S.B. No. 544
AN ACT
relating to unlawful acts against and criminal offenses involving
the Medicaid program; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 36.001, Human Resources Code, is amended
by adding Subdivisions (5-a) and (7-a) to read as follows:
(5-a) "Material" means having a natural tendency to
influence or to be capable of influencing.
(7-a) "Obligation" means a duty, whether or not fixed,
that arises from:
(A) an express or implied contractual,
grantor-grantee, or licensor-licensee relationship;
(B) a fee-based or similar relationship;
(C) a statute or regulation; or
(D) the retention of any overpayment.
SECTION 2. Section 36.002, Human Resources Code, is amended
to read as follows:
Sec. 36.002. UNLAWFUL ACTS. A person commits an unlawful
act if the person:
(1) knowingly makes or causes to be made a false
statement or misrepresentation of a material fact to permit a
person to receive a benefit or payment under the Medicaid program
that is not authorized or that is greater than the benefit or
payment that is authorized;
(2) knowingly conceals or fails to disclose
information that permits a person to receive a benefit or payment
under the Medicaid program that is not authorized or that is greater
than the benefit or payment that is authorized;
(3) knowingly applies for and receives a benefit or
payment on behalf of another person under the Medicaid program and
converts any part of the benefit or payment to a use other than for
the benefit of the person on whose behalf it was received;
(4) knowingly makes, causes to be made, induces, or
seeks to induce the making of a false statement or
misrepresentation of material fact concerning:
(A) the conditions or operation of a facility in
order that the facility may qualify for certification or
recertification required by the Medicaid program, including
certification or recertification as:
(i) a hospital;
(ii) a nursing facility or skilled nursing
facility;
(iii) a hospice;
(iv) an intermediate care facility for the
mentally retarded;
(v) an assisted living facility; or
(vi) a home health agency; or
(B) information required to be provided by a
federal or state law, rule, regulation, or provider agreement
pertaining to the Medicaid program;
(5) except as authorized under the Medicaid program,
knowingly pays, charges, solicits, accepts, or receives, in
addition to an amount paid under the Medicaid program, a gift,
money, a donation, or other consideration as a condition to the
provision of a service or product or the continued provision of a
service or product if the cost of the service or product is paid
for, in whole or in part, under the Medicaid program;
(6) knowingly presents or causes to be presented a
claim for payment under the Medicaid program for a product provided
or a service rendered by a person who:
(A) is not licensed to provide the product or
render the service, if a license is required; or
(B) is not licensed in the manner claimed;
(7) knowingly makes or causes to be made a claim under
the Medicaid program for:
(A) a service or product that has not been
approved or acquiesced in by a treating physician or health care
practitioner;
(B) a service or product that is substantially
inadequate or inappropriate when compared to generally recognized
standards within the particular discipline or within the health
care industry; or
(C) a product that has been adulterated, debased,
mislabeled, or that is otherwise inappropriate;
(8) makes a claim under the Medicaid program and
knowingly fails to indicate the type of license and the
identification number of the licensed health care provider who
actually provided the service;
(9) knowingly enters into an agreement, combination,
or conspiracy to defraud the state by obtaining or aiding another
person in obtaining an unauthorized payment or benefit from the
Medicaid program or a fiscal agent;
(10) is a managed care organization that contracts
with the Health and Human Services Commission or other state agency
to provide or arrange to provide health care benefits or services to
individuals eligible under the Medicaid program and knowingly:
(A) fails to provide to an individual a health
care benefit or service that the organization is required to
provide under the contract;
(B) fails to provide to the commission or
appropriate state agency information required to be provided by
law, commission or agency rule, or contractual provision; or
(C) engages in a fraudulent activity in
connection with the enrollment of an individual eligible under the
Medicaid program in the organization's managed care plan or in
connection with marketing the organization's services to an
individual eligible under the Medicaid program;
(11) knowingly obstructs an investigation by the
attorney general of an alleged unlawful act under this section;
(12) knowingly makes, uses, or causes the making or
use of a false record or statement to conceal, avoid, or decrease an
obligation to pay or transmit money or property to this state under
the Medicaid program; or
(13) knowingly engages in conduct that constitutes a
violation under Section 32.039(b).
