Part I.
Texas Department of Health
Chapter 28.
Third-Party Resources
On behalf of the State Medicaid Director, the Texas Department of
Health (department) adopts the repeal §§28.101, 28.111, 28.121,
28.131 and new §§28.101 - 28.102, 28.201 - 28.203, 28.301 - 28.302,
and 28.401 - 28.404, relating to third party recovery in the Medicaid program.
Sections 28.203, 28.301-28.302, and 28.403 are adopted with changes to the
proposed text as published in the December 25, 1998, issue of the
Texas Register
(23 TexReg 13002). The repeal of §§28.101,
28.111, 28.121, and 28.131, and new §§28.101-28.102, 28.201-28.202,
28.401-28.402, and 28.404 are adopted without changes and therefore will not
be republished.
The Social Security Act, §1902a(25) (codified at 42 U.S.C. §1396a(a)(25))
requires the department to implement reasonable procedures to identify, establish,
and seek recovery from third parties who may have a legal liability to pay
for services provided by Medicaid. The Human Resources Code, §32.033,
establishes the requirement that an applicant who applies for, or receives
medical assistance assign his or her right of recovery from third parties
to the department and creates a separate and distinct cause of action in favor
of the department to recover from liable third parties. Federal regulations
found at 42 C.F.R. §§447.15 and 447.20, require that the state limit
participation in the Medicaid program to providers who agree to accept Medicaid
payment as payment in full for covered services provided to Medicaid recipients
and places restrictions upon providers when there are third party resources
available for payment of some or all of services provided by Medicaid. In
addition to the above requirements, there has been a concerted effort on the
part of both state and federal government to prevent, detect and prosecute
fraud and abuse in state and federal healthcare programs. States have been
called upon to implement effective programs and procedures to enhance their
ability to prevent and detect fraud and abuse in the Medicaid program.
The General Appropriations Act, HB 1, Article IX, Rider 167, passed by
the 75th Legislature, required each state agency to review and consider for
re-adoption each rule adopted by the agency under Government Code, Chapter
2001 (Administrative Procedure Act). The department published a Notice of
Intention to Review and consider for re-adoption, revision, or repeal Title
25, Texas Administrative Code, Part I, Chapter 28, Medicaid Third Party Recovery,
§§28.101, 28.111, 28.121, and 28.131, as required by Rider 167 in
the
Texas Register
on February 12, 1999 (24
Tex Reg 1001). The department had already determined that §§28.101,
28.111, 28.121, and 28.131, would be repealed and replaced by these adopted
new rules.
The existing rules which are being repealed will be replaced by the new
rules. The existing rules are being repealed to provide for adoption of a
complete re-adoption of the rules which will provide more information about
the laws that apply, the process and procedures to follow and be more easily
understood. The new rules also implement an alternative process to ensure
the collection of money under a third party reimbursement right under the
provisions of Government Code, §531.0391, which was passed by the 75th
Legislature, 1997, and directs the Health and Human Services Commission (or
a health and human services agency) to either: contract with a contractor
to recover third party reimbursement rights; or, develop alternative policies
to ensure the collection of money under a subrogation or third-party reimbursement.
The following affected parties were provided an opportunity to assist in
the development of the rules: the Texas Trial Lawyers Association (TTLA);
the Texas Association of Defense Counsel (TADC); The Association of Texas
Hospitals and Health Care Organizations (THA); the Texas Medical Association
(TMA); the Texas Osteopathic Medical Association (TOMA); Advocacy, Inc.; Texas
Legal Services Center; and the State Bar of Texas.
The new sections clarify the department's legal and procedural requirements;
provide notice to recipients, providers and attorneys about their rights and
responsibilities; protect the state's right to recovery of third party resources;
enhance the department's ability to monitor third party resources and recoveries;
improve the department's ability to deter and detect fraud and abuse in the
Medicaid program; and, implement the Legislature's intent to improve recoveries
from third parties to which the state is entitled arising from payment of
medical expenses.
The department is making the following changes to clarify the intent of
the department:
Change: Regarding 28.301(c), the department changed the wording in the
rule to clarify what is meant by "to pursue" to be consistent with comments
and responses offered on other sections of the rule.
Change: Regarding §28.302(c), the department changed "pursue a recovery
from" to "submit a bill, or other written demand for payment or collection
of debt" to clarify what is meant by "pursue a recovery". The department also
added a sentence to clarify that a provider may file a statutory provider
lien, and make reasonable requests for information relating to the likelihood
of recovery from a third party or a representative of a recipient, without
being required to refund a Medicaid payment. The intent of the department
is that the provider is allowed to make reasonable inquiry regarding the availability
and profitability of pursuing a third party before being required to return
the Medicaid paid amount. Any inquiry which a reasonable person could interpret
as demand for payment, or an attempt to collect an unpaid debt, will bring
the provider within the limitations and prohibitions stated in §28.301(d)
and (h), and §28.302(g) and (j).
