H.B. No. 2894
AN ACT
relating to the prosecution of health care fraud; creating a
criminal offense.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 12.01, Code of Criminal Procedure, is
amended to read as follows:
Art. 12.01. FELONIES. Except as provided in Article 12.03,
felony indictments may be presented within these limits, and not
afterward:
(1) no limitation:
(A) murder and manslaughter;
(B) sexual assault under Section 22.011(a)(2),
Penal Code, or aggravated sexual assault under Section
22.021(a)(1)(B), Penal Code;
(C) sexual assault, if:
(i) during the investigation of the offense
biological matter is collected and subjected to forensic DNA
testing and the testing results show that the matter does not match
the victim or any other person whose identity is readily
ascertained; or
(ii) probable cause exists to believe that
the defendant has committed the same or a similar sexual offense
against five or more victims;
(D) continuous sexual abuse of young child or
children under Section 21.02, Penal Code;
(E) indecency with a child under Section 21.11,
Penal Code;
(F) an offense involving leaving the scene of an
accident under Section 550.021, Transportation Code, if the
accident resulted in the death of a person;
(G) trafficking of persons under Section
20A.02(a)(7) or (8), Penal Code;
(H) continuous trafficking of persons under
Section 20A.03, Penal Code; or
(I) compelling prostitution under Section
43.05(a)(2), Penal Code;
(2) ten years from the date of the commission of the
offense:
(A) theft of any estate, real, personal or mixed,
by an executor, administrator, guardian or trustee, with intent to
defraud any creditor, heir, legatee, ward, distributee,
beneficiary or settlor of a trust interested in such estate;
(B) theft by a public servant of government
property over which the public servant [he] exercises control in
the public servant's [his] official capacity;
(C) forgery or the uttering, using or passing of
forged instruments;
(D) injury to an elderly or disabled individual
punishable as a felony of the first degree under Section 22.04,
Penal Code;
(E) sexual assault, except as provided by
Subdivision (1);
(F) arson;
(G) trafficking of persons under Section
20A.02(a)(1), (2), (3), or (4), Penal Code; or
(H) compelling prostitution under Section
43.05(a)(1), Penal Code;
(3) seven years from the date of the commission of the
offense:
(A) misapplication of fiduciary property or
property of a financial institution;
(B) securing execution of document by deception;
(C) a felony violation under Chapter 162, Tax
Code;
(D) false statement to obtain property or credit
under Section 32.32, Penal Code;
(E) money laundering;
(F) credit card or debit card abuse under Section
32.31, Penal Code;
(G) fraudulent use or possession of identifying
information under Section 32.51, Penal Code;
(H) exploitation of a child, elderly individual,
or disabled individual under Section 32.53, Penal Code;
(I) health care [Medicaid] fraud under Section
35A.02, Penal Code; or
(J) bigamy under Section 25.01, Penal Code,
except as provided by Subdivision (6);
(4) five years from the date of the commission of the
offense:
(A) theft or robbery;
(B) except as provided by Subdivision (5),
kidnapping or burglary;
(C) injury to an elderly or disabled individual
that is not punishable as a felony of the first degree under Section
22.04, Penal Code;
(D) abandoning or endangering a child; or
(E) insurance fraud;
(5) if the investigation of the offense shows that the
victim is younger than 17 years of age at the time the offense is
committed, 20 years from the 18th birthday of the victim of one of
the following offenses:
(A) sexual performance by a child under Section
43.25, Penal Code;
(B) aggravated kidnapping under Section
20.04(a)(4), Penal Code, if the defendant committed the offense
with the intent to violate or abuse the victim sexually; or
(C) burglary under Section 30.02, Penal Code, if
the offense is punishable under Subsection (d) of that section and
the defendant committed the offense with the intent to commit an
offense described by Subdivision (1)(B) or (D) of this article or
Paragraph (B) of this subdivision;
(6) ten years from the 18th birthday of the victim of
the offense:
(A) trafficking of persons under Section
20A.02(a)(5) or (6), Penal Code;
(B) injury to a child under Section 22.04, Penal
Code; or
(C) bigamy under Section 25.01, Penal Code, if
the investigation of the offense shows that the person, other than
the legal spouse of the defendant, whom the defendant marries or
purports to marry or with whom the defendant lives under the
appearance of being married is younger than 18 years of age at the
time the offense is committed; or
(7) three years from the date of the commission of the
offense: all other felonies.
