Adopted Rules Title 1

TITLE 1. ADMINISTRATION

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 371. MEDICAID AND OTHER HEALTH AND HUMAN SERVICES FRAUD AND ABUSE PROGRAM INTEGRITY

SUBCHAPTER G. ADMINISTRATIVE ACTIONS AND SANCTIONS

DIVISION 3. ADMINISTRATIVE ACTIONS AND SANCTIONS

The Executive Commissioner of the Texas Health and Human Services Commission (HHSC), on behalf of the Office of Inspector General (OIG), adopts in the Texas Administrative Code (TAC), Title 1, Part 15, Chapter 371, Subchapter G, Division 3, new §371.1721, concerning Recoupment of Overpayments Identified by Inspection.

New §371.1721 is adopted without changes to the proposed text as published in the June 14, 2024, issue of the Texas Register (49 TexReg 4119). This rule will not be republished.

BACKGROUND AND JUSTIFICATION

New §371.1721 describes OIG's inspection procedures related to records requests, inspection processes, notices, final reports, and due process.

Texas Government Code §531.102 authorizes OIG to conduct inspections related to the provision and delivery of all health and human services in Texas to identify fraud, waste, or abuse.

COMMENTS

The 31-day comment period ended July 15, 2024.

During this period, OIG received comments regarding the proposed rule from seven commenters: Texas Academy of Pediatric Dentistry, Texas Medical Association, Texas Hospital Association, Texas Organization of Rural and Community Hospitals, Teaching Hospitals of Texas, Children's Hospital Association of Texas, and Texas Association for Home Care & Hospice. A summary of comments relating to §371.1721 and OIG's responses follow.

Comment: One commenter expressed concern that there is no express statutory authority for OIG to recover overpayments identified by inspections. The commenter asserted that recovering overpayments through an inspection versus an investigation would circumvent the Legislative intent of Senate Bill (S.B.) 1803, 83rd Legislature, Regular Session, 2013 and S.B. 207, 84th Legislature, Regular Session, 2015. Additionally, the commenter stated that OIG lacks implied authority to recover overpayments identified by inspection because recovering overpayments is (1) not necessary to carry out the express responsibilities given to OIG by the Legislature and (2) inconsistent with Texas Government Code Chapter 531 Subchapter C's general statutory objective. Further, the commenter stated that the recovery of overpayments identified by inspections is not necessary for OIG to carry out its responsibilities relating to preventing, detecting, and taking enforcement against fraud, waste, and abuse in the state's health and human services programs because the Legislature has already established a statutory framework for OIG to recover overpayments, and that framework contemplates recoveries identified by investigation. The commenter further asserted that the provisions of Subchapter C balance the OIG's enforcement efforts with due process and other protections for providers, but these protections and due process are contemplated in the context of an investigation, which is the only method of overpayment recovery expressly discussed in Subchapter C. Additionally, the commenter stated that the proposed rule does not contain these protections and due process, and is not in harmony with the general objectives of Subchapter C, and, therefore, exceed OIG's rulemaking authority. The commenter recommends that the proposed rules be amended to remove the provisions addressing the recovery of overpayments identified by inspections.

Response: OIG declines to revise the rule in response to these comments. Texas Government Code §531.102(a) grants OIG responsibility for the prevention, detection, audit, inspection, review, and investigation of fraud, waste, and abuse in the provision and delivery of all health and human services in the state and the enforcement of state law relating to the provision of those services. The Legislature chooses statutory words and phrases deliberately and purposefully. Audits, inspections, reviews, and investigations are different types of examinations OIG is expressly authorized by the Legislature to perform. Each of these types of examinations include the opportunity to detect health and human services payments made to persons or providers to which they were not entitled. Recovery of overpayments prevents fraud, waste, and abuse by recovering misspent state and federal dollars so they may be spent appropriately to care for persons in need and by deterring persons inclined to commit fraud, waste, and abuse.

When the Legislature expressly grants power to an agency, it also implicitly intends that the agency have the authority reasonably necessary to accomplish its express responsibilities. The Legislature's express statutory authority related to one type of examination (investigation) does not limit implied powers that are reasonably necessary to carry out other express responsibilities given by the Legislature to OIG. When OIG detects an overpayment during an inspection of a healthcare provider, the recovery of the overpayment fulfills the Legislature's mandate to prevent fraud, waste, and abuse.