SECTION 3. Subsection (a), Section 36.052, Human Resources
Code, is amended to read as follows:
(a) Except as provided by Subsection (c), a person who
commits an unlawful act is liable to the state for:
(1) the amount of any payment or the value of any
monetary or in-kind benefit provided under the Medicaid program,
directly or indirectly, as a result of the unlawful act, including
any payment made to a third party;
(2) interest on the amount of the payment or the value
of the benefit described by Subdivision (1) at the prejudgment
interest rate in effect on the day the payment or benefit was
received or paid, for the period from the date the benefit was
received or paid to the date that the state recovers the amount of
the payment or value of the benefit;
(3) a civil penalty of:
(A) not less than $5,500 or the minimum amount
imposed as provided by 31 U.S.C. Section 3729(a), if that amount
exceeds $5,500, and not [$5,000 or] more than $15,000 or the maximum
amount imposed as provided by 31 U.S.C. Section 3729(a), if that
amount exceeds $15,000, for each unlawful act committed by the
person that results in injury to an elderly person, as defined by
Section 48.002(a)(1), a disabled person, as defined by Section
48.002(a)(8)(A), or a person younger than 18 years of age; or
(B) not less than $5,500 or the minimum amount
imposed as provided by 31 U.S.C. Section 3729(a), if that amount
exceeds $5,500, and not [$5,000 or] more than $11,000 or the maximum
amount imposed as provided by 31 U.S.C. Section 3729(a), if that
amount exceeds $11,000, [$10,000] for each unlawful act committed
by the person that does not result in injury to a person described
by Paragraph (A); and
(4) two times the amount of the payment or the value of
the benefit described by Subdivision (1).
SECTION 4. Subsection (c), Section 36.110, Human Resources
Code, is amended to read as follows:
(c) A payment to a person under this section shall be made
from the proceeds of the action. A person receiving a payment
under this section is also entitled to receive from the defendant an
amount for reasonable expenses, reasonable attorney's fees, and
costs that the court finds to have been necessarily incurred. The
court's determination of expenses, fees, and costs to be awarded
under this subsection shall be made only after the defendant has
been found liable in the action or the state settles an action with
a defendant that the court determined, after a hearing, was fair,
adequate, and reasonable in accordance with Section 36.107(c).
SECTION 5. Section 36.113, Human Resources Code, is amended
by amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) A person may not bring an action under this subchapter
that is based on the public disclosure of allegations or
transactions in a criminal or civil hearing in which the state or an
agent of the state is a party, in a legislative or administrative
report, hearing, audit, or investigation, or from the news media,
unless the person bringing the action is an original source of the
information. In this subsection, "original source" means an
individual who:
(1) has direct and independent knowledge of the
information on which the allegations are based and has voluntarily
provided the information to the state before filing an action under
this subchapter that is based on the information; or
(2) has knowledge that is independent of and
materially adds to the publicly disclosed allegations and who has
voluntarily provided the information to the state before filing an
action under this subchapter that is based on the information.
(c) Before dismissing an action as barred under this
section, the court shall give the attorney general an opportunity
to oppose the dismissal.
SECTION 6. The heading to Section 36.115, Human Resources
Code, is amended to read as follows:
Sec. 36.115. RETALIATION [BY EMPLOYER] AGAINST PERSON
[BRINGING SUIT] PROHIBITED.
SECTION 7. Subsection (a), Section 36.115, Human Resources
Code, is amended to read as follows:
(a) A person, including an employee, contractor, or agent,
who is discharged, demoted, suspended, threatened, harassed, or in
any other manner discriminated against in the terms and conditions
of employment [by the person's employer] because of a lawful act
taken by the person in furtherance of an action under this
subchapter, including investigation for, initiation of, testimony
for, or assistance in an action filed or to be filed under this
subchapter, or other efforts taken by the person to stop one or more
violations of Section 36.002 is entitled to:
(1) reinstatement with the same seniority status the
person would have had but for the discrimination; and
(2) not less than two times the amount of back pay,
interest on the back pay, and compensation for any special damages
sustained as a result of the discrimination, including litigation
costs and reasonable attorney's fees.