Change: Regarding §28.302(j), the department changed "seeking payment
or co-payment" to clarify what is meant by seeking payment or co-payment,
and to put a knowledge requirement regarding a person's Medicaid eligibility
in the rule. The department also changed §28.302(j)(1) to reflect these
clarifications and to clarify that the remedy is in addition to other sanctions
and remedies available under other laws.
Change: Regarding §28.403, the department changed the waiver authority
of the commissioner to reflect a recent clarification from the federal Health
Care Financing Administration (HCFA). HCFA has stated that a state's authority
to waive all or part of the federal matching share in third party recovery
is limited to situations where the cost of recovery exceed the amount which
could be collected. The HCFA policy goes on to clarify that the Medicaid program
has first right of recovery in any settlement or court judgment, and that
federal law and regulations do not permit the compromise settlement or release
of any claim so long as the federal government has not been reimbursed for
its share of the amount recovered by Medicaid. HCFA did give states options
which would provide recipients and their legal representative with incentives
to continue to pursue the Medicaid right of recovery in third party cases.
The department must implement one of HCFA's options. The department anticipates
that there will be significant changes in the way third party recoveries will
be compromised and settled as a result of HCFA's policy clarification. HCFA's
policy letter, and procedures developed by the department to implement the
policy will be provided, when they become available, to any interested party
by contacting the Office of General Counsel, Texas Department of Health, 1100
West 49th, Austin, Texas 78756.
The department received written comments from the Association of Texas
Hospitals and Health Care Organizations (THA), the law firm of Sullins, Johnston,
Rohrbach and Magers, representing Memorial Hermann Hospital System, and Texas
Health Resources. The Texas Trial Lawyers offered appreciation for being included
in the drafting of the rules, but offered no specific comments to the proposed
rules. The following is a summary of the comments and the department's response
to each comment.
Comment: One commentor submitted comments which did not relate to the Third
Party Recovery rules, rather seemed related to the claims filing deadlines,
and data systems of the Medicaid program in general, which is outside the
scope of these rules.
Response: The department acknowledges the concerns of the commentor, but
the comments do not relate to the proposed rules. No change was made to the
rules as a result of the comment.
Comment: Regarding 28.301(c), two commentors stated that they felt that
the 12 month time period placed an unnecessarily short period of time on providers
to identify and attempt to pursue a third party insurer, if the provider has
been paid by the department. The commentors suggested that the time period
be extended to 18 or preferably 24 months. One commentor stated that a 24
month time period would be consistent with the two-year statute of limitations
and would provide a more reasonable amount of time.
Response: The department disagrees with the commentors. Medicaid requires
that third party insurers should be billed prior to submitting a bill to Medicaid.
This is consistent with long standing policy that Medicaid is the payor of
last resort. Cost avoidance is one of the first third party recovery methods
which the federal regulations require the state to implement. Section 28.301(c)
contemplates that the provider billed Medicaid, because at the time services
were provided, the third party insurer was unknown to the provider. Under
the provider's contract with the department, once the provider bills and receives
payment from the Medicaid program for covered services, the provider agrees
to accept the Medicaid payment as payment in full. This section allows the
provider the time-limited opportunity to abrogate the contract and seek recovery
from a third party insurer. The department believes that 12 months is a reasonable
period of time to determine whether an individual had another third party
insurer at the time services were provided. Most health insurers require a
claim or proof of loss to be submitted within 12 months from the date of service
as well. The department does not believe that a provider who has billed Medicaid,
and has received the Medicaid payable amount, and has thereby agreed to accept
Medicaid payment as payment in full, is harmed by being provided a time-limited
opportunity to refund the Medicaid payment and pursue a third party insurer
for more than the Medicaid payable amount. The provider is given an opportunity
to file an informational claim, and forego Medicaid payment, in which case
the time period within which to file a claim for payment with Medicaid is
18 months from the date of service. Before the end of the 18 month time period,
the provider must either submit a bill to Medicaid for payment and agree to
accept the Medicaid paid amount as payment in full, or forego Medicaid payment
and proceed with the provider's claim against a third party. Any time a provider
bills and accepts Medicaid payment as payment in full, the provider must release
all provider liens or claims filed against third parties, to the extent the
lien or claim has been satisfied by the Medicaid payment. The department does
not understand the two- year statute of limitations comment in the context
of a third party insurer claim. No change was made to the rule as a result
of the comment.
Comment: Regarding 28.301(c), one commentor suggests that a "provider must
refund only those amounts paid by Medicaid 'upon receipt of such recovery
from a third party health insurer" not 'prior to pursuing the third party
for payment'...".
Response: This alternative is clearly not acceptable under federal guidelines
provided to states from the federal Health Care Financing Administration (HCFA).
