82R9259 KLA-D
By: Uresti S.B. No. 962
A BILL TO BE ENTITLED
AN ACT
relating to the conduct of investigations, prepayment reviews, and
payment holds in cases of suspected fraud, waste, or abuse in the
provision of health and human services.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 531.102(e) and (g), Government Code,
are amended to read as follows:
(e) The executive commissioner [commission], in
consultation with the inspector general, by rule shall set specific
claims criteria that, when met, require the office to begin an
investigation. The claims criteria adopted under this subsection
must be consistent with the criteria adopted under Section
32.0291(a-1), Human Resources Code.
(g)(1) Whenever the office learns or has reason to suspect
that a provider's records are being withheld, concealed, destroyed,
fabricated, or in any way falsified, the office shall immediately
refer the case to the state's Medicaid fraud control unit. However,
such criminal referral does not preclude the office from continuing
its investigation of the provider, which investigation may lead to
the imposition of appropriate administrative or civil sanctions.
(2) In addition to other instances authorized under
state or federal law, the office shall impose without prior notice a
hold on payment of claims for reimbursement submitted by a provider
to compel production of records or when requested by the state's
Medicaid fraud control unit, as applicable. The office must notify
the provider of the hold on payment not later than the fifth working
day after the date the payment hold is imposed. The notice to the
provider must include:
(A) an information statement indicating the
nature of a payment hold;
(B) a statement of the reason the payment hold is
being imposed, the provider's suspected violation, and the evidence
to support that suspicion; and
(C) a statement that the provider is entitled to
request a hearing regarding the payment hold or an informal
resolution of the identified issues, the time within which the
request must be made, and the procedures and requirements for
making the request, including that a request for a hearing must be
in writing.
(3) On timely written request by a provider subject to
a hold on payment under Subdivision (2), other than a hold requested
by the state's Medicaid fraud control unit, the office shall file a
request with the State Office of Administrative Hearings for an
expedited administrative hearing regarding the hold. The provider
must request an expedited hearing under this subdivision not later
than the 10th day after the date the provider receives notice from
the office under Subdivision (2). A provider who submits a timely
request for a hearing under this subdivision must be given notice of
the following not later than the 30th day before the date the
hearing is scheduled:
(A) the date, time, and location of the hearing;
and
(B) a list of the provider's rights at the
hearing, including the right to present witnesses and other
evidence.
(3-a) With respect to a provider who timely requests a
hearing under Subdivision (3):
(A) if the hearing is not scheduled on or before
the 60th day after the date of the request, the payment hold is
automatically terminated on the 60th day after the date of the
request and may be reinstated only if prima facie evidence of fraud,
waste, or abuse is presented subsequently at the hearing; and
(B) if the hearing is held on or before the 60th
day after the date of the request, the payment hold may be continued
after the hearing only if the hearing officer determines that prima
facie evidence of fraud, waste, or abuse was presented at the
hearing.
(4) The executive commissioner [commission] shall
adopt rules that allow a provider subject to a hold on payment under
Subdivision (2), other than a hold requested by the state's
Medicaid fraud control unit, to seek an informal resolution of the
issues identified by the office in the notice provided under that
subdivision. A provider must seek an informal resolution under
this subdivision not later than the deadline prescribed by
Subdivision (3). A provider's decision to seek an informal
resolution under this subdivision does not extend the time by which
the provider must request an expedited administrative hearing under
Subdivision (3). However, a hearing initiated under Subdivision
(3) shall be stayed at the office's request until the informal
resolution process is completed. The period during which the
hearing is stayed under this subdivision is excluded in computing
whether a hearing was scheduled or held not later than the 60th day
after the hearing was requested for purposes of Subdivision (3-a).
(4-a) With respect to a provider who timely requests an
informal resolution under Subdivision (4):
(A) if the informal resolution is not completed
on or before the 60th day after the date of the request, the payment
hold is automatically terminated on the 60th day after the date of
the request and may be reinstated only if prima facie evidence of
fraud, waste, or abuse is subsequently presented at a hearing
requested and held under Subdivision (3); and
(B) if the informal resolution is completed on or
before the 60th day after the date of the request, the payment hold
may be continued after the completion of the informal resolution
only if the office determines that prima facie evidence of fraud,
waste, or abuse was presented during the informal resolution
process.
