HB 3984 Texas House · 89th Legislature (2025)

Relating to the review of claims and recovery of overpayments by Medicaid recovery audit contractors.

HB 3984 amends Texas Government Code Section 544.0504 to require the state Medicaid agency to contract with recovery audit contractors. These contractors must identify billing errors (both underpayments and overpayments) in the Medicaid managed care program and recover any overpayments. The bill directly affects Medicaid managed care providers and the state's Medicaid program by establishing a formal process for auditing claims and recouping excess payments. It takes effect on September 1, 2025.
Bill status passed 3 of 5 stages cleared
Introduction
Mar 2025
Committee Review
May 2025
House Passage
May 2025
Senate Passage
Governor
Introduced Mar 27, 2025 Last action May 13, 2025
Maddy AI version diff · 1 comparison

What changed between versions

Introduced Engrossed · 7 edits · May 12, 2025
MODERATE
This bill updates the Texas Government Code to establish a formal program for recovery audit contractors who identify and recover Medicaid overpayments. The changes add new operational requirements, including cost-effectiveness reviews, time limits on claim reviews, and protections against duplicate audits, while also clarifying how appeals and third-party administration of the program will work.
Scope change
The bill expands the scope of the recovery audit program by adding detailed operational procedures, including requirements for cost-effectiveness analysis, one-year time limits on claim reviews, and restrictions on initiating recovery efforts when managed care organizations are already auditing claims.
REQUIREMENT

Added requirement that recovery audit contractors must obtain approval from the office of inspector general before initiating claim reviews, including a cost-effectiveness determination.

Added one-year time limit since claim receipt before a recovery audit contractor can initiate a review.

Added prohibition on initiating recovery efforts when a managed care organization has already notified the office of inspector general that it is auditing the claim.

ENFORCEMENT

Added requirement for the executive commissioner to adopt an appeals process for overpayments identified by recovery audit contractors.

FISCAL

Added requirement that the Health and Human Services Commission can only implement changes if the legislature appropriates specific funding, with optional use of other available funds if not appropriated.

TIMELINE

Maintained September 1, 2025 effective date for the Act.

TECHNICAL

Added provision allowing the commission to contract with a third party to administer recovery efforts or the appeals process.

Floor votes · House May 10, 2025

How they voted

1230
Passed · 22 other
Total votes 145
May 10, 2025
D Democratic59
42 Yea 17
71% Yea
R Republican86
81 Yea 5
94% Yea
Vote distribution
All Yea All Nay Mixed No data
Full legislative history

Actions timeline

Total actions
25
Key actions
7
Committee
7
May 13, 2025
Committee
Referred to Health & Human Services
upper
May 13, 2025
Introduced
Read first time
upper
May 12, 2025
Introduced
Received from the House
upper
May 12, 2025
Lower · Passed
Passed
lower
May 10, 2025
Lower · Passed
Passed to engrossment
lower
Apr 29, 2025
Lower · Passed
Committee report sent to Calendars
lower
Apr 29, 2025
Lower · Passed
Committee report distributed
lower
Apr 25, 2025
Lower · Passed
Reported favorably as substituted
lower
Apr 22, 2025
Lower · Passed
Left pending in committee
lower
Apr 22, 2025
Lower · Passed
Testimony taken/registration(s) recorded in committee
lower
Mar 27, 2025
Committee
Referred to Human Services
lower
Mar 27, 2025
Introduced
Read first time
lower
1 primary · 0 co-sponsors

Sponsors

Role
Legislator
Party
State
District
P
Photo of Tom Oliverson
Tom Oliverson
RRepublican
TX
130