CS for CS for SB 8 First Engrossed
20108e1
1 A bill to be entitled
2 An act relating to Medicaid and public assistance
3 fraud; creating s. 624.35, F.S.; providing a short
4 title; creating s. 624.351, F.S.; providing
5 legislative intent; establishing the Medicaid and
6 Public Assistance Fraud Strike Force within the
7 Department of Financial Services to coordinate efforts
8 to eliminate Medicaid and public assistance fraud;
9 providing for membership; providing for meetings;
10 specifying duties; requiring an annual report to the
11 Legislature and Governor; creating s. 624.352, F.S.;
12 directing the Chief Financial Officer to prepare model
13 interagency agreements that address Medicaid and
14 public assistance fraud; specifying which agencies can
15 be a party to such agreements; amending s. 16.59,
16 F.S.; conforming provisions to changes made by the
17 act; requiring the Divisions of Insurance Fraud and
18 Public Assistance Fraud in the Department of Financial
19 Services to be collocated with the Medicaid Fraud
20 Control Unit if possible; requiring positions
21 dedicated to Medicaid managed care fraud to be
22 collocated with the Division of Insurance Fraud;
23 amending s. 20.121, F.S.; establishing the Division of
24 Public Assistance Fraud within the Department of
25 Financial Services; amending ss. 411.01, 414.33, and
26 414.39, F.S.; conforming provisions to changes made by
27 the act; transferring, renumbering, and amending s.
28 943.401, F.S.; directing the Department of Financial
29 Services rather than the Department of Law Enforcement
30 to investigate public assistance fraud; creating s.
31 409.91212, F.S.; requiring Medicaid managed care plans
32 to adopt an anti-fraud plan relating to the provision
33 of health care services; requiring certain managed
34 care plans to also establish an investigative unit or
35 contract for the investigation of fraudulent or
36 abusive activity; requiring an annual report;
37 providing administrative penalties for noncompliance;
38 authorizing the Agency for Health Care Administration
39 to adopt rules; directing the Auditor General and the
40 Office of Program Policy Analysis and Government
41 Accountability to review the Medicaid fraud and abuse
42 processes in the Agency for Health Care
43 Administration; requiring a report to the Legislature
44 and Governor by a certain date; establishing the
45 Medicaid claims adjudication project in the Agency for
46 Health Care Administration to decrease the incidence
47 of inaccurate payments and to improve the efficiency
48 of the Medicaid claims processing system; transferring
49 activities relating to public assistance fraud from
50 the Department of Law Enforcement to the Division of
51 Public Assistance Fraud in the Department of Financial
52 Services by a type two transfer; providing effective
53 dates.
54
55 WHEREAS, Florida’s Medicaid program is one of the largest
56 in the country, serving approximately 2.7 million persons each
57 month. The program provides health care benefits to families and
58 individuals below certain income and resource levels. For the
59 2008-2009 fiscal year, the Legislature appropriated $18.81
60 billion to operate the Medicaid program which is funded from
61 general revenue, trust funds that include federal matching
62 funds, and other state funds, and
63 WHEREAS, Medicaid fraud in Florida is epidemic, far
64 reaching, and costs the state and the Federal Government
65 billions of dollars annually. Medicaid fraud not only drives up
66 the cost of health care and reduces the availability of funds to
67 support needed services, but undermines the long-term solvency
68 of both health care providers and the state’s Medicaid program,
69 and
70 WHEREAS, the state’s public assistance programs serve
71 approximately 1.8 million Floridians each month by providing
72 benefits for food, cash assistance for needy families, home
73 health care for disabled adults, and grants to individuals and
74 communities affected by natural disasters. For the 2008-2009
75 fiscal year, the Legislature appropriated $626 million to
76 operate public assistance programs, and
77 WHEREAS, public assistance fraud costs taxpayers millions
78 of dollars annually, which significantly and negatively impacts
79 the various assistance programs by taking dollars that could be
80 used to provide services for those people who have a legitimate
81 need for assistance, and
82 WHEREAS, both Medicaid and public assistance programs are
83 vulnerable to fraudulent practices that can take many forms. For
84 Medicaid, these practices range from providers who bill for
85 services never rendered and who pay kickbacks to other providers
86 for client referrals, to fraud occurring at the corporate level
87 of a managed care organization. Fraudulent practices involving
88 public assistance involve persons not disclosing material facts
89 when obtaining assistance or not disclosing changes in
90 circumstances while on public assistance, and
91 WHEREAS, ridding the system of perpetrators who prey on the
92 state’s Medicaid and public assistance programs helps reduce the
93 state’s skyrocketing costs, makes more funds available for
94 essential services, and improves the quality of care and the
95 health status of our residents, and
96 WHEREAS, aggressive and comprehensive measures are needed
97 at the state level to investigate and prosecute Medicaid and
98 public assistance fraud and to recover dollars stolen from these
99 programs, and
100 WHEREAS, new statewide initiatives and coordinated efforts
101 are necessary to focus resources in order to aid law enforcement
102 and investigative agencies in detecting and deterring this type
103 of fraudulent activity, NOW, THEREFORE,
104
105 Be It Enacted by the Legislature of the State of Florida:
106
107 Section 1. Section 624.35, Florida Statutes, is created to
108 read:
109 624.35 Short title.—Sections 624.35-624.352 may be cited as
110 the “Medicaid and Public Assistance Fraud Strike Force Act.”
111 Section 2. Section 624.351, Florida Statutes, is created to
112 read:
113 624.351 Medicaid and Public Assistance Fraud Strike Force.—
114 (1) LEGISLATIVE FINDINGS.—The Legislature finds that there
115 is a need to develop and implement a statewide strategy to
116 coordinate state and local agencies, law enforcement entities,
117 and investigative units in order to increase the effectiveness
118 of programs and initiatives dealing with the prevention,
119 detection, and prosecution of Medicaid and public assistance
120 fraud.
121 (2) ESTABLISHMENT.—The Medicaid and Public Assistance Fraud
122 Strike Force is created within the department to oversee and
123 coordinate state and local efforts to eliminate Medicaid and
124 public assistance fraud and to recover state and federal funds.
125 The strike force shall serve in an advisory capacity and provide
126 recommendations and policy alternatives to the Chief Financial
127 Officer.
128 (3) MEMBERSHIP.—The strike force shall consist of the
129 following 11 members who may not designate anyone to serve in
130 their place:
131 (a) The Chief Financial Officer, who shall serve as chair.
132 (b) The Attorney General, who shall serve as vice chair.
133 (c) The executive director of the Department of Law
134 Enforcement.
135 (d) The Secretary of Health Care Administration.
136 (e) The Secretary of Children and Family Services.
137 (f) The State Surgeon General.
138 (g) Five members appointed by the Chief Financial Officer,
139 consisting of two sheriffs, two chiefs of police, and one state
140 attorney. When making these appointments, the Chief Financial
141 Officer shall consider representation by geography, population,
142 ethnicity, and other relevant factors in order to ensure that
143 the membership of the strike force is representative of the
144 state as a whole.
145 (4) TERMS OF MEMBERSHIP; COMPENSATION; STAFF.—
146 (a) The five members appointed by the Chief Financial
147 Officer will serve 4-year terms; however, for the purpose of
148 providing staggered terms, of the initial appointments, two
149 members will be appointed to a 2-year term, two members will be
150 appointed to a 3-year term, and one member will be appointed to
151 a 4-year term. The remaining members are standing members of the
152 strike force and may not serve beyond the time he or she holds
153 the position that was the basis for strike force membership. A
154 vacancy shall be filled in the same manner as the original
155 appointment but only for the unexpired term.
156 (b) The Legislature finds that the strike force serves a
157 legitimate state, county, and municipal purpose and that service
158 on the strike force is consistent with a member’s principal
159 service in a public office or employment. Therefore membership
160 on the strike force does not disqualify a member from holding
161 any other public office or from being employed by a public
162 entity, except that a member of the Legislature may not serve on
163 the strike force.
164 (c) Members of the strike force shall serve without
165 compensation, but are entitled to reimbursement for per diem and
166 travel expenses pursuant to s. 112.061. Reimbursements may be
167 paid from appropriations provided to the department by the
168 Legislature for the purposes of this section.
169 (d) The Chief Financial Officer shall appoint a chief of
170 staff for the strike force who must have experience, education,
171 and expertise in the fields of law, prosecution, or fraud
172 investigations and shall serve at the pleasure of the Chief
173 Financial Officer. The department shall provide the strike force
174 with staff necessary to assist the strike force in the
175 performance of its duties.
176 (5) MEETINGS.—The strike force shall hold its
177 organizational session by March 1, 2011. Thereafter, the strike
178 force shall meet at least four times per year. Additional
179 meetings may be held if the chair determines that extraordinary
180 circumstances require an additional meeting. Members may appear
181 by electronic means. A majority of the members of the strike
182 force constitutes a quorum.
183 (6) STRIKE FORCE DUTIES.—The strike force shall provide
184 advice and make recommendations, as necessary, to the Chief
185 Financial Officer.
186 (a) The strike force may advise the Chief Financial Officer
187 on initiatives that include, but are not limited to:
188 1. Conducting a census of local, state, and federal efforts
189 to address Medicaid and public assistance fraud in this state,
190 including fraud detection, prevention, and prosecution, in order
191 to discern overlapping missions, maximize existing resources,
192 and strengthen current programs.
193 2. Developing a strategic plan for coordinating and
194 targeting state and local resources for preventing and
195 prosecuting Medicaid and public assistance fraud. The plan must
196 identify methods to enhance multiagency efforts that contribute
197 to achieving the state’s goal of eliminating Medicaid and public
198 assistance fraud.
199 3. Identifying methods to implement innovative technology
200 and data sharing in order to detect and analyze Medicaid and
201 public assistance fraud with speed and efficiency.
202 4. Establishing a program to provide grants to state and
203 local agencies that develop and implement effective Medicaid and
204 public assistance fraud prevention, detection, and investigation
205 programs, which are evaluated by the strike force and ranked by
206 their potential to contribute to achieving the state’s goal of
207 eliminating Medicaid and public assistance fraud. The grant
208 program may also provide startup funding for new initiatives by
209 local and state law enforcement or administrative agencies to
210 combat Medicaid and public assistance fraud.
211 5. Developing and promoting crime prevention services and
212 educational programs that serve the public, including, but not
213 limited to, a well-publicized rewards program for the
214 apprehension and conviction of criminals who perpetrate Medicaid
215 and public assistance fraud.
216 6. Providing grants, contingent upon appropriation, for
217 multiagency or state and local Medicaid and public assistance
218 fraud efforts, which include, but are not limited to:
219 a. Providing for a Medicaid and public assistance fraud
220 prosecutor in the Office of the Statewide Prosecutor.
221 b. Providing assistance to state attorneys for support
222 services or equipment, or for the hiring of assistant state
223 attorneys, as needed, to prosecute Medicaid and public
224 assistance fraud cases.
225 c. Providing assistance to judges for support services or
226 for the hiring of senior judges, as needed, so that Medicaid and
227 public assistance fraud cases can be heard expeditiously.
228 (b) The strike force shall receive periodic reports from
229 state agencies, law enforcement officers, investigators,
230 prosecutors, and coordinating teams regarding Medicaid and
231 public assistance criminal and civil investigations. Such
232 reports may include discussions regarding significant factors
233 and trends relevant to a statewide Medicaid and public
234 assistance fraud strategy.
235 (7) REPORTS.—The strike force shall annually prepare and
236 submit a report on its activities and recommendations, by
237 October 1, to the President of the Senate, the Speaker of the
238 House of Representatives, the Governor, and the chairs of the
239 House of Representatives and Senate committees that have
240 substantive jurisdiction over Medicaid and public assistance
241 fraud.
242 Section 3. Section 624.352, Florida Statutes, is created to
243 read:
244 624.352 Interagency agreements to detect and deter Medicaid
245 and public assistance fraud.—
246 (1) The Chief Financial Officer shall prepare model
247 interagency agreements for the coordination of prevention,
248 investigation, and prosecution of Medicaid and public assistance
249 fraud to be known as “Strike Force” agreements. Parties to such
250 agreements may include any agency that is headed by a Cabinet
251 officer, the Governor, the Governor and Cabinet, a collegial
252 body, or any federal, state, or local law enforcement agency.
253 (2) The agreements must include, but are not limited to:
254 (a) Establishing the agreement’s purpose, mission,
255 authority, organizational structure, procedures, supervision,
256 operations, deputations, funding, expenditures, property and
257 equipment, reports and records, assets and forfeitures, media
258 policy, liability, and duration.