HCFA has issued very clear guidelines which state that, if a state is going
to allow a provider to return a Medicaid payment, and abrogate the contract
with the state which requires them to accept Medicaid as payment in full,
any refund must be made before pursuing the third party resource. HCFA Memorandum
FMC-31, dated February 8, 1994, reconfirmed in State Medicaid Director letter
dated June 9, 1997, which states in part:
Question: Must the provider refund Medicaid at the time the provider decides
to pursue the third-party payor, or may the refund occur subsequent to the
recovery (giving the option to retain the Medicaid reimbursement if the third
party recovery is unsuccessful). Answer: There is no option, the provider
must refund Medicaid prior to pursuing third-party payments. (emphasis added
to original text)
Comment: Regarding §28.301(d), one commentor suggested adding "Unless
the provider makes an election pursuant to these rules" before the text of
subsection (d). The commentor believes this will make it clear that the provider
is not limited to the Medicaid payable amount if they comply with the rules.
Response: The department disagrees with the commentor's suggestion. Section
28.301(d) is a substantive part of the rules, not a qualification within the
rules. It states that the provider is limited to the Medicaid payable amount,
regardless of any election they have made elsewhere in the rules. To be restricted
to the Medicaid paid amount under this section the provider submits a bill
and is paid by Medicaid and doesn't tell us at any time that another third
party has been billed for the same service. To fall within this limitation,
the provider has already violated other sections of the rule. No change was
made to the rule as a result of the comment.
Comment: Regarding §28.301(g), one commentor suggested the inclusion
of a "knowingly" requirement be added to the rule stating that they did not
think it was the intent of the state or federal government to include innocent,
inadvertent accounting errors to subject a provider to criminal or civil penalties.
Response: The department understands the commentor's concern, however,
this section does not create any substantive violation of the law or impose
any criminal or civil penalties. This section is intended to put providers
on notice that if the provider receives more than one payment for the same
service, and conceals or fails to account to the department for the duplicate
or excessive payment, the department may refer the incident to an agency charged
with investigation and/or prosecution under other laws and rules which may
apply. The department has a duty to refer all suspected fraud or abuse to
the appropriate agency for investigation. Because of this, the department
believes we have a duty to inform providers so they may take all appropriate
measures to avoid innocent or inadvertent acts or failure to act which could
bring them within the scope of state or federal fraud and abuse or false claims
laws. The substantive statutes and laws contain their own "scienter" requirement,
which is beyond the scope of this rule. No change was made to the rule as
a result of the comment.
Comment: Regarding §28.301(h), one commentor suggests adding a qualification
to this provision to read "Except as set forth under the provisions of this
section and section 28.302". The commentor goes on to suggest that there is
an ambiguity regarding what "seeking to recover" means in the context of this
section.
Response: The department disagrees with the commentor regarding adding
an exception to the rule. There are no exceptions to this prohibition against
billing a Medicaid recipient or the representative of the recipient found
in the federal law creating this prohibition (Social Security Act §§1902a(25)(C),
codified at 42 U.S.C. §1396a(a)(25)), or the federal regulation which
implements the law, and the department declines to create an exception. The
language was taken from the federal regulation found at 42 C.F.R. §447.20.
The department agrees that any ambiguity in the language can be eliminated
by changing "seeking payment or co- payment" to "submitting a bill or other
written demand for payment or collection of debt". Also, it is not the intent
of the department to preclude reasonable inquiry regarding the status of an
individual as Medicaid eligible, or the availability of third party resources.
The rule was changed to reflect these clarifications.
Comment: Regarding §28.302(a)(2), the commentor suggests that this
section creates an unfair obligation for providers to continue to monitor
Medicaid paid accounts and report the existence of possible third party liability.
They comment this is an "unfunded mandate".
Response: The department disagrees with the commentor. The provider has
no duty or continuing obligation to monitor the Medicaid paid claim if the
provider has accepted the Medicaid payment as payment in full, closes the
account, and releases any lien filed based upon the account. If this is the
case, the provider would be unlikely to discover the existence of a third
party. However, if the provider has: submitted an informational claim indicating
that they intend to submit a claim for payment to a third party; or, have
been paid but continue to monitor the account for third party resources; or,
have been paid but do not release any liens based on the account; and, they
have not repaid the department, they are required to comply with this section.
Under these circumstances it is fair to suggest that the provider is monitoring
the "paid" account for the provider's business reasons, not as an "unfunded
mandate" of the department. No change was made to the rule as a result of
the comment.
Comment: Regarding §28.302(c), two commentors suggested that the 12
month time period for identification of a third party is too short. One suggested
extending the deadline to twenty four 24 months, the other suggested an extension
to eighteen 18 months. One commentor also suggested that the phrase "whose
liability has been established or is undisputed" should be added to this section
to parallel the similar provision relating to third party insurer.
