H.B. No. 1720
 
 
 
 
AN ACT
  relating to certain facilities and care providers, including
  providers under the state Medicaid program and to improving health
  care provider accountability and efficiency under the child health
  plan and Medicaid programs; providing penalties.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 411.1143, Government Code, is amended by
  amending Subsection (a) and adding Subsection (a-1) to read as
  follows:
         (a)  The Health and Human Services Commission, [or] an agency
  operating part of the medical assistance program under Chapter 32,
  Human Resources Code, or the office of inspector general
  established under Chapter 531, Government Code, is entitled to
  obtain from the department the criminal history record information
  maintained by the department that relates to a provider under the
  medical assistance program or a person applying to enroll as a
  provider under the medical assistance program.
         (a-1)  Criminal history record information an agency or the
  office of inspector general is authorized to obtain under
  Subsection (a) includes criminal history record information
  relating to:
               (1)  a person with a direct or indirect ownership or
  control interest, as defined by 42 C.F.R. Section 455.101, in a
  provider of five percent or more; and
               (2)  a person whose information is required to be
  disclosed in accordance with 42 C.F.R. Part 1001.
         SECTION 2.  Subchapter B, Chapter 531, Government Code, is
  amended by adding Section 531.024161 to read as follows:
         Sec. 531.024161.  REIMBURSEMENT CLAIMS FOR CERTAIN MEDICAID
  OR CHIP SERVICES INVOLVING SUPERVISED PROVIDERS. (a)  If a
  provider, including a nurse practitioner or physician assistant,
  under the Medicaid or child health plan program provides a referral
  for or orders health care services for a recipient or enrollee, as
  applicable, at the direction or under the supervision of another
  provider, and the referral or order is based on the supervised
  provider's evaluation of the recipient or enrollee, the names and
  associated national provider identifier numbers of the supervised
  provider and the supervising provider must be included on any claim
  for reimbursement submitted by a provider based on the referral or
  order. For purposes of this section, "national provider
  identifier" means the national provider identifier required under
  Section 1128J(e), Social Security Act (42 U.S.C. Section
  1320a-7k(e)).
         (b)  The executive commissioner shall adopt rules necessary
  to implement this section.
         SECTION 3.  Subdivision (2), Subsection (g), Section
  531.102, Government Code, is amended to read as follows:
               (2)  In addition to other instances authorized under
  state or federal law, the office shall impose without prior notice a
  hold on payment of claims for reimbursement submitted by a provider
  to compel production of records, [or] when requested by the state's
  Medicaid fraud control unit, or on receipt of reliable evidence
  that the circumstances giving rise to the hold on payment involve
  fraud or wilful misrepresentation under the state Medicaid program
  in accordance with 42 C.F.R. Section 455.23, as applicable. The
  office must notify the provider of the hold on payment in accordance
  with 42 C.F.R. Section 455.23(b) [not later than the fifth working
  day after the date the payment hold is imposed].
         SECTION 4.  The heading to Section 531.1031, Government
  Code, is amended to read as follows:
         Sec. 531.1031.  DUTY TO EXCHANGE INFORMATION [REGARDING
  ALLEGATIONS OF MEDICAID FRAUD OR ABUSE].
         SECTION 5.  Subdivision (2), Subsection (a), Section
  531.1031, Government Code, is amended to read as follows:
               (2)  "Participating agency" means:
                     (A)  the Medicaid fraud enforcement divisions of
  the office of the attorney general; [and]
                     (B)  each board or agency with authority to
  license, register, regulate, or certify a health care professional
  or managed care organization that may participate in the state
  Medicaid program; and
                     (C)  the commission's office of inspector
  general.
         SECTION 6.  Section 531.1031, Government Code, is amended by
  amending Subsections (b) and (c) and adding Subsection (c-1) to
  read as follows:
         (b)  This section applies only to criminal history record
  information held by a participating agency that relates to a health
  care professional and information held by a participating agency
  that relates to a health care professional or managed care
  organization that is the subject of an investigation by a
  participating agency for alleged fraud or abuse under the state
  Medicaid program.
         (c)  A participating agency may submit to another
  participating agency a written request for information described by
  Subsection (b) regarding a health care professional or managed care
  organization [that is the subject of an investigation by the
  participating agency to any other participating agency]. The
  participating agency that receives the request shall provide the
  requesting agency with the information regarding the health care
  professional or managed care organization unless:
               (1)  the release of the information would jeopardize an
  ongoing investigation or prosecution by the participating agency
  with possession of the information; or
               (2)  the release of the information is prohibited by
  other law.
         (c-1)  Notwithstanding any other law, a participating agency
  may enter into a memorandum of understanding or agreement with
  another participating agency for the purpose of exchanging criminal
  history record information relating to a health care professional
  that both participating agencies are authorized to access under
  Chapter 411. Confidential criminal history record information in
  the possession of a participating agency that is provided to
  another participating agency in accordance with this subsection
  remains confidential while in the possession of the participating
  agency that receives the information.
         SECTION 7.  Subchapter C, Chapter 531, Government Code, is
  amended by adding Sections 531.1131, 531.1132, and 531.117 to read
  as follows:
         Sec. 531.1131.  FRAUD AND ABUSE RECOVERY BY CERTAIN PERSONS;
  RETENTION OF RECOVERED AMOUNTS. (a) If a managed care
  organization's special investigative unit under Section
  531.113(a)(1) or the entity with which the managed care
  organization contracts under Section 531.113(a)(2) discovers fraud
  or abuse in the Medicaid program or the child health plan program,
  the unit or entity shall:
               (1)  immediately and contemporaneously notify the
  commission's office of inspector general and the office of the
  attorney general;
               (2)  subject to Subsection (b), begin payment recovery
  efforts; and
               (3)  ensure that any payment recovery efforts in which
  the organization engages are in accordance with applicable rules
  adopted by the executive commissioner.
