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Second Substitute H.B. 315

Senator Stephen H. Urquhart proposes the following substitute bill:


             1     
OFFICE OF INSPECTOR GENERAL OF MEDICAID

             2     
SERVICES AMENDMENTS

             3     
2013 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: James A. Dunnigan

             6     
Senate Sponsor: Stephen H. Urquhart

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill amends budgeting related to the Office of Inspector General of Medicaid
             11      Services.
             12      Highlighted Provisions:
             13          This bill:
             14          .    amends the duties and powers of the inspector general;
             15          .    amends the period of time in which the inspector general can review claims for
             16      waste and abuse;
             17          .    amends the manner in which the inspector general accesses records;
             18          .    establishes the application of Medicaid policy when there is inconsistency between
             19      the state Medicaid plan, administrative rules, and department information bulletins;
             20          .    requires the Office of Inspector General of Medicaid Services to adopt
             21      administrative rules in consultation with health care providers to develop audit and
             22      investigation procedures;
             23          .    requires the Office of Inspector General of Medicaid Services to educate health care
             24      providers about the audit and investigation procedures; and
             25          .     amends the reporting requirements to the Legislature.


             26      Money Appropriated in this Bill:
             27          None
             28      Other Special Clauses:
             29          None
             30      Utah Code Sections Affected:
             31      AMENDS:
             32          63J-4a-202, as enacted by Laws of Utah 2011, Chapter 151
             33          63J-4a-204, as enacted by Laws of Utah 2011, Chapter 151
             34          63J-4a-301, as enacted by Laws of Utah 2011, Chapter 151
             35          63J-4a-302, as enacted by Laws of Utah 2011, Chapter 151
             36          63J-4a-501, as enacted by Laws of Utah 2011, Chapter 151
             37          63J-4a-502, as enacted by Laws of Utah 2011, Chapter 151
             38          63J-4a-602, as enacted by Laws of Utah 2011, Chapter 151
             39      ENACTS:
             40          63J-4a-305, Utah Code Annotated 1953
             41     
             42      Be it enacted by the Legislature of the state of Utah:
             43          Section 1. Section 63J-4a-202 is amended to read:
             44           63J-4a-202. Duties and powers of inspector general and office.
             45          (1) The inspector general shall:
             46          (a) administer, direct, and manage the office;
             47          (b) inspect and monitor the following in relation to the state Medicaid program:
             48          (i) the use and expenditure of federal and state funds;
             49          (ii) the provision of health benefits and other services;
             50          (iii) implementation of, and compliance with, state and federal requirements; and
             51          (iv) records and recordkeeping procedures;
             52          (c) receive reports of potential fraud, waste, or abuse in the state Medicaid program;
             53          (d) investigate and identify potential or actual fraud, waste, or abuse in the state
             54      Medicaid program;
             55          (e) consult with the Centers for Medicaid and Medicare Services and other states to
             56      determine and implement best practices for:


             57          (i) educating and communicating with health care professionals and providers about
             58      program and audit policies and procedures;
             59          (ii) discovering and eliminating fraud, waste, and abuse of Medicaid funds; and
             60          (iii) differentiating between honest mistakes and intentional errors, or fraud, waste, and
             61      abuse, if the office enters into settlement negotiations with the provider or health care
             62      professional;
             63          (f) obtain, develop, and utilize computer algorithms to identify fraud, waste, or abuse
             64      in the state Medicaid program;
             65          (g) work closely with the fraud unit to identify and recover improperly or fraudulently
             66      expended Medicaid funds;
             67          (h) audit, inspect, and evaluate the functioning of the division [to] for the purpose of
             68      making recommendations to the Legislature and the department to ensure that the state
             69      Medicaid program is managed:
             70          (i) in the most efficient and cost-effective manner possible; and
             71          (ii) in a manner that promotes adequate provider and health care professional
             72      participation and the provision of appropriate health benefits and services;
             73          (i) regularly advise the department and the division of an action that [should] could be
             74      taken to ensure that the state Medicaid program is managed in the most efficient and
             75      cost-effective manner possible;
             76          (j) refer potential criminal conduct, relating to Medicaid funds or the state Medicaid
             77      program, to the fraud unit;
             78          (k) refer potential criminal conduct, including relevant data from the controlled
             79      substance database, relating to Medicaid fraud, to law enforcement in accordance with Title 58,
             80      Chapter 37f, Controlled Substance Database Act;
             81          [(k)] (l) determine ways to:
             82          (i) identify, prevent, and reduce fraud, waste, and abuse in the state Medicaid program;
             83      and
             84          (ii) [recoup costs,] balance efforts to reduce costs, and avoid or minimize increased
             85      costs of the state Medicaid program with the need to encourage robust health care professional
             86      and provider participation in the state Medicaid program;
             87          [(l)] (m) [seek recovery of] recover improperly paid Medicaid funds;


