Bill Text: FL S0008 | 2010 | Regular Session | Comm Sub

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Medicaid and Public Assistance Fraud [CPSC]

Spectrum: Slight Partisan Bill (Republican 3-1)

Status: (Failed) 2010-04-30 - Died in Messages, companion bill(s) passed, see CS/CS/SB 1484 (Ch. 2010-144) [S0008 Detail]

Download: Florida-2010-S0008-Comm_Sub.html

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Florida Senate - 2010                                CS for SB 8 
 
By the Committee on Banking and Insurance; and Senator Negron 
597-03120A-10                                            20108c1 
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; directing the 
31         Auditor General, in consultation with the Office of 
32         Program Policy Analysis and Government Accountability, 
33         to conduct an operational audit of the Medicaid fraud 
34         and abuse processes in the Agency for Health Care 
35         Administration; requiring a report to the Legislature 
36         and Governor by a certain date; establishing the 
37         Medicaid claims adjudication project in the Agency for 
38         Health Care Administration to decrease the incidence 
39         of inaccurate payments and to improve the efficiency 
40         of the Medicaid claims processing system; transferring 
41         activities relating to public assistance fraud from 
42         the Department of Law Enforcement to the Division of 
43         Public Assistance Fraud in the Department of Financial 
44         Services by a type two transfer; providing an 
45         effective date. 
46 
47         WHEREAS, Florida’s Medicaid program is one of the largest 
48  in the country, serving approximately 2.7 million persons each 
49  month. The program provides health care benefits to families and 
50  individuals below certain income and resource levels. For the 
51  2008-2009 fiscal year, the Legislature appropriated $18.81 
52  billion to operate the Medicaid program which is funded from 
53  general revenue, trust funds that include federal matching 
54  funds, and other state funds, and 
55         WHEREAS, Medicaid fraud in Florida is epidemic, far 
56  reaching, and costs the state and the Federal Government 
57  billions of dollars annually. Medicaid fraud not only drives up 
58  the cost of health care and reduces the availability of funds to 
59  support needed services, but undermines the long-term solvency 
60  of both health care providers and the state’s Medicaid program, 
61  and 
62         WHEREAS, the state’s public assistance programs serve 
63  approximately 1.8 million Floridians each month by providing 
64  benefits for food, cash assistance for needy families, home 
65  health care for disabled adults, and grants to individuals and 
66  communities affected by natural disasters. For the 2008-2009 
67  fiscal year, the Legislature appropriated $626 million to 
68  operate public assistance programs, and 
69         WHEREAS, public assistance fraud costs taxpayers millions 
70  of dollars annually, which significantly and negatively impacts 
71  the various assistance programs by taking dollars that could be 
72  used to provide services for those people who have a legitimate 
73  need for assistance, and 
74         WHEREAS, both Medicaid and public assistance programs are 
75  vulnerable to fraudulent practices that can take many forms. For 
76  Medicaid, these practices range from providers who bill for 
77  services never rendered and who pay kickbacks to other providers 
78  for client referrals, to fraud occurring at the corporate level 
79  of a managed care organization. Fraudulent practices involving 
80  public assistance involve persons not disclosing material facts 
81  when obtaining assistance or not disclosing changes in 
82  circumstances while on public assistance, and 
83         WHEREAS, ridding the system of perpetrators who prey on the 
84  state’s Medicaid and public assistance programs helps reduce the 
85  state’s skyrocketing costs, makes more funds available for 
86  essential services, and improves the quality of care and the 
87  health status of our residents, and 
88         WHEREAS, aggressive and comprehensive measures are needed 
89  at the state level to investigate and prosecute Medicaid and 
90  public assistance fraud and to recover dollars stolen from these 
91  programs, and 
92         WHEREAS, new statewide initiatives and coordinated efforts 
93  are necessary to focus resources in order to aid law enforcement 
94  and investigative agencies in detecting and deterring this type 
95  of fraudulent activity, NOW, THEREFORE, 
96 
97  Be It Enacted by the Legislature of the State of Florida: 
98 
99         Section 1. Section 624.35, Florida Statutes, is created to 
100  read: 
101         624.35 Short title.—Sections 624.35-624.352 may be cited as 
102  the “Medicaid and Public Assistance Fraud Strike Force Act.” 
