bill changes how Medicaid plans claw back overpayments

The text as introduced · 456 words

89R223 KKR-D

By: Hinojosa of Hidalgo
S.B. No. 1616

A BILL TO BE ENTITLED

AN ACT

relating to certain payment recovery and recoupment efforts under

Medicaid and the child health plan program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 544.0502, Government Code, as effective

April 1, 2025, is amended by amending Subsection (i) and adding

Subsection (j) to read as follows:

(i) The executive commissioner shall adopt rules necessary

to implement this section, including rules establishing due process

procedures that a managed care organization must follow when

engaging in payment recovery efforts as provided by this section.

In adopting the rules establishing due process procedures, the

executive commissioner shall require that a managed care

organization or an organization's contracted entity that engages in

payment recovery efforts as provided by this section and Section

544.0503 provide to [ a provider required to use electronic visit

verification ]:

(1) a provider required to use electronic visit

verification written notice of the organization's intent to recoup

overpayments in accordance with Section 544.0503; and

(2) a provider, regardless of whether the provider is

required to use electronic visit verification, a minimum of [ at

least ] 60 days after the provider has exhausted all rights to an

appeal to cure any defect in a claim , including by submitting

necessary documentation for the claim or resubmitting the claim,

before the organization may begin efforts to collect overpayments.

(j) A managed care organization or the organization's

contracted entity that engages in payment recovery efforts under

this section or Section 544.0503, in conducting an audit or other

review of a claim for equipment, supplies, or services for which the

organization granted prior authorization, may not review:

(1) the medical necessity determination; or

(2) an error in the claim documentation for the

previously approved equipment, supplies, or services, if the error

was not made by the provider.

SECTION 2. Section 544.0504, Government Code, as effective

April 1, 2025, is amended to read as follows:

Sec. 544.0504. RECOVERY AUDIT CONTRACTORS. To the extent

required under Section 1902(a)(42), Social Security Act (42 U.S.C.

Section 1396a(a)(42)), the commission shall establish a program

under which the commission contracts with one or more recovery

audit contractors to identify [ Medicaid ] underpayments and

overpayments under Medicaid, including under the Medicaid managed

care program, and recover the overpayments.

SECTION 3. If before implementing any provision of this Act

a state agency determines that a waiver or authorization from a

federal agency is necessary for implementation of that provision,

the agency affected by the provision shall request the waiver or

authorization and may delay implementing that provision until the

waiver or authorization is granted.

SECTION 4. This Act takes effect September 1, 2025.