Bill Text: PA HB636 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for oversight of the integrity of health care programs; and imposing penalties.

Spectrum: Strong Partisan Bill (Democrat 17-1)

Status: (Introduced - Dead) 2011-02-14 - Referred to HUMAN SERVICES [HB636 Detail]

Download: Pennsylvania-2011-HB636-Introduced.html

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PRINTER'S NO. 637
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 636 Session of2011
INTRODUCED BY DAVIS, DeLUCA, BARRAR, CARROLL, D. COSTA, FABRIZIO, HORNAMAN, JOSEPHS, W. KELLER, KOTIK, MANN, MATZIE, MUNDY, M. O'BRIEN, PASHINSKI, SANTARSIERO, M. SMITH AND STURLA, FEBRUARY 14, 2011
REFERRED TO COMMITTEE ON HUMAN SERVICES, FEBRUARY 14, 2011
AN ACT
Amending Title 35 (Health and Safety) of the Pennsylvania
Consolidated Statutes, providing for oversight of the
integrity of health care programs; and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 35 of the Pennsylvania Consolidated
Statutes is amended by adding a part to read:
PART IV
HEALTH CARE PROGRAMS
Chapter
61. Preliminary Provisions (Reserved)
63. Oversight of the Integrity of Health Care Programs
CHAPTER 61
PRELIMINARY PROVISIONS
(RESERVED)
CHAPTER 63
OVERSIGHT OF THE INTEGRITY OF HEALTH CARE PROGRAMS
Sec.
6301. Scope of chapter.
6302. Definitions.
6303. Duties of executive agency and department.
6304. Termination and sanctions.
6305. Recipient and prescription refill fraud.
6306. Duties of Office of Attorney General.
6307. Initial service provision to a Medicaid or health care
program recipient.
6308. Home health care agencies.
6309. Medicaid fraud, disqualification for license, certificate
or registration.
6310. Executive agencies regulation of health care providers
activities.
6311. Temporary suspension.
6312. Antifraud plans.
§ 6301. Scope of chapter.
This chapter relates to oversight of the integrity of health
care programs.
§ 6302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Abuse." All of the following:
(1) Provider practices that are inconsistent with
generally accepted business or medical practices and that
result in an unnecessary cost to the Medicaid program or in
reimbursement for goods or services that are not medically
necessary or that fail to meet professionally recognized
standards for health care.
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(2) Recipient practices that result in an unnecessary
cost to the health care program.
"AdultBasic program." The program established pursuant to
chapter 13 of the act of June 26, 2001 (P.L.755, No.77), known
as the Tobacco Settlement Act.
"Children's Health Insurance Program." The Children's Health
Care Program established under Article XXIII of the act of May
17, 1921 (P.L.682, No.284), known as The Insurance Company Law
of 1921.
"Complaint." An allegation that fraud, abuse or an
overpayment has occurred.
"Department." All of the following:
(1) For health care programs under the administration of
the Insurance Department of the Commonwealth, the Insurance
Department of the Commonwealth.
(2) For health care programs not under the
administration of the Insurance Department of the
Commonwealth, the executive agency of the Commonwealth
charged with administering, managing or financing the health
care program.
"Fraud." An intentional deception or misrepresentation made
by a person with the knowledge that the deception results in
unauthorized benefit to the person or another person. The term
includes any act that constitutes fraud under applicable Federal
or State law.
"Health care program." A health care program administered,
managed or financed through an executive agency of the
Commonwealth, such as the Children's Health Insurance Program
and the adultBasic program. The term does not include the
Medicaid program.
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"Health care provider" or "provider." All of the following:
(1) A primary health care center or a person, including
a corporation, university or other educational institution,
licensed or approved by the Commonwealth to provide health
care or professional medical services as a physician, a
certified nurse midwife, a dentist, a pharmacist, a
podiatrist, hospital, nursing home or birth center.
(2) A person receiving compensation or reimbursements
from a health care program.
"Home health care agency." An organization or part thereof
staffed and equipped to provide nursing and at least one
therapeutic service to persons who are disabled, aged, injured
or sick in their place of residence or other independent living
environment.
"Insurance Company Law of 1921." The act of May 17, 1921
(P.L.682, No.284), known as The Insurance Company Law of 1921.
"Managed care plans." A company or health insurance entity
licensed under the act of May 17, 1921 (P.L.682, No.284), known
as The Insurance Company Law of 1921, to issue any individual or
group health, sickness or accident policy or subscriber contract
or certificate or plan that provides medical or health care
coverage by a health care facility or licensed health care
provider that is offered or governed under this chapter or any
of the following:
(1) Article XXIV of The Insurance Company Law of 1921.
(2) The act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act.
(3) The act of May 18, 1976 (P.L.123, No.54), known as
the Individual Accident and Sickness Insurance Minimum
Standards Act.
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(4) 40 Pa.C.S. Ch. 61 (relating to hospital plan
corporations) or 63 (relating to professional health services
plan corporations).
"Medical assistance" or "Medicaid." The State program of
medical assistance established under the act of June 13, 1967
(P.L.31, No.21), known as the Public Welfare Code.
"Medical necessity" or "medically necessary." Any goods or
services necessary to palliate the effects of a terminal
condition or to prevent, diagnose, correct, cure, alleviate or
preclude deterioration of a condition that threatens life,
causes pain or suffering or results in illness or infirmity,
which goods or services are provided in accordance with
generally accepted standards of medical practice.
"Overpayment." Any amount that is not authorized to be paid
by Medicaid or a health care program whether paid as a result of
inaccurate or improper cost reporting, improper claiming,
unacceptable practices, fraud, abuse or mistakes.
"Person." Any natural person, corporation, partnership,
association, clinic, group or other entity, whether or not the
person is enrolled in the Medicaid or health care program or is
a provider of health care.
§ 6303. Duties of executive agency and department.
(a) Reports.--
(1) The Department of Public Welfare and the department
shall operate their respective programs to oversee the
activities of the Commonwealth's health care programs for the
benefit of the programs' recipients, providers and their
representatives to ensure that fraudulent and abusive
behavior and neglect of recipients occur to the minimum
extent possible and to recover overpayments and impose
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sanctions as appropriate. Beginning January 1, 2012, and each
year thereafter, the Department of Public Welfare shall
submit a report to the General Assembly documenting the
effectiveness of the Commonwealth's efforts to control
Medicaid and health care program costs and abuse and to
recover Medicaid and health care program overpayments during
the previous year.
(2) The report shall describe all of the following:
(i) The number of cases opened and investigated each
year.
(ii) The sources of the cases opened.
(iii) The disposition of the cases closed each year.
(iv) The amount of overpayments alleged in
preliminary and final audit letters.
(v) The number and amount of fines or penalties
imposed.
(vi) Any reductions in overpayment amounts
negotiated in settlement agreements or by other means.
(vii) The amount of final Department of Public
Welfare determinations of overpayments.
(viii) The amount deducted from Federal claiming as
a result of overpayments.
(ix) The amount of overpayments recovered each year.
(x) The amount of cost of investigation recovered
each year.
(xi) The average length of time to collect from the
time the case was opened until the overpayment is paid in
full.
