Senate Bill No. 1038 seeks to strengthen the enforcement of fraud and abuse violations within Texas's Medicaid program by amending existing laws in the Government Code and Human Resources Code. 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 framework for rewarding whistleblowers who report Medicaid fraud, allowing them to receive up to five percent of the recovered remedy based on the importance of their disclosure. Additionally, it expands the definition of Medicaid violations to include specific fraudulent actions, such as knowingly submitting false claims, and establishes new administrative remedies that can impose penalties up to twice the amount paid due to the violation.

Furthermore, the bill updates procedures related to violations and remedies assessed by the commission, requiring written notices to individuals charged with violations to include a summary of facts, recommended remedies, and available due process options. It also sets a timeline for responses to the commission's notices and outlines processes for informal reviews and hearings. The legislation clarifies that civil remedies do not preclude other legal remedies for the same act and repeals certain provisions of the Human Resources Code. Importantly, the amended sections will only apply to violations occurring after the effective date of the Act, which is September 1, 2025, thereby aiming to streamline the process for addressing violations while ensuring individuals are informed of their 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 36, Human Resources Code 32)
Senate Committee Report: Human Resources Code 32.039, Human Resources Code 32.0391, Human Resources Code 36.006 (Human Resources Code 36, Human Resources Code 32)
Engrossed: Human Resources Code 32.039, Human Resources Code 32.0391, Human Resources Code 36.006 (Human Resources Code 36, Human Resources Code 32)