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Medical Assistance Program, Damages and Penalties,
codified at Human Resources Code § 32.039 (as amended
through Acts 2007, 80th leg., ch. 127)
Medicaid Fraud Prevention (including actions by
private persons), codified at Human Resources Code §§
36.001 et seq (as amended through Acts 2007, 80th Leg., ch. 78)
Award for Reporting Medicaid Fraud, Abuse, or
Overcharges, codified at Government Code §§ 531.101 et
seq (as amended through Acts 2003, 78th Leg., ch. 198)
TEXAS HUMAN RESOURCES CODE
CHAPTER 32. MEDICAL ASSISTANCE PROGRAM SUBCHAPTER B.
ADMINISTRATIVE PROVISIONS
32.039. Damages and Penalties
(a) In this section:
(1) "Claim" means an application for payment of health care
services under Title XIX of the federal Social Security Act that
is submitted by a person who is under a contract or provider
agreement with the department.
(1-a) "Inducement" includes a service, cash in any amount,
entertainment, or any item of value.
(2) "Managed care organization" means any entity or person that
is authorized or otherwise permitted by law to arrange for or
provide a managed care plan.
(3) "Managed care plan" means a plan under which a person
undertakes to provide, arrange for, pay for, or reimburse any
part of the cost of any health care service. A part of the plan
must consist of arranging for or providing health care services
as distinguished from indemnification against the cost of those
services on a prepaid basis through insurance or otherwise. The
term does not include a plan that indemnifies a person for the
cost of health care services through insurance.
(4) A person "should know" or "should have known" information to
be false if the person acts in deliberate ignorance of the truth
or falsity of the information or in reckless disregard of the
truth or falsity of the information, and proof of the person's
specific intent to defraud is not required.
(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.
(c) A person who commits a violation under Subsection (b) is
liable to the department for:
(1) the amount paid, if any, as a result of the violation and
interest on that amount determined at the rate provided by law
for legal judgments and accruing from the date on which the
payment was made; and
(2) payment of an administrative penalty of an amount not to
exceed twice the amount paid, if any, as a result of the
violation, plus an amount:
(A) not less than $ 5,000 or more than $ 15,000 for each
violation that results in injury to an elderly person, as
defined by Section 48.002(1), a disabled person, as defined by
Section 48.002(8)(A), or a person younger than 18 years of age;
or
(B) not more than $ 10,000 for each violation that does not
result in injury to a person described by Paragraph (A).
(d) Unless the provider submitted information to the department
for use in preparing a voucher that the provider knew or should
have known was false or failed to correct information that the
provider knew or should have known was false when provided an
opportunity to do so, this section does not apply to a claim
based on the voucher if the department calculated and printed
the amount of the claim on the voucher and then submitted the
voucher to the provider for the provider's signature. In
addition, the provider's signature on the voucher does not
constitute fraud. The department shall adopt rules that
establish a grace period during which errors contained in a
voucher prepared by the department may be corrected without
penalty to the provider.
(e) In determining the amount of the penalty to be assessed
under Subsection (c)(2), the department shall consider:
(1) the seriousness of the violation;
(2) whether the person had previously committed a violation; and
(3) the amount necessary to deter the person from committing
future violations.
(f) If after an examination of the facts the department
concludes that the person committed a violation, the department
may issue a preliminary report stating the facts on which it
based its conclusion, recommending that an administrative
penalty under this section be imposed and recommending the
amount of the proposed penalty.
(g) The department shall give written notice of the report to
the person charged with committing the violation. The notice
must include a brief summary of the facts, a statement of the
amount of the recommended penalty, and a statement of the
person's right to an informal review of the alleged violation,
the amount of the penalty, or both the alleged violation and the
amount of the penalty.
(h) Not later than the 10th day after the date on which the
person charged with committing the violation receives the
notice, the person may either give the department written
consent to the report, including the recommended penalty, or
make a written request for an informal review by the department.
(i) If the person charged with committing the violation consents
to the penalty recommended by the department or fails to timely
request an informal review, the department shall assess the
penalty. The department shall give the person written notice of
its action. The person shall pay the penalty not later than the
30th day after the date on which the person receives the notice.
(j) If the person charged with committing the violation requests
an informal review as provided by Subsection (h), the department
shall conduct the review. The department shall give the person
written notice of the results of the review.
(k) Not later than the 10th day after the date on which the
person charged with committing the violation receives the notice
prescribed by Subsection (j), the person may make to the
department a written request for a hearing. The hearing must be
conducted in accordance with Chapter 2001, Government Code.
( l ) If, after informal review, a person who has been
ordered to pay a penalty fails to request a formal hearing in a
timely manner, the department shall assess the penalty. The
department shall give the person written notice of its action.
The person shall pay the penalty not later than the 30th day
after the date on which the person receives the notice.
(m) Within 30 days after the date on which the board's order
issued after a hearing under Subsection (k) becomes final as
provided by Section 2001.144, Government Code, the person shall:
(1) pay the amount of the penalty;
(2) pay the amount of the penalty and 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; or
(3) without paying the amount of the penalty, 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.
