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SSSB 41: "An Act relating to medical care and crimes relating to medical care, including medical care and crimes relating to the medical assistance program."

00                  SPONSOR SUBSTITUTE FOR SENATE BILL NO. 41                                                              
01 "An Act relating to medical care and crimes relating to medical care, including medical                                 
02 care and crimes relating to the medical assistance program."                                                            
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 17.30.080 is amended to read:                                                                     
05            Sec. 17.30.080.  Unlawful administration, prescription, and dispensation of                                
06       controlled substances.  (a)  A controlled substance classified under federal law or in a                        
07       schedule set out in AS 11.71.140 - 11.71.190 may not be administered, prescribed,                                 
08       dispensed, or distributed other than for a [MEDICAL] purpose that is solely medical.                          
09       A person otherwise authorized may not administer, prescribe, dispense, or                                     
10       distribute a controlled substance classified under federal law or in a schedule set                           
11       out in AS 11.71.140 - 11.71.190 unless the substance is reasonably necessary for                              
12       treatment of a person's illness, injury, or medical condition, and the                                        
13       administration, prescription, dispensing, or distribution may only be provided                                
14       within the usual course of professional medical practice or research and in                                   
01       accordance with a standard of medical care generally recognized and accepted                                  
02       within the medical profession in the United States.                                                           
03            (b)  A person who violates (a) of this section, or who otherwise manufactures,                               
04       distributes, dispenses, or conducts research with a controlled substance in the state                             
05       without fully complying with 21 U.S.C. 811 - 830 (Controlled Substances Act), and                                 
06       regulations adopted under those sections, is guilty of misconduct involving a                                     
07       controlled substance under AS 11.71.010 - 11.71.070 in the degree appropriate to the                              
08       circumstances as described in those sections.  Upon filing a complaint, information,                          
09       presentment, or indictment charging a Medicaid provider with misconduct                                       
10       involving a controlled substance under AS 11.71.140 - 11.71.190, the attorney                                 
11       general shall, in writing, notify the commissioner of health and social services of                           
12       the filing.                                                                                                   
13    * Sec. 2.  AS 17.30.080 is amended by adding new subsections to read:                                              
14            (c)  Upon receiving a notice from the attorney general under (b) of this section,                            
15       the commissioner of health and social services shall  immediately suspend payment                                 
16       for, and undertake a prepayment review of, all unpaid claims or requests for                                      
17       reimbursements attributable to services claimed to have been provided by the person                               
18       charged.                                                                                                          
19            (d)  In this section, "claims" and "Medicaid provider" have the meanings given                               
20       in AS 47.07.790.                                                                                                  
21    * Sec. 3.  AS 47.07.010 is amended to read:                                                                        
22            Sec. 47.07.010.  Purpose.  It is declared by the legislature as a matter of                            
23       public concern that the needy persons of this state who are eligible for medical care                         
24       at public expense under this chapter should receive uniform and high quality                                  
25       medical care that is appropriate to their condition and cost-effective to the state,                          
26       regardless of race, age, national origin, or economic standing.  It is equally a matter                       
27       of public concern that providers of services under this chapter should operate                                
28       honestly, responsibly, and in accordance with applicable laws and regulations in                              
29       order to maintain the integrity and fiscal viability of the state's medical assistance                        
30       program, and that those who do not operate in this manner should be held                                      
31       accountable for their conduct.  It is vital that the department administer this                               
01       chapter in a manner that ensures effective, long-term cost containment while                                  
02       providing medically necessary services to recipients.  Accordingly, this chapter                              
03       authorizes the department [DEPARTMENT OF HEALTH AND SOCIAL                                                    
04       SERVICES] to apply for participation in the national medical assistance program as                                
05       provided for under 42 U.S.C. 1396 - 1396p (Title XIX, Social Security Act).                                       
06    * Sec. 4.  AS 47.07.074(a) is amended to read:                                                                     
07            (a)  As a condition of obtaining payment under this chapter, a provider                                  
08       [AS 47.07.070, A HEALTH FACILITY] shall allow                                                                     
09                 (1)  the department and the commission reasonable access to the                                         
10       financial records of medical assistance beneficiaries; and                                                        
11                 (2)  audit and inspection of financial records by state and federal                                     
12       agencies.                                                                                                         
13    * Sec. 5.  AS 47.07.074 is amended by adding new subsections to read:                                              
14            (c)  Each year, the department shall award a contract providing for independent                              
15       financial audits in order to identify violations of criminal statutes by, or overpayments                         
16       to, Medicaid providers.  The audits may not be conducted by the department or                                     
17       employees of the department.  The number of annual audits shall be determined by the                              
18       department, but may not be fewer than four percent of all enrolled and participating                              
19       providers, must include both on-site as well as desk audits, and must be of a variety of                          
20       provider types.  The department may not award a contract under this subsection to an                              
21       organization that does not employ at least one person on the audit team who is an                                 
22       attorney licensed to practice law in this state, who has been engaged in the active                               
23       practice of law in this state for at least five of the 10 years immediately preceding the                         
24       award of the contract, and who has significant experience in criminal prosecutions; an                            
25       attorney who meets these qualifications shall have ultimate authority on behalf of the                            
26       audit team to decide the ratio of desk and on-site audits to the total number selected by                         
27       the department and to select the providers to be audited, although the selections shall                           
28       be made with the advice of the commissioner.                                                                      
29            (d)  Within 90 days after receiving each audit report, the department shall                                  
30       begin administrative procedures to recoup overpayments identified in the audits and                               
31       shall allocate the reasonable and necessary financial and personnel resources to ensure                           
01       prompt recovery of overpayments unless the attorney general has advised the                                       
02       commissioner in writing that a criminal investigation of an audited provider has or is                            
03       about to be undertaken, in which case the administrative procedure shall be held in                               
04       abeyance until a final charging decision by the attorney general has been made.                                   
