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CSSSSB 41(FIN) am H: "An Act relating to medical care and crimes relating to medical care, including medical care and crimes relating to the medical assistance program, catastrophic illness assistance, and medical assistance for chronic and acute medical conditions."

00         CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 41(FIN) am H                                                      
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, catastrophic illness                                        
03 assistance, and medical assistance for chronic and acute medical conditions."                                           
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1.  AS 17.30.080(b) is amended to read:                                                                  
06            (b)  A person who violates (a) of this section, or who otherwise manufactures,                               
07       distributes, dispenses, or conducts research with a controlled substance in the state                             
08       without fully complying with 21 U.S.C. 811 - 830 (Controlled Substances Act), and                                 
09       regulations adopted under those sections, is guilty of misconduct involving a                                     
10       controlled substance under AS 11.71.010 - 11.71.070 in the degree appropriate to the                              
11       circumstances as described in those sections.  Upon filing a complaint, information,                          
12       presentment, or indictment charging a medical assistance provider with                                        
13       misconduct involving a controlled substance under AS 11.71.140 - 11.71.190, the                               
14       attorney general shall, in writing, notify the commissioner of health and social                              
01       services of the filing.                                                                                       
02    * Sec. 2.  AS 17.30.080 is amended by adding new subsections to read:                                              
03            (c)  Upon receiving a notice from the attorney general under (b) of this section,                            
04       the commissioner of health and social services shall  immediately undertake a review                              
05       of all unpaid claims or requests for reimbursements attributable to services claimed to                           
06       have been provided by the person charged.                                                                         
07            (d)  In this section,                                                                                        
08                 (1)  "claims" has the meaning given in AS 47.05.290;                                                    
09                 (2)  "medical assistance provider" has the meaning given in                                             
10       AS 47.05.290;                                                                                                     
11                 (3)  "medical purpose" means a purpose that is solely medical as                                        
12       opposed to any other purpose, that is reasonably necessary for treatment of a person's                            
13       illness, injury, or physical or mental health, and that is provided by a practitioner while                       
14       acting within the usual course of professional practice or research and in accordance                             
15       with a standard of care generally recognized and accepted within the medical                                      
16       profession in the United States;                                                                                  
17                 (4)  "practitioner" has the meaning given in AS 11.71.900.                                              
18    * Sec. 3.  AS 47.05 is amended by adding new sections to read:                                                     
19                     Article 2.  Medical Care Programs.                                                                
20            Sec. 47.05.200.  Annual audits.  (a)  The department shall annually contract                               
21       for independent audits of a statewide sample of all medical assistance providers in                               
22       order to identify overpayments and violations of criminal statutes.  The audits                                   
23       conducted under this section may not be conducted by the department or employees of                               
24       the department.  The number of audits under this section each year, as a total for the                            
25       medical assistance programs under AS 47.07 and AS 47.08, shall be 0.75 percent of                                 
26       all enrolled providers under the programs, adjusted annually on July 1, as determined                             
27       by the department, except that the number of audits under this section may not be less                            
28       than 75.  The audits under this section must include both on-site audits and desk audits                          
29       and must be of a variety of provider types.  The department may not award a contract                              
30       under this subsection to an organization that does not retain persons with a significant                          
31       level of expertise and recent professional practice in the general areas of standard                              
01       accounting principles and financial auditing and in the specific areas of medical                                 
02       records review, investigative research, and Alaska health care criminal law.  The                                 
03       contractor, in consultation with the commissioner, shall select the providers to be                               
04       audited and decide the ratio of desk audits and on-site audits to the total number                                
05       selected.                                                                                                         
06            (b)  Within 90 days after receiving each audit report from an audit conducted                                
07       under this section, the department shall begin administrative procedures to recoup                                
08       overpayments identified in the audits and shall allocate the reasonable and necessary                             
09       financial and human resources to ensure prompt recovery of overpayments unless the                                
10       attorney general has advised the commissioner in writing that a criminal investigation                            
11       of an audited provider has been or is about to be undertaken, in which case, the                                  
12       commissioner shall hold the administrative procedure in abeyance until a final                                    
13       charging decision by the attorney general has been made.  The commissioner shall                                  
14       provide copies of all audit reports to the attorney general so that the reports can be                            
15       screened for the purpose of bringing criminal charges.                                                            
16            (c)  Each fiscal year, the state's share of recovered overpayments obtained                                  
17       because of the required contract audits under this section shall be deposited with the                            
18       commissioner of revenue under AS 37.10.050 and separately accounted for by the                                    
19       commissioner of administration under AS 37.05.142.  The legislature may appropriate                               
20       a portion of the estimated balance in the account to the department to pay for the                                
21       annual audits described in this section.                                                                          
22            (d)  As a condition of obtaining payment under AS 47.07 and AS 47.08 and for                                 
23       purposes of this section, a provider shall allow                                                                  
24                 (1)  the department reasonable access to the records of medical                                         
25       assistance recipients and providers; and                                                                          
26                 (2)  audit and inspection of the records by state and federal agencies.                                 
