Texas Department of Aging and Disability Services
Case Manager Community Based Alternatives Handbook
Revision: 13-1
Effective: March 1, 2013

Section 8000

Sanctions, Fraud and Abuse

8100  Provider Fraud and Abuse

Revision 13-1; Effective March 1, 2013

The Department of Aging and Disability Services (DADS) must refer cases of suspected fraud or abuse of Medicare, Medicaid or social services programs.

To carry out this responsibility, DADS must:

  • be prepared to exclude from program reimbursement any provider that defrauds or abuses the Medicare or Medicaid program; and
  • suspend, in the event that the Health and Human Services Commission directs the suspension, any person or business entity that receives Medicaid reimbursement that has been convicted of a crime related to the delivery of medical care or services under Medicare, Medicaid or social services programs.

8110  Determination of Provider Fraud

Revision 13-1; Effective March 1, 2013

The Department of Aging and Disability Services (DADS) endorses the concept that people who provide services are essentially honest and are entitled to the same protection under the law as all other persons. However, when there is an indication of potential fraud, the allegations must be investigated.

To determine the existence of fraud, it must be established that:

  • intentional misstatement or concealment by the provider created a false impression; or
  • DADS paid the provider based on a false impression when the payment would not have been made if the truth had been known.

Examples of provider fraud include:

  • billing for services that were not provided;
  • filing false claims;
  • continuing inappropriate billing after provider education visits; and
  • using improper billing practices.

8120  Determination of Abuse

Revision 13-1; Effective March 1, 2013

To determine the existence of abuse, it must be established that:

  • provider practices are inconsistent with sound fiscal, business or medical practices; and
  • these inconsistent practices result in unnecessary cost to the program, or reimbursement for services that are not medically necessary or that fail to meet professionally recognized standards of health care or standards required by contract, statute, regulations or interpretations of a statute or regulation sent to the provider.

Examples of provider abuse include:

  • services provided that are not medically necessary;
  • billing for services provided by inappropriate persons;
  • practicing without a proper license or obtaining a license under false pretenses; and
  • violating the contract or provider agreement.

8130  Civil Penalty

Revision 13-1; Effective March 1, 2013

Cases of fraud or abuse may also be referred to the Health and Human Services Commission (HHSC) for civil penalties under the federal Civil Monetary Law of the Social Security Act. Under this provision, a provider (person or business entity) may be assessed a fine of up to $2,000 and double damages for each line item identified as fraudulent or abusive billing. HHSC may also require a provider that has been assessed civil monetary penalties to be barred from participation in the Medicare or Medicaid program or both.

8140  Reporting Fraud and Abuse

Revision 13-1; Effective March 1, 2013

Department of Aging and Disability Services (DADS) staff are required to report provider fraud and abuse through established agency procedures. The reporting process is different for DADS contracted and non-contracted providers. Refer to Section 8160, Development of the Fraud Referral Packet, for procedures for reporting fraud and abuse by providers contracted with DADS.

For providers not contracted with DADS, reports of fraud and abuse may be completed by calling the:

  • DADS Consumer Rights and Services hotline at 1-800-458-9858, and
  • Health and Human Services Commission (HHSC) Office of Inspector General (OIG) hotline at 1-800-436-6184.

Referrals of fraud and abuse may also be submitted by completing the Waste, Abuse and Fraud Referral Form at the HHSC OIG online referral website at https://oig.hhsc.state.tx.us/.

People who are not DADS staff and who know of suspected fraud or abuse of assistance benefits, including eligibility and services, are urged to use these reporting options.

The case manager must follow procedures in Section 8200, Fraud Detection and Referrals for Individuals Receiving Services, for making fraud referrals regarding individuals receiving services.

8150  Responding to Allegations of Provider Fraud and Abuse

Revision 13-1; Effective March 1, 2013

When an allegation of provider fraud is received, Department of Aging and Disability Services (DADS) staff should follow these procedures.

  1. During the first contact, staff receiving the allegation should obtain facts relating to the specific case in as much detail as possible. This includes:
    • who engaged or participated in the alleged fraudulent, abusive conduct, or both;
    • what the suspected violation was;
    • when the conduct occurred (dates or time periods);
    • where the conduct occurred;
    • how the fraudulent or abusive action was performed;
    • the names, addresses and telephone numbers of witnesses and how they can be contacted; and
    • if and when a referral to law enforcement was made.
  2. DADS staff should try to obtain the complainant's name, address, home telephone and telephone number where the complainant can be reached during the day. DADS staff should advise informants who wish to remain anonymous that DADS needs a way to contact them during the investigation.
  3. DADS staff must not make any agreements or commitments to anyone regarding the investigation or any possible adverse action.

8160  Development of the Fraud Referral Packet

Revision 13-1; Effective March 1, 2013

The case manager must consult with his supervisor for guidance in determining the appropriateness of a provider fraud and abuse referral for providers contracted with the Department of Aging and Disability Services (DADS). If it is decided that a referral is to be submitted for a DADS contracted provider, staff follow procedures found on the Contract Oversight and Support (COS) website at http://dadsview.dads.state.tx.us/contract/fraud/index.html.