SECTION 8. Subsection (a), Section 35A.02, Penal Code, is
amended to read as follows:
(a) A person commits an offense if the person:
(1) knowingly makes or causes to be made a false
statement or misrepresentation of a material fact to permit a
person to receive a benefit or payment under the Medicaid program
that is not authorized or that is greater than the benefit or
payment that is authorized;
(2) knowingly conceals or fails to disclose
information that permits a person to receive a benefit or payment
under the Medicaid program that is not authorized or that is greater
than the benefit or payment that is authorized;
(3) knowingly applies for and receives a benefit or
payment on behalf of another person under the Medicaid program and
converts any part of the benefit or payment to a use other than for
the benefit of the person on whose behalf it was received;
(4) knowingly makes, causes to be made, induces, or
seeks to induce the making of a false statement or
misrepresentation of material fact concerning:
(A) the conditions or operation of a facility in
order that the facility may qualify for certification or
recertification required by the Medicaid program, including
certification or recertification as:
(i) a hospital;
(ii) a nursing facility or skilled nursing
facility;
(iii) a hospice;
(iv) an intermediate care facility for the
mentally retarded;
(v) an assisted living facility; or
(vi) a home health agency; or
(B) information required to be provided by a
federal or state law, rule, regulation, or provider agreement
pertaining to the Medicaid program;
(5) except as authorized under the Medicaid program,
knowingly pays, charges, solicits, accepts, or receives, in
addition to an amount paid under the Medicaid program, a gift,
money, a donation, or other consideration as a condition to the
provision of a service or product or the continued provision of a
service or product if the cost of the service or product is paid
for, in whole or in part, under the Medicaid program;
(6) knowingly presents or causes to be presented a
claim for payment under the Medicaid program for a product provided
or a service rendered by a person who:
(A) is not licensed to provide the product or
render the service, if a license is required; or
(B) is not licensed in the manner claimed;
(7) knowingly makes or causes to be made a claim under
the Medicaid program for:
(A) a service or product that has not been
approved or acquiesced in by a treating physician or health care
practitioner;
(B) a service or product that is substantially
inadequate or inappropriate when compared to generally recognized
standards within the particular discipline or within the health
care industry; or
(C) a product that has been adulterated, debased,
mislabeled, or that is otherwise inappropriate;
(8) makes a claim under the Medicaid program and
knowingly fails to indicate the type of license and the
identification number of the licensed health care provider who
actually provided the service;
(9) knowingly enters into an agreement, combination,
or conspiracy to defraud the state by obtaining or aiding another
person in obtaining an unauthorized payment or benefit from the
Medicaid program or a fiscal agent;
(10) is a managed care organization that contracts
with the Health and Human Services Commission or other state agency
to provide or arrange to provide health care benefits or services to
individuals eligible under the Medicaid program and knowingly:
(A) fails to provide to an individual a health
care benefit or service that the organization is required to
provide under the contract;
(B) fails to provide to the commission or
appropriate state agency information required to be provided by
law, commission or agency rule, or contractual provision; or
(C) engages in a fraudulent activity in
connection with the enrollment of an individual eligible under the
Medicaid program in the organization's managed care plan or in
connection with marketing the organization's services to an
individual eligible under the Medicaid program;
(11) knowingly obstructs an investigation by the
attorney general of an alleged unlawful act under this section or
under Section 32.039, 32.0391, or 36.002, Human Resources Code; or
(12) knowingly makes, uses, or causes the making or
use of a false record or statement to conceal, avoid, or decrease an
obligation to pay or transmit money or property to this state under
the Medicaid program.
SECTION 9. (a) The changes in law made by this Act to
Section 36.002, Human Resources Code, and Section 35A.02, Penal
Code, apply only to conduct that occurs on or after the effective
date of this Act. Conduct that occurs before the effective date of
this Act is governed by the law in effect at the time the conduct
occurred, and that law is continued in effect for that purpose.
(b) For purposes of this section, conduct constituting an
offense under the penal law of this state occurred before the
effective date of this Act if any element of the offense occurred
before that date.
SECTION 10. The changes in law made by this Act to Sections
36.052, 36.110, and 36.113, Human Resources Code, apply only to a
civil action for a violation of Section 36.002, Human Resources
Code, as amended by this Act, commenced on or after the effective
date of this Act. A civil action commenced before the effective
date of this Act is governed by the law in effect immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 11. This Act takes effect September 1, 2011.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 544 passed the Senate on
March 30, 2011, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendment on May 23, 2011, by the
following vote: Yeas 30, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 544 passed the House, with
amendment, on May 18, 2011, by the following vote: Yeas 129,
Nays 0, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor