Florida Senate - 2010 CS for SB 8
By the Committee on Banking and Insurance; and Senator Negron
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,
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
101 624.35 Short 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
105 624.351 Medicaid 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
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
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.
136 (4) TERMS OF MEMBERSHIP; COMPENSATION; STAFF.—
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
232 624.352 Interagency 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
250 Section 4. Section 16.59, Florida Statutes, is amended to
252 16.59 Medicaid fraud control.—The Medicaid Fraud Control
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
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
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
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 Enforcemen t 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
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
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
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.