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  • Texas Human Resources Code

     The purpose of this chapter is to enable the state to provide medical assistance on behalf of needy individuals and to enable the state to obtain all benefits for those persons authorized under the Social Security Act or any other federal act.

Acts 1979, 66th Leg., p. 2348, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

     (a) This chapter shall be liberally construed and applied in relation to applicable federal laws and regulations so that adequate and high quality health care may be made available to all children and adults who need the care and are not financially able to pay for it.

     (b) If a provision of this chapter conflicts with a provision of the Social Security Act or any other federal act and renders the state program out of conformity with federal law to the extent that federal matching money is not available to the state, the conflicting provision of state law shall be inoperative to the extent of the conflict but shall not affect the remainder of this chapter.

Acts 1979, 66th Leg., p. 2348, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

     In this chapter:

     (1) "Board" means the Health and Human Services Commission or the governing body of an agency operating part of the medical assistance program, as appropriate.

     (2) "Commissioner" means the Health and Human Services Commission or the commissioner or executive director of an agency operating part of the medical assistance program, as appropriate.

     (3) "Department" means the Health and Human Services Commission or an agency operating part of the medical assistance program, as appropriate.

     (4) "Medical assistance" includes all of the health care and related services and benefits authorized or provided under federal law for needy individuals of this state.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

Amended by Acts 1995, 74th Leg., ch. 6, § 2, eff. March 23, 1995.

     (a) The department is the state agency designated to administer the medical assistance program provided in this chapter.

     (b) The department shall enter into agreements with any federal agency designated by federal law to administer medical assistance when the department determines the agreements to be compatible with the state's participation in the medical assistance program and within the limits of appropriated funds. The department shall cooperate with federal agencies designated by federal law to administer medical assistance in any reasonable manner necessary to qualify for federal funds.

     (c) The department shall establish methods of administration and adopt necessary rules for the proper and efficient operation of the program.

     (d) The department shall include in its contracts for the delivery of medical assistance by nursing facilities provisions for monetary penalties to be assessed for violations as required by 42 U.S.C. Section 1396r, including without limitation the Omnibus Budget Reconciliation Act (OBRA), P.L. 100–203, Nursing Home Reform Amendments of 1987, provided that the department shall:

     (1) provide for an informal dispute resolution process in the department's central office; the informal dispute resolution process shall:

     (A) require the institution to request informal dispute resolution no later than the 10th calendar day after notification by the department of a violation of a standard or standards;

     (B) require the department to complete the process no later than the 30th calendar day after receipt of a request from the institution for informal dispute resolution; and

     (C) require any individual representing an institution in an informal dispute resolution process to register with the department and disclose the following:

     (i) the individual's five-year employment history during the preceding five years, including employment in regulatory agencies of this state and other states;

     (ii) ownership, including the identity of the controlling person or persons, of the institution the person is representing before the department; and

     (iii) the identity of other entities the person represents or has represented before the agency during the previous 24 months; and

     (2) develop rules to adjudicate claims in contested cases.

     (e) Rules governing the application of penalties shall include the following:

     (1) specific and objective criteria which describe the scope and severity of a contract violation which results in a recommendation for each specific penalty. Penalties must be appropriate to the violation, and the most severe financial penalties must be reserved for situations which create an immediate and serious threat to the health and safety of residents; "immediate and serious threat" means a situation in which there is a high probability that serious harm or injury to patients could occur at any time or already has occurred and may well occur again if patients are not protected effectively from the harm or if the threat is not removed;

     (2) a system to ensure standard and consistent application of penalties among surveyors and different areas of the state;

     (3) due process for nursing facilities providers, including an appeals procedure consistent with Chapter 2001, Government Code; and

     (4) per diem and/or minimum penalties. The department may by rule prescribe a minimum penalty period; however, once a facility gives the department notice that deficiencies have been corrected, if surveyors are unable to revisit the facility within five days and the deficiencies are later shown to be corrected, the per diem penalties cease as of the day the facility gave notice to the department or on the last day of the minimum penalty period established by the department, whichever is later.

     (f) To encourage facilities to provide the best possible care, the department shall develop an incentive program to recognize facilities providing the highest quality care to Medicaid residents.

     (g) Funds collected as a result of the imposition of penalties shall be applied to the protection of the health or property of residents of nursing facilities, including the cost of relocation of residents to other facilities and maintenance or operation of a facility pending correction of deficiencies or closure, or to incentive programs which recognize the highest quality care to residents who are entitled to Medicaid.

     (h) Medicaid nursing facilities shall also comply with state licensure rules, which may be more stringent than the requirements for certification. The department shall use appropriate civil, administrative, or criminal remedies authorized by state or federal law with respect to a facility that is in violation of a certification or licensing requirement.

     (i) Except as provided by Subsections (j) and (k), a department survey, complaint investigation, incident investigation, or survey report that documents that an institution has violated a standard for participation in the state Medicaid program, or the assessment of a monetary penalty by the department or the payment of a monetary penalty by the institution, is not admissible as evidence in a civil action to prove that the institution has committed a violation.

     (j) Subsection (i) does not:

     (1) apply in an enforcement action or related proceeding in which the state or an agency or political subdivision of the state is a party;

     (2) prohibit or limit the testimony of a department surveyor or investigator in a civil action; or

     (3) bar the admission into evidence in a civil action of a written finding, survey report, complaint investigation, incident investigation, or inspection report of the department that is offered:

     (A) to establish warning or notice to an institution of a relevant finding; or

     (B) under any rule or evidentiary predicate of the Texas Rules of Civil Evidence.

     (k) A department surveyor or investigator may testify in a civil action as to observations, factual findings, conclusions, or violations of requirements for licensure or for certification for participation in the state Medicaid program that were made in the discharge of official duties for the department, in accordance with the Texas Rules of Civil Evidence.

     (l) The department may not include as a reimbursable item to a nursing facility an administrative or civil penalty assessed against the facility under this chapter or under Chapter 242, Health and Safety Code.

     (m) Notwithstanding any provision of law to the contrary, the department shall terminate a nursing facility's provider agreement if the department has imposed required Category 2 or Category 3 remedies on the facility three times within a 24-month period unless the department makes an affirmative finding that good cause exists to waive this requirement to facilitate a change in ownership to protect residents of a facility. In this subsection, "Category 2 remedies" and "Category 3 remedies" have the meanings assigned by 42 C.F.R. Section 488.408.

     (n) An assessment of monetary penalties under this section is subject to arbitration under Subchapter J, Chapter 242, Health and Safety Code.

     (o) In any circumstance in which a nursing facility would otherwise be required to admit a resident transferred from another facility, because of an emergency or otherwise, the nursing facility may not admit a resident whose needs cannot be met through service from the facility's staff or in cooperation with community resources or other providers under contract. If a nursing facility refuses to admit a resident under this subsection, the nursing facility shall provide a written statement of the reasons for the refusal to the department within a period specified by department rule. A nursing facility that fails to provide the written statement, or that includes false or misleading information in the statement, is subject to monetary penalties assessed in accordance with this chapter.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 15, § 5.22, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1049, § 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1159, § 2.01, eff. Sept. 1, 1997.

