HBA-NLM C.S.H.B. 875 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 875 By: Maxey Public Health 3/19/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE The Office of Investigations and Enforcement (OIE) was created within the Health and Human Services Commission (commission) by Senate Bill 30 of the 1997 Texas Legislature to investigate recipient and provider Medicaid fraud. Recipient fraud occurs when an ineligible individual receives Medicaid services or other benefits, and provider fraud occurs when a healthcare provider submits and is compensated for false Medicaid claims. Senate Bill 30 also required the HHSC to use learning or neural network technology to identify and deter fraud in the state's Medicaid program. C.S.H.B. 875 requires the commission to use an automated fraud investigation tracking system to improve current methods of monitoring Medicaid service providers and recipients for fraud. This bill requires each health and human services agency to participate in the implementation and use of the automated fraud investigation tracking system. This bill also provides for the tracking of fraud and purchasing, the implementation of commercially available software to monitor recoveries from settled fraud cases, and the modification and automation of telephone collection processes to increase collections. C.S.H.B. 875 also delegates rulemaking authority to the commission and to the Texas Department of Human Services to ensure that subjects of investigation are provided the opportunity to review and correct the information upon which the department makes its decision. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Health and Human Services Commission in SECTION 1 (Section 531.102, Government Code) and to the Texas Department of Human Services in SECTION 3 (Section 22.025, Human Resources Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 531.102, Government Code, by adding Subsection (e), as follows: (e) Requires the Health and Human Services Commission (commission), by rule, to establish procedures to provide to a person who is the subject of an investigation for Medicaid or welfare fraud or abuse an opportunity to review and correct inaccuracies in the information on which the investigation is based. SECTION 2. Amends Subchapter C, Chapter 531, Government Code, by adding Sections 531.1061 and 531.1062, as follows: Sec. 531.1061. FRAUD INVESTIGATION TRACKING SYSTEM. (a) Requires the commission to use an automated fraud investigation tracking system through the commission's office of investigations and enforcement to monitor the progress of an investigation of suspected fraud, abuse, or insufficient quality of care under the state Medicaid program. (b) Provides that for each case of suspected fraud, abuse, or insufficient quality of care identified by the learning or neural network technology required under Section 531.106 (Learning or Neural Network Technology), Government Code, the automated fraud investigation tracking system must: (1) receive electronically transferred records relevant to the identified case from the learning or neural network technology; (2) record the details and monitor the status of an investigation of the identified case, including maintaining a record of the beginning and completion dates for each phase of the case investigation; (3) generate documents and reports related to the status of the case investigation; and (4) generate standard letters to a provider regarding the status or outcome of an investigation. (c) Requires the commission to require each health and human services agency that performs any aspect of the state Medicaid program to participate in the implementation and use of the automated fraud investigation tracking system. Sec. 531.1062. RECOVERY MONITORING SYSTEM. (a) Requires the commission to use an automated recovery monitoring system to monitor the collections process for a settled case of fraud, abuse, or insufficient quality of care under the state Medicaid program. (b) Provides that the recovery monitoring system must monitor the collection of funds resulting from settled cases, including recording monetary payments received from a provider who has agreed to a monetary payment plan and recording deductions taken through the recoupment program from subsequent Medicaid claims filed by the provider. Provides that the recovery monitoring system must provide immediate notice of a provider who has agreed to a monetary payment or to deductions through the recoupment program from subsequent Medicaid claims who fails to comply with the settlement agreement, including providing notice of a provider who does not make a scheduled payment or who pays less than the scheduled amount. SECTION 3. Amends Section 22.025, Human Resources Code, by adding Subsection (e), as follows: (e) Requires the Texas Department of Human Services (department), by rule, to establish procedures to provide to a person who received in error as determined by the department a benefit under the food stamp program or the program of financial assistance under Chapter 31 (Financial Assistance and Service Programs) an opportunity to review and correct inaccuracies in the information on which that determination is based. SECTION 4. Amends Section 22.0252, Human Resources Code, by adding Subsections (c) and (d), as follows: (c) Requires the department to ensure that the telephone collection program attempts to collect reimbursement for all identified delinquent payments of 15 days or more from the initial date the delinquency notice was sent. (d) Requires the use of an automated collections system for the monitoring of results of the telephone collection program. Provides that the system must: (1) accept data from the accounts receivable tracking system used by the department; (2) automate recording tasks performed by a collector, including providing access to department records regarding the recipient and recording notes and actions resulting from a call placed to the recipient; (3) automatically generate a letter to a recipient following a telephone contact that confirms the action to be taken regarding the delinquency; (4) monitor the receipt of scheduled payments from a recipient for repayment of a delinquency; and (5) generate reports regarding the effectiveness of individual collectors and of the telephone collection program. SECTION 5. Requires the commission, by January 1, 2000, to implement the automated fraud investigation tracking system required by Section 531.1061, Government Code, as added by this Act, and to award the contract for the purchase and installation of commercially available accounting software, and begin using the software to implement the recovery monitoring system required by Section 531.1062, Government Code, as added by this Act. SECTION 6. Requires the Department of Human Services to award the contract for the purchase and installation of commercially available collections software to implement the automated collections system required by Section 22.0252 (Telephone Collection Program), Human Resources Code, as amended by this Act, and to begin using the software, by January 1, 2000. SECTION 7. Effective date: September 1, 1999. SECTION 8. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 875 modifies the original by adding a new SECTION 1 requiring the Health and Human Services Commission (commission), by rule, to establish procedures to provide to a person who is the subject of an investigation for Medicaid or welfare fraud or abuse an opportunity to review and correct inaccuracies in the information on which the investigation is based. This substitute redesignates proposed SECTION 1 in the original to SECTION 2 in the substitute. C.S.H.B. 875 modifies the original by adding a new SECTION 3 requiring the Texas Department of Human Services (department), by rule, to establish procedures to provide to a person who received in error, as determined by the department, a benefit under the food stamp program or the program of financial assistance under Chapter 31 (Financial Assistance and Service Programs) an opportunity to review and correct inaccuracies in the information on which that determination is based. This substitute redesignates proposed SECTIONS 2-6 in the original to SECTION 4-8 in the substitute.