             88          [(m)] (n) track recovery of Medicaid funds by the state;
             89          [(n)] (o) in accordance with Section [ 63J-4a-501 ] 63J-4a-502 :
             90          (i) report on the actions and findings of the inspector general; and
             91          (ii) make recommendations to the Legislature and the governor;
             92          [(o)] (p) provide training to:
             93          (i) agencies and employees on identifying potential fraud, waste, or abuse of Medicaid
             94      funds; and
             95          (ii) health care professionals and providers on program and audit policies, procedures,
             96      and compliance; and
             97          [(p)] (q) develop and implement principles and standards for the fulfillment of the
             98      duties of the inspector general, based on principles and standards used by:
             99          (i) the Federal Offices of Inspector General;
             100          (ii) the Association of Inspectors General; and
             101          (iii) the United States Government Accountability Office.
             102          (2) (a) The office may, in fulfilling the duties under Subsection (1), conduct a
             103      performance or financial audit of:
             104          [(a)] (i) a state executive branch entity or a local government entity, including an entity
             105      described in Subsection 63J-4a-301 (3), that:
             106          [(i)] (A) manages or oversees a state Medicaid program; or
             107          [(ii)] (B) manages or oversees the use or expenditure of state or federal Medicaid
             108      funds; or
             109          [(b)] (ii) Medicaid funds received by a person by a grant from, or under contract with, a
             110      state executive branch entity or a local government entity.
             111          (b) (i) The office may not, in fulfilling the duties under Subsection (1), amend the
             112      Medicaid state program or change the policies and procedures of the Medicaid state program.
             113          (ii) The office may identify conflicts between the state Medicaid plan, department
             114      administrative rules, Medicaid provider manuals, and Medicaid information bulletins and
             115      recommend that the department reconcile inconsistencies. If the department does not reconcile
             116      the inconsistencies, the office shall report the inconsistencies to the Legislature's
             117      Administrative Rules Review Committee created in Section 63G-3-501 .
             118          (iii) Beginning July 1, 2013, the office shall review a Medicaid provider manual and a


             119      Medicaid information bulletin in accordance with Subsection (2)(b)(ii), prior to the department
             120      making the provider manual or Medicaid information bulletin available to the public.
             121          (c) Beginning July 1, 2013, the Department of Health shall submit a Medicaid provider
             122      manual and a Medicaid information bulletin to the office for the review required by Subsection
             123      (2)(b)(ii) prior to releasing the document to the public.
             124          (3) (a) The office shall, in fulfilling the duties under this section to investigate,
             125      discover, and recover fraud, waste, and abuse in the Medicaid program, apply the state
             126      Medicaid plan, department administrative rules, Medicaid provider manuals, and Medicaid
             127      information bulletins in effect at the time the medical services were provided.
             128          (b) A health care provider may rely on the policy interpretation included in a current
             129      Medicaid provider manual or a Medicaid information bulletin that is available to the public.
             130          [(3)] (4) The inspector general, or a designee of the inspector general within the office,
             131      may take a sworn statement or administer an oath.
             132          Section 2. Section 63J-4a-204 is amended to read:
             133           63J-4a-204. Selection and review of claims.
             134          (1) (a) On an annual basis, the office shall select and review a representative sample of
             135      claims submitted for reimbursement under the state Medicaid program to determine whether
             136      fraud, waste, or abuse occurred.
             137          (b) The office shall limit its review for waste and abuse under Subsection (1)(a) to 36
             138      months prior to the date of the inception of the investigation or 72 months if there is a credible
             139      allegation of fraud.
             140          (2) The office may directly contact the recipient of record for a Medicaid reimbursed
             141      service to determine whether the service for which reimbursement was claimed was actually
             142      provided to the recipient of record.
             143          (3) The office shall generate statistics from the sample described in Subsection (1) to
             144      determine the type of fraud, waste, or abuse that is most advantageous to focus on in future
             145      audits or investigations.
             146          Section 3. Section 63J-4a-301 is amended to read:
             147           63J-4a-301. Access to records -- Retention of designation under Government
             148      Records Access and Management Act.
             149          (1) In order to fulfill the duties described in Section 63J-4a-202 , and in the manner