(n) A person who acts under Subsection (m)(3) within the 30-day
period may:
(1) stay enforcement of the penalty by:
(A) paying the amount of the penalty to the court for placement
in an escrow account; or
(B) giving to the court a supersedeas bond that is approved by
the court for the amount of the penalty and that is effective
until all judicial review of the department's order is final; or
(2) request the court to stay enforcement of the penalty by:
(A) filing with the court a sworn affidavit of the person
stating that the person is financially unable to pay the amount
of the penalty and is financially unable to give the supersedeas
bond; and
(B) giving a copy of the affidavit to the commissioner by
certified mail.
(o) If the commissioner receives a copy of an affidavit under
Subsection (n)(2), the commissioner may file with the court,
within five days after the date the copy is received, a contest
to the affidavit. The court shall hold a hearing on the facts
alleged in the affidavit as soon as practicable and shall stay
the enforcement of the penalty on finding that the alleged facts
are true. The person who files an affidavit has the burden of
proving that the person is financially unable to pay the amount
of the penalty and to give a supersedeas bond.
(p) If the person charged does not pay the amount of the penalty
and the enforcement of the penalty is not stayed, the department
may forward the matter to the attorney general for enforcement
of the penalty and interest as provided by law for legal
judgments. An action to enforce a penalty order under this
section must be initiated in a court of competent jurisdiction
in Travis County or in the county in which the violation was
committed.
(q) Judicial review of a department order or review under this
section assessing a penalty is under the substantial evidence
rule. A suit may be initiated by filing a petition with a
district court in Travis County, as provided by Subchapter G,
Chapter 2001, Government Code.
(r) If a penalty is reduced or not assessed, the department
shall remit to the person the appropriate amount plus accrued
interest if the penalty has been paid or shall execute a release
of the bond if a supersedeas bond has been posted. The accrued
interest on amounts remitted by the department under this
subsection shall be paid at a rate equal to the rate provided by
law for legal judgments and shall be paid for the period
beginning on the date the penalty is paid to the department
under this section and ending on the date the penalty is
remitted.
(s) A damage, cost, or penalty collected under this section is
not an allowable expense in a claim or cost report that is or
could be used to determine a rate or payment under the medical
assistance program.
(t) All funds collected under this section shall be deposited in
the State Treasury to the credit of the General Revenue Fund.
(u) Except as provided by Subsection (w), a person found liable
for a violation under Subsection (c) that resulted in injury to
an elderly person, as defined by Section 48.002(a)(1), a
disabled person, as defined by Section 48.002(a)(8)(A), or a
person younger than 18 years of age may not provide or arrange
to provide health care services under the medical assistance
program for a period of 10 years. The department by rule may
provide for a period of ineligibility longer than 10 years. The
period of ineligibility begins on the date on which the
determination that the person is liable becomes final.
(v) Except as provided by Subsection (w), a person found liable
for a violation under Subsection (c) that did not result in
injury to an elderly person, as defined by Section 48.002(a)(1),
a disabled person, as defined by Section 48.002(a)(8)(A), or a
person younger than 18 years of age may not provide or arrange
to provide health care services under the medical assistance
program for a period of three years. The department by rule may
provide for a period of ineligibility longer than three years.
The period of ineligibility begins on the date on which the
determination that the person is liable becomes final.
(w) The department by rule may prescribe criteria under which a
person described by Subsection (u) or (v) is not prohibited from
providing or arranging to provide health care services under the
medical assistance program. The criteria may include
consideration of:
(1) the person's knowledge of the violation;
(2) the likelihood that education provided to the person would
be sufficient to prevent future violations;
(3) the potential impact on availability of services in the
community served by the person; and
(4) any other reasonable factor identified by the department.
(x) Subsections (b)(1-b) through (1-f) do not prohibit a person
from engaging in:
(1) generally accepted business practices, as determined by
department rule, including:
(A) conducting a marketing campaign;
(B) providing token items of minimal value that advertise the
person's trade name; and
(C) providing complimentary refreshments at an informational
meeting promoting the person's goods or services;
(2) the provision of a value-added service if the person is a
managed care organization; or
(3) other conduct specifically authorized by law, including
conduct authorized by federal safe harbor regulations (42 C.F.R.
Section 1001.952).
TEXAS HUMAN RESOURCES CODE
CHAPTER 36. MEDICAID FRAUD PREVENTION
SUBCHAPTER A. GENERAL PROVISIONS
36.001. Definitions
In this chapter:
(1) "Claim" means a written or electronically submitted request
or demand that:
(A) is signed by a provider or a fiscal agent and that
identifies a product or service provided or purported to have
been provided to a Medicaid recipient as reimbursable under the
Medicaid program, without regard to whether the money that is
requested or demanded is paid; or
(B) states the income earned or expense incurred by a provider
in providing a product or a service and that is used to
determine a rate of payment under the Medicaid program.
