Senate Bill sb1412c2
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Florida Senate - 2006 CS for CS for SB 1412
By the Committees on Judiciary; and 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; requiring
31 representatives from managed care organizations
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1 and other specified governmental organizations
2 to meet at least twice each year to review and
3 discuss fraud and abuse case studies and
4 enforcement matters; requiring that any
5 recovery of funds by the state from a Medicaid
6 provider or recipient representing payment or
7 payments made by a managed care organization
8 compensated by the state by capitation be
9 returned to the capitated managed care
10 organization from which the payment to the
11 Medicaid provider or recipient originated;
12 providing exceptions; directing the Medicaid
13 Fraud Control Unit, in conjunction with managed
14 care organizations, to track and publish on an
15 annual basis all Medicaid fraud recoveries made
16 under the act; providing rulemaking authority;
17 providing an exemption from the application of
18 certain provisions regarding the investigation
19 of insurance fraud; providing an exemption for
20 the Children's Medical Services Program;
21 requiring the program to coordinate activities
22 with the inspector general of the agency;
23 requiring the agency to create a system to
24 validate information collected by a Medicaid
25 encounter-data system; requiring that the
26 agency report on its efforts to coordinate
27 anti-fraud and abuse systems related to managed
28 care organizations to the Governor and the
29 Legislature; providing an effective date.
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31 Be It Enacted by the Legislature of the State of Florida:
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1 Section 1. Section 409.9135, Florida Statutes, is
2 created to read:
3 409.9135 Medicaid managed care organizations' special
4 investigative units or contracts; plans to prevent or reduce
5 fraud and abuse.--Each managed care organization that provides
6 or arranges for the provision of health care services to
7 Medicaid recipients under this chapter shall establish and
8 maintain a special investigative unit to investigate
9 fraudulent claims and other types of program abuse by
10 recipients and service providers. A managed care organization
11 may contract with another entity for the investigation of
12 fraudulent claims and other types of program abuse by
13 recipients and service providers. As used in this section, the
14 terms "abuse," "fraud," and "overpayment" have the same
15 meanings as in s. 409.913.
16 (1) Each managed care organization shall adopt a plan
17 to prevent and reduce fraud and abuse and annually file that
18 plan with the Office of the Inspector General in the agency
19 for approval. The plan must include:
20 (a) A general description of the managed care
21 organization's procedures for detecting and investigating
22 possible acts of fraud, abuse, or overpayment;
23 (b) A description of the managed care organization's
24 procedures for the mandatory reporting of possible acts of
25 fraud or abuse to the Office of the Inspector General in the
26 agency;
27 (c) A description of the managed care organization's
28 procedures for educating and training personnel on how to
29 detect and prevent fraud, abuse, or overpayment;
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1 (d) The name, address, telephone number, and fax
2 number of the individual responsible for carrying out the
3 plan;
4 (e) A description or chart outlining the
5 organizational arrangement of the managed care organization's
6 personnel who are responsible for investigating and reporting
7 possible acts of fraud, abuse, or overpayment;
8 (f) A summary of the results of investigations of
9 fraud, abuse, or overpayment which were conducted during the
10 past year by the managed care organization's special
11 investigative unit or its contractor; and
12 (g) Provisions for maintaining the confidentiality of
13 any patient information that is relevant to an investigation
14 of fraud, abuse, or overpayment.
15 (2) If a managed care organization contracts for the
16 investigation of fraudulent claims and other types of program
17 abuse by recipients or service providers, the managed care
18 organization shall file the following with the Office of the
19 Inspector General in the agency for approval before the
20 managed care plan implements any contracts for fraud and abuse
21 prevention and detection:
22 (a) A copy of the written contract between the managed
23 care organization and the contracting entity;
24 (b) The names, addresses, telephone numbers, and fax
25 numbers of the principals of the entity with which the managed
26 care organization has contracted; and
27 (c) A description of the qualifications of the
28 principals of the entity with which the managed care
29 organization has contracted.