HHSC's rulemaking authority is broad. Texas Government Code §531.033 requires the Executive Commissioner to adopt rules necessary to carry out the commission's duties under Chapter 531. Texas Government Code §531.0055(e) and Texas Human Resources Code §32.021 and §32.032 provide the HHSC Executive Commissioner with rulemaking authority for the operation of health and human services in Texas. Texas Human Resources Code §32.021 gives the HHSC Executive Commissioner authority to adopt necessary rules for the proper and efficient operation of the Medicaid program. Texas Human Resources Code §32.032 requires the HHSC Executive Commissioner to adopt reasonable rules for minimizing the opportunity for fraud and abuse and for establishing and maintaining methods for detecting and identifying situations in which a question of fraud or abuse in the program may exist.

Additionally, Texas Government Code §531.1131(c-2) states, in part, that if OIG discovers fraud, waste, or abuse in the performance of its duties, OIG may recover payments made as a result of the fraud, waste, or abuse as otherwise provided by Texas Government Code, Chapter 531, Subchapter C. Section 531.1131(e) requires the Executive Commissioner to adopt rules necessary to implement §531.1131. OIG's statutory duties under Texas Government Code §531.102(a) include conducting inspections and preventing and detecting fraud, waste, and abuse.

Senate Bill 1803 was passed in 2013 at a time when OIG did not conduct inspections. Similarly, S.B. 207, passed in 2015, focused largely on implementing the recommendations of the Sunset Advisory Commission review, which was conducted at a time when OIG did not perform inspections. Additionally, much of S.B. 1803 and S.B. 207 focused on protections related to an OIG payment hold, a different process than recovery of an overpayment.

Further, Title 42 United States Code (U.S.C.) §1396a(a)(30), in part, requires HHSC to have a State plan for Medicaid that provides methods and procedures relating to the utilization of, and payment for, care and services available under the plan as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care. Title 42 Code of Federal Regulations (C.F.R.) §456.3 requires the Medicaid state agency to implement a statewide surveillance and utilization control program that safeguards against unnecessary or inappropriate use of Medicaid services and against excess payments. HHSC's Medicaid State Plan states, in part, that HHSC has implemented a statewide program of surveillance and utilization control that safeguards against unnecessary or inappropriate use of Medicaid services and against excess payments.

New §371.1721 implements a method for detecting and identifying fraud, waste, and abuse, increases the efficiency of the Medicaid program by recovering payments to which a person or provider was not entitled, and minimizes the opportunity for fraud, waste, and abuse by deterring bad actors. The Statutory Authority section of this Adoption Preamble describes additional statutory authority and HHSC rulemaking authority for §371.1721.

Comment: Four commenters stated that new §371.1721 appears to extend beyond OIG's statutory authority. The commenters asserted that OIG's authority under Texas Government Code §531.102(a) and Texas Administrative Code (TAC) §371.11 limit OIG inspections to the inspection of fraud, waste, and abuse and would not include overpayments caused by error, such as billing or payment errors, or misunderstanding. The commenters stated that §371.1721 should be revised to define inspections in a way that limits inspections to fraud, waste, and abuse and to not include any overpayment allegation arising outside of fraud, waste, or abuse. Additionally, the commenters asserted that §371.1721 is improper because an inspection is not bounded by OIG's limited statutory authority to police fraud, waste, and abuse.

Response: OIG declines to revise the rule in response to these comments. Texas Government Code §531.102(a) grants OIG responsibility for the prevention, detection, audit, inspection, review, and investigation of fraud, waste, and abuse in the provision and delivery of all health and human services in the state and the enforcement of state law relating to the provision of those services. The Legislature chooses statutory words and phrases deliberately and purposefully. Audits, inspections, reviews, and investigations are different types of examinations that OIG is expressly authorized by the Legislature to perform. Each of these types of examinations include the opportunity to detect health and human services payments made to persons or providers to which they were not entitled. Recovery of overpayments prevents fraud, waste, and abuse by recovering misspent state and federal dollars so they may be spent appropriately to care for persons in need and by deterring persons inclined to commit fraud, waste, and abuse.

When the Legislature expressly grants power to an agency, it also implicitly intends that the agency have the authority reasonably necessary to accomplish its express responsibilities. When OIG detects an overpayment during an inspection of a healthcare provider, the recovery of the overpayment fulfills the Legislature's mandate to prevent fraud, waste, and abuse.