Response: The department disagrees with both suggestions. The department
established the 12 month time period as a compromise during the drafting of
the rules. The trial lawyers, who almost always include a claim for medical
care in their representation of recipients against third parties, had taken
the position that after the provider bills and is paid by the Medicaid program,
the provider is limited to the Medicaid payable amount under federal law and
the provider's contract with the department. This position is legally correct;
the department has no legal or contract obligation to allow providers to continue
to seek payment in excess of the Medicaid paid amount after they have been
paid in full by Medicaid. After Medicaid has paid the claim, by operation
of law, the right to recover from any liable third party belongs to the department,
not to the provider as required by Human Resources Code §32.033, and
Social Security Act §1092(a)(25)(H), 1902(a)(45), 1912(a). It is important
to note that the department reached the 12 month time period as a compromise
for the benefit of providers, over the objection of the trial lawyers. Under
the compromise, a provider can bill and receive payment from the department
and still be allowed a 12 month period to identify a potential third party,
make a decision regarding the likelihood of recovery, and refund the Medicaid
paid amount to the department, before pursuing recovery. The provider would
be given an additional 6 months before they would be required to either submit
a claim for payment to the department, or forgo Medicaid payment altogether.
In reality all providers are given 18 months to determine whether there is
a potential third party, before risking foregoing Medicaid payment, they simply
cannot continue to keep Medicaid money beyond the 12 month time period allowed
by the rule. Providers are already provided 18 months to decide whether to
submit a claim for payment to Medicaid, so we believe no change is required
to the rule. The department has determined that allowing a provider to retain
Medicaid payments for longer than 12 months, while seeking additional amounts
is not sound management of state or federal funds. The department declines
the request to extend the 12 month time period for refunding Medicaid paid
amounts. The 18 month deadline also gives the department 6 months to adjudicate
and pay the claim after a provider decides to submit the claim. Any time a
provider bills and accepts Medicaid payment as payment in full, the provider
must release all provider liens or claims filed against third parties, to
the extent the lien or claim has been satisfied by the Medicaid payment. There
are two federal deadlines that the department also took into consideration
in determining the time periods to include in the compromise. The first is
the federal requirement that all provider claims must be submitted to the
department no later than 12 months from the date of service, as required by
42 C.F.R. 447.45(d). The second is the federal requirement that the state
must pay all claims within two years from the date of service, as required
by the Social Security Act §1132(a). Failure to comply with either of
these federal claims filing requirements could result in loss of federal matching
funds to the state. No change was made to the rule as a result of the comments.
The department also disagrees with adding the phrase "whose liability has
been established or is undisputed" suggested to this section, because requiring
liability to be established or undisputed before a provider could return the
Medicaid payment and pursue the third party would be unnecessarily restrictive
to the provider. No change was made to the rule as a result of the comment.
Comment: Regarding 28.302(d)(3), a commentor suggests that the requirement
that "the provider establish its right to payment separate of any amounts
claimed and established by the recipient", without the benefit of clarifications
which took place during the drafting of the proposed rule would preclude them
from relying on their statutory hospital lien (Property Code, Chapter 55).
Response: The department disagrees with the commentor. Health Care Financing
Administration (HCFA) has instructed the states that even if they allow a
provider to pursue a recovery, they must: "prohibit providers from pursuing
money that has been awarded to the Medicaid beneficiary. In other words, the
provider lien must be against the tortfeasor and not the general assets of
the beneficiary, e.g., the provider would be entitled to reimbursement from
a tort judgment or settlement when the settlement specifically distinguishes
a set amount of money for medical expenses and then only if the amount is
above the amount owed to Medicaid (for unreimbursed Medicaid expenses). The
provider could be reimbursed only if the money has not been allotted to the
beneficiary in a court judgment or settlement. This would mean that if the
lien is not perfected, the tortfeasor would stand to retain the money. If
the State does, in fact, assure protection of beneficiary assets in this way,
then it would be permissible to allow the provider to abrogate its agreement
with Medicaid and return Medicaid's payment before pursuing it own lien."
(emphasis in original) HCFA State Medicaid Director letter, dated June 9,
1997.
To allow the provider to abrogate the contract, and obtain HCFA approval
for being out of compliance with specific federal statutes and regulations,
the department adopted the standard specifically set out in HCFA's guidance
letter to the States. If the provider has refunded the Medicaid paid amount
as required by §28.302(c)(1), and has complied with the other provisions
of §28.302(d), there would be no impediment to the hospital lien attaching
to the claim of the recipient. However, this section applies to all providers,
not just hospital providers, so it is important that the provider establish
their separate right to payment, by filing a pleading in the case, or by reliance
on a statutory lien or right of action. No change has been made to the rule
as a result of the comment.
Comment: Regarding §28.302(j), a commentor suggested that the section
contain the following exception "Except as set forth in Section 28.302(c),(d),(e),(f),(g),(h),and
(i)".
Response: The department disagrees with the commentor for the reasons set
forth in the response to the comment regarding §28.301(h). No change
was made to the rule as a result of the comment.
Comment: Regarding §28.302, a commentor suggested a knowledge requirement
be added to this section of the rule.
Response: The department disagrees with the commentor for the reasons stated
in the response to Comment regarding §28.301(h). New language was added
to §28.302(j) to include a knowledge requirement regarding an individual's
Medicaid eligibility as a result of the comment.
