The Texas Health and Human Services Commission (HHSC) passed new and consolidated rules on October 14, 2012. According to the OIG’s counsel, the new rules increase the likelihood of litigation, increase revenue for the state, lower the State fiscal burden and increase the State’s ability to exercise a sanction on providers.
On December 1, 2011 Mike McMillen, Deputy Chief Counsel, Office of Inspector General, presented to the Health and Human Services Commission Council the following description of the proposed rule changes:
“The proposed new rules … are updated in light of recent state and federal legislation. Moreover, the new rules delete unnecessary language, revise or eliminate obsolete terminology, and provide better and more helpful organization. The new rules do not substantially change current HHSC-OIG policy related to providers’ substantive rights or the procedural due process afforded them.”
He further states that there is no fiscal impact on the state with the proposed rules, however, he goes on to represent to the Council that there could be (a)  increases in litigation and work in the Sanctions division, (b) it will eliminate the two-notice requirement for certain sanctions, (c) new “payment holds and penalties that may result in increased revenue for the State” and “new provider termination requirements may result in increased cost avoidance benefits for the State”.  He also says the proposed new rule “requires that providers establish a compliance program for detecting criminal, civil and administrative violations and that promotes quality of care” (PPACA §6401’s amendment to 42 U.S.C. 1395cc(j)).1
Actually, the mandatory requirement for an effective compliance program is listed as a program violation if a person, as defined in the rules, does not have one. A person is defined as “[a]ny legally cognizable entity, including an individual, firm, association, partnership, limited partnership, corporation, agency, institution, MCO, Special Investigative Unit, CHIP participant, trust, non-profit organization, special-purpose corporation, limited liability company, professional entity, professional association, professional corporation, accountable care organization, or other organization or legal entity.” Under the new rule they commit a violation if they “(7) fail to establish an effective compliance program for detecting criminal, civil, and administrative violations, that promotes quality of care and contains the core elements identified in the federal sentencing guidelines for corporations or established by the United States Secretary of Health and Human Services.”
Participants in the Texas Medicaid program are encouraged to review the new rules and their operations and assess their ability to comply with the new rules and mitigate the newly imposed risks.
  1 Health and Human Services Commission Council, OIG Administration Actions and Sanctions, Agenda item 5.e., December 1, 2011.