SECTION 371.1305. Preliminary Investigation

(a) The OIG may receive and investigate complaints related to fraud, waste, or abuse within HHSC or an HHS agency. The OIG prioritizes complaints for purposes of determining the order in which complaints are investigated, taking into account the seriousness of the allegations made in a complaint. The OIG may consider the following factors when opening cases and prioritizing cases for the efficient management of the OIG's workload:

(1) the highest potential for recovery or risk to the State;

(2) the history of noncompliance with applicable law and regulations;

(3) identified fraud trends;

(4) internal affairs investigations according to the seriousness of the threat to recipient or public safety or the risk to program integrity in terms of the amount or scope of fraud, waste, or abuse posed by the allegation that is the subject of the investigation;

(5) acts or the failure to act that potentially threatens the public health or may result in physical harm to the public; and

(6) the potential for or actual physical destruction of state property, including the loss, theft and destruction of State assets, property, benefits, or equipment.

(b) The OIG assesses complaints received by the OIG from any source to determine within 30 days of receipt whether it has:

(1) sufficient indicators of fraud, waste, or abuse; and

(2) jurisdiction.

(c) If the OIG has jurisdiction and sufficient information to justify an investigation, the OIG completes a preliminary investigation within 45 days of receipt of the complaint to determine whether there is sufficient basis to warrant a full investigation. The OIG may also collaborate with federal or other state authorities in conducting audits or investigations and in taking enforcement measures in response to program violations.

(1) After completing its preliminary investigation, the OIG may, at its discretion, initiate settlement discussions of an administrative case with the person who is the subject of the investigation. If the matter cannot reasonably be settled or if the OIG determines that further investigation is required before the propriety of settlement or other enforcement can be evaluated, the OIG may conduct a full investigation.

(2) If, at any point during its investigation, the OIG determines that an overpayment resulted without wrongdoing, the OIG may refer the matter for routine payment correction by HHSC's fiscal agent or an operating agency or may offer a payment plan.

(d) The OIG may also consider the following factors in determining whether to open a full investigation:

(1) the nature of the program violation;

(2) evidence of knowledge and intent;

(3) the seriousness of the program violation;

(4) the extent of the violation;

(5) prior noncompliance issues;

(6) prior imposition of sanctions, damages, or penalties;

(7) willingness to comply with program rules;

(8) efforts to interfere with an investigation or witnesses;

(9) recommendations of peer review groups;

(10) program violations within Medicaid, Medicare, Titles V, XIX, XX, CHIP, and other HHS programs;

(11) pertinent affiliate relationships;

(12) past and present compliance with licensure and certification requirements;

(13) history of criminal, civil, or administrative liability; and

(14) any other relevant information or analysis the OIG deems appropriate.

(e) In addition to the factors listed in subsection (d) of this section, the OIG may also consider the following factors in determining whether to close a preliminary investigation:

(1) the complainant is unavailable or unwilling to cooperate;

(2) information or evidence to substantiate the complaint is unavailable or unobtainable;

(3) the complaint is resolved after it is filed with the OIG;

(4) data regarding the subject of the complaint, such as claims or encounter data, does not support the allegations raised in the complaint;

(5) an investigation, audit, inspection, or other review regarding the complaint already exists;

(6) an analysis of the provider's billing patterns does not show that the provider's billing patterns vary significantly from those of comparable providers; or

(7) any other relevant information or analysis the OIG deems appropriate.

(f) Once the preliminary investigation is completed, the OIG reviews the allegations of fraud, waste, abuse, or questionable practices, and all facts and evidence relating to the allegation and prepares a preliminary report before the allegation of fraud or abuse proceeds to a full investigation. The preliminary report documents the following:

(1) the allegation that is the basis of the report;

(2) the evidence reviewed;

(3) the procedures used to conduct the preliminary investigation;

(4) the findings of the preliminary investigation; and

(5) whether a full investigation is warranted.

(g) The OIG maintains a record of all allegations of fraud, waste, or abuse against a provider containing the date each allegation was received or identified and the source of the allegation, if available. This record is confidential under Texas Government Code §531.1021(g) and subject to Texas Government Code §531.1021(h).

Source Note: The provisions of this §371.1305 adopted to be effective April 15, 2014, 39 TexReg 2833; amended to be effective May 1, 2016, 41 TexReg 2941; amended to be effective July 23, 2019, 44 TexReg 3628