84R29844 EES-D
By: Hinojosa, et al. S.B. No. 207
(Gonzales, Raymond)
Substitute the following for S.B. No. 207: No.
A BILL TO BE ENTITLED
AN ACT
relating to the authority and duties of the office of inspector
general of the Health and Human Services Commission.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.1011(4), Government Code, is amended
to read as follows:
(4) "Fraud" means an intentional deception or
misrepresentation made by a person with the knowledge that the
deception could result in some unauthorized benefit to that person
or some other person[, including any act that constitutes fraud
under applicable federal or state law]. The term does not include
unintentional technical, clerical, or administrative errors.
SECTION 2. Section 531.102, Government Code, is amended by
amending Subsections (g) and (k), amending Subsection (f) as
amended by S.B. No. 219, Acts of the 84th Legislature, Regular
Session, 2015, and adding Subsections (a-2), (a-3), (a-4), (a-5),
(a-6), (f-1), (p), (q), (r), (s), (t), (u), (v), and (w) to read as
follows:
(a-2) Pursuant to federal law, the office shall work in
consultation with the executive commissioner to adopt rules
necessary to implement a power or duty of the office related to the
operations of the office. Rules adopted under this section may not
affect Medicaid policies.
(a-3) The executive commissioner is responsible for
performing all administrative support services functions necessary
to operate the office in the same manner that the executive
commissioner is responsible for providing administrative support
services functions for the health and human services system,
including functions of the office related to the following:
(1) procurement processes;
(2) contracting policies;
(3) information technology services;
(4) legal services;
(5) budgeting; and
(6) personnel and employment policies.
(a-4) The commission's internal audit division shall
regularly audit the office as part of the commission's internal
audit program and shall include the office in the commission's risk
assessments.
(a-5) The office shall closely coordinate with the
executive commissioner and the relevant staff of health and human
services system programs that the office oversees in performing
functions relating to the prevention of fraud, waste, and abuse in
the delivery of health and human services and the enforcement of
state law relating to the provision of those services, including
audits, utilization reviews, provider education, and data
analysis.
(a-6) The office shall conduct investigations independent
of the executive commissioner and the commission but shall rely on
the coordination required by Subsection (a-5) to ensure that the
office has a thorough understanding of the health and human
services system for purposes of knowledgeably and effectively
performing the office's duties under this section and any other
law.
(f)(1) If the commission receives a complaint or allegation
of Medicaid fraud or abuse from any source, the office must conduct
a preliminary investigation as provided by Section 531.118(c) to
determine whether there is a sufficient basis to warrant a full
investigation. A preliminary investigation must begin not later
than the 30th day, and be completed not later than the 45th day,
after the date the commission receives a complaint or allegation or
has reason to believe that fraud or abuse has occurred. [A
preliminary investigation shall be completed not later than the
90th day after it began.]
(2) If the findings of a preliminary investigation
give the office reason to believe that an incident of fraud or abuse
involving possible criminal conduct has occurred in Medicaid, the
office must take the following action, as appropriate, not later
than the 30th day after the completion of the preliminary
investigation:
(A) if a provider is suspected of fraud or abuse
involving criminal conduct, the office must refer the case to the
state's Medicaid fraud control unit, provided that the 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; or
(B) if there is reason to believe that a
recipient has defrauded Medicaid, the office may conduct a full
investigation of the suspected fraud, subject to Section
531.118(c).
(f-1) The office shall complete a full investigation of a
complaint or allegation of Medicaid fraud or abuse against a
provider not later than the 180th day after the date the full
investigation begins unless the office determines that more time is
needed to complete the investigation. Except as otherwise provided
by this subsection, if the office determines that more time is
needed to complete the investigation, the office shall provide
notice to the provider who is the subject of the investigation
stating that the length of the investigation will exceed 180 days
and specifying the reasons why the office was unable to complete the
investigation within the 180-day period. The office is not
required to provide notice to the provider under this subsection if
the office determines that providing notice would jeopardize the
investigation.
