Mistakes Aren’t Fraud; Make Medicaid OIG Fair

TMA Testimony: Senate Bill 207 

House Human Services Committee
Senate Bill 207
May 11, 2015

Submitted on behalf of:
Texas Medical Association, Texas Pediatric Society, 
Texas Academy of Family Physicians, Texas Association of Obstetricians and Gynecologists, the American Congress of Obstetricians and Gynecologists-Texas Chapter and Federation of Texas Psychiatry

On behalf of the above named medical societies, thank you for the opportunity to provide input on legislation relating to the sunset of the Health and Human Service Commission Office of Inspector General. We strongly support Senate Bill 207, which embodies recommendations organized medicine has long championed to ensure accountability at the OIG as well as fair, impartial rules and processes for physicians accused of waste, fraud or abuse. We applaud the Sunset Advisory Commission for its remarkably thorough and much needed review of this agency and appreciate and support the measures in the bill to strengthen due process protections and promote resolution of Medicaid fraud and abuse investigations. 

Perhaps most importantly, the bill specifies that unintended billing errors or coding mistakes are decidedly not fraud.  Medical coding and billing are remarkably complex and even the most proficient medical coders make innocent errors. On top of that, Medicaid coding rules are not the same as Medicare’s or commercial payer’s, amplifying the opportunity for mistakes. Physicians who make mistakes are willing to repay the state for the costs associated with them, but do not want to have their practices ruined if the state subsequently labels those mistakes as fraud.  

SB 207 augments due process protections for physicians and providers, eliminates redundant reviews, while also ensuring the OIG retains the ability to protect taxpayers from indisputable fraud.  Reforms included in the bill include: 

  • Expediting the timeframe for the OIG to complete investigations of physicians or providers accused of fraud.

  • Making clear that payment holds are a “serious enforcement tool” and should only be used in when failing to do so would impose significant financial risk to the state. 

  • Giving OIG discretion as to whether to impose a full or partial payment hold or to impose no hold at all if there is good cause. 

  • Removing the requirement for physicians and providers to pay for half of the costs of hearings held in relation to accusations of Credible Allegations of Fraud.

  • Directing OIG to adopt rules establishing criteria for prioritizing cases to be opened and closing preliminary investigations that are not worth pursuing further. Additionally, OIG rules must specify standards for categorizing cases according to the seriousness of the Medicaid violation and scaling enforcement actions accordingly.

  • Directing the office to review its sampling and extrapolation methodology for fairness.

  • Specifying that the OIG must investigate potential waste, fraud or abuse by managed care organizations (MCOs).

  • Requiring OIG to coordinate its physician/provider fraud reviews with MCO special investigative units to minimize redundant reviews. Further, OIG must coordinate its provider and MCO audit activities with those conducted by HHSC to avoid duplication of resources and costs. 

We urge your prompt support of this important legislation.

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Last Updated On

September 16, 2015

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