103         Section 2. Section 624.351, Florida Statutes, is created to 
104  read: 
105         624.351 Medicaid and Public Assistance Fraud Strike Force.— 
106         (1) LEGISLATIVE FINDINGS.—The Legislature finds that there 
107  is a need to develop and implement a statewide strategy to 
108  coordinate state and local agencies, law enforcement entities, 
109  and investigative units in order to focus programs and 
110  initiatives dealing with the prevention, detection, and 
111  prosecution of Medicaid and public assistance fraud. 
112         (2) ESTABLISHMENT.—The Medicaid and Public Assistance Fraud 
113  Strike Force is created within the department to oversee and 
114  coordinate state and local efforts to eliminate Medicaid and 
115  public assistance fraud and to recover state and federal funds. 
116  The strike force shall serve in an advisory capacity and provide 
117  recommendations and policy alternatives to the Chief Financial 
118  Officer. 
119         (3) MEMBERSHIP.—The strike force shall consist of the 
120  following 11 members who may not designate anyone to serve in 
121  their place: 
122         (a) The Chief Financial Officer, who shall serve as chair. 
123         (b) The Attorney General, who shall serve as vice chair. 
124         (c) The executive director of the Department of Law 
125  Enforcement. 
126         (d) The Secretary of Health Care Administration. 
127         (e) The Secretary of Children and Family Services. 
128         (f) The State Surgeon General. 
129         (g) Five members appointed by the Chief Financial Officer, 
130  consisting of two sheriffs, two chiefs of police, and one state 
131  attorney. When making these appointments, the Chief Financial 
132  Officer shall consider representation by geography, population, 
133  ethnicity, and other relevant factors in order to ensure that 
134  the membership of the strike force is representative of the 
135  state as a whole. 
136         (4) TERMS OF MEMBERSHIP; COMPENSATION; STAFF.— 
137         (a) All members appointed by the Chief Financial Officer 
138  shall be appointed for a term of 2 years. The remaining members 
139  are standing members of the strike force and may not serve 
140  beyond the time he or she ceases to hold the position that was 
141  the basis for appointment to the strike force. A vacancy shall 
142  be filled in the same manner as the original appointment but 
143  only for the unexpired term. 
144         (b) The Legislature finds that the strike force serves a 
145  legitimate state, county, and municipal purpose and that service 
146  on the strike force is consistent with a member’s principal 
147  service in a public office or employment. Therefore membership 
148  on the strike force does not disqualify a member from holding 
149  any other public office or from being employed by a public 
150  entity, except that a member of the Legislature may not serve on 
151  the strike force. 
152         (c) Members of the strike force shall serve without 
153  compensation, but are entitled to reimbursement for per diem and 
154  travel expenses pursuant to s. 112.061. Reimbursements may be 
155  paid from appropriations provided to the department by the 
156  Legislature for the purposes of this section. 
157         (d) The Chief Financial Officer shall appoint a chief of 
158  staff for the strike force who must have experience, education, 
159  and expertise in the fields of law, prosecution, or fraud 
160  investigations and shall serve at the pleasure of the Chief 
161  Financial Officer. The department shall provide the strike force 
162  with staff necessary to assist the strike force in the 
163  performance of its duties. 
164         (5) MEETINGS.—The strike force shall hold its 
165  organizational session by March 1, 2011. Thereafter, the strike 
166  force shall meet at least four times per year. Additional 
167  meetings may be held if the chair determines that extraordinary 
168  circumstances require an additional meeting. Members may appear 
169  by electronic means. A majority of the members of the strike 
170  force constitutes a quorum. 
171         (6) STRIKE FORCE DUTIES.—The strike force shall provide 
172  advice and make recommendations, as necessary, to the Chief 
173  Financial Officer. 
174         (a) The strike force may advise the Chief Financial Officer 
175  on the feasibility of undertaking initiatives that include, but 
176  are not limited to: 
177         1. Conducting a census of local, state, and federal efforts 
178  to address Medicaid and public assistance fraud in this state, 
179  including fraud detection, prevention, and prosecution, in order 
180  to discern overlapping missions, maximize existing resources, 
181  and strengthen current programs. 