         (b)  If the amount sought to be recovered under Subsection
  (a)(2) exceeds $100,000, the managed care organization's special
  investigative unit or contracted entity described by Subsection (a)
  may not engage in payment recovery efforts if, not later than the
  10th business day after the date the unit or entity notified the
  commission's office of inspector general and the office of the
  attorney general under Subsection (a)(1), the unit or entity
  receives a notice from either office indicating that the unit or
  entity is not authorized to proceed with recovery efforts.
         (c)  A managed care organization may retain any money
  recovered under Subsection (a)(2) by the organization's special
  investigative unit or contracted entity described by Subsection
  (a).
         (d)  A managed care organization shall submit a quarterly
  report to the commission's office of inspector general detailing
  the amount of money recovered under Subsection (a)(2).
         (e)  The executive commissioner shall adopt rules necessary
  to implement this section, including rules establishing due process
  procedures that must be followed by managed care organizations when
  engaging in payment recovery efforts as provided by this section.
         Sec. 531.1132.  ANNUAL REPORT ON CERTAIN FRAUD AND ABUSE
  RECOVERIES.  Not later than December 1 of each year, the commission
  shall prepare and submit a report to the legislature relating to the
  amount of money recovered during the preceding 12-month period as a
  result of investigations and recovery efforts made under Sections
  531.113 and 531.1131 by special investigative units or entities
  with which a managed care organization contracts under Section
  531.113(a)(2). The report must specify the amount of money retained
  by each managed care organization under Section 531.1131(c).
         Sec. 531.117.  RECOVERY AUDIT CONTRACTORS. To the extent
  required under Section 1902(a)(42), Social Security Act (42 U.S.C.
  Section 1396a(a)(42)), the commission shall establish a program
  under which the commission contracts with one or more recovery
  audit contractors for purposes of identifying underpayments and
  overpayments under the Medicaid program and recovering the
  overpayments.
         SECTION 8.  Subchapter D, Chapter 62, Health and Safety
  Code, is amended by adding Section 62.1561 to read as follows:
         Sec. 62.1561.  PROHIBITION OF CERTAIN HEALTH CARE PROVIDERS.  
  The executive commissioner of the commission shall adopt rules for
  prohibiting a person from participating in the child health plan
  program as a health care provider for a reasonable period, as
  determined by the executive commissioner, if the person:
               (1)  fails to repay overpayments under the program; or
               (2)  owns, controls, manages, or is otherwise
  affiliated with and has financial, managerial, or administrative
  influence over a provider who has been suspended or prohibited from
  participating in the program.
         SECTION 9.  Section 142.001, Health and Safety Code, is
  amended by adding Subdivisions (11-a), (11-b), and (12-a) to read
  as follows:
               (11-a)  "Department" means the Department of Aging and
  Disability Services.
               (11-b)  "Executive commissioner" means the executive
  commissioner of the Health and Human Services Commission.
               (12-a)  "Home and community support services agency
  administrator" or "administrator" means the person who is
  responsible for implementing and supervising the administrative
  policies and operations of the home and community support services
  agency and for administratively supervising the provision of all
  services to agency clients on a day-to-day basis.
         SECTION 10.  Section 142.0025, Health and Safety Code, is
  amended to read as follows:
         Sec. 142.0025.  TEMPORARY LICENSE. If a person is in the
  process of becoming certified by the United States Department of
  Health and Human Services to qualify as a certified agency, the
  department may issue a temporary home and community support
  services agency license to the person authorizing the person to
  provide certified home health services. A temporary license is
  effective as provided by [board] rules adopted by the executive
  commissioner.
         SECTION 11.  Section 142.009, Health and Safety Code, is
  amended by adding Subsections (a-1) and (i) and amending Subsection
  (g) to read as follows:
         (a-1)  A license applicant or license holder must provide the
  department representative conducting the survey with a reasonable
  and safe workspace at the premises. The executive commissioner may
  adopt rules to implement this subsection.
         (g)  After a survey of a home and community support services
  agency by the department, the department shall provide to the home
  and community support services [chief executive officer of the]
  agency administrator:
               (1)  specific and timely written notice of the official
  findings of the survey, including:
                     (A)  the specific nature of the survey;
                     (B)  any alleged violations of a specific statute
  or rule;
                     (C)  the specific nature of any finding regarding
  an alleged violation or deficiency; and
                     (D)  if a deficiency is alleged, the severity of
  the deficiency;
               (2)  information on the identity, including the name
  [signature], of each department representative conducting or[,]
  reviewing[, or approving] the results of the survey and the date on
  which the department representative acted on the matter; and
               (3)  if requested by the agency, copies of all
  documents relating to the survey maintained by the department or
  provided by the department to any other state or federal agency that
  are not confidential under state law.
         (i)  Except as provided by Subsection (h), the department may
  not renew an initial home and community support services agency
  license unless the department has conducted an initial on-site
  survey of the agency.
         SECTION 12.  The heading to Section 142.0091, Health and
  Safety Code, is amended to read as follows:
         Sec. 142.0091.  [SURVEYOR] TRAINING.
         SECTION 13.  Section 142.0091, Health and Safety Code, is
  amended by amending Subsection (b) and adding Subsection (c) to
  read as follows:
         (b)  In developing and updating the training required by
  Subsection (a) [this section], the department shall consult with
  and include providers of home health, hospice, and personal
  assistance services, recipients of those services and their family
  members, and representatives of appropriate advocacy
  organizations.
         (c)  The department at least semiannually shall provide
  joint training for home and community support services agencies and
  surveyors on subjects that address the 10 most common violations of
  federal or state law by home and community support services
  agencies. The department may charge a home and community support
  services agency a fee, not to exceed $50 per person, for the
  training.
