Bill Text: MI SB0018 | 2013-2014 | 97th Legislature | Introduced

---

Bill Title: Human services; medical services; office of medicaid inspector general; create. Amends 1939 PA 280 (MCL 400.1 - 400.119b) by adding secs. 104, 104a, 104b, 104c & 104d.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2013-01-16 - Referred To Committee On Appropriations [SB0018 Detail]

Download: Michigan-2013-SB0018-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 18

 

 

January 16, 2013, Introduced by Senator KAHN and referred to the Committee on Appropriations.

 

 

 

     A bill to amend 1939 PA 280, entitled

 

"The social welfare act,"

 

(MCL 400.1 to 400.119b) by adding sections 104, 104a, 104b, 104c,

 

and 104d.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 104. As used in this section and sections 104a to 104d:

 

     (a) "Abuse" means practices that are inconsistent with sound

 

fiscal, business, or medical practices or violate department

 

policies and procedures and that result in unnecessary costs to

 

medicaid, result in reimbursement for services that are not

 

medically necessary or fail to meet professionally recognized

 

standards for health care, or result in waste.

 

     (b) "Department" means the department of human services.

 

     (c) "Department director" means the director of the department

 

of human services.

 

     (d) "Fraud" means any deception or misrepresentation made by

 

any person who knows or should have known that the deception could

 

result in unnecessary or inappropriate cost to the medicaid

 

program, including any act that constitutes fraud or submission of

 

a false claim under applicable federal or state law.

 

     (e) "Inspector" means the medicaid inspector general created

 

in section 104a.

 

     (f) "Investigation" means the thorough and systematic inquiry

 

into potential fraud, abuse, inappropriate billing or use of

 

services, policy or contractual violations, or illegal acts

 

committed by any medicaid funds recipient.

 

     (g) "Medicaid" and "medicaid program" mean the program for

 

medical assistance for the medically indigent provided under this

 

act, that includes the program for medical assistance established

 

under title XIX of the social security act, 42 USC 1396 to 1396w-5,

 

and administered according to the state plan.

 

     (h) "Medicaid fraud control unit" means the certified medicaid

 

fraud control unit in the office of the attorney general.

 

     (i) "Medicaid funds recipient" means any person or entity,

 

public or private, that provides medical care, services, or

 

supplies paid for, directly or indirectly, by medicaid or that

 

receives or administers medicaid funds paid out under the state

 

plan. Medicaid funds recipient includes, but is not limited to,

 

governmental units, providers, contractors, suppliers, and medicaid

 

managed care organizations, and their subcontractors.

 

     (j) "Office" means the office of medicaid inspector general

 

created in section 104a.

 

     Sec. 104a. (1) The office of medicaid inspector general is

 

created as an agency within the department. The department is the

 

single state agency for determining eligibility for the medical

 

assistance program in Michigan. The office of medicaid inspector

 

general shall assume, exercise, and be responsible for the

 

department's duties with respect to all of the following:

 

     (a) Prevention, detection, and investigation of fraud and

 

abuse within the medicaid program, including fraud or abuse within

 

the department or by a medicaid funds recipient.

 

     (b) Referral of appropriate cases for criminal prosecution and

 

civil actions.

 

     (c) Internal and external administrative enforcement, audit,

 

quality review, and compliance.

 

     (d) Oversight and control of information technology relating

 

to medicaid program fraud and abuse.

 

     (e) Investigation, oversight, and enforcement of fraud and

 

abuse control and auditing, including oversight of reporting and

 

data submissions from managed care organizations.

 

     (2) The head of the office shall be the medicaid inspector

 

general, who shall be appointed by the governor. The inspector

 

shall report directly to the governor. A vacancy in the position

 

shall be filled in the same manner as the original appointment.

 

     (3) The inspector shall be selected without regard to

 

political affiliation and on the basis of capacity for effectively

 

carrying out the duties of the office. The inspector shall possess

 

demonstrated knowledge, skills, abilities, and experience in

 

detecting and combating medicaid fraud and abuse and shall be

 

familiar with the medicaid program.

