2008 Legislation
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SENATE BILL NO. 1340<br /> – Public assistance pymts, recovery


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Bill Status

S1340.................................................by HEALTH AND WELFARE
PUBLIC ASSISTANCE - PAYMENTS - Amends existing law relating to Medicaid to
revise definitions; to provide for documentation retention for a specified
time period; to provide for recovery by the Department of Health and
Welfare of payments made under any public assistance contract or provider
agreement; to revise grounds upon which the Department of Health and
Welfare may take certain action; to provide for exclusion from program
participation as a Medicaid provider; to provide for sanctions for
intentional program violations; and to provide an opportunity to appeal.

01/24    Senate intro - 1st rdg - to printing
01/25    Rpt prt - to Health/Wel
02/01    Rpt out - rec d/p - to 2nd rdg
02/04    2nd rdg - to 3rd rdg
02/06    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
      Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
      Little, Lodge, Malepeai(Sagness), McGee, McKague, McKenzie, Pearce,
      Richardson, Schroeder, Siddoway, Stegner, Stennett(Thorson), Werk
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Hammond
    Title apvd - to House
02/07    House intro - 1st rdg - to Health/Wel
03/11    Rpt out - rec d/p - to 2nd rdg
03/12    2nd rdg - to 3rd rdg
03/13    3rd rdg - PASSED - 66-1-3
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Black, Block,
      Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez,
      Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
      Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador, Lake,
      LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
      Moyle, Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Raybould,
      Ringo, Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
      Shepherd(08), Shirley, Shively, Smith(30), Smith(24), Stevenson,
      Thayn, Thomas, Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
      NAYS -- Trail
      Absent and excused -- Bilbao, Harwood, Snodgrass
    Floor Sponsor - Luker
    Title apvd - to Senate
03/14    To enrol
03/17    Rpt enrol - Pres signed - Sp signed
03/18    To Governor
03/18    Governor signed
         Session Law Chapter 187
         Effective: 07/01/08

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008


                                       IN THE SENATE

                                    SENATE BILL NO. 1340

                              BY HEALTH AND WELFARE COMMITTEE

  1                                        AN ACT

 10    Be It Enacted by the Legislature of the State of Idaho:

 11        SECTION  1.  That  Section 56-209h, Idaho Code, be, and the same is hereby
 12    amended to read as follows:

 13        56-209h.  ADMINISTRATIVE REMEDIES. (1) Definitions. For purposes  of  this
 14    section:
 15        (a)  "Abuse"  or  "abusive" means provider practices that are inconsistent
 16        with sound fiscal, business, child care or medical practices,  and  result
 17        in  an  unnecessary  cost  to  the medical a public assistance program, in
 18        reimbursement for services that are not medically necessary or  that  fail
 19        to  meet professionally recognized standards for health care, or in physi-
 20        cal harm, pain or mental anguish to a medical public assistance recipient.
 21        (b)  "Claim" means any request or demand for payment, of or document  sub-
 22        mitted  to  initiate  payment,  for  items  or services provided under the
 23        state's medical a public assistance program, whether under a  contract  or
 24        otherwise.
 25        (c)  "Fraud"  or  "fraudulent" means an intentional deception or misrepre-
 26        sentation made by a person with the knowledge  that  the  deception  could
 27        result in some unauthorized benefit to himself or some other person.
 28        (d)  "Intentional program violation" means intentionally false or mislead-
 29        ing  action,  omission or statement made in order to qualify as a provider
 30        or recipient in a public assistance program.
 31        (e)  "Knowingly," "known" or "with knowledge" means that  a  person,  with
 32        respect to information or an action:
 33             (i)   Has actual knowledge of the information or action; or
 34             (ii)  Acts  in  deliberate  ignorance  of the truth or falsity of the
 35             information or the correctness or incorrectness of the action; or
 36             (iii) Acts in reckless disregard of  the  truth  or  falsity  of  the
 37             information or the correctness or incorrectness of the action.
 38        (ef)  "Managing  employee"  means  a  general  manager,  business manager,
 39        administrator, director or other individual who exercises  operational  or
 40        managerial  control  over, or who directly or indirectly conducts the day-
 41        to-day operation of, an institution, organization or agency.
 42        (fg)  "Medicaid fraud control unit" means that medicaid fraud control unit
 43        as provided for in section 56-226, Idaho Code.