         SECTION 14.  Subchapter A, Chapter 142, Health and Safety
  Code, is amended by adding Section 142.0104 to read as follows:
         Sec. 142.0104.  CHANGE IN APPLICATION INFORMATION. (a)  If
  certain application information as specified by executive
  commissioner rule changes after the applicant submits an
  application to the department for a license under this chapter or
  after the department issues the license, the license holder shall
  report the change to the department and pay a fee not to exceed $50
  not later than the time specified by executive commissioner rule.
         (b)  The executive commissioner by rule shall:
               (1)  specify the information provided in an application
  that a license holder shall report to the department if the
  information changes;
               (2)  prescribe the time for reporting a change in the
  application information required by Subdivision (1);
               (3)  establish which changes required to be reported
  under Subdivision (1) will require department evaluation and
  approval; and
               (4)  set the amount of a late fee to be assessed against
  a license holder who fails to report a change in the application
  information within the time prescribed under Subdivision (2).
         SECTION 15.  Subsection (a), Section 142.011, Health and
  Safety Code, is amended to read as follows:
         (a)  The department may deny a license application or suspend
  or revoke the license of a person who:
               (1)  fails to comply with the rules or standards for
  licensing required by this chapter; or
               (2)  engages in conduct that violates Section 102.001,
  Occupations Code [161.091].
         SECTION 16.  Subsections (a), (b), and (c), Section 142.012,
  Health and Safety Code, are amended to read as follows:
         (a)  The executive commissioner [board, with the
  recommendations of the council,] shall adopt rules necessary to
  implement this chapter. The executive commissioner may adopt rules
  governing the duties and responsibilities of home and community
  support services agency administrators, including rules regarding:
               (1)  an administrator's management of daily operations
  of the home and community support services agency;
               (2)  an administrator's responsibility for supervising
  the provision of quality care to agency clients;
               (3)  an administrator's implementation of agency policy
  and procedures; and
               (4)  an administrator's responsibility to be available
  to the agency at all times in person or by telephone.
         (b)  The executive commissioner [board] by rule shall set
  minimum standards for home and community support services agencies
  licensed under this chapter that relate to:
               (1)  qualifications for professional and
  nonprofessional personnel, including volunteers;
               (2)  supervision of professional and nonprofessional
  personnel, including volunteers;
               (3)  the provision and coordination of treatment and
  services, including support and bereavement services, as
  appropriate;
               (4)  the management, ownership, and organizational
  structure, including lines of authority and delegation of
  responsibility and, as appropriate, the composition of an
  interdisciplinary team;
               (5)  clinical and business records;
               (6)  financial ability to carry out the functions as
  proposed;
               (7)  safety, fire prevention, and sanitary standards
  for residential units and inpatient units; and
               (8)  any other aspects of home health, hospice, or
  personal assistance services as necessary to protect the public.
         (c)  The initial minimum standards adopted [by the board]
  under Subsection (b) for hospice services must be at least as
  stringent as the conditions of participation for a Medicare
  certified provider of hospice services in effect on April 30, 1993,
  under Title XVIII, Social Security Act (42 U.S.C. Section 1395 et
  seq.).
         SECTION 17.  Subsection (e), Section 242.032, Health and
  Safety Code, is amended to read as follows:
         (e)  In making the evaluation required by Subsection (d), the
  department shall require the applicant or license holder to file a
  sworn affidavit of a satisfactory compliance history and any other
  information required by the department to substantiate a
  satisfactory compliance history relating to each state or other
  jurisdiction in which the applicant or license holder and any other
  person described by Subsection (d) operated an institution at any
  time before [during the five-year period preceding] the date on
  which the application is made. The department by rule shall
  determine what constitutes a satisfactory compliance history. The
  department may consider and evaluate the compliance history of the
  applicant and any other person described by Subsection (d) for any
  period during which the applicant or other person operated an
  institution in this state or in another state or jurisdiction. The
  department may also require the applicant or license holder to file
  information relating to the history of the financial condition of
  the applicant or license holder and any other person described by
  Subsection (d) with respect to an institution operated in another
  state or jurisdiction at any time before [during the five-year
  period preceding] the date on which the application is made.
         SECTION 18.  Subsection (b), Section 242.0615, Health and
  Safety Code, is amended to read as follows:
         (b)  Exclusion of a person under this section must extend for
  a period of at least two years and[, but] may extend throughout the
  person's lifetime or existence [not exceed a period of 10 years].
         SECTION 19.  Section 250.001, Health and Safety Code, is
  amended by amending Subdivision (1) and adding Subdivisions (3-a)
  and (3-b) to read as follows:
               (1)  "Nurse aide registry" means a list maintained by
  the [Texas] Department of Aging and Disability [Human] Services of
  nurse aides under the Omnibus Budget Reconciliation Act of 1987
  (Pub. L. No. 100-203).
               (3-a) "Financial management services agency" means an
  entity that contracts with the Department of Aging and Disability
  Services to serve as a fiscal and employer agent for an individual
  employer in the consumer-directed service option described by
  Section 531.051, Government Code.
               (3-b) "Individual employer" means an individual or
  legally authorized representative who participates in the
  consumer-directed service option described by Section 531.051,
  Government Code, and is responsible for hiring service providers to
  deliver program services.
         SECTION 20.  Section 250.002, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsection (c-1) to
  read as follows:
         (a)  A facility, a regulatory agency, a financial management
  services agency on behalf of an individual employer, or a private
  agency on behalf of a facility is entitled to obtain from the
  Department of Public Safety of the State of Texas criminal history
  record information maintained by the Department of Public Safety
  that relates to a person who is:
               (1)  an applicant for employment at a facility other
  than a facility licensed under Chapter 142;
               (2)  an employee of a facility other than a facility
  licensed under Chapter 142; [or]
               (3)  an applicant for employment at or an employee of a
  facility licensed under Chapter 142 whose employment duties would
  or do involve direct contact with a consumer in the facility; or
               (4)  an applicant for employment by or an employee of an
  individual employer.