SECTION 2. Section 3(a)(3), Article 37.07, Code of Criminal
Procedure, is amended to read as follows:
(3) Regardless of the plea and whether the punishment
is assessed by the judge or the jury, during the punishment phase of
the trial of an offense under Section 35A.02, Penal Code, subject to
the applicable rules of evidence, the state and the defendant may
offer evidence not offered during the guilt or innocence phase of
the trial concerning the total pecuniary loss to the affected
health care [Medicaid] program caused by the defendant's conduct
or, if applicable, the scheme or continuing course of conduct of
which the defendant's conduct is part. Evidence may be offered in
summary form [Subject to the applicable rules of evidence, an
employee of the Health and Human Services Commission's office of
inspector general or the office of attorney general's Medicaid
fraud control unit may testify] concerning the total pecuniary loss
to the affected health care [Medicaid] program. Testimony
regarding the total pecuniary loss to the affected health care
program [An employee who testifies under this subdivision] is
subject to cross-examination. Evidence offered under this
subdivision may be considered by the judge or jury in ordering or
recommending the amount of any restitution to be made to the
affected health care [Medicaid] program or the appropriate
punishment for the defendant.
SECTION 3. Article 59.01(2), Code of Criminal Procedure, is
amended to read as follows:
(2) "Contraband" means property of any nature,
including real, personal, tangible, or intangible, that is:
(A) used in the commission of:
(i) any first or second degree felony under
the Penal Code;
(ii) any felony under Section 15.031(b),
20.05, 20.06, 21.11, 38.04, or Chapter 43, 20A, 29, 30, 31, 32, 33,
33A, or 35, Penal Code;
(iii) any felony under The Securities Act
(Article 581-1 et seq., Vernon's Texas Civil Statutes); or
(iv) any offense under Chapter 49, Penal
Code, that is punishable as a felony of the third degree or state
jail felony, if the defendant has been previously convicted three
times of an offense under that chapter;
(B) used or intended to be used in the commission
of:
(i) any felony under Chapter 481, Health
and Safety Code (Texas Controlled Substances Act);
(ii) any felony under Chapter 483, Health
and Safety Code;
(iii) a felony under Chapter 151, Finance
Code;
(iv) any felony under Chapter 34, Penal
Code;
(v) a Class A misdemeanor under Subchapter
B, Chapter 365, Health and Safety Code, if the defendant has been
previously convicted twice of an offense under that subchapter;
(vi) any felony under Chapter 32, Human
Resources Code, or Chapter 31, 32, 35A, or 37, Penal Code, that
involves a health care [the state Medicaid] program, as defined by
Section 35A.01, Penal Code;
(vii) a Class B misdemeanor under Chapter
522, Business & Commerce Code;
(viii) a Class A misdemeanor under Section
306.051, Business & Commerce Code;
(ix) any offense under Section 42.10, Penal
Code;
(x) any offense under Section 46.06(a)(1)
or 46.14, Penal Code;
(xi) any offense under Chapter 71, Penal
Code;
(xii) any offense under Section 20.05 or
20.06, Penal Code; or
(xiii) an offense under Section 326.002,
Business & Commerce Code;
(C) the proceeds gained from the commission of a
felony listed in Paragraph (A) or (B) of this subdivision, a
misdemeanor listed in Paragraph (B)(vii), (ix), (x), or (xi) of
this subdivision, or a crime of violence;
(D) acquired with proceeds gained from the
commission of a felony listed in Paragraph (A) or (B) of this
subdivision, a misdemeanor listed in Paragraph (B)(vii), (ix), (x),
or (xi) of this subdivision, or a crime of violence;
(E) used to facilitate or intended to be used to
facilitate the commission of a felony under Section 15.031 or
43.25, Penal Code; or
(F) used to facilitate or intended to be used to
facilitate the commission of a felony under Section 20A.02 or
Chapter 43, Penal Code.