259 (b) Requiring that parties to an agreement have appropriate
260 powers and authority relative to the purpose and mission of the
261 agreement.
262 Section 4. Section 16.59, Florida Statutes, is amended to
263 read:
264 16.59 Medicaid fraud control.—The Medicaid Fraud Control
265 Unit There is created in the Department of Legal Affairs to the
266 Medicaid Fraud Control Unit, which may investigate all
267 violations of s. 409.920 and any criminal violations discovered
268 during the course of those investigations. The Medicaid Fraud
269 Control Unit may refer any criminal violation so uncovered to
270 the appropriate prosecuting authority. The offices of the
271 Medicaid Fraud Control Unit, and the offices of the Agency for
272 Health Care Administration Medicaid program integrity program,
273 and the Divisions of Insurance Fraud and Public Assistance Fraud
274 within the Department of Financial Services shall, to the extent
275 possible, be collocated; however, positions dedicated to
276 Medicaid managed care fraud within the Medicaid Fraud Control
277 Unit shall be collocated with the Division of Insurance Fraud.
278 The Agency for Health Care Administration, and the Department of
279 Legal Affairs, and the Divisions of Insurance Fraud and Public
280 Assistance Fraud within the Department of Financial Services
281 shall conduct joint training and other joint activities designed
282 to increase communication and coordination in recovering
283 overpayments.
284 Section 5. Paragraph (o) is added to subsection (2) of
285 section 20.121, Florida Statutes, to read:
286 20.121 Department of Financial Services.—There is created a
287 Department of Financial Services.
288 (2) DIVISIONS.—The Department of Financial Services shall
289 consist of the following divisions:
290 (o) The Division of Public Assistance Fraud.
291 Section 6. Paragraph (b) of subsection (7) of section
292 411.01, Florida Statutes, is amended to read:
293 411.01 School readiness programs; early learning
294 coalitions.—
295 (7) PARENTAL CHOICE.—
296 (b) If it is determined that a provider has provided any
297 cash to the beneficiary in return for receiving the purchase
298 order, the early learning coalition or its fiscal agent shall
299 refer the matter to the Department of Financial Services
300 pursuant to s. 414.411 Division of Public Assistance Fraud for
301 investigation.
302 Section 7. Subsection (2) of section 414.33, Florida
303 Statutes, is amended to read:
304 414.33 Violations of food stamp program.—
305 (2) In addition, the department shall establish procedures
306 for referring to the Department of Law Enforcement any case that
307 involves a suspected violation of federal or state law or rules
308 governing the administration of the food stamp program to the
309 Department of Financial Services pursuant to s. 414.411.
310 Section 8. Subsection (9) of section 414.39, Florida
311 Statutes, is amended to read:
312 414.39 Fraud.—
313 (9) All records relating to investigations of public
314 assistance fraud in the custody of the department and the Agency
315 for Health Care Administration are available for examination by
316 the Department of Financial Services Law Enforcement pursuant to
317 s. 414.411 943.401 and are admissible into evidence in
318 proceedings brought under this section as business records
319 within the meaning of s. 90.803(6).
320 Section 9. Section 943.401, Florida Statutes, is
321 transferred, renumbered as section 414.411, Florida Statutes,
322 and amended to read:
323 414.411 943.401 Public assistance fraud.—
324 (1)(a) The Department of Financial Services Law Enforcement
325 shall investigate all public assistance provided to residents of
326 the state or provided to others by the state. In the course of
327 such investigation the department of Law Enforcement shall
328 examine all records, including electronic benefits transfer
329 records and make inquiry of all persons who may have knowledge
330 as to any irregularity incidental to the disbursement of public
331 moneys, food stamps, or other items or benefits authorizations
332 to recipients.
333 (b) All public assistance recipients, as a condition
334 precedent to qualification for public assistance received and as
335 defined under the provisions of chapter 409, chapter 411, or
336 this chapter 414, must shall first give in writing, to the
337 Agency for Health Care Administration, the Department of Health,
338 the Agency for Workforce Innovation, and the Department of
339 Children and Family Services, as appropriate, and to the
340 Department of Financial Services Law Enforcement, consent to
341 make inquiry of past or present employers and records, financial
342 or otherwise.
343 (2) In the conduct of such investigation the Department of
344 Financial Services Law Enforcement may employ persons having
345 such qualifications as are useful in the performance of this
346 duty.