(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) As [In addition to other instances] authorized
under state and [or] federal law, and except as provided by
Subdivisions (8) and (9), the office shall impose without prior
notice a payment hold on claims for reimbursement submitted by a
provider only to compel production of records, when requested by
the state's Medicaid fraud control unit, or on the determination
that a credible allegation of fraud exists, subject to Subsections
(l) and (m), as applicable. The payment hold is a serious
enforcement tool that the office imposes to mitigate ongoing
financial risk to the state. A payment hold imposed under this
subdivision takes effect immediately. The office must notify the
provider of the payment hold in accordance with 42 C.F.R. Section
455.23(b) and, except as provided by that regulation, not later
than the fifth day after the date the office imposes the payment
hold. In addition to the requirements of 42 C.F.R. Section
455.23(b), the notice of payment hold provided under this
subdivision must also include:
(A) the specific basis for the hold, including
identification of the claims supporting the allegation at that
point in the investigation, [and] a representative sample of any
documents that form the basis for the hold, and a detailed summary
of the office's evidence relating to the allegation; [and]
(B) a description of administrative and judicial
due process rights and remedies, including the provider's option
[right] to seek informal resolution, the provider's right to seek a
formal administrative appeal hearing, or that the provider may seek
both; and
(C) a detailed timeline for the provider to
pursue the rights and remedies described in Paragraph (B).
(3) On timely written request by a provider subject to
a payment hold 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 not later than
the third day after the date the office receives the provider's
request. The provider must request an expedited administrative
hearing under this subdivision not later than the 10th [30th] day
after the date the provider receives notice from the office under
Subdivision (2). The State Office of Administrative Hearings shall
hold the expedited administrative hearing not later than the 45th
day after the date the State Office of Administrative Hearings
receives the request for the hearing. In a hearing held under this
subdivision [Unless otherwise determined by the administrative law
judge for good cause at an expedited administrative hearing, the
state and the provider shall each be responsible for]:
(A) the provider and the office are each limited
to four hours of testimony, excluding time for responding to
questions from the administrative law judge [one-half of the costs
charged by the State Office of Administrative Hearings];
(B) the provider and the office are each entitled
to two continuances under reasonable circumstances [one-half of the
costs for transcribing the hearing]; and
(C) the office is required to show probable cause
that the credible allegation of fraud that is the basis of the
payment hold has an indicia of reliability and that continuing to
pay the provider presents an ongoing significant financial risk to
the state and a threat to the integrity of Medicaid [the party's own
costs related to the hearing, including the costs associated with
preparation for the hearing, discovery, depositions, and
subpoenas, service of process and witness expenses, travel
expenses, and investigation expenses; and
[(D) all other costs associated with the hearing
that are incurred by the party, including attorney's fees].
(4) Unless otherwise determined by the administrative
law judge for good cause, the office is responsible for the costs of
a hearing held under Subdivision (3), but a provider is responsible
for the provider's own costs incurred in preparing for the hearing
[The executive commissioner and the State Office of Administrative
Hearings shall jointly adopt rules that require a provider, before
an expedited administrative hearing, to advance security for the
costs for which the provider is responsible under that
subdivision].
(5) In a hearing held under Subdivision (3), the
administrative law judge shall decide if the payment hold should
continue but may not adjust the amount or percent of the payment
hold. Notwithstanding any other law, including Section
2001.058(e), the decision of the administrative law judge is final
and may not be appealed [Following an expedited administrative
hearing under Subdivision (3), a provider subject to a payment
hold, other than a hold requested by the state's Medicaid fraud
control unit, may appeal a final administrative order by filing a
petition for judicial review in a district court in Travis County].
(6) The executive commissioner, in consultation with
the office, shall adopt rules that allow a provider subject to a
payment hold 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 request an
initial informal resolution meeting under this subdivision not
later than the deadline prescribed by Subdivision (3) for
requesting an expedited administrative hearing. On receipt of a
timely request, the office shall decide whether to grant the
provider's request for an initial informal resolution meeting, and
if the office decides to grant the request, the office shall
schedule the [an] initial informal resolution meeting [not later
than the 60th day after the date the office receives the request,
but the office shall schedule the meeting on a later date, as
determined by the office, if requested by the provider]. The office
shall give notice to the provider of the time and place of the
initial informal resolution meeting [not later than the 30th day
before the date the meeting is to be held]. A provider may request a
second informal resolution meeting [not later than the 20th day]
after the date of the initial informal resolution meeting. On
receipt of a timely request, the office shall decide whether to
grant the provider's request for a second informal resolution
meeting, and if the office decides to grant the request, the office
shall schedule the [a] second informal resolution meeting [not
later than the 45th day after the date the office receives the
request, but the office shall schedule the meeting on a later date,
as determined by the office, if requested by the provider]. The
office shall give notice to the provider of the time and place of
the second informal resolution meeting [not later than the 20th day
before the date the meeting is to be held]. A provider must have an
opportunity to provide additional information before the second
informal resolution meeting for consideration by the office. 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).
