The bill amends the Government Code to enhance payment recovery and recoupment processes under Medicaid and the child health plan program, effective April 1, 2025. It requires the executive commissioner to establish due process procedures for managed care organizations (MCOs) engaging in payment recovery efforts. Specifically, MCOs must provide written notice of their intent to recoup overpayments to providers, allowing them a minimum of 60 days after exhausting all appeal rights to rectify any claim defects before collection efforts can begin. Additionally, the bill prohibits MCOs from reviewing medical necessity determinations or claim documentation errors for previously approved services if the error was not made by the provider.

Furthermore, the bill mandates the establishment of a program for recovery audit contractors to identify and recover overpayments under Medicaid, including those related to the Medicaid managed care program. If a state agency requires a federal waiver or authorization for any provision of the bill, it may delay implementation until such approval is obtained. The act is set to take effect on September 1, 2025.