SECTION 4. Article 59.06(p), Code of Criminal Procedure, is
amended to read as follows:
(p) Notwithstanding Subsection (a), and to the extent
necessary to protect the state's [commission's] ability to recover
amounts wrongfully obtained by the owner of the property and
associated damages and penalties to which the affected health care
program [commission] may otherwise be entitled by law, the attorney
representing the state shall transfer to the governmental entity
administering the affected health care program [Health and Human
Services Commission] all forfeited property defined as contraband
under Article 59.01(2)(B)(vi). If the forfeited property consists
of property other than money or negotiable instruments, the
attorney representing the state may, with the consent of the
governmental entity administering the affected health care program
[if approved by the commission], sell the property and deliver to
the governmental entity administering the affected health care
program [commission] the proceeds from the sale, minus costs
attributable to the sale. The sale must be conducted in a manner
that is reasonably expected to result in receiving the fair market
value for the property.
SECTION 5. Section 250.006(a), Health and Safety Code, is
amended to read as follows:
(a) A person for whom the facility or the individual
employer is entitled to obtain criminal history record information
may not be employed in a facility or by an individual employer if
the person has been convicted of an offense listed in this
subsection:
(1) an offense under Chapter 19, Penal Code (criminal
homicide);
(2) an offense under Chapter 20, Penal Code
(kidnapping, unlawful restraint, and smuggling of persons);
(3) an offense under Section 21.02, Penal Code
(continuous sexual abuse of young child or children), or Section
21.11, Penal Code (indecency with a child);
(4) an offense under Section 22.011, Penal Code
(sexual assault);
(5) an offense under Section 22.02, Penal Code
(aggravated assault);
(6) an offense under Section 22.04, Penal Code (injury
to a child, elderly individual, or disabled individual);
(7) an offense under Section 22.041, Penal Code
(abandoning or endangering child);
(8) an offense under Section 22.08, Penal Code (aiding
suicide);
(9) an offense under Section 25.031, Penal Code
(agreement to abduct from custody);
(10) an offense under Section 25.08, Penal Code (sale
or purchase of child);
(11) an offense under Section 28.02, Penal Code
(arson);
(12) an offense under Section 29.02, Penal Code
(robbery);
(13) an offense under Section 29.03, Penal Code
(aggravated robbery);
(14) an offense under Section 21.08, Penal Code
(indecent exposure);
(15) an offense under Section 21.12, Penal Code
(improper relationship between educator and student);
(16) an offense under Section 21.15, Penal Code
(invasive [(improper photography or] visual recording);
(17) an offense under Section 22.05, Penal Code
(deadly conduct);
(18) an offense under Section 22.021, Penal Code
(aggravated sexual assault);
(19) an offense under Section 22.07, Penal Code
(terroristic threat);
(20) an offense under Section 32.53, Penal Code
(exploitation of child, elderly individual, or disabled
individual);
(21) an offense under Section 33.021, Penal Code
(online solicitation of a minor);
(22) an offense under Section 34.02, Penal Code (money
laundering);
(23) an offense under Section 35A.02, Penal Code
(health care [Medicaid] fraud);
(24) an offense under Section 36.06, Penal Code
(obstruction or retaliation);
(25) an offense under Section 42.09, Penal Code
(cruelty to livestock animals), or under Section 42.092, Penal Code
(cruelty to nonlivestock animals); or
(26) a conviction under the laws of another state,
federal law, or the Uniform Code of Military Justice for an offense
containing elements that are substantially similar to the elements
of an offense listed by this subsection.