     (a) After service in the department ends, a former member of the board or a former commissioner may not knowingly represent a person before an agency or court:

     (1) in a matter related to the medical assistance program in which the department or the federal government has a direct interest and in which the board member or commissioner participated personally while employed with the department; or

     (2) for two years after the date on which service ends in a matter related to the medical assistance program if the department or the federal government has a direct interest in the matter, the matter was pending during his last year of service to the department, and the matter was one for which the board member or commissioner had responsibility.

     (b) Subsection (a) of this section does not apply to a former board member or commissioner who holds one of the following positions and is acting in the scope of that position:

     (1) employee or officer of federal, state, or local government;

     (2) employee of a nonprofit hospital or medical research organization; or

     (3) employee of an accredited degree-granting college or university.

     (c) A current board member or commissioner may not knowingly participate in the course of his service in a matter related to the medical assistance program in which the department or the federal government has a direct interest and in which he, his spouse, minor child, or business partner has a substantial financial interest.

     (d) A business partner of a current board member or commissioner may not knowingly represent a person before an agency or court in a matter related to the medical assistance program:

     (1) in which the board member or commissioner participates or has participated personally and substantially; or

     (2) that is under the official responsibility of the board member or commissioner.

     (e) Past or present board members or commissioners are subject to a civil penalty of $5,000 for each violation of this section. A partner of a current board member or commissioner is subject to a civil penalty of $2,500 for each violation of this section. Each appearance before an agency or court constitutes a separate offense.

     (f) If it appears that this section has been violated, the department may request the attorney general to conduct a suit in the name of the State of Texas to enjoin the prohibited activity and to recover the penalty provided for in this section.

Added by Acts 1981, 67th Leg., p. 755, ch. 287, § 1, eff. Aug. 31, 1981.

     (a) The department by rule shall establish procedures for:

     (1) controlling the number of Medicaid beds in nursing facilities;

     (2) decertification of unused Medicaid beds in nursing facilities; and

     (3) reallocation of nursing home beds decertified under Subdivision (2) to other nursing facilities.

     (b) The procedures established under this section must take into account the occupancy rate of the nursing facility.

     (c) The department may exempt a nursing facility from the procedures established under this section if the facility:

     (1) is affiliated with a state-supported medical school;

     (2) is located on land owned or controlled by the state-supported medical school; and

     (3) serves as a teaching facility for physicians and related health care professionals.

Added by Acts 1997, 75th Leg., ch. 1159, § 2.02, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 1487, § 1, eff. June 19, 1999.

     (a) The department may include in a contract for the delivery of medical assistance by a home or community care provider a provision for monetary penalties to be assessed for a contract violation or any violation of home or community care requirements, as required by 42 U.S.C. Section 1396t(j).

     (b) The department shall develop rules governing the application of civil money penalties, including rules prescribing:

     (1) criteria that describe when and how a civil money penalty may be assessed and the amount of the penalty;

     (2) a system to ensure standard and consistent application of the penalties throughout the state; and

     (3) an administrative appeals process to adjudicate claims in contested cases in accordance with Chapter 2001, Government Code.

     (c) Rules adopted under this section must be designed to minimize the time between the identification of a violation and the final imposition of a penalty. Rules adopted under this section may authorize the imposition of a penalty that assesses and collects a monetary penalty, with interest, for a minimum penalty period and on a subsequent per diem basis.

     (d) A penalty must be appropriate to the violation. The department may assess incrementally more severe penalties for repeated or uncorrected violations.

     (e) The department shall review a penalized provider within 10 working days after the provider notifies the department that the deficiency that caused the imposition of the penalty has been corrected. If the department is unable to review the provider within that 10-working-day period, the penalty ceases on the earlier of the last day of the minimum penalty period or the date the provider gives notice to the department.

     (f) Money collected as a result of the imposition of penalties may be used for the protection of the health or property of an individual whose personal property was lost due to a failure of a home or community care provider to meet the requirements for participation as a provider of home or community care.

Added by Acts 1993, 73rd Leg., ch. 132, § 1, eff. Sept. 1, 1993. Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 1, 1995.

     (a) The board, on the recommendation of the commissioner, shall appoint a medical care advisory committee to advise the board and the department in developing and maintaining the medical assistance program and in making immediate and long-range plans for reaching the program's goal of providing access to high quality, comprehensive medical and health care services to medically indigent persons in the state. To ensure that qualified applicants receive services, the committee shall consider changes in the process the department uses to determine eligibility.

     (b) The board shall appoint the committee in compliance with the requirements of the federal agency administering medical assistance. The appointments shall provide for a balanced representation of the general public, providers, consumers, and other persons, state agencies, or groups with knowledge of and interest in the committee's field of work.

     (c) The department shall adopt rules for membership on the committee to provide for efficiency of operation, rotation, stability, and continuity.

     (d) The board, on the recommendation of the commissioner, may appoint regional and local medical care advisory committees and other advisory committees as considered necessary.

     (e) The board, on the recommendation of the commissioner, shall appoint a hospital payment advisory committee. The committee shall advise the board and the department on necessary changes in hospital payment methodologies for inpatient hospital prospective payments and on adjustments for disproportionate share hospitals that will ensure reasonable, adequate, and equitable payments to hospital providers and that will address the essential role of rural hospitals. The board shall appoint to the committee persons with knowledge of and an interest in hospital payment issues.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1987, 70th Leg., ch. 1052, § 2.01, eff. Sept. 1, 1987; Acts 1989, 71st Leg., ch. 1027, § 10, eff. Sept. 1, 1989.

     (a) The department's plan for administering medical assistance must include procedures for using health services administered by other state agencies pursuant to cooperative arrangements.

     (b) The department may enter into agreements with appropriate state agencies that will enable the department to implement Title XIX of the federal Social Security Act to provide medical assistance for individuals in institutions or in alternate care arrangements. The agreements must comply with federal law and rules. The department may make medical assistance payments in accordance with the agreements. The agreements are not subject to the Interagency Cooperation Act (Article 4413(32), Vernon's Texas Civil Statutes).

     (c) State agencies responsible for the administration or supervision of facilities to which medical assistance payments may be made under federal law shall enter into the agreements with the department and maintain compliance with the agreements so that the department may receive federal matching funds to support the medical assistance program.

     (d) The department may pay medical assistance to other facilities as required under federal law and rules.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

     (a) The department shall publish notice in the Texas Register of:

     (1) any attempt to obtain a waiver of federal regulations in the medical assistance program;

     (2) any attempt to obtain or the receipt of funding under Title XIX of the federal Social Security Act (42 U.S.C. Section 301 et seq.) for a pilot program; and

     (3) any amendment to the state medical assistance plan.

     (b) The notice must include the name and telephone number of a department employee who can provide information relating to the matter for which notice was published under this section.

     (c) The department shall provide to any requestor information relating to a matter for which notice was published, including the effect and cost of the change, any possible cost savings, the criteria for receiving services, and the number of people to be served.

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.

     (a) The department shall provide medical assistance to all persons who receive financial assistance from the state under Chapter 31 of this code and to other related groups of persons if the provision of medical assistance to those persons is required by federal law and rules as a condition for obtaining federal matching funds for the support of the medical assistance program.

     (b) The department may provide medical assistance to other persons who are financially unable to meet the cost of medical services if federal matching funds are available for that purpose. The department shall adopt rules governing the eligibility of those persons for the services.

