The Department of Aging and Disability Services (“DADS”) recently initiated the repeal of administrative code sections prohibiting solicitation of another provider’s community services contracts. Prior to January 2012, 40 Texas Administration Code §49.19, entitled “Advertising and Solicitation of Clients,” prohibited certain activities related to a provider’s soliciting prospective clients from other providers. The repeal became effective January 25, 2012.
DADS previously noted in Information Letter 11-31that Texas Occupations Code, Chapter 102, entitled “Solicitation of Patients,” prohibits certain actions regarding the solicitation of persons to receive services from an entity licensed, certified, or registered by a state health care regulatory agency. This applies to entities licensed, certified, or registered by DADS. The Aging and Disability Services Council meeting minutes for July 20, 2011 indicate that DADS was repealing the section in part because there had been confusion regarding the determination of solicitation violations and which entity should investigate such violations.
DADS does not make the determination of whether or not an entity committed solicitation. In accordance with §102.109 and §102.110, an alleged violation of the chapter is prosecuted by the Texas Attorney General or the appropriate county or district attorney. Furthermore, DADS may impose sanctions, including contract termination, if an entity licensed, certified, or registered by DADS is found to have violated Chapter 102. Additionally, OIG may impose penalties for solicitation pursuant to 1 Texas Administration Code §§ 371.1721(b)-371.1723.
Despite the protections in Chapter 102 of the Texas Occupations Code, the repeal of Section 49.19 eliminates one of the regulatory shields community services provides can assert against solicitation. Solicitation of a provider’s clients usually leads to restraining orders and/or litigation. To protect themselves, employers should continue to make efforts to protect confidential information in order to present a more favorable argument to a court that information is confidential and should be protected from unauthorized disclosure.
An experienced attorney can help draft a non-disclosure, non-solicitation and non-competition agreements that help protect confidential information, and can also help draft company policies and procedures regarding technology, conflicts of interest and confidentiality to strengthen such protections.