Senate Bill sb1412c1
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Florida Senate - 2006 CS for SB 1412
By the Committee on Health Care
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1 A bill to be entitled
2 An act relating to Medicaid fraud and abuse;
3 creating s. 409.9135, F.S.; requiring that
4 managed care organizations providing or
5 arranging services for Medicaid recipients
6 establish and maintain special investigative
7 units; requiring each managed care organization
8 to submit a plan for detecting and preventing
9 fraud and abuse within the Medicaid program to
10 the Agency for Health Care Administration;
11 specifying requirements that must be met if a
12 managed care organization contracts with
13 another entity to conduct activities to detect
14 and prevent fraud and abuse; providing that the
15 act does not create a private right of action;
16 authorizing the Office of the Inspector General
17 in the agency, the agency's Bureau of Program
18 Integrity, the agency's contract management
19 staff, and the Medicaid Fraud Control Unit to
20 review records and determine compliance with
21 the act; requiring managed care organizations
22 to file a report with the Office of the
23 Inspector General if a fraudulent or abusive
24 act is suspected; specifying the information to
25 be included in a report of suspected fraud or
26 abuse; providing civil immunity to any person
27 or entity that reports suspected fraud or
28 abuse; authorizing designated staff of a
29 managed care organization to share information
30 concerning suspected fraud or abuse; providing
31 that a managed care organization is not liable
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1 for the fraud or abuse of an employee or agent
2 under certain circumstances; providing
3 exceptions; requiring that any recovery of
4 funds by the state from a Medicaid provider or
5 recipient representing payment or payments made
6 by a managed care organization compensated by
7 the state by capitation be returned to the
8 capitated managed care organization from which
9 the payment to the Medicaid provider or
10 recipient originated; providing exceptions;
11 directing the Medicaid Fraud Control Unit, in
12 conjunction with managed care organizations, to
13 track and publish on an annual basis all
14 Medicaid fraud recoveries made under the act;
15 providing rulemaking authority; requiring the
16 agency to create a system to validate
17 information collected by a Medicaid
18 encounter-data system; requiring that the
19 agency report on its efforts to coordinate
20 anti-fraud and abuse systems related to managed
21 care organizations to the Governor and the
22 Legislature; providing an effective date.
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24 Be It Enacted by the Legislature of the State of Florida:
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26 Section 1. Section 409.9135, Florida Statutes, is
27 created to read:
28 409.9135 Medicaid managed care organizations' special
29 investigative units or contracts; plans to prevent or reduce
30 fraud and abuse.--Each managed care organization that provides
31 or arranges for the provision of health care services to
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1 Medicaid recipients under this chapter shall establish and
2 maintain a special investigative unit to investigate
3 fraudulent claims and other types of program abuse by
4 recipients and service providers. A managed care organization
5 may contract with another entity for the investigation of
6 fraudulent claims and other types of program abuse by
7 recipients and service providers. As used in this section, the
8 terms "abuse," "fraud," and "overpayment" have the same
9 meanings as in s. 409.913.
10 (1) Each managed care organization shall adopt a plan
11 to prevent and reduce fraud and abuse and annually file that
12 plan with the Office of the Inspector General in the agency
13 for approval. The plan must include:
14 (a) A general description of the managed care
15 organization's procedures for detecting and investigating
16 possible acts of fraud, abuse, or overpayment;
17 (b) A description of the managed care organization's
18 procedures for the mandatory reporting of possible acts of
19 fraud or abuse to the Office of the Inspector General in the
20 agency;
21 (c) A description of the managed care organization's
22 procedures for educating and training personnel on how to
23 detect and prevent fraud, abuse, or overpayment;
24 (d) The name, address, telephone number, and fax
25 number of the individual responsible for carrying out the
26 plan;
27 (e) A description or chart outlining the
28 organizational arrangement of the managed care organization's
29 personnel who are responsible for investigating and reporting
30 possible acts of fraud, abuse, or overpayment;
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1 (f) A summary of the results of investigations of
2 fraud, abuse, or overpayment which were conducted during the
3 past year by the managed care organization's special
4 investigative unit or its contractor; and
5 (g) Provisions for maintaining the confidentiality of
6 any patient information that is relevant to an investigation
7 of fraud, abuse, or overpayment.
8 (2) If a managed care organization contracts for the
9 investigation of fraudulent claims and other types of program
10 abuse by recipients or service providers, the managed care
11 organization shall file the following with the Office of the
12 Inspector General in the agency for approval before the
13 managed care plan implements any contracts for fraud and abuse
14 prevention and detection:
15 (a) A copy of the written contract between the managed
16 care organization and the contracting entity;
17 (b) The names, addresses, telephone numbers, and fax
18 numbers of the principals of the entity with which the managed
19 care organization has contracted; and
20 (c) A description of the qualifications of the
21 principals of the entity with which the managed care
22 organization has contracted.