(5) The executive commissioner [office] shall, in
consultation with the state's Medicaid fraud control unit, adopt
rules for the office [establish guidelines] under which holds on
payment or program exclusions:
(A) may permissively be imposed on a provider; or
(B) shall automatically be imposed on a provider.
(6) If a payment hold is terminated, either
automatically or after a hearing or informal review, in accordance
with Subdivision (3-a) or (4-a), the office shall inform all
affected claims payors, including Medicaid managed care
organizations, of the termination not later than the fifth day
after the date of the termination.
(7) A provider in a case in which a payment hold was
imposed under this subsection who ultimately prevails in a hearing
or, if the case is appealed, on appeal, or with respect to whom the
office determines that prima facie evidence of fraud, waste, or
abuse was not presented during an informal resolution process, is
entitled to prompt payment of all payments held and interest on
those payments at a rate equal to the prime rate, as published in
The Wall Street Journal on the first day of each calendar year that
is not a Saturday, Sunday, or legal holiday, plus one percent.
SECTION 2. Sections 531.103(a) and (b), Government Code,
are amended to read as follows:
(a) The commission, acting through the commission's office
of inspector general, and the office of the attorney general shall
enter into a memorandum of understanding to develop and implement
joint written procedures for processing cases of suspected fraud,
waste, or abuse, as those terms are defined by state or federal law,
or other violations of state or federal law under the state Medicaid
program or other program administered by the commission or a health
and human services agency, including the financial assistance
program under Chapter 31, Human Resources Code, a nutritional
assistance program under Chapter 33, Human Resources Code, and the
child health plan program. The memorandum of understanding shall
require:
(1) the office of inspector general and the office of
the attorney general to set priorities and guidelines for referring
cases to appropriate state agencies for investigation,
prosecution, or other disposition to enhance deterrence of fraud,
waste, abuse, or other violations of state or federal law,
including a violation of Chapter 102, Occupations Code, in the
programs and maximize the imposition of penalties, the recovery of
money, and the successful prosecution of cases;
(1-a) the office of inspector general to refer each
case of suspected provider fraud, waste, or abuse to the office of
the attorney general not later than the 20th business day after the
date the office of inspector general determines that the existence
of fraud, waste, or abuse is reasonably indicated;
(1-b) the office of the attorney general to take
appropriate action in response to each case referred to the
attorney general, which action may include direct initiation of
prosecution, with the consent of the appropriate local district or
county attorney, direct initiation of civil litigation, referral to
an appropriate United States attorney, a district attorney, or a
county attorney, or referral to a collections agency for initiation
of civil litigation or other appropriate action;
(2) the office of inspector general to keep detailed
records for cases processed by that office or the office of the
attorney general, including information on the total number of
cases processed and, for each case:
(A) the agency and division to which the case is
referred for investigation;
(B) the date on which the case is referred; and
(C) the nature of the suspected fraud, waste, or
abuse;
(3) the office of inspector general to notify each
appropriate division of the office of the attorney general of each
case referred by the office of inspector general;
(4) the office of the attorney general to ensure that
information relating to each case investigated by that office is
available to each division of the office with responsibility for
investigating suspected fraud, waste, or abuse;
(5) the office of the attorney general to notify the
office of inspector general of each case the attorney general
declines to prosecute or prosecutes unsuccessfully;
(6) representatives of the office of inspector general
and of the office of the attorney general to meet not less than
quarterly to share case information and determine the appropriate
agency and division to investigate each case; [and]
(7) the office of inspector general and the office of
the attorney general to submit information requested by the
comptroller about each resolved case for the comptroller's use in
improving fraud detection; and
(8) the office of inspector general and the office of
the attorney general to develop and implement joint written
procedures for processing cases of suspected fraud, waste, or
abuse, which must include:
(A) procedures for maintaining a chain of custody
for any records obtained during an investigation and for
maintaining the confidentiality of the records;
(B) a procedure by which a provider who is the
subject of an investigation may make copies of any records taken
from the provider during the course of the investigation before the
records are taken or, in lieu of the opportunity to make copies, a
requirement that the office of inspector general or the office of
the attorney general, as applicable, make copies of the records
taken during the course of the investigation and provide those
copies to the provider not later than the 10th day after the date
the records are taken; and
(C) a procedure for returning any original
records obtained from a provider who is the subject of a case of
suspected fraud, waste, or abuse not later than the 15th day after
the final resolution of the case, including all hearings and
appeals.
