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       Florida Senate - 2010                                CS for SB 8
       By the Committee on Banking and Insurance; and Senator Negron
       597-03120A-10                                            20108c1
    1                        A bill to be entitled                      
    2         An act relating to Medicaid and public assistance
    3         fraud; creating s. 624.35, F.S.; providing a short
    4         title; creating s. 624.351, F.S.; providing
    5         legislative intent; establishing the Medicaid and
    6         Public Assistance Fraud Strike Force within the
    7         Department of Financial Services to coordinate efforts
    8         to eliminate Medicaid and public assistance fraud;
    9         providing for membership; providing for meetings;
   10         specifying duties; requiring an annual report to the
   11         Legislature and Governor; creating s. 624.352, F.S.;
   12         directing the Chief Financial Officer to prepare model
   13         interagency agreements that address Medicaid and
   14         public assistance fraud; specifying which agencies can
   15         be a party to such agreements; amending s. 16.59,
   16         F.S.; conforming provisions to changes made by the
   17         act; requiring the Divisions of Insurance Fraud and
   18         Public Assistance Fraud in the Department of Financial
   19         Services to be collocated with the Medicaid Fraud
   20         Control Unit if possible; requiring positions
   21         dedicated to Medicaid managed care fraud to be
   22         collocated with the Division of Insurance Fraud;
   23         amending s. 20.121, F.S.; establishing the Division of
   24         Public Assistance Fraud within the Department of
   25         Financial Services; amending ss. 411.01, 414.33, and
   26         414.39, F.S.; conforming provisions to changes made by
   27         the act; transferring, renumbering, and amending s.
   28         943.401, F.S.; directing the Department of Financial
   29         Services rather than the Department of Law Enforcement
   30         to investigate public assistance fraud; directing the
   31         Auditor General, in consultation with the Office of
   32         Program Policy Analysis and Government Accountability,
   33         to conduct an operational audit of the Medicaid fraud
   34         and abuse processes in the Agency for Health Care
   35         Administration; requiring a report to the Legislature
   36         and Governor by a certain date; establishing the
   37         Medicaid claims adjudication project in the Agency for
   38         Health Care Administration to decrease the incidence
   39         of inaccurate payments and to improve the efficiency
   40         of the Medicaid claims processing system; transferring
   41         activities relating to public assistance fraud from
   42         the Department of Law Enforcement to the Division of
   43         Public Assistance Fraud in the Department of Financial
   44         Services by a type two transfer; providing an
   45         effective date.
   47         WHEREAS, Florida’s Medicaid program is one of the largest
   48  in the country, serving approximately 2.7 million persons each
   49  month. The program provides health care benefits to families and
   50  individuals below certain income and resource levels. For the
   51  2008-2009 fiscal year, the Legislature appropriated $18.81
   52  billion to operate the Medicaid program which is funded from
   53  general revenue, trust funds that include federal matching
   54  funds, and other state funds, and
   55         WHEREAS, Medicaid fraud in Florida is epidemic, far
   56  reaching, and costs the state and the Federal Government
   57  billions of dollars annually. Medicaid fraud not only drives up
   58  the cost of health care and reduces the availability of funds to
   59  support needed services, but undermines the long-term solvency
   60  of both health care providers and the state’s Medicaid program,
   61  and
   62         WHEREAS, the state’s public assistance programs serve
   63  approximately 1.8 million Floridians each month by providing
   64  benefits for food, cash assistance for needy families, home
   65  health care for disabled adults, and grants to individuals and
   66  communities affected by natural disasters. For the 2008-2009
   67  fiscal year, the Legislature appropriated $626 million to
   68  operate public assistance programs, and
   69         WHEREAS, public assistance fraud costs taxpayers millions
   70  of dollars annually, which significantly and negatively impacts
   71  the various assistance programs by taking dollars that could be
   72  used to provide services for those people who have a legitimate
   73  need for assistance, and
   74         WHEREAS, both Medicaid and public assistance programs are
   75  vulnerable to fraudulent practices that can take many forms. For
   76  Medicaid, these practices range from providers who bill for
   77  services never rendered and who pay kickbacks to other providers
   78  for client referrals, to fraud occurring at the corporate level
   79  of a managed care organization. Fraudulent practices involving
   80  public assistance involve persons not disclosing material facts
   81  when obtaining assistance or not disclosing changes in
   82  circumstances while on public assistance, and
   83         WHEREAS, ridding the system of perpetrators who prey on the
   84  state’s Medicaid and public assistance programs helps reduce the
   85  state’s skyrocketing costs, makes more funds available for
   86  essential services, and improves the quality of care and the
   87  health status of our residents, and
   88         WHEREAS, aggressive and comprehensive measures are needed
   89  at the state level to investigate and prosecute Medicaid and
   90  public assistance fraud and to recover dollars stolen from these
   91  programs, and
   92         WHEREAS, new statewide initiatives and coordinated efforts
   93  are necessary to focus resources in order to aid law enforcement
   94  and investigative agencies in detecting and deterring this type
   95  of fraudulent activity, NOW, THEREFORE,
   97  Be It Enacted by the Legislature of the State of Florida:
   99         Section 1. Section 624.35, Florida Statutes, is created to
  100  read:
  101         624.35Short title.—Sections 624.35-624.352 may be cited as
  102  the “Medicaid and Public Assistance Fraud Strike Force Act.”
