US Laws, Codes, Statutes & Cases

HUMAN RESOURCES CODE

CHAPTER 32. MEDICAL ASSISTANCE PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS


	§ 32.001. PURPOSE OF CHAPTER.  The purpose of this 
chapter is to enable the state to provide medical assistance on 
behalf of needy individuals and to enable the state to obtain all 
benefits for those persons authorized under the Social Security Act  
or any other federal act.

Acts 1979, 66th Leg., p. 2348, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979. 


	§ 32.002. CONSTRUCTION OF CHAPTER.  (a) This chapter 
shall be liberally construed and applied in relation to applicable 
federal laws and regulations so that adequate and high quality 
health care may be made available to all children and adults who 
need the care and are not financially able to pay for it.
	(b)  If a provision of this chapter conflicts with a 
provision of the Social Security Act  or any other federal act and 
renders the state program out of conformity with federal law to the 
extent that federal matching money is not available to the state, 
the conflicting provision of state law shall be inoperative to the 
extent of the conflict but shall not affect the remainder of this 
chapter.

Acts 1979, 66th Leg., p. 2348, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979. 


	§ 32.003. DEFINITIONS.  In this chapter:                                    
		(1)  "Board" means the Health and Human Services 
Commission or the governing body of an agency operating part of the 
medical assistance program, as appropriate.
		(2)  "Commissioner" means the Health and Human Services 
Commission or the commissioner or executive director of an agency 
operating part of the medical assistance program, as appropriate.
		(3)  "Department" means the Health and Human Services 
Commission or an agency operating part of the medical assistance 
program, as appropriate.
		(4)  "Medical assistance" includes all of the health 
care and related services and benefits authorized or provided under 
federal law for needy individuals of this state.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1995, 74th Leg., ch. 6, § 2, eff. March 23, 
1995.

SUBCHAPTER B. ADMINISTRATIVE PROVISIONS


	§ 32.021. ADMINISTRATION OF THE PROGRAM.  (a) The 
department is the state agency designated to administer the medical 
assistance program provided in this chapter.
	(b)  The department shall enter into agreements with any 
federal agency designated by federal law to administer medical 
assistance when the department determines the agreements to be 
compatible with the state's participation in the medical assistance 
program and within the limits of appropriated funds.  The 
department shall cooperate with federal agencies designated by 
federal law to administer medical assistance in any reasonable 
manner necessary to qualify for federal funds.
	(c)  The department shall establish methods of 
administration and adopt necessary rules for the proper and 
efficient operation of the program.
	(d)  The department shall include in its contracts for the 
delivery of medical assistance by nursing facilities provisions for 
monetary penalties to be assessed for violations as required by 42 
U.S.C. Section 1396r, including without limitation the Omnibus 
Budget Reconciliation Act (OBRA), P. L. 100-203, Nursing Home 
Reform Amendments of 1987, provided that the department shall:
		(1)  provide for an informal dispute resolution process 
in the Health and Human Services Commission as provided by Section 
531.058, Government Code;  and
		(2)  develop rules to adjudicate claims in contested 
cases, including claims unresolved by the informal dispute 
resolution process of the Health and Human Services Commission.
	(e)  Rules governing the application of penalties shall 
include the following:
		(1)  specific and objective criteria which describe the 
scope and severity of a contract violation which results in a 
recommendation for each specific penalty.  Penalties must be 
appropriate to the violation, and the most severe financial 
penalties must be reserved for situations which create an immediate 
and serious threat to the health and safety of residents;  
"immediate and serious threat" means a situation in which there is a 
high probability that serious harm or injury to patients could 
occur at any time or already has occurred and may well occur again 
if patients are not protected effectively from the harm or if the 
threat is not removed;
		(2)  a system to ensure standard and consistent 
application of penalties among surveyors and different areas of the 
state;
		(3)  due process for nursing facilities providers, 
including an appeals procedure consistent with Chapter 2001, 
Government Code;  and
		(4)  per diem and/or minimum penalties.  The department 
may by rule prescribe a minimum penalty period;  however, once a 
facility gives the department notice that deficiencies have been 
corrected, if surveyors are unable to revisit the facility within 
five days and the deficiencies are later shown to be corrected, the 
per diem penalties cease as of the day the facility gave notice to 
the department or on the last day of the minimum penalty period 
established by the department, whichever is later.
	(f)  To encourage facilities to provide the best possible 
care, the department shall develop an incentive program to 
recognize facilities providing the highest quality care to Medicaid 
residents.
	(g)  Funds collected as a result of the imposition of 
penalties shall be applied to the protection of the health or 
property of residents of nursing facilities, including the cost of 
relocation of residents to other facilities and maintenance or 
operation of a facility pending correction of deficiencies or 
closure, or to incentive programs which recognize the highest 
quality care to residents who are entitled to Medicaid.
	(h)  Medicaid nursing facilities shall also comply with 
state licensure rules, which may be more stringent than the 
requirements for certification.  The department shall use 
appropriate civil, administrative, or criminal remedies authorized 
by state or federal law with respect to a facility that is in 
violation of a certification or licensing requirement.
	(i)  Repealed by Acts 2003, 78th Leg., ch. 204, § 
16.03(1).               
	(j)  Repealed by Acts 2001, 77th Leg., ch. 1284, § 3.04, 
eff. June 15, 2001.
	(k)  Repealed by Acts 2003, 78th Leg., ch. 204, § 
16.03(1).               
	(l)  The department may not include as a reimbursable item to 
a nursing facility an administrative or civil penalty assessed 
against the facility under this chapter or under Chapter 242, 
Health and Safety Code.
	(m)  Notwithstanding any provision of law to the contrary, 
the department shall terminate a nursing facility's provider 
agreement if the department has imposed required Category 2 or 
Category 3 remedies on the facility three times within a 24-month 
period unless the department makes an affirmative finding that good 
cause exists to waive this requirement to facilitate a change in 
ownership to protect residents of a facility.  In this subsection, 
"Category 2 remedies" and "Category 3 remedies" have the meanings 
assigned by 42 C.F.R. Section 488.408.
	(n)  An assessment of monetary penalties under this section 
is subject to arbitration under Subchapter J, Chapter 242, Health 
and Safety Code.
	(o)  In any circumstance in which a nursing facility would 
otherwise be required to admit a resident transferred from another 
facility, because of an emergency or otherwise, the nursing 
facility may not admit a resident whose needs cannot be met through 
service from the facility's staff or in cooperation with community 
resources or other providers under contract.  If a nursing facility 
refuses to admit a resident under this subsection, the nursing 
facility shall provide a written statement of the reasons for the 
refusal to the department within a period specified by department 
rule.  A nursing facility that fails to provide the written 
statement, or that includes false or misleading information in the 
statement, is subject to monetary penalties assessed in accordance 
with this chapter.
	(p)  In order to increase the personal needs allowance under 
Section 32.024(v), as added by Chapter 1333, Acts of the 76th 
Legislature, Regular Session, 1999, the department shall develop an 
early warning system to detect fraud in the handling of the personal 
needs allowance and other funds of residents of long-term care 
facilities.
	(q)  The department shall include in its contracts for the 
delivery of medical assistance by nursing facilities clearly 
defined minimum standards that relate directly to the quality of 
care for residents of those facilities.  The department shall 
consider the recommendations made by the nursing facility quality 
assurance team under Section 32.060 in establishing the standards.  
The department shall include in each contract:
		(1)  specific performance measures by which the 
department may evaluate the extent to which the nursing facility is 
meeting the standards;  and
		(2)  provisions that allow the department to terminate 
the contract if the nursing facility is not meeting the standards.
	(r)  The department may not award a contract for the delivery 
of medical assistance to a nursing facility that does not meet the 
minimum standards that would be included in the contract as 
required by Subsection (q).  The department shall terminate a 
contract for the delivery of medical assistance by a nursing 
facility that does not meet or maintain the minimum standards 
included in the contract in a manner consistent with the terms of 
the contract.
	(s)  Not later than November 15 of each even-numbered year, 
the department shall submit a report to the legislature regarding 
nursing facilities that contract with the department to provide 
medical assistance under this chapter and other nursing facilities 
with which the department was prohibited to contract as provided by 
Subsection (r).  The department may include the report required 
under this section with the report made by the long-term care 
legislative oversight committee as required by Section 242.654, 
Health and Safety Code.  The report must include:
		(1)  recommendations for improving the quality of 
information provided to consumers about the facilities;
		(2)  the minimum standards and performance measures 
included in the department's contracts with those facilities;
		(3)  the performance of the facilities with regard to 
the minimum standards;
		(4)  the number of facilities with which the department 
has terminated a contract or to which the department will not award 
a contract because the facilities do not meet the minimum 
standards;  and
		(5)  the overall impact of the minimum standards on the 
quality of care provided by the facilities, consumers' access to 
facilities, and cost of care.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 15, § 5.22, 
eff. Sept. 1, 1991;  Acts 1995, 74th Leg., ch. 76, § 5.95(49), 
eff. Sept. 1, 1995;  Acts 1995, 74th Leg., ch. 1049, § 1, eff. 
Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1159, § 2.01, eff. 
Sept. 1, 1997;  Acts 2001, 77th Leg., ch. 974, § 2, eff. Sept. 1, 
2001;  Acts 2001, 77th Leg., ch. 1284, § 3.01, 3.04, 7.04, eff. 
June 15, 2001;  Acts 2003, 78th Leg., ch. 198, § 2.92(a), eff. 
Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 204, § 16.03(1), eff. 
Sept. 1, 2003.


	§ 32.0211. RESTRICTIONS ON MEMBERS OF THE BOARD, 
COMMISSIONERS, AND THEIR PARTNERS.  (a) After service in the 
department ends, a former member of the board or a former 
commissioner may not knowingly represent a person before an agency 
or court:
		(1)  in a matter related to the medical assistance 
program in which the department or the federal government has a 
direct interest and in which the board member or commissioner 
participated personally while employed with the department;  or
		(2)  for two years after the date on which service ends 
in a matter related to the medical assistance program if the 
department or the federal government has a direct interest in the 
matter, the matter was pending during his last year of service to 
the department, and the matter was one for which the board member or 
commissioner had responsibility.
	(b)  Subsection (a) of this section does not apply to a 
former board member or commissioner who holds one of the following 
positions and is acting in the scope of that position:
		(1)  employee or officer of federal, state, or local 
government;            
		(2)  employee of a nonprofit hospital or medical 
research organization;  or 
		(3)  employee of an accredited degree-granting college 
or university.       
	(c)  A current board member or commissioner may not knowingly 
participate in the course of his service in a matter related to the 
medical assistance program in which the department or the federal 
government has a direct interest and in which he, his spouse, minor 
child, or business partner has a substantial financial interest.
	(d)  A business partner of a current board member or 
commissioner may not knowingly represent a person before an agency 
or court in a matter related to the medical assistance program:
		(1)  in which the board member or commissioner 
participates or has participated personally and substantially;  or
		(2)  that is under the official responsibility of the 
board member or commissioner.
	(e)  Past or present board members or commissioners are 
subject to a civil penalty of $5,000 for each violation of this 
section.  A partner of a current board member or commissioner is 
subject to a civil penalty of $2,500 for each violation of this 
section.  Each appearance before an agency or court constitutes a 
separate offense.
	(f)  If it appears that this section has been violated, the 
department may request the attorney general to conduct a suit in the 
name of the State of Texas to enjoin the prohibited activity and to 
recover the penalty provided for in this section.

Added by Acts 1981, 67th Leg., p. 755, ch. 287, § 1, eff. Aug. 31, 
1981. 


	§ 32.0212. DELIVERY OF MEDICAL 
ASSISTANCE.  Notwithstanding any other law and subject to Section 
533.0025, Government Code, the department shall provide medical 
assistance for acute care through the Medicaid managed care system 
implemented under Chapter 533, Government Code.

Added by Acts 2003, 78th Leg., ch. 198, § 2.95, eff. Sept. 1, 
2003.      


	§ 32.0213. NURSING FACILITY BED CERTIFICATION AND 
DECERTIFICATION.  (a) The department by rule shall establish 
procedures for:
		(1)  controlling the number of Medicaid beds in nursing 
facilities;         
		(2)  decertification of unused Medicaid beds in nursing 
facilities;  and    
		(3)  reallocation of nursing home beds decertified 
under Subdivision (2) to other nursing facilities.
	(b)  The procedures established under this section must take 
into account the occupancy rate of the nursing facility.
	(c)  The department may exempt a nursing facility from the 
procedures established under this section if the facility:
		(1)  is affiliated with a state-supported medical 
school;                   
		(2)  is located on land owned or controlled by the 
state-supported medical school;  and
		(3)  serves as a teaching facility for physicians and 
related health care professionals.