182         2. Developing a strategic plan for coordinating and 
183  targeting state and local resources for preventing and 
184  prosecuting Medicaid and public assistance fraud. The plan must 
185  identify methods to enhance multiagency efforts that contribute 
186  to achieving the state’s goal of eliminating Medicaid and public 
187  assistance fraud. 
188         3. Identifying methods to implement innovative technology 
189  and data sharing in order to identify and analyze Medicaid and 
190  public assistance fraud with speed and efficiency. 
191         4. Establishing a program that provides grants to state and 
192  local agencies that develop and implement effective Medicaid and 
193  public assistance fraud prevention and investigative programs, 
194  which are determined by the strike force to significantly 
195  contribute to achieving the state’s goal of eliminating Medicaid 
196  and public assistance fraud. The grant program may also provide 
197  startup funding for new initiatives by local and state law 
198  enforcement or administrative agencies to combat Medicaid and 
199  public assistance fraud. 
200         5. Developing and promoting crime prevention services and 
201  educational programs that serve the public, including, but not 
202  limited to, a well-publicized rewards program for the 
203  apprehension and conviction of criminals who perpetrate Medicaid 
204  and public assistance fraud. 
205         6. Providing grants, contingent upon appropriation, for 
206  multiagency or state and local Medicaid and public assistance 
207  fraud efforts, which would include, but are not limited to: 
208         a. Providing for a Medicaid and public assistance fraud 
209  prosecutor in the Office of the Statewide Prosecutor. 
210         b. Providing assistance to state attorneys for support 
211  services or equipment, or for the hiring of assistant state 
212  attorneys, as needed, to prosecute Medicaid and public 
213  assistance fraud cases. 
214         c. Providing assistance to judges for support services or 
215  for the hiring of senior judges, as needed, so that Medicaid and 
216  public assistance fraud cases can be heard expeditiously. 
217         (b) The strike force shall receive periodic reports from 
218  relevant state agencies, law enforcement officers, 
219  investigators, prosecutors, and coordinating teams which relate 
220  to Medicaid and public assistance criminal and civil 
221  investigations. Such reports may include discussions regarding 
222  significant factors and trends relevant to a statewide Medicaid 
223  and public assistance fraud strategy. 
224         (7) REPORTS.—The strike force shall annually prepare and 
225  submit a report on its activities and recommendations, by 
226  October 1, to the President of the Senate, the Speaker of the 
227  House of Representatives, the Governor, and the chairs of the 
228  Senate and House committees that have substantive jurisdiction 
229  over Medicaid and public assistance fraud. 
230         Section 3. Section 624.352, Florida Statutes, is created to 
231  read: 
232         624.352 Interagency agreements to detect and deter Medicaid 
233  and public assistance fraud.— 
234         (1) The Chief Financial Officer shall prepare model 
235  interagency agreements for the prevention, investigation, and 
236  prosecution of Medicaid and public assistance fraud to be known 
237  as “Strike Force” agreements. Parties to such agreements may 
238  include any agency that is headed by a Cabinet officer, the 
239  Governor and Cabinet, a collegial body, or any federal, state, 
240  or local law enforcement agency. 
241         (2) The agreements must include, but are not limited to: 
242         (a) Establishing the agreement’s purpose, mission, 
243  authority, organizational structure, procedures, supervision, 
244  operations, deputations, funding, expenditures, property and 
245  equipment, reports and records, assets and forfeitures, media 
246  policy, liability, and duration. 
247         (b) Requiring that parties to an agreement have appropriate 
248  powers and authority relative to the purpose and mission of the 
249  agreement. 
