BILL ANALYSIS C.S.H.B. 3984 By: Oliverson Human Services Committee Report (Substituted) BACKGROUND AND PURPOSE The bill author has informed the committee that the federal Government Accountability Office has highlighted the necessity for enhanced oversight of Medicaid managed care organizations (MCO) claims to prevent improper payments. The bill author has also informed the committee that claims filed by the state's MCOs are excluded from the scope of the Medicaid Recovery Audit Contractor program, but incorporating MCOs into that program could not only ensure accountability in health care spending but also increase recoveries from the Recovery Audit Contractor program. C.S.H.B. 3984 seeks to provide for the identification of underpayments and overpayments under the Medicaid managed care program. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the executive commissioner of the Health and Human Services Commission in SECTION 1 of this bill. ANALYSIS C.S.H.B. 3984 amends the Government Code to include the identification of underpayments and overpayments under the Medicaid managed care program among the specified purposes for which the Health and Human Services Commission (HHSC) must establish a program under which HHSC contracts with one or more recovery audit contractors to the extent required by the federal Social Security Act and with respect to statutory provisions relating to recovery and recoupment in cases of fraud, abuse, and overcharges. The bill authorizes an overpayment to be recovered from either the provider or the managed care organization. C.S.H.B. 3984 prohibits a recovery audit contractor from initiating the following: a review of a claim unless: o the office of inspector general or the office's designee determines that the review would be cost-effective and approves the review; and o at least one year has elapsed since the date the claim was received; or a recovery effort on a claim if a managed care organization has notified the office of inspector general that the organization is auditing the claim. C.S.H.B. 3984 requires, on request by a recovery audit contractor or the office of inspector general, a managed care organization or provider who is the subject of a review conducted under the bill's provisions to submit to the contractor or office all information necessary to perform the review not later than the date specified in the request. All information and materials obtained under the bill's provisions are confidential as prescribed under statutory provisions relating to subpoenas. C.S.H.B. 3984 requires the HHSC executive commissioner by rule to adopt a process for appeals related to overpayments identified by a recovery audit contractor under the bill's provisions and authorizes the executive commissioner, in consultation with the office of inspector general, to adopt rules necessary to implement the bill's provisions. The bill authorizes HHSC to contract with a third party to administer an overpayment recovery or the appeals process adopted under executive commissioner rule. C.S.H.B. 3984 requires HHSC to implement the bill's provisions only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, the commission may, but is not required to, implement those changes in law using other money available to the commission for that purpose. If before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted. EFFECTIVE DATE September 1, 2025. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 3984 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute includes provisions that were not in the introduced that do the following: authorize an overpayment to be recovered from either the provider or the managed care organization; prohibit a recovery audit contractor from initiating: o a review of a claim unless: the office of inspector general or the office's designee determines that the review would be cost-effective approves the review; and at least one year has elapsed since the date the claim was received; or o a recovery effort on a claim if a managed care organization has notified the office of inspector general that the organization is auditing the claim; require, on request by a recovery audit contractor or the office of inspector general, a managed care organization or provider who is the subject of a review conducted under the bill's provisions to submit to the contractor or office all information necessary to perform the review not later than the date specified in the request; establish that all information and materials obtained under the bill's provisions are confidential; require the HHSC executive commissioner by rule to adopt a process for appeals related to overpayments identified by a recovery audit contractor under the bill's provisions; authorize the executive commissioner, in consultation with the office of inspector general, to adopt rules necessary to implement the bill's provisions; authorize HHSC to contract with a third party to administer an overpayment recovery or the appeals process adopted under executive commissioner rule; require HHSC to implement the bill's provisions only if the legislature appropriates money specifically for that purpose and establish that if the legislature does not appropriate money specifically for that purpose, the commission may, but is not required to, implement those changes in law using other money available to the commission for that purpose; and establish that if before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 3984
By: Oliverson
Human Services
Committee Report (Substituted)
C.S.H.B. 3984
By: Oliverson
Human Services
Committee Report (Substituted)
BACKGROUND AND PURPOSE The bill author has informed the committee that the federal Government Accountability Office has highlighted the necessity for enhanced oversight of Medicaid managed care organizations (MCO) claims to prevent improper payments. The bill author has also informed the committee that claims filed by the state's MCOs are excluded from the scope of the Medicaid Recovery Audit Contractor program, but incorporating MCOs into that program could not only ensure accountability in health care spending but also increase recoveries from the Recovery Audit Contractor program. C.S.H.B. 3984 seeks to provide for the identification of underpayments and overpayments under the Medicaid managed care program.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the executive commissioner of the Health and Human Services Commission in SECTION 1 of this bill.
ANALYSIS C.S.H.B. 3984 amends the Government Code to include the identification of underpayments and overpayments under the Medicaid managed care program among the specified purposes for which the Health and Human Services Commission (HHSC) must establish a program under which HHSC contracts with one or more recovery audit contractors to the extent required by the federal Social Security Act and with respect to statutory provisions relating to recovery and recoupment in cases of fraud, abuse, and overcharges. The bill authorizes an overpayment to be recovered from either the provider or the managed care organization. C.S.H.B. 3984 prohibits a recovery audit contractor from initiating the following: a review of a claim unless: o the office of inspector general or the office's designee determines that the review would be cost-effective and approves the review; and o at least one year has elapsed since the date the claim was received; or a recovery effort on a claim if a managed care organization has notified the office of inspector general that the organization is auditing the claim. C.S.H.B. 3984 requires, on request by a recovery audit contractor or the office of inspector general, a managed care organization or provider who is the subject of a review conducted under the bill's provisions to submit to the contractor or office all information necessary to perform the review not later than the date specified in the request. All information and materials obtained under the bill's provisions are confidential as prescribed under statutory provisions relating to subpoenas. C.S.H.B. 3984 requires the HHSC executive commissioner by rule to adopt a process for appeals related to overpayments identified by a recovery audit contractor under the bill's provisions and authorizes the executive commissioner, in consultation with the office of inspector general, to adopt rules necessary to implement the bill's provisions. The bill authorizes HHSC to contract with a third party to administer an overpayment recovery or the appeals process adopted under executive commissioner rule. C.S.H.B. 3984 requires HHSC to implement the bill's provisions only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, the commission may, but is not required to, implement those changes in law using other money available to the commission for that purpose. If before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.
