CHAPTER 36. MEDICAID FRAUD PREVENTION
HUMAN RESOURCES CODE
TITLE 2. DEPARTMENT OF HUMAN SERVICES AND DEPARTMENT OF
PROTECTIVE AND REGULATORY SERVICES
SUBTITLE C. ASSISTANCE PROGRAMS
CHAPTER 36. MEDICAID FRAUD PREVENTION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 36.001. DEFINITIONS. In this chapter:
(1) "Claim" means a written or electronically submitted request
or demand that:
(A) is signed by a provider or a fiscal agent and that
identifies a product or service provided or purported to have
been provided to a Medicaid recipient as reimbursable under the
Medicaid program, without regard to whether the money that is
requested or demanded is paid; or
(B) states the income earned or expense incurred by a provider
in providing a product or a service and that is used to determine
a rate of payment under the Medicaid program.
(2) "Documentary material" means a record, document, or other
tangible item of any form, including:
(A) a medical document or X ray prepared by a person in relation
to the provision or purported provision of a product or service
to a Medicaid recipient;
(B) a medical, professional, or business record relating to:
(i) the provision of a product or service to a Medicaid
recipient; or
(ii) a rate or amount paid or claimed for a product or service,
including a record relating to a product or service provided to a
person other than a Medicaid recipient as needed to verify the
rate or amount;
(C) a record required to be kept by an agency that regulates
health care providers; or
(D) a record necessary to disclose the extent of services a
provider furnishes to Medicaid recipients.
(3) "Fiscal agent" means:
(A) a person who, through a contractual relationship with the
Texas Department of Human Services, the Texas Department of
Health, or another state agency, receives, processes, and pays a
claim under the Medicaid program; or
(B) the designated agent of a person described by Paragraph (A).
(4) "Health care practitioner" means a dentist, podiatrist,
psychologist, physical therapist, chiropractor, registered nurse,
or other provider licensed to provide health care services in
this state.
(5) "Managed care organization" has the meaning assigned by
Section 32.039(a).
(6) "Medicaid program" means the state Medicaid program.
(7) "Medicaid recipient" means an individual on whose behalf a
person claims or receives a payment from the Medicaid program or
a fiscal agent, without regard to whether the individual was
eligible for benefits under the Medicaid program.
(8) "Physician" means a physician licensed to practice medicine
in this state.
(9) "Provider" means a person who participates in or who has
applied to participate in the Medicaid program as a supplier of a
product or service and includes:
(A) a management company that manages, operates, or controls
another provider;
(B) a person, including a medical vendor, that provides a
product or service to a provider or to a fiscal agent;
(C) an employee of a provider;
(D) a managed care organization; and
(E) a manufacturer or distributor of a product for which the
Medicaid program provides reimbursement.
(10) "Service" includes care or treatment of a Medicaid
recipient.
(11) "Signed" means to have affixed a signature directly or
indirectly by means of handwriting, typewriting, signature stamp,
computer impulse, or other means recognized by law.
(12) "Unlawful act" means an act declared to be unlawful under
Section 36.002.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1153, Sec. 4.02, eff.
Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 1, eff. September 1, 2005.
Sec. 36.0011. CULPABLE MENTAL STATE. (a) For purposes of this
chapter, a person acts "knowingly" with respect to information if
the person:
(1) has knowledge of the information;
(2) acts with conscious indifference to the truth or falsity of
the information; or
(3) acts in reckless disregard of the truth or falsity of the
information.
(b) Proof of the person's specific intent to commit an unlawful
act under Section 36.002 is not required in a civil or
administrative proceeding to show that a person acted "knowingly"
with respect to information under this chapter.
Added by Acts 2005, 79th Leg., Ch.
806, Sec. 2, eff. September 1, 2005.
