(a) If a managed care organization (MCO) suspects fraud or abuse in the Medicaid or CHIP program, based on information, data, or facts obtained by the MCO, it must:
  (1) immediately notify the Health and Human Services Commission-Office of Inspector General (HHSC-OIG) and the Office of the Attorney General (OAG);
  (2) following the completion of ordinary due diligence regarding a suspected overpayment, begin payment recovery efforts subject to subsection (b) of this section; and
  (3) ensure that any payment recovery efforts in which the MCO engages are in accordance with this subchapter.
(b) If the amount to be recovered exceeds $100,000, the MCO may not engage in payment recovery efforts if it receives a notice from the HHSC-OIG or the OAG indicating that the MCO is not authorized to proceed with recovery effort. Such notice must be supplied no later than the tenth business day after the MCO notifies the HHSC-OIG and OAG of the suspected fraud or abuse.
(c) If the HHSC-OIG or the OAG has assumed responsibility for completion of the investigation and final disposition of any administrative, civil, or criminal action taken by the state or federal government, the HHSC-OIG or the OAG will determine and direct the collection of any overpayment.
(d) An MCO may retain any money recovered by the MCO.
(e) The HHSC-OIG will distribute any amounts collected to the MCO, less any costs of investigation and collection proceedings.
(f) An MCO must submit a quarterly report to the HHSC-OIG detailing the amount of money recovered.

Source Note: The provisions of this §370.505 adopted to be effective August 8, 2004, 29 TexReg 7302; amended to be effective March 1, 2012, 37 TexReg 1301