27            (e)  This section does not preclude the department from performing audits that                               
28       are allowed or required under other laws.                                                                         
29            Sec. 47.05.210.  Medical assistance fraud.  (a)  A person commits the crime                                
30       of medical assistance fraud if the person                                                                         
31                 (1)  knowingly submits or authorizes the submission of a claim to a                                     
01       medical assistance agency for property, services, or a benefit with reckless disregard                            
02       that the claimant is not entitled to the property, services, or benefit;                                          
03                 (2)  knowingly prepares or assists another person to prepare a claim for                                
04       submission to a medical assistance agency for property, services, or a benefit with                               
05       reckless disregard that the claimant is not entitled to the property, services, or benefit;                       
06                 (3)  except as otherwise authorized under the medical assistance                                        
07       program, confers, offers to confer, solicits, agrees to accept, or accepts property,                              
08       services, or a benefit                                                                                            
09                      (A)  to refer a medical assistance recipient to a health care                                      
10            provider; or                                                                                                 
11                      (B)  for providing health care to a medical assistance recipient if                                
12            the property, services, or benefit is in addition to payment by a medical                                    
13            assistance agency;                                                                                           
14                 (4)  does not produce medical assistance records to a person authorized                                 
15       to request the records;                                                                                           
16                 (5)  knowingly makes a false entry in or falsely alters a medical                                       
17       assistance record;                                                                                                
18                 (6)  knowingly destroys, mutilates, suppresses, conceals, removes, or                                   
19       otherwise impairs the verity, legibility, or availability of a medical assistance record                          
20       knowing that the person lacks the authority to do so; or                                                          
21                 (7)  violates a provision of AS 47.07 or AS 47.08 or a regulation                                       
22       adopted under AS 47.07 or AS 47.08.                                                                               
23            (b)  Medical assistance fraud under (a)(1), (2), or (3) of this section is                                   
24                 (1)  a class B felony if the portion of the claim or claims submitted in                                
25       violation of (a)(1) or (2) of this section, or the value of the property, services, or                            
26       benefit that is in violation of (a)(3) of this section, is $25,000 or more;                                       
27                 (2)  a class C felony if the portion of the claim or claims submitted in                                
28       violation of (a)(1) or (2) of this section, or the value of the property, services, or                            
29       benefit that is in violation of (a)(3) of this section, is $500 or more but less than                             
30       $25,000;                                                                                                          
31                 (3)  a class A misdemeanor if the portion of the claim or claims                                        
01       submitted in violation of (a)(1) or (2) of this section, or the value of the property,                            
02       services, or benefit that is in violation of (a)(3) of this section, is less than $500.                           
03            (c)  Medical assistance fraud under (a)(4), (5), or (6) of this section is a class A                         
04       misdemeanor.                                                                                                      
05            (d)  Medical assistance fraud under (a)(7) of this section is a class B                                      
06       misdemeanor.                                                                                                      
07            Sec. 47.05.220.  Notice of charges.  Upon the filing of a complaint,                                       
08       information, presentment, or indictment charging a medical assistance provider with a                             
09       crime under AS 47.05.210, the attorney general shall, in writing, notify the                                      
10       commissioner of the filing.  Upon receiving notice from the attorney general under                                
11       this section, the commissioner shall immediately undertake a review of all unpaid                                 
12       claims or requests for reimbursements attributable to services claimed to have been                               
13       provided by the person charged.                                                                                   
14            Sec. 47.05.230.  Determination of value; aggregation of amounts.  In                                       
15       AS 47.05.210, whenever it is necessary to determine the value of property, that value                             
16       shall be determined in accordance with AS 11.46.980.  In determining the degree or                                
17       classification of a crime described under AS 47.05.210, amounts involved in criminal                              
18       acts committed under one course of conduct, whether from the same person or several                               
19       persons, shall be aggregated.                                                                                     
20            Sec. 47.05.240.  Exclusion from medical assistance programs.  (a)  The                                     
21       commissioner may exclude an applicant to or disenroll a medical assistance provider                               
22       in the medical assistance program in AS 47.07 or AS 47.08, or both, for a period of up                            
23       to 10 years after unconditional discharge on a conviction                                                         
24                 (1)  for medical assistance fraud under AS 47.05.210 or misconduct                                      
25       involving a controlled substance under AS 11.71; or                                                               
26                 (2)  in a court of the United States or a court of another state or                                     
27       territory, for a crime with elements similar to the crimes included under (1) of this                             
28       subsection.                                                                                                       
29            (b)  After a period of exclusion under (a) of this section, an applicant may not                             
30       participate in a medical assistance program under AS 47.07 or AS 47.08 until the                                  
31       applicant establishes to the commissioner by clear and convincing evidence that the                               
01       applicant possesses all required licenses and certificates and is qualified to participate.                       