SECTION 6. Chapter 35A, Penal Code, is amended to read as
follows:
CHAPTER 35A. HEALTH CARE [MEDICAID] FRAUD
Sec. 35A.01. DEFINITIONS. In this chapter:
(1) "Claim" means a written or electronically
submitted request or demand that:
(A) is submitted by a provider or the provider's
agent and identifies a service or product provided or purported to
have been provided to a health care recipient as reimbursable under
a health care program, without regard to whether the money that is
requested or demanded is paid; or
(B) states the income earned or expense incurred
by a provider in providing a service or product and is used to
determine a rate of payment under a health care program [has the
meaning assigned by Section 36.001, Human Resources Code].
(2) "Fiscal agent" means:
(A) a person who, through a contractual
relationship with a state agency or the federal government,
receives, processes, and pays a claim under a health care program;
or
(B) the designated agent of a person described by
Paragraph (A) [has the meaning assigned by Section 36.001, Human
Resources Code].
(3) "Health care practitioner" means a dentist,
podiatrist, psychologist, physical therapist, chiropractor,
registered nurse, or other provider licensed to provide health care
services in this state [has the meaning assigned by Section 36.001,
Human Resources Code].
(4) "Health care program" means a program funded by
this state, the federal government, or both and designed to provide
health care services to health care recipients, including a program
that is administered in whole or in part through a managed care
delivery model.
(5) "Health care recipient" means an individual to
whom a service or product is provided or purported to have been
provided and with respect to whom a person claims or receives a
payment for that service or product from a health care program or
fiscal agent, without regard to whether the individual was eligible
for benefits under the health care program.
(6) "Managed care organization" means a person who is
authorized or otherwise permitted by law to arrange for or provide a
managed care plan [has the meaning assigned by Section 36.001,
Human Resources Code].
[(5) "Medicaid program" has the meaning assigned by
Section 36.001, Human Resources Code.
[(6) "Medicaid recipient" has the meaning assigned by
Section 36.001, Human Resources Code.]
(7) "Physician" means a physician licensed to practice
medicine in this state [has the meaning assigned by Section 36.001,
Human Resources Code].
(8) "Provider" means a person who participates in or
has applied to participate in a health care program as a supplier of
a service or product and includes:
(A) a management company that manages, operates,
or controls another provider;
(B) a person, including a medical vendor, who
provides a service or product to another provider or the other
provider's agent;
(C) an employee of the person who participates in
or has applied to participate in the program;
(D) a managed care organization; and
(E) a manufacturer or distributor of a product
for which a health care program provides reimbursement [has the
meaning assigned by Section 36.001, Human Resources Code].
(9) "Service" includes care or treatment of a health
care recipient [has the meaning assigned by Section 36.001, Human
Resources Code].
(10) "High managerial agent" means a director,
officer, or employee who is authorized to act on behalf of a
provider and has duties of such responsibility that the conduct of
the director, officer, or employee reasonably may be assumed to
represent the policy or intent of the provider.
Sec. 35A.02. HEALTH CARE [MEDICAID] FRAUD. (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 a health care [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 a health care [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 a health care [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 under a health care program [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 a health care [the Medicaid] program;
(5) except as authorized under a health care [the
Medicaid] program, knowingly pays, charges, solicits, accepts, or
receives, in addition to an amount paid under the health care
[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 a health care [the Medicaid] program;
(6) knowingly presents or causes to be presented a
claim for payment under a health care [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
a health care [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 a health care [the Medicaid]
program and knowingly fails to indicate the type of license and the
identification number of the licensed health care practitioner
[provider] who actually provided the service;
(9) knowingly enters into an agreement, combination,
or conspiracy to defraud the state or federal government by
obtaining or aiding another person in obtaining an unauthorized
payment or benefit from a health care [the Medicaid] program or [a]
fiscal agent;
(10) is a managed care organization that contracts
with the Health and Human Services Commission, another [or other]
state agency, or the federal government to provide or arrange to
provide health care benefits or services to individuals eligible
under a health care [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
falsifies [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 a
health care [the Medicaid] program in the organization's managed
care plan or in connection with marketing the organization's
services to an individual eligible under a health care [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 or the
federal government under a health care [the Medicaid] program.
