As reported last week by the Austin American Statesman, Stuart Bowen, the new Inspector General for the Texas Health and Human Services Commission, is sending his first report to the Governor today.
TDMR has obtained a copy of the full report which is available for download – OIG Quarterly Report Final.
Report very comprehensive
The report has not been examined in full but contains tremendous information about the reorganization of the HHSC-OIG under Bowen and introduces his staff. It also provides statistical data on the OIG’s latest activities. For instance, the agency has settled 26 cases worth $8,604,072 since Bowen took over (page 23).
“Credible Allegation of Fraud” payment holds now too restrictive
One point that jumped off the page was that the agency feels new restrictions on applying Medicaid payment holds under SB 207 are too restrictive and may be in violation of federal law (pg 22).
The Affordable Care Act requires states to withhold payments to Medicaid providers if a credible accusation of potential fraud is discovered during the review or investigation of a provider’s billings to the program.
In practice, the provider is notified of the hold and the reason for the hold, and then payment for future billings is withheld by the Inspector General’s office until such time as the issue is resolved or the payments on hold cover the overpayments discovered. Most often a provider negotiates a settlement with the Litigation Section. In some cases, the payment hold is litigated before the State Office of Administrative Hearings in a formal hearing.
Historically, the Inspector General has used this tool to bring providers into compliance and to recoup large overpayments. Unfortunately, the practice of implementing payment holds increased inordinately over the past several years, leading the Sunset Commission to conclude that the holds were being over utilized and sometimes abused.
In reaction to this finding, the Legislature set a new SOAH evidentiary standard for payment holds. Now, for a hold to be upheld, the Inspector General must prove probable cause and show that the actions of the provider could potentially damage the state budget and threaten the integrity of the Medicaid program. This standard is so restrictive that it effectively prevents the Inspector General from successfully instituting holds. Our discussions with CMS indicate this provision may be in conflict with federal law.