02            Sec. 47.05.290.  Definitions.  In AS 47.05.200 - 47.05.290,                                                
03                 (1)  "benefit" has the meaning given in AS 11.81.900;                                                   
04                 (2)  "claim" includes a request for payment for medical assistance                                      
05       services under applicable state or federal law or regulations, whether the request is in                          
06       an electronic format or paper format or both;                                                                     
07                 (3)  "commissioner" means the commissioner of health and social                                         
08       services;                                                                                                         
09                 (4)  "department" means the Department of Health and Social Services;                                   
10                 (5)  "falsely alters" has the meaning given in AS 11.46.580;                                            
11                 (6)  "knowingly" has the meaning given in AS 11.81.900;                                                 
12                 (7)  "makes a false entry" has the meaning given in AS 11.56.820;                                       
13                 (8)  "medical assistance agency" means the department, an agency of                                     
14       the department, and an agent, contractor, or designee of the department or of one of its                          
15       agencies that performs one or more of the activities of the department or an agency of                            
16       the department;                                                                                                   
17                 (9)  "medical assistance program" means a program under AS 47.07 or                                     
18       AS 47.08;                                                                                                         
19                 (10)  "medical assistance provider" or "provider" means a person or                                     
20       organization that provides, attempts to provide, or claims to have provided services or                           
21       products to a medical assistance recipient that may qualify for reimbursement under                               
22       AS 47.07 or AS 47.08 or a person or organization that participates in or has applied to                           
23       participate in a medical assistance program as a supplier of a service or product;                                
24                 (11)  "medical assistance recipient" means a person on whose behalf                                     
25       another claims or receives a payment from a medical assistance agency, without                                    
26       regard to whether the individual was eligible for benefits under a medical assistance                             
27       program;                                                                                                          
28                 (12)  "medical assistance record" means records required to be kept by                                  
29       state or federal law or regulation regarding claims to a medical assistance agency;                               
30                 (13)  "organization" has the meaning given in AS 11.81.900;                                             
31                 (14)  "person" has the meaning given in AS 11.81.900;                                                   
01                 (15)  "property" has the meaning given in AS 11.81.900;                                                 
02                 (16)  "reckless disregard" means acting recklessly, as that term is                                     
03       defined in AS 11.81.900;                                                                                          
04                 (17)  "services" or "medical assistance services" means a health care                                   
05       benefit that may qualify for reimbursement under AS 47.07 or AS 47.08, including                                  
06       health care benefits provided, attempted to be provided, or claimed to have been                                  
07       provided to another, by a medical assistance provider, or "services" as defined in                                
08       AS 11.81.900;                                                                                                     
09                 (18)  "unconditional discharge" has the meaning given in                                                
10       AS 12.55.185.                                                                                                     
11    * Sec. 4.  AS 47.07.010 is amended to read:                                                                        
12            Sec. 47.07.010.  Purpose.  It is declared by the legislature as a matter of                            
13       public concern that the needy persons of this state who are eligible for medical care                         
14       at public expense under this chapter should seek only [RECEIVE] uniform and                                   
15       high quality [MEDICAL] care that is appropriate to their condition and cost-                                  
16       effective to the state and receive that care, regardless of race, age, national origin, or                    
17       economic standing.  It is equally a matter of public concern that providers of                                
18       services under this chapter should operate honestly, responsibly, and in                                      
19       accordance with applicable laws and regulations in order to maintain the                                      
20       integrity and fiscal viability of the state's medical assistance program, and that                            
21       those who do not operate in this manner should be held accountable for their                                  
22       conduct.  It is vital that the department administer this chapter in a manner that                            
23       promotes effective, long-term cost containment of the state's medical assistance                              
24       expenditures while providing medical care to recipients.  Accordingly, this chapter                           
25       authorizes the department [DEPARTMENT OF HEALTH AND SOCIAL                                                    
26       SERVICES] to apply for participation in the national medical assistance program as                                
27       provided for under 42 U.S.C. 1396 - 1396p (Title XIX, Social Security Act).                                       
28    * Sec. 5.  AS 47.07.074(a) is amended to read:                                                                     
29            (a)  As a condition of obtaining payment under AS 47.07.070, a health facility                               
30       shall allow                                                                                                       
31                 (1)  the department and the commission reasonable access to the                                         
01       [FINANCIAL] records of medical assistance recipients and providers                                            
02       [BENEFICIARIES]; and                                                                                              
03                 (2)  audit and inspection of the [FINANCIAL] records by state and                                   
04       federal agencies.