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       Florida Senate - 2010                         CS for CS for SB 8
       By the Committees on Health Regulation; and Banking and
       Insurance; and Senator Negron
       588-03754-10                                             20108c2
    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 and the Office of Program Policy
   32         Analysis and Government Accountability to review the
   33         Medicaid fraud and abuse processes in the Agency for
   34         Health Care Administration; requiring a report to the
   35         Legislature and Governor by a certain date;
   36         establishing the Medicaid claims adjudication project
   37         in the Agency for Health Care Administration to
   38         decrease the incidence of inaccurate payments and to
   39         improve the efficiency of the Medicaid claims
   40         processing system; transferring activities relating to
   41         public assistance fraud from the Department of Law
   42         Enforcement to the Division of Public Assistance Fraud
   43         in the Department of Financial Services by a type two
   44         transfer; providing effective dates.
   46         WHEREAS, Florida’s Medicaid program is one of the largest
   47  in the country, serving approximately 2.7 million persons each
   48  month. The program provides health care benefits to families and
   49  individuals below certain income and resource levels. For the
   50  2008-2009 fiscal year, the Legislature appropriated $18.81
   51  billion to operate the Medicaid program which is funded from
   52  general revenue, trust funds that include federal matching
   53  funds, and other state funds, and
   54         WHEREAS, Medicaid fraud in Florida is epidemic, far
   55  reaching, and costs the state and the Federal Government
   56  billions of dollars annually. Medicaid fraud not only drives up
   57  the cost of health care and reduces the availability of funds to
   58  support needed services, but undermines the long-term solvency
   59  of both health care providers and the state’s Medicaid program,
   60  and
   61         WHEREAS, the state’s public assistance programs serve
   62  approximately 1.8 million Floridians each month by providing
   63  benefits for food, cash assistance for needy families, home
   64  health care for disabled adults, and grants to individuals and
   65  communities affected by natural disasters. For the 2008-2009
   66  fiscal year, the Legislature appropriated $626 million to
   67  operate public assistance programs, and
   68         WHEREAS, public assistance fraud costs taxpayers millions
   69  of dollars annually, which significantly and negatively impacts
   70  the various assistance programs by taking dollars that could be
   71  used to provide services for those people who have a legitimate
   72  need for assistance, and
   73         WHEREAS, both Medicaid and public assistance programs are
   74  vulnerable to fraudulent practices that can take many forms. For
   75  Medicaid, these practices range from providers who bill for
   76  services never rendered and who pay kickbacks to other providers
   77  for client referrals, to fraud occurring at the corporate level
   78  of a managed care organization. Fraudulent practices involving
   79  public assistance involve persons not disclosing material facts
   80  when obtaining assistance or not disclosing changes in
   81  circumstances while on public assistance, and
   82         WHEREAS, ridding the system of perpetrators who prey on the
   83  state’s Medicaid and public assistance programs helps reduce the
   84  state’s skyrocketing costs, makes more funds available for
   85  essential services, and improves the quality of care and the
   86  health status of our residents, and
   87         WHEREAS, aggressive and comprehensive measures are needed
   88  at the state level to investigate and prosecute Medicaid and
   89  public assistance fraud and to recover dollars stolen from these
   90  programs, and
   91         WHEREAS, new statewide initiatives and coordinated efforts
   92  are necessary to focus resources in order to aid law enforcement
   93  and investigative agencies in detecting and deterring this type
   94  of fraudulent activity, NOW, THEREFORE,
   96  Be It Enacted by the Legislature of the State of Florida:
   98         Section 1. Section 624.35, Florida Statutes, is created to
   99  read:
  100         624.35Short title.—Sections 624.35-624.352 may be cited as
  101  the “Medicaid and Public Assistance Fraud Strike Force Act.”
