HBA-GUM C.S.S.B. 1587 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.S.B. 1587
By: Zaffirini
Public Health
4/30/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, the comptroller of public accounts and the state auditor's
office report possible overpayment of approximately $162 million for
Medicaid acute services. The comptroller's Fraud Measurement Study contains
recommendations for improvements via random audits, data matches, and
investigations of possible fraud by dishonest providers and recipients.
C.S.S.B. 1587 sets forth procedures for detecting fraud, waste, and abuse
in the state Medicaid program. 

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 (HHSC) in SECTION 3 (Section 531.102, Government Code), and to
HHSC or a health and human services agency designated by HHSC in SECTION 4
(Section 531.110, Government Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 32B, Human Resources Code, by adding Sections
32.0242 and 32.0243, as follows:  

Sec. 32.0242. VERIFICATION OF CERTAIN INFORMATION. Requires the Texas
Department of Human Services (DHS) to verify an applicant's residential
address at the time an application for medical assistance is filed, to the
extent possible.  

Sec. 32.0243.  PERIODIC REVIEW OF ELIGIBILITY FOR CERTAIN RECIPIENTS.
Requires DHS, in cooperation with the United States Social Security
Administration to review the eligibility of a recipient of medical
assistance based on eligibility to receive benefits under 42 U.S.C. Section
1381 et seq. as amended (SSI benefits). Requires DHS to ensure that only
recipients who reside in this state and who continue to be eligible for SSI
benefits remain eligible for medical assistance.  

SECTION 2.  Amends Section 403.026(a), Government Code, as added by Chapter
1153, Acts of the 75th Legislature, Regular Session, 1997, to require the
comptroller of public accounts (comptroller), in consultation with the
state auditor's office, to conduct a study to determine the number and type
of potential fraudulent claims for certain benefits submitted and the need
for changes to the eligibility system used under the state Medicaid
program.  Makes conforming changes.  

SECTION 3.  Amends Section 531.102, Government Code, by adding Subsection
(e), to require the Health and Human Services Commission (HHSC) to set, by
rule, specific claims criteria that when met require the office to begin an
investigation.  

SECTION 4. Amends Subchapter C, Chapter 531, Government Code, by adding
Sections 531.109, 531.110, and 531.111, as follows:  

Sec. 531.109.  SELECTION AND REVIEW OF CLAIMS. Requires HHSC to review a
sample of all claims for reimbursement under the state Medicaid program,
including the vendor drug program, for potential cases of fraud, waste, or
abuse. Authorizes HHSC to directly contact a recipient by a certain manner
to verify that services claimed for reimbursement were actually provided.
Requires HHSC to determine the types of claims at which HHSC resources for
fraud and detection should be primarily directed.  
 
Sec. 531.110.  ELECTRONIC DATA MATCHING PROGRAM.  (a)  Requires HHSC to
conduct electronic data matches for a recipient of assistance under the
state Medicaid program at least quarterly to verify certain factors that
affect the eligibility of the recipient.  

(b)  Requires the electronic data matching to match information provided by
the recipient with information contained in databases maintained by
appropriate federal and state agencies.  

(c)  Requires DHS to provide data or any other assistance necessary to
conduct the electronic data matches to HHSC.   

(d)  Authorizes HHSC to contract with a public or private entity to conduct
the electronic data matches.  

(e)  Requires HHSC or a health and human services agency designated by HHSC
to establish, by rule, procedures to verify the electronic data matches
conducted by HHSC. Requires DHS to remove recipients ineligible for
assistance under the state Medicaid program, within 20 days of an
electronic data matches' verification.   

(f)  Requires HHSC to report biennially to the legislature on the results
of the electronic data matching program.  Provides that the report must
include a summary of the number of recipients removed from eligibility.  

Sec. 531.111.  FRAUD DETECTION TECHNOLOGY.  Authorizes HHSC to contract
with a contractor who specializes in developing technology to implement
fraud detection technology to determine if a pattern of fraud by Medicaid
recipients is present.  

SECTION 5.  Requires HHSC to study and consider fraud detection technology
for implementation. 

SECTION 6.  Requires the Texas Department of Health to obtain a compliance
report from its existing contractor responsible for implementation of a
Medicaid claims payment system to ensure timely payment of claims and
accuracy of claims payments, and eliminate inconsistencies in the payment
system.  Provides that the contractor must follow a structured change
management process to ensure that all state agencies impacted by the
Medicaid claims payment system have input into issues regarding
implementation and future changes to the operation of the system. 

SECTION 7.  Requires DHS to develop an eligibility confirmation letter, not
easily duplicated, before October 1, 2000, to be used to replace the
Medicaid eligibility letter used on the effective date of this Act.
Requires the interagency task force on electronic benefits transfers
(taskforce) to identify and consider other methods, including electronic
methods, for use by a recipient to prove eligibility, and requires the task
force to consider methods used by other states.  Requires the task force to
report the results of the study conducted under this section to certain
legislative leaders and committees, not later than September 1, 2000.
Requires the report to make a recommendation regarding the implementation
of a permanent system.  Requires the recommended system to be designed to
reduce the potential for fraudulent claims eligibility.  Requires HHSC to
submit a biennial report to the legislature regarding alternative methods
of verification of eligibility for benefits.  

SECTION 8.  Requires DHS to begin the first review of eligibility for
recipients of medical assistance no later than October 1, 2000.  

SECTION 9.  Requires an agency affected by a need for a waiver or
authorization to implement a provision of this Act to request the waiver or
authorization, and authorizes the agency to delay implementation until the
request is granted.  

SECTION 10.  Effective date: September 1, 1999.

SECTION 11.  Emergency clause. 


 COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies SECTION 3 (Section 531.102, Government Code) of the
original by deleting language in proposed Subsection (e) providing that the
claims criteria must be based on a total dollar value amount or a total
number of claims submitted for services to a particular recipient during a
specified amount of time that indicates a high potential for fraud.  

The substitute also modifies the original in SECTION 6 by requiring the
Texas Department of Health to obtain a compliance report from its existing
contractor responsible for implementation of a Medicaid claims payment
system, rather than contract with a contractor who specializes in Medicaid
claims payment systems to perform tests on the Medicaid claims payment
system, before December 31, 2000.  In addition, the substitute provides
that the contractor must follow a structured change management process to
ensure that all state agencies impacted by the Medicaid claims payment
system have input into issues regarding implementation and future changes
to the operation of the system, rather than requiring a contractor to
conduct independent tests on any replacements for or enhancements to the
system before the implementation of replacements or enhancements.