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.