(2) "Documentary material" means a record, document, or other
tangible item of any form, including:
(A) a medical document or X ray prepared by a person in relation
to the provision or purported provision of a product or service
to a Medicaid recipient;
(B) a medical, professional, or business record relating to:
(i) the provision of a product or service to a Medicaid
recipient; or
(ii) a rate or amount paid or claimed for a product or service,
including a record relating to a product or service provided to
a person other than a Medicaid recipient as needed to verify the
rate or amount;
(C) a record required to be kept by an agency that regulates
health care providers; or
(D) a record necessary to disclose the extent of services a
provider furnishes to Medicaid recipients.
(3) "Fiscal agent" means:
(A) a person who, through a contractual relationship with the
Texas Department of Human Services, the Texas Department of
Health, or another state agency, receives, processes, and pays a
claim under the Medicaid program; or
(B) the designated agent of a person described by Paragraph (A).
(4) "Health care practitioner" means a dentist, podiatrist,
psychologist, physical therapist, chiropractor, registered
nurse, or other provider licensed to provide health care
services in this state.
(5) "Managed care organization" has the meaning assigned by
Section 32.039(a).
(6) "Medicaid program" means the state Medicaid program.
(7) "Medicaid recipient" means an individual on whose behalf a
person claims or receives a payment from the Medicaid program or
a fiscal agent, without regard to whether the individual was
eligible for benefits under the Medicaid program.
(8) "Physician" means a physician licensed to practice medicine
in this state.
(9) "Provider" means a person who participates in or who has
applied to participate in the Medicaid program as a supplier of
a product or service and includes:
(A) a management company that manages, operates, or controls
another provider;
(B) a person, including a medical vendor, that provides a
product or service to a provider or to a fiscal agent;
(C) an employee of a provider;
(D) a managed care organization; and
(E) a manufacturer or distributor of a product for which the
Medicaid program provides reimbursement.
(10) "Service" includes care or treatment of a Medicaid
recipient.
(11) "Signed" means to have affixed a signature directly or
indirectly by means of handwriting, typewriting, signature
stamp, computer impulse, or other means recognized by law.
(12) "Unlawful act" means an act declared to be unlawful under
Section 36.002.
36.0011. Culpable Mental State
(a) For purposes of this chapter, a person acts "knowingly" with
respect to information if the person:
(1) has knowledge of the information;
(2) acts with conscious indifference to the truth or falsity of
the information; or
(3) acts in reckless disregard of the truth or falsity of the
information.
(b) Proof of the person's specific intent to commit an unlawful
act under Section 36.002 is not required in a civil or
administrative proceeding to show that a person acted
"knowingly" with respect to information under this chapter.
36.002. Unlawful Acts
A person commits an unlawful act if the
person:
(1) knowingly makes or causes to be made a false statement or
misrepresentation of a material fact to permit a person to
receive a benefit or payment under the Medicaid program that is
not authorized or that is greater than the benefit or payment
that is authorized;
(2) knowingly conceals or fails to disclose information that
permits a person to receive a benefit or payment under the
Medicaid program that is not authorized or that is greater than
the benefit or payment that is authorized;
(3) knowingly applies for and receives a benefit or payment on
behalf of another person under the Medicaid program and converts
any part of the benefit or payment to a use other than for the
benefit of the person on whose behalf it was received;
(4) knowingly makes, causes to be made, induces, or seeks to
induce the making of a false statement or misrepresentation of
material fact concerning:
(A) the conditions or operation of a facility in order that the
facility may qualify for certification or recertification
required by the Medicaid program, including certification or
recertification as:
(i) a hospital;
(ii) a nursing facility or skilled nursing facility;
(iii) a hospice;
(iv) an intermediate care facility for the mentally retarded;
(v) an assisted living facility; or
(vi) a home health agency; or
(B) information required to be provided by a federal or state
law, rule, regulation, or provider agreement pertaining to the
Medicaid program;
(5) except as authorized under the Medicaid program, knowingly
pays, charges, solicits, accepts, or receives, in addition to an
amount paid under the Medicaid program, a gift, money, a
donation, or other consideration as a condition to the provision
of a service or product or the continued provision of a service
or product if the cost of the service or product is paid for, in
whole or in part, under the Medicaid program;
(6) knowingly presents or causes to be presented a claim for
payment under the Medicaid program for a product provided or a
service rendered by a person who:
(A) is not licensed to provide the product or render the
service, if a license is required; or
(B) is not licensed in the manner claimed;
(7) knowingly makes a claim under the Medicaid program for:
(A) a service or product that has not been approved or
acquiesced in by a treating physician or health care
practitioner;
(B) a service or product that is substantially inadequate or
inappropriate when compared to generally recognized standards
within the particular discipline or within the health care
industry; or
(C) a product that has been adulterated, debased, mislabeled, or
that is otherwise inappropriate;
(8) makes a claim under the Medicaid program and knowingly fails
to indicate the type of license and the identification number of
the licensed health care provider who actually provided the
service;
(9) knowingly enters into an agreement, combination, or
conspiracy to defraud the state by obtaining or aiding another
person in obtaining an unauthorized payment or benefit from the
Medicaid program or a fiscal agent;
(10) is a managed care organization that contracts with the
Health and Human Services Commission or other state agency to
provide or arrange to provide health care benefits or services
to individuals eligible under the Medicaid program and
knowingly:
(A) fails to provide to an individual a health care benefit or
service that the organization is required to provide under the
contract;
(B) fails to provide to the commission or appropriate state
agency information required to be provided by law, commission or
agency rule, or contractual provision; or
(C) engages in a fraudulent activity in connection with the
enrollment of an individual eligible under the Medicaid program
in the organization's managed care plan or in connection with
marketing the organization's services to an individual eligible
under the Medicaid program;
(11) knowingly obstructs an investigation by the attorney
general of an alleged unlawful act under this section;
(12) knowingly makes, uses, or causes the making or use of a
false record or statement to conceal, avoid, or decrease an
obligation to pay or transmit money or property to this state
under the Medicaid program; or
(13) knowingly engages in conduct that constitutes a violation
under Section 32.039(b).