EFFECTIVE DATE September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 3984 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute includes provisions that were not in the introduced that do the following: authorize an overpayment to be recovered from either the provider or the managed care organization; prohibit a recovery audit contractor from initiating: o a review of a claim unless: the office of inspector general or the office's designee determines that the review would be cost-effective approves the review; and at least one year has elapsed since the date the claim was received; or o a recovery effort on a claim if a managed care organization has notified the office of inspector general that the organization is auditing the claim; require, on request by a recovery audit contractor or the office of inspector general, a managed care organization or provider who is the subject of a review conducted under the bill's provisions to submit to the contractor or office all information necessary to perform the review not later than the date specified in the request; establish that all information and materials obtained under the bill's provisions are confidential; require the HHSC executive commissioner by rule to adopt a process for appeals related to overpayments identified by a recovery audit contractor under the bill's provisions; authorize the executive commissioner, in consultation with the office of inspector general, to adopt rules necessary to implement the bill's provisions; authorize HHSC to contract with a third party to administer an overpayment recovery or the appeals process adopted under executive commissioner rule; require HHSC to implement the bill's provisions only if the legislature appropriates money specifically for that purpose and establish that if the legislature does not appropriate money specifically for that purpose, the commission may, but is not required to, implement those changes in law using other money available to the commission for that purpose; and establish that if before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.
BACKGROUND AND PURPOSE
The bill author has informed the committee that the federal Government Accountability Office has highlighted the necessity for enhanced oversight of Medicaid managed care organizations (MCO) claims to prevent improper payments. The bill author has also informed the committee that claims filed by the state's MCOs are excluded from the scope of the Medicaid Recovery Audit Contractor program, but incorporating MCOs into that program could not only ensure accountability in health care spending but also increase recoveries from the Recovery Audit Contractor program. C.S.H.B. 3984 seeks to provide for the identification of underpayments and overpayments under the Medicaid managed care program.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is expressly granted to the executive commissioner of the Health and Human Services Commission in SECTION 1 of this bill.
ANALYSIS
C.S.H.B. 3984 amends the Government Code to include the identification of underpayments and overpayments under the Medicaid managed care program among the specified purposes for which the Health and Human Services Commission (HHSC) must establish a program under which HHSC contracts with one or more recovery audit contractors to the extent required by the federal Social Security Act and with respect to statutory provisions relating to recovery and recoupment in cases of fraud, abuse, and overcharges. The bill authorizes an overpayment to be recovered from either the provider or the managed care organization.
C.S.H.B. 3984 prohibits a recovery audit contractor from initiating the following:
a review of a claim unless:
o the office of inspector general or the office's designee determines that the review would be cost-effective and approves the review; and
o at least one year has elapsed since the date the claim was received; or
a recovery effort on a claim if a managed care organization has notified the office of inspector general that the organization is auditing the claim.
C.S.H.B. 3984 requires, on request by a recovery audit contractor or the office of inspector general, a managed care organization or provider who is the subject of a review conducted under the bill's provisions to submit to the contractor or office all information necessary to perform the review not later than the date specified in the request. All information and materials obtained under the bill's provisions are confidential as prescribed under statutory provisions relating to subpoenas.
C.S.H.B. 3984 requires the HHSC executive commissioner by rule to adopt a process for appeals related to overpayments identified by a recovery audit contractor under the bill's provisions and authorizes the executive commissioner, in consultation with the office of inspector general, to adopt rules necessary to implement the bill's provisions. The bill authorizes HHSC to contract with a third party to administer an overpayment recovery or the appeals process adopted under executive commissioner rule.
C.S.H.B. 3984 requires HHSC to implement the bill's provisions only if the legislature appropriates money specifically for that purpose. If the legislature does not appropriate money specifically for that purpose, the commission may, but is not required to, implement those changes in law using other money available to the commission for that purpose. If before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 3984 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The substitute includes provisions that were not in the introduced that do the following:
authorize an overpayment to be recovered from either the provider or the managed care organization;
prohibit a recovery audit contractor from initiating:
o a review of a claim unless:
the office of inspector general or the office's designee determines that the review would be cost-effective approves the review; and
at least one year has elapsed since the date the claim was received; or
o a recovery effort on a claim if a managed care organization has notified the office of inspector general that the organization is auditing the claim;
require, on request by a recovery audit contractor or the office of inspector general, a managed care organization or provider who is the subject of a review conducted under the bill's provisions to submit to the contractor or office all information necessary to perform the review not later than the date specified in the request;
establish that all information and materials obtained under the bill's provisions are confidential;
require the HHSC executive commissioner by rule to adopt a process for appeals related to overpayments identified by a recovery audit contractor under the bill's provisions;
authorize the executive commissioner, in consultation with the office of inspector general, to adopt rules necessary to implement the bill's provisions;
authorize HHSC to contract with a third party to administer an overpayment recovery or the appeals process adopted under executive commissioner rule;
require HHSC to implement the bill's provisions only if the legislature appropriates money specifically for that purpose and establish that if the legislature does not appropriate money specifically for that purpose, the commission may, but is not required to, implement those changes in law using other money available to the commission for that purpose; and
establish that if before implementing any provision of the bill 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 must request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.