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       Florida Senate - 2010                                       SB 8
       By Senator Negron
       28-01302C-10                                             20108__
    1                        A bill to be entitled                      
    2         An act relating to public assistance fraud; creating
    3         s. 624.35, F.S.; providing legislative intent;
    4         establishing the Medicaid and Public Assistance Fraud
    5         Coordinating Council within the Department of
    6         Financial Services to coordinate efforts to eliminate
    7         Medicaid and public assistance fraud; providing for
    8         membership; providing for meetings; specifying council
    9         duties; requiring an annual report to the Governor and
   10         Legislature; creating s. 624.351, F.S.; directing the
   11         Chief Financial Officer to prepare model interagency
   12         agreements that address Medicaid and public assistance
   13         fraud; specifying which agencies can be a party to
   14         such agreements; amending s. 16.59, F.S.; conforming
   15         provisions to changes made by the act; requiring the
   16         Divisions of Insurance Fraud and Public Assistance
   17         Fraud in the Department of Financial Services to be
   18         collocated with the Medicaid Fraud Control Unit if
   19         possible; requiring positions dedicated to Medicaid
   20         managed care fraud to be collocated with the Division
   21         of Insurance Fraud; amending s. 20.121, F.S.;
   22         establishing the Division of Public Assistance Fraud
   23         within the Department of Financial Services; amending
   24         ss. 411.01, 414.33, and 414.39, F.S.; conforming
   25         provisions to changes made by the act; transferring,
   26         renumbering, and amending s. 943.401, F.S.; directing
   27         the Department of Financial Services rather than the
   28         Department of Law Enforcement to investigate public
   29         assistance fraud; establishing the Medicaid claims
   30         adjudication project in the Agency for Health Care
   31         Administration to decrease the incidence of inaccurate
   32         payments and to improve the efficiency of the Medicaid
   33         claims processing system; transferring activities
   34         relating to public assistance fraud from the
   35         Department of Law Enforcement to the Division of
   36         Public Assistance Fraud in the Department of Financial
   37         Services by a type two transfer; providing an
   38         effective date.
   40         WHEREAS, Florida’s Medicaid program is one of the largest
   41  in the country, serving approximately 2.7 million persons each
   42  month. The program provides health care benefits to families and
   43  individuals below certain income and resource levels. For the
   44  2008-2009 fiscal year, the Legislature appropriated $18.81
   45  billion to operate the Medicaid program which is funded from
   46  general revenue, trust funds that include federal matching
   47  funds, and other state funds, and
   48         WHEREAS, Medicaid fraud in Florida is epidemic, far
   49  reaching, and costs the state and the Federal Government
   50  millions of dollars annually. Medicaid fraud not only drives up
   51  the cost of health care and reduces the availability of funds to
   52  support needed services, but undermines the long-term solvency
   53  of both health care providers and the state’s Medicaid program,
   54  and
   55         WHEREAS, the state’s public assistance programs serve
   56  approximately 1.8 million Floridians each month by providing
   57  benefits for food, cash assistance for needy families, home
   58  health care for disabled adults, and grants to individuals and
   59  communities affected by natural disasters. For the 2008-2009
   60  fiscal year, the Legislature appropriated $626 million to
   61  operate public assistance programs, and
   62         WHEREAS, public assistance fraud costs taxpayers millions
   63  of dollars annually, which significantly and negatively impacts
   64  the various assistance programs by taking dollars that could be
   65  used to provide services for those people who have a legitimate
   66  need for assistance, and
   67         WHEREAS, both Medicaid and public assistance programs are
   68  vulnerable to fraudulent practices that can take many forms. For
   69  Medicaid, these practices range from providers who bill for
   70  services never rendered and who pay kickbacks to other providers
   71  for client referrals, to fraud occurring at the corporate level
   72  of a managed care organization. Fraudulent practices involving
   73  public assistance involve persons not disclosing material facts
   74  when obtaining assistance or not disclosing changes in
   75  circumstances while on public assistance, and
   76         WHEREAS, ridding the system of perpetrators who prey on the
   77  state’s Medicaid and public assistance programs helps reduce the
   78  state’s skyrocketing costs, makes more funds available for
   79  essential services, and improves the quality of care and the
   80  health status of our residents, and
   81         WHEREAS, aggressive and comprehensive measures are needed
   82  at the state level to investigate and prosecute Medicaid and
   83  public assistance fraud and to recover dollars stolen from these
   84  programs, and
   85         WHEREAS, new statewide initiatives and coordinated efforts
   86  are necessary to focus resources in order to aid law enforcement
   87  and investigative agencies in detecting and deterring this type
   88  of fraudulent activity, NOW, THEREFORE,
   90  Be It Enacted by the Legislature of the State of Florida:
   92         Section 1. Section 624.35, Florida Statutes, is created to
   93  read:
   94         624.35Medicaid and Public Assistance Fraud Coordinating
   95  Council.—
   96         (1)LEGISLATIVE FINDINGS.—The Legislature finds that there
   97  is a need to develop and implement a statewide strategy to
   98  coordinate state and local agencies, law enforcement entities,
   99  and investigative units in order to focus programs and
  100  initiatives dealing with the prevention, detection, and
  101  prosecution of Medicaid and public assistance fraud.