  1        (gh)  "Ownership or control interest" means a person or entity that:
  2             (i)   Has an ownership interest totaling twenty-five percent (25%) or
  3             more in an entity; or
  4             (ii)  Is an officer or director of an entity that is organized  as  a
  5             corporation; or
  6             (iii) Is  a  partner in an entity that is organized as a partnership;
  7             or
  8             (iv)  Is a managing member in an entity that is organized as  a  lim-
  9             ited liability company.
 10        (i)  "Provider"  means an individual, organization, agency or other entity
 11        providing items or services under a public assistance program.
 12        (j)  "Public assistance program" means assistance for which  provision  is
 13        made  in  any  federal  or  state law existing or hereafter enacted by the
 14        state of Idaho or the congress of the United States by which payments  are
 15        made  from  the  federal  government to the state in aid, or in respect to
 16        payment by the state for welfare purposes to any category of needy person,
 17        and any other program of assistance for which  provision  for  federal  or
 18        state funds for aid may from time to time be made.
 19        (2)  The  department  shall  establish and operate an administrative fraud
 20    control program to enforce violations of the provisions of this chapter and of
 21    the state plan pursuant to subchapters XIX  and  XXI,  chapter  7,  title  42,
 22    U.S.C., that are outside the scope of the duties of the medicaid fraud control
 23    unit and to render and receive referrals from and to said unit.
 24        (3)  Review   of  documentation  of  services.  All  claims  submitted  by
 25    providers for payment are subject to prepayment and postpayment review as des-
 26    ignated by rule. Except as otherwise provided by rule, providers shall  gener-
 27    ate documentation at the time of service sufficient to support each claim, and
 28    shall  retain  the documentation for a minimum of five (5) years from the date
 29    the item or service was provided. The department or authorized agent shall  be
 30    given immediate access to such documentation upon written request.
 31        (4)  Immediate  action. In the event that the department identifies a sus-
 32    pected case of fraud or abuse and the department has reason  to  believe  that
 33    payments  made  during  the  investigation  may be difficult or impractical to
 34    recover, the department may suspend or withhold payments to the provider pend-
 35    ing investigation. In the event that the  department  identifies  a  suspected
 36    case  of  fraud  or abuse and it determines that it is necessary to prevent or
 37    avoid immediate danger to the public health or safety, the department may sum-
 38    marily suspend a provider agreement pending investigation. When payments  have
 39    been  suspended or withheld or a provider agreement suspended pending investi-
 40    gation, the department shall provide for a hearing within thirty (30) days  of
 41    receipt of any duly filed notice of appeal.
 42        (5)  Recovery  of  payments.  Upon  referral of a matter from the medicaid
 43    fraud control unit, or if it is determined by the department that  any  condi-
 44    tion  of payment contained in rule, regulation, statute, or provider agreement
 45    was not met, the department may initiate administrative proceedings to recover
 46    any payments made for items or services under any public  assistance  contract
 47    or provider agreement the individual or entity has with the department. Inter-
 48    est  shall  accrue  on overpayments at the statutory rate set forth in section
 49    28-22-104, Idaho Code, from the date of final determination of the amount owed
 50    for items or services until the date of recovery.
 51        (6)  Provider status. The department may terminate the provider  agreement
 52    or otherwise deny provider status to any individual or entity who:
 53        (a)  Submits a claim with knowledge that the claim is incorrect, including
 54        reporting costs as allowable which were known to be disallowed in a previ-
 55        ous  audit,  unless  the provider clearly indicates that the item is being