     (c) The department shall establish standards governing the amount, duration, and scope of services provided under the medical assistance program. The standards may not be lower than the minimum standards required by federal law and rule as a condition for obtaining federal matching funds for support of the program, and may not be lower than the standards in effect on August 27, 1967. Standards or payments for the vendor drug program may not be lower than those in effect on January 1, 1973.

     (d) The department may establish standards that increase the amount, duration, and scope of the services provided only if federal matching funds are available for the optional services and payments and if the department determines that the increase is feasible and within the limits of appropriated funds. The department may establish and maintain priorities for the provision of the optional medical services.

     (e) The department may not authorize the provision of any service to any person under the program unless federal matching funds are available to pay the cost of the service.

     (f) The department shall set the income eligibility cap for persons qualifying for nursing home care at an amount that is not less than $1,104 and that does not exceed the highest income for which federal matching funds are payable. The department shall set the cap at a higher amount than the minimum provided by this subsection if appropriations made by the legislature for a fiscal year will finance benefits at the higher cap for at least the same number of recipients of the benefits during that year as were served during the preceding fiscal year, as estimated by the department. In setting an income eligibility cap under this subsection, the department shall consider the cost of the adjustment required by Subsection (g) of this section.

     (g) During a fiscal year for which the cap described by Subsection (f) of this section has been set, the department shall adjust the cap in accordance with any percentage change in the amount of benefits being paid to social security recipients during the year.

     (h) Subject to the amount of the cap set as provided by Subsections (f) and (g) of this section, and to the extent permitted by federal law, the income eligibility cap for community care for aged and disabled persons shall be the same as the income eligibility cap for nursing home care. The department shall ensure that the eligibility requirements for persons receiving other services under the medical assistance program are not affected.

     (i) The department in its adoption of rules shall establish a medically needy program that serves pregnant women, children, and caretakers who have high medical expenses.

     (j) The department in its adoption of rules shall in fiscal year 1990 restore three percent of the 10 percent reduction in provider reimbursement.

     (k) The department in its adoption of rules shall in fiscal year 1991 restore 4.5 percent of the 10 percent reduction in provider reimbursement.

     (l) The department shall set the income eligibility cap for medical assistance for pregnant women and infants up to age one at not less than 130 percent of the federal poverty guidelines.

     (m) The department shall set the income eligibility cap for medical assistance for children up to age four at not less than 100 percent of the federal poverty guidelines for state fiscal year 1990 and for children up to age six for state fiscal year 1991.

     (n) The department in its adoption of rules and standards governing the scope of hospital and long-term services shall authorize the providing of respite care by hospitals.

     (o) The department, in its rules and standards governing the scope of hospital and long-term services, shall establish a swing bed program in accordance with federal regulations to provide reimbursement for skilled nursing patients who are served in hospital settings provided that the length of stay is limited to 30 days per year and the hospital is located in a county with a population of 100,000 or less. If the swing beds are used for more than one 30-day length of stay per year, per patient, the hospital must comply with the Minimum Licensing Standards as mandated by Chapter 242, Health and Safety Code, and the Medicaid standards for nursing home certification, as promulgated by the department.

     (p) The department shall provide home respiratory therapy services for ventilator-dependent persons to the extent permitted by federal law.

     (q) The department shall provide physical therapy services.

     (r) The department, from funds otherwise appropriated to the department for the early and periodic screening, diagnosis, and treatment program, shall provide to a child who is 14 years of age or younger, permanent molar sealants as dental service under that program as follows:

     (1) sealant shall be applied only to the occlusal buccal and lingual pits and fissures of a permanent molar within four years of its eruption;

     (2) teeth to be sealed must be free of proximal caries and free of previous restorations on the surface to be sealed;

     (3) if a second molar is the prime tooth to be sealed, a non-restored first molar may be sealed at the same sitting, if the fee for the first molar sealing is no more than half the usual sealant fee;

     (4) the sealing of premolars and primary molars will not be reimbursed; and

     (5) replacement sealants will not be reimbursed.

     (s) The department, in its rules governing the early and periodic screening, diagnosis, and treatment program, shall:

     (1) revise the periodicity schedule to allow for periodic visits at least as often as the frequency recommended by the American Academy of Pediatrics and allow for interperiodic screens without prior approval when there are indications that it is medically necessary; and

     (2) require, as a condition for eligibility for reimbursement under the program for the cost of services provided at a visit or screening, that a child younger than 15 years of age be accompanied at the visit or screening by:

     (A) the child's parent or guardian; or

     (B) another adult, including an adult related to the child, authorized by the child's parent or guardian to accompany the child.

     (s–1) Subsection (s)(2) does not apply to services provided by a school health clinic, Head Start program, or child-care facility, as defined by Section 42.002, if the clinic, program, or facility:

     (1) obtains written consent to the services from the child's parent or guardian within the one-year period preceding the date on which the services are provided, and that consent has not been revoked; and

     (2) encourages parental involvement in and management of the health care of children receiving services from the clinic, program, or facility.

     (t) The department by rule shall require a physician, nursing facility, health care provider, or other responsible party to obtain authorization from the department or a person authorized to act on behalf of the department before an ambulance is used to transport a recipient of medical assistance under this chapter in circumstances not involving an emergency. The rules must provide that:

     (1) except as provided by Subdivision (3), a request for authorization must be evaluated based on the recipient's medical needs and may be granted for a length of time appropriate to the recipient's medical condition;

     (2) except as provided by Subdivision (3), a response to a request for authorization must be made not later than 48 hours after receipt of the request;

     (3) a request for authorization must be immediately granted and must be effective for a period of 180 days from the date of issuance if the request includes a written statement from a physician that:

     (A) states that alternative means of transporting the recipient are contraindicated; and

     (B) is dated not earlier than the 60th day before the date on which the request for authorization is made; and

     (4) a person denied payment for services rendered because of failure to obtain prior authorization or because a request for prior authorization was denied is entitled to appeal the denial of payment to the department.

     (u) The department by rule shall require a health care provider who arranges for durable medical equipment for a child who receives medical assistance under this chapter to:

     (1) ensure that the child receives the equipment prescribed, the equipment fits properly, if applicable, and the child or the child's parent or guardian, as appropriate considering the age of the child, receives instruction regarding the equipment's use; and

     (2) maintain a record of compliance with the requirements of Subdivision (1) in an appropriate location.

Text of subsec. (v) as added by Acts 1999, 76th Leg., ch. 1333, § 1

     (v) The department is authorized to increase the personal needs allowance above the minimum of $30 a month, subject to the availability of funds, for a resident of a convalescent or nursing home or related institution licensed under Chapter 242, Health and Safety Code, personal care facility, ICF-MR facility, or other similar long-term care facility who receives medical assistance. The department may send the personal needs allowance directly to a resident who receives Supplemental Security Income (SSI) (42 U.S.C. Section 1381 et seq.). This subsection does not apply to a resident who is participating in a medical assistance waiver program administered by the department.

Text of subsec. (v) as added by Acts 1999, 76th Leg., ch. 1347, § 3

     (v) The department by rule shall provide a screening test for hearing loss in accordance with Chapter 47, Health and Safety Code, and any necessary diagnostic follow-up care related to the screening test to a child younger than 30 days old who receives medical assistance.

