Senate Passes SB 8 To End Medicaid Fraud

April 15, 2013

The Texas Senate today passed SB 8 by Senator Jane Nelson to eliminate the epidemic levels of fraud, waste and abuse in our Medicaid system.

"Fraud robs us of the resources we need to care for our most vulnerable citizens and breaches the trust of taxpayers," said Senator Nelson. "This bill will make it tougher for fraudulent providers to take advantage of the system."

Between 2004 and 2011, the Office of Inspector General identified more than $6 billion in fraud and waste in Texas health and human service programs. Massive overutilization has been uncovered in Medicaid dental, with costs more than quadrupling from 2006 to 2011. Additionally, a 2012 internal audit of the Medicaid Transportation Program found systemic issues related to advanced payments. There have been numerous reports of Texas Medicaid patients being solicited by doctors using gifts such as iPads, gift cards and even cash.

SB 8 confronts Medicaid fraud by:

  • Establishing a unit at the Health and Human Services Commission to identify anomalies and red flags that could indicate Medicaid fraud, waste or abuse;
  • Confirming the Office of Inspector General's authority to investigate fraud, waste, and abuse across all health and human services programs;
  • Strengthening policies prohibiting the solicitation of Medicaid clients;
  • Transitioning medical transportation services to a regional, capitated delivery model;
  • Enhancing policies to prevent inappropriate ambulance services;
  • Requiring the Commission to regularly monitor prior authorization and utilization review processes; and
  • Excluding providers from the Texas Medicaid program who have been excluded from a state or federal health care program for fraudulent acts, or for injury to a child, senior, or individual with a disability.

The bill now moves to the House of Representatives for further consideration.