  1        claimed to establish the basis for an appeal and each  disputed  item  and
  2        amount is specifically identified; or
  3        (b)  Submits a fraudulent claim; or
  4        (c)  Knowingly  makes a false statement or representation of material fact
  5        in any document required to be maintained or submitted to the  department;
  6        or
  7        (d)  Submits a claim for an item or service known to be medically unneces-
  8        sary; or
  9        (e)  Fails  to  provide, upon written request by the department, immediate
 10        access to documentation required to be maintained; or
 11        (f)  Fails repeatedly or substantially to comply with the rules and  regu-
 12        lations  governing  medical assistance payments or other public assistance
 13        program payments; or
 14        (g)  Knowingly violates any material term or  condition  of  its  provider
 15        agreement; or
 16        (h)  Has  failed  to  repay,  or  was  a  "managing  employee"  or  had an
 17        "ownership or control interest" in any entity that has  failed  to  repay,
 18        any overpayments or claims previously found to have been obtained contrary
 19        to statute, rule, regulation or provider agreement; or
 20        (i)  Has  been found, or was a "managing employee" in any entity which has
 21        been found, to have engaged in fraudulent conduct or  abusive  conduct  in
 22        connection  with the delivery of health care or public assistance items or
 23        services; or
 24        (j)  Fails to meet the qualifications specifically required by rule or  by
 25        any applicable licensing board.
 26    Any individual or entity denied provider status under this section may be pre-
 27    cluded  from  participating as a provider in the medical any public assistance
 28    program for up to five (5) years from the date the department's action becomes
 29    final.
 30        (7)  The department must refer all cases of  suspected  medicaid  provider
 31    fraud  to  the  medicaid fraud control unit and shall promptly comply with any
 32    request from the medicaid fraud control unit for access to and free copies  of
 33    any  records or information kept by the department or its contractors, comput-
 34    erized data stored by the department or its contractors, and  any  information
 35    kept by providers to which the department is authorized access by law.
 36        (8)  Civil  monetary penalties. The department may also assess civil mone-
 37    tary penalties against a provider and any  officer,  director,  owner,  and/or
 38    managing  employee  of a provider for conduct identified in subsections (6)(a)
 39    through (6)(i) of this section. The amount of the penalties shall be up to one
 40    thousand dollars ($1,000) for each item or service improperly claimed,  except
 41    that in the case of multiple penalties the department may reduce the penalties
 42    to  not less than twenty-five percent (25%) of the amount of each item or ser-
 43    vice improperly claimed if an amount can be readily determined. Each line item
 44    of a claim, or cost on a cost report is considered  a  separate  claim.  These
 45    penalties are intended to be remedial, recovering at a minimum costs of inves-
 46    tigation and administrative review, and placing the costs associated with non-
 47    compliance on the offending provider.
 48        (9)  Exclusion.  Any  individual or entity convicted of a criminal offense
 49    related to the delivery of an item or service under any state or federal  pro-
 50    gram shall be excluded from program participation as a medicaid provider for a
 51    period of not less than ten (10) years. Unless otherwise provided in this sec-
 52    tion  or required by federal law, the department may exclude any individual or
 53    entity for a period of not less than one (1) year for any  conduct  for  which
 54    the secretary of the department of health and human services or designee could
 55    exclude an individual or entity.


  1        (10) Sanction  of  individuals  or  entities.  The department may sanction
  2    individuals or entities by barring them from public  assistance  programs  for
  3    intentional  program violations where the federal law allows sanctioning indi-
  4    viduals from receiving assistance. Individuals or entities who are  determined
  5    to  have  committed  an  intentional program violation will be sanctioned from
  6    receiving public assistance for a period of twelve (12) months for  the  first
  7    violation,  twenty-four  (24)  months for the second violation and permanently
  8    for the third violation.
  9        (11) Individuals  or  entities  subject  to  administrative  remedies   as
 10    described  in  subsections  (4) through (10) of this section shall be provided
 11    the opportunity to appeal pursuant to chapter 52, title 67,  Idaho  Code,  and
 12    the department's rules for contested cases.
 13        (12) Adoption  of rules. The department shall promulgate such rules as are
 14    necessary to carry out the policies and purposes of this section.

Statement of Purpose / Fiscal Impact

                  STATEMENT OF PURPOSE

                        RS 17425

The Department of Health and Welfare currently investigates 
fraud in its public assistance programs by providers and 
applicants and addresses fraud and abuse through administrative 
remedies. The Department’s current authority only addresses 
administrative remedies associated with Medicaid providers and 
the proposed revisions expand this authority to address all 
public assistance programs and assist the Department with 
protecting program resources when fraud or other misconduct is 
identified in those programs. The Department currently enters 
into provider agreements and reimburses providers in various 
public assistance programs for services provided to eligible 
clients. The Department currently lacks statutory authority to 
terminate the provider agreements for fraud or misconduct for 
any providers other than Medicaid providers. The Department 
regulations currently allow the sanctioning of individuals or 
entities for fraud, abuse, or misconduct in certain programs; 
however the Department is lacking the necessary statutory 
authority to sanction ICCP providers and applicants who commit 
fraud. This proposed change will provide the necessary statutory 
authority for those sanctions which are already promulgated in 
regulations. This proposed legislation will also require all 
public assistance vendors to maintain documentation necessary 
for the Department to review services provided and will allow 
Department staff immediate access to the documentation upon 
written request.

                       FISCAL NOTE

The proposed legislation adds to, and clarifies the authority of 
the Department to take administrative actions against 
individuals and entities for public assistance fraud and abuse. 
There is no anticipated fiscal impact to this proposed 
legislation since the Department is currently conducting many of 
these activities; this proposed legislation clarifies the 
statutory authority of many practices already defined in 

Name:	Mond Warren
Agency:	Health and Welfare
Phone:	208-334-0609