  103         Section 2. Section 624.351, Florida Statutes, is created to
  104  read:
  105         624.351Medicaid and Public Assistance Fraud Strike Force.—
  106         (1)LEGISLATIVE FINDINGS.—The Legislature finds that there
  107  is a need to develop and implement a statewide strategy to
  108  coordinate state and local agencies, law enforcement entities,
  109  and investigative units in order to focus programs and
  110  initiatives dealing with the prevention, detection, and
  111  prosecution of Medicaid and public assistance fraud.
  112         (2) ESTABLISHMENT.—The Medicaid and Public Assistance Fraud
  113  Strike Force is created within the department to oversee and
  114  coordinate state and local efforts to eliminate Medicaid and
  115  public assistance fraud and to recover state and federal funds.
  116  The strike force shall serve in an advisory capacity and provide
  117  recommendations and policy alternatives to the Chief Financial
  118  Officer.
  119         (3)MEMBERSHIP.—The strike force shall consist of the
  120  following 11 members who may not designate anyone to serve in
  121  their place:
  122         (a)The Chief Financial Officer, who shall serve as chair.
  123         (b) The Attorney General, who shall serve as vice chair.
  124         (c) The executive director of the Department of Law
  125  Enforcement.
  126         (d) The Secretary of Health Care Administration.
  127         (e)The Secretary of Children and Family Services.
  128         (f)The State Surgeon General.
  129         (g) Five members appointed by the Chief Financial Officer,
  130  consisting of two sheriffs, two chiefs of police, and one state
  131  attorney. When making these appointments, the Chief Financial
  132  Officer shall consider representation by geography, population,
  133  ethnicity, and other relevant factors in order to ensure that
  134  the membership of the strike force is representative of the
  135  state as a whole.
  137         (a)All members appointed by the Chief Financial Officer
  138  shall be appointed for a term of 2 years. The remaining members
  139  are standing members of the strike force and may not serve
  140  beyond the time he or she ceases to hold the position that was
  141  the basis for appointment to the strike force. A vacancy shall
  142  be filled in the same manner as the original appointment but
  143  only for the unexpired term.
  144         (b)The Legislature finds that the strike force serves a
  145  legitimate state, county, and municipal purpose and that service
  146  on the strike force is consistent with a member’s principal
  147  service in a public office or employment. Therefore membership
  148  on the strike force does not disqualify a member from holding
  149  any other public office or from being employed by a public
  150  entity, except that a member of the Legislature may not serve on
  151  the strike force.
  152         (c)Members of the strike force shall serve without
  153  compensation, but are entitled to reimbursement for per diem and
  154  travel expenses pursuant to s. 112.061. Reimbursements may be
  155  paid from appropriations provided to the department by the
  156  Legislature for the purposes of this section.
  157         (d)The Chief Financial Officer shall appoint a chief of
  158  staff for the strike force who must have experience, education,
  159  and expertise in the fields of law, prosecution, or fraud
  160  investigations and shall serve at the pleasure of the Chief
  161  Financial Officer. The department shall provide the strike force
  162  with staff necessary to assist the strike force in the
  163  performance of its duties.