         (c-1)  A financial management services agency shall forward
  criminal history record information received under this section to
  the individual employer requesting the information.
         SECTION 21.  Section 250.003, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsection (c-1) to
  read as follows:
         (a)  A facility or individual employer may not employ an
  applicant:
               (1)  if the facility or individual employer determines,
  as a result of a criminal history check, that the applicant has been
  convicted of an offense listed in this chapter that bars employment
  or that a conviction is a contraindication to employment with the
  consumers the facility or individual employer serves;
               (2)  if the applicant is a nurse aide, until the
  facility further verifies that the applicant is listed in the nurse
  aide registry; and
               (3)  until the facility verifies that the applicant is
  not designated in the registry maintained under this chapter or in
  the employee misconduct registry maintained under Section 253.007
  as having a finding entered into the registry concerning abuse,
  neglect, or mistreatment of a consumer of a facility, or
  misappropriation of a consumer's property.
         (c-1)  An individual employer shall immediately discharge
  any employee whose criminal history check reveals conviction of a
  crime that bars employment or that the individual employer
  determines is a contraindication to employment as provided by this
  chapter.
         SECTION 22.  Section 250.004, Health and Safety Code, is
  amended to read as follows:
         Sec. 250.004.  CRIMINAL HISTORY RECORD OF EMPLOYEES.
  (a)  Identifying information of an employee in a covered facility
  or of an employee of an individual employer shall be submitted
  electronically, on disk, or on a typewritten form to the Department
  of Public Safety to obtain the person's criminal conviction record
  when the person applies for employment and at other times as the
  facility or individual employer may determine appropriate. In this
  subsection, "identifying information" includes:
               (1)  the complete name, race, and sex of the employee;
               (2)  any known identifying number of the employee,
  including social security number, driver's license number, or state
  identification number; and
               (3)  the employee's date of birth.
         (b)  If the Department of Public Safety reports that a person
  has a criminal conviction of any kind, the conviction shall be
  reviewed by the facility, the financial management services agency,
  or the individual employer to determine if the conviction may bar
  the person from employment in a facility or by the individual
  employer under Section 250.006 or if the conviction may be a
  contraindication to employment.
         SECTION 23.  Section 250.005, Health and Safety Code, is
  amended to read as follows:
         Sec. 250.005.  NOTICE AND OPPORTUNITY TO BE HEARD CONCERNING
  ACCURACY OF INFORMATION. (a)  If a facility, financial management
  services agency, or individual employer believes that a conviction
  may bar a person from employment in a facility or by the individual
  employer under Section 250.006 or may be a contraindication to
  employment, the facility or individual employer shall notify the
  applicant or employee.
         (b)  The Department of Public Safety of the State of Texas
  shall give a person notified under Subsection (a) the opportunity
  to be heard concerning the accuracy of the criminal history record
  information and shall notify the facility or individual employer if
  inaccurate information is discovered.
         SECTION 24.  Subsections (a) and (b), Section 250.006,
  Health and Safety Code, are amended to read as follows:
         (a)  A person for whom the facility or the individual
  employer is entitled to obtain criminal history record information
  may not be employed in a facility or by an individual employer if
  the person has been convicted of an offense listed in this
  subsection:
               (1)  an offense under Chapter 19, Penal Code (criminal
  homicide);
               (2)  an offense under Chapter 20, Penal Code
  (kidnapping and unlawful restraint);
               (3)  an offense under Section 21.02, Penal Code
  (continuous sexual abuse of young child or children), or Section
  21.11, Penal Code (indecency with a child);
               (4)  an offense under Section 22.011, Penal Code
  (sexual assault);
               (5)  an offense under Section 22.02, Penal Code
  (aggravated assault);
               (6)  an offense under Section 22.04, Penal Code (injury
  to a child, elderly individual, or disabled individual);
               (7)  an offense under Section 22.041, Penal Code
  (abandoning or endangering child);
               (8)  an offense under Section 22.08, Penal Code (aiding
  suicide);
               (9)  an offense under Section 25.031, Penal Code
  (agreement to abduct from custody);
               (10)  an offense under Section 25.08, Penal Code (sale
  or purchase of a child);
               (11)  an offense under Section 28.02, Penal Code
  (arson);
               (12)  an offense under Section 29.02, Penal Code
  (robbery);
               (13)  an offense under Section 29.03, Penal Code
  (aggravated robbery);
               (14)  an offense under Section 21.08, Penal Code
  (indecent exposure);
               (15)  an offense under Section 21.12, Penal Code
  (improper relationship between educator and student);
               (16)  an offense under Section 21.15, Penal Code
  (improper photography or visual recording);
               (17)  an offense under Section 22.05, Penal Code
  (deadly conduct);
               (18)  an offense under Section 22.021, Penal Code
  (aggravated sexual assault);
               (19)  an offense under Section 22.07, Penal Code
  (terroristic threat);
               (20)  an offense under Section 33.021, Penal Code
  (online solicitation of a minor);
               (21)  an offense under Section 34.02, Penal Code (money
  laundering);
               (22)  an offense under Section 35A.02, Penal Code
  (Medicaid fraud);
               (23)  an offense under Section 42.09, Penal Code
  (cruelty to animals); or
               (24)  a conviction under the laws of another state,
  federal law, or the Uniform Code of Military Justice for an offense
  containing elements that are substantially similar to the elements
  of an offense listed by this subsection.