The informal resolution process shall run concurrently with the
administrative hearing process, and the informal resolution
process shall be discontinued once the State Office of
Administrative Hearings issues a final determination on the payment
hold. [However, a hearing initiated under Subdivision (3) shall be
stayed until the informal resolution process is completed.]
(7) The office shall, in consultation with the state's
Medicaid fraud control unit, establish guidelines under which
[payment holds or] program exclusions:
(A) may permissively be imposed on a provider; or
(B) shall automatically be imposed on a provider.
(7-a) The office shall, in consultation with the
state's Medicaid fraud control unit, establish guidelines
regarding the imposition of payment holds authorized under
Subdivision (2).
(8) In accordance with 42 C.F.R. Sections 455.23(e)
and (f), on the determination that a credible allegation of fraud
exists, the office may find that good cause exists to not impose a
payment hold, to not continue a payment hold, to impose a payment
hold only in part, or to convert a payment hold imposed in whole to
one imposed only in part, if any of the following are applicable:
(A) law enforcement officials have specifically
requested that a payment hold not be imposed because a payment hold
would compromise or jeopardize an investigation;
(B) available remedies implemented by the state
other than a payment hold would more effectively or quickly protect
Medicaid funds;
(C) the office determines, based on the
submission of written evidence by the provider who is the subject of
the payment hold, that the payment hold should be removed;
(D) Medicaid recipients' access to items or
services would be jeopardized by a full or partial payment hold
because the provider who is the subject of the payment hold:
(i) is the sole community physician or the
sole source of essential specialized services in a community; or
(ii) serves a large number of Medicaid
recipients within a designated medically underserved area;
(E) the attorney general declines to certify that
a matter continues to be under investigation; or
(F) the office determines that a full or partial
payment hold is not in the best interests of Medicaid.
(9) The office may not impose a payment hold on claims
for reimbursement submitted by a provider for medically necessary
services for which the provider has obtained prior authorization
from the commission or a contractor of the commission unless the
office has evidence that the provider has materially misrepresented
documentation relating to those services.
(k) A final report on an audit or investigation is subject
to required disclosure under Chapter 552. All information and
materials compiled during the audit or investigation remain
confidential and not subject to required disclosure in accordance
with Section 531.1021(g). A confidential draft report on an audit
or investigation that concerns the death of a child may be shared
with the Department of Family and Protective Services. A draft
report that is shared with the Department of Family and Protective
Services remains confidential and is not subject to disclosure
under Chapter 552.
(p) The executive commissioner, in consultation with the
office, shall adopt rules establishing criteria:
(1) for opening a case;
(2) for prioritizing cases for the efficient
management of the office's workload, including rules that direct
the office to prioritize:
(A) provider cases according to the highest
potential for recovery or risk to the state as indicated through the
provider's volume of billings, the provider's history of
noncompliance with the law, and identified fraud trends;
(B) recipient cases according to the highest
potential for recovery and federal timeliness requirements; and
(C) internal affairs investigations according to
the seriousness of the threat to recipient safety and the risk to
program integrity in terms of the amount or scope of fraud, waste,
and abuse posed by the allegation that is the subject of the
investigation; and
(3) to guide field investigators in closing a case
that is not worth pursuing through a full investigation.
(q) The executive commissioner, in consultation with the
office, shall adopt rules establishing criteria for determining
enforcement and punitive actions with regard to a provider who has
violated state law, program rules, or the provider's Medicaid
provider agreement that include:
(1) direction for categorizing provider violations
according to the nature of the violation and for scaling resulting
enforcement actions, taking into consideration:
(A) the seriousness of the violation;
(B) the prevalence of errors by the provider;
(C) the financial or other harm to the state or
recipients resulting or potentially resulting from those errors;
and
(D) mitigating factors the office determines
appropriate; and
(2) a specific list of potential penalties, including
the amount of the penalties, for fraud and other Medicaid
violations.
(r) The office shall review the office's investigative
process, including the office's use of sampling and extrapolation
to audit provider records. The review shall be performed by staff
who are not directly involved in investigations conducted by the
office.
(s) The office shall arrange for the Association of
Inspectors General or a similar third party to conduct a peer review
of the office's sampling and extrapolation techniques. Based on
the review and generally accepted practices among other offices of
inspectors general, the executive commissioner, in consultation
with the office, shall by rule adopt sampling and extrapolation
standards to be used by the office in conducting audits.