             150      provided in Subsection (4), the office shall have unrestricted access to all records of state
             151      executive branch entities, all local government entities, and all providers relating, directly or
             152      indirectly, to:
             153          (a) the state Medicaid program;
             154          (b) state or federal Medicaid funds;
             155          (c) the provision of Medicaid related services;
             156          (d) the regulation or management of any aspect of the state Medicaid program;
             157          (e) the use or expenditure of state or federal Medicaid funds;
             158          (f) suspected or proven fraud, waste, or abuse of state or federal Medicaid funds;
             159          (g) Medicaid program policies, practices, and procedures;
             160          (h) monitoring of Medicaid services or funds; or
             161          (i) a fatality review of a person who received Medicaid funded services.
             162          (2) The office shall have access to information in any database maintained by the state
             163      or a local government to verify identity, income, employment status, or other factors that affect
             164      eligibility for Medicaid services.
             165          (3) The records described in Subsections (1) and (2) include records held or maintained
             166      by the department, the division, the Department of Human Services, the Department of
             167      Workforce Services, a local health department, a local mental health authority, or a school
             168      district. The records described in Subsection (1) include records held or maintained by a
             169      provider. When conducting an audit of a provider, the office shall, to the extent possible, limit
             170      the records accessed to the scope of the audit.
             171          (4) A record, described in Subsection (1) or (2), that is accessed or copied by the
             172      office:
             173          (a) may be reviewed or copied by the office during normal business hours, unless
             174      otherwise requested by the provider or health care professional under Subsection (4)(b); [and]
             175          (b) unless there is a credible allegation of fraud, shall be accessed, reviewed, and
             176      copied in a manner, on a day, and at a time that is minimally disruptive to the health care
             177      professional's or provider's care of patients, as requested by the health care professional or
             178      provider;
             179          (c) may be submitted electronically;
             180          (d) may be submitted together with other records for multiple claims; and


             181          [(b)] (e) if it is a government record, shall retain the classification made by the entity
             182      responsible for the record, under Title 63G, Chapter 2, Government Records Access and
             183      Management Act.
             184          (5) Notwithstanding any provision of state law to the contrary, the office shall have the
             185      same access to all records, information, and databases [that] to which the department or the
             186      division have access [to].
             187          (6) The office shall comply with the requirements of federal law, including the Health
             188      Insurance Portability and Accountability Act of 1996 and 42 C.F.R., Part 2, relating to [the
             189      confidentiality of alcohol and drug abuse records, in] the office's:
             190          (a) access, review, retention, and use of records; and
             191          (b) use of information included in, or derived from, records.
             192          Section 4. Section 63J-4a-302 is amended to read:
             193           63J-4a-302. Access to employees -- Cooperating with investigation or audit.
             194          (1) The office shall have access to interview the following persons if the inspector
             195      general determines that the interview may assist the inspector general in fulfilling the duties
             196      described in Section 63J-4a-202 :
             197          (a) a state executive branch official, executive director, director, or employee;
             198          (b) a local government official or employee;
             199          (c) a consultant or contractor of a person described in Subsection (1)(a) or (b); or
             200          (d) a provider or a health care professional or an employee of a provider or a health
             201      care professional.
             202          (2) A person described in Subsection (1) and each supervisor of the person shall fully
             203      cooperate with the office by:
             204          (a) providing the office or the inspector general's designee with access to interview the
             205      person;
             206          (b) completely and truthfully answering questions asked by the office or the inspector
             207      general's designee;
             208          (c) providing the records, described in Subsection 63J-4a-301 (1), in the manner
             209      described in Subsection 63J-4a-301 (4), requested by the office or the inspector general's
             210      designee; and
             211          (d) providing the office or the inspector general's designee with information relating to


             212      the office's investigation or audit.
             213          (3) A person described in Subsection (1)(a) or (b) and each supervisor of the person
             214      shall fully cooperate with the office by:
             215          (a) providing records requested by the office or the inspector general's designee in the
             216      manner described in Subsection 63J-4a-301 (4); and
             217          (b) providing the office or the inspector general's designee with information relating to
             218      the office's investigation or audit, including information that is classified as private, controlled,
             219      or protected under Title 63G, Chapter 2, Government Records Access and Management Act.
             220          Section 5. Section 63J-4a-305 is enacted to read:
             221          63J-4a-305. Audit and investigation procedures.
             222          (1) (a) The office shall, in accordance with Section 63J-4a-602 , adopt administrative
             223      rules in consultation with providers and health care professionals subject to audit and
             224      investigation under this chapter to establish procedures for audits and investigations that are
             225      fair and consistent with the duties of the office under this chapter.
             226          (b) If the providers and health care professionals do not agree with the rules proposed
             227      or adopted by the office under Subsection (1)(a) or Section 63J-4a-602 , the providers or health
             228      care professionals may:
             229          (i) request a hearing for the proposed administrative rule or seek any other remedies
             230      under the provisions of Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
             231          (ii) request a review of the rule by the Legislature's Administrative Rules Review
             232      Committee created in Section 63G-3-501 .
             233          (2) The office shall notify and educate providers and health care professionals subject
             234      to audit and investigation under this chapter of the providers' and health care professionals'
             235      responsibilities and rights under the administrative rules adopted by the office under the
             236      provisions of this section and Section 63J-4a-602 .
             237          Section 6. Section 63J-4a-501 is amended to read:
             238           63J-4a-501. Duty to report potential Medicaid fraud to the office or fraud unit.
             239          (1) [A] (a) Except as provided in Subsection (1)(b), a health care professional, a
             240      provider, or a state or local government official or employee who becomes aware of fraud,
             241      waste, or abuse shall report the fraud, waste, or abuse to the office or the fraud unit.
             242          (b) (i) The reporting exception in this Subsection (1)(b) does not apply to fraud and