05       Copies of all audit reports shall be provided to the attorney general so that the reports                         
06       can be screened for the purpose of bringing criminal charges.                                                     
07            (e)  Each fiscal year, the state's share of recovered overpayments obtained                                  
08       because of an audit under this section shall be deposited with the commissioner of                                
09       revenue under AS 37.10.050 and separately accounted for by the commissioner of                                    
10       administration under AS 37.05.142.  The legislature may appropriate a portion of the                              
11       estimated balance in the account to the department to pay for the annual audits                                   
12       described in this section.                                                                                        
13            (f)  In this section, "provider" has the meaning given in AS 47.07.790.                                      
14    * Sec. 6.  AS 47.07 is amended by adding new sections to read:                                                     
15               Article 2.  Misconduct Involving Medicaid Services.                                                     
16            Sec. 47.07.700.  Misconduct involving Medicaid services in the first degree.                               
17       (a)  A person commits the crime of misconduct involving Medicaid services in the                                  
18       first degree if the person knowingly                                                                              
19                 (1)  makes or causes to be made a statement that the person knows is                                    
20       not true on a Medicaid program provider enrollment form application, or on a                                      
21       document attached to the application, that is submitted to be used to determine the                               
22       eligibility for a benefit or payment under the Medicaid program to a person or                                    
23       organization;                                                                                                     
24                 (2)  conceals or fails to disclose an event that the person knows affects                               
25       the initial or continued right of that person or another person to a benefit or payment                           
26       under the Medicaid program and, as a consequence, a person receives a benefit or                                  
27       payment that is not authorized or that is greater than the payment or benefit that is                             
28       authorized;                                                                                                       
29                 (3)  applies for and receives a benefit or payment on behalf of another                                 
30       person under the Medicaid program and converts part of the benefit or payment to a                                
31       use other than for the benefit of the person on whose behalf it was received;                                     
01                 (4)  makes, causes to be made, or solicits the making of a statement that                               
02       the person knows is not true concerning the conditions of operation of a health facility                          
03       with the intent to aid the health facility in qualifying for certification or recertification                     
04       required by the Medicaid program, including certification or recertification as a                                 
05       hospital, a nursing facility or skilled nursing facility, a hospice, an intermediate care                         
06       facility, an intermediate care facility for the mentally retarded, an assisted living                             
07       facility, a home health agency, a rehabilitation facility, an inpatient psychiatric facility,                     
08       a rural health clinic, an outpatient surgical clinic, or an outpatient community mental                           
09       health clinic;                                                                                                    
10                 (5)  makes, causes to be made, or solicits the making of a statement that                               
11       the person knows is not true concerning information required to be provided under a                               
12       federal, state, or municipal law, rule, regulation, ordinance, or provider agreement                              
13       pertaining to the Medicaid program; or                                                                            
14                 (6)  provides a product or service to a Medicaid recipient that has been                                
15       adulterated, debased, or mislabeled, is dangerous, harmful, or potentially harmful, or is                         
16       otherwise medically inappropriate when compared to generally recognized standards                                 
17       within the provider's particular discipline or within the health care industry in the                             
18       United States.                                                                                                    
19            (b)  Misconduct involving Medicaid services in the first degree is a class B                                 
20       felony.                                                                                                           
21            Sec. 47.07.710.  Misconduct involving Medicaid services in the second                                      
22       degree.  (a)  A person commits the crime of misconduct involving Medicaid services                              
23       in the second degree if the person knowingly                                                                      
24                 (1)  except as authorized under the Medicaid program, charges, solicits,                                
25       accepts, or receives a gift, money, a donation, a personal service, or other                                      
26       consideration, in addition to an amount paid under the Medicaid program, from                                     
27       another as a condition to the provision of a service or continued service to a Medicaid                           
28       recipient if the cost of the service provided to the Medicaid recipient is paid for, in                           
29       whole or in part, under the Medicaid program;                                                                     
30                 (2)  presents or causes to be presented a claim for payment under the                                   
31       Medicaid program for a product or a service claimed to have been provided or                                      
01       rendered by a person who, if a license is required in order to provide the service or                             
02       product, is not licensed to provide the product or render the service or is not licensed                          
03       in the manner claimed;                                                                                            
04                 (3)  makes a claim under the Medicaid program for a product or service                                  
05       that                                                                                                              
06                      (A)  was not actually provided to a Medicaid recipient;                                            
07                      (B)  was not actually provided to a Medicaid recipient as                                          
08            claimed;                                                                                                     
09                      (C)  has not been approved by a treating physician or licensed                                     
10            health care practitioner;                                                                                    