 

     (4) The inspector shall exercise his or her prescribed powers,

 

duties, responsibilities, and functions independently of the

 

department director.

 

     Sec. 104b. (1) The medicaid program audit, fraud, and abuse

 

prevention functions of the department shall be immediately

 

transferred to the office of medicaid inspector general. Officers

 

and employees substantially engaged in the performance of the

 

functions to be transferred to the office shall be transferred,

 

along with any equipment, office space, documents, records, and

 

resources necessary and related to the transfer of those functions.

 

The director and the inspector shall confer to determine the

 

officers and employees who are substantially engaged in the

 

medicaid program audit-, fraud-, and abuse-related functions to be

 

transferred and to expedite establishment of the office. The

 

employees shall be transferred without further examination or

 

qualification to the same or similar titles and shall retain their

 

respective civil service classification. All office employees shall

 

be colocated, to the greatest extent practicable. The inspector has

 

sole responsibility for establishing methods of administration for

 

the office.

 

     (2) State departments, agencies, and state officers shall

 

fully and actively cooperate with the office of the medicaid

 

inspector general.

 

     Sec. 104c. The inspector shall function as an autonomous

 

entity within the department to serve as a point of leadership and

 

responsibility for managing and directing medical assistance

 

program efforts to control medicaid fraud and abuse. The powers and

 

duties of the inspector shall include, but not be limited to, all

 

of the following:

 

     (a) To appoint deputies, directors, assistants, and other

 

employees as needed for the office to meet its responsibilities and

 

to prescribe their duties and fix their compensation in accordance

 

with state law and within the amounts appropriated.

 

     (b) To conduct and supervise all administrative activities

 

currently vested in the department relating to medicaid program

 

integrity, fraud, and abuse, including, but not limited to, audits,

 

surveillance, utilization review, information systems, database

 

queries, and all activities related to monitoring and analyzing

 

payments made to any medicaid funds recipient.

 

     (c) To solicit, receive, and investigate complaints and take

 

all appropriate action to prevent, detect, investigate, and

 

prosecute fraud and abuse in the medicaid program committed by the

 

department or by any medicaid funds recipient.

 

     (d) To make investigations relating to the administration of

 

the programs and operations of the medicaid program as are in the

 

judgment of the inspector necessary or desirable and consistent

 

with the department's obligations under the law, the state plan,

 

and the memorandum of understanding with the attorney general

 

regarding jurisdiction of the medicaid fraud control unit.

 

     (e) To promptly refer and provide all information and evidence

 

relating to suspected criminal acts and potential civil liability

 

involving medicaid funds to the medicaid fraud control unit,

 

according to the requirements of federal law, and to provide

 

assistance to the medicaid fraud control unit to develop criminal

 

investigations, prosecutions, civil actions, and financial

 

recoveries.

 

     (f) To identify practices that increase the risk of fraud or

 

abuse relating to medicaid funds and make appropriate

 

recommendations to prevent and detect fraud and financial abuse.

 

     (g) To oversee and recommend policies and procedures relating

 

to medicaid program integrity and monitor the implementation of

 

recommendations made by the inspector to the department or to other

 

offices, agencies, or entities involved in administration of the

 

medicaid program.

 

     (h) To call on any department, agency, office, commission, or

 

committee of state or local government and any medicaid fund

 

recipient to provide full and unrestricted access to all non-law-

 

enforcement records, reports, audits, reviews, documents, papers,

 

data, financial statements, recommendations, or other material

 

prepared, maintained, or held by or available to that entity and to

 

provide other assistance as the inspector considers necessary to

 

discharge the duties and functions and to fulfill the

 

responsibilities of the office. Each entity shall, consistent with

 

federal or state law, cooperate with the inspector and furnish the

 

office with the items and assistance necessary, provided that the

 

information is afforded patient confidentiality protection required

 

under state and federal law.