Added by Acts 1997, 75th Leg., ch. 1159, § 2.02, eff. Sept. 1, 
1997.  Amended by Acts 1999, 76th Leg., ch. 1487, § 1, eff. June 
19, 1999.


	§ 32.0215. HOME OR COMMUNITY CARE PROVIDERS:  CIVIL 
MONETARY PENALTIES.  (a) The department may include in a contract 
for the delivery of medical assistance by a home or community care 
provider a provision for monetary penalties to be assessed for a 
contract violation or any violation of home or community care 
requirements, as required by 42 U.S.C. Section 1396t(j).
	(b)  The department shall develop rules governing the 
application of civil money penalties, including rules prescribing:
		(1)  criteria that describe when and how a civil money 
penalty may be assessed and the amount of the penalty;
		(2)  a system to ensure standard and consistent 
application of the penalties throughout the state;  and
		(3)  an administrative appeals process to adjudicate 
claims in contested cases in accordance with Chapter 2001, 
Government Code.
	(c)  Rules adopted under this section must be designed to 
minimize the time between the identification of a violation and the 
final imposition of a penalty.  Rules adopted under this section may 
authorize the imposition of a penalty that assesses and collects a 
monetary penalty, with interest, for a minimum penalty period and 
on a subsequent per diem basis.
	(d)  A penalty must be appropriate to the violation.  The 
department may assess incrementally more severe penalties for 
repeated or uncorrected violations.
	(e)  The department shall review a penalized provider within 
10 working days after the provider notifies the department that the 
deficiency that caused the imposition of the penalty has been 
corrected.  If the department is unable to review the provider 
within that 10-working-day period, the penalty ceases on the 
earlier of the last day of the minimum penalty period or the date 
the provider gives notice to the department.
	(f)  Money collected as a result of the imposition of 
penalties may be used for the protection of the health or property 
of an individual whose personal property was lost due to a failure 
of a home or community care provider to meet the requirements for 
participation as a provider of home or community care.

Added by Acts 1993, 73rd Leg., ch. 132, § 1, eff. Sept. 1, 1993.  
Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 
1, 1995.


	§ 32.022. MEDICAL AND HOSPITAL CARE ADVISORY 
COMMITTEES.  (a) The board, on the recommendation of the 
commissioner, shall appoint a medical care advisory committee to 
advise the board and the department in developing and maintaining 
the medical assistance program and in making immediate and 
long-range plans for reaching the program's goal of providing 
access to high quality, comprehensive medical and health care 
services to medically indigent persons in the state.  To ensure that 
qualified applicants receive services, the committee shall 
consider changes in the process the department uses to determine 
eligibility.
	(b)  The board shall appoint the committee in compliance with 
the requirements of the federal agency administering medical 
assistance.  The appointments shall provide for a balanced 
representation of the general public, providers, consumers, and 
other persons, state agencies, or groups with knowledge of and 
interest in the committee's field of work.
	(c)  The department shall adopt rules for membership on the 
committee to provide for efficiency of operation, rotation, 
stability, and continuity.
	(d)  The board, on the recommendation of the commissioner, 
may appoint regional and local medical care advisory committees and 
other advisory committees as considered necessary.
	(e)  The board, on the recommendation of the commissioner, 
shall appoint a hospital payment advisory committee.  The committee 
shall advise the board and the department on necessary changes in 
hospital payment methodologies for inpatient hospital prospective 
payments and on adjustments for disproportionate share hospitals 
that will ensure reasonable, adequate, and equitable payments to 
hospital providers and that will address the essential role of 
rural hospitals.  The board shall appoint to the committee persons 
with knowledge of and an interest in hospital payment issues.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1987, 70th Leg., ch. 1052, § 2.01, eff. 
Sept. 1, 1987;  Acts 1989, 71st Leg., ch. 1027, § 10, eff. Sept. 
1, 1989.


	§ 32.023. COOPERATION WITH OTHER STATE AGENCIES.  (a) The 
department's plan for administering medical assistance must 
include procedures for using health services administered by other 
state agencies pursuant to cooperative arrangements.
	(b)  The department may enter into agreements with 
appropriate state agencies that will enable the department to 
implement Title XIX of the federal Social Security Act  to provide 
medical assistance for individuals in institutions or in alternate 
care arrangements.  The agreements must comply with federal law and 
rules.  The department may make medical assistance payments in 
accordance with the agreements.  The agreements are not subject to 
the Interagency Cooperation Act (Article 4413(32), Vernon's Texas 
Civil Statutes).
	(c)  State agencies responsible for the administration or 
supervision of facilities to which medical assistance payments may 
be made under federal law shall enter into the agreements with the 
department and maintain compliance with the agreements so that the 
department may receive federal matching funds to support the 
medical assistance program.
	(d)  The department may pay medical assistance to other 
facilities as required under federal law and rules.

Acts 1979, 66th Leg., p. 2349, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979. 


	§ 32.0231. ANNOUNCEMENT OF FUNDING OR PROGRAM 
CHANGE.  (a) The department shall publish notice in the Texas 
Register of:
		(1)  any attempt to obtain a waiver of federal 
regulations in the medical assistance program;
		(2)  any attempt to obtain or the receipt of funding 
under Title XIX of the federal Social Security Act (42 U.S.C. 
Section 301 et seq.) for a pilot program;  and
		(3)  any amendment to the state medical assistance 
plan.                    
	(b)  The notice must include the name and telephone number of 
a department employee who can provide information relating to the 
matter for which notice was published under this section.
	(c)  The department shall provide to any requestor 
information relating to a matter for which notice was published, 
including the effect and cost of the change, any possible cost 
savings, the criteria for receiving services, and the number of 
people to be served.

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.          


	§ 32.024. AUTHORITY AND SCOPE OF PROGRAM;  
ELIGIBILITY.  (a) The department shall provide medical assistance 
to all persons who receive financial assistance from the state 
under Chapter 31 of this code and to other related groups of persons 
if the provision of medical assistance to those persons is required 
by federal law and rules as a condition for obtaining federal 
matching funds for the support of the medical assistance program.
	(b)  The department may provide medical assistance to other 
persons who are financially unable to meet the cost of medical 
services if federal matching funds are available for that purpose.  
The department shall adopt rules governing the eligibility of those 
persons for the services.
	(c)  The department shall establish standards governing the 
amount, duration, and scope of services provided under the medical 
assistance program.  The standards may not be lower than the minimum 
standards required by federal law and rule as a condition for 
obtaining federal matching funds for support of the program, and 
may not be lower than the standards in effect on August 27, 1967.  
Standards or payments for the vendor drug program may not be lower 
than those in effect on January 1, 1973.
	(d)  The department may establish standards that increase 
the amount, duration, and scope of the services provided only if 
federal matching funds are available for the optional services and 
payments and if the department determines that the increase is 
feasible and within the limits of appropriated funds.  The 
department may establish and maintain priorities for the provision 
of the optional medical services.
	(e)  The department may not authorize the provision of any 
service to any person under the program unless federal matching 
funds are available to pay the cost of the service.
	(f)  The department shall set the income eligibility cap for 
persons qualifying for nursing home care at an amount that is not 
less than $1,104 and that does not exceed the highest income for 
which federal matching funds are payable.  The department shall set 
the cap at a higher amount than the minimum provided by this 
subsection if appropriations made by the legislature for a fiscal 
year will finance benefits at the higher cap for at least the same 
number of recipients of the benefits during that year as were served 
during the preceding fiscal year, as estimated by the department.  
In setting an income eligibility cap under this subsection, the 
department shall consider the cost of the adjustment required by 
Subsection (g) of this section.
	(g)  During a fiscal year for which the cap described by 
Subsection (f) of this section has been set, the department shall 
adjust the cap in accordance with any percentage change in the 
amount of benefits being paid to social security recipients during 
the year.
	(h)  Subject to the amount of the cap set as provided by 
Subsections (f) and (g) of this section, and to the extent permitted 
by federal law, the income eligibility cap for community care for 
aged and disabled persons shall be the same as the income 
eligibility cap for nursing home care.  The department shall ensure 
that the eligibility requirements for persons receiving other 
services under the medical assistance program are not affected.

Text of subsec. (i) as amended by Acts 2003, 78th Leg., ch. 198, 
§ 2.96
	(i)  The department in its adoption of rules may establish a 
medically needy program that serves pregnant women, children, and 
caretakers who have high medical expenses, subject to availability 
of appropriated funds.

Text of subsec. (i) as amended by Acts 2003, 78th Leg., ch. 1251, 
§ 6
	(i)  Subject to appropriated state funds, the department in 
its adoption of rules shall establish a medically needy program 
that serves pregnant women, children, and caretakers who have high 
medical expenses.
	(j)  The department in its adoption of rules shall in fiscal 
year 1990 restore three percent of the 10 percent reduction in 
provider reimbursement.
	(k)  The department in its adoption of rules shall in fiscal 
year 1991 restore 4.5 percent of the 10 percent reduction in 
provider reimbursement.
	(l)  The department shall set the income eligibility cap for 
medical assistance for pregnant women and infants up to age one at 
not less than 130 percent of the federal poverty guidelines.
	(m)  The department shall set the income eligibility cap for 
medical assistance for children up to age four at not less than 100 
percent of the federal poverty guidelines for state fiscal year 
1990 and for children up to age six for state fiscal year 1991.
	(n)  The department in its adoption of rules and standards 
governing the scope of hospital and long-term services shall 
authorize the providing of respite care by hospitals.
	(o)  The department, in its rules and standards governing the 
scope of hospital and long-term services, shall establish a swing 
bed program in accordance with federal regulations to provide 
reimbursement for skilled nursing patients who are served in 
hospital settings provided that the length of stay is limited to 30 
days per year and the hospital is located in a county with a 
population of 100,000 or less.  If the swing beds are used for more 
than one 30-day length of stay per year, per patient, the hospital 
must comply with the Minimum Licensing Standards as mandated by 
Chapter 242, Health and Safety Code, and the Medicaid standards for 
nursing home certification, as promulgated by the department.
	(p)  The department shall provide home respiratory therapy 
services for ventilator-dependent persons to the extent permitted 
by federal law.
	(q)  The department shall provide physical therapy services.                   
	(r)  The department, from funds otherwise appropriated to 
the department for the early and periodic screening, diagnosis, and 
treatment program, shall provide to a child who is 14 years of age 
or younger, permanent molar sealants as dental service under that 
program as follows:
		(1)  sealant shall be applied only to the occlusal 
buccal and lingual pits and fissures of a permanent molar within 
four years of its eruption;
		(2)  teeth to be sealed must be free of proximal caries 
and free of previous restorations on the surface to be sealed;
		(3)  if a second molar is the prime tooth to be sealed, 
a non-restored first molar may be sealed at the same sitting, if the 
fee for the first molar sealing is no more than half the usual 
sealant fee;
		(4)  the sealing of premolars and primary molars will 
not be reimbursed;  and
		(5)  replacement sealants will not be reimbursed.                             
	(s)  The department, in its rules governing the early and 
periodic screening, diagnosis, and treatment program, shall:
		(1)  revise the periodicity schedule to allow for 
periodic visits at least as often as the frequency recommended by 
the American Academy of Pediatrics and allow for interperiodic 
screens without prior approval when there are indications that it 
is medically necessary;  and
		(2)  require, as a condition for eligibility for 
reimbursement under the program for the cost of services provided 
at a visit or screening, that a child younger than 15 years of age be 
accompanied at the visit or screening by:
			(A)  the child's parent or guardian;  or                                     
			(B)  another adult, including an adult related to 
the child, authorized by the child's parent or guardian to 
accompany the child.
	(s-1)  Subsection (s)(2) does not apply to services provided 
by a school health clinic, Head Start program, or child-care 
facility, as defined by Section 42.002, if the clinic, program, or 
facility:
		(1)  obtains written consent to the services from the 
child's parent or guardian within the one-year period preceding the 
date on which the services are provided, and that consent has not 
been revoked;  and
		(2)  encourages parental involvement in and management 
of the health care of children receiving services from the clinic, 
program, or facility.
	(t)  The department by rule shall require a physician, 
nursing facility, health care provider, or other responsible party 
to obtain authorization from the department or a person authorized 
to act on behalf of the department before an ambulance is used to 
transport a recipient of medical assistance under this chapter in 
circumstances not involving an emergency.  The rules must provide 
that:
		(1)  except as provided by Subdivision (3), a request 
for authorization must be evaluated based on the recipient's 
medical needs and may be granted for a length of time appropriate to 
the recipient's medical condition;
		(2)  except as provided by Subdivision (3), a response 
to a request for authorization must be made not later than 48 hours 
after receipt of the request;
		(3)  a request for authorization must be immediately 
granted and must be effective for a period of 180 days from the date 
of issuance if the request includes a written statement from a 
physician that:
			(A)  states that alternative means of 
transporting the recipient are contraindicated;  and
			(B)  is dated not earlier than the 60th day before 
the date on which the request for authorization is made;
		(4)  a person denied payment for ambulance services 
rendered is entitled to payment from the nursing facility, health 
care provider, or other responsible party that requested the 
services if:
			(A)  payment under the medical assistance program 
is denied because of lack of prior authorization;  and
			(B)  the person provides the nursing facility, 
health care provider, or other responsible party with a copy of the 
bill for which payment was denied;  and
		(5)  a person denied payment for services rendered 
because of failure to obtain prior authorization or because a 
request for prior authorization was denied is entitled to appeal 
the denial of payment to the department.
	(t-1)  The department, in its rules governing the medical 
transportation program, may not prohibit a recipient of medical 
assistance from receiving transportation services through the 
program to obtain renal dialysis treatment on the basis that the 
recipient resides in a nursing facility.
	(u)  The department by rule shall require a health care 
provider who arranges for durable medical equipment for a child who 
receives medical assistance under this chapter to:
		(1)  ensure that the child receives the equipment 
prescribed, the equipment fits properly, if applicable, and the 
child or the child's parent or guardian, as appropriate considering 
the age of the child, receives instruction regarding the 
equipment's use;  and
		(2)  maintain a record of compliance with the 
requirements of Subdivision (1) in an appropriate location.
	(v)  The department by rule shall provide a screening test 
for hearing loss in accordance with Chapter 47, Health and Safety 
Code, and any necessary diagnostic follow-up care related to the 
screening test to a child younger than 30 days old who receives 
medical assistance.
	(w)  The department shall set a personal needs allowance of 
not less than $45 a month for a resident of a convalescent or 
nursing home or related institution licensed under Chapter 242, 
Health and Safety Code, personal care facility, ICF-MR facility, or 
other similar long-term care facility who receives medical 
assistance.  The department may send the personal needs allowance 
directly to a resident who receives Supplemental Security Income 
(SSI) (42 U.S.C. Section 1381 et seq.). This subsection does not 
apply to a resident who is participating in a medical assistance 
waiver program administered by the department.
	(x)  The department shall provide dental services annually 
to a resident of a nursing facility who is a recipient of medical 
assistance under this chapter.  The dental services must include:
		(1)  a dental examination by a licensed dentist;                              
		(2)  a prophylaxis by a licensed dentist or licensed 
dental hygienist, if practical considering the health of the 
resident;  and
		(3)  diagnostic dental x-rays, if possible.                                   
	(y)  The department shall provide medical assistance to a 
person in need of treatment for breast or cervical cancer who is 
eligible for that assistance under the Breast and Cervical Cancer 
Prevention and Treatment Act of 2000 (Pub.  L. No. 106-354) for a 
continuous period during which the person requires that treatment.  
The department shall simplify the provider enrollment process for a 
provider of that medical assistance and shall adopt rules to 
provide for certification of presumptive eligibility of a person 
for that assistance.  In determining a person's eligibility for 
medical assistance under this subsection, the department, to the 
extent allowed by federal law, may not require a personal 
interview.
	(z)  In its rules and standards governing the vendor drug 
program, the department, to the extent allowed by federal law and if 
the department determines the policy to be cost-effective, may 
ensure that a recipient of prescription drug benefits under the 
medical assistance program does not, unless authorized by the 
department in consultation with the recipient's attending 
physician or advanced practice nurse, receive under the medical 
assistance program:
		(1)  more than four different outpatient brand-name 
prescription drugs during a month;  or
		(2)  more than a 34-day supply of a brand-name 
prescription drug at any one time.
	(z-1)  Subsection (z) does not affect any other limit on 
prescription medications otherwise prescribed by department rule.
	(aa)  The department shall incorporate physician-oriented 
instruction on the appropriate procedures for authorizing 
ambulance service into current medical education courses.

Text of subsec. (bb) as added by Acts 2005, 79th Leg., ch. 349, § 
22
	(bb)  The department may not provide an erectile dysfunction 
medication under the Medicaid vendor drug program to a person 
required to register as a sex offender under Chapter 62, Code of 
Criminal Procedure, to the maximum extent federal law allows the 
department to deny that medication.

Text of subsec. (bb) as added by Acts 2005, 79th Leg., ch. 1314, 
§ 1
	(bb)  In this subsection, "deaf" and "hard of hearing" have 
the meanings assigned by Section 81.001.  Subject to the 
availability of funds, the department shall provide interpreter 
services as requested during the receipt of medical assistance 
under this chapter to:
		(1)  a person receiving that assistance who is deaf or 
hard of hearing;  or 
		(2)  a parent or guardian of a person receiving that 
assistance if the parent or guardian is deaf or hard of hearing.

Acts 1979, 66th Leg., p. 2350, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1989, 71st Leg., ch. 1027, § 11, eff. 
Sept. 1, 1989;  Acts 1989, 71st Leg., ch. 1085, § 3, eff. Sept. 1, 
1989;  Acts 1989, 71st Leg., ch. 1107, § 1, eff. Sept. 1, 1989;  
Acts 1989, 71st Leg., ch. 1219, § 1, eff. Sept. 1, 1989;  Acts 
1990, 71st Leg., 6th C.S., ch. 12, § 2(11) to (13), eff. Sept. 6, 
1990;  Acts 1991, 72nd Leg., ch. 690, § 1, eff. Aug. 26, 1991;  
Acts 1995, 74th Leg., ch. 6, § 3, eff. March 23, 1995;  Acts 1997, 
75th Leg., ch. 1153, § 2.01(a), 2.02(a), eff. June 20, 1997;  
Acts 1999, 76th Leg., ch. 766, § 1, eff. Sept. 1, 1999;  Acts 
1999, 76th Leg., ch. 1333, § 1, eff. Sept. 1, 1999;  Acts 1999, 
76th Leg., ch. 1347, § 3, eff. Sept. 1, 1999;  Acts 1999, 76th 
Leg., ch. 1505, § 1.06, eff. Sept. 1, 1999;  Acts 2001, 77th 
Leg., ch. 220, § 1, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 
348, § 1, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 974, § 
1, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 1420, § 
21.001(81), eff. Sept. 1, 2001;  Acts 2003, 78th Leg., ch. 198, § 
2.96, 2.97(a), 2.207(a), eff. Sept. 1, 2003;  Acts 2003, 78th Leg., 
ch. 215, § 1, eff. June 18, 2003;  Acts 2003, 78th Leg., ch. 1251, 
§ 6, eff. June 20, 2003;  Acts 2003, 78th Leg., ch. 1275, § 
2(97), eff. Sept. 1, 2003;  Acts 2005, 79th Leg., ch. 728, § 
23.001(57), eff. Sept. 1, 2005;  Acts 2005, 79th Leg., ch. 349, § 
22, eff. Sept. 1, 2005;  Acts 2005, 79th Leg., ch. 1314, § 1, eff. 
Sept. 1, 2005.


	§ 32.0241. REVIEW OF WAIVER REQUEST.  The department 
shall, at least biennially, review the feasibility of requesting a 
waiver for the elderly under Section 1915(c), federal Social 
Security Act (42 U.S.C. Section 1396n), if the reimbursement rates 
for nursing homes under the medical assistance program have 
increased since the preceding review.

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.          


	§ 32.0242. VERIFICATION OF CERTAIN INFORMATION.  To the 
extent possible, the department shall verify an applicant's 
residential address at the time the application for medical 
assistance is filed.

Added by Acts 1999, 76th Leg., ch. 1289, § 1, eff. Sept. 1, 1999.          


	§ 32.0243. PERIODIC REVIEW OF ELIGIBILITY FOR CERTAIN 
RECIPIENTS.  (a) The department, in cooperation with the United 
States Social Security Administration, shall periodically review 
the eligibility of a recipient of medical assistance who is 
eligible on the basis of the recipient's eligibility for 
Supplemental Security Income (SSI) benefits under 42 U.S.C. Section 
1381 et seq., as amended.
	(b)  In reviewing the eligibility of a recipient as required 
by Subsection (a), the department shall ensure that only recipients 
who reside in this state and who continue to be eligible for 
Supplemental Security Income (SSI) benefits under 42 U.S.C. Section 
1381 et seq., as amended, remain eligible for medical assistance.

Added by Acts 1999, 76th Leg., ch. 1289, § 1, eff. Sept. 1, 1999.          


	§ 32.0244. NURSING HOME BEDS IN CERTAIN COUNTIES.  (a) At 
the request of the commissioners court of a county in which not more 
than two nursing facilities are certified to participate in the 
state Medicaid program, and subject to Subsection (d), the 
department may contract for additional nursing home beds under the 
state Medicaid program in the county without regard to the 
occupancy rate of available Medicaid beds.
	(b)  A commissioners court that intends to make a request 
under Subsection (a) shall publish notice of its intent in the Texas 
Register and in a newspaper of general circulation in the county.  
The notice must request:
		(1)  comments on whether the request should be made;  
and                   
		(2)  proposals from persons interested in providing 
additional Medicaid beds in the county, including persons providing 
Medicaid beds in a nursing facility with a high occupancy rate.
	(c)  A commissioners court shall determine whether to 
proceed with a request after considering all comments and proposals 
received in response to the notices provided under Subsection (b).  
If the commissioners court proceeds with the request, the court may 
recommend that the department contract with a specific nursing 
facility that submitted a proposal.  In determining whether to 
proceed with the request and whether to recommend a specific 
nursing facility, the commissioners court shall consider:
		(1)  the demographic and economic needs of the county;                        
		(2)  the quality of existing nursing facility services 
under the state Medicaid program in the county;
		(3)  the quality of the proposals submitted;  and                             
		(4)  the degree of community support for additional 
nursing facility services.
	(d)  The department may not contract under this section for 
more than 120 additional nursing home beds per county per year and 
may not exceed 500 additional nursing home beds statewide in a 
calendar year.

Added by Acts 1997, 75th Leg., ch. 555, § 1, eff. Sept. 1, 1997.  
Renumbered from § 32.0246 by Acts 1999, 76th Leg., ch. 62, § 
19.01(73), eff. Sept. 1, 1999.


	§ 32.0245. NURSING HOME BEDS FOR CERTAIN FACILITIES 
TREATING ALZHEIMER'S DISEASE.  The department shall waive for a 
nursing facility a restriction imposed by state law on the 
authority to contract under the state Medicaid program for nursing 
home beds based on the percentage of beds that are occupied in a 
geographical area if the facility:
		(1)  is affiliated with a medical school operated by 
the state;             
		(2)  is participating in a research program for the 
care and treatment of persons with Alzheimer's disease;  and
		(3)  is designed to separate and treat Alzheimer's 
disease by stage or functional level.

Added by Acts 1995, 74th Leg., ch. 841, § 1, eff. Aug. 28, 1995.           


	§ 32.0246. PILOT PROGRAM FOR TREATMENT OF ALZHEIMER'S 
PATIENTS.  (a) The Texas Department of Human Services, in 
cooperation with all appropriate state and federal agencies and 
with the advisory committee established in Subsection (b), shall 
develop and implement a pilot program for the treatment of 
individuals diagnosed with Alzheimer's disease.  The pilot program 
shall:
		(1)  be operated in one rural county and one urban 
county contiguous to the rural county;
		(2)  provide a continuum of care and comprehensive case 
management, address gaps in services, and address the special needs 
of Alzheimer's patients;  and
		(3)  develop and implement counseling, education, and 
support services for the caregivers and family members of 
Alzheimer's patients.
	(b)  The Texas Department of Human Services shall appoint an 
advisory committee to assist the department in developing and 
implementing the pilot program.  The advisory committee shall be 
composed of:
		(1)  four representatives from groups that advocate for 
Alzheimer's patients;
		(2)  one representative from an institution of higher 
education;            
		(3)  one clinician;                                                           
		(4)  one representative from the Texas Department on 
Aging;                 
		(5)  one representative from the Texas Department of 
Human Services;  and   
		(6)  one representative from the Texas Department of 
Mental Health and Mental Retardation.
	(c)  The pilot program may not make eligible for medical 
assistance any individual not otherwise eligible for medical 
assistance.
	(d)  The Texas Department of Human Services may seek and 
accept a gift, grant, or donation from any person for purposes of 
developing and implementing the pilot program provided that the 
person does not have a contested case pending before any agency 
participating in the pilot program.
	(e)  Not later than January 15, 1999, the Texas Department of 
Human Services shall submit to the legislature a report concerning 
the effectiveness of the pilot program.

Added by Acts 1997, 75th Leg., ch. 415, § 1, eff. Sept. 1, 1997.           