The case manager gathers information to complete Form 5913, DADS Suspected Provider Fraud Referral.

The form requires:

  • contact information and additional collateral contacts for DADS regional and state office staff;
  • names, addresses, and work and home telephone numbers of potential witnesses;
  • information relating to law enforcement referrals;
  • provider information, including name, address, telephone number, provider type and specialty, business address, contract number, facility ID and owning entity;
  • type of alleged fraud (billing, falsification of records, solicitation) and identification of a specific policy, regulation or procedural violation, including specific handbook or manual references;
  • physical address of where the alleged fraud or abuse took place; and
  • other pertinent documentation relating to the incident.

DADS staff may contact COS to determine if a provider fraud and abuse referral has already been made. Check the COS website for information on how to contact COS staff.

8161  Expedited Referrals

Revision 13-1; Effective March 1, 2013

If Department of Aging and Disability Services (DADS) staff have reason to believe that the conduct of the suspected provider is serious enough to require immediate action, it may be appropriate to expedite the referral. As with routine referrals, the case manager's supervisor must first be consulted.

An expedited referral should be made when a delay would:

  • probably result in the loss, destruction or altering of valuable evidence;
  • probably result in harm to an individual receiving services;
  • probably result in significant monetary loss to DADS that would probably not be recoverable; or
  • hinder an investigation or criminal prosecution of the alleged offense.

In these situations, the case is immediately referred to the Texas Health and Human Services Commission Office of Inspector General fraud hotline at 1-800-436-6184.

8162  Referral of Potential Provider Fraud

Revision 13-1; Effective March 1, 2013

If the case manager's supervisor determines that the criteria for fraud exist for a provider contracted with the Department of Aging and Disability Services (DADS), a fraud referral is made. Staff follow procedures found on the Contract Oversight and Support (COS) website at http://dadsview.dads.state.tx.us/contract/fraud/index.html.

DADS staff:

  • complete Form 5913, DADS Suspected Provider Fraud Referral;
  • call the DADS Consumer Rights and Services (CRS) hotline at 1-800-458-9858; and
  • fax the completed form to CRS at 877-438-5827 with "Attention: CRS hotline."

CRS will advise DADS staff of further action to take and will make the referral of provider fraud and abuse to the Health and Human Services Commission (HHSC) Office of Inspector General (OIG).

Only if directed to do so by CRS, DADS staff will submit the Waste, Abuse and Fraud Referral Form information to HHSC OIG through one of the following methods:

  • online at the HHSC OIG website at https://oig.hhsc.state.tx.us;
  • by mail to:
  • Texas Health and Human Services Commission
    Office of Inspector General
    Medicaid Program Integrity, Mail Code 1361
    P.O. Box 85200
    Austin, TX 78708-5200
  • via fax to 512-973-3185, Attention: Medicaid Program Integrity Intake; or
  • by telephone to the HHSC OIG fraud hotline at 1-800-436-6184.

8170  After Referrals of Potential Provider Fraud are Made

Revision 13-1; Effective March 1, 2013

The Health and Human Services Commission (HHSC) is responsible for ensuring that all pertinent information is obtained about a provider and may subsequently request additional information. Providing requested material to HHSC does not constitute a confidentiality violation. The HHSC Office of Inspector General (OIG) will conduct an analysis and collect data to create a complete picture of the provider utilization patterns related to the alleged incident.

After the case is referred to HHSC OIG, no other action is necessary. Department of Aging and Disability Services staff should maintain a professional working relationship with the provider while the fraud referral is being investigated. However, for the duration of the investigation, staff must not discuss the alleged violation with provider staff. This prevents the possibility of interference with the investigation.

Investigation of fraud is the responsibility of the state's OIG and could result in a felony conviction, contract termination, exclusion or suspension from the Texas Medicaid program.

8200  Fraud Detection and Referrals for Individuals Receiving Services

Revision 13-1; Effective March 1, 2013

Individuals receiving services from the Department of Aging and Disability Services are entitled to the same protection under the law as all other people. However, when there is an indication of potential fraud by the individual, the allegations must be investigated.

8210  Determination of Fraud Committed by an Individual

Revision 13-1; Effective March 1, 2013

To determine the existence of fraud, it must be established that:

  • intentional misstatement or concealment by the individual receiving services or responsible party created a false impression; or
  • Department of Aging and Disability Services (DADS) staff determined eligibility or the DADS contracted provider delivered services based on a false impression.

Some examples of fraud include:

  • knowingly providing false information regarding an applicant's financial, medical or functional status in order to be determined eligible for assistance;
  • withholding or concealing information pertaining to the applicant's financial, medical or functional status that may cause the applicant to be ineligible for services;
  • receiving services that the individual knows to be medically unnecessary;
  • knowingly receiving services from persons who do not have a proper license or who obtained a license under false pretenses; and
  • falsifying time sheets for persons delivering services.