(t) At each quarterly meeting of any advisory council
responsible for advising the executive commissioner on the
operation of the commission, the inspector general shall submit a
report to the executive commissioner, the governor, and the
legislature on:
(1) the office's activities;
(2) the office's performance with respect to
performance measures established by the executive commissioner for
the office;
(3) fraud trends identified by the office; and
(4) any recommendations for changes in policy to
prevent or address fraud, waste, and abuse in the delivery of health
and human services in this state.
(u) The office shall publish each report required under
Subsection (t) on the office's Internet website.
(v) In accordance with Section 533.015(b), the office shall
consult with the executive commissioner regarding the adoption of
rules defining the office's role in and jurisdiction over, and the
frequency of, audits of managed care organizations participating in
Medicaid that are conducted by the office and the commission.
(w) The office shall coordinate all audit and oversight
activities relating to providers, including the development of
audit plans, risk assessments, and findings, with the commission to
minimize the duplication of activities. In coordinating activities
under this subsection, the office shall:
(1) on an annual basis, seek input from the commission
and consider previous audits and on-site visits made by the
commission for purposes of determining whether to audit a managed
care organization participating in Medicaid; and
(2) request the results of any informal audit or
on-site visit performed by the commission that could inform the
office's risk assessment when determining whether to conduct, or
the scope of, an audit of a managed care organization participating
in Medicaid.
SECTION 3. Section 531.1021(a), Government Code, as amended
by S.B. No. 219, Acts of the 84th Legislature, Regular Session,
2015, is amended to read as follows:
(a) The office of inspector general may issue [request that
the executive commissioner or the executive commissioner's
designee approve the issuance by the office of] a subpoena in
connection with an investigation conducted by the office. A [If the
request is approved, the office may issue a] subpoena may be issued
under this section to compel the attendance of a relevant witness or
the production, for inspection or copying, of relevant evidence
that is in this state.
SECTION 4. Subchapter C, Chapter 531, Government Code, is
amended by adding Section 531.10225 to read as follows:
Sec. 531.10225. ADDITIONAL PEACE OFFICERS. (a) Pursuant
to federal law, the commission's office of inspector general shall
employ and commission peace officers for the purpose of assisting
the office in carrying out, in coordination and conjunction with
the appropriate federal entities, the duties of the office relating
to the investigation of fraud, waste, and abuse in the supplemental
nutrition assistance program under Chapter 33, Human Resources
Code, and the temporary assistance for needy families program under
Chapter 31, Human Resources Code.
(b) A peace officer employed and commissioned by the office
under this section is a peace officer for purposes of Article 2.12,
Code of Criminal Procedure.
(c) The office shall supervise a peace officer employed and
commissioned under this section.
SECTION 5. Section 531.1031(a), Government Code, as amended
by S.B. No. 219, Acts of the 84th Legislature, Regular Session,
2015, is amended to read as follows:
(a) In this section and Sections 531.1032, 531.1033, and
531.1034:
(1) "Health care professional" means a person issued a
license[, registration, or certification] to engage in a health
care profession.
(1-a) "License" means a license, certificate,
registration, permit, or other authorization that:
(A) is issued by a licensing authority; and
(B) must be obtained before a person may practice
or engage in a particular business, occupation, or profession.
(1-b) "Licensing authority" means a department,
commission, board, office, or other agency of the state that issues
a license.
(1-c) "Office" means the commission's office of
inspector general unless a different meaning is plainly required by
the context in which the term appears.
(2) "Participating agency" means:
(A) the Medicaid fraud enforcement divisions of
the office of the attorney general;
(B) each licensing authority [board or agency]
with authority to issue a license to[, register, regulate, or
certify] a health care professional or managed care organization
that may participate in Medicaid; and
(C) the [commission's] office [of inspector
general].
(3) "Provider" has the meaning assigned by Section
531.1011(10)(A).
SECTION 6. Subchapter C, Chapter 531, Government Code, is
amended by adding Sections 531.1032, 531.1033, and 531.1034 to read
as follows:
Sec. 531.1032. OFFICE OF INSPECTOR GENERAL: CRIMINAL
HISTORY RECORD INFORMATION CHECK. (a) The office and each
licensing authority that requires the submission of fingerprints
for the purpose of conducting a criminal history record information
check of a health care professional shall enter into a memorandum of
understanding to ensure that only persons who are licensed and in
good standing as health care professionals participate as providers
in Medicaid. The memorandum under this section may be combined with
a memorandum authorized under Section 531.1031(c-1) and must
include a process by which:
(1) the office may confirm with a licensing authority
that a health care professional is licensed and in good standing for
purposes of determining eligibility to participate in Medicaid; and
(2) the licensing authority immediately notifies the
office if:
(A) a provider's license has been revoked or
suspended; or
(B) the licensing authority has taken
disciplinary action against a provider.