250         Section 4. Section 16.59, Florida Statutes, is amended to 
251  read: 
252         16.59 Medicaid fraud control.—The Medicaid Fraud Control 
253  Unit There is created in the Department of Legal Affairs to the 
254  Medicaid Fraud Control Unit, which may investigate all 
255  violations of s. 409.920 and any criminal violations discovered 
256  during the course of those investigations. The Medicaid Fraud 
257  Control Unit may refer any criminal violation so uncovered to 
258  the appropriate prosecuting authority. The offices of the 
259  Medicaid Fraud Control Unit, and the offices of the Agency for 
260  Health Care Administration Medicaid program integrity program, 
261  and the Divisions of Insurance Fraud and Public Assistance Fraud 
262  within the Department of Financial Services shall, to the extent 
263  possible, be collocated; however, positions dedicated to 
264  Medicaid managed care fraud within the Medicaid Fraud Control 
265  Unit shall be collocated with the Division of Insurance Fraud. 
266  The Agency for Health Care Administration, and the Department of 
267  Legal Affairs, and the Divisions of Insurance Fraud and Public 
268  Assistance Fraud within the Department of Financial Services 
269  shall conduct joint training and other joint activities designed 
270  to increase communication and coordination in recovering 
271  overpayments. 
272         Section 5. Paragraph (o) is added to subsection (2) of 
273  section 20.121, Florida Statutes, to read: 
274         20.121 Department of Financial Services.—There is created a 
275  Department of Financial Services. 
276         (2) DIVISIONS.—The Department of Financial Services shall 
277  consist of the following divisions: 
278         (o) The Division of Public Assistance Fraud. 
279         Section 6. Paragraph (b) of subsection (7) of section 
280  411.01, Florida Statutes, is amended to read: 
281         411.01 School readiness programs; early learning 
282  coalitions.— 
283         (7) PARENTAL CHOICE.— 
284         (b) If it is determined that a provider has provided any 
285  cash to the beneficiary in return for receiving the purchase 
286  order, the early learning coalition or its fiscal agent shall 
287  refer the matter to the Department of Financial Services 
288  pursuant to s. 414.411 Division of Public Assistance Fraud for 
289  investigation. 
290         Section 7. Subsection (2) of section 414.33, Florida 
291  Statutes, is amended to read: 
292         414.33 Violations of food stamp program.— 
293         (2) In addition, the department shall establish procedures 
294  for referring to the Department of Law Enforcement any case that 
295  involves a suspected violation of federal or state law or rules 
296  governing the administration of the food stamp program to the 
297  Department of Financial Services pursuant to s. 414.411. 
298         Section 8. Subsection (9) of section 414.39, Florida 
299  Statutes, is amended to read: 
300         414.39 Fraud.— 
301         (9) All records relating to investigations of public 
302  assistance fraud in the custody of the department and the Agency 
303  for Health Care Administration are available for examination by 
304  the Department of Financial Services Law Enforcement pursuant to 
305  s. 414.411 943.401 and are admissible into evidence in 
306  proceedings brought under this section as business records 
307  within the meaning of s. 90.803(6). 
308         Section 9. Section 943.401, Florida Statutes, is 
309  transferred, renumbered as section 414.411, Florida Statutes, 
310  and amended to read: 
311         414.411 943.401 Public assistance fraud.— 
312         (1)(a) The Department of Financial Services Law Enforcement 
313  shall investigate all public assistance provided to residents of 
314  the state or provided to others by the state. In the course of 
315  such investigation the department of Law Enforcement shall 
316  examine all records, including electronic benefits transfer 
317  records and make inquiry of all persons who may have knowledge 
318  as to any irregularity incidental to the disbursement of public 
319  moneys, food stamps, or other items or benefits authorizations 
320  to recipients. 
321         (b) All public assistance recipients, as a condition 
322  precedent to qualification for public assistance received and as 
323  defined under the provisions of chapter 409, chapter 411, or 
324  this chapter 414, must shall first give in writing, to the 
325  Agency for Health Care Administration, the Department of Health, 
326  the Agency for Workforce Innovation, and the Department of 
327  Children and Family Services, as appropriate, and to the 
328  Department of Financial Services Law Enforcement, consent to 
329  make inquiry of past or present employers and records, financial 
330  or otherwise. 
331         (2) In the conduct of such investigation the Department of 
332  Financial Services Law Enforcement may employ persons having 
333  such qualifications as are useful in the performance of this 
334  duty. 