	§ 32.0247. MEDICAL ASSISTANCE FOR CERTAIN PERSONS MAKING 
TRANSITION FROM FOSTER CARE TO INDEPENDENT LIVING.  (a) In this 
section, "independent foster care adolescent" has the meaning 
assigned by 42 U.S.C. Section 1396d(w)(1), as amended.
	(b)  The department shall provide medical assistance, in 
accordance with department rules, to an independent foster care 
adolescent who:
		(1)  is not otherwise eligible for medical assistance;  
and                 
		(2)  is not covered by a health benefits plan offering 
adequate benefits, as determined by the Health and Human Services 
Commission.
	(c)  The department shall by rule establish a specific set of 
income, assets, or resources allowable for recipients under this 
section.  The income level shall not be less than 200 percent or 
more than 400 percent of the federal poverty level.  Allowable asset 
or resource levels shall not be less than:
		(1)  the levels allowed for individuals who are in 
foster care;  and        
		(2)  the levels allowed for a person under 19 years of 
age who is eligible for the medical assistance program.
	(d)  In setting allowable income, asset, or resource levels, 
the department shall exclude:
		(1)  any financial benefit used for the purpose of 
educational or vocational training, such as scholarships, student 
loans, or grants;
		(2)  any financial benefit used for the purpose of 
housing;  and            
		(3)  any grants or subsidies obtained as a result of the 
Foster Care Independence Act of 1999 (Pub.  L. No. 106-169).
	(e)  The Department of Protective and Regulatory Services 
shall certify the income, assets, or resources of each individual 
on the date the individual exits substitute care.  An individual 
qualifying for medical assistance as established by this section 
shall remain eligible for 12 calendar months after certification 
and after each recertification.
	(f)  The recertification process for individuals who are 
eligible for medical assistance under this section shall include 
the option of recertifying by mail or phone.

Added by Acts 2001, 77th Leg., ch. 1218, § 1, eff. Sept. 1, 2001.          


	§ 32.0248. DEMONSTRATION PROJECT FOR WOMEN'S HEALTH CARE 
SERVICES.        

Text of section effective until September 1, 2011
	(a)  The department shall establish a five-year 
demonstration project through the medical assistance program to 
expand access to preventive health and family planning services for 
women.  A woman eligible under Subsection (b) to participate in the 
demonstration project may receive appropriate preventive health 
and family planning services, including:
		(1)  medical history recording and evaluation;                                
		(2)  physical examinations;                                                   
		(3)  health screenings, including screening for:                              
			(A)  diabetes;                                                               
			(B)  cervical cancer;                                                        
			(C)  breast cancer;                                                          
			(D)  sexually transmitted diseases;                                          
			(E)  hypertension;                                                           
			(F)  cholesterol;  and                                                       
			(G)  tuberculosis;                                                           
		(4)  counseling and education on contraceptive methods 
emphasizing the health benefits of abstinence from sexual activity 
to recipients who are not married, except for counseling and 
education regarding emergency contraception;
		(5)  provision of contraceptives, except for the 
provision of emergency contraception;
		(6)  risk assessment;  and                                                    
		(7)  referral of medical problems to appropriate 
providers that are entities or organizations that do not perform or 
promote elective abortions or contract or affiliate with entities 
that perform or promote elective abortions.
	(b)  A woman is eligible to participate in the demonstration 
project if the woman is at least 18 years of age and:
		(1)  has a net family income that is at or below 185 
percent of the federal poverty level;
		(2)  participates in or receives benefits under any of 
the following:       
			(A)  the medical assistance program;                                         
			(B)  the financial assistance program under 
Chapter 31;                    
			(C)  the nutritional assistance program under 
Chapter 33;                  
			(D)  the Supplemental Food Program for Women, 
Infants and Children;  or    
			(E)  another program administered by the state 
that:                       
				(i)  requires documentation of income;  and                                 
				(ii)  restricts eligibility to persons with 
income equal to or less than the income eligibility guidelines 
applicable to the medical assistance program;
		(3)  is presumed eligible for one of the programs 
listed in Subdivision (2) pending completion of that program's 
eligibility process;  or
		(4)  is a member of a family that contains at least one 
person who participates in or receives benefits under one of the 
programs listed in Subdivision (2).
	(c)  The department shall ensure that the standards of care 
provided to a woman participating in the demonstration project are 
consistent with the requirements of law and current best practices 
for provision of public health services.
	(d)  The department shall develop procedures for determining 
and certifying eligibility for services under the demonstration 
project at the point of service delivery using integrated 
procedures that minimize duplication of effort by providers, the 
department, and other state agencies.  The department may not use a 
procedure that would require a cost in excess of 10 percent of the 
total costs of actual preventive health and family planning 
services provided under the demonstration project.  The eligibility 
procedure may provide for expedited determination and 
certification using a simplified form requiring only family income 
and family size.
	(e)  The department shall compile a list of potential funding 
sources a woman participating in the demonstration project may be 
able to use to help pay for treatment for health problems:
		(1)  identified using services provided under the 
demonstration project;  and
		(2)  for which the woman is not eligible to receive 
treatment under the medical assistance program or the demonstration 
project.
	(f)  Providers of services under the demonstration project 
shall comply with requests made by the department for information 
necessary for the department to:
		(1)  make efficient use of money spent for the 
operation and administration of the demonstration project;
		(2)  report and provide information required by federal 
law;  and           
		(3)  compile the report required by Subsection (g).                           
	(g)  Not later than December 1 of each even-numbered year, 
the department shall submit a report to the legislature regarding 
the department's progress in establishing and operating the 
demonstration project.
	(h)  The department shall ensure the money spent under the 
demonstration project, regardless of the funding source, is not 
used to perform or promote elective abortions.  The department, for 
the purpose of the demonstration project, may not contract with 
entities that perform or promote elective abortions or are 
affiliates of entities that perform or promote elective abortions.
	(i)  This section expires September 1, 2011.                                   

Added by Acts 2005, 79th Leg., ch. 816, § 1, eff. Sept. 1, 2005.           


	§ 32.025. APPLICATION FOR MEDICAL ASSISTANCE.  (a) A 
recipient of benefits under Chapter 31 of this code or supplemental 
security income from the federal government is automatically 
eligible for medical assistance, and an application for benefits 
under these programs constitutes an application for medical 
assistance.
	(b)  The department shall prescribe application forms for 
persons who are not recipients of benefits under Chapter 31 of this 
code or supplemental security income from the federal government 
and shall adopt rules for processing the applications.
	(c)  The department shall inform applicants for nursing home 
care of any community services which might be available under the 
community care for the aged and disabled program.
	(d)  The department shall adopt an application form and 
procedures for a request for medical assistance provided to a child 
under 19 years of age.  To the extent allowed by federal law and 
except as otherwise provided by this section, the application form 
and procedures must be the same as the form and procedures adopted 
under Section 62.103, Health and Safety Code.  The department shall 
coordinate the form and procedures adopted under this subsection 
with the form and procedures adopted under Section 62.103, Health 
and Safety Code, to ensure that there is a single consolidated 
application for a child under 19 years of age to seek medical 
assistance or to request coverage under the state child health plan 
under Chapter 62, Health and Safety Code.
	(e)  The department shall permit an application requesting 
medical assistance for a child under 19 years of age to be conducted 
by mail instead of through a personal appearance at a department 
office, unless the department determines that the information 
needed to verify eligibility cannot be obtained in that manner.  The 
department by rule may develop procedures requiring an application 
for a child described by this subsection to be conducted through a 
personal interview with a department representative only if the 
department determines that information needed to verify 
eligibility cannot be obtained in any other manner.
	(f)  The commissioner by rule may develop procedures by 
which:               
		(1)  any office of a health and human services agency 
may accept an application requesting medical assistance for a child 
under 19 years of age;  and
		(2)  the department may contract with hospital 
districts, hospitals, including state-owned teaching hospitals, 
federally qualified health centers, and county health departments 
to accept applications requesting medical assistance for a child 
under 19 years of age.

Acts 1979, 66th Leg., p. 2350, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1989, 71st Leg., ch. 1085, § 5, eff. Sept. 
1, 1989;  Acts 2001, 77th Leg., ch. 584, § 2;  Acts 2003, 78th 
Leg., ch. 376, § 2, eff. June 18, 2003;  Acts 2003, 78th Leg., ch. 
1251, § 7, eff. June 20, 2003.


	§ 32.0251. ELIGIBILITY NOTIFICATION AND REVIEW FOR 
CERTAIN CHILDREN.  (a) The department shall establish and 
implement procedures under which the department automatically 
reviews a child's eligibility for medical assistance if:
		(1)  the child originally establishes eligibility for 
medical assistance on the basis of receipt of financial assistance 
under Chapter 31, as provided by Section 32.025(a);  and
		(2)  that receipt of financial assistance under Chapter 
31 ceases.          
	(b)  If the review required by this section indicates that 
the child may be eligible for medical assistance on a basis other 
than receipt of financial assistance under Chapter 31, the 
department may provide for provisional eligibility for medical 
assistance for the child pending a recertification review.  The 
provisional eligibility period authorized by this subsection may 
not exceed one month.
	(c)  In addition to the review required by this section, the 
department shall also promote continued medical assistance for a 
child described by Subsection (a) through:
		(1)  revising client education and notification 
policies relating to a child's eligibility for medical assistance;  
and
		(2)  providing specific notification of a child's 
potential eligibility for medical assistance to the child's parent 
or other caretaker at the time the parent or caretaker is notified 
of:
			(A)  a scheduled eligibility recertification 
review;  or                   
			(B)  the termination of financial assistance.                                

Added by Acts 1999, 76th Leg., ch. 704, § 1, eff. June 18, 1999.           


	§ 32.0255. TRANSITIONAL MEDICAL ASSISTANCE.  (a) The 
state shall provide transitional medical assistance, in accordance 
with state rules and federal law, to a person who was receiving 
financial assistance under Chapter 31 but is no longer eligible to 
receive the assistance because:
		(1)  the person's household income has increased;  or                         
		(2)  the person has exhausted the person's benefits 
under Section 31.0065.  
	(b)  Except as provided by Section 31.012(c), the state may 
provide the medical assistance only until the earlier of:
		(1)  the end of the applicable period prescribed by 
Section 31.0065 for the provision of transitional benefits;  or
		(2)  the first anniversary of the date on which the 
person becomes ineligible for financial assistance because of 
increased household income.

Added by Acts 1995, 74th Leg., ch. 655, § 3.03, eff. Sept. 1, 
1995.      


	§ 32.026. CERTIFICATION OF ELIGIBILITY AND NEED FOR 
MEDICAL ASSISTANCE.  (a) The department shall promulgate rules for 
determining and certifying a person's eligibility and need for 
medical assistance.
	(b)  The department shall promulgate rules to provide for 
determination and certification of presumptive eligibility for any 
pregnant woman who applies for Medicaid and who meets the basic 
eligibility requirements under Title XIX of the federal Social 
Security Act.
	(c)  Medical assistance payments may not be made on a 
person's behalf until the person's eligibility and need for medical 
assistance have been certified in accordance with the department's 
rules.
	(d)  In adopting rules under this section, the department 
shall ensure, to the extent allowed by federal law, that 
documentation and verification procedures used in determining and 
certifying the eligibility and need for medical assistance of a 
child under 19 years of age, including the documentation and 
verification procedures used to evaluate the assets and resources 
of the child, the child's parents, or the child's other caretaker 
for that purpose, are the same as the documentation and 
verification procedures used to determine and certify a child's 
eligibility for coverage under Chapter 62, Health and Safety Code, 
except that the documentation and verification procedures adopted 
in accordance with this subsection may not be more stringent than 
the documentation and verification procedures existing on January 
1, 2001, for determination and certification of a child's 
eligibility for coverage under Chapter 62, Health and Safety Code.
	(e)  The department shall permit a recertification review of 
the eligibility and need for medical assistance of a child under 19 
years of age to be conducted by telephone or mail instead of through 
a personal appearance at a department office, unless the department 
determines that the information needed to verify eligibility cannot 
be obtained in that manner.  The department by rule may develop 
procedures to determine whether there is a need for a 
recertification review of a child described by this subsection to 
be conducted through a personal interview with a department 
representative.  Procedures developed under this subsection shall 
be based on objective, risk-based factors and conditions and shall 
focus on a targeted group of recertification reviews for which 
there is a high probability that eligibility will not be 
recertified.
	(f)  In adopting rules under this section, the department 
shall ensure, to the extent allowed by federal law, that forms and 
procedures used in conducting a recertification review of the 
eligibility and need for medical assistance of a child under 19 
years of age, including documentation and verification procedures, 
are the same as the forms and procedures used to determine and 
certify a child's renewal of coverage under Chapter 62, Health and 
Safety Code.
	(g)  Notwithstanding any other provision of this code, the 
department may use information obtained from a third party to 
verify the assets and resources of a person for purposes of 
determining the person's eligibility and need for medical 
assistance.  Third-party information includes information obtained 
from:
		(1)  a consumer reporting agency, as defined by Section 
20.01, Business & Commerce Code;
		(2)  an appraisal district;  or                                               
		(3)  the Texas Department of Transportation's vehicle 
registration record database.