Further, 42 U.S.C. §1396a(a)(30), in part, requires HHSC to have a State plan for Medicaid that provides methods and procedures relating to the utilization of, and payment for, care and services available under the plan as may be necessary to safeguard against unnecessary utilization of such care and services and to assure that payments are consistent with efficiency, economy, and quality of care. Title 42 C.F.R. §456.3 requires the Medicaid state agency to implement a statewide surveillance and utilization control program that safeguards against unnecessary or inappropriate use of Medicaid services and against excess payments. HHSC's Medicaid State Plan states, in part, that HHSC has implemented a statewide program of surveillance and utilization control that safeguards against unnecessary or inappropriate use of Medicaid services and against excess payments.

Title 42 C.F.R §433.304, §438.2, and 1 TAC §371.1(55) define "overpayment" without any relationship to, or confinement within, the terms fraud, waste, and abuse. A search for fraud, waste, or abuse in Medicaid may lead to a payment made to a person to which the person was not entitled under Medicaid - an overpayment.

Comment: Four commenters asserted that OIG's statutory authority for inspections for fraud, waste, and abuse does not encompass alleged overpayment determinations arising from contractual agreements between managed care organizations (MCOs) and providers that use different payment models, methodologies or rates than Medicaid fee-for-service. The commenters stated that use of new §371.1721 to recover overpayments made by an MCO to a provider based on a negotiated contract methodology would be beyond OIG's statutory authority, be inconsistent with federal regulations, case law, and Texas Medicaid authorities, and, absent a showing of fraud, waste, or abuse, constitute a prohibited constitutional taking and a violation of the Contracts Clause under the United States and Texas constitutions. The commenters stated that OIG's statutory authority does not support an inspection process that deprives managed care providers of the protections included in the contracts negotiated between providers and MCOs that specifically address contractual reimbursement disputes. The commenters further asserted that the federal and state regulatory structure for MCO-delivered services demands more predicate for an inspection or audit than a payment being inconsistent with Texas fee-for-service Medicaid coverage or payment requirements. The commenters stated that §371.1721 binds providers and MCOs to fee for service rules, coverages, and payment amounts in clear opposition to the state's long-standing goals for and operational authority within managed care and fails to identify how OIG will fulfill its responsibilities for oversight of MCOs' waste, fraud, and abuse. The commenters expressed concern that §371.1721 would interfere with Medicaid participating hospitals and Medicaid MCOs' contracts. The commenters requested that new §371.1721 make clear that the inspection process will not be used to conduct inspections that involve disagreements over the appropriate reimbursement methodologies or contractual payment arrangements for services under a managed care agreement. The commenters further requested that new §371.1721 be narrowed to provide that OIG will only conduct inspections where there is a clear violation of billing rules applicable to managed care payments (e.g., submitting duplicate claims, etc.) or other meaningful showing of fraud, waste, or abuse.

Response: OIG declines to revise the rule in response to these comments. Title 42 C.F.R. §438.2 defines "overpayment" as, in part, any payment made to a network provider by a MCO to which the network provider is not entitled under Title XIX of the [Social Security] Act. The Uniform Managed Care Contract (UMCC) uses the definition from C.F.R. §438.2 to define "overpayment." The definitions of "overpayment" in 42 C.F.R. §438.2, the UMCC, and 1 TAC §371.1(55) do not refer to the terms fraud, waste, or abuse. By these definitions, an overpayment includes an amount a person is paid to which the person was not entitled under Medicaid. The criteria by which entitlement of funds is measured in Medicaid may arise from multiple sources, including federal or state statute, federal or state rule, or contract. A network provider contract with a MCO may not circumvent law or HHSC contract to authorize a payment to a network provider to which the network provider is not entitled under Medicaid. OIG inspections will use valid fee-for-service and managed care criteria, as applicable, to evaluate payments to persons subject to an inspection, including managed care network providers.

OIG is unable to answer the part of the comment that refers to federal regulations, case law, Texas Medicaid authorities, and, potentially, a violation of the Contracts Clause under the United States and Texas constitutions, because that part of the comment is too vague and too broad.

Comment: Four commenters asked how the changes in §371.1721 would apply to inspections in progress as of the effective date of the rule. The commenters asserted that the Administrative Procedures Act in Texas Government Code chapter 2001 requires that this information be specified in the proposal rule and when the final rule is adopted.

