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Second Substitute H.B. 315
8 LONG TITLE
9 General Description:
10 This bill amends budgeting related to the Office of Inspector General of Medicaid
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:
28 Other Special Clauses:
30 Utah Code Sections Affected:
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
40 63J-4a-305, Utah Code Annotated 1953
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
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 [
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 [
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;
82 (i) identify, prevent, and reduce fraud, waste, and abuse in the state Medicaid program;
84 (ii) [
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;
90 (i) report on the actions and findings of the inspector general; and
91 (ii) make recommendations to the Legislature and the governor;
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
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:
105 described in Subsection 63J-4a-301 (3), that:
108 funds; or
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.
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
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); [
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
179 (c) may be submitted electronically;
180 (d) may be submitted together with other records for multiple claims; and
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 [
186 division have access [
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 [
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
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) [
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
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; [
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
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
299 (3) developing and implementing the principles and standards described in Subsection
300 63J-4a-202 (1)[
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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