Acts 1979, 66th Leg., p. 2350, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1989, 71st Leg., ch. 1215, § 1, eff. Sept. 
1, 1989;  Acts 2001, 77th Leg., ch. 584, § 3;  Acts 2003, 78th 
Leg., ch. 198, § 2.99(a), eff. Sept. 1, 2003;   Acts 2003, 78th 
Leg., ch. 376, § 3, eff. June 18, 2003;  Acts 2003, 78th Leg., ch. 
1251, § 8, eff. June 20, 2003.


	§ 32.0261. CONTINUOUS ELIGIBILITY.  The department shall 
adopt rules in accordance with 42 U.S.C. Section 1396a(e)(12), as 
amended, to provide for a period of continuous eligibility for a 
child under 19 years of age who is determined to be eligible for 
medical assistance under this chapter.  The rules shall provide 
that the child remains eligible for medical assistance, without 
additional review by the department and regardless of changes in 
the child's resources or income, until the earlier of:
		(1)  the end of the six-month period following the date 
on which the child's eligibility was determined;  or
		(2)  the child's 19th birthday.                                               

Added by Acts 2001, 77th Leg., ch. 584, § 4, eff. Sept. 1, 2002.  
Amended by Acts 2005, 79th Leg., ch. 349, § 23, eff. Sept. 1, 
2005;  Acts 2005, 79th Leg., ch. 899, § 3.02, eff. Aug. 29, 2005.


	§ 32.0262. ELIGIBILITY TRANSITION.  (a) The department 
shall develop procedures to ensure that all necessary information 
regarding a child who will be denied continued medical assistance 
under this chapter because of an increase in income, assets, or 
resources but who is eligible for enrollment in the child health 
plan under Chapter 62, Health and Safety Code, is promptly 
transmitted to the child health plan in accordance with the 
standards established under Section 62.104(d), Health and Safety 
Code.
	(b)  The department shall develop procedures to ensure that 
the parent or caretaker of a child who will be denied continued 
medical assistance under this chapter because of a failure to keep 
an appointment, including an appointment for recertification of 
eligibility, a failure to provide information, or for another 
procedural reason, is promptly contacted and informed of:
		(1)  the need to recertify eligibility for continued 
medical assistance under this chapter;  and
		(2)  the availability of medical coverage under the 
child health plan under Chapter 62, Health and Safety Code.
	(c)  The department shall develop materials under this 
section in consultation with the Health and Human Services 
Commission and the appropriate agencies administering all or part 
of the child health plan under Chapter 62, Health and Safety Code.
	(d)  The department by rule shall adopt procedures to assist 
a family whose child loses eligibility for medical assistance under 
this chapter in making a transition to the child health plan under 
Chapter 62, Health and Safety Code, with no interruption in 
coverage.

Added by Acts 2001, 77th Leg., ch. 584, § 4, eff. Jan. 1, 2002.            


	§ 32.0263. HEALTH CARE ORIENTATION.  (a) The department 
shall require that the parent or guardian of a child under 19 years 
of age who originally establishes eligibility for medical 
assistance must:
		(1)  attend an in-person counseling session with a 
department representative not later than the 31st day after the 
date the child originally establishes eligibility;  or
		(2)  accompany the child to an appointment with a 
health care provider for a comprehensive health care orientation 
not later than the 61st day after the date the child originally 
establishes eligibility.
	(b)  The commissioner by rule shall develop procedures to 
verify that:       
		(1)  the parent or guardian of the child who originally 
establishes eligibility complies with the requirement of 
Subsection (a)(2), if applicable;  and
		(2)  the child is provided a comprehensive health care 
orientation at the appointment with the health care provider.

Added by Acts 2001, 77th Leg., ch. 584, § 4, eff. Jan. 1, 2002.            


	§ 32.027. SELECTION OF PROVIDER OF MEDICAL ASSISTANCE.                      

[Without reference to the amendment of subsec. (b) by Acts 2003, 
78th Leg., ch. 1251, § 9, Acts 2003, 78th Leg., ch. 198, § 
2.156(a)(2) repealed subsec. (b) effective September 1, 2003.]
	(a) Except as provided by Subsections (f), (g), and (h), a 
recipient of medical assistance authorized in this chapter may 
select any provider authorized by the department to provide medical 
assistance.
	(b)  Subject to appropriated state funds, the department 
shall assure that a recipient of medical assistance under this 
chapter may select a licensed podiatrist to perform any foot health 
care service or procedure covered under the medical assistance 
program if the podiatrist is authorized by law to perform the 
service or procedure.  This subsection shall be liberally 
construed.
	(c)  Repealed by Acts 2003, 78th Leg., ch. 1167, § 4.                       
	(d)  The department shall permit a recipient of medical 
assistance under this chapter to receive services relating to 
physical therapy from any person authorized to practice physical 
therapy under Chapter 453, Occupations Code.
	(e)  Repealed by Acts 2005, 79th Leg., ch. 349, § 7(b).                     
	(f)  The executive commissioner of the Health and Human 
Services Commission by rule may develop a system of selective 
contracting with health care providers for the provision of 
nonemergency inpatient hospital services to a recipient of medical 
assistance under this chapter.  In implementing this subsection, 
the executive commissioner shall:
		(1)  seek input from consumer representatives and from 
representatives of hospitals licensed under Chapter 241, Health and 
Safety Code, and from organizations representing those hospitals;  
and
		(2)  ensure that providers selected under the system 
meet the needs of a recipient of medical assistance under this 
chapter.
	(g)  The process to select a hospital must afford each 
disproportionate share hospital an opportunity to negotiate for a 
contract.  The process will take into account the special 
circumstances of disproportionate share hospitals when evaluating 
proposals.
	(h)  A proposal or bid submitted by a hospital and any work 
papers, cost reports, or other financial data used to prepare the 
proposal or bid shall be confidential and not subject to required 
disclosure by the department or the hospital under any other 
statute until the executed contracts have been awarded.
	(i)  In its establishment of provider criteria for 
hospitals, home health providers, or hospice providers, the 
department shall accept licensure by the Texas Department of Health 
or certification by the Medicare program, Title XVIII of the Social 
Security Act (42 U.S.C. Section 1395 et seq.).

Text of subsection (j) as added by Acts 2001, 77th Leg., ch. 812, 
§ 4
	(j)  The department shall assure that a recipient of medical 
assistance under this chapter may select a nurse first assistant, 
as defined by Section 301.1525, Occupations Code, to perform any 
health care service or procedure covered under the medical 
assistance program if:
		(1)  the selected nurse first assistant is authorized 
by law to perform the service or procedure;  and
		(2)  the physician requests that the service or 
procedure be performed by the nurse first assistant.

Text of subsection (j) as added by Acts 2001, 77th Leg., ch. 1014, 
§ 6
	(j)  The department shall assure that a recipient of medical 
assistance under this chapter may select a surgical assistant 
licensed under Chapter 206, Occupations Code, to perform any health 
care service or procedure covered under the medical assistance 
program if:
		(1)  the selected surgical assistant is authorized by 
law to perform the service or procedure;  and
		(2)  the physician requests that the service or 
procedure be performed by the surgical assistant.
	(l)  Subject to appropriations, the department shall assure 
that a recipient of medical assistance under this chapter may 
select a licensed psychologist, a licensed marriage and family 
therapist, as defined by Section 502.002, Occupations Code, a 
licensed professional counselor, as defined by Section 503.002, 
Occupations Code, or a licensed master social worker, as defined by 
Section 505.002, Occupations Code, to perform any health care 
service or procedure covered under the medical assistance program 
if the selected person is authorized by law to perform the service 
or procedure.  This subsection shall be liberally construed.

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1989, 71st Leg., ch. 1085, § 4, eff. Sept. 
1, 1989;  Acts 1989, 71st Leg., ch. 1173, § 1, eff. Aug. 28, 1989;  
Acts 1990, 71st Leg., 6th C.S., ch. 12, § 2(14), eff. Sept. 6, 
1990;  Acts 1993, 73rd Leg., ch. 390, § 1, 2, eff. Sept. 1, 1993;  
Acts 1995, 74th Leg., ch. 965, § 57, eff. June 16, 1995;  Acts 
1999, 76th Leg., ch. 930, § 1, eff. Jan. 1, 2000;  Acts 2001, 77th 
Leg., ch. 812, § 4, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 
1014, § 6, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 1420, 
§ 14.813, eff. Sept. 1, 2001;  Acts 2003, 78th Leg., ch. 198, 
§ 2.156(a)(2), eff. Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 
1167, § 4, eff. Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 1251, 
§ 9, eff. June 20, 2003;  Acts 2005, 79th Leg., ch. 349, § 7, 
eff. Sept. 1, 2005.


	§ 32.028. FEES, CHARGES, AND RATES.  (a) The department 
shall adopt reasonable rules and standards governing the 
determination of fees, charges, and rates for medical assistance 
payments.
	(b)  The fee, charge, or rate for a professional service is 
the usual and customary fee, charge, or rate that prevails in the 
community.
	(c)  The fee, charge, or rate for other medical assistance is 
the usual and customary fee, charge, or rate that prevails in the 
community unless the payment is limited by state or federal law.
	(d)  The department in its adoption of reasonable rules and 
standards governing the determination of rates paid for inpatient 
hospital services on a prospective payment basis shall:
		(1)  assure that the payment rates are reasonable and 
adequate to meet the costs incurred by the hospital in rendering 
services to Medicaid recipients;
		(2)  assure that the prospective payment methodology 
for hospital services sets the hospital-specific standardized 
amount at a minimum level of $1,600;  and
		(3)  assure that the adjustment in payment rates for 
hospital services furnished by disproportionate share hospitals 
takes into account the essential role of rural hospitals in 
providing access to hospital services to medically indigent persons 
in rural areas of the state.
	(e)  The department in its adoption of reasonable rules and 
standards governing the determination of rates paid for services 
provided by a federally qualified health center, as defined by 42 
U.S.C. Section 1396d(l)(2)(B), shall assure that a center is 
reimbursed for 100 percent of reasonable costs incurred by the 
center in rendering services to Medicaid recipients.
	(f)  The department in its adoption of reasonable rules and 
standards governing the determination of rates paid for services 
provided by a rural health clinic, as defined by 42 U.S.C. Section 
1396d(l)(1), shall assure that a clinic is reimbursed for 100 
percent of reasonable costs incurred by the clinic in rendering 
services to Medicaid recipients.
	(g)  Subject to Subsection (i), the Health and Human Services 
Commission shall ensure that the rules governing the determination 
of rates paid for nursing home services improve the quality of care 
by:
		(1)  providing a program offering incentives for 
increasing direct care staff and direct care wages and benefits, 
but only to the extent that appropriated funds are available after 
money is allocated to base rate reimbursements as determined by the 
Health and Human Services Commission's nursing facility rate 
setting methodologies;  and
		(2)  if appropriated funds are available after money is 
allocated for payment of incentive-based rates under Subdivision 
(1), providing incentives that incorporate the use of a quality of 
care index, a customer satisfaction index, and a resolved 
complaints index developed by the commission.
	(h)  The Health and Human Services Commission shall ensure 
that the rules governing the determination of rates paid for 
nursing home services provide for the rate component derived from 
reported liability insurance costs to be paid only to those homes 
that purchase liability insurance acceptable to the commission.
	(i)  The Health and Human Services Commission shall ensure 
that rules governing the incentives program described by Subsection 
(g)(1):
		(1)  provide that participation in the program by a 
nursing home is voluntary;
		(2)  do not impose on a nursing home not participating 
in the program a minimum spending requirement for direct care staff 
wages and benefits;
		(3)  do not set a base rate for a nursing home 
participating in the program that is more than the base rate for a 
nursing home not participating in the program;  and
		(4)  establish a funding process to provide incentives 
for increasing direct care staff and direct care wages and benefits 
in accordance with appropriations provided.
	(j)  The Health and Human Services Commission shall adopt 
rules governing the determination of the amount of reimbursement or 
credit for restocking drugs under Section 562.1085, Occupations 
Code, that recognize the costs of processing the drugs, including 
the cost of:
		(1)  reporting the drug's prescription number and date 
of original issue;   
		(2)  verifying whether the drug's expiration date or 
the drug's recommended shelf life exceeds 120 days;
		(3)  determining the source of payment;  and                                  
		(4)  preparing credit records.                                                
	(k)  The commission shall provide an electronic system for 
the issuance of credit for returned drugs that complies with the 
Health Insurance Portability and Accountability Act of 1996, Pub. 
L. No. 104-191, as amended.  To ensure a cost-effective system, only 
drugs for which the credit exceeds the cost of the restocking fee by 
at least 100 percent are eligible for credit.
	(l)  The commission shall establish a task force to develop 
the rules necessary to implement Subsections (j) and (k).  The task 
force must include representatives of nursing facilities and 
pharmacists.
	(m)  The commission may not fund an incentive program under 
Subsection (g)(1) using money appropriated for base rate 
reimbursements for nursing facilities.
	(n)  The commission shall ensure that rules governing the 
determination of rates paid for nursing home services provide for 
the reporting of all revenue and costs, without regard to whether a 
cost is an allowable cost for reimbursement under the medical 
assistance program, except:
		(1)  as provided by Subsection (h);  and                                      
		(2)  a penalty imposed under this chapter or Chapter 
242, Health and Safety Code.