Response: Publication of final rule §371.1721 in the Texas Register will include the effective date. The provisions in §371.1721 will be effective for all inspections begun on or after the effective date. OIG disagrees that the Administrative Procedures Act in Texas Government Code chapter 2001 requires that the proposal rule include information about how the rule would apply to inspections in progress as of the effective date of the rule.

Comment: Four commenters stated that §371.1721 does not define "inspection," does not provide specifics or boundaries on what an inspection may entail, and, therefore, inspection targets are deprived of adequate notice of what should be expected under §371.1721. The commenters requested that OIG revise §371.1721 to include a definition of inspection consistent with its statutory authority to pursue only matters involving fraud, waste, and abuse.

Response: OIG declines to revise the rule in response to this comment. Section 371.1721 does provide specifics, boundaries, and a description of what an inspection encompasses. In part, §371.1721 includes a summary of the statutory scope of an inspection (subsection (a)); the standards OIG inspections follow, which include standards for independence, competence, planning, evidence collection and analysis, reporting, follow-up, and quality control (subsection (c)(1)); procedures, time deadlines, and potential penalties related to records requests; the scope of time an inspection may examine (subsection (c)(2)); the types of notices provided to persons subject to an inspection (subsection (c)(3) and (d)); the elements included in an inspection final report (subsection (e)); the opportunity to produce documentation to address any finding found during an inspection (subsection (c)(4)); the due process available to a person subject to an inspection, including the time deadlines and requirements for requesting an administrative hearing appeal (subsection (f)); and the scope, effect, and timelines related to a final inspection report (subsection (g)). The specifics, boundaries, and description contained in the rule effectively define an OIG inspection and provide adequate notice of what persons should expect from the rule.

Comment: One commenter asked whether OIG inspections are conducted on-site, off-site, or both.

Response: Section 371.1721 allows on-site and off-site inspections.

Comment: One commenter asked whether a records request is based on sampling.

Response: Ordinarily, OIG requests a full population of records for the scope period and then selects a sample from that population.

Comment: One commenter asked whether the number of records requested is supposed to be reasonable and how that term is defined. The commenter stated that there is no method in the rule for the provider to extend the period for submission of records if the number of records requested is unreasonable or overburdensome.

Response: The rule requires a provider to provide records within the time period requested by OIG or ten calendar days from the date of receipt of the request, whichever is later. An OIG record request may provide for a due date beyond ten days, but not less than ten days. The volume of records requested for an inspection should be reasonable. Additionally, OIG is receptive to requests for extension when an extension is warranted.

Comment: One commenter stated that the rule could allow OIG to request records to be submitted along with the required affidavit within one day to maintain the element of surprise. The commenter requested that element of surprise be defined to ensure there is a clear understanding of what this means in the context of the rule.

Response: OIG declines to revise the rule in response to this comment. An example of an element of surprise would be the circumstance in which there was compelling evidence that a provider was in the process of destroying records that had been requested for an OIG inspection. In that example, OIG could request that the records be provided immediately.

Comment: One commenter stated that since the inspection period allows the OIG to go back five years, some records could be off-site. The commenter asserts that §371.1721(b)(1) is too broad and without provider protections; and there is the opportunity for provider noncompliance related to factors outside the provider's control.

Response: OIG declines to revise the rule in response to this comment. OIG is receptive to requests for extension when an extension is warranted.

Comment: Four commenters stated that, under §371.1721(b)(1), while the proposed rule recognizes the discretion of the OIG to establish a longer document response deadline, a ten-day default period to produce records or risk enforcement action is unreasonable and draconian - and particularly punitive for rural and community hospitals with limited resources and workforce. The commenters recommended the default period should be extended to 30 days, at a minimum, or should be tiered based on the size and date range of the record request and the rule should create a process to request an extension based on extenuating circumstances. Additionally, the commenters recommended that OIG revise the rule to give a provider written notice and an opportunity to cure any deficiencies before enforcement action is taken under §371.1721(b)(3).

Response: OIG declines to revise the rule in response to these comments. As noted by the commenters, the rule requires a provider to submit records within the time period requested by OIG or ten calendar days from the date of receipt of the request, whichever is later. An OIG record request may provide for a due date beyond ten days, but not less than ten days. Additionally, OIG is receptive to requests for extension when an extension is warranted.

Comment: One commenter stated that producing five years of records in 10 calendar days is difficult and overburdensome for a pediatric dentist who practices in multiple locations, including the hospital setting. The commenter proposed revising the deadline to 30 calendar days.