Acts 1979, 66th Leg., p. 2350, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1989, 71st Leg., ch. 1027, § 11, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1085, § 3, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1107, § 1, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1219, § 1, eff. Sept. 1, 1989.

Amended by Acts 1990, 71st Leg., 6th C.S., ch. 12, § 2(11) to (13), eff. Sept. 6, 1990; Acts 1991, 72nd Leg., ch. 690, § 1, eff. Aug. 26, 1991; Acts 1995, 74th Leg., ch. 6, § 3, eff. March 23, 1995; Acts 1997, 75th Leg., ch. 1153, §§ 2.01(a), 2.02(a), eff. June 20, 1997; Acts 1999, 76th Leg., ch. 766, § 1, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1333, § 1, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1347, § 3, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1505, § 1.06, eff. Sept. 1, 1999.

     The department shall, at least biennially, review the feasibility of requesting a waiver for the elderly under Section 1915(c), federal Social Security Act (42 U.S.C. Section 1396n), if the reimbursement rates for nursing homes under the medical assistance program have increased since the preceding review.

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.

     To the extent possible, the department shall verify an applicant's residential address at the time the application for medical assistance is filed.

Added by Acts 1999, 76th Leg., ch. 1289, § 1, eff. Sept. 1, 1999.

     (a) The department, in cooperation with the United States Social Security Administration, shall periodically review the eligibility of a recipient of medical assistance who is eligible on the basis of the recipient's eligibility for Supplemental Security Income (SSI) benefits under 42 U.S.C. Section 1381 et seq., as amended.

     (b) In reviewing the eligibility of a recipient as required by Subsection (a), the department shall ensure that only recipients who reside in this state and who continue to be eligible for Supplemental Security Income (SSI) benefits under 42 U.S.C. Section 1381 et seq., as amended, remain eligible for medical assistance.

Added by Acts 1999, 76th Leg., ch. 1289, § 1, eff. Sept. 1, 1999.

     (a) At the request of the commissioners court of a county in which not more than two nursing facilities are certified to participate in the state Medicaid program, and subject to Subsection (d), the department may contract for additional nursing home beds under the state Medicaid program in the county without regard to the occupancy rate of available Medicaid beds.

     (b) A commissioners court that intends to make a request under Subsection (a) shall publish notice of its intent in the Texas Register and in a newspaper of general circulation in the county. The notice must request:

     (1) comments on whether the request should be made; and

     (2) proposals from persons interested in providing additional Medicaid beds in the county, including persons providing Medicaid beds in a nursing facility with a high occupancy rate.

     (c) A commissioners court shall determine whether to proceed with a request after considering all comments and proposals received in response to the notices provided under Subsection (b). If the commissioners court proceeds with the request, the court may recommend that the department contract with a specific nursing facility that submitted a proposal. In determining whether to proceed with the request and whether to recommend a specific nursing facility, the commissioners court shall consider:

     (1) the demographic and economic needs of the county;

     (2) the quality of existing nursing facility services under the state Medicaid program in the county;

     (3) the quality of the proposals submitted; and

     (4) the degree of community support for additional nursing facility services.

     (d) The department may not contract under this section for more than 120 additional nursing home beds per county per year and may not exceed 500 additional nursing home beds statewide in a calendar year.

Added by Acts 1997, 75th Leg., ch. 555, § 1, eff. Sept. 1, 1997. Renumbered from § 32.0246 by Acts 1999, 76th Leg., ch. 62, § 19.01(73), eff. Sept. 1, 1999.

     The department shall waive for a nursing facility a restriction imposed by state law on the authority to contract under the state Medicaid program for nursing home beds based on the percentage of beds that are occupied in a geographical area if the facility:

     (1) is affiliated with a medical school operated by the state;

     (2) is participating in a research program for the care and treatment of persons with Alzheimer's disease; and

     (3) is designed to separate and treat Alzheimer's disease by stage or functional level.

Added by Acts 1995, 74th Leg., ch. 841, § 1, eff. Aug. 28, 1995.

     (a) The Texas Department of Human Services, in cooperation with all appropriate state and federal agencies and with the advisory committee established in Subsection (b), shall develop and implement a pilot program for the treatment of individuals diagnosed with Alzheimer's disease. The pilot program shall:

     (1) be operated in one rural county and one urban county contiguous to the rural county;

     (2) provide a continuum of care and comprehensive case management, address gaps in services, and address the special needs of Alzheimer's patients; and

     (3) develop and implement counseling, education, and support services for the caregivers and family members of Alzheimer's patients.

     (b) The Texas Department of Human Services shall appoint an advisory committee to assist the department in developing and implementing the pilot program. The advisory committee shall be composed of:

     (1) four representatives from groups that advocate for Alzheimer's patients;

     (2) one representative from an institution of higher education;

     (3) one clinician;

     (4) one representative from the Texas Department on Aging;

     (5) one representative from the Texas Department of Human Services; and

     (6) one representative from the Texas Department of Mental Health and Mental Retardation.

     (c) The pilot program may not make eligible for medical assistance any individual not otherwise eligible for medical assistance.

     (d) The Texas Department of Human Services may seek and accept a gift, grant, or donation from any person for purposes of developing and implementing the pilot program provided that the person does not have a contested case pending before any agency participating in the pilot program.

     (e) Not later than January 15, 1999, the Texas Department of Human Services shall submit to the legislature a report concerning the effectiveness of the pilot program.

Added by Acts 1997, 75th Leg., ch. 415, § 1, eff. Sept. 1, 1997.

     (a) A recipient of benefits under Chapter 31 of this code or supplemental security income from the federal government is automatically eligible for medical assistance, and an application for benefits under these programs constitutes an application for medical assistance.

     (b) The department shall prescribe application forms for persons who are not recipients of benefits under Chapter 31 of this code or supplemental security income from the federal government and shall adopt rules for processing the applications.

     (c) The department shall inform applicants for nursing home care of any community services which might be available under the community care for the aged and disabled program.

Acts 1979, 66th Leg., p. 2350, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1989, 71st Leg., ch. 1085, § 5, eff. Sept. 1, 1989.

     (a) The department shall establish and implement procedures under which the department automatically reviews a child's eligibility for medical assistance if:

     (1) the child originally establishes eligibility for medical assistance on the basis of receipt of financial assistance under Chapter 31, as provided by Section 32.025(a); and

     (2) that receipt of financial assistance under Chapter 31 ceases.

     (b) If the review required by this section indicates that the child may be eligible for medical assistance on a basis other than receipt of financial assistance under Chapter 31, the department may provide for provisional eligibility for medical assistance for the child pending a recertification review. The provisional eligibility period authorized by this subsection may not exceed one month.

     (c) In addition to the review required by this section, the department shall also promote continued medical assistance for a child described by Subsection (a) through:

     (1) revising client education and notification policies relating to a child's eligibility for medical assistance; and

     (2) providing specific notification of a child's potential eligibility for medical assistance to the child's parent or other caretaker at the time the parent or caretaker is notified of:

     (A) a scheduled eligibility recertification review; or

     (B) the termination of financial assistance.

Added by Acts 1999, 76th Leg., ch. 704, § 1, eff. June 18, 1999.

     (a) The state shall provide transitional medical assistance, in accordance with state rules and federal law, to a person who was receiving financial assistance under Chapter 31 but is no longer eligible to receive the assistance because:

     (1) the person's household income has increased; or

     (2) the person has exhausted the person's benefits under Section 31.0065.