The department received written comments from the Association of Texas
Hospitals and Health Care Organizations (THA), the law firm of Sullins, Johnston,
Rohrbach & Magers, representing Memorial Hermann Hospital System, and
Texas Health Resources. These commentors generally supported the adoption
of the new rules, except as noted in the comments. The Texas Trial Lawyers
offered appreciation for being included in the drafting of the rules, but
offered no specific comments to the rules.
25 TAC §§28.101, 28.111, 28.121, 28.131
The repeals are adopted under the Human Resources Code, §32.033
which gives the department the authority to adopt rules for the enforcement
of its third party recovery rights, and Government Code, §531.021, which
gives the Health and Human Services Commission the authority to adopt rules
to administer the state's medical assistance program and is submitted by the
Texas Department of Health under its agreement with the Health and Human Services
Commission to operate the purchased health services program and as authorized
under Chapter 15, §1.07, Acts of the 72nd Legislature, First Called Session
(1991). The General Appropriations Act, House Bill 1, Article IX, Rider 167,
passed by the 75th Legislature is implemented by this repeal and adoption.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March
31, 1999.
TRD-9901947
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: April 30, 1999
Proposal publication date: December 25, 1998
For further information, please call: (512) 458-7236
Subchapter A. General Provisions
25 TAC §28.101, §28.102
The new sections are adopted under the Human Resources Code,
§32.033 which gives the department the authority to adopt rules for the
enforcement of its third party recovery rights, and Government Code, §531.021,
which gives the Health and Human Services Commission the authority to adopt
rules to administer the state's medical assistance program and is submitted
by the Texas Department of Health under its agreement with the Health and
Human Services Commission to operate the purchased health services program
and as authorized under Chapter 15, §1.07, Acts of the 72nd Legislature,
First Called Session (1991). The General Appropriations Act, House Bill 1,
Article IX, Rider 167, passed by the 75th Legislature is implemented by this
repeal and adoption.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March
31, 1999.
TRD-9901948
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: April 30, 1999
Proposal publication date: December 25, 1998
For further information, please call: (512) 458-7236
25 TAC §§28.201-28.203
The new sections are adopted under the Human Resources Code,
§32.033 which gives the department the authority to adopt rules for the
enforcement of its third party recovery rights, and Government Code, §531.021,
which gives the Health and Human Services Commission the authority to adopt
rules to administer the state's medical assistance program and is submitted
by the Texas Department of Health under its agreement with the Health and
Human Services Commission to operate the purchased health services program
and as authorized under Chapter 15, §1.07, Acts of the 72nd Legislature,
First Called Session (1991). The General Appropriations Act, House Bill 1,
Article IX, Rider 167, passed by the 75th Legislature is implemented by this
repeal and adoption.
§28.203.Duty of Attorney or Representative of a Recipient.
(a)
An attorney or other person who represents or acts on behalf
of a recipient in a third party claim or action for damages for personal injuries,
regardless of whether a legal action has been filed, for which medical services
are provided and paid for by Medicaid must send written notice of representation
to the department. The written notice must be signed by the attorney or representative
of the recipient and sent to the address listed in Subchapter D of this chapter
for notices and department contact. The written notice must be submitted within
45 days from the date the attorney or representative undertakes representation
of the recipient, or from the date a potential third party is identified.
The written notice must include the following information, if known at the
time of initial filing:
(1)
the name and address and identifying information of the
recipient (either the date of birth and the Social Security number, or the
date of birth and the Medicaid identification number);
(2)
the name and address of any third party or third party
health insurer against whom a third party claim is or may be asserted for
injuries to the Medicaid applicant or recipient;
(3)
the name and address of any health care provider who
has asserted a claim for payment provided to the Medicaid applicant or recipient
for medical services provided to the Medicaid applicant or recipient for which
a third party may be liable for payment, whether or not the claim may have
been submitted to or paid by the department; and
(4)
if any of the information described in subsection
(a) of this section is unknown at the time the initial notice is filed, this
should be indicated on the notice, and revised if and when the information
becomes known.
(b)
An authorization to release information relating to the
recipient directly to the attorney or representative may be included as a
part of the notice and must be signed by the recipient. A notice containing
an authorization for release of information will be considered valid until
revoked in writing by the recipient, and no separate authorization will be
required of the recipient or the attorney or the representative at the time
of a request for information.
(c)
Any settlement, trust, judgment, order or distribution
of proceeds which is required to be disclosed to the department to carry out
the purpose of this chapter is protected from further disclosure by the department
or its agents under the provisions of the Social Security Act, §1902(a)(7)
(codified at 42 U.S.C 1396a(a)(7)), relating to restrictions on information
disclosure).
(d)
The department must be paid all amounts owed under this
chapter prior to placing any proceeds from a third party into a trust created
under the provisions of the Social Security Act §1917(d)(4) (codified
at 42 U.S.C 1396p(d)(4)), unless the department agrees otherwise.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March
31, 1999.