Response: OIG declines to revise the rule in response to this comment. The rule requires a provider to submit records within the time period requested by OIG or ten calendar days from the date of receipt of the request, whichever is later. An OIG record request may provide for a due date beyond ten days, but not less than ten days. Additionally, OIG is receptive to requests for extension when an extension is warranted.

Comment: A commenter expressed concern that the rule requirements for a business records affidavit could place persons in a compliance catch-22 situation if the requested document did not qualify as a business record under the Texas Rules of Evidence. The commenter was also concerned about requiring a person to sign and notarize a document that was prepared by OIG and not the person's legal counsel. Additionally, the commenter recommended that the requirements in §371.1721(b) relating to the records affidavit be removed.

Response: OIG declines to revise the rule in response to this comment. If the "catch-22" scenario described in the comment occurred, OIG would consider the person's objection that the requested record in the person's possession was not, in fact, a business record under the Texas Rules of Evidence. The OIG-approved business records affidavit was prepared by OIG and based on the "Form of Affidavit" provided in the Texas Rules of Evidence. If the person who received the OIG records request preferred to have the person's attorney prepare the affidavit, OIG would assess whether the affidavit met the requirements specified in the Texas Rules of Evidence.

Comment: Four commenters stated that the affidavit requirement in §371.1721(b)(2) is too strict, burdensome, and unreasonable and may lead to unfair rejections of medical record submissions. Additionally, the commenters asserted that an administratively deficient affidavit, without an opportunity to cure, should not lead to an enforcement action under §371.1721(b)(3).

Response: OIG declines to revise the rule in response to these comments. When a records affidavit is requested by OIG for an inspection, OIG would provide the OIG-approved records affidavit referred to in §371.1721(b)(2) to the subject of the inspection along with the records request. The affidavit was prepared by OIG and based on the "Form of Affidavit" provided in the Texas Rules of Evidence Rule. If the person who received the OIG records request preferred to have the person's attorney prepare the affidavit, OIG would assess whether the affidavit met the requirements specified in the Texas Rules of Evidence.

Comment: A commenter expressed concern about electronic notices being sent without a recipient's awareness. This commenter recommended that the rule be amended so that email notices must be consented to by the recipient and that the rule be revised to include, by reference, OIG's other methods of service in §371.1609. Additionally, four commenters stated that §371.1721(d)(3) is unduly burdensome to providers or otherwise unreasonable because it does not specify how an appropriate email notice will be determined or whether OIG will commit to receiving information, including appeal requests by electronic mail.

Response: OIG declines to revise the rule in response to this comment. Electronic mail, including secure or encrypted email for confidential or HIPAA information, is an appropriate and reliable alternative method to send notices. Before sending the inspection announcement email, OIG will contact the person who is the subject of the inspection by telephone to obtain the best email address or addresses for sending email notices. Subsequent notices will be sent by email to the email address provided by the subject of the inspection.

Comment: Four commenters stated that the five-year limit in subsection §371.1721(c)(2) is unclear because it does not adequately define the starting or ending point of the five-year period. The commenters asserted that OIG does not have authority to apply a longer period to recover alleged overpayments than any limitations period set forth in a contract with an MCO or with Texas law applicable to contracts (which, at its longest, creates a four-year statute of limitations). The commenters recommended that §371.1721 should (1) clarify that any inspection of payments made by MCOs to providers under network participation agreements is subject to the applicable contractual lookback periods unless there is evidence of fraud, waste, or abuse; (2) establish the parameters around the limitations period along with an example of how the limitations period is applied; and (3) incorporate an appropriate backstop time period, such as the one set forth in the Texas Medicaid Fraud Prevention Act--which generally does not allow recoveries beyond six years from the date of the act.

Response: OIG declines to revise the rule in response to this comment. Section 371.1721(c)(2) refers to the time scope of the records and conduct an OIG inspection may examine. For example, an OIG inspection may examine records and conduct covering state fiscal years (SFYs) 2020 through 2024, but not SFYs 2019 through 2024. The latter covers a six year period. OIG is unable to answer the comments related to "any limitations period set forth in a contract with an MCO or with Texas law applicable to contracts" and "under network participation agreements" because these comments are hypothetical and too vague.

Comment: One commenter stated that a person should be allowed a defined amount of time in §371.1721(c)(4), such as 10 days, to produce documentation to address a finding found during an inspection.

