Bill Text: TX HB3279 | 2015-2016 | 84th Legislature | Introduced
Bill Title: Relating to the authority and duties of the office of inspector general of the Health and Human Services Commission.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-04-29 - Recommitted to committee [HB3279 Detail]
Download: Texas-2015-HB3279-Introduced.html
84R5757 EES-D | ||
By: Gonzales | H.B. No. 3279 |
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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[ |
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unintentional technical, clerical, or administrative errors. | ||
SECTION 2. Section 531.102, Government Code, is amended by | ||
amending Subsections (a-1), (f), (g), and (k) and adding | ||
Subsections (f-1), (p), (q), and (r) to read as follows: | ||
(a-1) The executive commissioner [ |
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an inspector general to serve as director of the office. The | ||
inspector general serves a one-year term that expires on February | ||
1. | ||
(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. [ |
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(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 the Medicaid | ||
program, 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 the Medicaid program, 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 [ |
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under state and [ |
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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 immediate effect. 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, [ |
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documents that form the basis for the hold, and a detailed summary | ||
of the office's evidence relating to the allegation; [ |
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(B) a description of administrative and judicial | ||
due process rights and remedies, including the provider's option | ||
[ |
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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 [ |
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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 [ |
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(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 [ |
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(B) the provider and the office are each entitled | ||
to two continuances under reasonable circumstances [ |
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(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 the Medicaid program [ |
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(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 | ||
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(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. The decision of the administrative law judge is final and may | ||
not be appealed [ |
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(6) The executive commissioner 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 [ |
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office shall give notice to the provider of the time and place of | ||
the initial informal resolution meeting [ |
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request a second informal resolution meeting [ |
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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 [ |
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meeting [ |
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time and place of the second informal resolution meeting [ |
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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. [ |
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(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. | ||
(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 the Medicaid program. | ||
(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, on behalf of 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, on behalf of 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 program | ||
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. | ||
SECTION 3. Section 531.102(l), Government Code, as added by | ||
Chapter 1311 (S.B. 8), Acts of the 83rd Legislature, Regular | ||
Session, 2013, is redesignated as Section 531.102(o), Government | ||
Code, to read as follows: | ||
(o) [ |
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any other state agency or governmental entity. | ||
SECTION 4. Section 531.113, Government Code, is amended by | ||
adding Subsection (d-1) and amending Subsection (e) to read as | ||
follows: | ||
(d-1) The commission's office of inspector general 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 the Medicaid program and communicate those trends to special | ||
investigative units and contracted entities to determine the | ||
prevalence of those trends; and | ||
(5) assist managed care organizations in discovering | ||
or investigating fraud, waste, and abuse, as needed. | ||
(e) The executive commissioner 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 where 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 5. 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 6. Section 531.120(b), Government Code, is amended | ||
to read as follows: | ||
(b) A provider may [ |
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resolution meeting under this section, and on [ |
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shall schedule the [ |
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office shall give notice to the provider of the time and place of | ||
the [ |
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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. [ |
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SECTION 7. Section 531.1201(b), Government Code, is amended | ||
to read as follows: | ||
(b) 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 [ |
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SECTION 8. Subchapter C, Chapter 531, Government Code, is | ||
amended by adding Section 531.1203 to read as follows: | ||
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 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 the Medicaid program, | ||
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 an entity that contracts with the federal government to | ||
audit Medicaid providers detailed 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 the | ||
Medicaid program. | ||
SECTION 9. The following provisions are repealed: | ||
(1) Section 531.1201(c), Government Code; and | ||
(2) Section 32.0422(k), Human Resources Code. | ||
SECTION 10. 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 11. The change in law made by this Act to Section | ||
531.102(a-1), Government Code, does not affect the entitlement of | ||
the person serving as inspector general for the Health and Human | ||
Services Commission immediately before the effective date of this | ||
Act to continue to serve as inspector general for the remainder of | ||
the person's term, unless otherwise removed. The change in law | ||
applies only to a person appointed as inspector general on or after | ||
the effective date of this Act. | ||
SECTION 12. 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 13. Not later than March 1, 2016, the executive | ||
commissioner of the Health and Human Services Commission 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 14. 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 15. Not later than March 1, 2016, the executive | ||
commissioner of the Health and Human Services Commission shall | ||
adopt rules necessary to implement Section 531.1203, Government | ||
Code, as added by this Act. | ||
SECTION 16. 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 17. This Act takes effect September 1, 2015. |