8220  Responding to Allegations of Fraud Committed by an Individual

Revision 13-1; Effective March 1, 2013

When potential fraud committed by an individual receiving services is discovered, Department of Aging and Disability Services (DADS) staff should follow these procedures:

  1. Record all pertinent facts relating to the specific case in detail, including:
    • the name of the individual;
    • the suspected violation;
    • date and time the conduct occurred;
    • place of the occurrence;
    • the fraudulent action;
    • the names, addresses and telephone numbers of persons with knowledge of the situation and contact information; and
    • if and when a referral to law enforcement was made.
  2. If fraud is alleged by a third party source, try to obtain the complainant's name, address, home telephone number and telephone number where the complainant can be reached during the day. DADS staff should advise informants who wish to remain anonymous that DADS needs a way to contact them during the investigation.
  3. Do not make any agreements or commitments to anyone regarding the investigation or any possible adverse action.

DADS contracted provider staff should follow the above procedures and report information about suspected fraud committed by an individual by sending Form 2067, Case Information, to the case manager by the next working day.

Restitution must not be requested in cases where fraud is being investigated or alleged. Once restitution is requested, a referral for fraud cannot be made.

8230  DADS Development of Fraud Referral

Revision 13-1; Effective March 1, 2013

The case manager must consult his supervisor for guidance in determining the appropriateness of the fraud referral.

The supervisor may require the case manager to call the Consumer Rights and Services hotline at 800-458-9858, to determine if the situation is an appropriate fraud referral for investigation by the Texas Health and Human Services Commission (HHSC) Office of Inspector General (OIG) or if the situation should be handled by other referrals or actions.

If a referral to OIG is appropriate, the case manager gathers the information necessary to complete Form 5913, DADS Suspected Provider Fraud Referral.

8240  Expedited Referrals

Revision 13-1; Effective March 1, 2013

If the case manager has reason to believe that the conduct of the suspected individual or responsible party is serious enough to require immediate action, it may be appropriate to expedite the referral. As with routine referrals, the case manager's supervisor must first be consulted. An expedited referral should be made when a delay could:

  • result in the loss, destruction or altering of valuable evidence;
  • result in harm to an individual;
  • result in significant monetary loss to the Department of Aging and Disability Services that would probably not be recoverable; or
  • hinder an investigation or criminal prosecution of the alleged offense.

In these situations, a referral is immediately made to the Texas Health and Human Services Commission Office of Inspector General Fraud hotline at 800-436-6184.

8250  Referral of Potential Fraud Committed by an Individual

Revision 13-1; Effective March 1, 2013

If the case manager's supervisor determines that the criteria for fraud are met, a referral is made.

Routine referrals of potential fraud should be made to the Health and Human Services Commission (HHSC) Office of Inspector General (OIG) through one of the following methods:

  • Submit Form 5913, DADS Suspected Provider Fraud Referral, to HHSC OIG. The HHSC OIG Fraud Referral website is: https://oig.hhsc.state.tx.us/.
  • Mail Form 5913 to:
  • Texas Health and Human Services Commission
    Office of Inspector General
    General Investigations Division, Mail Code 1362
    Attention: Fraud Hotline Staff
    P.O. Box 85200
    Austin, TX 78708-5200
  • Fax the referral to 512-973-3185, Attention: Fraud Hotline Staff.
  • Telephone the referral to the HHSC OIG Fraud hotline at 800-436-6184.

8260  After Referrals of Potential Fraud Committed by an Individual are Made

Revision 13-1; Effective March 1, 2013

The Health and Human Services Commission (HHSC) Office of Inspector General (OIG) is responsible for ensuring that all pertinent information is obtained and may subsequently request additional information. Providing requested material to HHSC OIG does not constitute a confidentiality violation. The HHSC OIG staff will conduct an analysis and collect data to create a complete picture of the alleged incident.

After a fraud referral is made to HHSC OIG, no other action is necessary. Department of Aging and Disability Services (DADS) staff and DADS contracted provider staff continue to maintain service delivery as usual. DADS staff and contracted provider staff should preserve a professional working relationship with the individual or his responsible party while the fraud referral is being investigated. However, for the duration of the investigation, DADS staff and contracted provider staff must not discuss the alleged violation with unauthorized personnel. This prevents the possibility of interference with the investigation.

8300  Sanctions

Revision 13-1; Effective March 1, 2013

The Department of Aging and Disability Services (DADS) may impose a sanction (adverse action) against a contractor for failure to meet contractual obligations. Examples of sanctions that can be imposed by DADS include:

  • Referral Hold — Placing a hold on referrals for initial enrollments or transfer of individuals by DADS.
  • Vendor Hold — Suspending payment to a contractor.
  • Recoupment – Recovering an overpayment made to a contractor.
  • Contract Suspension — Suspending the contractor’s right to do business with DADS for a specific time period.
  • Contract Termination — Terminating the contractor’s business contract involuntarily.
  • Debarment — Prohibiting the legal entity from conducting business with DADS in any capacity for a certain period of time.

A corrective action plan can be developed and implemented allowing a contractor to correct substantiated problems before sanctions are issued or at the time sanctions are imposed.

For additional information about specific sanctions, refer to the Texas Administrative Code (TAC), Title 40, Chapter 49, Contracting for Community Care Services, or the DADS Contract Administration Handbook.