HB142

HB142 updates the Texas Health and Human Services Commission’s inspector-general powers and expressly extends recovery-audit work to Medicaid managed care. Contractors identify underpayments and overpayments, and overpayments may be recovered from either the provider or the managed-care organization. The law does not make every billing error fraud or change a patient’s Medicaid eligibility. Final law.

Audit safeguards: a recovery audit contractor cannot start reviewing a claim until at least one year after it was received and until the inspector general or its designee both finds the review cost-effective and approves it. A contractor cannot begin a recovery effort if a managed-care organization has notified the inspector general that it is already auditing the claim. These limits concern this contractor program, not a blanket one-year immunity from all investigations. Providers and managed-care organizations under review must supply requested information by the stated deadline. An appeals process for identified overpayments must be adopted by rule; recovery administration or appeals may be handled through a third-party contract. Final law, Section 544.0504.

Other changes: qualified experts retained for the inspector general are treated as expert witnesses for the statutory procurement exemption, replacing the former process dependent on a solicitation receiving no responsive bids. The office may share administrative-oversight information with specified government entities or people it authorizes to receive it for its duties. This is not a general public-disclosure right; audit materials remain subject to the cited confidentiality protections. Final law, Sections 1–2 and 5; expert-witness exemption.

For professionals confirmed licensed and in good standing, the final eligibility-screening restriction on fingerprint-based criminal-history checks now expressly yields to federal requirements. Checks required or appropriate for other reasons, including fraud investigations, remain allowed. The bill also replaces a specifically required toll-free fraud hotline with an “appropriate communications system.” It does not direct that all phone reporting be shut down. Final law, Sections 3–4.

The bill repeals the specific annual random-sample claims-review requirement and one overlapping preliminary-investigation provision. It does not repeal the separate Medicaid preliminary-investigation rule in Section 544.0252(b), including its 30-day start and 45-day completion deadlines. Nor does it abolish Medicaid audits generally. Repealers; remaining preliminary-investigation provision.

Timing and funding: effective September 1, 2025, but implementation of a provision is mandatory for HHSC only if lawmakers specifically appropriate money for it; without that appropriation, HHSC may use other available money but is not required to do so. Necessary federal permission may also delay a provision. HB142 itself makes no appropriation. Final law, Sections 7–9; official history.