Senate Bill 1803 Moving, Hopefully in the Right Direction

It’s politics as usual at the Capitol. But is the truth even uglier?

Thanks to a deluge of calls and contacts from countless Medicaid providers, Senate Bill 1803 recently moved out of the Health and Human Services committee. As it’s the only bill out of committee that puts any checks and balances on the Officer of the Inspector General (“OIG”), we’re hoping that’s a Good Thing. But this is politics — so things aren’t exactly as they appear.

We gave testimony regarding the bill on March 26th — testimony some might consider “scathing” in its indictment of OIG. We said it then and we’ll say it now: we’re in favor of ANYTHING that puts the brakes on OIG and Jack Stick, its Director of Enforcement. SB 1803 is a step towards that goal — albeit a tiny one.

If we sound guarded, it’s because this was originally a much more substantial bill. What happened is that the night before the committee hearing, a substitute was entered. And, surprise surprise, most of the best parts of SB 1803 had been taken out.

The worst changes were the ones that impacted the so-called “CAF holds“, payment holds based on “credible allegations of fraud”. The old bill had some definitions of what a “credible allegation of fraud” actually is, and had strict time limits (not short enough, but better than nothing) on payment holds. It also provided for much more well-defined processes in the determination of the actual credibility of these allegations. But most importantly, it gave providers an opportunity to respond to allegations BEFORE a CAF hold is put in place.

These things were substantively absent from the new bill sprung on us pre-hearing. Putting aside all the things we’d LIKE to see happen, here’s what got gutted out of the old 1803:

  • The provider now has no opportunity to respond to the CAF before their payments are held. This is the number one due process issue facing all Medicaid providers.
  • The notion of a “credible allegation” ISN’T EVEN DEFINED in the new version. The problem right now is that a CAF is open to interpretation.
  • CAF’s are subject to an “integrity review”, but as far as we can tell, these reviews will be unavailable for scrutiny by anyone outside of OIG. So much for accountability; the problem right now is that all these investigations are completely internal to OIG.
  • Overpayment hearings can still be conducted by HHSC if the OIG chooses to go that route (we’re betting they’d generally want to be judge, jury & executioner).
  • Costs for hearings (both CAF hold hearings and overpayment hearings) are now to be split with providers! These are the same providers who are already being bankrupted by the CAF holds while trying to pay their attorneys.

There are some upsides — the biggest one is the right to appeal a CAF hold or an overpayment finding in Travis County District Court. This is a plus for overpayements, but providers have actually had good experiences in SOAH appeals so far; it’s getting there in one piece that’s the problem. There are also many lines of statute about informal hearings, but this is useless when you have a bully like Mr. Stick running enforcement over at OIG. The threshold of a CAF is changed from “reliable evidence” to a “determination” based on the aforementioned internal integrity review; it’s unclear how much good the integrity reviews will actually do.

So that’s where we stand — the one bill regarding OIG that’s moved out of committee is a decidedly mixed bag. This is despite the push by the really big lobby in the room – the Texas Medical Association, who are almost certainly disappointed. Of course, things could change drastically at any moment; most of the action in a Texas legislative session happens in the last couple of weeks anyway. We’re hopeful that folks like Senator Hinojosa will get in there and fix some of these issues. But the real problem is that we keep hearing that the Governor and friends are actively making sure that the bill remains in its current state, or that nothing passes at all.

This raises the question of whether the Governor has any interest at all in restoring confidence within the Medicaid provider network. We can’t answer that one. Nor can we answer the following: is the provider network being actively undermined in order to facilitate the Governor’s position on “expansion”? It’s outrageous to think that people — providers, their employees, and their patients — would be thrown under a bus in the name of political expediency. We’ll keep hoping that’s not the case — and that as the bill moves forward, we see some signs of a genuine interest in concepts like rule of law and due process on the part of Texas’ conservative majority.

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