White collar crime related issues to clinical trials in the state system
Medicaid Fraud Control Units ("MFCU") investigate and prosecute Medicaid fraud. MFCU coordinates with State of Texas resources. Texas Medicaid must suspend all Medicaid payments to a provider after a determination that there is a credible allegation of fraud. Payments may be suspended unilaterally without notice to the provider. The Texas statutory scheme authorized the Civil Medicaid Fraud Division to investigate and prosecute "unlawful acts," issue civil investigative demands, require sworn answers to written questions, and obtain sworn testimony through examinations under oath prior to litigation. Remedies the State can recover include treble damages, up to $10,000 civil penalties per violation, a revocation of provider agreement or license, and automatic exclusion from participation in Medicaid for a period of ten years. The same as in the federal system, Texas also authorizes a private cause of action. The OAG determines whether the State will participate in the suit. In 2007 an amendment now allows the Relator to continue the suit even if OAG declines to intervene. However, whether the State intervenes or not, the Texas Medicaid Program recovers damages and the Relator shares in the recovery. With the 2007 amendment the State has effectively monetized and incentivized an aggressive litigation atmosphere subsequently deepened by the large numbers of desperate and unemployed lawyers willing to take their first case on a contingent fee agreement solely to gain their first client and gain marketable litigation experience. In addition to the traditional CMS penalties, the State of Texas prosecutes violations under the most appropriate Texas Penal Code statute including the garden variety white collar crime prosecutions for theft, misapplication of fiduciary property, and tampering with a government record.
More recent developments
Texas Medicaid Fraud was given additional teeth in enforcement effective on September 1, 2013. The legislation was purportedly aimed at enhancing the state's ability to detect and prevent Medicaid fraud, waste, and abuse. However the majority of provisions were added to comply with federal mandates necessary to secure ongoing federal funding for the Texas Medicaid program to ensure continued eligibility for incentive recoveries under its civil false claims act. S.B. 746 brought the State's civil false claims act - Texas Medicaid Fraud Prevention Act ("TMFPA") - into compliance with the federal requirement that the corresponding state statute be at least as effective in rewarding and facilitating qui tam actions as the federal false claims act. The U.S. Department of Health and Human Services Office of Inspector General gave Texas until September 1, 2013 to amend the TMFPA so that the state may continue to qualify for a 10-percentage-point increase in its share of recovery of civil Medicaid false claims judgments and settlements. The bill also extended false claims liability to any person or entity that commits an unlawful act by conspiring to otherwise violate the TMFPA, or who conceals, avoids, or decreases their obligations to repay funds to Medicaid. The bill also made procedural changes to the state civil false claims statute of limitations and public disclosure provisions, and broadened the anti-retaliation provisions. Another bill, S.B. 1803, amended the Texas Government Code to meet federal requirements allowing the state to continue receiving matching funds from the federal government for the state's Medicaid program. S.B. 8 amended the Texas Government Code to require the Medicaid program to establish a data analysis unit intended to detect data trends and identify anomalies relating to compliance with Medicaid and Children's Health Insurance Program (CHIP) requirements. The bill also limits the marketing activities of CHIP and Medicaid providers and changes the licensure of non-emergency medical transportation companies and emergency medical services providers. The bill also provided a two-year moratorium on new licenses for emergency medical services providers beginning September 1, 2013. The result of the newest developments may be increased Medicaid program oversight and enhanced opportunities for whistleblowers and state enforcement authorities to bring Medicaid-based civil false claims actions in Texas. These new laws, combined with the swelling ranks of Medicaid Recovery Audit Contractors and similar entities, mean that Texas health care providers will likely see more scrutiny of their Medicaid billing activities. These present potential challenges for healthcare providers because Texas now has additional tools at its disposal to bring enforcement claims under the TMFPA. The state now has more resources to detect Medicaid fraud prior to receiving complaints, is able to restrict providers' ability to advertise services to potential patients, and has broadened the definition of "unlawful acts." However, the bills also provide additional protections for healthcare providers, which balance to some extent the state's interest in enforcing its Medicaid laws and providers' need for clarity and transparency.
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