(b) The office may not, for purposes of determining a health
care professional's eligibility to participate in Medicaid as a
provider, conduct a criminal history record information check of a
health care professional who the office has confirmed under
Subsection (a) is licensed and in good standing. This subsection
does not prohibit the office from performing a criminal history
record information check of a provider that is required or
appropriate for other reasons, including for conducting an
investigation of fraud, waste, or abuse.
(c) For purposes of determining eligibility to participate
in Medicaid and subject to Subsection (d), the office, after
seeking public input, shall establish and the executive
commissioner by rule shall adopt guidelines for the evaluation of
criminal history record information of providers and potential
providers. The guidelines must outline conduct, by provider type,
that may be contained in criminal history record information that
will result in exclusion of a person from Medicaid as a provider,
taking into consideration:
(1) the extent to which the underlying conduct relates
to the services provided under Medicaid;
(2) the degree to which the person would interact with
Medicaid recipients as a provider; and
(3) any previous evidence that the person engaged in
fraud, waste, or abuse under Medicaid.
(d) The guidelines adopted under Subsection (c) may not
impose stricter standards for the eligibility of a person to
participate in Medicaid than a licensing authority described by
Subsection (a) requires for the person to engage in a health care
profession without restriction in this state.
(e) The office and the commission shall use the guidelines
adopted under Subsection (c) to determine whether a provider
participating in Medicaid continues to be eligible to participate
in Medicaid as a provider.
(f) The provider enrollment contractor, if applicable, and
a managed care organization participating in Medicaid shall defer
to the office regarding whether a person's criminal history record
information precludes the person from participating in Medicaid as
a provider.
Sec. 531.1033. MONITORING OF CERTAIN FEDERAL DATABASES.
The office shall routinely check appropriate federal databases,
including databases referenced in 42 C.F.R. Section 455.436, to
ensure that a person who is excluded from participating in Medicaid
or in the Medicare program by the federal government is not
participating as a provider in Medicaid.
Sec. 531.1034. TIME TO DETERMINE PROVIDER ELIGIBILITY;
PERFORMANCE METRICS. (a) Not later than the 10th day after the
date the office receives the complete application of a health care
professional seeking to participate in Medicaid, the office shall
inform the commission or the health care professional, as
appropriate, of the office's determination regarding whether the
health care professional should be denied participation in Medicaid
based on:
(1) information concerning the licensing status of the
health care professional obtained as described by Section
531.1032(a);
(2) information contained in the criminal history
record information check that is evaluated in accordance with
guidelines adopted under Section 531.1032(c);
(3) a review of federal databases under Section
531.1033;
(4) the pendency of an open investigation by the
office; or
(5) any other reason the office determines
appropriate.
(b) Completion of an on-site visit of a health care
professional during the period prescribed by Subsection (a) is not
required.
(c) The office shall develop performance metrics to measure
the length of time for conducting a determination described by
Subsection (a) with respect to applications that are complete when
submitted and all other applications.
SECTION 7. Section 531.113, Government Code, is amended by
adding Subsection (d-1) and amending Subsection (e) as amended by
S.B. No. 219, Acts of the 84th Legislature, Regular Session, 2015,
to read as follows:
(d-1) The commission's office of inspector general, in
consultation with the commission, shall:
(1) investigate, including by means of regular audits,
possible fraud, waste, and abuse by managed care organizations
subject to this section;
(2) establish requirements for the provision of
training to and regular oversight of special investigative units
established by managed care organizations under Subsection (a)(1)
and entities with which managed care organizations contract under
Subsection (a)(2);
(3) establish requirements for approving plans to
prevent and reduce fraud and abuse adopted by managed care
organizations under Subsection (b);
(4) evaluate statewide fraud, waste, and abuse trends
in Medicaid and communicate those trends to special investigative
units and contracted entities to determine the prevalence of those
trends;
(5) assist managed care organizations in discovering
or investigating fraud, waste, and abuse, as needed; and
(6) provide ongoing, regular training to appropriate
commission and office staff concerning fraud, waste, and abuse in a
managed care setting, including training relating to fraud, waste,
and abuse by service providers and recipients.