  102         (2) ESTABLISHMENT.—The Medicaid and Public Assistance Fraud
  103  Coordinating Council is created within the department to oversee
  104  and coordinate state and local efforts to eliminate Medicaid and
  105  public assistance fraud and to recover state and federal funds.
  106  The coordinating council shall serve in an advisory capacity and
  107  provide recommendations and policy alternatives to the Chief
  108  Financial Officer.
  109         (3)MEMBERSHIP.—The coordinating council shall consist of
  110  the following 11 members who may not designate anyone to serve
  111  in their place:
  112         (a)The Chief Financial Officer, who shall serve as chair.
  113         (b) The Attorney General, who shall serve as vice chair.
  114         (c) The executive director of the Department of Law
  115  Enforcement.
  116         (d) The Secretary of Health Care Administration.
  117         (e)The Secretary of Children and Family Services.
  118         (f)The State Surgeon General.
  119         (g) Five members appointed by the Chief Financial Officer,
  120  consisting of two sheriffs, two chiefs of police, and one state
  121  attorney. When making these appointments, the Chief Financial
  122  Officer shall consider representation by geography, population,
  123  ethnicity, and other relevant factors in order to ensure that
  124  the membership of the council is representative of the state as
  125  a whole.
  127         (a)All members appointed by the Chief Financial Officer
  128  shall be appointed for a term of 2 years. The remaining members
  129  are standing members of the council and may not serve beyond the
  130  time he or she ceases to hold the position that was the basis
  131  for appointment to the coordinating council. A vacancy shall be
  132  filled in the same manner as the original appointment but only
  133  for the unexpired term.
  134         (b)The Legislature finds that the coordinating council
  135  serves a legitimate state, county, and municipal purpose and
  136  that service on the coordinating council is consistent with a
  137  member’s principal service in a public office or employment.
  138  Therefore membership on the coordinating council does not
  139  disqualify a member from holding any other public office or from
  140  being employed by a public entity, except that a member of the
  141  Legislature may not serve on the council.
  142         (c)Members of the coordinating council shall serve without
  143  compensation, but are entitled to reimbursement for per diem and
  144  travel expenses pursuant to s. 112.061. Reimbursements may be
  145  paid from appropriations provided to the department by the
  146  Legislature for the purposes of this section.
  147         (d)The Chief Financial Officer shall appoint a chief of
  148  staff for the coordinating council who must have experience,
  149  education, and expertise in the fields of law, prosecution, or
  150  fraud investigations and shall serve at the pleasure of the
  151  Chief Financial Officer. The department shall provide the
  152  coordinating council with staff necessary to assist the
  153  coordinating council in the performance of its duties.
  154         (5)MEETINGS.—The coordinating council shall hold its
  155  organizational session by March 1, 2011. Thereafter, the
  156  coordinating council shall meet at least four times per year.
  157  Additional meetings may be held if the chair determines that
  158  extraordinary circumstances require an additional meeting.
  159  Members may appear by electronic means. A majority of the
  160  members of the coordinating council constitutes a quorum.
  161         (6)COUNCIL DUTIES.—The coordinating council shall provide
  162  advice and make recommendations, as necessary, to the Chief
  163  Financial Officer.
  164         (a) The coordinating council may advise the Chief Financial
  165  Officer on the feasibility of undertaking initiatives that
  166  include, but are not limited to:
  167         1. Conducting a census of local, state, and federal efforts
  168  to address Medicaid and public assistance fraud in this state,
  169  including fraud detection, prevention, and prosecution, in order
  170  to discern overlapping missions, maximize existing resources,
  171  and strengthen current programs.
  172         2. Developing a strategic plan for coordinating and
  173  targeting state and local resources for preventing and
  174  prosecuting Medicaid and public assistance fraud. The plan must
  175  identify methods to enhance multiagency efforts that contribute
  176  to achieving the state’s goal of eliminating Medicaid and public
  177  assistance fraud.
  178         3. Identifying methods to implement innovative technology
  179  and data sharing in order to identify and analyze Medicaid and
  180  public assistance fraud with speed and efficiency.
