As provided in the Texas Register on March 22, 2019, the Texas Health and Human Services Commission (“HHSC”) has proposed several amendments to Title 1 of the Texas Administrative Code, which include amendments to the rules and procedures for preventing and investigating Medicaid fraud and abuse.

Managed Care Organizations

HHSC has proposed amendments to Sections 353.502 and 353.505 in effort to reflect the legislative changes as a result of House Bill 2379, which provided managed care organizations (“MCOs”) the ability to, under certain circumstances, retain a portion of the funds recovered by the HHSC Office of the Inspector General (“HHSC-OIG”) when fraud or abuse cases are referred to it by an MCO.

The proposed amendments include reducing the number of Medicaid recipient claims an MCO must review from 50 to 30 recipients or 15 percent of a provider’s claims. In addition, an MCO is required to notify HHSC-OIG of possible acts of waste, abuse, or fraud within 30 working days of the completion of an investigation.  MCOs must also include specific documentation in their report to HHSC-OIG, including, among other documents, the provider’s credentialing documents, the complete investigative file as well as a summary of past investigations.  The proposed amendments also attempt to simplify the existing language of Section 353.505 to improve coordination between MCOs and the HHSC-OIG regarding the referrals and recovery process of Medicaid fraud and abuse claims.

Fraud and Abuse Investigations

Texas Government Code Section 531.102(p) was added to require HHSC to adopt rules establishing criteria for opening, prioritizing, and closing Medicaid investigation cases. Accordingly, the proposed amendments to Sections 371.1305 and 371.1307, as well as the new rule 371.1312, formalize criteria for prioritizing and closing Medicaid cases, including specific criteria that will be used to determine whether a particular investigation should be closed. As for preliminary investigations, the proposed amendments provide additional criteria that investigators may also use when deciding whether a case should be pursued as a full-scale investigation. The proposed new rule requires that cases be prioritized according to the highest potential for recovery and consider federal timeliness requirements. While the OIG’s approach to pursuing investigations has not changed, the proposed amendments provide additional details as to what factors investigators may use when determining the extent of their investigation.

For additional information on the proposed amendments please refer to the Texas Register.

Written comments on the proposed amendments above may be submitted before April 21, 2019 to:

Mail: In Person: Email:
HHS Office of Inspector General
Chief Counsel Division
P.O. Box 85200
Austin, Texas 78708
11501 Burnet Road, Building 902,
Austin, Texas 78758



Comments must be: (1) postmarked before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on April 19, 2019; or (3) emailed by midnight on April 21, 2019. When emailing comments, please indicate “Comments on Proposed Rule 18R069” or “18R070” in the subject line.