         (b)  A person may not be employed in a position the duties of
  which involve direct contact with a consumer in a facility or may
  not be employed by an individual employer before the fifth
  anniversary of the date the person is convicted of:
               (1)  an offense under Section 22.01, Penal Code
  (assault), that is punishable as a Class A misdemeanor or as a
  felony;
               (2)  an offense under Section 30.02, Penal Code
  (burglary);
               (3)  an offense under Chapter 31, Penal Code (theft),
  that is punishable as a felony;
               (4)  an offense under Section 32.45, Penal Code
  (misapplication of fiduciary property or property of a financial
  institution), that is punishable as a Class A misdemeanor or a
  felony;
               (5)  an offense under Section 32.46, Penal Code
  (securing execution of a document by deception), that is punishable
  as a Class A misdemeanor or a felony;
               (6)  an offense under Section 37.12, Penal Code (false
  identification as peace officer); or
               (7)  an offense under Section 42.01(a)(7), (8), or (9),
  Penal Code (disorderly conduct).
         SECTION 25.  Subsections (a) and (b), Section 250.007,
  Health and Safety Code, are amended to read as follows:
         (a)  The criminal history records are for the exclusive use
  of the regulatory agency, the requesting facility, the private
  agency on behalf of the requesting facility, the financial
  management services agency on behalf of the individual employer,
  the individual employer, and the applicant or employee who is the
  subject of the records.
         (b)  All criminal records and reports and the information
  they contain that are received by the regulatory agency or private
  agency for the purpose of being forwarded to the requesting
  facility or received by the financial management services agency
  under this chapter are privileged information.
         SECTION 26.  Subsection (a), Section 250.009, Health and
  Safety Code, is amended to read as follows:
         (a)  A facility, [or] an officer or employee of a facility, a
  financial management services agency, or an individual employer is
  not civilly liable for failure to comply with this chapter if the
  facility, financial management services agency, or individual
  employer makes a good faith effort to comply.
         SECTION 27.  Section 22.039(c), Human Resources Code, is
  amended to read as follows:
         (c)  The department shall semiannually provide training for
  surveyors and providers on subjects that address [at least one of]
  the 10 most common violations by long-term care facilities of
  [under] federal or state law. The department may charge a fee not to
  exceed $50 per person for the training.
         SECTION 28.  Section 32.0322, Human Resources Code, is
  amended to read as follows:
         Sec. 32.0322.  CRIMINAL HISTORY RECORD INFORMATION;
  ENROLLMENT OF PROVIDERS. (a)  The department or the office of
  inspector general established under Chapter 531, Government Code,
  may obtain from any law enforcement or criminal justice agency the
  criminal history record information that relates to a provider
  under the medical assistance program or a person applying to enroll
  as a provider under the medical assistance program.
         (a-1)  The criminal history record information the
  department and the office of inspector general are authorized to
  obtain under Subsection (a) includes criminal history record
  information relating to:
               (1)  a person with a direct or indirect ownership or
  control interest, as defined by 42 C.F.R. Section 455.101, in a
  provider of five percent or more; and
               (2)  a person whose information is required to be
  disclosed in accordance with 42 C.F.R. Part 1001.
         (b)  The executive commissioner of the Health and Human
  Services Commission [department] by rule shall establish criteria
  for the department or the commission's office of inspector general
  to suspend a provider's billing privileges under the medical
  assistance program, revoke [revoking] a provider's enrollment
  under the program, or deny [denying] a person's application to
  enroll as a provider under the [medical assistance] program based
  on:
               (1)  the results of a criminal history check;
               (2)  any exclusion or debarment of the provider from
  participation in a state or federally funded health care program;
               (3)  the provider's failure to bill for medical
  assistance or refer clients for medical assistance within a
  12-month period; or
               (4)  any of the provider screening or enrollment
  provisions contained in 42 C.F.R. Part 455, Subpart E.
         (c)  As a condition of eligibility to participate as a
  provider in the medical assistance program, the executive
  commissioner of the Health and Human Services Commission by rule
  shall:
               (1)  require a provider or a person applying to enroll
  as a provider to disclose:
                     (A)  all persons described by Subsection
  (a-1)(1);
                     (B)  any managing employees of the provider; and
                     (C)  an agent or subcontractor of the provider if:
                           (i)  the provider or a person described by
  Subsection (a-1)(1) has a direct or indirect ownership interest of
  at least five percent in the agent or subcontractor; or
                           (ii)  the provider engages in a business
  transaction with the agent or subcontractor that meets the criteria
  specified by 42 C.F.R. Section 455.105; and
               (2)  require disclosure by persons applying for
  enrollment as providers and provide for screening of applicants for
  enrollment in conformity and compliance with the requirements of 42
  C.F.R. Part 455, Subparts B and E.
         (d)  In adopting rules under this section, the executive
  commissioner of the Health and Human Services Commission shall
  adopt rules as authorized by and in conformity with 42 C.F.R.
  Section 455.470 for the imposition of a temporary moratorium on
  enrollment of new providers, or to impose numerical caps or other
  limits on the enrollment of providers, that the department or the
  commission's office of inspector general, in consultation with the
  department, determines have a significant potential for fraud,
  waste, or abuse.
