S.B. No. 1038 seeks to enhance the administrative remedies available for reporting fraud and abuse within the Texas Medicaid program. The bill amends Sections 544.0205 and 32.039 of the Government and Human Resources Codes, replacing the term "administrative penalty" with "remedy" to broaden the potential awards for whistleblowers. Individuals who report Medicaid violations may receive up to five percent of the remedy imposed, contingent upon the commission's determination that their disclosure contributed to recovery. The bill also introduces new definitions and clarifications regarding claims and the knowledge required for identifying violations, while outlining specific fraudulent actions related to Medicaid claims and establishing corresponding administrative penalties.

In addition to the terminology changes, the bill updates procedures for addressing violations, requiring written notices to individuals charged with violations to include a summary of facts, recommended remedies, and available due process options. It establishes a timeline for responses and outlines processes for informal reviews and hearings. The bill clarifies that civil remedies do not preclude other legal remedies for the same act, and it repeals certain provisions of the Human Resources Code. Importantly, the amendments will only apply to violations occurring after the effective date of the Act, set for September 1, 2025, aiming to streamline enforcement and ensure clear avenues for addressing violations while upholding due process rights.

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)