Sec. 36.002. UNLAWFUL ACTS. A person commits an unlawful act if
the person:
(1) knowingly makes or causes to be made a false statement or
misrepresentation of a material fact to permit a person to
receive a benefit or payment under the Medicaid program that is
not authorized or that is greater than the benefit or payment
that is authorized;
(2) knowingly conceals or fails to disclose information that
permits a person to receive a benefit or payment under the
Medicaid program that is not authorized or that is greater than
the benefit or payment that is authorized;
(3) knowingly applies for and receives a benefit or payment on
behalf of another person under the Medicaid program and converts
any part of the benefit or payment to a use other than for the
benefit of the person on whose behalf it was received;
(4) knowingly makes, causes to be made, induces, or seeks to
induce the making of a false statement or misrepresentation of
material fact concerning:
(A) the conditions or operation of a facility in order that the
facility may qualify for certification or recertification
required by the Medicaid program, including certification or
recertification as:
(i) a hospital;
(ii) a nursing facility or skilled nursing facility;
(iii) a hospice;
(iv) an intermediate care facility for the mentally retarded;
(v) an assisted living facility; or
(vi) a home health agency; or
(B) information required to be provided by a federal or state
law, rule, regulation, or provider agreement pertaining to the
Medicaid program;
(5) except as authorized under the Medicaid program, knowingly
pays, charges, solicits, accepts, or receives, in addition to an
amount paid under the Medicaid program, a gift, money, a
donation, or other consideration as a condition to the provision
of a service or product or the continued provision of a service
or product if the cost of the service or product is paid for, in
whole or in part, under the Medicaid program;
(6) knowingly presents or causes to be presented a claim for
payment under the Medicaid program for a product provided or a
service rendered by a person who:
(A) is not licensed to provide the product or render the
service, if a license is required; or
(B) is not licensed in the manner claimed;
(7) knowingly makes a claim under the Medicaid program for:
(A) a service or product that has not been approved or
acquiesced in by a treating physician or health care
practitioner;
(B) a service or product that is substantially inadequate or
inappropriate when compared to generally recognized standards
within the particular discipline or within the health care
industry; or
(C) a product that has been adulterated, debased, mislabeled, or
that is otherwise inappropriate;
(8) makes a claim under the Medicaid program and knowingly fails
to indicate the type of license and the identification number of
the licensed health care provider who actually provided the
service;
(9) knowingly enters into an agreement, combination, or
conspiracy to defraud the state by obtaining or aiding another
person in obtaining an unauthorized payment or benefit from the
Medicaid program or a fiscal agent;
(10) is a managed care organization that contracts with the
Health and Human Services Commission or other state agency to
provide or arrange to provide health care benefits or services to
individuals eligible under the Medicaid program and knowingly:
(A) fails to provide to an individual a health care benefit or
service that the organization is required to provide under the
contract;
(B) fails to provide to the commission or appropriate state
agency information required to be provided by law, commission or
agency rule, or contractual provision; or
(C) engages in a fraudulent activity in connection with the
enrollment of an individual eligible under the Medicaid program
in the organization's managed care plan or in connection with
marketing the organization's services to an individual eligible
under the Medicaid program;
(11) knowingly obstructs an investigation by the attorney
general of an alleged unlawful act under this section;
(12) knowingly makes, uses, or causes the making or use of a
false record or statement to conceal, avoid, or decrease an
obligation to pay or transmit money or property to this state
under the Medicaid program; or
(13) knowingly engages in conduct that constitutes a violation
under Section 32.039(b).
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1153, Sec. 4.03, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 233, Sec. 4, eff. Sept.
1, 1999.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 3, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
78, Sec. 1, eff. September 1, 2007.
Sec. 36.003. DOCUMENTARY MATERIAL IN POSSESSION OF STATE AGENCY.
(a) A state agency, including the Health and Human Services
Commission, the Texas Department of Human Services, the Texas
Department of Health, the Texas Department of Mental Health and
Mental Retardation, or the Department of Protective and
Regulatory Services, shall provide the attorney general access to
all documentary materials of persons and Medicaid recipients
under the Medicaid program to which that agency has access.
Documentary material provided under this subsection is provided
to permit investigation of an alleged unlawful act or for use or
potential use in an administrative or judicial proceeding.
(b) Except as ordered by a court for good cause shown, the
office of the attorney general may not produce for inspection or
copying or otherwise disclose the contents of documentary
material obtained under this section to a person other than:
(1) an employee of the attorney general;
(2) an agency of this state, the United States, or another
state;
(3) a criminal district attorney, district attorney, or county
attorney of this state;
(4) the United States attorney general;
(5) a state or federal grand jury;
(6) a political subdivision of this state; or
(7) a person authorized by the attorney general to receive the
information.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.007 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(a), eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 4, eff. September 1, 2005.