23 (3) This section does not create a private right of
24 action related to any violation of this section. The Office of
25 the Inspector General in the agency, the agency's Bureau of
26 Program Integrity, the agency's contract management staff, and
27 the Medicaid Fraud Control Unit in the Office of the Attorney
28 General may review the records of a managed care organization
29 and its subcontractors to determine compliance with this
30 section. If a managed care organization or its subcontractors
31 fail to comply with the requirements of this section, the
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1 agency shall take appropriate administrative action as
2 provided in section 409.913.
3 (4)(a) Upon detecting acts by providers or recipients
4 that the managed care organization believes are fraudulent,
5 the managed care organization must report the acts to the
6 Office of the Inspector General in the agency. At a minimum,
7 the report must contain the name of the provider or recipient,
8 the Medicaid billing number or tax identification number of
9 the provider or the Medicaid recipient's identification
10 number, and a description of the suspected fraudulent act. The
11 managed care organization must report acts of suspected fraud
12 under this section no later than 15 days after the managed
13 care organization initially detects the suspicious fraudulent
14 activity.
15 (b) The Office of the Inspector General in the agency
16 shall forward the report of suspected fraud to the appropriate
17 investigative unit, including, but not limited to, the
18 Medicaid Fraud Control Unit in the Office of the Attorney
19 General and the Department of Law Enforcement.
20 (c) Upon detecting acts by providers or recipients
21 which the managed care organization suspects are abusive, the
22 managed care organization shall thoroughly review the acts to
23 eliminate instances of simple error or routine anomalies in
24 billing practices or health care service delivery. If
25 suspected abusive acts by providers or recipients are not
26 eliminated by the review or are determined by the managed care
27 organization not to be simple error or routine anomalies in
28 billing practices or health care service delivery, the managed
29 care organization shall report such acts to the Office of the
30 Inspector General in the agency. At a minimum, the report must
31 contain the name of the provider or recipient, the Medicaid
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1 billing number or tax identification number of the provider or
2 the Medicaid recipient's identification number, and a
3 description of the suspected abusive act. The managed care
4 organization shall provide reportable acts of suspected abuse
5 to the Office of the Inspector General in the agency no later
6 than 15 days after the act is determined not to be simple
7 error or routine anomalies in billing practices or health care
8 service delivery.
9 (d) The Office of the Inspector General in the agency
10 shall forward the report of suspected abuse to the appropriate
11 investigative unit, including, but not limited to, the
12 agency's Bureau of Program Integrity, the Medicaid Fraud
13 Control Unit in the Office of the Attorney General, or the
14 Department of Law Enforcement.
15 (5) A person or managed care organization is not
16 subject to civil liability of any nature absent proof by clear
17 and convincing evidence of a specific intent to harm a person
18 or entity that is the subject of any report or reports
19 regarding:
20 (a) Any information relating to suspected fraudulent
21 or abusive acts, or persons suspected of engaging in such
22 acts, which is furnished to or received from law enforcement
23 officials, their agents, or employees;
24 (b) Any information relating to suspected fraudulent
25 or abusive acts, or persons suspected of engaging in such
26 acts, which is furnished to or received from other persons
27 subject to the provisions of this chapter;
28 (c) Any such information furnished in reports to the
29 agency, the Office of the Attorney General, the Department of
30 Law Enforcement, or any other local, state, or federal law
31 enforcement officials or their agents or employees; or
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1 (d) Other actions taken in cooperation with any of the
2 agencies or individuals specified in this subsection in the
3 lawful investigation of suspected fraudulent or abusive acts.
4 (6) In addition to the immunity granted in subsection
5 (5), an employee or contractor of a managed care organization
6 whose responsibilities include the investigation and
7 disposition of claims relating to suspected fraudulent or
8 abusive acts may share information relating to persons
9 suspected of committing fraudulent or abusive acts with the
10 employees or contractors of the same or other managed care
11 organization whose responsibilities include the investigation
12 and disposition of claims relating to fraudulent or abusive
13 acts. A person or managed care organization is not subject to
14 civil liability of any nature absent proof by clear and
15 convincing evidence of a specific intent to harm a person or
16 entity that is the subject of information-sharing or reporting
17 under the provisions of this subsection.
18 (7) This section does not abrogate or modify in any
19 way any common-law or statutory privilege or immunity
20 heretofore enjoyed by any person.
21 (8) A managed care organization is not liable for the
22 fraud or abuse of an employee or agent unless the officers,
23 directors, or managing agents of the managed care organization
24 actively and knowingly participated in the misconduct or
25 unless the officers, directors, or managing agents of the
26 managed care organization negligently failed to monitor and
27 prevent activities constituting misconduct.
28 (9) Representatives from managed care organizations,
29 Medicaid, the Office of the Inspector General of the agency,
30 the Medicaid Fraud Control Unit, and the Department of Law
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1 Enforcement shall meet at least twice each year to review and
2 discuss fraud and abuse case studies and enforcement matters.
