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Controlling Fraud in Medicaid and Other Welfare Programs - S.B. 30

by Senator Zaffirini, et al.

House Sponsor: Representative Maxey

§ Requires the Texas Department of Human Services (DHS) to take a number of steps to improve the detection and enforcement of fraud under the food stamp and financial assistance program. These include:

§ improving the time it takes to establish an overpayment claim;

§ using the telephone to collect reimbursement from a person who received a benefit in error;

§ participating in the Federal Tax Refund Offset program;

§ keeping records of fraud cases referred for prosecution;

§ using a computer system to compare state information with federal immigrant and foreign visitor information to prevent people from illegally receiving public assistance benefits;

§ identifying Medicaid recipients who are eligible to receive similar assistance under Medicare and analyzing claims to ensure that allowable Medicare payments are sought first, and matching Medicaid claims to determine if other programs should appropriately pay the claims; and

§ identifying each Medicaid service under which the state is eligible for enhanced federal reimbursement and ensuring that the state receives the highest reimbursement.

Fraud Detection and Prevention

§ Requires the Health and Human Services Commission (HHSC) to set a minimum goal for DHS recovering a percentage of benefits that were granted in error.

§ Requires reduction in general revenue appropriation if DHS failed to meet its goal.

§ Allows HHSC to grant an award to an individual who reports fraud or abuse of funds in Medicaid.

§ Makes HHSC, through a new office of investigations and enforcement office, responsible for investigating and enforcing fraud in health and human services.

§ Requires HHSC and the office of the attorney general (OAG) to take a number of joint actions on Medicaid fraud. These include: signing a memorandum of understanding on developing and implementing joint written procedures for processing fraud cases; preparing reports on fraud detection and prosecution activities; signing a memorandum of understanding for HHSC to provide investigative support on certain cases, and cooperating with entities participating in "Operation Restore Trust," a federal fraud detection program.

§ Prohibits HHSC and the OAG from collecting investigation and attorney's fees unless the state gets a penalty, restitution, or other reimbursement. Requires HHSC to refer cases to local prosecuting attorneys if the office of the attorney general fails to act within 30 days.

§ Requires HHSC to develop a fraud detection training program.

§ Requires HHSC to use learning or neural network technology to identify and deter fraud in Medicaid.

§ Establishes the Medicaid and Public Assistance Fraud Oversight task force to assist HHSC in improving the efficiency of fraud investigations and collections.

§ Requires a number of actions and techniques by HHSC to improve fraud detection and prevention. These include:

§ compiling statistics on fraud, publicizing successful fraud prosecutions prevention programs, and ensuring that a toll-free number is available for reporting fraud;

§ developing a cost-effective method of identifying applicants for public assistance in Texas counties bordering other states who are already receiving assistance in those states; and

§ verifying automobile information used in determining eligibility and establishing a computer matching system with the Texas Department of Criminal Justice (TDCJ) to prevent someone in prison from illegally receiving public assistance benefits.

§ Consolidates staff and transfers responsibilities to HHSC from DHS' utilization and assessment review function and TDH's claims review and analysis group and policy and data analysis group.

§ Requires certain actions of DHS in fraud detection and enforcement. These include:

§ using private collection agents as an additional method to collect reimbursements for benefits granted in error;

§ studying the impact of expedited food stamp delivery on fraud; and

§ studying the feasibility of collecting benefits granted in error by garnishing wages or filing property liens.

§ Requires advance authorization for ambulance transportation except for emergencies.

§ Requires actions to ensure that a child's durable medical equipment provided under Medicaid is as prescribed, fits, and that the family is instructed in its use.

§ Provides for surety bonds for each provider of medical assistance in a type of service that has demonstrated significant potential for fraud and abuse.

§ Authorizes certain agencies to obtain criminal history records relating to a Medicaid provider or a person who applies as a provider.

§ Requires certain information and other contractual, disclosure, and audit provisions from managed care organizations that contract with Medicaid.

Fraud Enforcement

§ Requires HHSC to establish a pilot program for conducting random on-site reviews of persons who apply to provide Medicaid health care services.

§ Requires HHSC to develop a new provider contract for health care services that contains provisions designed to strengthen HHSC's ability to prevent Medicaid fraud.

§ Requires TDH to develop a competitive process for obtaining durable medical equipment.