(xii) The amount determined as uncollectible and the
portion of the uncollectible amount subsequently
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reclaimed from the Federal Government.
(xiii) The number of providers, by type, that are
terminated from participation in the Medicaid and health
care programs as a result of fraud and abuse.
(xiv) All costs associated with discovering and
prosecuting cases of health care program overpayments and
making recoveries in the cases.
(3) The report shall document actions taken to prevent
overpayments and the number of providers prevented from
enrolling in or reenrolling in each health care program and
Medicaid as a result of documented fraud and abuse and shall
include policy recommendations necessary to prevent or
recover overpayments and changes necessary to prevent and
detect fraud.
(4) All policy recommendations in the report shall
include a detailed fiscal analysis, including implementation
costs, estimated savings to Medicaid and each health care
program and the return on investment.
(5) The Department of Public Welfare and the department
shall submit the policy recommendations and fiscal analyses
in the report to the President pro tempore of the Senate, the
Speaker of the House of Representatives, the Banking and
Insurance Committee of the Senate and the Insurance Committee
of the House of Representatives by February 15 of each year.
(6) The Department of Public Welfare and the department
shall each include detailed unit-specific performance
standards, benchmarks and metrics in the report, including
projected cost savings to each health care program during the
following fiscal year.
(b) Reviews.--
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(1) The Department of Public Welfare shall conduct
reviews, investigations, analyses, audits or any combination
thereof, to determine possible fraud, abuse, overpayment or
recipient neglect in the Medicaid program and shall report
the findings of any overpayments in audit reports. At least
5% of all audits shall be conducted on a random basis. As
part of its ongoing fraud detection activities, the
Department of Public Welfare shall identify and monitor
patterns of overutilization of health care services based on
State averages. The Department of Public Welfare shall track
health care provider prescription and billing patterns and
evaluate them against Medicaid medical necessity criteria and
coverage and limitation guidelines adopted by rule. The
Department of Public Welfare shall conduct reviews of
provider exceptions to peer group norms and shall, using
statistical methodologies, provider profiling and analysis of
billing patterns, detect and investigate abnormal or unusual
increases in billing or payment of claims for Medicaid
services and medically unnecessary provision of services. For
purposes of determining Medicaid reimbursement, the
Department of Public Welfare is the final arbiter of medical
necessity. Determinations of medical necessity must be made
by a licensed physician employed by or under contract with
the Department of Public Welfare and must be based upon
information available at the time the goods or services are
provided.
(2) The department shall conduct reviews,
investigations, analyses, audits or any combination thereof
to determine possible fraud, abuse or waste in health care
programs and shall report the findings in the report required
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under this section.
(c) Prepayment review.--
(1) The Department of Public Welfare may conduct
prepayment review of provider claims to:
(i) Ensure cost-effective purchasing.
(ii) Ensure that billing by a provider to the
Department of Public Welfare is in accordance with
applicable provisions of rules, regulations, handbooks
and policies and in accordance with Federal and State
law.
(iii) Ensure that appropriate care is rendered to
Medicaid recipients.
(2) Prepayment reviews may be conducted as determined
appropriate by the Department of Public Welfare, without any
suspicion or allegation of fraud, abuse or neglect and may
last for up to one year. Unless the Department of Public
Welfare has reliable evidence of fraud, misrepresentation,
abuse or neglect, claims shall be adjudicated for denial or
payment within 90 days after receipt of complete
documentation by the Department of Public Welfare for review.
If there is reliable evidence of fraud, misrepresentation,
abuse or neglect, claims shall be adjudicated for denial of
payment within 180 days after receipt of complete
documentation by the Department of Public Welfare for review.
(d) Referrals to the Office of Attorney General.--Any
suspected criminal violation identified by the Department of
Public Welfare or by the department shall be referred to the
Office of Attorney General for investigation. The Department of
Public Welfare and the department shall periodically conduct
joint training and other joint activities with the Office of
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Attorney General designed to increase communication and
coordination in recovering overpayments.
(e) Peer review.--A health care provider is subject to
having goods and services that are paid for by Medicaid or a
health care program reviewed by an appropriate peer-review
organization designated by the Department of Public Welfare or
the department. The written findings of the peer-review
organization shall be admissible in any court or administrative
proceeding as evidence of medical necessity or the lack of
medical necessity.
(f) Notice of peer review.--Any notice required to be given
to a provider under this section shall be presumed to be
sufficient notice if sent to the address last shown on the
provider enrollment file. It is the responsibility of the
provider to furnish and keep the Department of Public Welfare
informed of the provider's current address. United States Postal
Service proof of mailing or certified or registered mailing of
the notice to the provider at the address shown on the provider
enrollment file shall constitute sufficient proof of notice. Any
notice required to be given to the Department of Public Welfare
under this section must be sent to the Department of Public
Welfare at an address designated by rule.
(g) Payments.--When presenting a claim for payment under
Medicaid or a health care program, a provider shall have an
affirmative duty to supervise the provision of, and be
responsible for, goods and services claimed to have been
provided, to supervise and be responsible for preparation and
submission of the claim, and to present a claim that is true and
accurate and that is for goods and services that:
(1) Have actually been furnished to the recipient by the
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provider prior to submitting the claim.
(2) Are covered goods or services under the health care
program and that are medically necessary.
(3) Are of a quality comparable to those furnished to
the general public by the provider's peers.
(4) Have not been billed in whole or in part to a
recipient or a recipient's responsible party, except for the
copayments, coinsurance or deductibles as are authorized by
the Department of Public Welfare.
(5) Are provided in accord with applicable provisions of
all health care program rules, regulations, handbooks and
policies and in accordance with Federal and State law.
(6) Are documented by records made at the time the goods
or services were provided, demonstrating the medical
necessity for the goods or services rendered. Medicaid and
health care program goods or services shall be considered
excessive or not medically necessary unless both the medical
basis and the specific need for them are fully and properly
documented in the recipient's medical record.
(7) Medicaid and the Department of Public Welfare shall
deny payment or require repayment for goods or services that
are not presented as required under this section.
(h) Denial of payments.--The Department of Public Welfare
shall not reimburse any person or entity for any prescription
for medications, medical supplies or medical services if the
prescription was written by a physician or other prescribing
practitioner who is not enrolled in the health care program.
This section shall not apply:
(1) In instances involving bona fide emergency medical
conditions as determined by the Department of Public Welfare.
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(2) To a provider of medical services to a patient in a
hospital emergency department, hospital inpatient or
outpatient setting or nursing home.
(3) To bona fide pro bono services by preapproved non-
Medicaid providers as determined by the Department of Public
Welfare.
(4) To prescribing physicians who are board-certified
specialists treating Medicaid recipients referred for
treatment by a treating physician who is enrolled in the
health care program.
(5) To prescriptions written for duly eligible Medicare
beneficiaries by an authorized Medicare provider who is not
enrolled in the Medicaid program.
(6) To other physicians who are not enrolled in the
Medicaid program but who provide a medically necessary
service or prescription not otherwise reasonably available
from a Medicaid-enrolled physician.