  181         4.Establishing a program that provides grants to state and
  182  local agencies that develop and implement effective Medicaid and
  183  public assistance fraud prevention and investigative programs,
  184  which are determined by the coordinating council to
  185  significantly contribute to achieving the state’s goal of
  186  eliminating Medicaid and public assistance fraud. The grant
  187  program may also provide startup funding for new initiatives by
  188  local and state law enforcement or administrative agencies to
  189  combat Medicaid and public assistance fraud.
  190         5.Developing and promoting crime prevention services and
  191  educational programs that serve the public, including, but not
  192  limited to, a well-publicized rewards program for the
  193  apprehension and conviction of criminals who perpetrate Medicaid
  194  and public assistance fraud.
  195         6. Providing grants, contingent upon appropriation, for
  196  multiagency or state and local Medicaid and public assistance
  197  fraud efforts, which would include, but are not limited to:
  198         a. Providing for a Medicaid and public assistance fraud
  199  prosecutor in the Office of the Statewide Prosecutor.
  200         b. Providing assistance to state attorneys for support
  201  services or equipment, or for the hiring of assistant state
  202  attorneys, as needed, to prosecute Medicaid and public
  203  assistance fraud cases.
  204         c.Providing assistance to judges for support services or
  205  for the hiring of senior judges, as needed, so that Medicaid and
  206  public assistance fraud cases can be heard expeditiously.
  207         (b)The coordinating council shall receive periodic reports
  208  from relevant state agencies, law enforcement officers,
  209  investigators, prosecutors, and coordinating teams which relate
  210  to Medicaid and public assistance criminal and civil
  211  investigations. Such reports may include discussions regarding
  212  significant factors and trends relevant to a statewide Medicaid
  213  and public assistance fraud strategy.
  214         (7)REPORTS.—The coordinating council shall annually
  215  prepare and submit a report on its activities and
  216  recommendations, by October 1, to the Governor, the President of
  217  the Senate, the Speaker of the House of Representatives, and the
  218  chairs of the Senate and House committees that have substantive
  219  jurisdiction over Medicaid and public assistance fraud.
  220         Section 2. Section 624.351, Florida Statutes, is created to
  221  read:
  222         624.351Interagency agreements to detect and deter Medicaid
  223  and public assistance fraud.—
  224         (1) The Chief Financial Officer shall prepare model
  225  interagency agreements for the prevention, investigation, and
  226  prosecution of Medicaid and public assistance fraud to be known
  227  as “Attack Fraud” agreements. Parties to such agreements may
  228  include any agency that is headed by a Cabinet officer, the
  229  Governor and Cabinet, a collegial body, or any federal, state,
  230  or local law enforcement agency.
  231         (2) The agreements must include, but are not limited to:
  232         (a) Establishing the agreement’s purpose, mission,
  233  authority, organizational structure, procedures, supervision,
  234  operations, deputations, funding, expenditures, property and
  235  equipment, reports and records, assets and forfeitures, media
  236  policy, liability, and duration.
  237         (b) Requiring that parties to an agreement have appropriate
  238  powers and authority relative to the purpose and mission of the
  239  agreement.
  240         Section 3. Section 16.59, Florida Statutes, is amended to
  241  read:
  242         16.59 Medicaid fraud control.—The Medicaid Fraud Control
  243  Unit There is created in the Department of Legal Affairs to the
  244  Medicaid Fraud Control Unit, which may investigate all
  245  violations of s. 409.920 and any criminal violations discovered
  246  during the course of those investigations. The Medicaid Fraud
  247  Control Unit may refer any criminal violation so uncovered to
  248  the appropriate prosecuting authority. The offices of the
  249  Medicaid Fraud Control Unit, and the offices of the Agency for
  250  Health Care Administration Medicaid program integrity program,
  251  and the Divisions of Insurance Fraud and Public Assistance Fraud
  252  within the Department of Financial Services shall, to the extent
  253  possible, be collocated; however, positions dedicated to
  254  Medicaid managed care fraud within the Medicaid Fraud Control
  255  Unit shall be collocated with the Division of Insurance Fraud.
  256  The Agency for Health Care Administration, and the Department of
  257  Legal Affairs, and the Divisions of Insurance Fraud and Public
  258  Assistance Fraud within the Department of Financial Services
  259  shall conduct joint training and other joint activities designed
  260  to increase communication and coordination in recovering
  261  overpayments.
  262         Section 4. Paragraph (o) is added to subsection (2) of
  263  section 20.121, Florida Statutes, to read:
  264         20.121 Department of Financial Services.—There is created a
  265  Department of Financial Services.
  266         (2) DIVISIONS.—The Department of Financial Services shall
  267  consist of the following divisions:
  268         (o) The Division of Public Assistance Fraud.