(e) The executive commissioner, in consultation with the
office, shall adopt rules as necessary to accomplish the purposes
of this section, including rules defining the investigative role of
the commission's office of inspector general with respect to the
investigative role of special investigative units established by
managed care organizations under Subsection (a)(1) and entities
with which managed care organizations contract under Subsection
(a)(2). The rules adopted under this section must specify the
office's role in:
(1) reviewing the findings of special investigative
units and contracted entities;
(2) investigating cases in which the overpayment
amount sought to be recovered exceeds $100,000; and
(3) investigating providers who are enrolled in more
than one managed care organization.
SECTION 8. Section 531.118(b), Government Code, is amended
to read as follows:
(b) If the commission receives an allegation of fraud or
abuse against a provider from any source, the commission's office
of inspector general shall conduct a preliminary investigation of
the allegation to determine whether there is a sufficient basis to
warrant a full investigation. A preliminary investigation must
begin not later than the 30th day, and be completed not later than
the 45th day, after the date the commission receives or identifies
an allegation of fraud or abuse.
SECTION 9. Section 531.120, Government Code, is amended to
read as follows:
Sec. 531.120. NOTICE AND INFORMAL RESOLUTION OF PROPOSED
RECOUPMENT OF OVERPAYMENT OR DEBT. (a) The commission or the
commission's office of inspector general shall provide a provider
with written notice of any proposed recoupment of an overpayment or
debt and any damages or penalties relating to a proposed recoupment
of an overpayment or debt arising out of a fraud or abuse
investigation. The notice must include:
(1) the specific basis for the overpayment or debt;
(2) a description of facts and supporting evidence;
(3) a representative sample of any documents that form
the basis for the overpayment or debt;
(4) the extrapolation methodology;
(4-a) information relating to the extrapolation
methodology used as part of the investigation and the methods used
to determine the overpayment or debt in sufficient detail so that
the extrapolation results may be demonstrated to be statistically
valid and are fully reproducible;
(5) the calculation of the overpayment or debt amount;
(6) the amount of damages and penalties, if
applicable; and
(7) a description of administrative and judicial due
process remedies, including the provider's option [right] to seek
informal resolution, the provider's right to seek a formal
administrative appeal hearing, or that the provider may seek both.
(b) A provider may [must] request an [initial] informal
resolution meeting under this section, and on [not later than the
30th day after the date the provider receives notice under
Subsection (a). On] receipt of the [a timely] request, the office
shall schedule the [an initial] informal resolution meeting [not
later than the 60th day after the date the office receives the
request, but the office shall schedule the meeting on a later date,
as determined by the office if requested by the provider]. The
office shall give notice to the provider of the time and place of
the [initial] informal resolution meeting [not later than the 30th
day before the date the meeting is to be held]. The informal
resolution process shall run concurrently with the administrative
hearing process, and the administrative hearing process may not be
delayed on account of the informal resolution process. [A provider
may request a second informal resolution meeting not later than the
20th day after the date of the initial informal resolution meeting.
On receipt of a timely request, the office shall schedule a second
informal resolution meeting not later than the 45th day after the
date the office receives the request, but the office shall schedule
the meeting on a later date, as determined by the office if
requested by the provider. The office shall give notice to the
provider of the time and place of the second informal resolution
meeting not later than the 20th day before the date the meeting is
to be held. A provider must have an opportunity to provide
additional information before the second informal resolution
meeting for consideration by the office.]
SECTION 10. Sections 531.1201(a) and (b), Government Code,
are amended to read as follows:
(a) A provider must request an appeal under this section not
later than the 30th [15th] day after the date the provider is
notified that the commission or the commission's office of
inspector general will seek to recover an overpayment or debt from
the provider. On receipt of a timely written request by a provider
who is the subject of a recoupment of overpayment or recoupment of
debt arising out of a fraud or abuse investigation, the office of
inspector general shall file a docketing request with the State
Office of Administrative Hearings or the Health and Human Services
Commission appeals division, as requested by the provider, for an
administrative hearing regarding the proposed recoupment amount
and any associated damages or penalties. The office shall file the
docketing request under this section not later than the 60th day
after the date of the provider's request for an administrative
hearing or not later than the 60th day after the completion of the
informal resolution process, if applicable.
