SECTION 353.505. Recovery of Funds

(a) If a managed care organization (MCO) discovers fraud or abuse has occurred in the Medicaid or CHIP program, based on information, data, or facts obtained by the MCO, it must:

(1) notify the Health and Human Services Commission-Office of Inspector General (HHSC-OIG) and the Office of the Attorney General (OAG) through a referral as described in §353.502 of this subchapter (relating to Managed Care Organization's Plans and Responsibilities in Preventing and Reducing Waste, Abuse, and Fraud) that includes a detailed description of the fraud or abuse and each payment made to a provider as a result of the fraud or abuse;

(2) subject to subsection (b) of this section, begin payment recovery efforts; and

(3) ensure that any payment recovery efforts in which the MCO engages are in accordance with this subchapter.

(b) If the amount sought to be recovered under subsection (a)(2) of this section exceeds $100,000, the MCO may not engage in payment recovery efforts if, not later than the 10th business day after the date the MCO notified HHSC-OIG and the OAG under subsection (a)(1) of this section, the MCO receives a notice from either office indicating that the MCO is not authorized to proceed with recovery efforts.

(c) To the extent allowed by federal law, an MCO may retain one-half of any money recovered under subsection (a)(2) of this section by the MCO. The MCO shall remit the remaining money recovered under subsection (a)(2) of this section to the OIG.

(d) If the OIG notifies an MCO under subsection (b) of this section, the OIG proceeds with recovery efforts, and the OIG recovers all or part of the payments the MCO identified as required by subsection (a)(1) of this section, the MCO is entitled to one-half of the amount recovered for each payment the MCO identified after any applicable federal share is deducted. The MCO may not receive more than one-half of the total amount of money recovered after any applicable federal share is deducted.

(e) An MCO shall submit a quarterly report to the HHSC-OIG detailing the amount of money recovered under subsection (a)(2) of this section.

(f) Notwithstanding any provision of this section, if the OIG discovers waste, abuse, or fraud in Medicaid or CHIP in the performance of its duties, the OIG may recover payments made to a provider as a result of the waste, abuse, or fraud. All payments recovered by the OIG shall be deposited to the credit of the general revenue fund.

(g) The OIG shall coordinate with MCOs to ensure that the OIG and the MCOs do not both begin payment recovery efforts under this rule for the same case of waste, abuse, or fraud.

Source Note: The provisions of this §353.505 adopted to be effective August 8, 2004, 29 TexReg 7301; amended to be effective March 1, 2012, 37 TexReg 1291; amended to be effective July 18, 2019, 44 TexReg 3543