Sec. 36.004. IMMUNITY. Notwithstanding any other law, a person
is not civilly or criminally liable for providing access to
documentary material under this chapter to:
(1) an employee of the attorney general;
(2) an agency of this state, the United States, or another
state;
(3) a criminal district attorney, district attorney, or county
attorney of this state;
(4) the United States attorney general;
(5) a state or federal grand jury;
(6) a political subdivision of this state; or
(7) a person authorized by the attorney general to receive the
information.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.008 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(a), eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 5, eff. September 1, 2005.
Sec. 36.005. SUSPENSION OR REVOCATION OF AGREEMENT; PROFESSIONAL
DISCIPLINE. (a) A health and human services agency, as defined
by Section 531.001, Government Code:
(1) shall suspend or revoke:
(A) a provider agreement between the agency and a person, other
than a person who operates a nursing facility or an ICF-MR
facility, found liable under Section 36.052; and
(B) a permit, license, or certification granted by the agency to
a person, other than a person who operates a nursing facility or
an ICF-MR facility, found liable under Section 36.052; and
(2) may suspend or revoke:
(A) a provider agreement between the agency and a person who
operates a nursing facility or an ICF-MR facility and who is
found liable under Section 36.052; or
(B) a permit, license, or certification granted by the agency to
a person who operates a nursing facility or an ICF-MR facility
and who is found liable under Section 36.052.
(b) A provider found liable under Section 36.052 for an unlawful
act may not, for a period of 10 years, provide or arrange to
provide health care services under the Medicaid program or supply
or sell, directly or indirectly, a product to or under the
Medicaid program. The executive commissioner of the Health and
Human Services Commission may by rule:
(1) provide for a period of ineligibility longer than 10 years;
or
(2) grant a provider a full or partial exemption from the period
of ineligibility required by this subsection if the executive
commissioner finds that enforcement of the full period of
ineligibility is harmful to the Medicaid program or a beneficiary
of the program.
(b-1) The period of ineligibility begins on the date on which
the determination that the provider is liable becomes final.
(b-2) Subsections (b) and (b-1) do not apply to a provider who
operates a nursing facility or an ICF-MR facility.
(c) A person licensed by a state regulatory agency who commits
an unlawful act is subject to professional discipline under the
applicable licensing law or rules adopted under that law.
(d) For purposes of this section, a person is considered to have
been found liable under Section 36.052 if the person is found
liable in an action brought under Subchapter C.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.009 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(a), eff. Sept. 1, 1997.
Amended by Acts 1997, 75th Leg., ch. 1153, Sec. 4.06, eff. Sept.
1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 6, eff. September 1, 2005.
Sec. 36.006. APPLICATION OF OTHER LAW. The application of a
civil remedy under this chapter does not preclude the application
of another common law, statutory, or regulatory remedy, except
that a person may not be liable for a civil remedy under this
chapter and civil damages or a penalty under Section 32.039 if
the civil remedy and civil damages or penalty are assessed for
the same act.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.010 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(a), eff. Sept. 1, 1997.
Sec. 36.007. RECOVERY OF COSTS, FEES, AND EXPENSES. The
attorney general may recover fees, expenses, and costs reasonably
incurred in obtaining injunctive relief or civil remedies or in
conducting investigations under this chapter, including court
costs, reasonable attorney's fees, witness fees, and deposition
fees.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.011 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(a), eff. Sept. 1, 1997.
Sec. 36.008. USE OF MONEY RECOVERED. The legislature, in
appropriating money recovered under this chapter, shall consider
the requirements of the attorney general and other affected state
agencies in investigating Medicaid fraud and enforcing this
chapter.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.012 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(a), eff. Sept. 1, 1997.
SUBCHAPTER B. ACTION BY ATTORNEY GENERAL
Sec. 36.051. INJUNCTIVE RELIEF. (a) If the attorney general
has reason to believe that a person is committing, has committed,
or is about to commit an unlawful act, the attorney general may
institute an action for an appropriate order to restrain the
person from committing or continuing to commit the act.
(b) An action under this section shall be brought in a district
court of Travis County or of a county in which any part of the
unlawful act occurred, is occurring, or is about to occur.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.003 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(b), eff. Sept. 1, 1997.