30 (3) This section does not create a private right of
31 action related to any violation of this section. The Office of
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1 the Inspector General in the agency, the agency's Bureau of
2 Program Integrity, the agency's contract management staff, and
3 the Medicaid Fraud Control Unit in the Office of the Attorney
4 General may review the records of a managed care organization
5 and its subcontractors to determine compliance with this
6 section. If a managed care organization or its subcontractors
7 fail to comply with the requirements of this section, the
8 agency shall take appropriate administrative action as
9 provided in section 409.913.
10 (4)(a) Upon detecting acts by providers or recipients
11 that the managed care organization believes are fraudulent,
12 the managed care organization must report the acts to the
13 Office of the Inspector General in the agency. At a minimum,
14 the report must contain the name of the provider or recipient,
15 the Medicaid billing number or tax identification number of
16 the provider or the Medicaid recipient's identification
17 number, and a description of the suspected fraudulent act. The
18 managed care organization must report acts of suspected fraud
19 under this section no later than 15 days after the managed
20 care organization initially detects the suspicious fraudulent
21 activity.
22 (b) The Office of the Inspector General in the agency
23 shall forward the report of suspected fraud to the appropriate
24 investigative unit, including, but not limited to, the
25 Medicaid Fraud Control Unit in the Office of the Attorney
26 General and the Department of Law Enforcement.
27 (c) Upon detecting acts by providers or recipients
28 which the managed care organization suspects are abusive, the
29 managed care organization shall thoroughly review the acts to
30 eliminate instances of simple error or routine anomalies in
31 billing practices or health care service delivery. If
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1 suspected abusive acts by providers or recipients are not
2 eliminated by the review or are determined by the managed care
3 organization not to be simple error or routine anomalies in
4 billing practices or health care service delivery, the managed
5 care organization shall report such acts to the Office of the
6 Inspector General in the agency. At a minimum, the report must
7 contain the name of the provider or recipient, the Medicaid
8 billing number or tax identification number of the provider or
9 the Medicaid recipient's identification number, and a
10 description of the suspected abusive act. The managed care
11 organization shall provide reportable acts of suspected abuse
12 to the Office of the Inspector General in the agency no later
13 than 30 days after the act is determined not to be simple
14 error or routine anomalies in billing practices or health care
15 service delivery.
16 (d) The Office of the Inspector General in the agency
17 shall forward the report of suspected abuse to the appropriate
18 investigative unit, including, but not limited to, the
19 agency's Bureau of Program Integrity, the Medicaid Fraud
20 Control Unit in the Office of the Attorney General, or the
21 Department of Law Enforcement.
22 (5) A person or managed care organization is not
23 subject to civil liability of any nature absent proof by clear
24 and convincing evidence of a specific intent to harm a person
25 or entity that is the subject of any report or reports
26 regarding:
27 (a) Any information relating to suspected fraudulent
28 or abusive acts, or persons suspected of engaging in such
29 acts, which is furnished to or received from law enforcement
30 officials, their agents, or employees;
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1 (b) Any information relating to suspected fraudulent
2 or abusive acts, or persons suspected of engaging in such
3 acts, which is furnished to or received from other persons
4 subject to the provisions of this chapter;
5 (c) Any such information furnished in reports to the
6 agency, the Office of the Attorney General, the Department of
7 Law Enforcement, or any other local, state, or federal law
8 enforcement officials or their agents or employees; or
9 (d) Other actions taken in cooperation with any of the
10 agencies or individuals specified in this subsection in the
11 lawful investigation of suspected fraudulent or abusive acts.
12 (6) In addition to the immunity granted in subsection
13 (5), an employee or contractor of a managed care organization
14 whose responsibilities include the investigation and
15 disposition of claims relating to suspected fraudulent or
16 abusive acts may share information relating to persons
17 suspected of committing fraudulent or abusive acts with the
18 employees or contractors of the same or other managed care
19 organization whose responsibilities include the investigation
20 and disposition of claims relating to fraudulent or abusive
21 acts. A person or managed care organization is not subject to
22 civil liability of any nature absent proof by clear and
23 convincing evidence of a specific intent to harm a person or
24 entity that is the subject of information-sharing or reporting
25 under the provisions of this subsection.
26 (7) This section does not abrogate or modify in any
27 way any common-law or statutory privilege or immunity
28 heretofore enjoyed by any person.