3 (10) Any funds recovered by the state from a Medicaid
4 provider or recipient representing payment or payments made by
5 a managed care organization compensated by the state by
6 capitation shall be returned to the capitated managed care
7 organization from which the payment to the Medicaid provider
8 or recipient originated, including interest, if any. The
9 agency, the Medicaid Fraud Control Unit, and the Department of
10 Law Enforcement may not return recovered funds associated with
11 a fraudulent or abusive act committed by an employee or agent
12 of the managed care organization if the officers, directors,
13 or managing agents of the managed care organization actively
14 and knowingly participated in the misconduct or negligently
15 failed to monitor and prevent activities constituting
16 misconduct. Any funds returned to a managed care organization
17 may not include monetary fines, penalties, or sanctions
18 imposed by the agency, the Medicaid Fraud Control Unit, or the
19 Department of Law Enforcement under s. 409.913 which do not
20 represent payment or payments made by a managed care
21 organization. The agency, the Medicaid Fraud Control Unit, and
22 the Department of Law Enforcement may recover investigative,
23 legal, and expert witness costs, if any, under s. 409.913
24 which are separate and apart from recovery of payment or
25 payments made by a managed care organization.
26 (11) The agency and the Medicaid Fraud Control Unit,
27 in conjunction with managed care organizations, must track and
28 publish on an annual basis all Medicaid fraud recoveries by
29 providers made under this section. Such information shall be
30 submitted to the Department of Health by the provider pursuant
31 to the procedures under s. 456.039.
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1 (12) The agency shall develop and adopt rules to
2 administer this section.
3 (13) Notwithstanding other provisions of law to the
4 contrary, health maintenance organizations under contract with
5 the agency under s. 409.912 or s. 409.91211 are exempt from
6 ss. 626.989 and 626.9891 for Medicaid lines of business.
7 Section 2. The Agency for Health Care Administration
8 shall develop and implement a methodology to validate the
9 information that is collected by any encounter-data-reporting
10 system and used for tracking the services provided to Medicaid
11 recipients through managed care organizations. This validation
12 methodology shall assess whether the encounter-data-reporting
13 system accurately reflects, at a minimum, the following items:
14 (1) The demographic characteristics of the patient.
15 (2) The principal, secondary, and tertiary diagnosis.
16 (3) The procedure performed.
17 (4) The date and location where the procedure was
18 performed.
19 (5) The payment for the procedure, if any.
20 (6) If applicable, the health care practitioner's
21 universal identification number.
22 (7) If the health care practitioner rendering the
23 service is a dependent practitioner, the modifiers appropriate
24 to indicate that the service was delivered by the dependent
25 practitioner.
26 (8) Prescription drugs for each type of patient
27 encounter.
28 (9) Appropriate information related to health care
29 costs and utilization from managed care plans.
30 Section 3. The Agency for Health Care Administration
31 shall report to the Governor, the President of the Senate, and
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1 the Speaker of the House of Representatives by January 1,
2 2007, on how the agency is coordinating its internal
3 anti-fraud and abuse-prevention and detection systems as they
4 apply to managed care organizations. This report must include
5 a description of how information is coordinated and shared
6 among managed care organizations, the agency, and other
7 governmental entities that are responsible for preventing,
8 detecting, and prosecuting Medicaid provider and recipient
9 fraud or abuse. The agency may include the content of this
10 section in its annual report to the Legislature concerning
11 Medicaid fraud and its abuse-prevention and detection
12 activities as required by s. 409.913, Florida Statutes, in
13 lieu of a separate report.
14 Section 4. This act shall take effect July 1, 2006.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 Senate Bill 1412
3
4 The Committee Substitute:
5 -- Specifies that the failure of a Medicaid managed care
organization to comply with the provisions of the bill
6 does not create a private right of action;
7 -- Clarifies that the Agency for Health Care Administration
(AHCA) and the Medicaid Fraud Control Unit (MFCU) may
8 access the records of managed care plans and their
subcontractors to investigate incidents of suspected
9 fraud and abuse;
10 -- Requires the agency to take appropriate administrative
actions if a managed care organization or its
11 subcontractors fail to comply with the provisions of the
bill;
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-- Clarifies when and how a managed care organization must
13 report suspected fraud or abuse;
14 -- Simplifies the civil immunity protection language for
managed care organizations that report suspected fraud
15 and abuse as required by this bill;
16 -- Specifies that a managed care organization is not liable
for fraud or abuse committed by its employees or agents
17 unless the officers, directors, or managing agents
knowingly participated in the activity or negligently
18 failed to monitor and prevent misconduct;
19 -- Requires representatives of Medicaid managed care
organizations, AHCA, MFCU, and the Florida Department of
20 Law Enforcement to meet at least twice a year to discuss
anti-fraud and abuse initiatives;
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-- Requires recovered funds associated with a capitated
22 payment to be returned to the managed care organization
of origin;
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-- Requires MFCU, in conjunction with the managed care
24 organizations, to track and report fraud recoveries by
provider on an annual basis and that such information
25 must be provided to the Department of Health pursuant to
the procedures under s. 456.039, F.S.; and,
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-- Exempts an HMO's Medicaid line of business from similar
27 anti-fraud and abuse requirements found in chapter 626,
F.S., so that the Medicaid HMOs only have to comply with
28 the provisions of this bill.
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