SECTION 371.1603. Legal Basis and Scope

(a) The OIG may take administrative enforcement measures against a person or an affiliate of a person based upon an investigation or finding, including an audit finding, in the Medicaid or other HHS programs. Administrative enforcement measures may include:

(1) making referrals for further investigation or action;

(2) taking an administrative action;

(3) imposing a sanction;

(4) assessing damages, penalties, costs related to an administrative appeal, and investigative and administrative costs; or

(5) denying the enrollment of a person for participation in the Medicaid program.

(b) When the OIG receives information regarding a possible program violation or possible fraud, abuse, overpayment, or waste, the OIG conducts an investigation pursuant to Subchapter F of this chapter (relating to Investigations). 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 the agency's fiscal agent or an operating agency or may offer a payment plan.

(c) At the OIG's sole discretion, overpayments may be collected in a lump sum or through installments. A person may request to pay through installments, but the OIG has sole discretion whether to grant the request. The OIG determines a reasonable length of time for an installment agreement based on the circumstances of each individual case. Installment agreements may include provisions for the assessment of interest, administrative penalties, or both.

(d) Nothing in these rules is intended to prevent concurrent administrative, civil, or criminal investigation and action. Subject to express statutory limitations, the OIG may proceed with recoupment or other administrative enforcement concurrently with judicial prosecution of the same matter.

(e) An OIG case remains open until:

(1) the investigation is complete;

(2) the case is settled;

(3) the OIG makes an administrative determination that closes the case for lack of evidence or appropriate administrative enforcement; or

(4) all administrative remedies have been exhausted.

(f) Except as provided in other statute, rule, or regulation, the OIG, when making a preliminary determination, will take into consideration the following when determining the appropriate administrative action or sanction, including the amount of any administrative damages and penalties:

(1) the seriousness of the violation;

(2) the prevalence of errors by the person;

(3) the financial or other harm to the state or recipients resulting or potentially resulting from those errors;

(4) whether the person had previously committed a violation;

(5) any mitigating factors; and

(6) in the event the OIG opts to pursue administrative penalties, the amount of administrative penalty necessary to deter the person from committing future violations.

(g) When determining the seriousness, prevalence of error, harm, or potential harm of the violation, as described in subsection (f) of this section, the OIG may consider multiple factors. These factors may include:

(1) physical or emotional harm to one or more patients;

(2) one or more violations that involve more than one patient;

(3) economic harm to any individual or entity;

(4) potential for harm to the public;

(5) attempted concealment of the act constituting a violation;

(6) intentional, premeditated, knowing, or grossly negligent act constituting a violation;

(7) prior similar violations;

(8) previous disciplinary action by a licensing board, any government agency, peer review organization, or health care entity for committing a violation or violations relevant to the violation or violations under consideration by the OIG;

(9) violation of a licensing board or government agency order concerning a violation or violations relevant to the violation or violations under consideration by the OIG; or

(10) other circumstances relevant to the seriousness of the misconduct.

(h) The following may be considered as mitigating factors that warrant less severe or restrictive administrative action or sanction by the OIG, as described in subsection (f) of this section. The person seeking mitigation shall have the burden to present evidence regarding any mitigating factors that may apply in any contested case. OIG may consider any mitigating evidence the agency becomes aware of while making a preliminary determination regarding an appropriate administrative action or sanction. Once the OIG issues a notice that the agency intends to impose a sanction upon a person, including a preliminary penalty report, then the person subject to that notice or preliminary report shall provide any mitigating evidence that the person wishes the OIG to consider to the OIG before any scheduled informal resolution meeting or informal review. Mitigating factors may include:

(1) self-reported and voluntary admissions of a violation or violations;

(2) implementation of remedial measures to correct or mitigate harm from the violation or violations, such as:

(A) the extent and expeditious initiation of the person's own investigation;

(B) resources that the person committed to correcting or mitigating the problem;

(C) disciplinary action or actions that the person has taken against the individuals responsible for the problem; and

(D) institutional change or changes made by the person in order to ensure compliance and prevent future violations;

(3) acknowledgment of wrongdoing and willingness to cooperate with the OIG, such as by acceptance of a settlement agreement;

(4) rehabilitative potential;

(5) prior community service and present value to the community;

(6) other relevant circumstances reducing the seriousness of the misconduct; or

(7) other relevant circumstances lessening responsibility for the misconduct.

(i) This rule shall not be construed to deny any person potentially subject to an administrative sanction imposed by the OIG, including administrative damages or penalties, the right to introduce mitigating evidence in a contested case proceeding. This rule also shall not be construed to deny the OIG the right to introduce any evidence supporting any of the factors described above in a contested case proceeding in which the agency seeks to impose an administrative sanction, including administrative damages or penalties, upon a person.

Source Note: The provisions of this §371.1603 adopted to be effective October 14, 2012, 37 TexReg 7989; amended to be effective April 15, 2014, 39 TexReg 2833; amended to be effective May 1, 2016, 41 TexReg 2941; amended to be effective May 20, 2020, 45 Texreg 3259