Print Friendly HOUSE BILL NO. 461 – Medical assistance fraud, penalties
HOUSE BILL NO. 461
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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
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fourth Legislature Second Regular Session - 1998
IN 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
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;
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
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.
The legislation is expected to result in no additional cost to the state.
Name: Kathleen Allyn
Agency: Department of Health and Welfare
Statement of Purpose/Fiscal Impact