     (b) Except as provided by Section 31.012(c), the state may provide the medical assistance only until the earlier of:

     (1) the end of the applicable period prescribed by Section 31.0065 for the provision of transitional benefits; or

     (2) the first anniversary of the date on which the person becomes ineligible for financial assistance because of increased household income.

Added by Acts 1995, 74th Leg., ch. 655, § 3.03, eff. Sept. 1, 1995.

     (a) The department shall promulgate rules for determining and certifying a person's eligibility and need for medical assistance.

     (b) The department shall promulgate rules to provide for determination and certification of presumptive eligibility for any pregnant woman who applies for Medicaid and who meets the basic eligibility requirements under Title XIX of the federal Social Security Act.

     (c) Medical assistance payments may not be made on a person's behalf until the person's eligibility and need for medical assistance have been certified in accordance with the department's rules.

Acts 1979, 66th Leg., p. 2350, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1989, 71st Leg., ch. 1215, § 1, eff. Sept. 1, 1989.

     (a) Except as provided by Subsections (f), (g), and (h), a recipient of medical assistance authorized in this chapter may select any provider authorized by the department to provide medical assistance.

     (b) The department shall assure that a recipient of medical assistance under this chapter may select a licensed podiatrist to perform any foot health care service or procedure covered under the medical assistance program if the podiatrist is authorized by law to perform the service or procedure. This subsection shall be liberally construed.

     (c) A recipient of medical assistance that is authorized in this chapter may select for the provision of respiratory care therapy any person authorized to practice respiratory care under Chapter 829, Acts of the 69th Legislature, Regular Session, 1985 (Article 4512l, Vernon's Texas Civil Statutes). The department shall provide reimbursement to a person authorized to practice respiratory care under that Act, a licensed health care entity, or a physician licensed to practice medicine under the laws of this state.

     (d) The department shall permit a recipient of medical assistance under this chapter to receive services relating to physical therapy from any person authorized to practice physical therapy under Chapter 836, Acts of the 62nd Legislature, Regular Session, 1971 (Article 4512e, Vernon's Texas Civil Statutes).

     (e) The department shall assure that a recipient of medical assistance under this chapter may select a licensed psychologist or a licensed marriage and family therapist, as defined by Section 2, Licensed Marriage and Family Therapist Act (Article 4512c–1, Vernon's Texas Civil Statutes), to perform any health care service or procedure covered under the medical assistance program if the selected psychologist or marriage and family therapist is authorized by law to perform the service or procedure. This subsection shall be liberally construed.

     (f) The department by rule shall develop a system of selective contracting with health care providers for the provision of nonemergency inpatient hospital services to a recipient of medical assistance under this chapter. In implementing this subsection, the department shall:

     (1) seek input from consumer representatives and from representatives of hospitals licensed under Chapter 241, Health and Safety Code, and from organizations representing those hospitals; and

     (2) ensure that providers selected under the system meet the needs of a recipient of medical assistance under this chapter.

     (g) The process to select a hospital must afford each disproportionate share hospital an opportunity to negotiate for a contract. The process will take into account the special circumstances of disproportionate share hospitals when evaluating proposals.

     (h) A proposal or bid submitted by a hospital and any work papers, cost reports, or other financial data used to prepare the proposal or bid shall be confidential and not subject to required disclosure by the department or the hospital under any other statute until the executed contracts have been awarded.

     (i) In its establishment of provider criteria for hospitals, home health providers, or hospice providers, the department shall accept licensure by the Texas Department of Health or certification by the Medicare program, Title XVIII of the Social Security Act (42 U.S.C. Section 1395 et seq.).

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1989, 71st Leg., ch. 1085, § 4, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1173, § 1, eff. Aug. 28, 1989.

Amended by Acts 1990, 71st Leg., 6th C.S., ch. 12, § 2(14), eff. Sept. 6, 1990; Acts 1993, 73rd Leg., ch. 390, §§ 1, 2, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 965, § 57, eff. June 16, 1995; Acts 1999, 76th Leg., ch. 930, § 1, eff. Jan. 1, 2000.

     (a) The department shall adopt reasonable rules and standards governing the determination of fees, charges, and rates for medical assistance payments.

     (b) The fee, charge, or rate for a professional service is the usual and customary fee, charge, or rate that prevails in the community.

     (c) The fee, charge, or rate for other medical assistance is the usual and customary fee, charge, or rate that prevails in the community unless the payment is limited by state or federal law.

     (d) The department in its adoption of reasonable rules and standards governing the determination of rates paid for inpatient hospital services on a prospective payment basis shall:

     (1) assure that the payment rates are reasonable and adequate to meet the costs incurred by the hospital in rendering services to Medicaid recipients;

     (2) assure that the prospective payment methodology for hospital services sets the hospital-specific standardized amount at a minimum level of $1,600; and

     (3) assure that the adjustment in payment rates for hospital services furnished by disproportionate share hospitals takes into account the essential role of rural hospitals in providing access to hospital services to medically indigent persons in rural areas of the state.

     (e) The department in its adoption of reasonable rules and standards governing the determination of rates paid for services provided by a federally qualified health center, as defined by 42 U.S.C. Section 1396d(l)(2)(B), shall assure that a center is reimbursed for 100 percent of reasonable costs incurred by the center in rendering services to Medicaid recipients.

     (f) The department in its adoption of reasonable rules and standards governing the determination of rates paid for services provided by a rural health clinic, as defined by 42 U.S.C. Section 1396d(l)(1), shall assure that a clinic is reimbursed for 100 percent of reasonable costs incurred by the clinic in rendering services to Medicaid recipients.

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1989, 71st Leg., ch. 1219, § 2, eff. Sept. 1, 1989.

Amended by Acts 1999, 76th Leg., ch. 1411, § 1.16, eff. Sept. 1, 1999.

     (a) The department shall by rule describe the process used to determine payment rates for medical assistance and shall notify providers, consumers, the Legislative Budget Board, and the governor's office for budget and planning of that process.

     (b) The department shall adopt rules relating to payment rates that include:

     (1) a description of the process used to determine payment rates;

     (2) a description of each cost of living index used in calculating inflation rates and the procedure for determining the level of inflation used in the department's calculations;

     (3) the criteria for desk audits;

     (4) the procedure for notifying providers of exclusions and adjustments to reported expenses, if notification is requested; and

     (5) a method of adjusting rates if new legislation, regulations, or economic factors affect costs.

     (c) The department shall include in the Title XIX State Medicaid Plan submitted to the federal government for approval the procedures for making available to the public the data and methodology used in establishing payment rates.

     (d) The procedures for adopting rules under this section shall be governed by Chapter 2001, Government Code.

     (e) An interested party may appeal an action taken by the department under this section, and an appeal of such action shall be governed by the procedures for a contested case hearing under Chapter 2001, Government Code. The filing of an appeal under this section shall not stay the implementation of payment rates adopted by the department in accordance with its rules.

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.

Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 1, 1995.

     (a) The department shall hold a public hearing to allow interested persons to present comments relating to proposed payment rates for medical assistance.

     (b) The department shall provide notice of each hearing to the public.

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.

     (a) The department may prescribe a method of payment for medical assistance claims by establishing a direct vendor payment program that is administered by the department, or by an insurance plan, a hospital or medical service plan, or any other health service plan authorized to do business in the state, or by a combination of those plans.