  269         Section 5. Paragraph (b) of subsection (7) of section
  270  411.01, Florida Statutes, is amended to read:
  271         411.01 School readiness programs; early learning
  272  coalitions.—
  273         (7) PARENTAL CHOICE.—
  274         (b) If it is determined that a provider has provided any
  275  cash to the beneficiary in return for receiving the purchase
  276  order, the early learning coalition or its fiscal agent shall
  277  refer the matter to the Department of Financial Services
  278  pursuant to s. 414.411 Division of Public Assistance Fraud for
  279  investigation.
  280         Section 6. Subsection (2) of section 414.33, Florida
  281  Statutes, is amended to read:
  282         414.33 Violations of food stamp program.—
  283         (2) In addition, the department shall establish procedures
  284  for referring to the Department of Law Enforcement any case that
  285  involves a suspected violation of federal or state law or rules
  286  governing the administration of the food stamp program to the
  287  Department of Financial Services pursuant to s. 414.411.
  288         Section 7. Subsection (9) of section 414.39, Florida
  289  Statutes, is amended to read:
  290         414.39 Fraud.—
  291         (9) All records relating to investigations of public
  292  assistance fraud in the custody of the department and the Agency
  293  for Health Care Administration are available for examination by
  294  the Department of Financial Services Law Enforcement pursuant to
  295  s. 414.411 943.401 and are admissible into evidence in
  296  proceedings brought under this section as business records
  297  within the meaning of s. 90.803(6).
  298         Section 8. Section 943.401, Florida Statutes, is
  299  transferred, renumbered as section 414.411, Florida Statutes,
  300  and amended to read:
  301         414.411 943.401 Public assistance fraud.—
  302         (1)(a) The Department of Financial Services Law Enforcement
  303  shall investigate all public assistance provided to residents of
  304  the state or provided to others by the state. In the course of
  305  such investigation the department of Law Enforcement shall
  306  examine all records, including electronic benefits transfer
  307  records and make inquiry of all persons who may have knowledge
  308  as to any irregularity incidental to the disbursement of public
  309  moneys, food stamps, or other items or benefits authorizations
  310  to recipients.
  311         (b) All public assistance recipients, as a condition
  312  precedent to qualification for public assistance received and as
  313  defined under the provisions of chapter 409, chapter 411, or
  314  this chapter 414, must shall first give in writing, to the
  315  Agency for Health Care Administration, the Department of Health,
  316  the Agency for Workforce Innovation, and the Department of
  317  Children and Family Services, as appropriate, and to the
  318  Department of Financial Services Law Enforcement, consent to
  319  make inquiry of past or present employers and records, financial
  320  or otherwise.
  321         (2) In the conduct of such investigation the Department of
  322  Financial Services Law Enforcement may employ persons having
  323  such qualifications as are useful in the performance of this
  324  duty.
  325         (3) The results of such investigation shall be reported by
  326  the Department of Financial Services Law Enforcement to the
  327  appropriate legislative committees, the Agency for Health Care
  328  Administration, the Department of Health, the Agency for
  329  Workforce Innovation, and the Department of Children and Family
  330  Services, and to such others as the department of Law
  331  Enforcement may determine.
  332         (4) The Department of Health and the Department of Children
  333  and Family Services shall report to the Department of Financial
  334  Services Law Enforcement the final disposition of all cases
  335  wherein action has been taken pursuant to s. 414.39, based upon
  336  information furnished by the Department of Financial Services
  337  Law Enforcement.
  338         (5) All lawful fees and expenses of officers and witnesses,
  339  expenses incident to taking testimony and transcripts of
  340  testimony and proceedings are a proper charge to the Department
  341  of Financial Services Law Enforcement.
  342         (6) The provisions of this section shall be liberally
  343  construed in order to carry out effectively the purposes of this
  344  section in the interest of protecting public moneys and other
  345  public property.
  346         Section 9. Medicaid claims adjudication project.—The Agency
  347  for Health Care Administration shall issue a competitive
  348  procurement pursuant to chapter 287, Florida Statutes, with a
  349  third-party vendor, at no cost to the state, to provide a real
  350  time, front-end database to augment the Medicaid fiscal agent
  351  program edits and claims adjudication process. The vendor shall
  352  provide an interface with the Medicaid fiscal agent to decrease
  353  inaccurate payment to Medicaid providers and improve the overall
  354  efficiency of the Medicaid claims-processing system.
  355         Section 10. All powers, duties, functions, records,
  356  offices, personnel, property, pending issues and existing
  357  contracts, administrative authority, administrative rules, and
  358  unexpended balances of appropriations, allocations, and other
  359  funds relating to public assistance fraud in the Department of
  360  Law Enforcement are transferred by a type two transfer, as
  361  defined in s. 20.06(2), Florida Statutes, to the Division of
  362  Public Assistance Fraud in the Department of Financial Services.
  363         Section 11. This act shall take effect January 1, 2011.

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