         SECTION 29.  Section 32.039, Human Resources Code, is
  amended by amending Subsection (b) and adding Subsection (b-1) to
  read as follows:  
         (b)  A person commits a violation if the person:
               (1)  presents or causes to be presented to the
  department a claim that contains a statement or representation the
  person knows or should know to be false;
               (1-a)  engages in conduct that violates Section
  102.001, Occupations Code;
               (1-b)  solicits or receives, directly or indirectly,
  overtly or covertly any remuneration, including any kickback,
  bribe, or rebate, in cash or in kind for referring an individual to
  a person for the furnishing of, or for arranging the furnishing of,
  any item or service for which payment may be made, in whole or in
  part, under the medical assistance program, provided that this
  subdivision does not prohibit the referral of a patient to another
  practitioner within a multispecialty group or university medical
  services research and development plan (practice plan) for
  medically necessary services;
               (1-c)  solicits or receives, directly or indirectly,
  overtly or covertly any remuneration, including any kickback,
  bribe, or rebate, in cash or in kind for purchasing, leasing, or
  ordering, or arranging for or recommending the purchasing, leasing,
  or ordering of, any good, facility, service, or item for which
  payment may be made, in whole or in part, under the medical
  assistance program;
               (1-d)  offers or pays, directly or indirectly, overtly
  or covertly any remuneration, including any kickback, bribe, or
  rebate, in cash or in kind to induce a person to refer an individual
  to another person for the furnishing of, or for arranging the
  furnishing of, any item or service for which payment may be made, in
  whole or in part, under the medical assistance program, provided
  that this subdivision does not prohibit the referral of a patient to
  another practitioner within a multispecialty group or university
  medical services research and development plan (practice plan) for
  medically necessary services;
               (1-e)  offers or pays, directly or indirectly, overtly
  or covertly any remuneration, including any kickback, bribe, or
  rebate, in cash or in kind to induce a person to purchase, lease, or
  order, or arrange for or recommend the purchase, lease, or order of,
  any good, facility, service, or item for which payment may be made,
  in whole or in part, under the medical assistance program;
               (1-f)  provides, offers, or receives an inducement in a
  manner or for a purpose not otherwise prohibited by this section or
  Section 102.001, Occupations Code, to or from a person, including a
  recipient, provider, employee or agent of a provider, third-party
  vendor, or public servant, for the purpose of influencing or being
  influenced in a decision regarding:
                     (A)  selection of a provider or receipt of a good
  or service under the medical assistance program;
                     (B)  the use of goods or services provided under
  the medical assistance program; or
                     (C)  the inclusion or exclusion of goods or
  services available under the medical assistance program; [or]
               (2)  is a managed care organization that contracts with
  the department to provide or arrange to provide health care
  benefits or services to individuals eligible for medical assistance
  and:
                     (A)  fails to provide to an individual a health
  care benefit or service that the organization is required to
  provide under the contract with the department;
                     (B)  fails to provide to the department
  information required to be provided by law, department rule, or
  contractual provision;
                     (C)  engages in a fraudulent activity in
  connection with the enrollment in the organization's managed care
  plan of an individual eligible for medical assistance or in
  connection with marketing the organization's services to an
  individual eligible for medical assistance; or
                     (D)  engages in actions that indicate a pattern
  of:
                           (i)  wrongful denial of payment for a health
  care benefit or service that the organization is required to
  provide under the contract with the department; or
                           (ii)  wrongful delay of at least 45 days or a
  longer period specified in the contract with the department, not to
  exceed 60 days, in making payment for a health care benefit or
  service that the organization is required to provide under the
  contract with the department; or
               (3)  fails to maintain documentation to support a claim
  for payment in accordance with the requirements specified by
  department rule or medical assistance program policy or engages in
  any other conduct that a department rule has defined as a violation
  of the medical assistance program.
         (b-1)  A person who commits a violation described by
  Subsection (b)(3) is liable to the department for either the amount
  paid in response to the claim for payment or the payment of an
  administrative penalty in an amount not to exceed $500 for each
  violation, as determined by the department.
         SECTION 30.  Section 32.047, Human Resources Code, is
  amended to read as follows:
         Sec. 32.047.  PROHIBITION OF CERTAIN HEALTH CARE SERVICE
  PROVIDERS. (a) A person is permanently prohibited from providing
  or arranging to provide health care services under the medical
  assistance program if:
               (1)  the person is convicted of an offense arising from
  a fraudulent act under the program; and
               (2)  the person's fraudulent act results in injury to an
  elderly person, as defined by Section 48.002(a)(1) [48.002(1)], a
  disabled person, as defined by Section 48.002(a)(8)(A) 
  [48.002(8)(A)], or a person younger than 18 years of age.
         (b)  The executive commissioner of the Health and Human
  Services Commission shall adopt rules for prohibiting a person from
  participating in the medical assistance program as a health care
  provider for a reasonable period, as determined by the executive
  commissioner, if the person:
               (1)  fails to repay overpayments under the program; or
               (2)  owns, controls, manages, or is otherwise
  affiliated with and has financial, managerial, or administrative
  influence over a provider who has been suspended or prohibited from
  participating in the program.
         SECTION 31.  Subchapter B, Chapter 32, Human Resources Code,
  is amended by adding Section 32.068 to read as follows:
         Sec. 32.068.  IN-PERSON EVALUATION REQUIRED FOR CERTAIN
  SERVICES. (a)  A medical assistance provider may order or otherwise
  authorize the provision of home health services for a recipient
  only if the provider has conducted an in-person evaluation of the
  recipient within the 12-month period preceding the date the order
  or other authorization was issued.
         (b)  A physician, physician assistant, nurse practitioner,
  clinical nurse specialist, or certified nurse-midwife that orders
  or otherwise authorizes the provision of durable medical equipment
  for a recipient in accordance with Chapter 157, Occupations Code,
  and other applicable law, including rules, must certify on the
  order or other authorization that the person conducted an in-person
  evaluation of the recipient within the 12-month period preceding
  the date the order or other authorization was issued.
         (c)  The executive commissioner of the Health and Human
  Services Commission shall adopt rules necessary to implement this
  section.  The executive commissioner may by rule adopt limited
  exceptions to the requirements of this section.
         SECTION 32.  Subsection (a), Section 103.009, Human
  Resources Code, is amended to read as follows:
         (a)  The department may deny, suspend, or revoke the license
  of an applicant or holder of a license who fails to comply with the
  rules or standards for licensing required by this chapter or has
  committed an act described by Sections 103.012(a)(2)-(7).