(i) Retention.--
(1) A health care program provider shall retain medical,
professional, financial and business records pertaining to
services and goods furnished to Medicaid or a health care
program recipient and billed to Medicaid or the health care
program for a period of five years after the date of
furnishing the services or goods.
(2) The Department of Public Welfare or department may
investigate, review or analyze the records, which must be
made available during normal business hours, except that 24-
hour notice must be provided if patient treatment would be
disrupted. The provider shall be responsible for furnishing
to the Department of Public Welfare or the department, and
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keeping the Department of Public Welfare or the department
informed of the location of, the provider's Medicaid and
health care program-related records.
(3) The authority of the Department of Public Welfare to
obtain Medicaid or health care program-related records from a
provider shall not be curtailed nor limited during a period
of litigation between the Department of Public Welfare and
the provider or the department and the provider.
(j) Billing payments.--Payments for the services of billing
agents or persons participating in the preparation of a Medicaid
or health care program claim shall not be based on amounts for
which they bill nor based on the amount a provider receives from
Medicaid or the health care program.
(k) Denial of payments.--The Department of Public Welfare or
the department shall deny payment or require repayment for
inappropriate, medically unnecessary or excessive goods or
services from the person furnishing them, the person under whose
supervision they were furnished or the person causing them to be
furnished.
(l) Confidentiality.--The complaint and all information
obtained pursuant to an investigation of a health care provider,
or the authorized representative or agent of a provider,
relating to an allegation of fraud, abuse or neglect are
confidential and shall be exempt from the act of February 14,
2008 (P.L.6, No.3), known as the Right-to-Know Law, under the
following circumstances:
(1) Until the Department of Public Welfare or the
department takes final Department of Public Welfare action
with respect to the provider and requires repayment of any
overpayment or imposes an administrative sanction.
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(2) Until the Attorney General refers the case for
criminal prosecution.
(3) Until ten days after the complaint is determined
without merit.
(4) At any time if the complaint or information is
otherwise protected by law.
§ 6304. Termination and sanctions.
(a) Termination of participation.--The Department of Public
Welfare or the department shall immediately terminate
participation of a health care program provider in the Medicaid
or health care program and may seek civil remedies or impose
other administrative sanctions against a provider if the
provider or any principal, officer, director, agent, managing
employee or affiliated person of the provider, or any partner or
shareholder having an ownership interest in the provider equal
to at least 5%, has been:
(1) Convicted of a criminal offense related to the
delivery of any health care goods or services, including the
performance of management or administrative functions
relating to the delivery of health care goods or services.
(2) Convicted of a criminal offense under Federal law or
the law of any state relating to the practice of the
provider's profession.
(3) Found by a court of competent jurisdiction to have
neglected or physically abused a patient in connection with
the delivery of health care goods or services.
(b) Termination for foreign suspension.--If the provider has
been suspended or terminated from participation in the Medicaid
program or the Medicare program by the Federal Government or any
state, the Department of Public Welfare shall immediately
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suspend or terminate the provider's participation in the
Commonwealth's Medicaid program for a period no less than that
imposed by the Federal Government or any other state, and may
not enroll the provider in the Commonwealth's Medicaid program
while the foreign suspension or termination remains in effect.
The Department of Public Welfare shall immediately suspend or
terminate, as appropriate, a provider's participation in the
Commonwealth's Medicaid program if the provider participated or
acquiesced in any action for which any principal, officer,
director, agent, managing employee or affiliated person of the
provider, or any partner or shareholder having an ownership
interest in the provider equal to at least 5%, was suspended or
terminated from participating in the Medicaid program or the
Medicare program by the Federal Government or any state. The
sanction under this subsection shall be in addition to any other
remedies provided by law.
(c) Remedies.--The Department of Public Welfare shall seek
any remedy provided by law, including any remedy provided under
this chapter if any of the following apply:
(1) The provider's license has not been renewed or has
been revoked, suspended or terminated, for cause, by the
licensing agency of any state.
(2) The provider has failed to make available or has
refused access to Medicaid or health care program-related
records to an auditor, investigator or other authorized
employee or agent of the Department of Public Welfare, the
Attorney General or the Federal Government.
(3) The provider has not furnished or has failed to make
available Medicaid or health care program-related records as
the Department of Public Welfare or the department has found
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necessary to determine whether Medicaid or health care
program payments are or were due and the amounts of the
payments.
(4) The provider has failed to maintain medical records
made at the time of service, or prior to service if prior
authorization is required, demonstrating the necessity and
appropriateness of the goods or services rendered.
(5) The provider is not in compliance with the
provisions applicable to the health care program of any of
the following:
(i) Provisions of Medicaid provider publications.
(ii) Federal or State laws, rules or regulations.
(iii) Provisions of the provider agreement between
the Department of Public Welfare and the provider.
(iv) Certifications found on claim forms or on
transmittal forms for electronically submitted claims
that are submitted by the provider or authorized
representative.
(6) The provider or person who ordered or prescribed the
care, services or supplies has furnished, or ordered the
furnishing of, goods or services to a recipient which are
inappropriate, unnecessary, excessive or harmful to the
recipient or are of inferior quality.
(7) The provider has demonstrated a pattern of failure
to provide goods or services that are medically necessary.
(8) The provider, an authorized representative of the
provider or a person who ordered or prescribed the goods or
services has submitted or caused to be submitted false or a
pattern of erroneous Medicaid or health care program claims.
(9) The provider, an authorized representative of the
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provider or a person who has ordered or prescribed the goods
or services has submitted or caused to be submitted a health
care provider enrollment application, a request for prior
authorization for Medicaid services, a drug exception request
or a health care program or Medicaid cost report that
contains materially false or incorrect information.
(10) The provider or an authorized representative of the
provider has collected from or billed a recipient or a
recipient's responsible party improperly for amounts that
should not have been collected or billed by reason of the
provider's billing of the Medicaid or health care program for
the same service.
(11) The provider is charged by information or
indictment with fraudulent billing practices. The sanction
under this paragraph shall be limited to suspension of the
provider's participation in the Medicaid or health care
program for the duration of the indictment unless the
provider is found guilty pursuant to the information or
indictment.
(12) The provider or a person who has ordered or
prescribed the goods or services is found liable for
negligent practice resulting in death or injury to the
provider's patient.
(13) The provider fails to demonstrate that the provider
had available during a specific audit or review period
sufficient quantities of goods, or sufficient time in the
case of services, to support the provider's billings to the
Medicaid or health care program.
(14) The Department of Public Welfare has received
reliable information of patient abuse or neglect or of any
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act prohibited by 18 Pa.C.S. (relating to crimes and
offenses).
(15) The provider has failed to comply with an agreed-
upon repayment schedule.
(d) Sanctions.--A provider is subject to sanctions for
violations of subsections (a) and (b) as the result of actions
or inactions of the provider, or actions or inactions of any
principal, officer, director, agent, managing employee,
affiliated person of the provider or any partner or shareholder
having an ownership interest in the provider equal to at least
5% or greater, in which the provider participated or acquiesced.
