87R593 JG-F
By: Raymond H.B. No. 648
A BILL TO BE ENTITLED
AN ACT
relating to the duties of the Health and Human Services
Commission's office of inspector general.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 531.102, Government Code, is amended by
amending Subsections (b), (f), (f-1), (h), (n), (p), and (r) and
adding Subsection (z) to read as follows:
(b) The [commission, in consultation with the] inspector
general[,] shall set clear objectives, priorities, and performance
standards for the office that emphasize:
(1) coordinating investigative efforts to
aggressively recover money;
(2) allocating resources to cases that have the
strongest supportive evidence [and the greatest potential for
recovery of money]; and
(3) maximizing opportunities for referral of cases to
the office of the attorney general in accordance with Section
531.103.
(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.
(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 or Medicaid managed care
organization 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 or Medicaid managed care organization, 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 or Medicaid managed care organization 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 or
Medicaid managed care organization that [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 or Medicaid
managed care organization under this subsection if the office
determines that providing notice would jeopardize the
investigation.
(h) In addition to performing functions and duties
otherwise provided by law, the office may:
(1) assess administrative penalties otherwise
authorized by law on behalf of the commission or a health and human
services agency;
(2) request that the attorney general obtain an
injunction to prevent a person from disposing of an asset
identified by the office as potentially subject to recovery by the
office due to the person's fraud or abuse;
(3) provide for coordination between the office and
special investigative units formed by managed care organizations
under Section 531.113 or entities with which managed care
organizations contract under that section;
(4) audit the use and effectiveness of state or
federal funds, including contract and grant funds, administered by
a person, [or] state agency, or managed care organization receiving
the funds from a health and human services agency;
(5) conduct investigations relating to the funds
described by Subdivision (4); and
(6) recommend policies promoting economical and
efficient administration of the funds described by Subdivision (4)
and the prevention and detection of fraud and abuse in
administration of those funds.
(n) To the extent permitted under federal law, the executive
commissioner, on behalf of the office, shall adopt rules
establishing the criteria for initiating a full-scale fraud or
abuse investigation, conducting the investigation, collecting
evidence, accepting and approving a provider's request to post a
surety bond to secure potential recoupments in lieu of a payment
hold or other asset or payment guarantee, and establishing minimum
training requirements for Medicaid [provider] fraud or abuse
investigators.
(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 and managed care organization 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.
(r) The office shall review the office's investigative
process, including the office's use of sampling and extrapolation
to audit provider and managed care organization records. The
review shall be performed by staff who are not directly involved in
investigations conducted by the office.
(z) Based on the results of an audit, inspection, or
investigation of a managed care organization conducted by the
office under this section, the office may recommend to the
commission that enforcement actions, including the payment of
liquidated damages, be taken against the managed care organization
and suggest the amount of a penalty to be assessed.
SECTION 2. Sections 531.102(g)(1) and (7), Government Code,
are amended to read as follows:
(1) Whenever the office learns or has reason to
suspect that a provider's or Medicaid managed care organization'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 or Medicaid managed care
organization, which investigation may lead to the imposition of
appropriate administrative or civil sanctions.
(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
Medicaid managed care organization; or
(B) shall automatically be imposed on a provider
or Medicaid managed care organization.
SECTION 3. Sections 531.118(a) and (b), Government Code,
are amended to read as follows:
(a) The commission shall maintain a record of all
allegations of fraud or abuse against a provider or managed care
organization containing the date each allegation was received or
identified and the source of the allegation, if available. The
record is confidential under Section 531.1021(g) and is subject to
Section 531.1021(h).
(b) If the commission receives an allegation of fraud or
abuse against a provider or managed care organization 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 4. Subchapter C, Chapter 531, Government Code, is
amended by adding Section 531.1185 to read as follows:
Sec. 531.1185. REVIEW, RENEGOTIATION, AND REVISION OF
CERTAIN FINAL ORDERS AND SETTLEMENT AGREEMENTS. The office of
inspector general may, on request by a provider, review,
renegotiate, and revise a final order or settlement agreement
currently under repayment entered into by the provider and the
office between January 1, 2011, and December 31, 2014. In
reviewing, renegotiating, and revising a final order or settlement
agreement under this section, the office shall consider:
(1) amounts being paid by the provider under the order
or agreement;
(2) amounts paid or lost by the provider as a result of
any investigation, audit, or inspection that was the basis of the
order or agreement; and
(3) amounts of the federal share paid or being paid.
SECTION 5. Subchapter A, Chapter 533, Government Code, is
amended by adding Section 533.0122 to read as follows:
Sec. 533.0122. UTILIZATION REVIEW AUDITS CONDUCTED BY
OFFICE OF INSPECTOR GENERAL. (a) If the commission's office of
inspector general intends to conduct a utilization review audit of
a provider of services under a Medicaid managed care delivery
model, the office shall inform both the provider and the Medicaid
managed care organization with which the provider contracts of any
applicable criteria and guidelines the office will use in the
course of the audit.
(b) The commission's office of inspector general shall
ensure that each person conducting a utilization review audit under
this section has experience and training regarding the operations
of Medicaid managed care organizations.
(c) The commission's office of inspector general may not, as
the result of a utilization review audit, recoup an overpayment or
debt from a provider that contracts with a Medicaid managed care
organization based on a determination that a provided service was
not medically necessary unless the office:
(1) uses the same criteria and guidelines that were
used by the managed care organization in its determination of
medical necessity for the service; and
(2) verifies with the managed care organization and
the provider that the provider:
(A) at the time the service was delivered, had
reasonable notice of the criteria and guidelines used by the
managed care organization to determine medical necessity; and
(B) did not follow the criteria and guidelines
used by the managed care organization to determine medical
necessity that were in effect at the time the service was delivered.
SECTION 6. Not later than December 31, 2021, the executive
commissioner of the Health and Human Services Commission shall
adopt rules necessary to implement the changes in law made by this
Act.
SECTION 7. 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 8. This Act takes effect September 1, 2021.