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H0461........................................................by MR. SPEAKER
Requested by: Department of Health and Welfare
MEDICAL ASSISTANCE - FRAUD - Adds to existing law to provide very explicit
authority and direction concerning fraud and abuse in the state's medical
assistance program and to provide penalties, including the authority to
terminate provider agreements.
01/12 House intro - 1st rdg - to printing
01/12 Rpt prt - to Health/Wel
H0461|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 461 BY MR. SPEAKER Requested by: Department of Health and Welfare 1 AN ACT 2 RELATING TO MEDICAL ASSISTANCE PROGRAMS; PROVIDING A STATEMENT OF LEGISLATIVE 3 FINDINGS; AMENDING CHAPTER 2, TITLE 56, IDAHO CODE, BY THE ADDITION OF A 4 NEW SECTION 56-209h, IDAHO CODE, TO ESTABLISH CONDITIONS GOVERNING PAY- 5 MENTS FOR MEDICAL ASSISTANCE, PENALTIES FOR ABUSE AND FRAUD, AND TERMINA- 6 TION OF PROVIDER AGREEMENTS. 7 Be It Enacted by the Legislature of the State of Idaho: 8 SECTION 1. The Legislature finds that provider fraud and abuse in medical 9 assistance programs is a significant and growing problem which demands effec- 10 tive administrative remedies. This act is intended to provide explicit author- 11 ity to the Department of Health and Welfare to establish conditions of pay- 12 ments, to suspend payments and impose interest charges, to terminate provider 13 agreements and deny provider status, to impose civil monetary penalties and to 14 exclude certain individuals and entities. 15 SECTION 2. That Chapter 2, Title 56, Idaho Code, be, and the same is 16 hereby amended by the addition thereto of a NEW SECTION , to be 17 known and designated as Section 56-209h, Idaho Code, and to read as follows: 18 56-209h. ADMINISTRATIVE REMEDIES. (1) All claims submitted by providers 19 for payment are subject to pre- and post- payment review as designated by 20 rule. Except as otherwise provided by rule, providers shall generate and 21 retain documentation sufficient to support each claim for a minimum of five 22 (5) years from the date the item or service was provided. Documentation shall 23 be generated contemporaneously with the item or service and shall be immedi- 24 ately provided to the department upon demand. If it is determined that any 25 condition of payment was not met, the department shall immediately recover any 26 payments made. The department may immediately suspend and withhold all pay- 27 ments to the provider until recovery is made. Interest shall accrue on over- 28 payments at the statutory rate from the date of payment until the date of 29 recovery. 30 (2) The department may terminate the provider agreement or otherwise deny 31 provider status to any individual or entity who: 32 (a) Submits a false or fraudulent claim; 33 (b) Fails to provide adequate documentation to the department immediately 34 upon demand; 35 (c) Makes a false statement or representation of material fact in any 36 record required to be maintained or submitted to the department; 37 (d) Submits claims for medically unnecessary services; 38 (e) Fails or refuses to comply with the rules and regulations governing 39 medical assistance payments; 40 (f) Violates any terms or conditions of its provider agreement; 41 (g) Fails to meet the qualifications specifically required by rule or by 42 any applicable licensing board; 2 1 (h) Has been found, or was a "managing employee" or had an "ownership or 2 control interest" (as those terms are defined in 42 C.F.R. 455.101) in any 3 entity which has been found to have engaged in fraudulent conduct, or abu- 4 sive conduct (as defined in 42 C.F.R. 455.2) in connection with the deliv- 5 ery of health care items or services; or 6 (i) Has failed to repay, or was a "managing employee" or had an 7 "ownership or control interest" (as those terms are defined in 42 C.F.R. 8 455.101) in any entity that has failed to repay, any overpayments or 9 claims previously found to have been paid improperly, whether the failure 10 resulted from refusal, bankruptcy, or otherwise. 11 (3) Any individual or entity refused provider status under this section 12 is precluded from participating as a provider in Idaho medical assistance pro- 13 grams for a period of five (5) years from the date the department's action 14 becomes final. 15 (4) The department may also assess civil monetary penalties against a 16 provider and any officer, director, owner, and/or managing employee of a pro- 17 vider for conduct identified in subsections (a) through (f) of subsection (2) 18 of this section. The amount of the penalties shall be one thousand dollars 19 ($1,000) for each item or service improperly claimed, except that in the case 20 of multiple penalties the department may reduce the penalties to not less than 21 twenty-five percent (25%) of the amount of each item or service improperly 22 claimed if an amount can be readily determined. Each line item of a claim or 23 cost report is considered a separate claim. These penalties are intended to be 24 remedial, recovering costs of investigation, administrative review, placing 25 the costs associated with noncompliance on the offending provider and serving 26 as a deterrent to fraud and abuse. 27 (5) Any individual or entity whose conduct would be a criminal offense 28 related to the delivery of an item or service under any state or federal pro- 29 gram shall be excluded from program participation for a minimum period of ten 30 (10) years. A conviction is not required if the act can be established admin- 31 istratively by a preponderance of the evidence. The department may also 32 exclude any individual or entity for a minimum period of five (5) years for 33 any conduct for which the secretary of health and human services or designee 34 could exclude an individual or entity. 35 (6) Adoption of rules. The department shall promulgate such rules as are 36 necessary to carry out the policies and purposes of this section.
STATEMENT OF PURPOSE
RS07333
The purpose of this legislation is to provide explicit authority and direction regarding the
safeguarding of funds used in the state's medical assistance program. It is the intent of the
Legislature to provide adequate remedies to recover payments that are improperly
claimed or paid. It is also the intent of the Legislature to protect both state resources and
individuals receiving medical assistance from unprofessional, dishonest and abusive
providers by providing explicit authority to terminate provider agreements, impose
penalties and exclude certain providers and individuals.
FISCAL IMPACT
The legislation is expected to result in no additional cost to the state.
CONTACT
Name: Kathleen Allyn
Agency: Department of Health and Welfare
Phone: 334-5747
Statement of Purpose/Fiscal Impact
H 461