Sec. 36.052. CIVIL REMEDIES. (a) Except as provided by
Subsection (c), a person who commits an unlawful act is liable to
the state for:
(1) the amount of any payment or the value of any monetary or
in-kind benefit provided under the Medicaid program, directly or
indirectly, as a result of the unlawful act, including any
payment made to a third party;
(2) interest on the amount of the payment or the value of the
benefit described by Subdivision (1) at the prejudgment interest
rate in effect on the day the payment or benefit was received or
paid, for the period from the date the benefit was received or
paid to the date that the state recovers the amount of the
payment or value of the benefit;
(3) a civil penalty of:
(A) not less than $5,000 or more than $15,000 for each unlawful
act committed by the person that results in injury to an elderly
person, as defined by Section 48.002(a)(1), a disabled person, as
defined by Section 48.002(a)(8)(A), or a person younger than 18
years of age; or
(B) not less than $5,000 or more than $10,000 for each unlawful
act committed by the person that does not result in injury to a
person described by Paragraph (A); and
(4) two times the amount of the payment or the value of the
benefit described by Subdivision (1).
(b) In determining the amount of the civil penalty described by
Subsection (a)(3), the trier of fact shall consider:
(1) whether the person has previously violated the provisions of
this chapter;
(2) the seriousness of the unlawful act committed by the person,
including the nature, circumstances, extent, and gravity of the
unlawful act;
(3) whether the health and safety of the public or an individual
was threatened by the unlawful act;
(4) whether the person acted in bad faith when the person
engaged in the conduct that formed the basis of the unlawful act;
and
(5) the amount necessary to deter future unlawful acts.
(c) The trier of fact may assess a total of not more than two
times the amount of a payment or the value of a benefit described
by Subsection (a)(1) if the trier of fact finds that:
(1) the person furnished the attorney general with all
information known to the person about the unlawful act not later
than the 30th day after the date on which the person first
obtained the information; and
(2) at the time the person furnished all the information to the
attorney general, the attorney general had not yet begun an
investigation under this chapter.
(d) An action under this section shall be brought in Travis
County or in a county in which any part of the unlawful act
occurred.
(e) The attorney general may:
(1) bring an action for civil remedies under this section
together with a suit for injunctive relief under Section 36.051;
or
(2) institute an action for civil remedies independently of an
action for injunctive relief.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.004 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(b), eff. Sept. 1, 1997.
Amended by Acts 1997, 75th Leg., ch. 1153, Sec. 4.04, eff. Sept.
1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 7, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
29, Sec. 1, eff. May 4, 2007.
Sec. 36.053. INVESTIGATION. (a) The attorney general may take
action under Subsection (b) if the attorney general has reason to
believe that:
(1) a person has information or custody or control of
documentary material relevant to the subject matter of an
investigation of an alleged unlawful act;
(2) a person is committing, has committed, or is about to commit
an unlawful act; or
(3) it is in the public interest to conduct an investigation to
ascertain whether a person is committing, has committed, or is
about to commit an unlawful act.
(b) In investigating an unlawful act, the attorney general may:
(1) require the person to file on a prescribed form a statement
in writing, under oath or affirmation, as to all the facts and
circumstances concerning the alleged unlawful act and other
information considered necessary by the attorney general;
(2) examine under oath a person in connection with the alleged
unlawful act; and
(3) execute in writing and serve on the person a civil
investigative demand requiring the person to produce the
documentary material and permit inspection and copying of the
material under Section 36.054.
(c) The office of the attorney general may not release or
disclose information that is obtained under Subsection (b)(1) or
(2) or any documentary material or other record derived from the
information except:
(1) by court order for good cause shown;
(2) with the consent of the person who provided the information;
(3) to an employee of the attorney general;
(4) to an agency of this state, the United States, or another
state;
(5) to any attorney representing the state under Section 36.055
or in a civil action brought under Subchapter C;
(6) to a political subdivision of this state; or
(7) to a person authorized by the attorney general to receive
the information.
(d) The attorney general may use documentary material derived
from information obtained under Subsection (b)(1) or (2), or
copies of that material, as the attorney general determines
necessary in the enforcement of this chapter, including
presentation before a court.
(e) If a person fails to file a statement as required by
Subsection (b)(1) or fails to submit to an examination as
required by Subsection (b)(2), the attorney general may file in a
district court of Travis County a petition for an order to compel
the person to file the statement or submit to the examination
within a period stated by court order. Failure to comply with an
order entered under this subsection is punishable as contempt.
(f) An order issued by a district court under this section is
subject to appeal to the supreme court.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.005 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(b), eff. Sept. 1, 1997.
Amended by Acts 1997, 75th Leg., ch. 1153, Sec. 4.05, eff. Sept.
1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 8, eff. September 1, 2005.
Sec. 36.054. CIVIL INVESTIGATIVE DEMAND. (a) An investigative
demand must:
(1) state the rule or statute under which the alleged unlawful
act is being investigated and the general subject matter of the
investigation;
(2) describe the class or classes of documentary material to be
produced with reasonable specificity to fairly indicate the
documentary material demanded;
(3) prescribe a return date within which the documentary
material is to be produced; and
(4) identify an authorized employee of the attorney general to
whom the documentary material is to be made available for
inspection and copying.
(b) A civil investigative demand may require disclosure of any
documentary material that is discoverable under the Texas Rules
of Civil Procedure.
(c) Service of an investigative demand may be made by:
(1) delivering an executed copy of the demand to the person to
be served or to a partner, an officer, or an agent authorized by
appointment or by law to receive service of process on behalf of
that person;
(2) delivering an executed copy of the demand to the principal
place of business in this state of the person to be served; or
(3) mailing by registered or certified mail an executed copy of
the demand addressed to the person to be served at the person's
principal place of business in this state or, if the person has
no place of business in this state, to a person's principal
office or place of business.
(d) Documentary material demanded under this section shall be
produced for inspection and copying during normal business hours
at the office of the attorney general or as agreed by the person
served and the attorney general.
(e) The office of the attorney general may not produce for
inspection or copying or otherwise disclose the contents of
documentary material obtained under this section except:
(1) by court order for good cause shown;
(2) with the consent of the person who produced the information;
(3) to an employee of the attorney general;
(4) to an agency of this state, the United States, or another
state;
(5) to any attorney representing the state under Section 36.055
or in a civil action brought under Subchapter C;
(6) to a political subdivision of this state; or
(7) to a person authorized by the attorney general to receive
the information.
(e-1) The attorney general shall prescribe reasonable terms and
conditions allowing the documentary material to be available for
inspection and copying by the person who produced the material or
by an authorized representative of that person. The attorney
general may use the documentary material or copies of it as the
attorney general determines necessary in the enforcement of this
chapter, including presentation before a court.
(f) A person may file a petition, stating good cause, to extend
the return date for the demand or to modify or set aside the
demand. A petition under this section shall be filed in a
district court of Travis County and must be filed before the
earlier of:
(1) the return date specified in the demand; or
(2) the 20th day after the date the demand is served.
(g) Except as provided by court order, a person on whom a demand
has been served under this section shall comply with the terms of
an investigative demand.
(h) A person who has committed an unlawful act in relation to
the Medicaid program in this state has submitted to the
jurisdiction of this state and personal service of an
investigative demand under this section may be made on the person
outside of this state.
(i) This section does not limit the authority of the attorney
general to conduct investigations or to access a person's
documentary materials or other information under another state or
federal law, the Texas Rules of Civil Procedure, or the Federal
Rules of Civil Procedure.
(j) If a person fails to comply with an investigative demand, or
if copying and reproduction of the documentary material demanded
cannot be satisfactorily accomplished and the person refuses to
surrender the documentary material, the attorney general may file
in a district court of Travis County a petition for an order to
enforce the investigative demand.
(k) If a petition is filed under Subsection (j), the court may
determine the matter presented and may enter an order to
implement this section.
(l) Failure to comply with a final order entered under
Subsection (k) is punishable by contempt.
(m) A final order issued by a district court under Subsection
(k) is subject to appeal to the supreme court.
Added by Acts 1995, 74th Leg., ch. 824, Sec. 1, eff. Sept. 1,
1995. Renumbered from Human Resources Code Sec. 36.006 by Acts
1997, 75th Leg., ch. 1153, Sec. 4.01(b), eff. Sept. 1, 1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 9, eff. September 1, 2005.
Sec. 36.055. ATTORNEY GENERAL AS RELATOR IN FEDERAL ACTION. To
the extent permitted by 31 U.S.C. Sections 3729-3733, the
attorney general may bring an action as relator under 31 U.S.C.
Section 3730 with respect to an act in connection with the
Medicaid program for which a person may be held liable under 31
U.S.C. Section 3729. The attorney general may contract with a
private attorney to represent the state under this section.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.07(a), eff. Sept.
1, 1997.
SUBCHAPTER C. ACTION BY PRIVATE PERSONS
Sec. 36.101. ACTION BY PRIVATE PERSON AUTHORIZED. (a) A person
may bring a civil action for a violation of Section 36.002 for
the person and for the state. The action shall be brought in the
name of the person and of the state.
(b) In an action brought under this subchapter, a person who
violates Section 36.002 is liable as provided by Section 36.052.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.102. INITIATION OF ACTION. (a) A person bringing an
action under this subchapter shall serve a copy of the petition
and a written disclosure of substantially all material evidence
and information the person possesses on the attorney general in
compliance with the Texas Rules of Civil Procedure.
(b) The petition shall be filed in camera and, except as
provided by Subsection (c-1) or (d), shall remain under seal
until at least the 180th day after the date the petition is filed
or the date on which the state elects to intervene, whichever is
earlier. The petition may not be served on the defendant until
the court orders service on the defendant.
(c) The state may elect to intervene and proceed with the action
not later than the 180th day after the date the attorney general
receives the petition and the material evidence and information.
(c-1) At the time the state intervenes, the attorney general may
file a motion with the court requesting that the petition remain
under seal for an extended period.
(d) The state may, for good cause shown, move the court to
extend the 180-day deadline under Subsection (b) or (c). A
motion under this subsection may be supported by affidavits or
other submissions in camera.
(e) An action under this subchapter may be dismissed before the
end of the period during which the petition remains under seal
only if the court and the attorney general consent in writing to
the dismissal and state their reasons for consenting.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 10, eff. September 1, 2005.
Sec. 36.1021. STANDARD OF PROOF. In an action under this
subchapter, the state or person bringing the action must
establish each element of the action, including damages, by a
preponderance of the evidence.
Added by Acts 2007, 80th Leg., R.S., Ch.
29, Sec. 2, eff. May 4, 2007.
Sec. 36.103. ANSWER BY DEFENDANT. A defendant is not required
to file in accordance with the Texas Rules of Civil Procedure an
answer to a petition filed under this subchapter until the
petition is unsealed and served on the defendant.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 11, eff. September 1, 2005.
Sec. 36.104. STATE DECISION; CONTINUATION OF ACTION. (a) Not
later than the last day of the period prescribed by Section
36.102(c) or an extension of that period as provided by Section
36.102(d), the state shall:
(1) proceed with the action; or
(2) notify the court that the state declines to take over the
action.
(b) If the state declines to take over the action, the person
bringing the action may proceed without the state's
participation. On request by the state, the state is entitled to
be served with copies of all pleadings filed in the action and be
provided at the state's expense with copies of all deposition
transcripts. If the person bringing the action proceeds without
the state's participation, the court, without limiting the status
and right of that person, may permit the state to intervene at a
later date on a showing of good cause.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 12, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
29, Sec. 3, eff. May 4, 2007.
Acts 2007, 80th Leg., R.S., Ch.
29, Sec. 4, eff. May 4, 2007.
Sec. 36.105. REPRESENTATION OF STATE BY PRIVATE ATTORNEY. The
attorney general may contract with a private attorney to
represent the state in an action under this subchapter with which
the state elects to proceed.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.106. INTERVENTION BY OTHER PARTIES PROHIBITED. A person
other than the state may not intervene or bring a related action
based on the facts underlying a pending action brought under this
subchapter.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.107. RIGHTS OF PARTIES IF STATE CONTINUES ACTION. (a)
If the state proceeds with the action, the state has the primary
responsibility for prosecuting the action and is not bound by an
act of the person bringing the action. The person bringing the
action has the right to continue as a party to the action,
subject to the limitations set forth by this section.
(b) The state may dismiss the action notwithstanding the
objections of the person bringing the action if:
(1) the attorney general notifies the person that the state has
filed a motion to dismiss; and
(2) the court provides the person with an opportunity for a
hearing on the motion.
(c) The state may settle the action with the defendant
notwithstanding the objections of the person bringing the action
if the court determines, after a hearing, that the proposed
settlement is fair, adequate, and reasonable under all the
circumstances. On a showing of good cause, the hearing may be
held in camera.
(d) On a showing by the state that unrestricted participation
during the course of the litigation by the person bringing the
action would interfere with or unduly delay the state's
prosecution of the case, or would be repetitious, irrelevant, or
for purposes of harassment, the court may impose limitations on
the person's participation, including:
(1) limiting the number of witnesses the person may call;
(2) limiting the length of the testimony of witnesses called by
the person;
(3) limiting the person's cross-examination of witnesses; or
(4) otherwise limiting the participation by the person in the
litigation.
(e) On a showing by the defendant that unrestricted
participation during the course of the litigation by the person
bringing the action would be for purposes of harassment or would
cause the defendant undue burden or unnecessary expense, the
court may limit the participation by the person in the
litigation.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.108. STAY OF CERTAIN DISCOVERY. (a) On a showing by
the state that certain actions of discovery by the person
bringing the action would interfere with the state's
investigation or prosecution of a criminal or civil matter
arising out of the same facts, the court may stay the discovery
for a period not to exceed 60 days.
(b) The court shall hear a motion to stay discovery under this
section in camera.
(c) The court may extend the period prescribed by Subsection (a)
on a further showing in camera that the state has pursued the
criminal or civil investigation or proceedings with reasonable
diligence and that any proposed discovery in the civil action
will interfere with the ongoing criminal or civil investigation
or proceedings.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.109. PURSUIT OF ALTERNATE REMEDY BY STATE. (a)
Notwithstanding Section 36.101, the state may elect to pursue the
state's claim through any alternate remedy available to the
state, including any administrative proceeding to determine an
administrative penalty. If an alternate remedy is pursued in
another proceeding, the person bringing the action has the same
rights in the other proceeding as the person would have had if
the action had continued under this subchapter.
(b) A finding of fact or conclusion of law made in the other
proceeding that has become final is conclusive on all parties to
an action under this subchapter. For purposes of this subsection,
a finding or conclusion is final if:
(1) the finding or conclusion has been finally determined on
appeal to the appropriate court;
(2) no appeal has been filed with respect to the finding or
conclusion and all time for filing an appeal has expired; or
(3) the finding or conclusion is not subject to judicial review.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.110. AWARD TO PRIVATE PLAINTIFF. (a) If the state
proceeds with an action under this subchapter, the person
bringing the action is entitled, except as provided by Subsection
(b), to receive at least 15 percent but not more than 25 percent
of the proceeds of the action, depending on the extent to which
the person substantially contributed to the prosecution of the
action.
(a-1) If the state does not proceed with an action under this
subchapter, the person bringing the action is entitled, except as
provided by Subsection (b), to receive at least 25 percent but
not more than 30 percent of the proceeds of the action. The
entitlement of a person under this subsection is not affected by
any subsequent intervention in the action by the state in
accordance with Section 36.104(b).
(b) If the court finds that the action is based primarily on
disclosures of specific information, other than information
provided by the person bringing the action, relating to
allegations or transactions in a criminal or civil hearing, in a
legislative or administrative report, hearing, audit, or
investigation, or from the news media, the court may award the
amount the court considers appropriate but not more than seven
percent of the proceeds of the action. The court shall consider
the significance of the information and the role of the person
bringing the action in advancing the case to litigation.
(c) A payment to a person under this section shall be made from
the proceeds of the action. A person receiving a payment under
this section is also entitled to receive from the defendant an
amount for reasonable expenses, reasonable attorney's fees, and
costs that the court finds to have been necessarily incurred.
The court's determination of expenses, fees, and costs to be
awarded under this subsection shall be made only after the
defendant has been found liable in the action.
(d) In this section, "proceeds of the action" includes proceeds
of a settlement of the action.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 13, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
29, Sec. 5, eff. May 4, 2007.
Sec. 36.111. REDUCTION OF AWARD. (a) If the court finds that
the action was brought by a person who planned and initiated the
violation of Section 36.002 on which the action was brought, the
court may, to the extent the court considers appropriate, reduce
the share of the proceeds of the action the person would
otherwise receive under Section 36.110, taking into account the
person's role in advancing the case to litigation and any
relevant circumstances pertaining to the violation.
(b) If the person bringing the action is convicted of criminal
conduct arising from the person's role in the violation of
Section 36.002, the court shall dismiss the person from the civil
action and the person may not receive any share of the proceeds
of the action. A dismissal under this subsection does not
prejudice the right of the state to continue the action.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.112. AWARD TO DEFENDANT FOR FRIVOLOUS ACTION. Chapter
105, Civil Practice and Remedies Code, applies in an action under
this subchapter with which the state proceeds.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.113. CERTAIN ACTIONS BARRED. (a) A person may not
bring an action under this subchapter that is based on
allegations or transactions that are the subject of a civil suit
or an administrative penalty proceeding in which the state is
already a party.
(b) A person may not bring an action under this subchapter that
is based on the public disclosure of allegations or transactions
in a criminal or civil hearing, in a legislative or
administrative report, hearing, audit, or investigation, or from
the news media, unless the person bringing the action is an
original source of the information. In this subsection, "original
source" means an individual who has direct and independent
knowledge of the information on which the allegations are based
and has voluntarily provided the information to the state before
filing an action under this subchapter that is based on the
information.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.114. STATE NOT LIABLE FOR CERTAIN EXPENSES. The state
is not liable for expenses that a person incurs in bringing an
action under this subchapter.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.115. RETALIATION BY EMPLOYER AGAINST PERSON BRINGING
SUIT PROHIBITED. (a) A person who is discharged, demoted,
suspended, threatened, harassed, or in any other manner
discriminated against in the terms of employment by the person's
employer because of a lawful act taken by the person in
furtherance of an action under this subchapter, including
investigation for, initiation of, testimony for, or assistance in
an action filed or to be filed under this subchapter, is entitled
to:
(1) reinstatement with the same seniority status the person
would have had but for the discrimination; and
(2) not less than two times the amount of back pay, interest on
the back pay, and compensation for any special damages sustained
as a result of the discrimination, including litigation costs and
reasonable attorney's fees.
(b) A person may bring an action in the appropriate district
court for the relief provided in this section.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.116. SOVEREIGN IMMUNITY NOT WAIVED. Except as provided
by Section 36.112, this subchapter does not waive sovereign
immunity.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
Sec. 36.117. ATTORNEY GENERAL COMPENSATION. The office of the
attorney general may retain a reasonable portion of recoveries
under this subchapter, not to exceed amounts specified in the
General Appropriations Act, for the administration of this
subchapter.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.08, eff. Sept. 1,
1997.
SUBCHAPTER D. REVOCATION OF CERTAIN OCCUPATIONAL LICENSES
Sec. 36.132. REVOCATION OF LICENSES. (a) In this section:
(1) "License" means a license, certificate, registration,
permit, or other authorization that:
(A) is issued by a licensing authority;
(B) is subject before expiration to suspension, revocation,
forfeiture, or termination by an issuing licensing authority; and
(C) must be obtained before a person may practice or engage in a
particular business, occupation, or profession.
(2) "Licensing authority" means:
(A) the Texas Medical Board;
(B) the State Board of Dental Examiners;
(C) the Texas State Board of Examiners of Psychologists;
(D) the Texas State Board of Social Worker Examiners;
(E) the Texas Board of Nursing;
(F) the Texas Board of Physical Therapy Examiners;
(G) the Texas Board of Occupational Therapy Examiners; or
(H) another state agency authorized to regulate a provider who
receives or is eligible to receive payment for a health care
service under the Medicaid program.
(b) A licensing authority shall revoke a license issued by the
authority to a person if the person is convicted of a felony
under Section 35A.02, Penal Code. In revoking the license, the
licensing authority shall comply with all procedures generally
applicable to the licensing authority in revoking licenses.
Added by Acts 1997, 75th Leg., ch. 1153, Sec. 4.09, eff. Sept. 1,
1997. Amended by Acts 2003, 78th Leg., ch. 553, Sec. 2.012, eff.
Feb. 1, 2004.
Amended by:
Acts 2005, 79th Leg., Ch.
806, Sec. 15, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
889, Sec. 70, eff. September 1, 2007.