         SECTION 33.  Chapter 103, Human Resources Code, is amended
  by adding Sections 103.012 through 103.016 to read as follows:
         Sec. 103.012.  ADMINISTRATIVE PENALTY. (a)  The department
  may assess an administrative penalty against a person who:
               (1)  violates this chapter, a rule, standard, or order
  adopted under this chapter, or a term of a license issued under this
  chapter;
               (2)  makes a false statement of a material fact that the
  person knows or should know is false:
                     (A)  on an application for issuance or renewal of
  a license or in an attachment to the application; or
                     (B)  with respect to a matter under investigation
  by the department;
               (3)  refuses to allow a representative of the
  department to inspect:
                     (A)  a book, record, or file required to be
  maintained by an adult day-care facility; or
                     (B)  any portion of the premises of an adult
  day-care facility;
               (4)  wilfully interferes with the work of a
  representative of the department or the enforcement of this
  chapter;
               (5)  wilfully interferes with a representative of the
  department preserving evidence of a violation of this chapter, a
  rule, standard, or order adopted under this chapter, or a term of a
  license issued under this chapter;
               (6)  fails to pay a penalty assessed under this chapter
  not later than the 30th day after the date the assessment of the
  penalty becomes final; or
               (7)  fails to notify the department of a change of
  ownership before the effective date of the change of ownership.
         (b)  Except as provided by Section 103.013(c), the penalty
  may not exceed $500 for each violation.
         (c)  Each day of a continuing violation constitutes a
  separate violation.
         (d)  The department shall establish gradations of penalties
  in accordance with the relative seriousness of the violation.
         (e)  In determining the amount of a penalty, the department
  shall consider any matter that justice may require, including:
               (1)  the gradations of penalties established under
  Subsection (d);
               (2)  the seriousness of the violation, including the
  nature, circumstances, extent, and gravity of the prohibited act
  and the hazard or potential hazard created by the act to the health
  or safety of the public;
               (3)  the history of previous violations;
               (4)  the deterrence of future violations; and
               (5)  the efforts to correct the violation.
         (f)  A penalty assessed under Subsection (a)(6) is in
  addition to the penalty previously assessed and not timely paid.
         Sec. 103.013.  RIGHT TO CORRECT BEFORE IMPOSITION OF
  ADMINISTRATIVE PENALTY. (a)  The department may not collect an
  administrative penalty from an adult day-care facility under
  Section 103.012 if, not later than the 45th day after the date the
  facility receives notice under Section 103.014(c), the facility
  corrects the violation.
         (b)  Subsection (a) does not apply to:
               (1)  a violation that the department determines:
                     (A)  results in serious harm to or death of a
  person attending the facility;
                     (B)  constitutes a serious threat to the health
  and safety of a person attending the facility; or
                     (C)  substantially limits the facility's capacity
  to provide care;
               (2)  a violation described by Sections
  103.012(a)(2)-(7); or
               (3)  a violation of Section 103.011.
         (c)  An adult day-care facility that corrects a violation
  must maintain the correction. If the facility fails to maintain the
  correction until at least the first anniversary after the date the
  correction was made, the department may assess and collect an
  administrative penalty for the subsequent violation. An
  administrative penalty assessed under this subsection is equal to
  three times the amount of the original penalty assessed but not
  collected. The department is not required to provide the facility
  with an opportunity under this section to correct the subsequent
  violation.
         Sec. 103.014.  REPORT RECOMMENDING ADMINISTRATIVE PENALTY;
  NOTICE. (a)  The department shall issue a preliminary report
  stating the facts on which the department concludes that a
  violation of this chapter, a rule, standard, or order adopted under
  this chapter, or a term of a license issued under this chapter has
  occurred if the department has:
               (1)  examined the possible violation and facts
  surrounding the possible violation; and
               (2)  concluded that a violation has occurred.
         (b)  The report may recommend a penalty under Section 103.012
  and the amount of the penalty.
         (c)  The department shall give written notice of the report
  to the person charged with the violation not later than the 10th day
  after the date on which the report is issued. The notice must
  include:
               (1)  a brief summary of the charges;
               (2)  a statement of the amount of penalty recommended;
               (3)  a statement of whether the violation is subject to
  correction under Section 103.013 and, if the violation is subject
  to correction under that section, a statement of:
                     (A)  the date on which the adult day-care facility
  must file a plan of correction with the department that the
  department shall review and may approve, if satisfactory; and
                     (B)  the date on which the plan of correction must
  be completed to avoid assessment of the penalty; and
               (4)  a statement that the person charged has a right to
  a hearing on the occurrence of the violation, the amount of the
  penalty, or both.
         (d)  Not later than the 20th day after the date on which the
  notice under Subsection (c) is received, the person charged may:
               (1)  give to the department written notice that the
  person agrees with the department's report and consents to the
  recommended penalty; or
               (2)  make a written request for a hearing.
         (e)  If the violation is subject to correction under Section
  103.013, the adult day-care facility shall submit a plan of
  correction to the department for approval not later than the 10th
  day after the date on which the notice under Subsection (c) is
  received.
         (f)  If the violation is subject to correction under Section
  103.013 and the person reports to the department that the violation
  has been corrected, the department shall inspect the correction or
  take any other step necessary to confirm the correction and shall
  notify the person that:
               (1)  the correction is satisfactory and a penalty will
  not be assessed; or
               (2)  the correction is not satisfactory and a penalty
  is recommended.
         (g)  Not later than the 20th day after the date on which a
  notice under Subsection (f)(2) is received, the person charged with
  the violation may:
               (1)  give to the department written notice that the
  person agrees with the department's report and consents to the
  recommended penalty; or
               (2)  make a written request for a hearing.