     (b) The department may use any fiscal intermediary, method of payment, or combination of methods it finds most satisfactory and economical. The department may make whatever changes it finds necessary from time to time to administer the program in an economical and equitable manner consistent with simplicity of administration and the best interest of the recipients of medical assistance.

     (c) If the department elects to make direct vendor payments, the payments shall be made by vouchers and warrants drawn by the comptroller on the proper account. The department shall furnish the comptroller with a list of those vendors entitled to payments and the amounts to which each is entitled. When the warrants are drawn, they must be delivered to the department, which shall supervise the delivery to vendors.

     (d) If at any time state funds are not available to fully pay all claims for medical assistance, the board shall prorate the claims.

     (e) The department or its designee must notify providers of health care services in clear and concise language of the status of their claims on any claim not paid or denied within 30 days of receipt by the payor.

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1985, 69th Leg., ch. 264, § 12, eff. Aug. 26, 1985.

Amended by Acts 1993, 73rd Leg., ch. 390, § 3, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 6, § 4, eff. March 23, 1995.

     (a) The medical assistance fund is a special fund in the treasury and constitutes a separate account. The fund may be expended only for the purpose of carrying out the provisions of this chapter.

     (b) When necessary the department may request the transfer of money appropriated for financial assistance to the medical assistance fund. The transfer shall be requested and made in the manner authorized in the General Appropriations Act and in accordance with the department's rules.

     (c) The disproportionate share fund is a separate account that provides reimbursement each year to hospitals that render a high volume of services to medically indigent persons in the state. Payments from the fund shall be not less than $5 million annually in state funds in excess of the amounts contained in the general appropriations bill as introduced for the 1990–1991 biennium.

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1985, 69th Leg., ch. 264, § 13, eff. Aug. 26, 1985; Acts 1989, 71st Leg., ch. 1219, § 3, eff. Sept. 1, 1989.

Amended by Acts 1995, 74th Leg., ch. 6, § 5, eff. March 23, 1995.

     (a) The department may accept federal funds for the support of the medical assistance program and may expend the funds in the manner prescribed by this chapter or other laws. The expenditures must be made in accordance with appropriate agreements between the state and the federal government.

     (b) The department may administer and expend state funds appropriated for the program in accordance with its rules and the provisions of this chapter.

     (c) The amount of state funds spent for medical assistance on behalf of a qualified individual may not exceed the amount that is matchable with federal funds, and the total amount of state funds spent for all medical assistance on behalf of all qualified individuals may not exceed the amount that is matchable with federal funds.

     (d) The board is empowered and authorized to pursue the use of local funds as part of the state share under the Medicaid program as provided by federal law and regulation.

     (e) Public hospitals, including hospitals owned, operated, or leased by a governmental entity, including a municipality, county, hospital district, or this state, and specifically including a state teaching hospital, may transfer funds to the department for use as state share under the Medicaid disproportionate share program.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1989, 71st Leg., ch. 1215, § 4, eff. Sept. 1, 1989.

Amended by Acts 1995, 74th Leg., ch. 6, § 6, eff. March 23, 1995.

     The department shall require a recipient of medical assistance to exhaust drug benefits available under the medical assistance program before reimbursing the recipient, pharmacist, or other health care provider for drugs purchased by or on behalf of the recipient under the Kidney Health Care Program or the Chronically Ill and Disabled Children's Services Program.

Added by Acts 1999, 76th Leg., ch. 669, § 1, eff. June 18, 1999.

     (a) The department shall establish procedures and formulas for the allocation of federal medical assistance funds that are directed to be used to support graduate medical education in connection with the medical assistance program.

     (b) The department shall allocate the funds in the manner the department determines most effectively and equitably achieves the purposes for which those federal funds are received, consistent with the needs of this state for graduate medical education and the training of resident physicians in accredited residency programs in appropriate fields and specialties, taking into account other money available to support graduate medical education. In determining the needs of this state for graduate medical education, the department shall give emphasis to graduate medical education in primary care specialties.

     (c) The department shall consult with the Texas Higher Education Coordinating Board before adopting or revising a formula under this section. At the request of the department, the coordinating board shall provide the department with any information the board possesses to assist the department in administering this section.

     (d) The department shall reimburse each teaching hospital under this section using the following formula:

R = GME/P x WNP x MD/TD

where:

     "R" is the annual amount to be reimbursed;

     "GME" is the hospital's annual cost of training resident physicians for the fiscal year;

     "P" is the number of resident physicians for the fiscal year;

     "WNP" is the weighted number of full-time equivalent resident physicians trained by the hospital during the fiscal year and reported on its Medicaid cost report, adjusted to count each full-time equivalent resident in primary care as 1.2 residents and each other full-time equivalent resident as 1.0 residents;

     "MD" means the number of patient days for the hospital for the fiscal year that are attributable to Medicaid patients; and

     "TD" means the total number of patient days for the hospital for the fiscal year.

     (d–1) Expired.

     (e) To determine a teaching hospital's average annual cost for training residents for purposes of this section, the department may use the most recent Medicaid cost report submitted to the department by the hospital, or may establish alternative procedures to determine that cost.

     (f) The department shall make payments under this section in equal monthly installments, except that the department may make adjustments in any payment or make additional payments as necessary to ensure that each teaching hospital or other entity receives the appropriate annual amount under this section.

     (g) For purposes of this section, primary care means a field or specialty described by Section 58.008(a), Education Code.

     (h) Notwithstanding Subsections (d) and (e), each teaching hospital that received federal medical assistance funds for training residents in the state fiscal year ending August 31, 1995, shall receive an amount under this section that is:

     (1) for the state fiscal year ending August 31, 1999, not less than 90 percent of the amount of those funds the hospital would have received in that fiscal year under the formulas used to determine the amount of federal medical assistance funds for training residents the hospital received in that 1995 fiscal year;

     (2) for the state fiscal year ending August 31, 2000, not less than 85 percent of the amount of those funds the hospital would have received in that fiscal year under the formulas used to determine the amount of federal medical assistance funds for training residents the hospital received in that 1995 fiscal year;

     (3) for the state fiscal year ending August 31, 2001, not less than 80 percent of the amount of those funds the hospital would have received in that fiscal year under the formulas used to determine the amount of federal medical assistance funds for training residents the hospital received in that 1995 fiscal year; and

     (4) for the state fiscal year ending August 31, 2002, not less than 75 percent of the amount of those funds the hospital would have received in that fiscal year under the formulas used to determine the amount of federal medical assistance funds for training residents the hospital received in that 1995 fiscal year.

Added by Acts 1997, 75th Leg., ch. 252, § 1, eff. Sept. 1, 1997.

     The department shall adopt reasonable rules for minimizing the opportunity for fraud, for establishing and maintaining methods for detecting and identifying situations in which a question of fraud in the program may exist, and for referring cases where fraud appears to exist to the appropriate law enforcement agencies for prosecution.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

     (a) The department by rule may require each provider of medical assistance in a provider type that has demonstrated significant potential for fraud or abuse to file with the department a surety bond in a reasonable amount.

     (b) The bond must be payable to the department to compensate the department for damages resulting from or penalties or fines imposed in connection with an act of fraud or abuse committed by the provider under the medical assistance program.