36.003. Documentary Material in
Possession of State Agency
(a) A state agency, including the Health and
Human Services Commission, the Texas Department of Human
Services, the Texas Department of Health, the Texas Department
of Mental Health and Mental Retardation, or the Department of
Protective and Regulatory Services, shall provide the attorney
general access to all documentary materials of persons and
Medicaid recipients under the Medicaid program to which that
agency has access. Documentary material provided under this
subsection is provided to permit investigation of an alleged
unlawful act or for use or potential use in an administrative or
judicial proceeding.
(b) Except as ordered by a court for good cause shown, the
office of the attorney general may not produce for inspection or
copying or otherwise disclose the contents of documentary
material obtained under this section to a person other than:
(1) an employee of the attorney general;
(2) an agency of this state, the United States, or another
state;
(3) a criminal district attorney, district attorney, or county
attorney of this state;
(4) the United States attorney general;
(5) a state or federal grand jury;
(6) a political subdivision of this state; or
(7) a person authorized by the attorney general to receive the
information.
36.004. Immunity
Notwithstanding any other law, a person is
not civilly or criminally liable for providing access to
documentary material under this chapter to:
(1) an employee of the attorney general;
(2) an agency of this state, the United States, or another
state;
(3) a criminal district attorney, district attorney, or county
attorney of this state;
(4) the United States attorney general;
(5) a state or federal grand jury;
(6) a political subdivision of this state; or
(7) a person authorized by the attorney general to receive the
information.
36.005. Suspension or Revocation of
Agreement; Professional Discipline
(a) A health and human services agency, as
defined by Section 531.001, Government Code:
(1) shall suspend or revoke:
(A) a provider agreement between the agency and a person, other
than a person who operates a nursing facility or an ICF-MR
facility, found liable under Section 36.052; and
(B) a permit, license, or certification granted by the agency to
a person, other than a person who operates a nursing facility or
an ICF-MR facility, found liable under Section 36.052; and
(2) may suspend or revoke:
(A) a provider agreement between the agency and a person who
operates a nursing facility or an ICF-MR facility and who is
found liable under Section 36.052; or
(B) a permit, license, or certification granted by the agency to
a person who operates a nursing facility or an ICF-MR facility
and who is found liable under Section 36.052.
(b) A provider found liable under Section 36.052 for an unlawful
act may not, for a period of 10 years, provide or arrange to
provide health care services under the Medicaid program or
supply or sell, directly or indirectly, a product to or under
the Medicaid program. The executive commissioner of the Health
and Human Services Commission may by rule:
(1) provide for a period of ineligibility longer than 10 years;
or
(2) grant a provider a full or partial exemption from the period
of ineligibility required by this subsection if the executive
commissioner finds that enforcement of the full period of
ineligibility is harmful to the Medicaid program or a
beneficiary of the program.
(b-1) The period of ineligibility begins on the date on which
the determination that the provider is liable becomes final.
(b-2) Subsections (b) and (b-1) do not apply to a provider who
operates a nursing facility or an ICF-MR facility.
(c) A person licensed by a state regulatory agency who commits
an unlawful act is subject to professional discipline under the
applicable licensing law or rules adopted under that law.
(d) For purposes of this section, a person is considered to have
been found liable under Section 36.052 if the person is found
liable in an action brought under Subchapter C.
36.006. Application of Other Law
The application of a civil remedy under this
chapter does not preclude the application of another common law,
statutory, or regulatory remedy, except that a person may not be
liable for a civil remedy under this chapter and civil damages
or a penalty under Section 32.039 if the civil remedy and civil
damages or penalty are assessed for the same act.
36.007. Recovery of Costs, Fees, and
Expenses
The attorney general may recover fees,
expenses, and costs reasonably incurred in obtaining injunctive
relief or civil remedies or in conducting investigations under
this chapter, including court costs, reasonable attorney's fees,
witness fees, and deposition fees.