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1989, 71st Leg., ch. 1219, § 2, eff. Sept. 
1, 1989;  Acts 1999, 76th Leg., ch. 1411, § 1.16, eff. Sept. 1, 
1999;  Acts 2001, 77th Leg., ch. 974, § 31, eff. Sept. 1, 2001;  
Acts 2001, 77th Leg., ch. 1284, § 10.01, eff. June 15, 2001;  
Acts 2003, 78th Leg., ch. 198, § 2.102(a), eff. Sept. 1, 2003;  
Acts 2003, 78th Leg., ch. 321, § 3, eff. June 18, 2003;  Acts 
2005, 79th Leg., ch. 667, § 2, eff. Sept. 1, 2005.


	§ 32.0281. RULES AND NOTICE RELATING TO PAYMENT 
RATES.  (a) The department shall by rule describe the process used 
to determine payment rates for medical assistance and shall notify 
providers, consumers, the Legislative Budget Board, and the 
governor's office for budget and planning of that process.
	(b)  The department shall adopt rules relating to payment 
rates that include:
		(1)  a description of the process used to determine 
payment rates;          
		(2)  a description of each cost of living index used in 
calculating inflation rates and the procedure for determining the 
level of inflation used in the department's calculations;
		(3)  the criteria for desk audits;                                            
		(4)  the procedure for notifying providers of 
exclusions and adjustments to reported expenses, if notification is 
requested;  and
		(5)  a method of adjusting rates if new legislation, 
regulations, or economic factors affect costs.
	(c)  The department shall include in the Title XIX State 
Medicaid Plan submitted to the federal government for approval the 
procedures for making available to the public the data and 
methodology used in establishing payment rates.
	(d)  The procedures for adopting rules under this section 
shall be governed by Chapter 2001, Government Code.
	(e)  An interested party may appeal an action taken by the 
department under this section, and an appeal of such action shall be 
governed by the procedures for a contested case hearing under 
Chapter 2001, Government Code.  The filing of an appeal under this 
section shall not stay the implementation of payment rates adopted 
by the department in accordance with its rules.

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.  
Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(49), eff. Sept. 
1, 1995.


	§ 32.0282. PUBLIC HEARING ON RATES.  (a) The department 
shall hold a public hearing to allow interested persons to present 
comments relating to proposed payment rates for medical assistance.
	(b)  The department shall provide notice of each hearing to 
the public.      

Added by Acts 1989, 71st Leg., ch. 1085, § 2, eff. Sept. 1, 1989.          


	§ 32.029. METHODS OF PAYMENT.  (a) The department may 
prescribe a method of payment for medical assistance claims by 
establishing a direct vendor payment program that is administered 
by the department, or by an insurance plan, a hospital or medical 
service plan, or any other health service plan authorized to do 
business in the state, or by a combination of those plans.
	(b)  The department may use any fiscal intermediary, method 
of payment, or combination of methods it finds most satisfactory 
and economical.  The department may make whatever changes it finds 
necessary from time to time to administer the program in an 
economical and equitable manner consistent with simplicity of 
administration and the best interest of the recipients of medical 
assistance.
	(c)  If the department elects to make direct vendor payments, 
the payments shall be made by vouchers and warrants drawn by the 
comptroller on the proper account.  The department shall furnish 
the comptroller with a list of those vendors entitled to payments 
and the amounts to which each is entitled.  When the warrants are 
drawn, they must be delivered to the department, which shall 
supervise the delivery to vendors.
	(d)  If at any time state funds are not available to fully pay 
all claims for medical assistance, the board shall prorate the 
claims.
	(e)  The department or its designee must notify providers of 
health care services in clear and concise language of the status of 
their claims on any claim not paid or denied within 30 days of 
receipt by the payor.

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1985, 69th Leg., ch. 264, § 12, eff. Aug. 
26, 1985;  Acts 1993, 73rd Leg., ch. 390, § 3, eff. Sept. 1, 1993;  
Acts 1995, 74th Leg., ch. 6, § 4, eff. March 23, 1995.


	§ 32.0291. PREPAYMENT REVIEWS AND POSTPAYMENT HOLDS.  (a) 
Notwithstanding any other law, the department may:
		(1)  perform a prepayment review of a claim for 
reimbursement under the medical assistance program to determine 
whether the claim involves fraud or abuse;  and
		(2)  as necessary to perform that review, withhold 
payment of the claim for not more than five working days without 
notice to the person submitting the claim.
	(b)  Notwithstanding any other law, the department may 
impose a postpayment hold on payment of future claims submitted by a 
provider if the department has reliable evidence that the provider 
has committed fraud or wilful misrepresentation regarding a claim 
for reimbursement under the medical assistance program.  The 
department must notify the provider of the postpayment hold not 
later than the fifth working day after the date the hold is imposed.
	(c)  On timely written request by a provider subject to a 
postpayment hold under Subsection (b), the department shall file a 
request with the State Office of Administrative Hearings for an 
expedited administrative hearing regarding the hold.  The provider 
must request an expedited hearing under this subsection not later 
than the 10th day after the date the provider receives notice from 
the department under Subsection (b).  The department shall 
discontinue the hold unless the department makes a prima facie 
showing at the hearing that the evidence relied on by the department 
in imposing the hold is relevant, credible, and material to the 
issue of fraud or wilful misrepresentation.
	(d)  The department shall adopt rules that allow a provider 
subject to a postpayment hold under Subsection (b) to seek an 
informal resolution of the issues identified by the department in 
the notice provided under that subsection.  A provider must seek an 
informal resolution under this subsection not later than the 
deadline prescribed by Subsection (c).  A provider's decision to 
seek an informal resolution under this subsection does not extend 
the time by which the provider must request an expedited 
administrative hearing under Subsection (c).  However, a hearing 
initiated under Subsection (c) shall be stayed at the department's 
request until the informal resolution process is completed.

Added by Acts 2003, 78th Leg., ch. 198, § 2.103, eff. Sept. 1, 
2003.     


	§ 32.030. MEDICAL ASSISTANCE FUND.  (a) The medical 
assistance fund is a special fund in the treasury and constitutes a 
separate account.  The fund may be expended only for the purpose of 
carrying out the provisions of this chapter.
	(b)  When necessary the department may request the transfer 
of money appropriated for financial assistance to the medical 
assistance fund.  The transfer shall be requested and made in the 
manner authorized in the General Appropriations Act and in 
accordance with the department's rules.
	(c)  The disproportionate share fund is a separate account 
that provides reimbursement each year to hospitals that render a 
high volume of services to medically indigent persons in the state.  
Payments from the fund shall be not less than $5 million annually in 
state funds in excess of the amounts contained in the general 
appropriations bill as introduced for the 1990-1991 biennium.

Acts 1979, 66th Leg., p. 2351, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1985, 69th Leg., ch. 264, § 13, eff. Aug. 
26, 1985;  Acts 1989, 71st Leg., ch. 1219, § 3, eff. Sept. 1, 
1989;  Acts 1995, 74th Leg., ch. 6, § 5, eff. March 23, 1995.


	§ 32.031. RECEIPT AND EXPENDITURE OF FUNDS.  (a) The 
department may accept federal funds for the support of the medical 
assistance program and may expend the funds in the manner 
prescribed by this chapter or other laws.  The expenditures must be 
made in accordance with appropriate agreements between the state 
and the federal government.
	(b)  The department may administer and expend state funds 
appropriated for the program in accordance with its rules and the 
provisions of this chapter.
	(c)  The amount of state funds spent for medical assistance 
on behalf of a qualified individual may not exceed the amount that 
is matchable with federal funds, and the total amount of state funds 
spent for all medical assistance on behalf of all qualified 
individuals may not exceed the amount that is matchable with 
federal funds.
	(d)  The board is empowered and authorized to pursue the use 
of local funds as part of the state share under the Medicaid program 
as provided by federal law and regulation.
	(e)  Public hospitals, including hospitals owned, operated, 
or leased by a governmental entity, including a municipality, 
county, hospital district, or this state, and specifically 
including a state teaching hospital, may transfer funds to the 
department for use as state share under the Medicaid 
disproportionate share program.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1989, 71st Leg., ch. 1215, § 4, eff. Sept. 
1, 1989;  Acts 1995, 74th Leg., ch. 6, § 6, eff. March 23, 1995.


	§ 32.0311. DRUG REIMBURSEMENT UNDER CERTAIN 
PROGRAMS.  The department shall require a recipient of medical 
assistance to exhaust drug benefits available under the medical 
assistance program before reimbursing the recipient, pharmacist, 
or other health care provider for drugs purchased by or on behalf of 
the recipient under the Kidney Health Care Program or the 
Chronically Ill and Disabled Children's Services Program.

Added by Acts 1999, 76th Leg., ch. 669, § 1, eff. June 18, 1999.           


	§ 32.0315. FUNDS FOR GRADUATE MEDICAL EDUCATION.  (a) 
Subject to appropriated state funds, the department shall establish 
procedures and formulas for the allocation of federal medical 
assistance funds that are directed to be used to support graduate 
medical education in connection with the medical assistance 
program.
	(b)  The department shall allocate the funds in the manner 
the department determines most effectively and equitably achieves 
the purposes for which those federal funds are received, consistent 
with the needs of this state for graduate medical education and the 
training of resident physicians in accredited residency programs in 
appropriate fields and specialties, taking into account other money 
available to support graduate medical education.  In determining 
the needs of this state for graduate medical education, the 
department shall give primary emphasis to graduate medical 
education in primary care specialties and shall also recognize the 
growth in residency training slots since 1997 in the Lower Rio 
Grande Valley and other health care shortage areas of this state.
	(c)  The department shall consult with the Texas Higher 
Education Coordinating Board before adopting or revising a formula 
under this section.  At the request of the department, the 
coordinating board shall provide the department with any 
information the board possesses to assist the department in 
administering this section.
	(d)  Repealed by Acts 2003, 78th Leg., ch. 198, § 
2.100(b).               
	(d-1)  Expired.                                                                
	(e)  to (h) Repealed by Acts 2003, 78th Leg., ch. 198, § 
2.100(b).        

Added by Acts 1997, 75th Leg., ch. 252, § 1, eff. Sept. 1, 1997.  
Amended by Acts 2003, 78th Leg., ch. 198, § 2.100(a), (b), eff. 
Sept. 1, 2003;  Acts 2005, 79th Leg., ch. 733, § 1, eff. Sept. 1, 
2005.


	§ 32.032. PREVENTION AND DETECTION OF FRAUD AND 
ABUSE.  The department shall adopt reasonable rules for minimizing 
the opportunity for fraud and abuse, for establishing and 
maintaining methods for detecting and identifying situations in 
which a question of fraud or abuse in the program may exist, and for 
referring cases where fraud or abuse appears to exist to the 
appropriate law enforcement agencies for prosecution.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 2003, 78th Leg., ch. 198, § 2.104, eff. 
Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 257, § 2, eff. Sept. 1, 
2003.


	§ 32.0321. SURETY BOND.  (a) The department by rule may 
require each provider of medical assistance in a provider type that 
has demonstrated significant potential for fraud or abuse to file 
with the department a surety bond in a reasonable amount.  The 
department by rule shall require a provider of medical assistance 
to file with the department a surety bond in a reasonable amount if 
the department identifies a pattern of suspected fraud or abuse 
involving criminal conduct relating to the provider's services 
under the medical assistance program that indicates the need for 
protection against potential future acts of fraud or abuse.
	(b)  The bond under Subsection (a) must be payable to the 
department to compensate the department for damages resulting from 
or penalties or fines imposed in connection with an act of fraud or 
abuse committed by the provider under the medical assistance 
program.
	(c)  Subject to Subsection (d) or (e), the department by rule 
may require each provider of medical assistance that establishes a 
resident's trust fund account to post a surety bond to secure the 
account.  The bond must be payable to the department to compensate 
residents of the bonded provider for trust funds that are lost, 
stolen, or otherwise unaccounted for if the provider does not repay 
any deficiency in a resident's trust fund account to the person 
legally entitled to receive the funds.
	(d)  The department may not require the amount of a surety 
bond posted for a single facility provider under Subsection (c) to 
exceed the average of the total average monthly balance of all the 
provider's resident trust fund accounts for the 12-month period 
preceding the bond issuance or renewal date.
	(e)  If an employee of a provider of medical assistance is 
responsible for the loss of funds in a resident's trust fund 
account, the resident, the resident's family, and the resident's 
legal representative are not obligated to make any payments to the 
provider that would have been made out of the trust fund had the 
loss not occurred.