(e) Imposition of sanctions.--The Department of Public
Welfare or the department shall impose any of the following
sanctions or disincentives on a provider or a person for any of
the acts described under subsection (a) or (b):
(1) Suspension for a specific period of time of not more
than one year. Suspension shall preclude participation in the
Medicaid or health care program, which shall include any
action that results in a claim for payment to the health care
program as a result of furnishing, supervising a person who
is furnishing or causing a person to furnish goods or
services.
(2) Termination for a specific period of time of from
more than one year to 20 years. Termination shall preclude
participation in the Medicaid and health care program, which
shall include any action that results in a claim for payment
to the Medicaid or health care program as a result of
furnishing, supervising a person who is furnishing or causing
a person to furnish goods or services.
(3) (i) Imposition of a fine of up to $5,000 for each
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violation. Each day that an ongoing violation continues,
such as refusing to furnish Medicaid related or health
care program-related records or refusing access to
records, is considered, for the purposes of this section,
to be a separate violation.
(ii) Each instance of improper billing of a Medicaid
or health care program recipient, each instance of
furnishing a Medicaid or health care program recipient
goods or professional services that are inappropriate or
of inferior quality as determined by competent peer
judgment, each instance of knowingly submitting a
materially false or erroneous Medicaid or health care
program provider enrollment application, request for
prior authorization for health care program services,
drug exception request or cost report, each instance of
the inappropriate prescribing of drugs for a Medicaid or
health care program recipient as determined by competent
peer judgment and each false or erroneous health care
provider claim leading to an overpayment to a provider is
considered, for the purposes of this section, to be a
separate violation.
(4) Immediate suspension, if the Department of Public
Welfare or the department has received information of patient
abuse or neglect or of any act prohibited by companion
criminal law. Upon suspension, the Department of Public
Welfare must issue an immediate final order appealable to a
court of competent jurisdiction.
(5) A fine, not to exceed $10,000, for a violation of
paragraph (15)(i).
(6) Imposition of liens against provider assets,
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including financial assets and real property, not to exceed
the amount of fines or recoveries sought, upon entry of an
order determining that the moneys are due or recoverable.
(7) Prepayment reviews of claims for a specified period
of time.
(8) Comprehensive follow-up reviews of providers every
six months to ensure that they are billing the Medicaid and
health care programs correctly.
(9) Corrective-action plans that would remain in effect
for providers for up to three years and that would be
monitored by the Department of Public Welfare or the
department every six months while in effect.
(10) Other remedies as permitted by law to effect the
recovery of a fine or overpayment.
(f) Discretion.--The Department of Public Welfare or
department head charged with responsibility for administering
Medicaid or each health care program may make a determination
that imposition of a sanction or disincentive is not in the best
interest of the Medicaid or health care program, in which case a
sanction or disincentive shall not be imposed.
(g) Factors affecting sanctions.--In determining the
appropriate administrative sanction to be applied, or the
duration of any suspension or termination, the Department of
Public Welfare or department head shall consider:
(1) The seriousness and extent of the violation or
violations.
(2) Any prior history of violations by the provider
relating to the delivery of health care programs which
resulted in either a criminal conviction or in administrative
sanction or penalty.
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(3) Evidence of continued violation within the
provider's management control of the health care program's
statutes, rules, regulations or policies after written
notification to the provider of improper practice or instance
of violation.
(4) The effect, if any, on the quality of medical care
provided to Medicaid or health care program recipients as a
result of the acts of the provider.
(5) Any action by a licensing agency respecting the
provider in any state in which the provider operates or has
operated.
(6) The apparent impact on access by recipients to
health care program services if the provider is suspended or
terminated, in the best judgment of the Department of Public
Welfare or the department.
(h) Documentation.--The Department of Public Welfare and the
department shall document the basis for all sanctioning actions
and recommendations.
(i) Limiting participation.--The Department of Public
Welfare or the department may take action to sanction, suspend
or terminate a particular provider working for a group provider
and may suspend or terminate participation in the health care
program at a specific location, rather than or in addition to
taking action against an entire group.
(j) Follow-up review process.--The Department of Public
Welfare or the department shall establish a process for
conducting follow-up reviews of a sampling of providers who have
a history of overpayment under the Medicaid or health care
program. This process shall consider the magnitude of previous
fraud or abuse and the potential effect of continued fraud or
20110HB0636PN0637 - 21 -
abuse on Medicaid or health care program costs.
(k) Overpayment determinations.--In making a determination
of overpayment to a provider, the Department of Public Welfare
or the department shall use accepted and valid auditing,
accounting, analytical, statistical or peer-review methods or
combinations thereof. Appropriate statistical methods may
include sampling and extension to the population, parametric and
nonparametric statistics, tests of hypotheses and other
generally accepted statistical methods. Appropriate analytical
methods may include reviews to determine variances between the
quantities of products that a provider had on hand and available
to be purveyed to health care program recipients during the
review period and the quantities of the same products paid for
by Medicaid or the health care program for the same period,
taking into appropriate consideration sales of the same products
to non-Medicaid or nonhealth care program customers during the
same period. In meeting its burden of proof in any
administrative or court proceeding, the Department of Public
Welfare or the department may introduce the results of the
statistical methods as evidence of overpayment.
(l) Audit reports.--When making a determination that an
overpayment has occurred, the Department of Public Welfare or
the department shall prepare and issue an audit report to the
provider showing the calculation of overpayments.
(m) Audit reports on overpayments.--The audit report,
supported by Department of Public Welfare or department work
papers, showing an overpayment to a provider constitutes
evidence of the overpayment. A provider may not present or
elicit testimony, either on direct examination or cross-
examination in any court or administrative proceeding, regarding
20110HB0636PN0637 - 22 -
the purchase or acquisition by any means of drugs, goods or
supplies, sales or divestment by any means of drugs, goods or
supplies or inventory of drugs, goods or supplies, unless the
acquisition, sales, divestment or inventory is documented by
written invoices, written inventory records or other competent
written documentary evidence maintained in the normal course of
the provider's business. Notwithstanding the applicable rules of
discovery, all documentation that will be offered as evidence at
an administrative hearing on a Medicaid or health care program
overpayment must be exchanged by all parties at least 14 days
before the administrative hearing or must be excluded from
consideration.
(n) Audit expenses.--In an audit or investigation of a
violation committed by a provider which is conducted under this
section, the Department of Public Welfare or the department is
entitled to recover all investigative, legal and expert witness
costs if the Department of Public Welfare's or department's
findings were not contested by the provider or, if contested,
the Department of Public Welfare or the department ultimately
prevailed.
(o) Burden of proof for audit expenses.--The Department of
Public Welfare or the department shall have the burden of
documenting the costs, which include salaries and employee
benefits and out-of-pocket expenses. The amount of costs that
may be recovered must be reasonable in relation to the
seriousness of the violation and must be set taking into
consideration the financial resources, earning ability and needs
of the provider, who has the burden of demonstrating the
factors.
(p) Periodic payment of audit expenses.--The provider may
20110HB0636PN0637 - 23 -
pay the costs over a period to be determined by the Department
of Public Welfare or the department if the Department of Public
Welfare or the department determines that an extreme hardship
would result to the provider from immediate full payment. Any
default in payment of costs may be collected by any means
authorized by law.