(b) An offense under this section is:
(1) a Class C misdemeanor if the amount of any payment
or the value of any monetary or in-kind benefit provided or claim
for payment made under a health care [the Medicaid] program,
directly or indirectly, as a result of the conduct is less than
$100;
(2) a Class B misdemeanor if the amount of any payment
or the value of any monetary or in-kind benefit provided or claim
for payment made under a health care [the Medicaid] program,
directly or indirectly, as a result of the conduct is $100 or more
but less than $750;
(3) a Class A misdemeanor if the amount of any payment
or the value of any monetary or in-kind benefit provided or claim
for payment made under a health care [the Medicaid] program,
directly or indirectly, as a result of the conduct is $750 or more
but less than $2,500;
(4) a state jail felony if:
(A) the amount of any payment or the value of any
monetary or in-kind benefit provided or claim for payment made
under a health care [the Medicaid] program, directly or indirectly,
as a result of the conduct is $2,500 or more but less than $30,000;
(B) the offense is committed under Subsection
(a)(11); or
(C) it is shown on the trial of the offense that
the amount of the payment or value of the benefit described by this
subsection cannot be reasonably ascertained;
(5) a felony of the third degree if:
(A) the amount of any payment or the value of any
monetary or in-kind benefit provided or claim for payment made
under a health care [the Medicaid] program, directly or indirectly,
as a result of the conduct is $30,000 or more but less than
$150,000; or
(B) it is shown on the trial of the offense that
the defendant submitted more than 25 but fewer than 50 fraudulent
claims under a health care [the Medicaid] program and the
submission of each claim constitutes conduct prohibited by
Subsection (a);
(6) a felony of the second degree if:
(A) the amount of any payment or the value of any
monetary or in-kind benefit provided or claim for payment made
under a health care [the Medicaid] program, directly or indirectly,
as a result of the conduct is $150,000 or more but less than
$300,000; or
(B) it is shown on the trial of the offense that
the defendant submitted 50 or more fraudulent claims under a health
care [the Medicaid] program and the submission of each claim
constitutes conduct prohibited by Subsection (a); or
(7) a felony of the first degree if the amount of any
payment or the value of any monetary or in-kind benefit provided or
claim for payment made under a health care [the Medicaid] program,
directly or indirectly, as a result of the conduct is $300,000 or
more.
(c) If conduct constituting an offense under this section
also constitutes an offense under another section of this code or
another provision of law, the actor may be prosecuted under either
this section or the other section or provision or both this section
and the other section or provision.
(d) When multiple payments or monetary or in-kind benefits
are provided under one or more health care programs [the Medicaid
program] as a result of one scheme or continuing course of conduct,
the conduct may be considered as one offense and the amounts of the
payments or monetary or in-kind benefits aggregated in determining
the grade of the offense.
(e) The punishment prescribed for an offense under this
section, other than the punishment prescribed by Subsection (b)(7),
is increased to the punishment prescribed for the next highest
category of offense if it is shown beyond a reasonable doubt on the
trial of the offense that the actor was a [provider or] high
managerial agent at the time of the offense.
(f) With the consent of the appropriate local county or
district attorney, the attorney general has concurrent
jurisdiction with that consenting local prosecutor to prosecute an
offense under this section that involves a health care [the
Medicaid] program.
SECTION 7. The change in law made by this Act applies only
to an offense committed on or after the effective date of this Act.
An offense committed before the effective date of this Act is
governed by the law in effect on the date the offense was committed,
and the former law is continued in effect for that purpose. For
purposes of this section, an offense was committed before the
effective date of this Act if any element of the offense occurred
before that date.
SECTION 8. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2894 was passed by the House on May 9,
2019, by the following vote: Yeas 142, Nays 0, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2894 was passed by the Senate on May
17, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor