Relating to administrative remedies for certain fraud and abuse violations under Medicaid; providing administrative penalties.
SB 1038 establishes a program to reward individuals who report Medicaid fraud or overcharges that result in recovered administrative penalties. Whistleblowers may receive up to 5% of the recovered penalty, but only if the Texas Health and Human Services Commission or attorney general did not already know about the fraud. The bill also clarifies key terms like "knowingly" and "material" to strengthen fraud enforcement in Medicaid. This law directly affects Medicaid providers who commit fraud and individuals who report such violations.
Bill status
signed
all 5 stages cleared
Introduction
Jan 2025
Committee Review
Apr 2025
Senate Passage
Apr 2025
House Passage
May 2025
Signed into Law
May 2025
Introduced Jan 31, 2025
Signed May 13, 2025
Maddy AI version diff · 2 comparisons
What changed between versions
Engrossed
→
Enrolled
·
5 edits
·
May 13, 2025
MODERATE
This bill amends Texas law to strengthen fraud and abuse enforcement in Medicaid by updating penalty amounts, clarifying definitions, and expanding the list of prohibited conduct. The changes increase potential fines for violations, particularly for cases involving elderly or disabled individuals, and add new categories of fraudulent behavior such as misrepresenting facility qualifications and submitting claims for unapproved services.
Scope change
The bill expands the scope of prohibited conduct under Medicaid fraud laws by adding 11 new specific violations related to false statements, unapproved services, and facility certification fraud, while also clarifying exemptions for managed care organizations and value-added services.
ENFORCEMENT
Increased administrative penalties from a maximum of 5% of recovered funds to up to twice the amount paid plus fixed fines of $5,000-$15,000 for violations harming elderly or disabled persons.
REQUIREMENT
Added 11 new specific violations including knowingly submitting claims for unapproved services, misrepresenting facility qualifications, and failing to maintain proper documentation.
Added new provisions requiring managed care organizations to provide required health care benefits and prohibiting patterns of wrongful payment denial or delays.
DEFINITION
Updated the definition of 'Claim' to clarify it includes applications for health care services under federal Title XIX of the Social Security Act.
TIMELINE
Set the effective date of the new provisions to September 1, 2025.
Floor votes · Senate Mar 31, 2025 · House Apr 28, 2025
How they voted
23–6
Passed · 1 other
Total votes 30
Mar 31, 2025
D
Democratic10
60% Nay
R
Republican20
95% Yea
Vote distribution
All Yea
All Nay
Mixed
No data
Full legislative history
Actions timeline
Total actions
45
Key actions
15
Committee
10
May 13, 2025
Signed into law
Signed by the Governor
executive
May 1, 2025
Lower · Passed
Signed in the House
lower
Apr 30, 2025
Upper · Passed
Signed in the Senate
upper
Apr 29, 2025
Upper · Passed
House passage reported
upper
Apr 29, 2025
Lower · Passed
Passed
lower
Apr 28, 2025
Lower · Passed
Committee report sent to Calendars
lower
Apr 28, 2025
House · Passed
House Vote: pass (118-21-6)
house
Apr 25, 2025
Lower · Passed
Committee report distributed
lower
Apr 15, 2025
Lower · Passed
Reported favorably w/o amendment(s)
lower
Apr 9, 2025
Committee
Referred to Human Services
lower
Apr 9, 2025
Introduced
Read first time
lower
Apr 1, 2025
Introduced
Received from the Senate
lower
Mar 31, 2025
Upper · Passed
Passed
upper
Mar 24, 2025
Upper · Passed
Committee report printed and distributed
upper
Mar 24, 2025
Upper · Passed
Reported favorably as substituted
upper
Mar 18, 2025
Upper · Passed
Vote taken in committee
upper
Mar 11, 2025
Upper · Passed
Left pending in committee
upper
Mar 11, 2025
Upper · Passed
Testimony taken in committee
upper
Feb 24, 2025
Committee
Referred to Health & Human Services
upper
Feb 24, 2025
Introduced
Read first time
upper
2 primary · 0 co-sponsors
Sponsors
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