36.008. Use of Money Recovered
The legislature, in appropriating money
recovered under this chapter, shall consider the requirements of
the attorney general and other affected state agencies in
investigating Medicaid fraud and enforcing this chapter.
SUBCHAPTER B. ACTION BY ATTORNEY
GENERAL
36.051. Injunctive Relief
(a) If the attorney general has reason to
believe that a person is committing, has committed, or is about
to commit an unlawful act, the attorney general may institute an
action for an appropriate order to restrain the person from
committing or continuing to commit the act.
(b) An action under this section shall be
brought in a district court of Travis County or of a county in
which any part of the unlawful act occurred, is occurring, or is
about to occur.
36.052. Civil Remedies
(a) Except as provided by Subsection (c), a person who
commits an unlawful act is liable to the state for:
(1) the amount of any payment or the value of any monetary or
in-kind benefit provided under the Medicaid program, directly or
indirectly, as a result of the unlawful act, including any
payment made to a third party;
(2) interest on the amount of the payment or the value of the
benefit described by Subdivision (1) at the prejudgment interest
rate in effect on the day the payment or benefit was received or
paid, for the period from the date the benefit was received or
paid to the date that the state recovers the amount of the
payment or value of the benefit;
(3) a civil penalty of:
(A) not less than $5,000 or more than $15,000 for each unlawful
act committed by the person that results in injury to an elderly
person, as defined by Section 48.002(a)(1), a disabled person,
as defined by Section 48. 002(a)(8)(A), or a person younger than
18 years of age; or
(B) not less than $5,000 or more than $10,000 for each unlawful
act committed by the person that does not result in injury to a
person described by Paragraph (A); and
(4) two times the amount of the payment or the value of the
benefit described by Subdivision (1).
(b) In determining the amount of the civil penalty described by
Subsection (a)(3), the trier of fact shall consider:
(1) whether the person has previously violated the provisions of
this chapter;
(2) the seriousness of the unlawful act committed by the person,
including the nature, circumstances, extent, and gravity of the
unlawful act;
(3) whether the health and safety of the public or an individual
was threatened by the unlawful act;
(4) whether the person acted in bad faith when the person
engaged in the conduct that formed the basis of the unlawful
act; and
(5) the amount necessary to deter future unlawful acts.
(c) The trier of fact may assess a total of not more than two
times the amount of a payment or the value of a benefit
described by Subsection (a)(1) if the trier of fact finds that:
(1) the person furnished the attorney general with all
information known to the person about the unlawful act not later
than the 30th day after the date on which the person first
obtained the information; and
(2) at the time the person furnished all the information to the
attorney general, the attorney general had not yet begun an
investigation under this chapter.
(d) An action under this section shall be brought in Travis
County or in a county in which any part of the unlawful act
occurred.
(e) The attorney general may:
(1) bring an action for civil remedies under this section
together with a suit for injunctive relief under Section 36.051;
or
(2) institute an action for civil remedies independently of an
action for injunctive relief.
36.053. Investigation
(a) The attorney general may take action under Subsection (b)
if the attorney general has reason to believe that:
(1) a person has information or custody or control of
documentary material relevant to the subject matter of an
investigation of an alleged unlawful act;
(2) a person is committing, has committed, or is about to commit
an unlawful act; or
(3) it is in the public interest to conduct an investigation to
ascertain whether a person is committing, has committed, or is
about to commit an unlawful act.
(b) In investigating an unlawful act, the attorney general may:
(1) require the person to file on a prescribed form a statement
in writing, under oath or affirmation, as to all the facts and
circumstances concerning the alleged unlawful act and other
information considered necessary by the attorney general;
(2) examine under oath a person in connection with the alleged
unlawful act; and
(3) execute in writing and serve on the person a civil
investigative demand requiring the person to produce the
documentary material and permit inspection and copying of the
material under Section 36.054.
(c) The office of the attorney general may not release or
disclose information that is obtained under Subsection (b)(1) or
(2) or any documentary material or other record derived from the
information except:
(1) by court order for good cause shown;
(2) with the consent of the person who provided the information;
(3) to an employee of the attorney general;
(4) to an agency of this state, the United States, or another
state;
(5) to any attorney representing the state under Section 36.055
or in a civil action brought under Subchapter C;
(6) to a political subdivision of this state; or
(7) to a person authorized by the attorney general to receive
the information.
(d) The attorney general may use documentary material derived
from information obtained under Subsection (b)(1) or (2), or
copies of that material, as the attorney general determines
necessary in the enforcement of this chapter, including
presentation before a court.
(e) If a person fails to file a statement as required by
Subsection (b)(1) or fails to submit to an examination as
required by Subsection (b)(2), the attorney general may file in
a district court of Travis County a petition for an order to
compel the person to file the statement or submit to the
examination within a period stated by court order. Failure to
comply with an order entered under this subsection is punishable
as contempt.
