Fighting for Fairness
By Crystal Zuzek Texas Medicine August 2013

TMA Wins Law to Improve OIG Probes

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Law Feature – August 2013

Tex Med. 2013;109(8):35-38.

By Crystal Zuzek 
Associate Editor

When the Texas Health and Human Services Commission (HHSC) Office of Inspector General (OIG) adopted "program integrity" rules physicians couldn't live with, the Texas Medical Association took action to protect physicians. The association fought during this year's legislative session to improve due process in OIG fraud investigations and secured legislation that lends greater transparency to the agency's investigative and payment hold processes.

"After speaking with people in both chambers, TMA found legislators who were willing to entertain a new bill that would put into statute due process for physicians accused of fraud, waste, or abuse. Nothing like that had been done before," said John Holcomb, MD, chair of TMA's Select Committee on Medicaid, CHIP, and the Uninsured.

TMA opposes health care fraud and supports a fair process to prevent and detect actual fraud.

TMA's work on the issue began last October when physicians complained the OIG's new rules essentially cast every Medicaid billing error as a possible target for fraud-and-abuse prosecution. They also worried they'd be incorrectly accused of fraud, waste, or abuse, or denied meaningful recourse during an investigation.

After OIG adopted the rules, TMA began evaluating its options for asking the legislature to make sure the state conducts fair investigations and gives physicians and other health care professionals appropriate due process if accused of fraud, waste, or abuse.

Additionally, TMA convened a Physicians Medicaid Congress in October to discuss ways to attract more physicians to participate in the program, such as alleviating physicians' fears of OIG. According to TMA's 2012 physician survey, Texas physicians available to treat all new Medicaid patients plummeted from 42 percent in 2010 to 31 percent – an all-time low.

TMA worked with lawmakers this year to craft legislation that improves due process when a physician faces Medicaid fraud or overpayment accusations. The hard work paid off in passage of Senate Bill 1803 by Sen. Joan Huffman (R-Houston) and Rep. Lois Kolkhorst (R-Brenham). SB 1803, which takes effect Sept. 1, clarifies the definition of "credible allegation of fraud" and establishes timelines for when OIG must notify doctors of an investigation or can withhold payments in the process.

Senator Huffman says she felt compelled to file SB 1803 because lawmakers "have an obligation to spend taxpayer dollars efficiently and effectively" while ensuring that truly needy Texans receive assistance in obtaining medical care.

"Many physicians and other medical providers around the state expressed concern that there is insufficient due process when OIG suspects or accuses a physician of Medicaid fraud or abuse. Certainly, those guilty of Medicaid fraud or abuse must be caught and prosecuted. It is equally important that the process in place is fair and transparent and does not fail Medicaid providers who are playing by the rules," she said.

Dr. Holcomb testified in support of SB 1803 at a House Human Services Committee in April.

"This legislation creates a framework for rulemaking that will meet the needs of the state for its required oversight of the Medicaid program and providers' need for transparency and clarity in the resolution of accusations and complaints against them," he testified.

He later told Texas Medicine that "OIG's punitive rules make it harder to convince physicians to participate in the Medicaid program."

TMA Gets Legislative Solution

Before HHSC adopted the "program integrity" rules, TMA submitted 35 pages of written comments that outlined the association's concerns. TMA adamantly opposed the rules, which repealed language that said not all overpayments to a physician are necessarily fraudulent. Dr. Holcomb asked HHSC officials to retain that language and reiterate in the new rules that some overpayments are mistakes, not fraud. However, that didn't happen.

The agency's decision to adopt the rules as proposed disheartened Dr. Holcomb, who says the rules made it "increasingly difficult to convince physicians to step up to the plate and see new Medicaid patients." He says the rules allowed "OIG to proceed with payment holds and essentially impound money from doctors without providing appropriate due process."

At the time, HHSC spokesperson Stephanie Goodman said the agency had to adopt the new rules "to comply with new program integrity requirements in the Affordable Care Act."

Dr. Holcomb said the OIG "made it clear they had no interest in collaborating with TMA on the Medicaid fraud rules. The agency wanted to pursue payment holds against physicians without interference. I'm pleased we made some progress this session in creating an open process for conducting investigations and payment holds."

SB 1803 improves due process and transparency within OIG by: 

  • Promoting transparency and due process in the investigation and resolution of Medicaid overpayment and payment holds based on a credible allegation of fraud;
  • Describing the information that must be included in the notice to physicians who are subject to a payment hold or proposed recoupment, including a description of supporting evidence and a description of the administrative and judicial due process remedies;
  • Providing timelines and procedures for seeking informal resolution of a payment hold or alleged overpayment;
  • Detailing a physician's right to appeal a final overpayment determination or payment hold and the applicable timelines for exercising appeal rights;
  • Directing OIG to hire a medical director and dental director to assist with investigations; and
  • Directing OIG to post on its website the policies and procedures used to determine whether to impose a payment hold on a physician.  

The bill gives physicians 30 days after receiving a notice of payment hold or overpayment to request an initial informal resolution meeting and 60 days to schedule the meeting. After the initial resolution meeting, physicians may request a second informal meeting. If physicians seek an administrative appeal at the State Office of Administrative Hearings (SOAH), both the state and the physicians are responsible for their own expenses for the hearing, including fees charged by SOAH. The bill also provides for an appeal of a final administrative order to Travis County district court.

SB 1803 directs OIG to adopt rules establishing the criteria for initiating a full-scale fraud or abuse investigation, conducting the investigation, collecting evidence, and establishing minimum training requirements for Medicaid fraud or abuse investigators.

To monitor the enforcement of protections provided by SB 1803 and to recommend additional changes in the law, the House Committee on Public Health, the House Committee on Human Services, and the Senate Committee on Health and Human Services will periodically review information from HHSC and OIG.

"The most common complaint I heard from stakeholders was that they felt OIG was operating 'in the dark' and that providers did not know what to expect if they were accused of fraud or an overpayment," Senator Huffman said.

Dr. Holcomb says all these changes are steps in the right direction, adding that the involvement of knowledgeable medical and dental directors who can lend clinical perspective in the adjudication process is encouraging.

Michelle Romero, TMA associate director for advocacy, says the bill represents some improvements over the original rules but doesn't go far enough to protect physicians. Through rulemaking, she says, TMA will work with OIG in an effort to lend more transparency to OIG's investigation process and to afford physicians greater due process.

Focus on Medicaid Fraud

Investigating and preventing fraud, waste, and abuse in the Texas Medicaid program received considerable attention this legislative session. Senator Huffman says that has to do with OIG's role in recovering erroneous, fraudulent, and wasteful payments in the state's health and human services programs to the tune of billions of dollars.

SB 1803 wasn't the only bill related to OIG operations filed this session. Senate Bill 8 by Sen. Jane Nelson (R-Flower Mound) and Representative Kolkhorst takes effect Sept. 1. The bill validates the authority of the inspector general to detect and investigate fraud at all levels of the state health and human services system. It also creates a data analysis unit within HHSC and authorizes OIG to employ and commission peace officers to assist the office in carrying out fraud investigations.

Senator Nelson says the legislation will allow the state to take a proactive approach to identifying potential fraud in the Medicaid program.

"SB 8 directs HHSC to develop a program to identify outliers, anomalies, and red flags in the Medicaid program so that we can deal with abuse trends on the front end. This will not only prevent lost revenue but also make the investigation process work more efficiently for all parties," she said.

 Crystal Zuzek can be reached by telephone at (800) 880-1300, ext. 1385, or (512) 370-1385; by fax at (512) 370-1629; or by email.

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Last Updated On

May 13, 2016

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