TRD-9901949
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: April 30, 1999
Proposal publication date: December 25, 1998
For further information, please call: (512) 458-7236
25 TAC §28.301, §28.302
The new sections are adopted under the Human Resources Code,
§32.033 which gives the department the authority to adopt rules for the
enforcement of its third party recovery rights, and Government Code, §531.021,
which gives the Health and Human Services Commission the authority to adopt
rules to administer the state's medical assistance program and is submitted
by the Texas Department of Health under its agreement with the Health and
Human Services Commission to operate the purchased health services program
and as authorized under Chapter 15, §1.07, Acts of the 72nd Legislature,
First Called Session (1991). The General Appropriations Act, House Bill 1,
Article IX, Rider 167, passed by the 75th Legislature is implemented by this
repeal and adoption.
§28.301.Provider Billing and Recovery From Third Party Health Insurer.
(a)
Providers must make a good faith effort to determine whether
a recipient is or may be insured by a third party health insurer at the time
services are provided, including examining the recipient's Medicaid eligibility
card for third party resources and making reasonable oral or written inquiry
of the recipient.
(b)
If a third party health insurer is identified, providers
are required to bill the third party health insurer before submitting a claim
for payment to the department under the provisions of §29.3 of this title
(relating to Time Limits for Submitted Claims) unless otherwise directed by
the department.
(c)
Providers who identify a third party, within 12 months
from the date of service, and wish to submit a claim for payment to a third
party health insurer after a claim for payment has been submitted and paid
by the department, must refund any amounts paid by Medicaid prior to submitting
a claim for payment to the third party insurer.
(d)
Providers are limited to the Medicaid payable amount and
the provider is required to accept the amount paid by the department as payment
in full if:
(1)
a claim for payment is submitted to and paid by the department;
and
(2)
the provider failed to inform the department at the
time the claim was filed, or any time thereafter, that a third party health
insurer was also billed for the same service.
(e)
Payments made by a third party health insurer to a provider
who is limited to the Medicaid payable amount under subsection (d) of this
section must be forwarded to the department for distribution according to
the provisions of Subchapter D of this chapter.
(f)
If the amount paid by a third party health insurer is less
than the amount payable for the service by Medicaid, the department may be
billed for the difference between the amount paid by the third party health
insurer and the Medicaid payable amount, if a claim was timely filed with
the department under the provisions of §29.3 of this title.
(g)
Any provider who accepts Medicaid payment as payment in
full for services and retains any amount in excess of the Medicaid payable
amount from a third party and conceals or fails to account to the department
for the third party amount, resulting in excessive or duplicate payment for
the same service, may be referred for investigation and prosecution for violations
of state and/or federal Medicaid or false claims laws.
(h)
Providers are prohibited from submitting a bill, or other
written demand for payment or collection of debt for any Medicaid-covered
service from an individual who the provider knows or should know is a Medicaid
eligible recipient or from the representative of a recipient, regardless of
whether a claim for payment for the service is submitted to the department.
This section does not prohibit a provider from submitting reasonable inquiries
or requests for information to a recipient, or representative of a recipient
to assist the provider in identifying a third party insurer. However, any
inquiry which would lead a reasonable person to believe that the provider
was making a demand for payment, or attempting to collect an unpaid debt,
will bring the provider within the limitations and prohibitions as follows:
(1)
If a provider attempts to recover any amount from a recipient
for any Medicaid- covered service, the department may provide for a reduction
of an amount otherwise payable to the provider in addition to referring the
provider for investigation and prosecution for violations of state and/or
federal Medicaid or false claims laws.
(2)
The amount of the reduction may be up to three times
the amount the provider sought in excess of the Medicaid payable amount.
(i)
Eventual recovery, repayment or recoupment of money by
the department or the recipient will not release or preclude referral by the
department for investigation, prosecution or liability under any civil or
criminal law which would otherwise apply to the unlawful conduct.
(j)
The department will not accept any claim for payment under
this subsection submitted after 18 months from the date of service, regardless
of whether an informational claim has been timely filed.
§28.302.Provider Billing and Recovery from Other Third Parties.
(a)
Providers must make a good faith effort to determine, at
the time services are delivered or at any time thereafter, whether the services
being provided to the recipient are a result of injuries caused by a person
who is or may be liable for payment for the services.
(1)
The good faith effort required by this section may be satisfied
by examination and verification of the recipient's Medicaid eligibility card
for third party resources and/or making reasonable oral or written inquiry
of the recipient at the time services are provided.
(2)
Providers must submit information relating to the
existence or possible existence of third party liability obtained from the
recipient or legal representative of the recipient at the time a claim is
submitted to the department for payment, or at any time thereafter, or when
an informational claim is submitted under the provisions of §29.3 of
this title (relating to Time Limits for Submitted Claims).
(b)
Providers are required to pursue recovery from third parties
whose liability has been established or is undisputed, before submitting a
claim for payment to the department unless otherwise directed by the department.