(f) An order issued by a district court under this section is
subject to appeal to the supreme court.
36.054. Civil Investigative Demand
(a) An investigative demand must:
(1) state the rule or statute under which the alleged unlawful
act is being investigated and the general subject matter of the
investigation;
(2) describe the class or classes of documentary material to be
produced with reasonable specificity to fairly indicate the
documentary material demanded;
(3) prescribe a return date within which the documentary
material is to be produced; and
(4) identify an authorized employee of the attorney general to
whom the documentary material is to be made available for
inspection and copying.
(b) A civil investigative demand may require disclosure of any
documentary material that is discoverable under the Texas Rules
of Civil Procedure.
(c) Service of an investigative demand may be made by:
(1) delivering an executed copy of the demand to the person to
be served or to a partner, an officer, or an agent authorized by
appointment or by law to receive service of process on behalf of
that person;
(2) delivering an executed copy of the demand to the principal
place of business in this state of the person to be served; or
(3) mailing by registered or certified mail an executed copy of
the demand addressed to the person to be served at the person's
principal place of business in this state or, if the person has
no place of business in this state, to a person's principal
office or place of business.
(d) Documentary material demanded under this section shall be
produced for inspection and copying during normal business hours
at the office of the attorney general or as agreed by the person
served and the attorney general.
(e) The office of the attorney general may not produce for
inspection or copying or otherwise disclose the contents of
documentary material obtained under this section except:
(1) by court order for good cause shown;
(2) with the consent of the person who produced the information;
(3) to an employee of the attorney general;
(4) to an agency of this state, the United States, or another
state;
(5) to any attorney representing the state under Section 36.055
or in a civil action brought under Subchapter C;
(6) to a political subdivision of this state; or
(7) to a person authorized by the attorney general to receive
the information.
(e-1) The attorney general shall prescribe reasonable terms and
conditions allowing the documentary material to be available for
inspection and copying by the person who produced the material
or by an authorized representative of that person. The attorney
general may use the documentary material or copies of it as the
attorney general determines necessary in the enforcement of this
chapter, including presentation before a court.
(f) A person may file a petition, stating good cause, to extend
the return date for the demand or to modify or set aside the
demand. A petition under this section shall be filed in a
district court of Travis County and must be filed before the
earlier of:
(1) the return date specified in the demand; or
(2) the 20th day after the date the demand is served.
(g) Except as provided by court order, a person on whom a demand
has been served under this section shall comply with the terms
of an investigative demand.
(h) A person who has committed an unlawful act in relation to
the Medicaid program in this state has submitted to the
jurisdiction of this state and personal service of an
investigative demand under this section may be made on the
person outside of this state.
(i) This section does not limit the authority of the attorney
general to conduct investigations or to access a person's
documentary materials or other information under another state
or federal law, the Texas Rules of Civil Procedure, or the
Federal Rules of Civil Procedure.
(j) If a person fails to comply with an investigative demand, or
if copying and reproduction of the documentary material demanded
cannot be satisfactorily accomplished and the person refuses to
surrender the documentary material, the attorney general may
file in a district court of Travis County a petition for an
order to enforce the investigative demand.
(k) If a petition is filed under Subsection (j), the court may
determine the matter presented and may enter an order to
implement this section.
( l ) Failure to comply with a final order entered
under Subsection (k) is punishable by contempt.
(m) A final order issued by a district court under Subsection
(k) is subject to appeal to the supreme court.
36.055. Attorney General as Relator
in Federal Action
To the extent permitted by 31 U.S.C. Sections
3729–3733, the attorney general may bring an action as relator
under 31 U.S.C. Section 3730 with respect to an act in
connection with the Medicaid program for which a person may be
held liable under 31 U.S.C. Section 3729. The attorney general
may contract with a private attorney to represent the state
under this section.
SUBCHAPTER C. ACTION BY PRIVATE
PERSONS
36.101. Action by Private Person
Authorized
(a) A person may bring a civil action for a
violation of Section 36.002 for the person and for the state.
The action shall be brought in the name of the person and of the
state.
(b) In an action brought under this
subchapter, a person who violates Section 36.002 is liable as
provided by Section 36.052.
§ 36.102. Initiation of Action
(a) A person bringing an action under this
subchapter shall serve a copy of the petition and a written
disclosure of substantially all material evidence and
information the person possesses on the attorney general in
compliance with the Texas Rules of Civil Procedure.
(b) The petition shall be filed in camera and, except as
provided by Subsection (c-1) or (d), shall remain under seal
until at least the 180th day after the date the petition is
filed or the date on which the state elects to intervene,
whichever is earlier. The petition may not be served on the
defendant until the court orders service on the defendant.
(c) The state may elect to intervene and proceed with the action
not later than the 180th day after the date the attorney general
receives the petition and the material evidence and information.
(c-1) At the time the state intervenes, the attorney general may
file a motion with the court requesting that the petition remain
under seal for an extended period.