 

     (i) To subpoena and enforce the attendance of witnesses,

 

administer oaths or affirmations, examine witnesses under oath, and

 

take testimony as the inspector considers relevant or material to

 

an investigation, examination, or review. A person summoned to

 

appear before the inspector may be examined with reference to any

 

matter within the scope of the inquiry or investigation being

 

conducted by the office and be compelled to produce any books,

 

records, or papers demanded by the inspector. If a person to whom a

 

subpoena is issued fails to appear or, having appeared, refuses to

 

give testimony, or fails to produce the books, papers, or other

 

documents required, the inspector may impose appropriate

 

administrative sanctions and may apply to the circuit court for the

 

thirtieth judicial circuit for an order for the person to appear

 

and give testimony and produce books, papers, or other documents. A

 

person failing to obey an order issued under this subdivision may

 

be punished by the court for contempt.

 

     (j) To perform on-site inspections and audits of any office or

 

facility where business records are kept by any medicaid funds

 

recipient.

 

     (k) To pursue administrative enforcement actions against any

 

individual or entity that engages in fraud, abuse, or illegal or

 

improper acts or unacceptable practices regarding the medicaid

 

program or medicaid funds and to impose administrative sanctions,

 

including, but not limited to, 1 or more of the following:

 

     (i) Referring information and evidence to regulatory agencies

 

and licensure boards.

 

     (ii) Withholding or adjusting payment of medicaid funds in

 

accordance with state and federal laws and regulations.

 

     (iii) Excluding a medicaid funds recipient from participation in

 

the medicaid program.

 

     (iv) Imposing other administrative sanctions and penalties in

 

accordance with state and federal laws and regulations.

 

     (v) Recovery of improperly expended medicaid funds from those

 

who engage in fraud or financial abuse.

 

     (l) To develop and implement protocols and procedures to

 

collect overpayments, restitution amounts, and settlement proceeds.

 

     (m) To recommend rules and regulations relating to the

 

prevention, detection, investigation, and referral of fraud and

 

abuse within the medicaid program and recovery of related funds.

 

     (n) To take appropriate actions to ensure that the medicaid

 

program is the payor of last resort, including development of an

 

effective third-party liability program to ensure that all private

 

or other governmental program resources have been exhausted before

 

a claim is paid and to seek reimbursement when a liable third party

 

is discovered after payment of a claim.

 

     (o) To oversee, audit, and approve contracts pertaining to any

 

aspect of the medicaid program, including, but not limited to,

 

audit contracts, cost reports, claims, bills, and any contract for

 

expenditure of medicaid funds, to determine compliance with

 

applicable federal and state laws, regulations, guidelines,

 

standards, and policies and to enhance the medicaid program

 

integrity.

 

     (p) To oversee and approve all medicaid managed care contracts

 

and service arrangements to minimize the risk of fraud and abuse

 

and ensure compliance with contract provisions and medicaid

 

policies and procedures and to monitor billing, encounter data, and

 

subcontracting arrangements to detect fraud and abuse by medicaid

 

managed care organizations or entities or individuals providing

 

goods or services to beneficiaries through, or to, managed care

 

organizations.

 

     (q) To serve as the central point of contact for the

 

department with entities having contracts or grants with the

 

department to audit, monitor, investigate, or report medicaid

 

program fraud or abuse.

 

     (r) To apply for and receive federal grants and money as the

 

inspector requires from the department consistent with the state

 

plan and to participate in any appropriate federal pilot programs

 

or demonstration projects.

 

     (s) To prepare an annual report for the governor and the

 

department on the progress of implementing the office, fraud

 

control initiatives, results, and recommendations.

 

     (t) To act as the liaison between the department and the

 

federal centers for medicare and medicaid services, United States

 

health and human services department, with respect to matters

 

pertaining to medicaid program fraud or abuse, audits and

 

investigations, compliance programs, and program fiscal integrity

 

issues.

 

     (u) To perform any other functions necessary or appropriate in

 

furtherance of the mission of the office.

 

     Sec. 104d. Any suit, action, or other proceeding lawfully

 

commenced by, against, or before any entity affected by sections

 

104 to 104c shall not abate by reason of sections 104 to 104c

 

taking effect.

 

     Enacting section 1. This amendatory act takes effect March 1,

 

2014.