Response: OIG declines to revise the rule in response to this comment. The date specified by OIG permitting a person to produce documentation to address any finding will vary depending on factors such as the complexity, scope, and issues involved in the inspection.

Comment: One commenter requested that any notice from OIG be sent by certified mail. The commenter stated that time periods are short to provide records, pediatric dentists receive numerous emails a day, lower-level staff are often in charge of the email box and pediatric dentists do not want to miss an email from OIG when OIG has the ability to penalize the dentist for being nonresponsive.

Comment: One commenter stated that audits of pediatric dentists often show under-billing and underpayments. The commenter stated that, although dentists will not be reimbursed for underpayments, it is helpful to know that they have missed filing claims so they can correct these clerical errors in the future. The commenter requested that the inspection final report include a finding of underpayments, if any were found.

Response: OIG declines to revise the rule in response to this comment. When an OIG inspection identifies overpayments and underpayments, those amounts will be offset and result in one finding of underpayment or overpayment. OIG will provide the detail of claims findings as part of the inspection process. When an OIG inspection identifies only underpayments, there will be a finding of an underpayment.

Comment: Four commenters observed that §371.1723 does not include any timeframes or deadlines for OIG to diligently complete the inspection process. The commenters state that inspection targets should not be held to stringent deadlines while OIG is not required to meet any timeframe requirements in various stages of the inspection process.

Response: OIG declines to revise the rule in response to these comments. The length of the inspection process varies depending on the responsiveness of the subject of the inspection, the completeness and clarity of the documentation provided, and the time involved for meetings between the parties when criteria clarification is needed.

Comment: One commenter requested that draft inspection reports be completed no later than one year from the time OIG receives all requested information and that the rule be revised to add a time limit on when an inspection final report can be issued by OIG. The commenter asserted that pediatric dentists report that it has taken OIG up to two years to respond to a dental audit.

Response: OIG declines to revise the rule in response to this comment. The length of time it takes for OIG to complete draft and final inspection reports varies depending on factors, such as the complexity, scope, and issues involved in the inspection. OIG is not aware of any dental audits that have remained ongoing for up to two years since, at least May of 2017, when OIG began publishing its final audit reports on its website.

Comment: Four commenters stated that it is unfair and unduly burdensome that §371.1721(f)(1) does not include a minimum time period for the target of an inspection to provide a written response to the draft inspection report. Another commenter stated that there should be a standard time set for receipt of the management response, such as within 10 days or the date specified by the OIG, whichever is longer.

Response: OIG declines to revise the rule in response to these comments. Providing a management response is voluntary under §371.1721(f)(1). The subject of a completed inspection who agrees with the inspection findings may not wish to submit a management response. The date specified by OIG to submit a management response will vary depending on factors such as the complexity, scope, and issues in the draft inspection report and how long the subject of the inspection has known about the issues.

Comment: Four commenters requested that the language in §371.1721(f)(2)(C) be clarified to state that the hearing process is not within the HHSC Appeals Division, but instead is through the State Office of Administrative Hearings (SOAH).

Response: OIG declines to revise the rule in response to this comment. The phrase "administrative hearing at the HHSC Appeals Division" in §371.1721(f)(2)(C) refers to an administrative hearing appeal at (i.e., "within") the HHSC Appeals Division. Section 371.1721 does not require a SOAH hearing. OIG believes an administrative hearing at the HHSC Appeals Division is the appropriate setting for the appeal of inspection findings. Texas Government Code, Chapter 2001, Subchapter G, provides for judicial review of agency decisions in a contested case.

Comment: One commenter asked why there is a separate process for collection of an overpayment as a result of an inspection rather than referring to §371.1711 for the collection process.

Response: OIG declines to revise the rule in response to this comment. The only process related to the collection of an overpayment in §371.1711 relates to subsection (c), notice requirements. The notice requirements specified in TAC Chapter 371 vary according to the different types of OIG examinations, such as investigations, audits, retrospective payment reviews, and utilization reviews. The notice requirements specific to OIG inspections are contained in §371.1721(d).

Comment: One commenter stated that the request for a payment plan agreement should be the same as in §371.1711.

Response: Section 371.1711 does not refer to payment plans. No revision to the rule is made in response to this comment.

Comment: One commenter stated that all other rules related to paying an overpayment and appeals should follow the process already outlined in §371.1711.