(d) The state may, for good cause shown, move the court to
extend the 180-day deadline under Subsection (b) or (c). A
motion under this subsection may be supported by affidavits or
other submissions in camera.
(e) An action under this subchapter may be dismissed before the
end of the period during which the petition remains under seal
only if the court and the attorney general consent in writing to
the dismissal and state their reasons for consenting.
36.1021. Standard of Proof
In an action under this subchapter, the state or person bringing
the action must establish each element of the action, including
damages, by a preponderance of the evidence.
36.103. Answer by Defendant
A defendant is not required to file in
accordance with the Texas Rules of Civil Procedure an answer to
a petition filed under this subchapter until the petition is
unsealed and served on the defendant.
36.104. Continuation or Dismissal of
Action Based on State Decision
(a) Not later than the last day of the period
prescribed by Section 36.102(c) or an extension of that period
as provided by Section 36.102(d), the state shall:
(1) proceed with the action; or
(2) notify the court that the state declines to take over the
action.
(b) If the state declines to take over the action, the person
bringing the action may proceed without the state's
participation. On request by the state, the state is entitled to
be served with copies of all pleadings filed in the action and
be provided at the state's expense with copies of all deposition
transcripts. If the person bringing the action proceeds without
the state's participation, the court, without limiting the
status and right of that person, may permit the state to
intervene at a later date on a showing of good cause.
36.105. Representation of State by
Private Attorney
The attorney general may contract with a
private attorney to represent the state in an action under this
subchapter with which the state elects to proceed.
36.106. Intervention by Other Parties
Prohibited
A person other than the state may not
intervene or bring a related action based on the facts
underlying a pending action brought under this subchapter.
36.107. Rights of Parties if State
Continues Action
(a) If the state proceeds with the action,
the state has the primary responsibility for prosecuting the
action and is not bound by an act of the person bringing the
action. The person bringing the action has the right to continue
as a party to the action, subject to the limitations set forth
by this section.
(b) The state may dismiss the action
notwithstanding the objections of the person bringing the action
if:
(1) the attorney general notifies the person
that the state has filed a motion to dismiss; and
(2) the court provides the person with an
opportunity for a hearing on the motion.
(c) The state may settle the action with the
defendant notwithstanding the objections of the person bringing
the action if the court determines, after a hearing, that the
proposed settlement is fair, adequate, and reasonable under all
the circumstances. On a showing of good cause, the hearing may
be held in camera.
(d) On a showing by the state that
unrestricted participation during the course of the litigation
by the person bringing the action would interfere with or unduly
delay the state's prosecution of the case, or would be
repetitious, irrelevant, or for purposes of harassment, the
court may impose limitations on the person's participation,
including:
(1) limiting the number of witnesses the
person may call;
(2) limiting the length of the testimony of
witnesses called by the person;
(3) limiting the person's cross-examination
of witnesses; or
(4) otherwise limiting the participation by
the person in the litigation.
(e) On a showing by the defendant that
unrestricted participation during the course of the litigation
by the person bringing the action would be for purposes of
harassment or would cause the defendant undue burden or
unnecessary expense, the court may limit the participation by
the person in the litigation.
36.108. Stay of Certain Discovery
(a) On a showing by the state that certain
actions of discovery by the person bringing the action would
interfere with the state's investigation or prosecution of a
criminal or civil matter arising out of the same facts, the
court may stay the discovery for a period not to exceed 60 days.
(b) The court shall hear a motion to stay
discovery under this section in camera.
(c) The court may extend the period
prescribed by Subsection (a) on a further showing in camera that
the state has pursued the criminal or civil investigation or
proceedings with reasonable diligence and that any proposed
discovery in the civil action will interfere with the ongoing
criminal or civil investigation or proceedings.
36.109. Pursuit of Alternate Remedy
by State
(a) Notwithstanding Section 36.101, the state
may elect to pursue the state's claim through any alternate
remedy available to the state, including any administrative
proceeding to determine an administrative penalty. If an
alternate remedy is pursued in another proceeding, the person
bringing the action has the same rights in the other proceeding
as the person would have had if the action had continued under
this subchapter.
(b) A finding of fact or conclusion of law
made in the other proceeding that has become final is conclusive
on all parties to an action under this subchapter. For purposes
of this subsection, a finding or conclusion is final if:
(1) the finding or conclusion has been
finally determined on appeal to the appropriate court;
(2) no appeal has been filed with respect to
the finding or conclusion and all time for filing an appeal has
expired; or
(3) the finding or conclusion is not subject
to judicial review.
36.110. Award to Private Plaintiff
(a) If the state proceeds with an action
under this subchapter, the person bringing the action is
entitled, except as provided by Subsection (b), to receive at
least 15 percent but not more than 25 percent of the proceeds of
the action, depending on the extent to which the person
substantially contributed to the prosecution of the action.
