a state agency determines that a waiver or authorization from a
294	294	federal agency is necessary for implementation of that provision,
295	295	the agency affected by the provision shall request the waiver or
296	296	authorization and may delay implementing that provision until the
297	297	waiver or authorization is granted.
298	298	SECTION 6. This Act takes effect September 1, 2009.