Added by Acts 1997, 75th Leg., ch. 1153, § 2.03, eff. Sept. 1, 
1997.  Amended by Acts 2003, 78th Leg., ch. 198, § 2.105, eff. 
Sept. 1, 2003;  Acts 2003, 78th Leg., ch. 257, § 3, eff. Sept. 1, 
2003.


	§ 32.0322. CRIMINAL HISTORY RECORD INFORMATION.  (a) The 
department may obtain from any law enforcement or criminal justice 
agency the criminal history record information that relates to a 
provider under the medical assistance program or a person applying 
to enroll as a provider under the medical assistance program.
	(b)  The department by rule shall establish criteria for 
revoking a provider's enrollment or denying a person's application 
to enroll as a provider under the medical assistance program based 
on the results of a criminal history check.

Added by Acts 1997, 75th Leg., ch. 1153, § 2.04(a), eff. Sept. 1, 
1997.  


	§ 32.033. SUBROGATION.  (a) The filing of an application 
for or receipt of medical assistance constitutes an assignment of 
the applicant's or recipient's right of recovery from:
		(1)  personal insurance;                                                      
		(2)  other sources;  or                                                       
		(3)  another person for personal injury caused by the 
other person's negligence or wrong.
	(b)  A person who applies for or receives medical assistance 
shall inform the department, at the time of application or at any 
time during eligibility and receipt of services, of any unsettled 
tort claim which may affect medical needs and of any private 
accident or sickness insurance coverage that is or may become 
available.  A recipient shall inform the department of any injury 
requiring medical attention that is caused by the act or failure to 
act of some other person.  An applicant or a recipient shall inform 
the department as required by this subsection within 60 days of the 
date the person learns of his or her insurance coverage, tort claim, 
or potential cause of action.  An applicant or a recipient who 
knowingly and intentionally fails to disclose the information 
required by this subsection commits a Class C misdemeanor.
	(c)  A claim for damages for personal injury does not 
constitute grounds for denying or discontinuing assistance under 
this chapter.
	(d)  A separate and distinct cause of action in favor of the 
state is hereby created, and the department may, without written 
consent, take direct civil action in any court of competent 
jurisdiction.  A suit brought under this section need not be 
ancillary to or dependent upon any other action.
	(e)  The department's right of recovery is limited to the 
amount of the cost of medical care services paid by the department.  
Other subrogation rights granted under this section are limited to 
the cost of the services provided.
	(f)  The commissioner may waive the department's right of 
recovery in whole or in part when the commissioner finds that 
enforcement would tend to defeat the purpose of public assistance.
	(g)  The department may designate an agent to collect funds 
the department has a right to recover from third parties under this 
section.  The department shall use any funds collected to pay costs 
of administering the medical assistance program.
	(h)  The department may adopt rules for the enforcement of 
its right of recovery.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1979, 66th Leg., p. 2436, ch. 842, art. 2, 
§ 10, eff. Sept. 1, 1979.


	§ 32.034. CONTRACT CANCELLATION;  NOTICE AND 
HEARING.  (a) The department has authority to adjudicate claims of 
contested cases in accordance with Chapter 2001, Government Code.  
When the department intends to cancel its contract or impose 
monetary penalties under a contract with a person providing medical 
assistance, the department shall give reasonable notice and an 
opportunity for hearing if one is requested.  The department shall 
adopt rules consistent with Chapter 2001, Government Code to 
implement this section, and hearings under this section are 
contested cases under that act.
	(b)  The department may not terminate a contract during the 
pendency of a hearing under this section.  The department may 
withhold payments during the pendency of a hearing, but the 
department shall pay the withheld payments and resume contract 
payments if the final determination is favorable to the contractor.  
The department's authority to withhold payments shall be 
established by contract.
	(c)  The section does not apply if federal matching funds are 
not available to pay the facility whose contract is being 
cancelled.  If federal matching funds cannot be used, no state funds 
may be used to pay the facility.

Acts 1979, 66th Leg., p. 2352, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1987, 70th Leg., ch. 1052, § 2.02, eff. 
Sept. 1, 1987;  Acts 1991, 72nd Leg., 1st C.S., ch. 15, § 5.22, 
eff. Sept. 1, 1991;  Acts 1995, 74th Leg., ch. 76, § 5.95(49), 
eff. Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1159, § 2.03, eff. 
Sept. 1, 1997.


	§ 32.035. APPEALS.  The provisions of Section 31.034 of 
this code governing the right of appeal of an applicant for or 
recipient of financial assistance authorized under Chapter 31 of 
this code also apply to applicants for medical assistance 
authorized in this chapter.

Acts 1979, 66th Leg., p. 2353, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979. 


	§ 32.036. PROGRAM PAYMENTS NONASSIGNABLE AND EXEMPT FROM 
LEGAL PROCESS.  (a) Neither medical assistance nor payments to 
providers of medical assistance under this chapter are transferable 
or assignable at law or in equity.
	(b)  No money paid or payable under the provisions of this 
chapter is subject to execution, levy, attachment, garnishment, or 
any other legal process, or the operation of any insolvency law.
	(c)  This section does not apply to the extent that it 
conflicts with the Social Security Act (42 U.S.C. Section 
1396a(a)(32)).

Acts 1979, 66th Leg., p. 2353, ch. 842, art. 1, § 1, eff. Sept. 1, 
1979.  Amended by Acts 1997, 75th Leg., ch. 216, § 1, eff. May 23, 
1997.


	§ 32.038. COLLECTION OF INSURANCE PAYMENTS.  (a) The 
department may receive directly from an insurance company any 
payments to which the department is entitled under Section 
1204.153, Insurance Code.
	(b)  The department shall adopt rules to implement this 
section, including rules establishing procedures relating to:
		(1)  notification to the department that a child 
receiving benefits under Chapter 31 or Chapter 32 of this code is 
covered by an insurance policy under which the department is 
eligible to receive direct payments;
		(2)  claims made by the department to receive payments 
under Subsection (a) of this section;
		(3)  notification to the department of any change in 
the status of the child or the parent;  and
		(4)  notification to the insurance company that the 
department is to receive payments under Subsection (a) of this 
section.
	(c)  Department rules relating to the notice prescribed by 
Subsection (b)(4) of this section must require the notice to be 
attached to the claim for insurance benefits when the claim is first 
submitted to the insurance company.

Added by Acts 1987, 70th Leg., ch. 1052, § 2.03, eff. Sept. 1, 
1987.  Amended by Acts 2005, 79th Leg., ch. 728, § 11.128, eff. 
Sept. 1, 2005.


	§ 32.0381. ICF-MR PAYMENT RATES.  (a) The board shall set 
the payment rates for ICF-MR facilities at least annually.
	(b)  The board shall adopt by rule the methodology used by 
the department in setting payment rates for ICF-MR facilities.  The 
methodology shall clearly define the procedures and methods used in 
projecting the costs of economic and efficient facilities and the 
procedures and methods used in setting payment rates that 
reasonably reimburse facilities at each level of care and in each 
class of providers, including size categories.
	(c)  The board shall ensure that the methodology used in 
projecting costs and setting payment rates and its implementation 
is the same for state-operated ICF-MR facilities and for private 
ICF-MR facilities.  Methods used to project costs, including those 
involving the handling of gifts, grants, and donations, upper 
limits on facility and administrative costs, occupancy 
adjustments, and in assessing the cost impact of new or revised 
requirements, must be the same for state-operated and private 
facilities.
	(d)  To the extent allowed by federal law, any differences in 
methodology or its implementation between state-operated 
facilities and private facilities must be stated explicitly in the 
rule, must be related to actual differences in the nature of the 
expenses incurred by the class of providers, including size 
categories, and must not favor state-operated facilities in setting 
payment rates.  When the proposed rule or amendments to the rule are 
published for public comment, the commissioner must certify that 
any differences in methodology between classes of providers, 
including size categories, are necessitated by cost structure and 
will not favor state-operated facilities in the setting of payment 
rates.

Added by Acts 1989, 71st Leg., ch. 1141, § 11(a), eff. Sept. 1, 
1989.    