(a-1) If the state does not proceed with an action under this
subchapter, the person bringing the action is entitled, except
as provided by Subsection (b), to receive at least 25 percent
but not more than 30 percent of the proceeds of the action. The
entitlement of a person under this subsection is not affected by
any subsequent intervention in the action by the state in
accordance with Section 36.104(b).
(b) If the court finds that the action is based primarily on
disclosures of specific information, other than information
provided by the person bringing the action, relating to
allegations or transactions in a criminal or civil hearing, in a
legislative or administrative report, hearing, audit, or
investigation, or from the news media, the court may award the
amount the court considers appropriate but not more than seven
percent of the proceeds of the action. The court shall consider
the significance of the information and the role of the person
bringing the action in advancing the case to litigation.
(c) A payment to a person under this section shall be made from
the proceeds of the action. A person receiving a payment under
this section is also entitled to receive from the defendant an
amount for reasonable expenses, reasonable attorney's fees, and
costs that the court finds to have been necessarily incurred.
The court's determination of expenses, fees, and costs to be
awarded under this subsection shall be made only after the
defendant has been found liable in the action.
(d) In this section, "proceeds of the action" includes proceeds
of a settlement of the action.
36.111. Reduction of Award
(a) If the court finds that the action was
brought by a person who planned and initiated the violation of
Section 36.002 on which the action was brought, the court may,
to the extent the court considers appropriate, reduce the share
of the proceeds of the action the person would otherwise receive
under Section 36.110, taking into account the person's role in
advancing the case to litigation and any relevant circumstances
pertaining to the violation.
(b) If the person bringing the action is
convicted of criminal conduct arising from the person's role in
the violation of Section 36.002, the court shall dismiss the
person from the civil action and the person may not receive any
share of the proceeds of the action. A dismissal under this
subsection does not prejudice the right of the state to continue
the action.
36.112. Award to Defendant for
Frivolous Action
Chapter 105, Civil Practice and Remedies
Code, applies in an action under this subchapter with which the
state proceeds.
36.113. Certain Actions Barred
(a) A person may not bring an action under
this subchapter that is based on allegations or transactions
that are the subject of a civil suit or an administrative
penalty proceeding in which the state is already a party.
(b) A person may not bring an action under
this subchapter that is based on the public disclosure of
allegations or transactions in a criminal or civil hearing, in a
legislative or administrative report, hearing, audit, or
investigation, or from the news media, unless the person
bringing the action is an original source of the information. In
this subsection, "original source" means an individual who has
direct and independent knowledge of the information on which the
allegations are based and has voluntarily provided the
information to the state before filing an action under this
subchapter that is based on the information.
36.114. State Not Liable for Certain
Expenses
The state is not liable for expenses that a
person incurs in bringing an action under this subchapter.
36.115. Retaliation by Employer
Against Person Bringing Suit Prohibited
(a) A person who is discharged, demoted,
suspended, threatened, harassed, or in any other manner
discriminated against in the terms of employment by the person's
employer because of a lawful act taken by the person in
furtherance of an action under this subchapter, including
investigation for, initiation of, testimony for, or assistance
in an action filed or to be filed under this subchapter, is
entitled to:
(1) reinstatement with the same seniority
status the person would have had but for the discrimination; and
(2) not less than two times the amount of
back pay, interest on the back pay, and compensation for any
special damages sustained as a result of the discrimination,
including litigation costs and reasonable attorney's fees.
(b) A person may bring an action in the
appropriate district court for the relief provided in this
section.
36.116. Sovereign Immunity Not Waived
Except as provided by Section 36.112, this
subchapter does not waive sovereign immunity.
36.117. Attorney General Compensation
The office of the attorney general may retain
a reasonable portion of recoveries under this subchapter, not to
exceed amounts specified in the General Appropriations Act, for
the administration of this subchapter.
TEXAS GOVERNMENT CODE
CHAPTER 531. HEALTH AND HUMAN SERVICES
COMMISSION
SUBCHAPTER C. MEDICAID AND OTHER WELFARE FRAUD, ABUSE, OR
OVERCHARGES
531.101.
AA
AWARD FOR REPORTING MEDICAID FRAUD,
ABUSE, OR OVERCHARGES.
A
(a)
AA
The commission may grant an award
to an individual who reports activity that constitutes fraud or
abuse of funds in the state Medicaid program or reports
overcharges in the program if the commission determines that the
disclosure results in the recovery of an administrative penalty
imposed under Section 32.039, Human Resources Code. The
commission may not grant an award to an individual in connection
with a report if the commission or attorney general had
independent knowledge of the activity reported by the
individual.
(b)
AA
The commission shall determine the
amount of an award. The award may not exceed five percent of the
amount of the administrative penalty imposed under Section
32.039, Human Resources Code, that resulted from the individual
's disclosure. In determining the amount of the award, the
commission shall consider how important the disclosure is in
ensuring the fiscal integrity of the program. The commission may
also consider whether the individual participated in the fraud,
abuse, or overcharge.
(c)
AA
A person who brings an action under
Subchapter C, Chapter 36, Human Resources Code, is not eligible
for an award under this section.
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