85R3516 EES-D
By: Hinojosa, Schwertner S.B. No. 293
A BILL TO BE ENTITLED
AN ACT
relating to the proof required to impose payment holds in certain
cases of alleged fraud by Medicaid providers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.102(g), Government Code, is amended
to read as follows:
(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 authorized under state and 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, 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;
(B) a description of administrative and judicial
due process rights and remedies, including the provider's option 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 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:
(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;
(B) the provider and the office are each entitled
to two continuances under reasonable circumstances; 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.
(3-a) The executive commissioner, in consultation with
the office, shall adopt rules regarding what constitutes an ongoing
significant financial risk to the state and a threat to the
integrity of Medicaid for purposes of Subdivision (3)(C).
(4) 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.
(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.
(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 initial informal resolution meeting. The office
shall give notice to the provider of the time and place of the
initial informal resolution meeting. A provider may request a
second informal resolution meeting 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 second informal
resolution meeting. The office shall give notice to the provider
of the time and place of the second informal resolution meeting. 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.
(7) The office shall, in consultation with the state's
Medicaid fraud control unit, establish guidelines under which
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.
SECTION 2. As soon as practicable after the effective date
of this Act, the executive commissioner of the Health and Human
Services Commission shall adopt the rules required by Section
531.102(g)(3-a), Government Code, as added by this Act.
SECTION 3. 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 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2017.