(a) The health insuring agent and the department develop and mutually agree to procedures and safeguards reasonably necessary to prevent and control fraud, program abuse, and other misutilization by eligible recipients, eligible providers, and others.
(b) The health insuring agent in accordance with procedures approved by the Texas Department of Health (department) may, or if required by the department will, withhold future payments to eligible providers involved in or suspected of being involved in potential fraud, program abuse, or other misutilization.
(c) In the event fraud, other violations of law of the State of Texas or the United States, program abuse, or other misutilizations are suspected, the health insuring agent promptly advises the department that such a situation appears to exist and that it has conducted an internal investigation and has determined that said situation is not the result of computer or human error. The health insuring agent in accordance with prior approval by the department independently or in conjunction with the department conducts an initial investigation to acquire and evaluate such facts as are necessary to determine if any offense, violation, program abuse, or other misutilization in fact exists.
(d) The health insuring agent assists the department in the furnishing of any reports or other documentation necessary for the department to acquire and evaluate facts necessary to determine if any offense, violation, program abuse, or other misutilization exists. The department refers cases to the appropriate state agencies and law enforcement agency, if the seriousness of an offense, violation, program abuse, or other misutilization warrants the referral.
(e) The health insuring agent, with prior approval of the department on a case-by-case basis, and in accordance with guidelines mutually agreed upon by the health insuring agent and the department, pursues and seeks to recover, with or without legal action, any amounts paid as the result of program abuse or other misutilization. The health insuring agent, with prior approval of the department on a case-by-case basis compromises, settles, and executes appropriate releases in accordance with generally accepted insurance practice.
(f) Any sums recovered under this section by the health insuring agent or the department, less court costs, attorney's fees, and other costs of litigation, if any, are applied against the claims involved.
(g) If an eligible provider delivers health care to an individual having a bona fide Medical Care Identification Card, the eligible provider is paid as usual for such services even though it may be determined that the card was obtained by fraudulent means unknown to the provider.

Source Note: The provisions of this §354.1157 adopted to be effective May 30, 1977, 2 TexReg 1929; amended to be effective April 18, 1984, 9 TexReg 1965; transferred effective September 1, 1993, as published in the Texas Register September 7, 1993, 18 TexReg 5978; transferred effective September 1, 2001, as published in the Texas Register May 24, 2002, 27 TexReg 4561