  164         (5)MEETINGS.—The strike force shall hold its
  165  organizational session by March 1, 2011. Thereafter, the strike
  166  force shall meet at least four times per year. Additional
  167  meetings may be held if the chair determines that extraordinary
  168  circumstances require an additional meeting. Members may appear
  169  by electronic means. A majority of the members of the strike
  170  force constitutes a quorum.
  171         (6)STRIKE FORCE DUTIES.—The strike force shall provide
  172  advice and make recommendations, as necessary, to the Chief
  173  Financial Officer.
  174         (a) The strike force may advise the Chief Financial Officer
  175  on the feasibility of undertaking initiatives that include, but
  176  are not limited to:
  177         1. Conducting a census of local, state, and federal efforts
  178  to address Medicaid and public assistance fraud in this state,
  179  including fraud detection, prevention, and prosecution, in order
  180  to discern overlapping missions, maximize existing resources,
  181  and strengthen current programs.
  182         2. Developing a strategic plan for coordinating and
  183  targeting state and local resources for preventing and
  184  prosecuting Medicaid and public assistance fraud. The plan must
  185  identify methods to enhance multiagency efforts that contribute
  186  to achieving the state’s goal of eliminating Medicaid and public
  187  assistance fraud.
  188         3. Identifying methods to implement innovative technology
  189  and data sharing in order to identify and analyze Medicaid and
  190  public assistance fraud with speed and efficiency.
  191         4.Establishing a program that provides grants to state and
  192  local agencies that develop and implement effective Medicaid and
  193  public assistance fraud prevention and investigative programs,
  194  which are determined by the strike force to significantly
  195  contribute to achieving the state’s goal of eliminating Medicaid
  196  and public assistance fraud. The grant program may also provide
  197  startup funding for new initiatives by local and state law
  198  enforcement or administrative agencies to combat Medicaid and
  199  public assistance fraud.
  200         5.Developing and promoting crime prevention services and
  201  educational programs that serve the public, including, but not
  202  limited to, a well-publicized rewards program for the
  203  apprehension and conviction of criminals who perpetrate Medicaid
  204  and public assistance fraud.
  205         6. Providing grants, contingent upon appropriation, for
  206  multiagency or state and local Medicaid and public assistance
  207  fraud efforts, which would include, but are not limited to:
  208         a. Providing for a Medicaid and public assistance fraud
  209  prosecutor in the Office of the Statewide Prosecutor.
  210         b. Providing assistance to state attorneys for support
  211  services or equipment, or for the hiring of assistant state
  212  attorneys, as needed, to prosecute Medicaid and public
  213  assistance fraud cases.
  214         c.Providing assistance to judges for support services or
  215  for the hiring of senior judges, as needed, so that Medicaid and
  216  public assistance fraud cases can be heard expeditiously.
  217         (b)The strike force shall receive periodic reports from
  218  relevant state agencies, law enforcement officers,
  219  investigators, prosecutors, and coordinating teams which relate
  220  to Medicaid and public assistance criminal and civil
  221  investigations. Such reports may include discussions regarding
  222  significant factors and trends relevant to a statewide Medicaid
  223  and public assistance fraud strategy.
  224         (7)REPORTS.—The strike force shall annually prepare and
  225  submit a report on its activities and recommendations, by
  226  October 1, to the President of the Senate, the Speaker of the
  227  House of Representatives, the Governor, and the chairs of the
  228  Senate and House committees that have substantive jurisdiction
  229  over Medicaid and public assistance fraud.
  230         Section 3. Section 624.352, Florida Statutes, is created to
  231  read:
  232         624.352Interagency agreements to detect and deter Medicaid
  233  and public assistance fraud.—
  234         (1) The Chief Financial Officer shall prepare model
  235  interagency agreements for the prevention, investigation, and
  236  prosecution of Medicaid and public assistance fraud to be known
  237  as “Strike Force” agreements. Parties to such agreements may
  238  include any agency that is headed by a Cabinet officer, the
  239  Governor and Cabinet, a collegial body, or any federal, state,
  240  or local law enforcement agency.
  241         (2) The agreements must include, but are not limited to:
  242         (a) Establishing the agreement’s purpose, mission,
  243  authority, organizational structure, procedures, supervision,
  244  operations, deputations, funding, expenditures, property and
  245  equipment, reports and records, assets and forfeitures, media
  246  policy, liability, and duration.
  247         (b) Requiring that parties to an agreement have appropriate
  248  powers and authority relative to the purpose and mission of the
  249  agreement.