11                      (D)  has not been approved by the Medicaid program;                                                
12                      (E)  was provided in a manner that violates AS 17.30.080(a); or                                    
13                      (F)  was provided by a practitioner who was not acting within                                      
14            the usual course of professional medical practice or who was not acting in                                   
15            accordance with a standard of care generally recognized and accepted within                                  
16            the practitioner's profession in the United States;                                                          
17                 (4)  engages in deception in connection with the application or                                         
18       enrollment of an individual who is eligible as a recipient for services under the                                 
19       Medicaid program or in connection with marketing the person's services to an                                      
20       individual who is eligible as a recipient under the Medicaid program; or                                          
21                 (5)  makes or causes to be made a false statement or representation of                                  
22       fact in a document containing items of income or expense that is or may be used by                                
23       the department to determine a general or specific rate of payment for a product or                                
24       service provided or claimed to have been provided by a provider.                                                  
25            (b)  Misconduct involving Medicaid services in the second degree is a class C                                
26       felony.                                                                                                           
27            Sec. 47.07.720.  Misconduct involving Medicaid services in the third                                       
28       degree.  (a)  A person commits the crime of misconduct involving Medicaid services                              
29       in the third degree if the person knowingly or recklessly                                                         
30                 (1)  makes a claim under the Medicaid program and fails to indicate the                                 
31       correct type of license or the correct identification number of the licensed health care                          
01       provider who actually provided the service;                                                                       
02                 (2)  contracts with the department or another state agency to provide or                                
03       arrange to provide health care benefits or services to individuals who are eligible                               
04       under the Medicaid program and fails to provide to                                                                
05                      (A)  an individual a health care benefit or service that the                                       
06            organization is required to provide under the contract; or                                                   
07                      (B)  the department or to another state agency the information                                     
08            that is required to be provided by a law, regulation, or contractual provision.                              
09            (b)  Misconduct involving Medicaid services in the third degree is a class A                                 
10       misdemeanor.                                                                                                      
11            Sec. 47.07.730.  Notice of charges.  Upon the filing of a complaint,                                       
12       information, presentment, or indictment charging a Medicaid provider with a crime                                 
13       under AS 47.07.700 or 47.07.720, the attorney general shall, in writing, notify the                               
14       commissioner of the filing.  Upon receiving notice from the attorney general under                                
15       this section, the commissioner shall immediately suspend payment for, and undertake                               
16       a prepayment review of, all unpaid claims or requests for reimbursements attributable                             
17       to services claimed to have been provided by the person charged.                                                  
18            Sec. 47.07.790.  Definitions.  In AS 47.07.700 - 47.07.790,                                                
19                 (1)  "benefit" has the meaning given in AS 11.81.900(b);                                                
20                 (2)  "claim," in addition to its usual meaning, also means a request for                                
21       payment for Medicaid benefits attempted to be provided, provided, or claimed to have                              
22       been provided to another, whether the request is in an electronic format or paper                                 
23       format or both, made or submitted by a person or an organization that is or claims to                             
24       be a Medicaid provider;                                                                                           
25                 (3)  "commissioner" means the commissioner of health and social                                         
26       services;                                                                                                         
27                 (4)  "deception" has the meaning given in AS 11.81.900(b);                                              
28                 (5)  "knowingly" has the meaning given in AS 11.81.900(a);                                              
29                 (6)  "Medicaid program" means the medical assistance program                                            
30       operated under this chapter;                                                                                      
31                 (7)  "Medicaid provider" or "provider" means a person or organization                                   
01       that provides, attempts to provide, or claims to have provided Medicaid services to                               
02       Medicaid recipients and includes a person or organization that participates in or has                             
03       applied to participate in the Medicaid program as a supplier of a product or a service;                           
04                 (8)  "Medicaid recipient" means a person on whose behalf another                                        
05       claims or receives a payment from the Medicaid program, without regard to whether                                 
06       the individual was eligible for benefits under the Medicaid program;                                              
07                 (9)  "Medicaid services" means a health care benefit available to                                       
08       Medicaid recipients, including health care benefits provided, attempted to be provided,                           
09       or claimed to have been provided to another by a person or organization enrolled in                               
10       the Medicaid program;                                                                                             
11                 (10)  "organization" has the meaning given in AS 11.81.900(b);                                          
12                 (11)  "person" has the meaning given in AS 11.81.900(b);                                                
13                 (12)  "practitioner" has the meaning given in AS 11.71.900;                                             
14                 (13)  "recklessly" has the meaning given in AS 11.81.900(a);                                            
15                 (14)  "statement" has the meaning given in AS 11.56.240.                                                
16    * Sec. 7.  AS 47.07.074(b) is repealed.