347 (3) The results of such investigation shall be reported by
348 the Department of Financial Services Law Enforcement to the
349 appropriate legislative committees, the Agency for Health Care
350 Administration, the Department of Health, the Agency for
351 Workforce Innovation, and the Department of Children and Family
352 Services, and to such others as the department of Law
353 Enforcement may determine.
354 (4) The Department of Health and the Department of Children
355 and Family Services shall report to the Department of Financial
356 Services Law Enforcement the final disposition of all cases
357 wherein action has been taken pursuant to s. 414.39, based upon
358 information furnished by the Department of Financial Services
359 Law Enforcement.
360 (5) All lawful fees and expenses of officers and witnesses,
361 expenses incident to taking testimony and transcripts of
362 testimony and proceedings are a proper charge to the Department
363 of Financial Services Law Enforcement.
364 (6) The provisions of this section shall be liberally
365 construed in order to carry out effectively the purposes of this
366 section in the interest of protecting public moneys and other
367 public property.
368 Section 10. Section 409.91212, Florida Statutes, is created
369 to read:
370 409.91212 Medicaid managed care fraud.—
371 (1) Each managed care plan, as defined in s. 409.920(1)(e),
372 shall adopt an anti-fraud plan addressing the detection and
373 prevention of overpayments, abuse, and fraud relating to the
374 provision of and payment for Medicaid services and submit the
375 plan to the Office of the Inspector General within the agency
376 for approval. At a minimum, the anti-fraud plan must include:
377 (a) A written description or chart outlining the
378 organizational arrangement of the plan’s personnel who are
379 responsible for the investigation and reporting of possible
380 overpayment, abuse, or fraud;
381 (b) A description of the plan’s procedures for detecting
382 and investigating possible acts of fraud, abuse, and
383 overpayment;
384 (c) A description of the plan’s procedures for the
385 mandatory reporting of possible overpayment, abuse, or fraud to
386 the Office of the Inspector General within the agency;
387 (d) A description of the plan’s program and procedures for
388 educating and training personnel on how to detect and prevent
389 fraud, abuse, and overpayment;
390 (e) The name, address, telephone number, e-mail address,
391 and fax number of the individual responsible for carrying out
392 the anti-fraud plan; and
393 (f) A summary of the results of the investigations of
394 fraud, abuse, or overpayment which were conducted during the
395 previous year by the managed care organization’s fraud
396 investigative unit.
397 (2) A managed care plan that provides Medicaid services
398 shall:
399 (a) Establish and maintain a fraud investigative unit to
400 investigate possible acts of fraud, abuse, and overpayment; or
401 (b) Contract for the investigation of possible fraudulent
402 or abusive acts by Medicaid recipients, persons providing
403 services to Medicaid recipients, or any other persons.
404 (3) If a managed care plan contracts for the investigation
405 of fraudulent claims and other types of program abuse by
406 recipients or service providers, the managed care plan shall
407 file the following with the Office of the Inspector General
408 within the agency for approval before the plan executes any
409 contracts for fraud and abuse prevention and detection:
410 (a) A copy of the written contract between the plan and the
411 contracting entity;
412 (b) The names, addresses, telephone numbers, e-mail
413 addresses, and fax numbers of the principals of the entity with
414 which the managed care plan has contracted; and
415 (c) A description of the qualifications of the principals
416 of the entity with which the managed care plan has contracted.
417 (4) On or before September 1 of each year, each managed
418 care plan shall report to the Office of the Inspector General
419 within the agency on its experience in implementing an anti
420 fraud plan, as provided under subsection (1), and, if
421 applicable, conducting or contracting for investigations of
422 possible fraudulent or abusive acts as provided under this
423 section for the prior state fiscal year. The report must
424 include, at a minimum:
425 (a) The dollar amount of losses and recoveries attributable
426 to overpayment, abuse, and fraud.