§ Requires TDH to conduct an automated review of physician, laboratory, and radiology services to identify improper billing practices.

§ Establishes administrative penalties for false claims or failure, to provide health services required under contract.

§ Provides for deductions from lottery winnings for a person who has been determined to be delinquent in reimbursing DHS for errors in food stamp or financial assistance.

§ Provides that it is unlawful for managed care organizations contracting for Medicaid to fail to provide required Medicaid health care services, to fail to provide required information, to engage in fraudulent activity involving enrollment of a person, or to obstruct an investigation by the attorney general.

§ Increases civil penalties for violations and adds special penalties for incidents involving children, elderly or disabled persons.

§ Requires certain agency directors to suspend or revoke a provider agreement and other permits for a person who is found liable under this section. Bars persons found liable from providing Medicaid services for 10 years or longer.

§ Authorizes a person to bring a civil action under certain provisions relating to Medicaid fraud.

§ Provides for actions by a person who is discharged or discriminated against due to a lawful act under certain provisions on Medicaid fraud.

§ Establishes a range of criminal offenses (misdemeanors and felonies) for unlawful acts under certain provisions on Medicaid fraud, including revocation of certain health professional licenses for felony convictions.

§ Provides for suspension of drivers' licenses or recreational licenses issued by the Parks and Wildlife Department for failure to reimburse DHS for an error in food stamps or financial assistance in excess of $250.


Increased Penalties for Medicaid Fraud - H.B. 1637

by Representative Alvarado

Senate Sponsor: Senator Carona

§ Increases civil penalties if a false statement or representation under a Medicaid claim results in injury to an elderly person, a disabled person, or a person younger than 18 years of age.

§ Bars a person found liable for this action from providing or arranging for Medicaid health care services for 10 years.

§ Authorizes a period of ineligibility longer than 10 years to be provided by rule.

§ Exempts a person who operates a nursing facility from both Medicaid ineligibility provisions.

§ Permanently prohibits a person from providing or arranging for Medicaid health care services if the person is convicted of Medicaid fraud, and the person's fraudulent act results in injury to an elderly person, a disabled person, or a person younger than 18 years of age.

§ Makes a person who commits certain unlawful acts liable to the state for an increased civil penalty for each act that results in injury to an elderly person, a disabled person, or a person younger than 18 years of age.

§ Requires commissioners or directors of certain human services or health care regulatory agencies to suspend or revoke provider agreements, permits, licenses, or certifications, if a person has been found liable for civil remedies under Medicaid fraud.

§ Exempts a person who operates a nursing facility from mandatory suspension or revocation, but gives the commissioners or directors authority to suspend or revoke provider agreements, permits, licenses, or certifications.

§ Prohibits a person found liable for civil remedies under Medicaid fraud from providing or arranging for Medicaid health care services for 10 years.

§ Exempts a person who operates a nursing facility from both Medicaid ineligibility provisions.

§ Authorizes professional disciplinary actions under applicable licensing law or rules for a person who commits an unlawful act.

§ Requires agencies to request a waiver or authorization from a federal agency if necessary for implementing these provisions, and authorizes a delay in implementing provisions if a federal waiver is required.


DHS Fraud Prevention and Detection - H.B. 2123

by Representatives Maxey and Naishtat

Senate Sponsor: Senator Moncrief

§ Requires the Texas Department of Human Services (DHS) to develop and implement policies and procedures designed to improve DHS administered entitlement programs that use electronic benefits transfer (EBT) cards.

§ Requires DHS and the comptroller to coordinate their efforts to cross-train staff whose duties include fraud prevention and detection.

§ Requires local law enforcement agencies that seize an EBT card to immediately notify DHS, and return the card.

§ Requires the EBT system operator and installer to report to DHS and the United States Department of Agriculture suspicious activity relating to a retailer's participation in the food stamp program.

§ Requires DHS to compare a retailer's food stamp sales volume with the retailer's total food sales to determine whether the retailer is eligible to receive free point-of-sale terminals.

§ Requires DHS, through the use of a computerized matching system, to at least semiannually compare department information relating to food stamp transactions with comparable information from the comptroller and other appropriate state agencies. Requires all entities to take necessary measures to keep information confidential.

§ Requires DHS to close certain accounts which have not been used by the account holder during the preceding 12 months.