(q) Notification.--If the Department of Public Welfare or
the department imposes an administrative sanction under
subsection (c), except paragraphs (5) and (15) or subsection
(m), upon any provider or any principal, officer, director,
agent, managing employee or affiliated person of the provider
who is regulated by another state entity, the Department of
Public Welfare or the department shall notify the other entity
of the imposition of the sanction within five business days. The
notification shall include the provider's or person's name and
license number and the specific reasons for sanction.
(r) Withholding payment.--
(1) The Department of Public Welfare or the department
shall withhold Medicaid or health care program payments, in
whole or in part, to a provider upon receipt of reliable
evidence that the circumstances giving rise to the need for a
withholding of payments involve fraud, willful
misrepresentation or abuse under the Medicaid or health care
program, or a crime committed while rendering goods or
services to Medicaid or the health care program recipients.
(2) The Department of Public Welfare or the department
shall deny payment or require repayment, if the goods or
services were furnished, supervised or caused to be
furnished, by a person who has been suspended or terminated
from the health care program or the Medicare program by the
20110HB0636PN0637 - 24 -
Federal Government or any state.
(3) Overpayments owed to the Department of Public
Welfare shall bear interest at the rate calculated under
section 806 of act of April 9, 1929 (P.L.343, No.176), known
as The Fiscal Code, from the date of determination of the
overpayment by the Department of Public Welfare. Payment
arrangements shall be made at the conclusion of legal
proceedings. A provider who does not enter into or adhere to
an agreed-upon repayment schedule may be terminated by the
Department of Public Welfare for nonpayment or partial
payment.
(s) Collection on judgments.--The Department of Public
Welfare, upon entry of a final Department of Public Welfare
order, a judgment or order of a court of competent jurisdiction,
or a stipulation or settlement, may collect the money owed by
all means allowable by law, including notifying any fiscal
intermediary of health care program benefits that the State has
a superior right of payment. Upon receipt of the written
notification, the Medicare fiscal intermediary shall remit to
the State the sum claimed.
(t) Administrative sanctions.--The Department of Public
Welfare may impose administrative sanctions against a Medicaid
recipient or may seek any other remedy provided by law if the
Department of Public Welfare finds that a recipient has abused
the Medicaid program.
(u) Overpayments.--If the Department of Public Welfare has
made a probable cause determination and alleged that an
overpayment to a health care provider has occurred, the
Department of Public Welfare, after notice to the provider,
shall:
20110HB0636PN0637 - 25 -
(1) Withhold, during the pendency of an administrative
hearing under 2 Pa.C.S. (relating to administrative law and
procedure), any medical assistance reimbursement payments
until the time as the overpayment is recovered, unless within
30 days after receiving notice of the overpayment, the
provider:
(i) makes repayment in full; or
(ii) establishes a repayment plan that is
satisfactory to the Department of Public Welfare.
(2) Withhold, during the pendency of an administrative
hearing under 2 Pa.C.S., medical assistance reimbursement
payments if the terms of a repayment plan are not adhered to
by the provider.
(v) Records review.--Notwithstanding any other provision of
law, the Department of Public Welfare may review a provider's
Medicaid, health care program-related and nonhealth care
program-related records in order to determine the total output
of a provider's practice to reconcile quantities of goods or
services billed to Medicaid with quantities of goods or services
used in the provider's total practice.
(w) Termination of participation in health care program.--
The Department of Public Welfare or the department shall
terminate a provider's participation in the Medicaid or health
care program if the provider fails to reimburse an overpayment
that has been determined by final order, not subject to further
appeal, within 35 days after the date of the final order, unless
the provider and the Department of Public Welfare have entered
into a repayment agreement.
(x) Administrative hearing.--If a provider requests an
administrative hearing, the hearing must be conducted within 90
20110HB0636PN0637 - 26 -
days following assignment of an administrative law judge, absent
exceptionally good cause, shown as determined by the hearing
officer. Upon issuance of a final order, the outstanding balance
of the amount determined to constitute the overpayment shall
become due. If a provider fails to make payments in full, fails
to enter into a satisfactory repayment plan or fails to comply
with the terms of a repayment plan or settlement agreement, the
Department of Public Welfare shall withhold medical assistance
reimbursement payments until the amount due is paid in full.
(y) Inspections.--Duly authorized agents and employees of
the Department of Public Welfare shall have the power to
inspect, during normal business hours, the records of any
pharmacy, wholesale establishment or manufacturer, or any other
place in which drugs and medical supplies are manufactured,
packed, packaged, made, stored, sold or kept for sale, for the
purpose of verifying the amount of drugs and medical supplies
ordered, delivered or purchased by a provider. The Department of
Public Welfare shall provide at least two business days' prior
notice of any inspection. The notice shall identify the provider
whose records will be inspected and the inspection shall include
only records specifically related to that provider.
(z) Internet website posting.--The Department of Public
Welfare shall post on its Internet website a current list of
each health care provider, including any principal, officer,
director, agent, managing employee or affiliated person of the
provider, or any partner or shareholder having an ownership
interest in the provider equal to at least 5%, who has been
terminated for cause from the Medicaid or health care program or
sanctioned under this section. The list shall be searchable by a
variety of search parameters and provide for the creation of
20110HB0636PN0637 - 27 -
formatted lists that may be printed or imported into other
applications, including spreadsheets. The Department of Public
Welfare shall update the list at least monthly.
(aa) Use of technology.--In order to improve the detection
of health care fraud, use technology to prevent and detect fraud
and maximize the electronic exchange of health care fraud
information, the Department of Public Welfare shall:
(1) Compile, maintain and publish on its Internet
website a detailed list of all Federal and state databases
that contain health care fraud information and update the
list at least biannually.
(2) Develop a strategic plan to connect all databases
that contain health care fraud information to facilitate the
electronic exchange of health information between the
Department of Public Welfare, the department, the Department
of Health and the Office of Attorney General. The plan must
include recommended standard data formats, fraud
identification strategies and specifications for the
technical interface between Federal and State health care
fraud databases.
(3) Monitor innovations in health information
technology, specifically as it pertains to Medicaid and
health care program fraud prevention and detection.
(4) Periodically publish policy briefs that highlight
available new technology to prevent or detect health care
fraud and projects implemented by other states, the private
sector or the Federal Government, which use technology to
prevent or detect health care fraud.
§ 6305. Recipient and prescription refill fraud.
(a) Recipient fraud.--In accordance with Federal law,
20110HB0636PN0637 - 28 -
Medicaid recipients convicted of a crime under section 1128B of
the Social Security Act (49 Stat. 620, 42 U.S.C. § 1320a-7b) may
be limited, restricted or suspended from other health care
program eligibility for a period not to exceed one year, as
determined by the Department of Public Welfare head or designee.
(b) Prescription refill fraud.--To deter fraud and abuse in
a health care program, the Department of Public Welfare may
limit the number of Schedule II and Schedule III refill
prescription claims submitted from a pharmacy provider. The
Department of Public Welfare shall limit the allowable amount of
reimbursement of prescription refill claims for Schedule II and
Schedule III pharmaceuticals if the Department of Public Welfare
determines that the specific prescription refill was not
requested by the Medicaid recipient or authorized representative
for whom the refill claim is submitted or was not prescribed by
the recipient's medical provider or physician. Any refill
request must be consistent with the original prescription.