(c)
Providers who identify a third party, within 12 months
from the date of service, and wish to submit a bill, or other written demand
for payment or collection of debt to a third party after a claim for payment
has been submitted and paid by the department, must: refund any amounts paid
by Medicaid prior to submitting a bill or other written demand for payment
or collection of debt to the third party for payment, and; comply with the
provisions of subsection (d) of this section. This section does not prohibit
a provider from filing a statutory provider lien or require a refund to Medicaid
prior to submitting reasonable requests for information to a third party or
a representative of a recipient to assess the likelihood of recovery from
a third party.
(d)
Providers may retain a payment from a third party in excess
of the amount Medicaid would otherwise have paid only if the following requirements
are met:
(1)
the provider submits an informational claim to the department
within the claim filing deadline contained in §29.3 of this title indicating
the identity of the third party from whom recovery is being pursued;
(2)
the provider gives notice to the recipient, or the
attorney or representative of the recipient that the provider may not or will
not submit a claim for payment to Medicaid and the provider may or will pursue
a third party, if one is identified, for payment of the claim. The notice
must contain a prominent disclosure that the provider is prohibited from billing
the recipient or a representative of the recipient for any Medicaid-covered
services, regardless of whether there is an eventual recovery or lack of recovery
from the third party or Medicaid;
(3)
the provider establishes its right to payment separate
of any amounts claimed and established by the recipient; and
(4)
the provider obtains a settlement or award in its
own name separate from a settlement obtained by or on behalf of the recipient
or award obtained by or on behalf of the recipient, or there is an agreement
between the recipient or attorney or representative of the recipient and the
provider, that specifies the amount which will be paid to the provider after
a settlement or award is obtained by the recipient.
(e)
Providers who have filed informational claims with the
department but have not made a recovery from a third party within 18 months
from the date of service must make a choice before the end of the 18th month
from the date of service to:
(1)
continue to pursue a claim against the third party for
payment and forego the right to submit a claim for payment to Medicaid; or
(2)
convert the informational claim to a claim for payment
from the department and receive payment from the department as payment in
full for all Medicaid-covered services.
(f)
Providers who pursue a third party for payment and who
subsequently fail to recover from the third party within 18 months from the
date of service, or recover less than the Medicaid payable amount within 18
months from the date of service, may submit a claim for payment to the department
for the difference between the amount recovered and the Medicaid payable amount,
only if the requirements of subsection (c) and/or (d) of this section are
met.
(g)
Providers are limited to the Medicaid payable amount and
the provider is required to accept the amount paid by the department as payment
in full if a claim for payment is submitted and paid by the department:
(1)
before a third party claim is paid; and
(2)
the provider failed to comply with each of the requirements
under subsection (c)and/or (d) of this section.
(h)
Except as provided by subsection (c) of this section, payments
made by third parties to a provider after the provider has been paid by the
department must be forwarded by the provider to the department for distribution
according to the provisions of Subchapter D of this chapter.
(i)
Any provider who accepts Medicaid payment as payment in
full for services and retains any amount in excess of the Medicaid payable
amount from a third party and conceals or fails to account to the department
for the third party amount, resulting in excessive or duplicate payment for
the same service may be referred for investigation and prosecution for violations
of state and/or federal Medicaid or false claims laws.
(j)
Providers are prohibited from submitting a bill, or other
written demand for payment or collection of debt for any Medicaid-covered
service from an individual who the provider knows or should know is a Medicaid
eligible recipient or from the legal representative of a recipient, regardless
of whether a claim for payment for the service is submitted to the department.
This section does not prohibit a provider from submitting reasonable requests
for information to a recipient, or representative of a recipient to assist
the provider in identifying a third party. However, any inquiry which would
lead a reasonable person to believe that the provider was making a demand
for payment, or attempting to collect an unpaid debt, will bring the provider
within the limitations and prohibitions as follows:
(1)
If a provider attempts to recover any amount from a recipient
for a Medicaid covered service the department may provide for a reduction
of an amount otherwise payable to the provider in addition to referring the
provider for investigation and prosecution for violations of state and/or
federal Medicaid or false claims laws.
(2)
The amount of the reduction may be up to three times
the amount the provider sought in excess of the Medicaid payable amount.
(3)
In addition to the amount of any reduction in paragraphs
(1) and (2) of this subsection, the provider may be referred for investigation
and prosecution for violations of state and federal Medicaid or false claims
laws.
(k)
The department will not accept and can not pay any claim
for payment under this subsection submitted after 18 months from the date
of service, regardless of whether an informational claim has been timely filed.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March
31, 1999.
TRD-9901950
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: April 30, 1999
Proposal publication date: December 25, 1998
For further information, please call: (512) 458-7236
25 TAC §§28.401-28.404
The new sections are adopted under the Human Resources Code,
§32.033 which gives the department the authority to adopt rules for the
enforcement of its third party recovery rights, and Government Code, §531.021,
which gives the Health and Human Services Commission the authority to adopt
rules to administer the state's medical assistance program and is submitted
by the Texas Department of Health under its agreement with the Health and
Human Services Commission to operate the purchased health services program
and as authorized under Chapter 15, §1.07, Acts of the 72nd Legislature,
First Called Session (1991). The General Appropriations Act, House Bill 1,
Article IX, Rider 167, passed by the 75th Legislature is implemented by this
repeal and adoption.