Added by Acts 1997, 75th Leg., ch. 1153, § 2.03, eff. Sept. 1, 1997.

     (a) The department 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.

     (b) The department by rule shall establish criteria for revoking a provider's enrollment or denying a person's application to enroll as a provider under the medical assistance program based on the results of a criminal history check.

Added by Acts 1997, 75th Leg., ch. 1153, § 2.04(a), eff. Sept. 1, 1997.

     (a) The filing of an application for or receipt of medical assistance constitutes an assignment of the applicant's or recipient's right of recovery from:

     (1) personal insurance;

     (2) other sources; or

     (3) another person for personal injury caused by the other person's negligence or wrong.

     (b) A person who applies for or receives medical assistance shall inform the department, at the time of application or at any time during eligibility and receipt of services, of any unsettled tort claim which may affect medical needs and of any private accident or sickness insurance coverage that is or may become available. A recipient shall inform the department of any injury requiring medical attention that is caused by the act or failure to act of some other person. An applicant or a recipient shall inform the department as required by this subsection within 60 days of the date the person learns of his or her insurance coverage, tort claim, or potential cause of action. An applicant or a recipient who knowingly and intentionally fails to disclose the information required by this subsection commits a Class C misdemeanor.

     (c) A claim for damages for personal injury does not constitute grounds for denying or discontinuing assistance under this chapter.

     (d) A separate and distinct cause of action in favor of the state is hereby created, and the department may, without written consent, take direct civil action in any court of competent jurisdiction. A suit brought under this section need not be ancillary to or dependent upon any other action.

     (e) The department's right of recovery is limited to the amount of the cost of medical care services paid by the department. Other subrogation rights granted under this section are limited to the cost of the services provided.

     (f) The commissioner may waive the department's right of recovery in whole or in part when the commissioner finds that enforcement would tend to defeat the purpose of public assistance.

     (g) The department may designate an agent to collect funds the department has a right to recover from third parties under this section. The department shall use any funds collected to pay costs of administering the medical assistance program.

     (h) The department may adopt rules for the enforcement of its right of recovery.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1979, 66th Leg., p. 2436, ch. 842, art. 2, § 10, eff. Sept. 1, 1979.

     (a) The department has authority to adjudicate claims of contested cases in accordance with Chapter 2001, Government Code. When the department intends to cancel its contract or impose monetary penalties under a contract with a person providing medical assistance, the department shall give reasonable notice and an opportunity for hearing if one is requested. The department shall adopt rules consistent with Chapter 2001, Government Code to implement this section, and hearings under this section are contested cases under that act.

     (b) The department may not terminate a contract during the pendency of a hearing under this section. The department may withhold payments during the pendency of a hearing, but the department shall pay the withheld payments and resume contract payments if the final determination is favorable to the contractor. The department's authority to withhold payments shall be established by contract.

     (c) The section does not apply if federal matching funds are not available to pay the facility whose contract is being cancelled. If federal matching funds cannot be used, no state funds may be used to pay the facility.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 1979. Amended by Acts 1987, 70th Leg., ch. 1052, § 2.02, eff. Sept. 1, 1987.

Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 15, § 5.22, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1159, § 2.03, eff. Sept. 1, 1997.

     The provisions of Section 31.034 of this code governing the right of appeal of an applicant for or recipient of financial assistance authorized under Chapter 31 of this code also apply to applicants for medical assistance authorized in this chapter.

Acts 1979, 66th Leg., p. 2353, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

     (a) Neither medical assistance nor payments to providers of medical assistance under this chapter are transferable or assignable at law or in equity.

     (b) No money paid or payable under the provisions of this chapter is subject to execution, levy, attachment, garnishment, or any other legal process, or the operation of any insolvency law.

     (c) This section does not apply to the extent that it conflicts with the Social Security Act (42 U.S.C. Section 1396a(a)(32)).

Acts 1979, 66th Leg., p. 2353, ch. 842, art. 1, § 1, eff. Sept. 1, 1979.

Amended by Acts 1997, 75th Leg., ch. 216, § 1, eff. May 23, 1997.

     (a) The department may receive directly from an insurance company any payments to which the department is entitled under Article 3.76, Insurance Code.

     (b) The department shall adopt rules to implement this section, including rules establishing procedures relating to:

     (1) notification to the department that a child receiving benefits under Chapter 31 or Chapter 32 of this code is covered by an insurance policy under which the department is eligible to receive direct payments;

     (2) claims made by the department to receive payments under Subsection (a) of this section;

     (3) notification to the department of any change in the status of the child or the parent; and

     (4) notification to the insurance company that the department is to receive payments under Subsection (a) of this section.

     (c) Department rules relating to the notice prescribed by Subsection (b)(4) of this section must require the notice to be attached to the claim for insurance benefits when the claim is first submitted to the insurance company.

Added by Acts 1987, 70th Leg., ch. 1052, § 2.03, eff. Sept. 1, 1987.

     (a) The board shall set the payment rates for ICF-MR facilities at least annually.

     (b) The board shall adopt by rule the methodology used by the department in setting payment rates for ICF-MR facilities. The methodology shall clearly define the procedures and methods used in projecting the costs of economic and efficient facilities and the procedures and methods used in setting payment rates that reasonably reimburse facilities at each level of care and in each class of providers, including size categories.

     (c) The board shall ensure that the methodology used in projecting costs and setting payment rates and its implementation is the same for state-operated ICF-MR facilities and for private ICF-MR facilities. Methods used to project costs, including those involving the handling of gifts, grants, and donations, upper limits on facility and administrative costs, occupancy adjustments, and in assessing the cost impact of new or revised requirements, must be the same for state-operated and private facilities.

     (d) To the extent allowed by federal law, any differences in methodology or its implementation between state-operated facilities and private facilities must be stated explicitly in the rule, must be related to actual differences in the nature of the expenses incurred by the class of providers, including size categories, and must not favor state-operated facilities in setting payment rates. When the proposed rule or amendments to the rule are published for public comment, the commissioner must certify that any differences in methodology between classes of providers, including size categories, are necessitated by cost structure and will not favor state-operated facilities in the setting of payment rates.

Added by Acts 1989, 71st Leg., ch. 1141, § 11(a), eff. Sept. 1, 1989.

     (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.

     (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; 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) A person found liable for a violation under Subsection (c) that resulted 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 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. This subsection does not apply to a person who operates a nursing facility or an ICF-MR facility.

     (v) 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(1), a disabled person, as defined by Section 48.002(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. This subsection does not apply to a person who operates a nursing facility or an ICF-MR facility.

Added by Acts 1987, 70th Leg., ch. 1052, § 2.04, eff. Sept. 1, 1987.

Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(49), (53), eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 1153, § 3.01(a), eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 12, §§ 1, 2, eff. Sept. 1, 1999.

     (a) A woman receiving medical assistance in the form of prenatal care, child delivery care, and obstetrical care related to prenatal care and child delivery care shall identify her husband, or, if unmarried, shall provide the name and last known address of the alleged father of the unborn child.

     (b) If the woman receiving medical assistance is under 18 years of age and resides with one or both parents, the parents shall cooperate in identifying the husband or the alleged father.

Added by Acts 1989, 71st Leg., 1st C.S., ch. 25, § 37, eff. Jan. 1, 1990.