(c) Recipient explanation of benefits.--At least three times
a year, the Department of Public Welfare shall provide to each
Medicaid recipient or the recipient's representative an
explanation of benefits in the form of a letter that is mailed
to the most recent address of the recipient on the record with
the Department of Public Welfare. The explanation of benefits
shall include the patient's name, the name of the health care
provider and the address of the location where the service was
provided, a description of all services billed to Medicaid in
terminology that should be understood by a reasonable person and
information on how to report inappropriate or incorrect billing
to the Department of Public Welfare or other law enforcement
entities for review or investigation. At least once a year, the
20110HB0636PN0637 - 29 -
Department of Public Welfare and the department shall by letter
notify Medicaid and health care program recipients of
information on how to report criminal health care provider fraud
and the Department of Public Welfare's toll-free hotline
telephone number.
§ 6306. Duties of the Office of Attorney General.
(a) Statewide Medicaid fraud prevention program.--The Office
of Attorney General shall conduct a Statewide program of
Medicaid and health care program fraud control. To accomplish
this purpose, the Attorney General shall:
(1) Investigate the possible criminal violation of any
State law pertaining to fraud in the administration of a
health care program or the Medicaid program, in the provision
of medical assistance or in the activities of providers of
health care under the Medicaid or health care program.
(2) Investigate the alleged abuse or neglect of patients
in health care facilities receiving payments under the
Medicaid program, in coordination with the Department of
Public Welfare.
(3) Investigate the alleged misappropriation of
patients' private funds in health care facilities receiving
payments under the Medicaid program.
(4) Refer to the Department of Public Welfare or the
department all suspected abusive activities not of a criminal
or fraudulent nature.
(5) Safeguard the privacy rights of all individuals and
provide safeguards to prevent the use of patient medical
records for any reason beyond the scope of a specific
investigation for fraud or abuse, or both, without the
patient's written consent.
20110HB0636PN0637 - 30 -
(6) Publicize to State employees and the public the
ability of persons to bring suit under 18 Pa.C.S. (relating
to crimes and offenses) and the potential for the persons
bringing a civil action under 18 Pa.C.S. to obtain a monetary
award.
(b) Discretionary actions.--In carrying out the duties and
responsibilities under this section, the Office of Attorney
General may:
(1) Enter upon the premises of any health care provider,
excluding a physician, participating in the Medicaid program
or health care program to examine all accounts and records
that may be relevant in determining the existence of fraud in
the Medicaid or health care program, to investigate alleged
abuse or neglect of patients or to investigate alleged
misappropriation of patients' private funds. A participating
physician shall make available any accounts or records that
may be relevant in determining the existence of fraud in the
Medicaid or health care program, alleged abuse or neglect of
patients or alleged misappropriation of patients' private
funds. The accounts or records of a non-Medicaid or nonhealth
care program patient may not be reviewed by, or turned over
to, the Attorney General without the patient's written
consent.
(2) Subpoena witnesses or materials, including medical
records relating to Medicaid and health care program
recipients, within or outside of this Commonwealth and,
through any duly designated employee, administer oaths and
affirmations and collect evidence for possible use in either
civil or criminal judicial proceedings.
(3) Request and receive the assistance of any district
20110HB0636PN0637 - 31 -
attorney or law enforcement agency in the investigation and
prosecution of any violation of this section.
(4) Take all actions necessary for the collection of
overpayments to a provider of health care under the Medicaid
program.
(5) Seek any other civil remedies permitted by law.
§ 6307. Initial service provision to a Medicaid or health care
program recipient.
(a) Initial notice.--
(1) On or before the first day services are provided to
a client, a health care provider shall inform the client and
his immediate family or representative, if appropriate, of
the right to report:
(i) Complaints. The Statewide toll-free telephone
number for reporting complaints to the licensing agency
shall be provided to clients in a manner that is clearly
legible and shall include the following language:
To report a complaint regarding the services you
receive, please call toll-free (telephone number).
(ii) Abusive, neglectful or exploitative practices.
The Statewide toll-free telephone number for the central
abuse hotline shall be provided to clients in a manner
that is clearly legible and shall include the following
language:
To report abuse, neglect or exploitation, please call
toll-free (telephone number).
(iii) Medicaid or health care program fraud. Any
licensing agency description of Medicaid or health care
program fraud and the Statewide toll-free telephone
number for the central Medicaid fraud hotline shall be
20110HB0636PN0637 - 32 -
provided to clients in a manner that is clearly legible
and shall include the following language:
To report suspected Medicaid or health care program
fraud, please call toll-free (telephone number).
(2) The licensing agency shall publish a minimum of a
90-day advance notice of a change in the toll-free telephone
numbers.
(b) Procedures and policies.--Each licensee shall establish
appropriate policies and procedures for providing notice to
clients.
(c) Proof of right to occupancy.--An applicant must provide
the Department of Public Welfare with proof of the applicant's
legal right to occupy the property before a license may be
issued. Proof may include copies of warranty deeds, lease or
rental agreements, contracts for deeds, quitclaim deeds or other
similar documentation.
(d) Initial application.--Upon application for initial
licensure or change of ownership licensure, the applicant shall
furnish satisfactory proof of the applicant's financial ability
to operate in accordance with the requirements of this chapter,
statute and applicable rules. The licensing agency shall
establish standards for this purpose, including information
concerning the applicant's controlling interests. The licensing
agency shall also establish documentation requirements, to be
completed by each applicant, that show anticipated provider
revenues and expenditures, the basis for financing the
anticipated cash-flow requirements of the provider and an
applicant's access to contingency financing. A current
certificate of authority, issued by a licensing agency, may be
provided as proof of financial ability to operate. The licensing
20110HB0636PN0637 - 33 -
agency may require a licensee to provide proof of financial
ability to operate at any time if there is evidence of financial
instability, including unpaid expenses necessary for the basic
operations of the provider.
(e) Evidence of financial stability.--A controlling interest
may not withhold from the Department of Public Welfare any
evidence of financial instability, including checks returned due
to insufficient funds, delinquent accounts, nonpayment of
withholding taxes, unpaid utility expenses, nonpayment for
essential services or adverse court action concerning the
financial viability of the provider that is under the control of
the controlling interest. Any person who violates this
subsection commits a misdemeanor of the second degree. Each day
of continuing violation constitutes a separate offense.
§ 6308. Home health care agencies.
(a) License suspension or revocation.--A licensing agency
may deny, revoke and suspend a license and impose an
administrative fine.
(b) Disciplinary action.--In addition to the grounds
provided under other statutes or regulations, any of the
following actions by a home health care agency or its employee
shall be grounds for disciplinary action by the Department of
Health:
(1) Violation of this chapter or any other act or
applicable rules or regulations promulgated under this
chapter or any other act.
(2) An intentional, reckless or negligent act that
materially affects the health or safety of a patient.
(3) Knowingly providing home health care services in an
unlicensed assisted living facility or unlicensed adult
20110HB0636PN0637 - 34 -
family-care home, unless the home health care agency or
employee reports the unlicensed facility or home to the
Department of Public Welfare within 72 hours after providing
the services.