427 (b) The number of referrals to the Office of the Inspector
428 General during the prior year.
429 (5) If a managed care plan fails to timely submit a final
430 acceptable anti-fraud plan, fails to timely submit its annual
431 report, fails to implement its anti-fraud plan or investigative
432 unit, if applicable, or otherwise refuses to comply with this
433 section, the agency shall impose:
434 (a) An administrative fine of $2,000 per calendar day for
435 failure to submit an acceptable anti-fraud plan or report until
436 the agency deems the managed care plan or report to be in
437 compliance;
438 (b) An administrative fine of not more than $10,000 for
439 failure by a managed care plan to implement an anti-fraud plan
440 or investigative unit, as applicable; or
441 (c) The administrative fines pursuant to paragraphs (a) and
442 (b).
443 (6) Each managed care plan shall report all suspected or
444 confirmed instances of provider or recipient fraud or abuse
445 within 15 calendar days after detection to the Office of the
446 Inspector General within the agency. At a minimum the report
447 must contain the name of the provider or recipient, the Medicaid
448 billing number or tax identification number, and a description
449 of the fraudulent or abusive act. The Office of the Inspector
450 General in the agency shall forward the report of suspected
451 overpayment, abuse, or fraud to the appropriate investigative
452 unit, including, but not limited to, the Bureau of Medicaid
453 program integrity, the Medicaid fraud control unit, the Division
454 of Public Assistance Fraud, the Division of Insurance Fraud, or
455 the Department of Law Enforcement.
456 (a) Failure to timely report shall result in an
457 administrative fine of $1,000 per calendar day after the 15th
458 day of detection.
459 (b) Failure to timely report may result in additional
460 administrative, civil, or criminal penalties.
461 (7) The agency may adopt rules to administer this section.
462 Section 11. Review of the Medicaid fraud and abuse
463 processes.—
464 (1) The Auditor General and the Office of Program Policy
465 Analysis and Government Accountability shall review and evaluate
466 the Agency for Health Care Administration’s Medicaid fraud and
467 abuse systems, including the Medicaid program integrity program.
468 The reviewers may access Medicaid-related information and data
469 from the Attorney General’s Medicaid Fraud Control Unit, the
470 Department of Health, the Department of Elderly Affairs, the
471 Agency for Persons with Disabilities, and the Department of
472 Children and Family Services, as necessary, to conduct the
473 review. The review must include, but is not limited to:
474 (a) An evaluation of current Medicaid policies and the
475 Medicaid fiscal agent;
476 (b) An analysis of the Medicaid fraud and abuse prevention
477 and detection processes, including agency contracts, Medicaid
478 databases, and internal control risk assessments;
479 (c) A comprehensive evaluation of the effectiveness of the
480 current laws, rules, and contractual requirements that govern
481 Medicaid managed care entities;
482 (d) An evaluation of the agency’s Medicaid managed care
483 oversight processes;
484 (e) Recommendations to improve the Medicaid claims
485 adjudication process, to increase the overall efficiency of the
486 Medicaid program, and to reduce Medicaid overpayments; and
487 (f) Operational and legislative recommendations to improve
488 the prevention and detection of fraud and abuse in the Medicaid
489 managed care program.
490 (2) The Auditor General’s Office and the Office of Program
491 Policy Analysis and Government Accountability may contract with
492 technical consultants to assist in the performance of the
493 review. The Auditor General and the Office of Program Policy
494 Analysis and Government Accountability shall report to the
495 President of the Senate, the Speaker of the House of
496 Representatives, and the Governor by December 1, 2011.
497 Section 12. Medicaid claims adjudication project.—The
498 Agency for Health Care Administration shall issue a competitive
499 procurement pursuant to chapter 287, Florida Statutes, with a
500 third-party vendor, at no cost to the state, to provide a real
501 time, front-end database to augment the Medicaid fiscal agent
502 program edits and claims adjudication process. The vendor shall
503 provide an interface with the Medicaid fiscal agent to decrease
504 inaccurate payment to Medicaid providers and improve the overall
505 efficiency of the Medicaid claims-processing system.
506 Section 13. All powers, duties, functions, records,
507 offices, personnel, property, pending issues and existing
508 contracts, administrative authority, administrative rules, and
509 unexpended balances of appropriations, allocations, and other
510 funds relating to public assistance fraud in the Department of
511 Law Enforcement are transferred by a type two transfer, as
512 defined in s. 20.06(2), Florida Statutes, to the Division of
513 Public Assistance Fraud in the Department of Financial Services.
514 Section 14. Except for sections 10 and 11 of this act and
515 this section, which shall take effect upon this act becoming a
516 law, this act shall take effect January 1, 2011.