Response: This comment is beyond the scope of this rule because it relates to other rules.

Comment: One commenter asked what the delivery method and time frame is for receipt of the draft inspection report following completion of the field work and the final inspection report following the initial draft inspection report.

Response: Before sending the inspection announcement email, OIG will contact the person who is the subject of the inspection by telephone to obtain the best email address or addresses for sending email notices. The draft and final inspection reports will be sent by email to the email address provided by the person subject to inspection. The time frame between fieldwork and delivery of the draft inspection report and between the draft and final inspection reports may vary depending on factors, such as the complexity, scope, and issues involved in the inspection.

Comment: One commenter stated that all due process protections and procedures should be the same.

Response: OIG declines to revise the rule in response to this comment. The due process protections and procedures specified in TAC Chapter 371 vary according to the different types of OIG examinations, such as investigations, audits, retrospective payment reviews, and utilization reviews. OIG believes the due process protections and procedures in §371.1721 are appropriate for OIG inspections.

Comment: Four commenters stated that the 15-day period to request an appeal under §371.1721(f)(4) is not only unreasonable, but potentially impossible, if there are hundreds of claims at issue. The commenters requested that the rule provide 30 days for a provider to request an appeal and permit a provider to request an extension based on extenuating circumstances.

Response: OIG declines to revise the rule in response to these comments. Title 1, Texas Administrative Code §357.484, specifies the requirements for requesting a hearing with the HHSC Appeals Division. Section 357.484(b) states, in part, that (1) the request for hearing must be received within 15 days from the date the person receives notice of adverse action and (2) if the request is not filed in accordance with §357.484, the judge may deny the request. If §371.1721 allowed more than 15 days to request appeal, this could lead to confusion or, potentially, a denial of the appeal request despite complying with the time deadline in §371.1721. Additionally, OIG and the person subject to inspection discuss the inspection findings before the end of fieldwork, which occurs before dissemination of the draft and final inspection reports.

Comment: One commenter asked whether §371.1721(f)(4)(C) means that the person or provider who does not challenge inspection findings must still file an administrative hearing appeal to include that they will either pay the overpayment or seek a payment plan agreement.

Response: Section 371.1721(f)(4)(C) applies only when the person is challenging some, but not all, of the OIG inspection findings. In that circumstance, the person's written request to OIG for appeal must specify - for those findings that are not being challenged - whether the person will pay the overpayment within 60 days or seek a payment plan agreement.

STATUTORY AUTHORITY

The new rule is adopted under Texas Government Code §531.0055, which provides that the Executive Commissioner of HHSC shall adopt rules for the operation and provision of services by the health and human services system; Texas Government Code §531.102(a), which grants the OIG the responsibility for the prevention, detection, audit, inspection, review, and investigation of fraud, waste, and abuse in the provision and delivery of all health and human services in the state, including services through any state-administered health or human services program that is wholly or partly federally funded, and which provides the OIG with the authority to obtain any information or technology necessary to enable it to meet its responsibilities; Texas Government Code §531.102(a-2), which requires the Executive Commissioner of HHSC to work in consultation with the Office of the Inspector General to adopt rules necessary to implement a power or duty of the office; Texas Government Code §531.102(x), which requires the Executive Commissioner of HHSC, in consultation with the Office of Inspector General, to adopt rules establishing criteria for determining enforcement and punitive actions with regard to a provider who has violated state law, program rules, or the provider's Medicaid provider agreement; Texas Government Code §531.033, which requires the Executive Commissioner of HHSC to adopt rules necessary to carry out the commission's duties under Chapter 531; Texas Human Resources Code §32.021, which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas and adopt rules necessary for the proper and efficient operation of the Medicaid program; Texas Government Code §531.021(a), which provides HHSC with the authority to administer Medicaid funds; Texas Government Code §531.1131(e), which requires the Executive Commissioner of HHSC to adopt rules necessary to implement §531.1131, including rules establishing due process procedures that must be followed by managed care organizations when engaging in payment recovery efforts as provided by §531.1131; and Texas Human Resources Code §32.039, which provides authority to assess administrative penalties and damages and provides due process for persons potentially subject to damages and penalties.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 6, 2024.

TRD-202405893

Karen Ray

Chief Counsel

Texas Health and Human Services Commission

Effective date: December 26, 2024

Proposal publication date: June 14, 2024

For further information, please call: (512) 221-7320