Office of Inspector General, Health and Human Services Commission

Next Review Date: None

  • Last Review Cycle: 2014-2015 Review Cycle - 84th Legislative Session

Sunset Documents for 2014-2015 Review Cycle, 84th Legislative Session

Final Results of Last Sunset Review

The following material summarizes results of the Sunset review of the Health and Human Services Commission, including management actions directed to HHSC that do not require statutory changes. For additional information see the Health and Human Services Commission and System Issues Staff Report with Final Results.

Consolidation and Reorganization of the Health and Human Services System

  • Consolidates the functions of the Department of Assistive and Rehabilitative Services (DARS) and the Department of Aging and Disability Services (DADS) at HHSC in a phased, two-year approach to be completed by September 1, 2017.1 Maintains the Department of State Health Services (DSHS) and the Department of Family and Protective Services (DFPS) as independent agencies within the health and human services system focused on their primary public health and protective services missions.
  • Transfers to HHSC all client services, regulatory functions, state institutions from across the system, as well as administrative support services functions that can practicably be consolidated, by September 1, 2017.
  • Requires an HHSC organizational structure along functional lines, including, at a minimum, Medical and Social Services, Regulatory, Facilities, Administrative, and Office of Inspector General Divisions.
  • Creates a Transition Legislative Oversight Committee composed primarily of legislators to oversee the reorganization.
  • Establishes an Office of Policy and Performance to serve as a "think tank" for improving performance, assisting in the reorganization, and managing change on an ongoing basis.
  • Establishes an executive council composed of HHSC division directors and agency heads, as well as other individuals as determined by the executive commissioner, to take public input as well as input from the system’s advisory committees.

Oversight of System Administrative Support Functions

  • Establishes guiding principles in law to ensure accountability, workability, and clear communication in HHSC’s mandate to consolidate administrative support services.
  • Requires HHSC to provide more high-level oversight of contracting throughout the system, formalize a reporting structure for penalties, and define a system to escalate attention on large, problematic contracts to HHSC executive management. (management action – nonstatutory)
  • Gives clear authority to HHSC to oversee information technology (IT) throughout the system, to prepare and maintain a comprehensive IT plan, to consolidate authority for system networking and customer support, and to put in place an IT security system meeting minimum standards consistent across all agencies. (management action – nonstatutory)
  • Consolidates rate setting for the health and human services (HHS) system at HHSC. (management action – nonstatutory)
  • Elevates oversight and coordination of data to better manage, use, and share system data for improved service delivery. (management action – nonstatutory)


  • Requires HHSC to regularly evaluate the appropriateness of performance data requested of managed care organizations and to develop a dashboard identifying key performance data for agency leadership.
  • Directs HHSC to comprehensively evaluate data and trends for Medicaid on an ongoing basis. (management action – nonstatutory)
  • Directs HHSC to develop a system to automate data entry for data reported by managed care organizations. (management action – nonstatutory)
  • Streamlines the Medicaid provider enrollment and credentialing processes by creating an enrollment portal and working toward consolidating both processes.
  • Streamlines provider criminal history background checks by limiting OIG’s involvement to providers not already subject to fingerprint-based checks by state licensing boards, and requiring OIG background checks to be complete within ten business days.
  • Requires OIG and HHSC to define in rule their respective roles and purpose of managed care audits and to coordinate all audit activities.
  • Directs HHSC to redefine the role of its prescription drug program to provide better oversight of managed care organizations. (management action – nonstatutory)
  • Eliminates the Pharmaceutical and Therapeutics Committee, transfers its functions to the Drug Utilization Review Committee, and expands and repurposes the board’s membership.
  • Expands the Medical Care Advisory Committee’s membership to include managed care representation.
  • Requires HHSC to study aspects of network adequacy for Medicaid managed care organizations, and to report on non-emergent use of emergency departments. (management action – nonstatutory)

Quality of Health Care

  • Requires HHSC to develop a comprehensive, coordinated operational plan to align HHSC’s initiatives to improve the quality of healthcare and specifically to coordinate efforts to ensure consistency across state contracts, oversight of managed care organizations, and other aspects related to the delivery of health and human services. (management action – nonstatutory)
  • Requires HHSC to develop a pilot program to promote wider use of incentive-based payments to Medicaid providers.
  • Directs HHSC to include a requirement for use of incentive-based payments in managed care requests for proposals. (management action – nonstatutory)

Women’s Health Programs

  • Directs HHSC and DSHS to consolidate the Texas Women’s Health and Expanded Primary Care programs at HHSC, while leaving the Family Planning program unchanged. Moves funding for all women’s health programs under a single budget strategy, allowing for implementation of a consolidated women’s health program. Creates a Women’s Health Advisory Committee to provide recommendations to HHSC on the consolidation of women’s health programs.
  • Directs HHSC to study the feasibility of automatically transitioning new mothers in Medicaid who would otherwise not be eligible for Medicaid to the new women’s health program. (management action – nonstatutory)

Behavioral Health

  • Discontinues the NorthSTAR behavioral health services model on December 31, 2016, and reallocates funding to other models for integrating behavioral health services and primary care in the Dallas area.
  • Requires the state to promote maintenance of Medicaid eligibility statewide.
  • Requires HHSC to monitor contracts with managed care organizations to ensure that they are complying with requirements to integrate behavioral health.