  250         Section 4. Section 16.59, Florida Statutes, is amended to
  251  read:
  252         16.59 Medicaid fraud control.—The Medicaid Fraud Control
  253  Unit There is created in the Department of Legal Affairs to the
  254  Medicaid Fraud Control Unit, which may investigate all
  255  violations of s. 409.920 and any criminal violations discovered
  256  during the course of those investigations. The Medicaid Fraud
  257  Control Unit may refer any criminal violation so uncovered to
  258  the appropriate prosecuting authority. The offices of the
  259  Medicaid Fraud Control Unit, and the offices of the Agency for
  260  Health Care Administration Medicaid program integrity program,
  261  and the Divisions of Insurance Fraud and Public Assistance Fraud
  262  within the Department of Financial Services shall, to the extent
  263  possible, be collocated; however, positions dedicated to
  264  Medicaid managed care fraud within the Medicaid Fraud Control
  265  Unit shall be collocated with the Division of Insurance Fraud.
  266  The Agency for Health Care Administration, and the Department of
  267  Legal Affairs, and the Divisions of Insurance Fraud and Public
  268  Assistance Fraud within the Department of Financial Services
  269  shall conduct joint training and other joint activities designed
  270  to increase communication and coordination in recovering
  271  overpayments.
  272         Section 5. Paragraph (o) is added to subsection (2) of
  273  section 20.121, Florida Statutes, to read:
  274         20.121 Department of Financial Services.—There is created a
  275  Department of Financial Services.
  276         (2) DIVISIONS.—The Department of Financial Services shall
  277  consist of the following divisions:
  278         (o) The Division of Public Assistance Fraud.
  279         Section 6. Paragraph (b) of subsection (7) of section
  280  411.01, Florida Statutes, is amended to read:
  281         411.01 School readiness programs; early learning
  282  coalitions.—
  283         (7) PARENTAL CHOICE.—
  284         (b) If it is determined that a provider has provided any
  285  cash to the beneficiary in return for receiving the purchase
  286  order, the early learning coalition or its fiscal agent shall
  287  refer the matter to the Department of Financial Services
  288  pursuant to s. 414.411 Division of Public Assistance Fraud for
  289  investigation.
  290         Section 7. Subsection (2) of section 414.33, Florida
  291  Statutes, is amended to read:
  292         414.33 Violations of food stamp program.—
  293         (2) In addition, the department shall establish procedures
  294  for referring to the Department of Law Enforcement any case that
  295  involves a suspected violation of federal or state law or rules
  296  governing the administration of the food stamp program to the
  297  Department of Financial Services pursuant to s. 414.411.
  298         Section 8. Subsection (9) of section 414.39, Florida
  299  Statutes, is amended to read:
  300         414.39 Fraud.—
  301         (9) All records relating to investigations of public
  302  assistance fraud in the custody of the department and the Agency
  303  for Health Care Administration are available for examination by
  304  the Department of Financial Services Law Enforcement pursuant to
  305  s. 414.411 943.401 and are admissible into evidence in
  306  proceedings brought under this section as business records
  307  within the meaning of s. 90.803(6).
  308         Section 9. Section 943.401, Florida Statutes, is
  309  transferred, renumbered as section 414.411, Florida Statutes,
  310  and amended to read:
  311         414.411 943.401 Public assistance fraud.—
  312         (1)(a) The Department of Financial Services Law Enforcement
  313  shall investigate all public assistance provided to residents of
  314  the state or provided to others by the state. In the course of
  315  such investigation the department of Law Enforcement shall
  316  examine all records, including electronic benefits transfer
  317  records and make inquiry of all persons who may have knowledge
  318  as to any irregularity incidental to the disbursement of public
  319  moneys, food stamps, or other items or benefits authorizations
  320  to recipients.
  321         (b) All public assistance recipients, as a condition
  322  precedent to qualification for public assistance received and as
  323  defined under the provisions of chapter 409, chapter 411, or
  324  this chapter 414, must shall first give in writing, to the
  325  Agency for Health Care Administration, the Department of Health,
  326  the Agency for Workforce Innovation, and the Department of
  327  Children and Family Services, as appropriate, and to the
  328  Department of Financial Services Law Enforcement, consent to
  329  make inquiry of past or present employers and records, financial
  330  or otherwise.