§28.403.Waiver Authority of the Commissioner.
(a)
The commissioner has the authority to waive all or part
of the state's right to recover from liable third parties when the commissioner
finds that enforcement of the state's right of recovery would tend to defeat
the purpose of public assistance.
(b)
The commissioner has the authority to waive all or part
of the federal matching share of the department's right to recovery from liable
third parties only if the cost of recovery exceeds the amount which could
be recovered.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March
31, 1999.
TRD-9901951
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: April 30, 1999
Proposal publication date: December 25, 1998
For further information, please call: (512) 458-7236
Chapter 1301.
Health Care Information
Subchapter B. Collection and Reporting of Health Plan Employer Data and Information Set (HEDIS) from Health Maintenance Organizations (HMOs)
25 TAC §§1301.32-1301.34
The Texas Health Care Information Council (the Council) adopts
amendments to §§1301.32-1301.34, concerning the collection and reporting
of Health Plan Employer Data and Information Set (HEDIS) from health maintenance
organizations (HMOs), without changes to the proposed text as published in
the February 12, 1999, issue of the
Texas Register
(24 TexReg 914) and will not be republished.
The amendments are adopted to provide Texas citizens and consumers relevant
regional information upon which to make decisions regarding HMOs; to incorporate
HMO reporting division definitions as reported to the Texas Department of
Insurance (TDI) under 28 TAC §11.304; and to comply with Texas Health
and Safety Code, Title 2, Subtitle E Chapter 108.006 (a)(4) relating to building
on and not duplicating other state data. The adopted amendment to §1301.32
includes the new terms "Service Area Division" and "HEDIS Guidelines" and
adds new language to the terms "HEDIS", "Reporting set measures", "Service
Area" and "Testing set measures" to clarify the HEDIS Reporting Manual to
be used in this chapter. Section 1301.32 also has numbers assigned to the
definitions as required by 1 TAC §91.23. The adopted amendments to §1301.33
remove language requiring this rule to be amended annually. Language is added
to §1301.33 (b) that requires HMOs to report HEDIS data from the same
division that is currently required by the Texas Department of Insurance.
The adopted amendment to §1301.33(c) changes the deadline for data to
be received by the Council. The adopted amendments clarify and provide consistency
of language in this subchapter. These amendments apply beginning with the
1998 data to be reported in 1999.
The published notice of the proposed rules established a March 15, 1999
deadline for the furnishing of written comments. Aetna U.S. Healthcare presented
written comments. The Council conducted a public hearing on the proposed sections
February 24, 1999, at which there was no attendance. The Council has considered
the written comments before adopting the final sections.
The Council received no comments on §1301.33 and §1301.34. The
majority of comments received in relation to §1301.32 are best characterized
as being against THCIC's proposal to require separate submissions of HEDIS
data based on the same service area divisions used for reporting financial
information to the Texas Department of Insurance. The commenter contends that
this will result in sample sizes too small, thus compromising the validity
of the data. The Council recognizes that there are statistical issues raised
through the reporting of smaller service area populations but feels they are
resolvable. The Council's action is supported by various subcommittees and
technical advisory committees with expertise in the calculation of health
statistics in ways that enhance validity and reliability. In its first year
of reporting, the Council handled the problem of inadequate sample sizes to
ensure validity by reporting an "NA" in instances where HMOs had fewer than
100 patients for the measure. The Council recognizes that it may take some
time to secure enough reported data on a specific measure to provide Texans
with the performance of an HMO on a service area basis. The Council's HMO
Technical Advisory Committee has advised that the reporting of HEDIS data
by HMOs on the same basis as that used for the reporting of financial data
to the Texas Department of Insurance is the most expedient way for Council
to achieve Legislative intent regarding consumer relevant data on HMOs.
The amendments are adopted under the Health and Safety Code,
§108.006, and §108.009. The Council interprets §108.006 as
authorizing it to adopt rules necessary to carry out Chapter 108, including
rules concerning data collection requirements and rules prescribing a process
for providers to submit data. The Council interprets §108.009 as authorizing
it to collect data using methods of the health benefit plans industry.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April
1, 1999.
TRD-9901954
Jim Loyd
Executive Director
Texas Health Care Information Council
Effective date: April 21, 1999
Proposal publication date: February 12, 1999
For further information, please call: (512) 424-6490
Chapter 28.
Medicaid Third Party Recovery
Subchapter B. Applicant and Recipient Requirements
Subchapter C. Provider Requirements
Subchapter D. Duties of the Department
Part XVI.
Texas Health Care Information Council
Subchapter D. Rules and Procedures for Council Officers, Council Employees, Donors and Donations