Office of Inspector General

  • Clarifies the roles and relationships between the executive commissioner and inspector general of HHSC and requires quarterly reporting to the executive commissioner, governor, and the Legislature.
  • Requires a special purpose Sunset review of OIG in 2021.
  • Requires OIG to establish criteria for conducting its investigations and sanctioning providers and to complete investigations within certain timeframes.
  • Requires OIG to conduct quality assurance reviews and request a peer review, by the Association of Inspectors General or an equivalent organization, of the sampling methodology used in its investigative process.
  • Defines OIG’s role in managed care, including strengthened oversight of special investigative units and increased training for OIG and HHSC staff.
  • Repeals the prohibition on participation in both the Health Insurance Premium Payment Program and Medicaid managed care.
  • Allows OIG to share confidential drafts of investigative reports concerning child fatalities with DFPS.
  • Requires better communication and coordination between OIG and HHSC program staff to avoid duplication of efforts.
  • Directs OIG to promptly notify any harmed providers upon finding that a state employee, including an OIG employee, is suspected to have committed fraud. (management action – nonstatutory)
  • Directs OIG to limit the scope of its internal affairs investigations to those that are most serious and that create the most potential for harm. (management action – nonstatutory)
  • Directs OIG and HHSC to work together to transfer programs from OIG that are better situated within HHSC. (management action – nonstatutory)
  • Directs OIG to establish a formal plan for reducing its backlog and improving inefficiencies in its investigative process. Directs OIG to track basic performance measures needed to monitor the efficiency and effectiveness of its investigative processes. (management action – nonstatutory)
  • Requires OIG, and any OIG contractor that performs coding services, to comply with federal coding guidelines, including for diagnosis-related group validation and related audits. Requires the executive commissioner to develop rules that require OIG to communicate with and educate providers about diagnosis-related group validation criteria used in utilization reviews and audits.
  • Allows OIG to conduct a performance audit of any HHS program or project, including audits relating to contracting procedures of HHSC or any HHS agency. Allows OIG to issue subpoenas without the approval of the executive commissioner.

Credible Allegation of Fraud Appeals

  • Streamlines the credible allegation of fraud (CAF) hold appeal hearing process, to more quickly mitigate financial risks to the state.
  • Clarifies good cause exceptions for OIG’s application of a CAF payment hold.
  • Clarifies circumstances in which OIG has authority to place payment holds on providers.
  • Disallows CAF holds for services that have received prior authorization but lack additional evidence of fraud.
  • Amends the statutory definition of fraud.
  • Requires OIG to pay the costs of CAF hold and overpayment hearings at the State Office of Administrative Hearings.
  • Requires OIG to include, with written notice of a proposed recoupment of overpayment, information relating to the extrapolation methodology used to determine the amount of the overpayment.
  • Removes the statutory right to two informal resolution meetings before an overpayment hearing and provides that informal resolution meetings are confidential and not subject to disclosure. Extends the deadline to request a hearing on an overpayment to 30 days from 15 days.
  • Provides pharmacies audited by OIG or a federal contractor and not accused of fraud a right to an informal hearing.

Websites and Hotlines

  • Coordinates and consolidates most ombudsman services across the HHS system at HHSC.2
  • Requires HHSC to create an approval process and standard criteria for all system websites, consolidating websites when necessary.
  • Requires HHSC to create policies governing hotlines and call centers throughout the HHS system, consolidating hotlines and call centers when necessary.

Advisory Committees

  • Removes most advisory committees from statute and requires the executive commissioner to, at a minimum, re-establish advisory committees in major areas of agency operation by rule.
  • Removes the Task Force for Children with Special Needs, the Children’s Policy Council, the Council on Children and Families, and the Texas System of Care Consortium from statute and requires the executive commissioner to establish a single advisory committee to improve services and better coordinate advisory efforts for children with special needs.
  • Requires HHSC to create a master advisory committee calendar, stream advisory committee meetings, and provide Internet service in committee rooms to ensure access to online meeting materials.

Studies and Plans

  • Requires a study to examine transferring the operation of the Austin State Hospital to a new facility.
  • Requires development of a one-time strategic plan to reduce mortality from chronic respiratory diseases.
  • Requires development of a one-time strategic plan to reduce mortality from human papillomavirus-associated cancer.

Texas Health Services Authority

  • Removes THSA from statute on September 1, 2021, allowing its functions to continue only in the private sector.
  • Changes THSA’s current board to ensure broader representation.


  • Requires the executive commissioner to appoint a licensed Texas dentist as the Medicaid dental director.
  • Modifies Supplemental Nutrition Assistance Program (SNAP) eligibility requirements for persons with a felony drug conviction.

Sunset Reviews of Health and Human Services Agencies and Entities

  • Requires a limited-scope Sunset review of HHSC in the biennium ending August 31, 2023, but HHSC is not subject to abolishment as a part of this Sunset review.
  • Continues HHSC for 12 years until September 1, 2027.
  • Continues DSHS and DFPS for eight years until September 1, 2023, including continuing the Texas Health Care Information Collection Program, requiring its functions to be reviewed with all other functions of DSHS.