  331         (2) In the conduct of such investigation the Department of
  332  Financial Services Law Enforcement may employ persons having
  333  such qualifications as are useful in the performance of this
  334  duty.
  335         (3) The results of such investigation shall be reported by
  336  the Department of Financial Services Law Enforcement to the
  337  appropriate legislative committees, the Agency for Health Care
  338  Administration, the Department of Health, the Agency for
  339  Workforce Innovation, and the Department of Children and Family
  340  Services, and to such others as the department of Law
  341  Enforcement may determine.
  342         (4) The Department of Health and the Department of Children
  343  and Family Services shall report to the Department of Financial
  344  Services Law Enforcement the final disposition of all cases
  345  wherein action has been taken pursuant to s. 414.39, based upon
  346  information furnished by the Department of Financial Services
  347  Law Enforcement.
  348         (5) All lawful fees and expenses of officers and witnesses,
  349  expenses incident to taking testimony and transcripts of
  350  testimony and proceedings are a proper charge to the Department
  351  of Financial Services Law Enforcement.
  352         (6) The provisions of this section shall be liberally
  353  construed in order to carry out effectively the purposes of this
  354  section in the interest of protecting public moneys and other
  355  public property.
  356         Section 10. Audit of the Medicaid fraud and abuse
  357  processes.—
  358         (1) The Auditor General, in consultation with the Office of
  359  Program Policy Analysis and Government Accountability, shall
  360  conduct an operational audit of the Agency for Health Care
  361  Administration’s Medicaid fraud and abuse systems, including the
  362  Medicaid program integrity program. The scope of the audit may
  363  include the Attorney General’s Medicaid Fraud Control Unit, and
  364  the Medicaid-related programs in the Department of Health, the
  365  Department of Elderly Affairs, the Agency for Persons with
  366  Disabilities, and the Department of Children and Family
  367  Services. The audit must include, but is not limited to:
  368         (a) An evaluation of current Medicaid policies and the
  369  Medicaid fiscal agent.
  370         (b) A comprehensive analysis of all Medicaid fraud and
  371  abuse prevention and detection processes, including all agency
  372  contracts, Medicaid databases, and internal control risk
  373  assessments.
  374         (c) A comprehensive evaluation of the effectiveness of the
  375  current laws, rules, and contractual requirements that govern
  376  Medicaid managed care entities.
  377         (d) An evaluation of the agency’s Medicaid managed care
  378  oversight processes.
  379         (2) The audit report must include, but is not limited to:
  380         (a)Recommendations for additional Medicaid fiscal agent
  381  edits to increase the overall efficiency of the Medicaid
  382  program, including reductions in Medicaid overpayments; and
  383         (b) Operational and legislative recommendations to enhance
  384  the prevention and detection of fraud and abuse in the Medicaid
  385  program, including the Medicaid managed care program, and to
  386  manage the program in a more cost-effective manner.
  387         (3) The Auditor General’s Office and the Office of Program
  388  Policy Analysis and Government Accountability may contract with
  389  technical consultants to assist in the performance of the audit.
  390  The Auditor General shall submit the joint audit report to the
  391  President of the Senate, the Speaker of the House of
  392  Representatives, and the Governor by December 1, 2011.
  393         Section 11. Medicaid claims adjudication project.—The
  394  Agency for Health Care Administration shall issue a competitive
  395  procurement pursuant to chapter 287, Florida Statutes, with a
  396  third-party vendor, at no cost to the state, to provide a real
  397  time, front-end database to augment the Medicaid fiscal agent
  398  program edits and claims adjudication process. The vendor shall
  399  provide an interface with the Medicaid fiscal agent to decrease
  400  inaccurate payment to Medicaid providers and improve the overall
  401  efficiency of the Medicaid claims-processing system.
  402         Section 12. All powers, duties, functions, records,
  403  offices, personnel, property, pending issues and existing
  404  contracts, administrative authority, administrative rules, and
  405  unexpended balances of appropriations, allocations, and other
  406  funds relating to public assistance fraud in the Department of
  407  Law Enforcement are transferred by a type two transfer, as
  408  defined in s. 20.06(2), Florida Statutes, to the Division of
  409  Public Assistance Fraud in the Department of Financial Services.
  410         Section 13. This act shall take effect January 1, 2011.

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