An Overview of Medicaid Due Process Rights in Senate Bill 1803 for Providers

A quick summary of the main points of Senate Bill 1803 follows. This is not a definitive list or exhaustive explanation of each point nor legally accurate. For that we refer you to the legislation itself to read.

But the following highlights the points in the bill which will affect due process for Medicaid providers and gives a fast overview.

Definitions
The legislation provides definitions of:

• Abuse;
• Allegation of fraud; and
• Credible Allegation of fraud.

“Credible allegation of fraud” is defined as an allegation of fraud that has been verified by the state. An allegation is considered to be credible when the commission has verified that the allegation has indicia of reliability and reviewed all allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis.

Medical and Dental Directors
The bill provides for the hiring of medical and dental directors to oversee the process.

Investigations
When HHSC receives a complaint of fraud or abuse, it must start the investigation within 30 days from receiving the complaint and complete its preliminary investigation within 90 days.

Within 30 days after completion of preliminary investigation, if criminal conduct is suspected, the case must be refered to the Medicaid Fraud Control Unit as long as HHSC can continue its investigation for administrative or civil sanctions.

Payment Hold
HHSC can put in place a payment hold without prior notice to a provider to compel production of records or if there is a credible allegation of fraud. If the MFCU, will not accept the complaint, the payment hold must be dropped by HHSC unless other state or federal legislation allows it.

HHSC must notify the provider about the payment hold within 5 days as per federal law (30 days if a law enforcement agency requests) and include the specific basis for the payment hold including identification of the claims supporting the allegation and sample documents. A description of administrative and judicial due process remedies must be included.

SOAH Hearing
Upon receiving notification of a payment hold, a provider can request an expedited State Office of Administrative Hearings (SOAH) hearing within 30 days of the notice. The costs of the hearing will be split between provider and state unless dictated by the judge.

The provider afterwards can still petition for judicial review in a district court in Travis county.

Informal Resolution
A provider can request an informal resolution meeting within 30 days of receiving payment hold notice. The meeting cannot be set later than 60 days after the request is received by OIG. The provider is to receive notice of the date of the meeting at least 30 days in advance.

The provider can request a second informal meeting within 20 days after the first meeting and it is to be scheduled within 45 days after receipt of the request. The notice of the meeting must be sent to the provider at least 20 days before the meeting.

A neutral third party hired by HHSC, independent of OIG, is to attend informal meetings.

Both SOAH and Informal
If the provider wants a SOAH hearing, they must also request this within first 30 days of receving the notice of payment hold but the hearing will be put on hold until after informal process.

Alternatives to Payment Hold
HHSC is also to work out regulations that will allow a provider to post a surety bond or other asset or payment guarantee in lieu of a payment hold.

Overpayment Hearing
A provider receiving a notice of overpayment has 15 days to request an appeal which may go to SOAH at their request (and half costs, as with the payment hold hearings). OIG must file the docketing request not later than 60 days after receipt of the request or after the end of the informal process.

The provider may afterward request a judicial review in a district court in Travis county.