S.B. No. 1038 is a legislative bill designed to strengthen the enforcement of fraud and abuse violations within the Texas Medicaid program. It amends existing sections of the Government Code and Human Resources Code to clarify definitions and penalties related to fraudulent activities. A significant change in the bill is the replacement of the term "administrative penalty" with "remedy," which shifts the focus from punitive measures to the recovery of funds. The bill also introduces a provision that allows individuals who report fraud or abuse to receive awards capped at five percent of the recovered remedy. Additionally, it expands the definition of violations and specifies actions that constitute fraud, such as submitting false claims or failing to disclose important information.

The bill further updates procedures related to violations and remedies assessed by the commission, requiring written notices to include a summary of facts, recommended remedies, and available due process options. It establishes a timeline for responses to notices and outlines processes for informal reviews and hearings. Importantly, the bill clarifies that civil remedies do not preclude other legal remedies, ensuring individuals are not penalized twice for the same act. Certain provisions of the Human Resources Code are repealed, and the amended sections will apply only to violations occurring after the effective date of September 1, 2025. Overall, S.B. No. 1038 aims to enhance the integrity of the Medicaid system by providing clearer guidelines and more effective enforcement mechanisms against fraud and abuse.

Statutes affected:
Introduced: Human Resources Code 32.039, Human Resources Code 32.0391, Human Resources Code 36.002, Human Resources Code 36.006 (Human Resources Code 32, Human Resources Code 36)
Senate Committee Report: Human Resources Code 32.039, Human Resources Code 32.0391, Human Resources Code 36.006 (Human Resources Code 32, Human Resources Code 36)
Engrossed: Human Resources Code 32.039, Human Resources Code 32.0391, Human Resources Code 36.006 (Human Resources Code 32, Human Resources Code 36)
House Committee Report: Human Resources Code 32.039, Human Resources Code 32.0391, Human Resources Code 36.006 (Human Resources Code 32, Human Resources Code 36)
Enrolled: Human Resources Code 32.039, Human Resources Code 32.0391, Human Resources Code 36.006 (Human Resources Code 32, Human Resources Code 36)