(a) In this section, “contracted entity” means an entity with which a managed care organization contracts under § 544.0352(a)(2).
(b) A managed care organization or the organization’s contracted entity that discovers Medicaid or child health plan program fraud or abuse shall:
(1) immediately submit written notice to the office of inspector general and the office of the attorney general that:
(A) is in the form and manner the office of inspector general prescribes; and
(B) contains a detailed description of:
(i) the fraud or abuse; and
(ii) each payment made to a provider as a result of the fraud or abuse;
(2) subject to Subsection (c), begin payment recovery efforts; and
(3) ensure that any payment recovery efforts in which the organization engages are in accordance with rules the executive commissioner adopts.

(c) A managed care organization or the organization’s contracted entity may not engage in payment recovery efforts if:
(1) the amount sought to be recovered under Subsection (b)(2) exceeds $100,000; and
(2) not later than the 10th business day after the date the organization or entity notifies the office of inspector general and the office of the attorney general under Subsection (b)(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.
(d) A managed care organization may retain one-half of any money the organization or the organization’s contracted entity recovers under Subsection (b)(2). The organization shall remit the remaining amount of recovered money to the office of inspector general for deposit to the credit of the general revenue fund.
(e) If the office of inspector general notifies a managed care organization in accordance with Subsection (c), proceeds with recovery efforts, and recovers all or part of the payments the organization identified as required by Subsection (b)(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 recovered after any applicable federal share is deducted.
(f) Notwithstanding this section, if the office of inspector general discovers Medicaid or child health plan program fraud, waste, or abuse in performing the office’s duties, the office of inspector general may recover payments made to a provider as a result of the fraud, waste, or abuse as otherwise provided by this chapter. All payments the office of inspector general recovers under this subsection shall be deposited to the credit of the general revenue fund.
(g) The office of inspector general shall coordinate with appropriate managed care organizations to ensure that the office of inspector general and an organization or an organization’s contracted entity do not both begin payment recovery efforts under this section for the same case of fraud, waste, or abuse.
(h) A managed care organization shall submit a quarterly report to the office of inspector general detailing the amount of money the organization recovered under Subsection (b)(2).
(i) The executive commissioner shall adopt rules necessary to implement this section, including rules establishing due process procedures that a managed care organization must follow when engaging in payment recovery efforts as provided by this section. In adopting the rules establishing due process procedures, the executive commissioner shall require that a managed care organization or an organization’s contracted entity that engages in payment recovery efforts as provided by this section and § 544.0503 provide to a provider required to use electronic visit verification:
(1) written notice of the organization’s intent to recoup overpayments in accordance with § 544.0503; and
(2) at least 60 days to cure any defect in a claim before the organization may begin efforts to collect overpayments.

Text of section effective on April 01, 2025