(a) If a managed care organization or an entity with which the managed care organization contracts under § 531.113(a)(2) discovers fraud or abuse in Medicaid or the child health plan program, the organization or entity shall:
(1) immediately submit written notice to the commission’s office of inspector general and the office of the attorney general in the form and manner prescribed by the office of inspector general and containing a detailed description of the fraud or abuse and each payment made to a provider as a result of the fraud or abuse;
(2) subject to Subsection (b), begin payment recovery efforts; and
(3) ensure that any payment recovery efforts in which the organization engages are in accordance with applicable rules adopted by the executive commissioner.
(b) If the amount sought to be recovered under Subsection (a)(2) exceeds $100,000, the managed care organization or the contracted entity described by Subsection (a) may not engage in payment recovery efforts if, not later than the 10th business day after the date the organization or entity notified the commission’s office of inspector general and the office of the attorney general under Subsection (a)(1), the organization or entity receives a notice from either office indicating that the organization or entity is not authorized to proceed with recovery efforts.

(c) A managed care organization may retain one-half of any money recovered under Subsection (a)(2) by the organization or the contracted entity described by Subsection (a). The managed care organization shall remit the remaining amount of money recovered under Subsection (a)(2) to the commission’s office of inspector general for deposit to the credit of the general revenue fund.
(c-1) If the commission’s office of inspector general notifies a managed care organization under Subsection (b), proceeds with recovery efforts, and recovers all or part of the payments the organization identified as required by Subsection (a)(1), the organization is entitled to one-half of the amount recovered for each payment the organization identified after any applicable federal share is deducted. The organization may not receive more than one-half of the total amount of money recovered after any applicable federal share is deducted.
(c-2) Notwithstanding any provision of this section, if the commission’s office of inspector general discovers fraud, waste, or abuse in Medicaid or the child health plan program in the performance of its duties, the office may recover payments made to a provider as a result of the fraud, waste, or abuse as otherwise provided by this subchapter. All payments recovered by the office under this subsection shall be deposited to the credit of the general revenue fund.
(c-3) The commission’s office of inspector general shall coordinate with appropriate managed care organizations to ensure that the office and an organization or an entity with which an organization contracts under § 531.113(a)(2) do not both begin payment recovery efforts under this section for the same case of fraud, waste, or abuse.
(d) A managed care organization shall submit a quarterly report to the commission’s office of inspector general detailing the amount of money recovered under Subsection (a)(2).
(e) The executive commissioner shall adopt rules necessary to implement this section, including rules establishing due process procedures that must be followed by managed care organizations when engaging in payment recovery efforts as provided by this section.
(f) In adopting rules establishing due process procedures under Subsection (e), the executive commissioner shall require that a managed care organization or an entity with which the managed care organization contracts under § 531.113(a)(2) that engages in payment recovery efforts in accordance with this section and § 531.1135 provide:
(1) written notice to a provider required to use electronic visit verification of the organization’s intent to recoup overpayments in accordance with § 531.1135; and
(2) a provider described by Subdivision (1) at least 60 days to cure any defect in a claim before the organization may begin any efforts to collect overpayments.

Text of section effective until April 01, 2025