             243      abuse.
             244          (ii) If a person described in Subsection (1)(a) reasonably believes that the suspected
             245      waste is a mistake and is not intentional or knowing, the person may first report the suspected
             246      waste to the provider, health care professional, or compliance officer for the provider or health
             247      care professional.
             248          (iii) The person described in Subsection (1)(b)(ii) shall report the suspected waste to
             249      the office or the fraud unit unless, within 30 days after the day on which the person reported the
             250      suspected waste to the provider, health care professional, or compliance officer, the provider,
             251      health care professional, or compliance officer demonstrates to the person that the waste has
             252      been corrected.
             253          (2) A person who makes a report under Subsection (1) may request that the person's
             254      name not be released in connection with the investigation.
             255          (3) If a request is made under Subsection (2), the person's identity may not be released
             256      to any person or entity other than the office, the fraud unit, or law enforcement, unless a court
             257      of competent jurisdiction orders that the person's identity be released.
             258          Section 7. Section 63J-4a-502 is amended to read:
             259           63J-4a-502. Report and recommendations to governor and Executive
             260      Appropriations Committee.
             261          (1) The inspector general shall, on an annual basis, prepare a written report on the
             262      activities of the office for the preceding fiscal year.
             263          (2) The report shall include:
             264          (a) non-identifying information, including statistical information, on:
             265          (i) the items described in Subsection 63J-4a-202 (1)(b) and Section 63J-4a-204 ;
             266          (ii) action taken by the office and the result of that action;
             267          (iii) fraud, waste, and abuse in the state Medicaid program;
             268          (iv) the recovery of fraudulent or improper use of state and federal Medicaid funds;
             269          (v) measures taken by the state to discover and reduce fraud, waste, and abuse in the
             270      state Medicaid program;
             271          (vi) audits conducted by the office; [and]
             272          (vii) investigations conducted by the office and the results of those investigations; and
             273          (viii) administrative and educational efforts made by the office and the division to


             274      improve compliance with Medicaid program policies and requirements;
             275          (b) recommendations on action that should be taken by the Legislature or the governor
             276      to:
             277          (i) improve the discovery and reduction of fraud, waste, and abuse in the state
             278      Medicaid program;
             279          (ii) improve the recovery of fraudulently or improperly used Medicaid funds; and
             280          (iii) reduce costs and avoid or minimize increased costs in the state Medicaid program;
             281          (c) recommendations relating to rules, policies, or procedures of a state or local
             282      government entity; and
             283          (d) services provided by the state Medicaid program that exceed industry standards.
             284          (3) The report described in Subsection (1) may not include any information that would
             285      interfere with or jeopardize an ongoing criminal investigation or other investigation.
             286          (4) The inspector general shall provide the report described in Subsection (1) to the
             287      Executive Appropriations Committee of the Legislature and to the governor on or before
             288      October 1 of each year.
             289          (5) The inspector general shall present the report described in Subsection (1) to the
             290      Executive Appropriations Committee of the Legislature before November 30 of each year.
             291          Section 8. Section 63J-4a-602 is amended to read:
             292           63J-4a-602. Rulemaking authority.
             293          The office may make rules, pursuant to Title 63G, Chapter 3, Utah Administrative
             294      Rulemaking Act, and Section 63J-4a-305 , that establish policies, procedures, and practices, in
             295      accordance with the provisions of this chapter, relating to:
             296          (1) inspecting and monitoring the state Medicaid Program;
             297          (2) discovering and investigating potential fraud, waste, or abuse in the State Medicaid
             298      program;
             299          (3) developing and implementing the principles and standards described in Subsection
             300      63J-4a-202 (1)[(p)](q);
             301          (4) auditing, inspecting, and evaluating the functioning of the division under
             302      Subsection 63J-4a-202 (1)(h);
             303          (5) conducting an audit under Subsection 63J-4a-202 (1)(h) or (2); or
             304          (6) ordering a hold on the payment of a claim for reimbursement under Section


             305      63J-4a-205 .


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