(b) Unless otherwise determined by the administrative law
judge for good cause, the commission's office of inspector general
is responsible for the costs of an administrative hearing held
under Subsection (a), but a provider is responsible for the
provider's own costs incurred in preparing for the hearing [at any
administrative hearing under this section before the State Office
of Administrative Hearings, the state and the provider shall each
be responsible for:
[(1) one-half of the costs charged by the State Office
of Administrative Hearings;
[(2) one-half of the costs for transcribing the
hearing;
[(3) the party's own costs related to the hearing,
including the costs associated with preparation for the hearing,
discovery, depositions, and subpoenas, service of process and
witness expenses, travel expenses, and investigation expenses; and
[(4) all other costs associated with the hearing that
are incurred by the party, including attorney's fees].
SECTION 11. Section 531.1202, Government Code, is amended
to read as follows:
Sec. 531.1202. RECORD AND CONFIDENTIALITY OF INFORMAL
RESOLUTION MEETINGS. (a) On the written request of the provider,
the [The] commission shall, at no expense to the provider who
requested the meeting, provide for an informal resolution meeting
held under Section 531.102(g)(6) or 531.120(b) to be recorded. The
recording of an informal resolution meeting shall be made available
to the provider who requested the meeting. The commission may not
record an informal resolution meeting unless the commission
receives a written request from a provider under this subsection.
(b) Notwithstanding Section 531.1021(g) and except as
provided by this section, an informal resolution meeting held under
Section 531.102(g)(6) or 531.120(b) is confidential, and any
information or materials obtained by the commission's office of
inspector general, including the office's employees or the office's
agents, during or in connection with an informal resolution
meeting, including a recording made under Subsection (a), are
privileged and confidential and not subject to disclosure under
Chapter 552 or any other means of legal compulsion for release,
including disclosure, discovery, or subpoena.
SECTION 12. Subchapter C, Chapter 531, Government Code, is
amended by adding Sections 531.1023, 531.1024, 531.1025, and
531.1203 to read as follows:
Sec. 531.1023. COMPLIANCE WITH FEDERAL CODING GUIDELINES.
The commission's office of inspector general, including office
staff and any third party with which the office contracts to perform
coding services, shall comply with federal coding guidelines,
including guidelines for diagnosis-related group (DRG) validation
and related audits.
Sec. 531.1024. HOSPITAL UTILIZATION REVIEWS AND AUDITS:
PROVIDER EDUCATION PROCESS. The executive commissioner, in
consultation with the office, shall by rule develop a process for
the commission's office of inspector general, including office
staff and any third party with which the office contracts to perform
coding services, to communicate with and educate providers about
the diagnosis-related group (DRG) validation criteria that the
office uses in conducting hospital utilization reviews and audits.
Sec. 531.1025. PERFORMANCE AUDITS AND COORDINATION OF AUDIT
ACTIVITIES. (a) Notwithstanding any other law, the commission's
office of inspector general may conduct a performance audit of any
program or project administered or agreement entered into by the
commission or a health and human services agency, including an
audit related to:
(1) contracting procedures of the commission or a
health and human services agency; or
(2) the performance of the commission or a health and
human services agency.
(b) In addition to the coordination required by Section
531.102(w), the office shall coordinate the office's other audit
activities with those of the commission, including the development
of audit plans, the performance of risk assessments, and the
reporting of findings, to minimize the duplication of audit
activities. In coordinating audit activities with the commission
under this subsection, the office shall:
(1) seek input from the commission and consider
previous audits conducted by the commission for purposes of
determining whether to conduct a performance audit; and
(2) request the results of an audit conducted by the
commission if those results could inform the office's risk
assessment when determining whether to conduct, or the scope of, a
performance audit.
Sec. 531.1203. RIGHTS OF AND PROVISION OF INFORMATION TO
PHARMACIES SUBJECT TO CERTAIN AUDITS. (a) A pharmacy has a right
to request an informal hearing before the commission's appeals
division to contest the findings of an audit conducted by the
commission's office of inspector general or an entity that
contracts with the federal government to audit Medicaid providers
if the findings of the audit do not include findings that the
pharmacy engaged in Medicaid fraud.
(b) In an informal hearing held under this section, staff of
the commission's appeals division, assisted by staff responsible
for the commission's vendor drug program who have expertise in the
law governing pharmacies' participation in Medicaid, make the final
decision on whether the findings of an audit are accurate. Staff of
the commission's office of inspector general may not serve on the
panel that makes the decision on the accuracy of an audit.