         (h)  If the person charged with the violation consents to the
  penalty recommended by the department or does not timely respond to
  a notice sent under Subsection (c) or (f)(2), the department's
  commissioner or the commissioner's designee shall assess the
  penalty recommended by the department.
         (i)  If the department's commissioner or the commissioner's
  designee assesses the recommended penalty, the department shall
  give written notice of the decision to the person charged with the
  violation and the person shall pay the penalty.
         Sec. 103.015.  ADMINISTRATIVE PENALTY HEARING. (a)  An
  administrative law judge shall order a hearing and give notice of
  the hearing if a person assessed a penalty under Section 103.013(c)
  requests a hearing.
         (b)  The hearing shall be held before an administrative law
  judge.
         (c)  The administrative law judge shall make findings of fact
  and conclusions of law regarding the occurrence of a violation of
  this chapter, a rule or order adopted under this chapter, or a term
  of a license issued under this chapter.
         (d)  Based on the findings of fact and conclusions of law,
  and the recommendation of the administrative law judge, the
  department's commissioner or the commissioner's designee by order
  shall find:
               (1)  a violation has occurred and assess an
  administrative penalty; or
               (2)  a violation has not occurred.
         (e)  Proceedings under this section are subject to Chapter
  2001, Government Code.
         Sec. 103.016.  NOTICE AND PAYMENT OF ADMINISTRATIVE PENALTY;
  INTEREST; REFUND. (a)  The department's commissioner or the
  commissioner's designee shall give notice of the findings made
  under Section 103.015(d) to the person charged with a violation. If
  the commissioner or the commissioner's designee finds that a
  violation has occurred, the commissioner or the commissioner's
  designee shall give to the person charged written notice of:
               (1)  the findings;
               (2)  the amount of the administrative penalty;
               (3)  the rate of interest payable with respect to the
  penalty and the date on which interest begins to accrue; and
               (4)  the person's right to judicial review of the order
  of the commissioner or the commissioner's designee.
         (b)  Not later than the 30th day after the date on which the
  order of the department's commissioner or the commissioner's
  designee is final, the person assessed the penalty shall:
               (1)  pay the full amount of the penalty; or
               (2)  file a petition for judicial review contesting the
  occurrence of the violation, the amount of the penalty, or both the
  occurrence of the violation and the amount of the penalty.
         (c)  Notwithstanding Subsection (b), the department may
  permit the person to pay a penalty in installments.
         (d)  If the person does not pay the penalty within the period
  provided by Subsection (b) or in accordance with Subsection (c), if
  applicable:
               (1)  the penalty is subject to interest; and
               (2)  the department may refer the matter to the
  attorney general for collection of the penalty and interest.
         (e)  Interest under Subsection (d)(1) accrues:
               (1)  at a rate equal to the rate charged on loans to
  depository institutions by the New York Federal Reserve Bank; and
               (2)  for the period beginning on the day after the date
  on which the penalty becomes due and ending on the date the penalty
  is paid.
         (f)  If the amount of the penalty is reduced or the
  assessment of a penalty is not upheld on judicial review, the
  department's commissioner or the commissioner's designee shall:
               (1)  remit to the person charged the appropriate amount
  of any penalty payment plus accrued interest; or
               (2)  execute a release of the supersedeas bond if one
  has been posted.
         (g)  Accrued interest on the amount remitted by the
  department's commissioner or the commissioner's designee under
  Subsection (f)(1) shall be paid:
               (1)  at a rate equal to the rate charged on loans to
  depository institutions by the New York Federal Reserve Bank; and
               (2)  for the period beginning on the date the penalty is
  paid and ending on the date the penalty is remitted to the person
  charged with the violation.
         SECTION 34.  Section 531.1131, Government Code, as added by
  this Act, applies to the investigation of a fraudulent Medicaid or
  child health plan program claim or other program abuse that
  commences on or after the effective date of this Act. An
  investigation that commences before the effective date of this Act
  is governed by the law in effect when the investigation commenced,
  and the former law is continued in effect for that purpose.
         SECTION 35.  As soon as practicable after the effective date
  of this Act but not later than July 1, 2012, the executive
  commissioner of the Health and Human Services Commission shall
  adopt the rules necessary to implement the changes in law made by
  this Act to Chapter 142, Health and Safety Code.
         SECTION 36.  Subsection (e), Section 242.032, Health and
  Safety Code, as amended by this Act, applies only to an application,
  including a renewal application, filed on or after the effective
  date of this Act. An application filed before the effective date of
  this Act is governed by the law in effect when the application was
  filed, and the former law is continued in effect for that purpose.
         SECTION 37.  Subsection (b), Section 242.0615, Health and
  Safety Code, as amended by this Act, applies only to conduct that
  occurs on or after the effective date of this Act. Conduct that
  occurs before the effective date of this Act is governed by the law
  in effect at the time the conduct occurred, and the former law is
  continued in effect for that purpose.
         SECTION 38.  As soon as practicable after the effective date
  of this Act but not later than July 1, 2012, the executive
  commissioner of the Health and Human Services Commission shall
  adopt rules necessary to implement Section 22.039, Human Resources
  Code, as amended by this Act.
         SECTION 39.  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 40.  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 41.  This Act takes effect September 1, 2011.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 1720 was passed by the House on May 4,
  2011, by the following vote:  Yeas 138, Nays 0, 2 present, not
  voting; and that the House concurred in Senate amendments to H.B.
  No. 1720 on May 27, 2011, by the following vote:  Yeas 136, Nays 0,
  2 present, not voting.
 
  ______________________________
  Chief Clerk of the House   
 
         I certify that H.B. No. 1720 was passed by the Senate, with
  amendments, on May 23, 2011, by the following vote:  Yeas 31, Nays
  0.
 
  ______________________________
  Secretary of the Senate   
  APPROVED: __________________
                  Date       
   
           __________________
                Governor