	§ 32.039. DAMAGES AND PENALTIES.  (a) In this section:                      
		(1)  "Claim" means an application for payment of health 
care services under Title XIX of the federal Social Security Act  
that is submitted by a person who is under a contract or provider 
agreement with the department.
		(1-a)  "Inducement" includes a service, cash in any 
amount, entertainment, or any item of value.
		(2)  "Managed care organization" means any entity or 
person that is authorized or otherwise permitted by law to arrange 
for or provide a managed care plan.
		(3)  "Managed care plan" means a plan under which a 
person undertakes to provide, arrange for, pay for, or reimburse 
any part of the cost of any health care service.  A part of the plan 
must consist of arranging for or providing health care services as 
distinguished from indemnification against the cost of those 
services on a prepaid basis through insurance or otherwise.  The 
term does not include a plan that indemnifies a person for the cost 
of health care services through insurance.
		(4)  A person "should know" or "should have known" 
information to be false if the person acts in deliberate ignorance 
of the truth or falsity of the information or in reckless disregard 
of the truth or falsity of the information, and proof of the 
person's specific intent to defraud is not required.
	(b)  A person commits a violation if the person:                               
		(1)  presents or causes to be presented to the 
department a claim that contains a statement or representation the 
person knows or should know to be false;
		(1-a)  engages in conduct that violates Section 
102.001, Occupations Code;  
		(1-b)  solicits or receives, directly or indirectly, 
overtly or covertly any remuneration, including any kickback, 
bribe, or rebate, in cash or in kind for referring an individual to 
a person for the furnishing of, or for arranging the furnishing of, 
any item or service for which payment may be made, in whole or in 
part, under the medical assistance program, provided that this 
subdivision does not prohibit the referral of a patient to another 
practitioner within a multispecialty group or university medical 
services research and development plan (practice plan) for 
medically necessary services;
		(1-c)  solicits or receives, directly or indirectly, 
overtly or covertly any remuneration, including any kickback, 
bribe, or rebate, in cash or in kind for purchasing, leasing, or 
ordering, or arranging for or recommending the purchasing, leasing, 
or ordering of, any good, facility, service, or item for which 
payment may be made, in whole or in part, under the medical 
assistance program;
		(1-d)  offers or pays, directly or indirectly, overtly 
or covertly any remuneration, including any kickback, bribe, or 
rebate, in cash or in kind to induce a person to refer an individual 
to another person for the furnishing of, or for arranging the 
furnishing of, any item or service for which payment may be made, in 
whole or in part, under the medical assistance program, provided 
that this subdivision does not prohibit the referral of a patient to 
another practitioner within a multispecialty group or university 
medical services research and development plan (practice plan) for 
medically necessary services;
		(1-e)  offers or pays, directly or indirectly, overtly 
or covertly any remuneration, including any kickback, bribe, or 
rebate, in cash or in kind to induce a person to purchase, lease, or 
order, or arrange for or recommend the purchase, lease, or order of, 
any good, facility, service, or item for which payment may be made, 
in whole or in part, under the medical assistance program;
		(1-f)  provides or offers an inducement in a manner or 
for a purpose not otherwise prohibited by this section or Section 
102.001, Occupations Code, to an individual, including a recipient, 
provider, or employee of a provider, for the purpose of influencing 
a decision regarding selection of a provider or receipt of a good or 
service under the medical assistance program or for the purpose of 
otherwise influencing a decision regarding the use of goods or 
services provided under the medical assistance program;  or
		(2)  is a managed care organization that contracts with 
the department to provide or arrange to provide health care 
benefits or services to individuals eligible for medical assistance 
and:
			(A)  fails to provide to an individual a health 
care benefit or service that the organization is required to 
provide under the contract with the department;
			(B)  fails to provide to the department 
information required to be provided by law, department rule, or 
contractual provision;
			(C)  engages in a fraudulent activity in 
connection with the enrollment in the organization's managed care 
plan of an individual eligible for medical assistance or in 
connection with marketing the organization's services to an 
individual eligible for medical assistance;  or
			(D)  engages in actions that indicate a pattern 
of:                        
				(i)  wrongful denial of payment for a health 
care benefit or service that the organization is required to 
provide under the contract with the department;  or
				(ii)  wrongful delay of at least 45 days or a 
longer period specified in the contract with the department, not to 
exceed 60 days, in making payment for a health care benefit or 
service that the organization is required to provide under the 
contract with the department.
	(c)  A person who commits a violation under Subsection (b) is 
liable to the department for:
		(1)  the amount paid, if any, as a result of the 
violation and interest on that amount determined at the rate 
provided by law for legal judgments and accruing from the date on 
which the payment was made;  and
		(2)  payment of an administrative penalty of an amount 
not to exceed twice the amount paid, if any, as a result of the 
violation, plus an amount:
			(A)  not less than $5,000 or more than $15,000 for 
each violation that results in injury to an elderly person, as 
defined by Section 48.002(1), a disabled person, as defined by 
Section 48.002(8)(A), or a person younger than 18 years of age;  or
			(B)  not more than $10,000 for each violation that 
does not result in injury to a person described by Paragraph (A).
	(d)  Unless the provider submitted information to the 
department for use in preparing a voucher that the provider knew or 
should have known was false or failed to correct information that 
the provider knew or should have known was false when provided an 
opportunity to do so, this section does not apply to a claim based 
on the voucher if the department calculated and printed the amount 
of the claim on the voucher and then submitted the voucher to the 
provider for the provider's signature.  In addition, the provider's 
signature on the voucher does not constitute fraud.  The department 
shall adopt rules that establish a grace period during which errors 
contained in a voucher prepared by the department may be corrected 
without penalty to the provider.
	(e)  In determining the amount of the penalty to be assessed 
under Subsection (c)(2), the department shall consider:
		(1)  the seriousness of the violation;                                        
		(2)  whether the person had previously committed a 
violation;  and          
		(3)  the amount necessary to deter the person from 
committing future violations.
	(f)  If after an examination of the facts the department 
concludes that the person committed a violation, the department may 
issue a preliminary report stating the facts on which it based its 
conclusion, recommending that an administrative penalty under this 
section be imposed and recommending the amount of the proposed 
penalty.
	(g)  The department shall give written notice of the report 
to the person charged with committing the violation. The notice 
must include a brief summary of the facts, a statement of the amount 
of the recommended penalty, and a statement of the person's right to 
an informal review of the alleged violation, the amount of the 
penalty, or both the alleged violation and the amount of the 
penalty.
	(h)  Not later than the 10th day after the date on which the 
person charged with committing the violation receives the notice, 
the person may either give the department written consent to the 
report, including the recommended penalty, or make a written 
request for an informal review by the department.
	(i)  If the person charged with committing the violation 
consents to the penalty recommended by the department or fails to 
timely request an informal review, the department shall assess the 
penalty.  The department shall give the person written notice of its 
action.  The person shall pay the penalty not later than the 30th 
day after the date on which the person receives the notice.
	(j)  If the person charged with committing the violation 
requests an informal review as provided by Subsection (h), the 
department shall conduct the review.  The department shall give the 
person written notice of the results of the review.
	(k)  Not later than the 10th day after the date on which the 
person charged with committing the violation receives the notice 
prescribed by Subsection (j), the person may make to the department 
a written request for a hearing.  The hearing must be conducted in 
accordance with Chapter 2001, Government Code.
	(l)  If, after informal review, a person who has been ordered 
to pay a penalty fails to request a formal hearing in a timely 
manner, the department shall assess the penalty.  The department 
shall give the person written notice of its action.  The person 
shall pay the penalty not later than the 30th day after the date on 
which the person receives the notice.
	(m)  Within 30 days after the date on which the board's order 
issued after a hearing under Subsection (k) becomes final as 
provided by Section 2001.144, Government Code, the person shall:
		(1)  pay the amount of the penalty;                                           
		(2)  pay the amount of the penalty and file a petition 
for judicial review contesting the occurrence of the violation, the 
amount of the penalty, or both the occurrence of the violation and 
the amount of the penalty;  or
		(3)  without paying the amount of the penalty, file a 
petition for judicial review contesting the occurrence of the 
violation, the amount of the penalty, or both the occurrence of the 
violation and the amount of the penalty.
	(n)  A person who acts under Subsection (m)(3) within the 
30-day period may: 
		(1)  stay enforcement of the penalty by:                                      
			(A)  paying the amount of the penalty to the court 
for placement in an escrow account;  or
			(B)  giving to the court a supersedeas bond that 
is approved by the court for the amount of the penalty and that is 
effective until all judicial review of the department's order is 
final;  or
		(2)  request the court to stay enforcement of the 
penalty by:               
			(A)  filing with the court a sworn affidavit of 
the person stating that the person is financially unable to pay the 
amount of the penalty and is financially unable to give the 
supersedeas bond;  and
			(B)  giving a copy of the affidavit to the 
commissioner by certified mail. 
	(o)  If the commissioner receives a copy of an affidavit 
under Subsection (n)(2), the commissioner may file with the court, 
within five days after the date the copy is received, a contest to 
the affidavit.  The court shall hold a hearing on the facts alleged 
in the affidavit as soon as practicable and shall stay the 
enforcement of the penalty on finding that the alleged facts are 
true.  The person who files an affidavit has the burden of proving 
that the person is financially unable to pay the amount of the 
penalty and to give a supersedeas bond.
	(p)  If the person charged does not pay the amount of the 
penalty and the enforcement of the penalty is not stayed, the 
department may forward the matter to the attorney general for 
enforcement of the penalty and interest as provided by law for legal 
judgments.  An action to enforce a penalty order under this section 
must be initiated in a court of competent jurisdiction in Travis 
County or in the county in which the violation was committed.
	(q)  Judicial review of a department order or review under 
this section assessing a penalty is under the substantial evidence 
rule.  A suit may be initiated by filing a petition with a district 
court in Travis County, as provided by Subchapter G, Chapter 2001, 
Government Code.
	(r)  If a penalty is reduced or not assessed, the department 
shall remit to the person the appropriate amount plus accrued 
interest if the penalty has been paid or shall execute a release of 
the bond if a supersedeas bond has been posted.  The accrued 
interest on amounts remitted by the department under this 
subsection shall be paid at a rate equal to the rate provided by law 
for legal judgments and shall be paid for the period beginning on 
the date the penalty is paid to the department under this section 
and ending on the date the penalty is remitted.
	(s)  A damage, cost, or penalty collected under this section 
is not an allowable expense in a claim or cost report that is or 
could be used to determine a rate or payment under the medical 
assistance program.
	(t)  All funds collected under this section shall be 
deposited in the State Treasury to the credit of the General Revenue 
Fund.
	(u)  Except as provided by Subsection (w), a person found 
liable for a violation under Subsection (c) that resulted in injury 
to an elderly person, as defined by Section 48.002(a)(1), a 
disabled person, as defined by Section 48.002(a)(8)(A), or a person 
younger than 18 years of age may not provide or arrange to provide 
health care services under the medical assistance program for a 
period of 10 years.  The department by rule may provide for a period 
of ineligibility longer than 10 years.  The period of ineligibility 
begins on the date on which the determination that the person is 
liable becomes final.
	(v)  Except as provided by Subsection (w), a person found 
liable for a violation under Subsection (c) that did not result in 
injury to an elderly person, as defined by Section 48.002(a)(1), a 
disabled person, as defined by Section 48.002(a)(8)(A) , or a 
person younger than 18 years of age may not provide or arrange to 
provide health care services under the medical assistance program 
for a period of three years.  The department by rule may provide for 
a period of ineligibility longer than three years.  The period of 
ineligibility begins on the date on which the determination that 
the person is liable becomes final.
	(w)  The department by rule may prescribe criteria under 
which a person described by Subsection (u) or (v) is not prohibited 
from providing or arranging to provide health care services under 
the medical assistance program.  The criteria may include 
consideration of:
		(1)  the person's knowledge of the violation;                                 
		(2)  the likelihood that education provided to the 
person would be sufficient to prevent future violations;
		(3)  the potential impact on availability of services 
in the community served by the person;  and
		(4)  any other reasonable factor identified by the 
department.              
	(x)  Subsections (b)(1-b) through (1-f) do not prohibit a 
person from engaging in:
		(1)  generally accepted business practices, as 
determined by department rule, including:
			(A)  conducting a marketing campaign;                                        
			(B)  providing token items of minimal value that 
advertise the person's trade name;  and
			(C)  providing complimentary refreshments at an 
informational meeting promoting the person's goods or services;
		(2)  the provision of a value-added service if the 
person is a managed care organization;  or
		(3)  other conduct specifically authorized by law, 
including conduct authorized by federal safe harbor regulations (42 
C.F.R. Section 1001.952).

Added by Acts 1987, 70th Leg., ch. 1052, § 2.04, eff. Sept. 1, 
1987.  Amended by Acts 1995, 74th Leg., ch. 76, § 5.95(49), (53), 
eff. Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 1153, § 3.01(a), 
eff. Sept. 1, 1997;  Acts 1999, 76th Leg., ch. 12, § 1, 2, eff. 
Sept. 1, 1999;  Acts 2003, 78th Leg., ch. 257, § 4, 5, eff. Sept. 
1, 2003.


	§ 32.0391. CRIMINAL OFFENSE.  (a) A person commits an 
offense if the person intentionally or knowingly commits a 
violation under Section 32.039(b)(1-b), (1-c), (1-d), or (1-e).
	(b)  An offense under this section is a state jail felony.                     
	(c)  If conduct constituting an offense under this section 
also constitutes an offense under another provision of law, 
including a provision in the Penal Code, the person may be 
prosecuted under either this section or the other provision.
	(d)  With the consent of the appropriate local county or 
district attorney, the attorney general has concurrent 
jurisdiction with that consenting local prosecutor to prosecute an 
offense under this section.

Added by Acts 2003, 78th Leg., ch. 257, § 6, eff. Sept. 1, 2003.           


	§ 32.040. IDENTIFICATION OF HUSBAND OR ALLEGED 
FATHER.  (a) A woman receiving medical assistance in the form of 
prenatal care, child delivery care, and obstetrical care related to 
prenatal care and child delivery care shall identify her husband, 
or, if unmarried, shall provide the name and last known address of 
the alleged father of the unborn child.
	(b)  If the woman receiving medical assistance is under 18 
years of age and resides with one or both parents, the parents shall 
cooperate in identifying the husband or the alleged father.

Added by Acts 1989, 71st Leg., 1st C.S., ch. 25, § 37, eff. Jan. 
1, 1990.


	§ 32.041. MEDICAID MANAGED CARE DEMONSTRATION 
PROJECT.  (a) Beginning September 1, 1991, the department in 
consultation with the Medicaid analysis and cost control unit of 
the Legislative Budget Board shall initiate the planning for a 
Medicaid managed care demonstration project.
	(b)  The department shall request necessary waivers and 
approvals from the federal Health Care Financing Administration 
(HCFA) and other appropriate entities that will enable the state to 
begin implementation of the demonstration program not later than 
January 1, 1993.
	(c)  On or before January 1, 1995, the department shall 
evaluate the demonstration programs using specifications developed 
by the federal Health Care Financing Administration.
	(d)  If the results of the evaluation indicate that the 
program is cost-effective, the department shall incorporate a 
request for funding for the continuation or expansion of the 
managed care approach in its Medicaid program in the department's 
budget request for the 1996-1997 biennium.

Added by Acts 1991, 72nd Leg., 1st C.S., ch. 15, § 5.02, eff. 
Sept. 1, 1991.  Amended by Acts 1995, 74th Leg., ch. 6, § 7, eff. 
March 23, 1995.


	§ 32.042. INFORMATION REQUIRED FROM HEALTH INSURERS.  (a) 
An insurer shall maintain a file system that contains:
		(1)  the name, address, including claim submission 
address, group policy number, employer's mailing address, social 
security number, and date of birth of each enrollee, beneficiary, 
subscriber, or policyholder covered by the insurer;  and
		(2)  the name, address, including claim submission 
address, and date of birth of each dependent of each enrollee, 
beneficiary, subscriber, or policyholder covered by the insurer.
	(b)  The state's Medicaid third-party recovery division 
shall identify state medical assistance recipients who have 
third-party health coverage or insurance as provided by this 
subsection.  The department may:
		(1)  provide to an insurer Medicaid data tapes that 
identify medical assistance recipients and request that the insurer 
identify each enrollee, beneficiary, subscriber, or policyholder 
of the insurer whose name also appears on the Medicaid data tape;  
or
		(2)  request that an insurer provide to the department 
identifying information for each enrollee, beneficiary, 
subscriber, or policyholder of the insurer.
	(b-1)  An insurer from which the department requests 
information under Subsection (b) shall provide that information, 
except that the insurer is only required to provide the department 
with the information maintained under Subsection (a) by the insurer 
or made available to the insurer from the plan.  A plan 
administrator is subject to Subsection (b) and shall provide 
information under that subsection to the extent the information is 
made available to the plan administrator from the insurer or plan.
	(c)  An insurer may not be required to provide information in 
response to a request under this section more than once every six 
months.
	(d)  An insurer