(c) In order to increase transparency, the commission's
office of inspector general shall, if the office has access to the
information, provide to pharmacies that are subject to audit by the
office, or by an entity that contracts with the federal government
to audit Medicaid providers, information relating to the
extrapolation methodology used as part of the audit and the methods
used to determine whether the pharmacy has been overpaid under
Medicaid in sufficient detail so that the audit results may be
demonstrated to be statistically valid and are fully reproducible.
SECTION 13. Section 533.015, Government Code, as amended by
S.B. No. 219, Acts of the 84th Legislature, Regular Session, 2015,
is amended to read as follows:
Sec. 533.015. COORDINATION OF EXTERNAL OVERSIGHT
ACTIVITIES. (a) To the extent possible, the commission shall
coordinate all external oversight activities to minimize
duplication of oversight of managed care plans under Medicaid and
disruption of operations under those plans.
(b) The executive commissioner, after consulting with the
commission's office of inspector general, shall by rule define the
commission's and office's roles in and jurisdiction over, and
frequency of, audits of managed care organizations participating in
Medicaid that are conducted by the commission and the commission's
office of inspector general.
(c) In accordance with Section 531.102(w), the commission
shall share with the commission's office of inspector general, at
the request of the office, the results of any informal audit or
on-site visit that could inform that office's risk assessment when
determining whether to conduct, or the scope of, an audit of a
managed care organization participating in Medicaid.
SECTION 14. The following provisions are repealed:
(1) Section 531.1201(c), Government Code; and
(2) Section 32.0422(k), Human Resources Code, as
amended by S.B. No. 219, Acts of the 84th Legislature, Regular
Session, 2015.
SECTION 15. Notwithstanding Section 531.004, Government
Code, the Sunset Advisory Commission shall conduct a
special-purpose review of the overall performance of the Health and
Human Services Commission's office of inspector general. In
conducting the review, the Sunset Advisory Commission shall
particularly focus on the office's investigations and the
effectiveness and efficiency of the office's processes, as part of
the Sunset Advisory Commission's review of agencies for the 87th
Legislature. The office is not abolished solely because the office
is not explicitly continued following the review.
SECTION 16. Section 531.102, Government Code, as amended by
this Act, applies only to a complaint or allegation of Medicaid
fraud or abuse received by the Health and Human Services Commission
or the commission's office of inspector general on or after the
effective date of this Act. A complaint or allegation received
before the effective date of this Act is governed by the law as it
existed when the complaint or allegation was received, and the
former law is continued in effect for that purpose.
SECTION 17. Not later than March 1, 2016, the executive
commissioner of the Health and Human Services Commission, in
consultation with the inspector general of the commission's office
of inspector general, shall adopt rules necessary to implement the
changes in law made by this Act to Section 531.102(g)(2),
Government Code, regarding the circumstances in which a payment
hold may be placed on claims for reimbursement submitted by a
Medicaid provider.
SECTION 18. As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission, in consultation with the inspector general of
the commission's office of inspector general, shall adopt the rules
establishing the process for communicating with and educating
providers about diagnosis-related group (DRG) validation criteria
under Section 531.1024, Government Code, as added by this Act.
SECTION 19. Not later than September 1, 2016, the executive
commissioner of the Health and Human Services Commission shall
adopt the guidelines required under Section 531.1032(c),
Government Code, as added by this Act.
SECTION 20. Sections 531.120 and 531.1201, Government Code,
as amended by this Act, apply only to a proposed recoupment of an
overpayment or debt of which a provider is notified on or after the
effective date of this Act. A proposed recoupment of an overpayment
or debt that a provider was notified of before the effective date of
this Act is governed by the law as it existed when the provider was
notified, and the former law is continued in effect for that
purpose.
SECTION 21. (a) Not later than March 1, 2016, the executive
commissioner of the Health and Human Services Commission, in
consultation with the inspector general of the commission's office
of inspector general, shall adopt rules necessary to implement
Section 531.1203, Government Code, as added by this Act.
(b) Section 531.1203, Government Code, as added by this Act,
applies to:
(1) the findings of an audit that are made on or after
the effective date of this Act; or
(2) an audit the results of which are the subject of a
dispute pending on the effective date of this Act.
SECTION 22. Not later than September 1, 2016, the executive
commissioner of the Health and Human Services Commission shall
adopt rules required by Section 533.015(b), Government Code, as
added by this Act.
SECTION 23. 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 24. This Act takes effect September 1, 2015.