(4) Preparing or maintaining fraudulent patient records,
such as charting ahead, recording vital signs or symptoms
that were not personally obtained or observed by the home
health care agency's staff at the time indicated, borrowing
patients or patient records from other home health agencies
to pass a survey or inspection, or falsifying signatures.
(5) Failing to provide at least one service directly to
a patient for a period of 60 days.
(c) Fines.--
(1) The Department of Health shall impose a fine of
$1,000 against a home health care agency that demonstrates a
pattern of falsifying:
(i) Documents of training for home health care aides
or certified nursing assistants.
(ii) Health statements for staff providing direct
care to patients.
(2) A pattern under paragraph (1) may be demonstrated by
a showing of at least three fraudulent entries or documents.
The fine shall be imposed for each fraudulent document or, if
multiple staff members are included on one document, for each
fraudulent entry on the document.
(d) Additional fine for pattern of false billing.--The
Department of Health shall impose a fine of $5,000 against a
home health care agency that demonstrates a pattern of billing
any payor for services not provided. A pattern may be
demonstrated by a showing of at least three billings for
20110HB0636PN0637 - 35 -
services not provided within a 12-month period. The fine shall
be imposed for each incident that is falsely billed. The
Department of Health may also:
(1) require payback of all funds;
(2) issue a temporary license suspension under section
6311 (relating to temporary suspension); and
(3) revoke the license.
(e) Additional fine for pattern of false billing of
services.--The Department of Health shall impose a fine of
$5,000 against a home health care agency that demonstrates a
pattern of failing to provide a service specified in the home
health care agency's written agreement with a patient or the
patient's legal representative, or the plan of care for that
patient, unless a reduction in service is mandated by Medicare,
Medicaid or a State program. A pattern may be demonstrated by a
showing of at least three incidences, regardless of the patient
or service, where the home health care agency did not provide a
service specified in a written agreement or plan of care during
a three-month period. The Department of Health shall impose the
fine for each occurrence. The Department of Health may also
impose an additional administrative fine for the direct or
indirect harm to a patient, or deny, revoke or suspend the
license of the home health care agency for a pattern of failing
to provide a service specified in the home health care agency's
written agreement with a patient or the plan of care for that
patient.
(f) License action.--Notwithstanding any other law, the
Department of Health may deny, revoke or suspend the license of
a home health care agency and shall impose a fine of $5,000
against a home health care agency that:
20110HB0636PN0637 - 36 -
(1) Gives remuneration for staffing services to another
home health care agency with which it has formal or informal
patient-referral transactions or arrangements.
(2) Gives remuneration for staffing services to a health
services pool with which it has formal or informal patient-
referral transactions or arrangements.
(3) Provides services to residents in an assisted living
facility for which the home health care agency does not
receive fair market value remuneration.
(4) Provides staffing to an assisted living facility for
which the home health care agency does not receive fair
market value remuneration.
(5) Fails to provide the licensing agency, upon request,
with copies of all contracts with assisted living facilities
which were executed within five years before the request.
(6) Gives remuneration to a case manager, discharge
planner, facility-based staff member or third-party vendor
who is involved in the discharge planning process of a
facility from whom the home health care agency receives
referrals.
(7) Fails to submit to the licensing agency, within 15
days after the end of each calendar quarter, a written report
that includes the following data based on data as it existed
on the last day of the quarter:
(i) The number of insulin-dependent diabetic
patients receiving insulin-injection services from the
home health care agency.
(ii) The number of patients receiving both home
health care services from the home health care agency and
hospice services.
20110HB0636PN0637 - 37 -
(iii) The number of patients receiving home health
care services from that home health care agency.
(iv) The names and license numbers of nurses whose
primary job responsibility is to provide home health care
services to patients and who received remuneration from
the home health care agency in excess of $25,000 during
the calendar quarter.
(8) Gives cash, or its equivalent, to a Medicare or
Medicaid beneficiary.
(9) Has more than one medical director contract in
effect at one time or more than one medical director contract
and one contract with a physician-specialist whose services
are mandated for the home health care agency in order to
qualify to participate in a Federal or State health care
program at one time.
(10) Fails to provide to the Department of Public
Welfare, upon request, copies of all contracts with a medical
director which were executed within five years before the
request.
(11) Demonstrates a pattern of billing the Medicaid
program for services to Medicaid recipients which are
medically unnecessary as determined by a final order. A
pattern may be demonstrated by a showing of at least two
medically unnecessary services within one Medicaid program
integrity audit period.
(g) Interpretation.--Nothing in this chapter shall be
interpreted as applying to or precluding any discount,
compensation, waiver of payment or payment practice permitted
under section 1128B of the Social Security Act (49 Stat. 620, 42
U.S.C. § 1320a-7b).
20110HB0636PN0637 - 38 -
(h) Additional criminal law violation.--In addition to any
requirements under the act of July 19, 1979 (P.L.130, No.48),
known as the Health Care Facilities Act, any person, partnership
or corporation that operates an unlicensed home and that
previously operated a licensed home health care agency or
concurrently operates both a licensed home health care agency
and an unlicensed home health care agency commits a felony of
the third degree.
(i) Fraud referral.--If any home health care agency is found
to be operating without a license and that home health care
agency has received any government reimbursement for services,
the Department of Public Welfare shall make a fraud referral to
the appropriate government reimbursement program.
§ 6309. Medicaid fraud, disqualification for license,
certificate or registration.
(a) General.--Medicaid fraud in the practice of a health
care profession is prohibited.
(b) Disqualification.--In addition to the grounds provided
under other statutes or regulations, each licensing authority
shall refuse to admit a candidate to any examination and refuse
to issue or renew a license, certificate or registration to any
applicant if the candidate or applicant or any principal,
officer, agent, managing employee or affiliated person of the
applicant has been:
(1) Convicted of, or entered a plea of guilty or nolo
contendere to, regardless of adjudication, a felony under 18
Pa.C.S. (relating to crimes and offenses) or 21 U.S.C. §§
801-970, unless the sentence and any subsequent period of
probation for the conviction or pleas ended more than 15
years prior to the date of the application.
20110HB0636PN0637 - 39 -
(2) Terminated for cause from the Medicaid program under
section 6304 (relating to termination and sanctions), unless
the applicant has been in good standing with the Medicaid
program for the most recent five years.
(3) Terminated for cause, pursuant to the appeals
procedures established by the Federal Government or the
Commonwealth, from any state Medicaid program, a health care
program or the Federal Medicare program, unless the applicant
has been in good standing with a state Medicaid program or
the Federal Medicare program for the most recent five years
and the termination occurred at least 20 years prior to the
date of the application.
(c) Report.--Licensed health care practitioners shall report
allegations of Medicaid fraud to the Department of Public
Welfare, regardless of the practice setting in which the alleged
Medicaid fraud occurred.
(d) Acceptance.--The acceptance by a licensing authority of
a candidate's relinquishment of a license which is offered in
response to or anticipation of the filing of administrative
charges alleging Medicaid or health care program fraud or
similar charges constitutes the permanent revocation of the
license.