(b) An exchange of information under this section between
the office of the attorney general and the commission, the office of
inspector general, or a health and human services agency does not
affect the confidentiality of the information or whether the
information is subject to disclosure under Chapter 552.
SECTION 3. Section 32.0291, Human Resources Code, is
amended to read as follows:
Sec. 32.0291. PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.
(a) Notwithstanding any other law and subject to Subsections (a-1)
and (a-2), the department may:
(1) perform a prepayment review of a claim for
reimbursement under the medical assistance program to determine
whether the claim involves fraud or abuse; and
(2) as necessary to perform that review, withhold
payment of the claim for not more than five working days without
notice to the person submitting the claim.
(a-1) The executive commissioner of the Health and Human
Services Commission shall adopt rules governing the conduct of a
prepayment review of a claim for reimbursement from a medical
assistance provider authorized by Subsection (a). The rules must:
(1) specify actions that must be taken by the
department, or an appropriate person with whom the department
contracts, to educate the provider and remedy irregular coding or
claims filing issues before conducting a prepayment review;
(2) outline the mechanism by which a specific provider
is identified for a prepayment review;
(3) define the criteria, consistent with the criteria
adopted under Section 531.102(e), Government Code, used to
determine whether a prepayment review will be imposed, including
the evidentiary threshold, such as prima facie evidence, that is
required before imposition of that review;
(4) prescribe the maximum number of days a provider
may be placed on prepayment review status;
(5) require periodic reevaluation of the necessity of
continuing a prepayment review after the review action is initially
imposed;
(6) establish procedures affording due process to a
provider placed on prepayment review status, including notice
requirements, an opportunity for a hearing, and an appeals process;
and
(7) provide opportunities for provider education
while providers are on prepayment review status.
(a-2) The department may not perform a random prepayment
review of a claim for reimbursement under the medical assistance
program to determine whether the claim involves fraud or abuse. The
department may only perform a prepayment review of the claims of a
provider who meets the criteria adopted under Subsection (a-1)(3)
for imposition of a prepayment review.
(b) Notwithstanding any other law and subject to Section
531.102(g), Government Code, the department may impose a
postpayment hold on payment of future claims submitted by a
provider if the department has reliable evidence that the provider
has committed fraud or wilful misrepresentation regarding a claim
for reimbursement under the medical assistance program. [The
department must notify the provider of the postpayment hold not
later than the fifth working day after the date the hold is
imposed.]
(c) A postpayment hold authorized by this section is
governed by the requirements and procedures specified for payment
holds under Section 531.102, Government Code. [On timely written
request by a provider subject to a postpayment hold under
Subsection (b), the department shall file a request with the State
Office of Administrative Hearings for an expedited administrative
hearing regarding the hold. The provider must request an expedited
hearing under this subsection not later than the 10th day after the
date the provider receives notice from the department under
Subsection (b). The department shall discontinue the hold unless
the department makes a prima facie showing at the hearing that the
evidence relied on by the department in imposing the hold is
relevant, credible, and material to the issue of fraud or wilful
misrepresentation.
[(d) The department shall adopt rules that allow a provider
subject to a postpayment hold under Subsection (b) to seek an
informal resolution of the issues identified by the department in
the notice provided under that subsection. A provider must seek an
informal resolution under this subsection not later than the
deadline prescribed by Subsection (c). A provider's decision to
seek an informal resolution under this subsection does not extend
the time by which the provider must request an expedited
administrative hearing under Subsection (c). However, a hearing
initiated under Subsection (c) shall be stayed at the department's
request until the informal resolution process is completed.]
SECTION 4. The executive commissioner of the Health and
Human Services Commission shall adopt the rules required by Section
32.0291(a-1), Human Resources Code, as added by this Act, not later
than November 1, 2011.
SECTION 5. If before implementing any provision of this Act
a state agency determines that a waiver or authorization from a
federal agency is necessary for implementation of that provision,
the agency affected by the provision shall request the waiver or
authorization and may delay implementing that provision until the
waiver or authorization is granted.
SECTION 6. This Act takes effect September 1, 2011.