     (a) Beginning September 1, 1991, the department in consultation with the Medicaid analysis and cost control unit of the Legislative Budget Board shall initiate the planning for a Medicaid managed care demonstration project.

     (b) The department shall request necessary waivers and approvals from the federal Health Care Financing Administration (HCFA) and other appropriate entities that will enable the state to begin implementation of the demonstration program not later than January 1, 1993.

     (c) On or before January 1, 1995, the department shall evaluate the demonstration programs using specifications developed by the federal Health Care Financing Administration.

     (d) If the results of the evaluation indicate that the program is cost-effective, the department shall incorporate a request for funding for the continuation or expansion of the managed care approach in its Medicaid program in the department's budget request for the 1996–1997 biennium.

Added by Acts 1991, 72nd Leg., 1st C.S., ch. 15, § 5.02, eff. Sept. 1, 1991. Amended by Acts 1995, 74th Leg., ch. 6, § 7, eff. March 23, 1995.

     (a) An insurer shall maintain a file system that contains:

     (1) the name, address, including claim submission address, group policy number, employer's mailing address, social security number, and date of birth of each subscriber or policyholder covered by the insurer; and

     (2) the name, address, including claim submission address, and date of birth of each dependent of each subscriber or policyholder covered by the insurer.

     (b) The state's Medicaid third-party recovery division shall identify state medical assistance recipients who have third-party health coverage or insurance as provided by this subsection. The department shall provide to an insurer Medicaid data tapes that identify medical assistance recipients and request that the insurer identify each subscriber or policyholder of the insurer whose name also appears on the Medicaid data tape. An insurer shall comply with a request under this subsection not later than the 60th day after the date the request was made. An insurer is only required under this subsection to provide the department with the information maintained under Subsection (a) by the insurer or made available to the insurer from the plan. A plan administrator is subject to this subsection to the extent the information described in this subsection is made available to the plan administrator from the plan.

     (c) An insurer may not be required to provide information in response to a request under this section more than once every six months.

     (d) An insurer shall provide the information required under this section only if the department certifies that the identified individuals are applicants for or recipients of services under Medicaid or are legally responsible for an applicant for or recipient of Medicaid services.

     (e) The department shall enter into an agreement to reimburse an insurer for necessary and reasonable costs incurred in providing information requested under this section. The department may enter into an agreement with insurers that provides procedures for requesting and providing information under this section. An agreement under this subsection may not be inconsistent with any law relating to the confidentiality or privacy of personal information or medical records. The procedures agreed to under this subsection must state the time and manner the procedures take effect.

     (f) Information required to be furnished to the department under this section is limited to information necessary to determine whether health benefits have been or should have been claimed and paid under a health insurance policy or plan for medical care or services received by an individual for whom Medicaid coverage would otherwise be available.

     (g) Information regarding an individual certified to an insurer as an applicant for or recipient of medical assistance may only be used to identify the records or information requested and may not violate the confidentiality of the applicant or recipient. The department shall establish guidelines not later than the date on which the procedures agreed to under Subsection (e) take effect.

     (h) This section applies to a plan administrator in the same manner and to the same extent as an insurer if the plan administrator has the information necessary to comply with the applicable requirement.

     (i) In this section:

     (1) "Insurer" means a group health services corporation, a health maintenance organization, a self-funded or self-insured welfare or benefit plan or program to the extent the regulation of the plan or program is not preempted by federal law, and any other entity that provides health coverage in this state through an employer, union, trade association, or other organization or other source.

     (2) "Plan administrator" means a third-party administrator, prescription drug payer or administrator, pharmacy benefit manager, or dental payer or administrator.

Added by Acts 1993, 73rd Leg., ch. 816, § 1.01, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 88, § 1, eff. Sept. 1, 1999.

     (a) The department may impose an administrative penalty on a person who does not comply with a request for information made under Section 32.042(b).

     (b) The amount of the penalty may not exceed $10,000 for each day of noncompliance that occurs after the 180th day after the date of the request. The amount shall be based on:

     (1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation;

     (2) the economic harm caused by the violation;

     (3) the history of previous violations;

     (4) the amount necessary to deter a future violation;

     (5) efforts to correct the violation; and

     (6) any other matter that justice may require.

     (c) The enforcement of the penalty may be stayed during the time the order is under judicial review if the person pays the penalty to the clerk of the court or files a supersedeas bond with the court in the amount of the penalty. A person who cannot afford to pay the penalty or file the bond may stay the enforcement by filing an affidavit in the manner required by the Texas Rules of Civil Procedure for a party who cannot afford to file security for costs, subject to the right of the department to contest the affidavit as provided by those rules.

     (d) The attorney general may sue to collect the penalty.

     (e) A proceeding to impose the penalty is considered to be a contested case under Chapter 2001, Government Code.

Added by Acts 1999, 76th Leg., ch. 88, § 2, eff. Sept. 1, 1999.

     (a) A public hospital that is designated as a disproportionate share hospital during a fiscal year may acquire goods and services in accordance with this section during the succeeding fiscal year. A procurement of goods or services made in accordance with this section is considered to satisfy any state law requiring purchases by competitive bidding or competitive proposals.

     (b) The public hospital shall acquire goods or services by any procurement method approved by the Health and Human Services Commission that provides the best value to the public hospital. The public hospital shall document that it considered all relevant factors under Subsection (c) in making the acquisition.

     (c) The public hospital may consider all relevant factors in determining the best value, including:

     (1) any installation costs;

     (2) the delivery terms;

     (3) the quality and reliability of the vendor's goods or services;

     (4) the extent to which the goods or services meet the public hospital's needs;

     (5) indicators of probable vendor performance under the contract such as past vendor performance, the vendor's financial resources and ability to perform, the vendor's experience and responsibility, and the vendor's ability to provide reliable maintenance agreements;

     (6) the impact on the ability of the public hospital to comply with laws and rules relating to historically underutilized businesses or relating to the procurement of goods and services from persons with disabilities;

     (7) the total long-term cost to the public hospital of acquiring the vendor's goods or services;

     (8) the cost of any employee training associated with the acquisition;

     (9) the effect of an acquisition on the public hospital's productivity;

     (10) the acquisition price; and

     (11) any other factor relevant to determining the best value for the public hospital in the context of a particular acquisition.

     (d) The state auditor or the department may audit the public hospital's acquisitions of goods and services to the extent that state money or federal money appropriated by the state is used to acquire the goods and services.

     (e) The public hospital may adopt rules and procedures for the acquisition of goods and services under this section.

Added by Acts 1997, 75th Leg., ch. 1045, § 2, eff. Sept. 1, 1997.

     (a) A public or private hospital that is designated as a disproportionate share hospital during a fiscal year may purchase goods and services in accordance with this section during the succeeding fiscal year. A purchase of goods or services made in accordance with this section is considered to satisfy any state law requiring purchases by competitive bidding or competitive proposals.

     (b) A state or local governmental entity may allow the public or private hospital to purchase goods or services by participating in one or more of the entity's contracts for the purchase of goods or services.

     (c) The public or private hospital may purchase goods or services in accordance with this section through a group purchasing program that offers discount prices to hospitals or other providers of health care services.

     (d) The department with the assistance of the Health and Human Services Commission and the General Services Commission shall adopt rules under this section that allow the public or private hospital to make purchases