§ 6310. Executive agencies regulation of health care providers
activities.
(a) Denial of license.--In addition to the grounds provided
under other statutes or regulations, grounds that may be used by
the licensing agency for denying and revoking a license or
change of ownership application include any of the following
actions by a controlling interest:
(1) False representation of a material fact in the
20110HB0636PN0637 - 40 -
license application or omission of any material fact from the
application.
(2) An intentional or negligent act materially affecting
the health or safety of a client of the provider.
(3) A violation of this chapter, other statutes or
applicable rules.
(4) A demonstrated pattern of deficient performance.
(5) A current exclusion, suspension or termination of
the applicant, licensee or controlling interest from
participation in the State Medicaid program, the Medicaid
program of any other state, the Medicare program or a health
care program.
(b) Licensure pending litigation.--If a licensee lawfully
continues to operate while a denial or revocation is pending in
litigation, the licensee shall continue to meet all other
requirements of this chapter, other statutes and applicable
rules and shall file subsequent renewal applications for
licensure and pay all licensure fees. No other law applying to a
particular health care provider shall apply to renewal
applications filed during the time period in which the
litigation of the denial or revocation is pending until that
litigation is final.
(c) Grounds for denial.--An action under section 6311
(relating to temporary suspension) or a denial of the license of
the transferor may be grounds for denial of a change of
ownership application of the transferee.
(d) Additional grounds for denial.--The licensing agency
shall deny an application for a license or license renewal if
the applicant or a person having a controlling interest in an
applicant has been:
20110HB0636PN0637 - 41 -
(1) Convicted of, or enters a plea of guilty or nolo
contendere to, regardless of adjudication, a felony under 18
Pa.C.S. (relating to crimes and offenses) or 21 U.S.C. §§
801-970, unless the sentence and any subsequent period of
probation for the convictions or plea ended more than 15
years prior to the date of the application.
(2) Terminated for cause from a health care program or
the State Medicaid program, unless the applicant has been in
good standing with the State Medicaid program for the most
recent five years.
(3) Terminated for cause, pursuant to the appeals
procedures established by the Federal Government or the
Commonwealth, from the Federal Medicare program, a health
care program or from any other state Medicaid program, unless
the applicant has been in good standing with a state Medicaid
program or the Federal Medicare program for the most recent
five years and the termination occurred at least 20 years
prior to the date of the application.
§ 6311. Temporary suspension.
A license or certificate issued under any act may be
temporarily suspended for a violation of this chapter as the
General Assembly declares a violation of this chapter to be an
immediate and clear danger to the public health and safety. The
licensing agency shall issue an order to that effect without a
hearing, but upon due notice, to the licensee or certificate
holder concerned at his last known address, which shall include
a written statement of all allegations against the licensee or
certificate holder. The provisions of section 9 of the act of
December 20, 1985 (P.L.457, No.112), known as the Medical
Practice Act of 1985, or similar legislation shall not apply to
20110HB0636PN0637 - 42 -
a temporary suspension. The licensing agency shall commence
formal action to suspend, revoke or restrict the license or
certificate of the person concerned as otherwise provided for
under this chapter. All actions shall be taken promptly and
without delay. Within 30 days following the issuance of an order
temporarily suspending a license, the licensing agency shall
conduct or cause to be conducted a preliminary hearing to
determine that there is a prima facie case supporting the
suspension. The licensee or certificate holder whose license or
certificate has been temporarily suspended may be present at the
preliminary hearing and may be represented by counsel, cross-
examine witnesses, inspect physical evidence, call witnesses,
offer evidence and testimony and make a record of the
proceedings. If it is determined that there is not a prima facie
case, the suspended license shall be immediately restored. The
temporary suspension shall remain in effect until vacated by the
licensing agency, but in no event longer than 180 days, unless
agreed to by the licensee or certificate holder.
§ 6312. Antifraud plans.
(a) Purpose.--The purpose of this section is to require the
development of an antifraud plan by the Department of Public
Welfare, the department and their respective employees, and to
encourage the prevention, detection, investigation and reporting
of Medicaid and health care program insurance fraud.
(b) Antifraud plans.--
(1) The Department of Public Welfare shall develop,
implement, disseminate and maintain written procedures to
prevent, detect, investigate and report suspected Medicaid
and health care program fraud.
(2) The written antifraud procedures shall at a minimum
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provide for the:
(i) Education of the Department of Public Welfare's
employees, contractors and business partners as to the
Commonwealth's antifraud effort and requirements.
(ii) Written policies, procedures and standards of
conduct to prevent and detect inappropriate behavior.
(iii) Detection of fraud or other criminal acts
occurring within or affecting the Department of Public
Welfare's policyholder services, vendor relations,
provider relations, claims or claim payment areas.
(iv) Designation of a chief compliance officer and
other appropriate bodies charged with the responsibility
of operating and monitoring the compliance program and
who report directly to high-level personnel and the
governing body.
(v) Reporting of claims information to appropriate
database systems permitting access to the information by
law enforcement.
(vi) Establishment of a fraud investigation unit,
employing or contracting with persons qualified by
education and experience to do the Department of Public
Welfare's investigation of Medicaid program fraud.
(vii) Use of reasonable efforts not to include any
individual in the substantial authority personnel whom
the organization knew or should have known has engaged in
illegal activities or other conduct inconsistent with an
effective compliance and ethics program.
(viii) Reporting of Medicaid fraud to Federal, State
or local criminal law enforcement authorities for
consideration of investigation and prosecution.
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(ix) Department of Public Welfare's cooperation with
Federal, State or local criminal law enforcement agencies
in investigation and prosecution of Medicaid and health
care program fraud.
(x) Release to Federal, State or local criminal law
enforcement agencies upon their request of all
information relating to reported Medicaid or health care
program fraud.
(xi) Pursuit of civil recovery of fraud-related
costs and expenses.
(xii) Maintenance of a process, such as a toll-free
hotline or dedicated and secure e-mail account, to
receive complaints and the adoption of procedures to
protect the anonymity of complainants and to protect
whistleblowers from retaliation.
(xiii) Establishment of processes and procedures for
the suspension of Medicaid and health care program
payments to health care providers consistent with Federal
and State law requirements.
(3) Plans developed under this section are confidential
and exempt from the act of February 14, 2008 (P.L.6, No.3),
known as the Right-to-Know Law.
Section 2. The following shall apply:
(1) Rules and regulations in effect on the effective
date of this section applicable to health care facilities not
clearly inconsistent with the provisions of 35 Pa.C.S. Ch. 63
shall remain in effect until replaced, revised or amended.
(2) All health care providers and home health care
agencies licensed on the effective date of this section to
establish, maintain or operate a health care facility shall
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be licensed for the period remaining on the license.
(3) Notwithstanding any other law, all departments under
the jurisdiction of the Governor, the Office of Attorney
General and the Auditor General shall cooperate with the
agencies in the implementation and ongoing administration of
35 Pa.C.S. Ch. 63.
Section 3. Agencies and departments charged with duties and
responsibilities under this chapter may promulgate all rules and
regulations necessary to implement 35 Pa.C.S. Ch. 63.
Section 4. This act shall take effect in 60 days.
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