29 (8) Representatives from managed care organizations,
30 Medicaid, the Office of the Inspector General of the agency,
31 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 (9) Any Medicaid funds recovered by the state from a
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 provider or
8 recipient originated, including interest, if any. The agency,
9 the Medicaid Fraud Control Unit, and the Department of Law
10 Enforcement may not return recovered funds associated with a
11 fraudulent or abusive act committed by an employee or agent of
12 the managed care organization if the officers, directors, or
13 managing agents of the managed care organization actively and
14 knowingly participated in the fraud or abuse or negligently
15 failed to monitor and prevent activities constituting fraud or
16 abuse. Any funds returned to a managed care organization may
17 not include monetary fines, penalties, or sanctions imposed by
18 the agency, the Medicaid Fraud Control Unit, or the Department
19 of Law Enforcement under s. 409.913 which do not represent
20 payment or payments made by a managed care organization. The
21 agency, the Medicaid Fraud Control Unit, and the Department of
22 Law Enforcement may recover investigative, legal, and expert
23 witness costs, if any, under s. 409.913 which are separate and
24 apart from recovery of payment or payments made by a managed
25 care organization.
26 (10) 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 as
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1 required by law in order that the Department of Health can
2 publish the information on the physician's profile.
3 (11) The agency shall adopt rules to administer this
4 section.
5 (12) Notwithstanding any other law to the contrary,
6 health maintenance organizations under contract with the
7 agency under s. 409.912 or s. 409.91211 are exempt from ss.
8 626.989 and 626.9891 for Medicaid lines of business.
9 (13) The Children's Medical Services Program of the
10 Department of Health, as described in chapter 391, is exempt
11 from the requirements of this section. The Children's Medical
12 Services Program shall coordinate activities related to the
13 identification and reporting of suspected fraud, abuse, or
14 overpayment with the inspector general of the agency.
15 Section 2. The Agency for Health Care Administration
16 shall develop and implement a methodology to validate the
17 information that is collected by any encounter-data-reporting
18 system and used for tracking the services provided to Medicaid
19 recipients through managed care organizations. This validation
20 methodology shall assess whether the encounter-data-reporting
21 system accurately reflects, at a minimum, the following items:
22 (1) The demographic characteristics of the patient.
23 (2) The principal, secondary, and tertiary diagnosis.
24 (3) The procedure performed.
25 (4) The date and location where the procedure was
26 performed.
27 (5) The payment for the procedure, if any.
28 (6) If applicable, the health care practitioner's
29 universal identification number.
30 (7) If the health care practitioner rendering the
31 service is a dependent practitioner, the modifiers appropriate
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1 to indicate that the service was delivered by the dependent
2 practitioner.
3 (8) Prescription drugs for each type of patient
4 encounter.
5 (9) Appropriate information related to health care
6 costs and utilization from managed care plans.
7 Section 3. The Agency for Health Care Administration
8 shall report to the Governor, the President of the Senate, and
9 the Speaker of the House of Representatives by January 1,
10 2007, on how the agency is coordinating its internal
11 anti-fraud and abuse-prevention and detection systems as they
12 apply to managed care organizations. This report must include
13 a description of how information is coordinated and shared
14 among managed care organizations, the agency, and other
15 governmental entities that are responsible for preventing,
16 detecting, and prosecuting Medicaid provider and recipient
17 fraud or abuse. The agency may include the content of this
18 section in its annual report to the Legislature concerning
19 Medicaid fraud and its abuse-prevention and detection
20 activities as required by s. 409.913, Florida Statutes, in
21 lieu of a separate report.
22 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 CS for Senate Bill 1412
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4 Adds provision exempting the Children's Medical Services (CMS)
Program of the Department of Health from the requirements of
5 the section of the bill requiring the establishment of a
special investigative unit to investigate fraudulent claims
6 and other types of program abuse.
7 Adds provision requiring CMS to coordinate activities related
to the identification and reporting of suspected fraud, abuse,
8 or overpayment with the Office of the Inspector General (OIG)
in the Agency for Health Care Administration (AHCA).
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Changes the number of days from 15 to 30 for a managed care
10 organization to file a report of suspected abusive acts with
the OIG in AHCA.
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Deletes provision providing that a managed care organization
12 would not be liable for the fraud or abuse of an employee or
agent under certain circumstances.
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