335         (3) The results of such investigation shall be reported by 
336  the Department of Financial Services Law Enforcement to the 
337  appropriate legislative committees, the Agency for Health Care 
338  Administration, the Department of Health, the Agency for 
339  Workforce Innovation, and the Department of Children and Family 
340  Services, and to such others as the department of Law 
341  Enforcement may determine. 
342         (4) The Department of Health and the Department of Children 
343  and Family Services shall report to the Department of Financial 
344  Services Law Enforcement the final disposition of all cases 
345  wherein action has been taken pursuant to s. 414.39, based upon 
346  information furnished by the Department of Financial Services 
347  Law Enforcement. 
348         (5) All lawful fees and expenses of officers and witnesses, 
349  expenses incident to taking testimony and transcripts of 
350  testimony and proceedings are a proper charge to the Department 
351  of Financial Services Law Enforcement. 
352         (6) The provisions of this section shall be liberally 
353  construed in order to carry out effectively the purposes of this 
354  section in the interest of protecting public moneys and other 
355  public property. 
356         Section 10. Audit of the Medicaid fraud and abuse 
357  processes.— 
358         (1) The Auditor General, in consultation with the Office of 
359  Program Policy Analysis and Government Accountability, shall 
360  conduct an operational audit of the Agency for Health Care 
361  Administration’s Medicaid fraud and abuse systems, including the 
362  Medicaid program integrity program. The scope of the audit may 
363  include the Attorney General’s Medicaid Fraud Control Unit, and 
364  the Medicaid-related programs in the Department of Health, the 
365  Department of Elderly Affairs, the Agency for Persons with 
366  Disabilities, and the Department of Children and Family 
367  Services. The audit must include, but is not limited to: 
368         (a) An evaluation of current Medicaid policies and the 
369  Medicaid fiscal agent. 
370         (b) A comprehensive analysis of all Medicaid fraud and 
371  abuse prevention and detection processes, including all agency 
372  contracts, Medicaid databases, and internal control risk 
373  assessments. 
374         (c) A comprehensive evaluation of the effectiveness of the 
375  current laws, rules, and contractual requirements that govern 
376  Medicaid managed care entities. 
377         (d) An evaluation of the agency’s Medicaid managed care 
378  oversight processes. 
379         (2) The audit report must include, but is not limited to: 
380         (a) Recommendations for additional Medicaid fiscal agent 
381  edits to increase the overall efficiency of the Medicaid 
382  program, including reductions in Medicaid overpayments; and 
383         (b) Operational and legislative recommendations to enhance 
384  the prevention and detection of fraud and abuse in the Medicaid 
385  program, including the Medicaid managed care program, and to 
386  manage the program in a more cost-effective manner. 
387         (3) The Auditor General’s Office and the Office of Program 
388  Policy Analysis and Government Accountability may contract with 
389  technical consultants to assist in the performance of the audit. 
390  The Auditor General shall submit the joint audit report to the 
391  President of the Senate, the Speaker of the House of 
392  Representatives, and the Governor by December 1, 2011. 
393         Section 11. Medicaid claims adjudication project.—The 
394  Agency for Health Care Administration shall issue a competitive 
395  procurement pursuant to chapter 287, Florida Statutes, with a 
396  third-party vendor, at no cost to the state, to provide a real 
397  time, front-end database to augment the Medicaid fiscal agent 
398  program edits and claims adjudication process. The vendor shall 
399  provide an interface with the Medicaid fiscal agent to decrease 
400  inaccurate payment to Medicaid providers and improve the overall 
401  efficiency of the Medicaid claims-processing system. 
402         Section 12. All powers, duties, functions, records, 
403  offices, personnel, property, pending issues and existing 
404  contracts, administrative authority, administrative rules, and 
405  unexpended balances of appropriations, allocations, and other 
406  funds relating to public assistance fraud in the Department of 
407  Law Enforcement are transferred by a type two transfer, as 
408  defined in s. 20.06(2), Florida Statutes, to the Division of 
409  Public Assistance Fraud in the Department of Financial Services. 
410         Section 13. This act shall take effect January 1, 2011.