  102         Section 2. Section 624.351, Florida Statutes, is created to
  103  read:
  104         624.351Medicaid and Public Assistance Fraud Strike Force.—
  105         (1)LEGISLATIVE FINDINGS.—The Legislature finds that there
  106  is a need to develop and implement a statewide strategy to
  107  coordinate state and local agencies, law enforcement entities,
  108  and investigative units in order to increase the effectiveness
  109  of programs and initiatives dealing with the prevention,
  110  detection, and prosecution of Medicaid and public assistance
  111  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)The five members appointed by the Chief Financial
  138  Officer will serve 4-year terms; however, for the purpose of
  139  providing staggered terms, of the initial appointments, two
  140  members will be appointed to a 2-year term, two members will be
  141  appointed to a 3-year term, and one member will be appointed to
  142  a 4-year term. The remaining members are standing members of the
  143  strike force and may not serve beyond the time he or she holds
  144  the position that was the basis for strike force membership. A
  145  vacancy shall be filled in the same manner as the original
  146  appointment but only for the unexpired term.
  147         (b)The Legislature finds that the strike force serves a
  148  legitimate state, county, and municipal purpose and that service
  149  on the strike force is consistent with a member’s principal
  150  service in a public office or employment. Therefore membership
  151  on the strike force does not disqualify a member from holding
  152  any other public office or from being employed by a public
  153  entity, except that a member of the Legislature may not serve on
  154  the strike force.
  155         (c)Members of the strike force shall serve without
  156  compensation, but are entitled to reimbursement for per diem and
  157  travel expenses pursuant to s. 112.061. Reimbursements may be
  158  paid from appropriations provided to the department by the
  159  Legislature for the purposes of this section.
  160         (d)The Chief Financial Officer shall appoint a chief of
  161  staff for the strike force who must have experience, education,
  162  and expertise in the fields of law, prosecution, or fraud
  163  investigations and shall serve at the pleasure of the Chief
  164  Financial Officer. The department shall provide the strike force
  165  with staff necessary to assist the strike force in the
  166  performance of its duties.
  167         (5)MEETINGS.—The strike force shall hold its
  168  organizational session by March 1, 2011. Thereafter, the strike
  169  force shall meet at least four times per year. Additional
  170  meetings may be held if the chair determines that extraordinary
  171  circumstances require an additional meeting. Members may appear
  172  by electronic means. A majority of the members of the strike
  173  force constitutes a quorum.
  174         (6)STRIKE FORCE DUTIES.—The strike force shall provide
  175  advice and make recommendations, as necessary, to the Chief
  176  Financial Officer.
  177         (a) The strike force may advise the Chief Financial Officer
  178  on initiatives that include, but are not limited to:
  179         1. Conducting a census of local, state, and federal efforts
  180  to address Medicaid and public assistance fraud in this state,
  181  including fraud detection, prevention, and prosecution, in order
  182  to discern overlapping missions, maximize existing resources,
  183  and strengthen current programs.
  184         2. Developing a strategic plan for coordinating and
  185  targeting state and local resources for preventing and
  186  prosecuting Medicaid and public assistance fraud. The plan must
  187  identify methods to enhance multiagency efforts that contribute
  188  to achieving the state’s goal of eliminating Medicaid and public
  189  assistance fraud.
  190         3. Identifying methods to implement innovative technology
  191  and data sharing in order to detect and analyze Medicaid and
  192  public assistance fraud with speed and efficiency.
  193         4.Establishing a program to provide grants to state and
  194  local agencies that develop and implement effective Medicaid and
  195  public assistance fraud prevention, detection, and investigation
  196  programs, which are evaluated by the strike force and ranked by
  197  their potential to contribute to achieving the state’s goal of
  198  eliminating Medicaid and public assistance fraud. The grant
  199  program may also provide startup funding for new initiatives by
  200  local and state law enforcement or administrative agencies to
  201  combat Medicaid and public assistance fraud.
  202         5.Developing and promoting crime prevention services and
  203  educational programs that serve the public, including, but not
  204  limited to, a well-publicized rewards program for the
  205  apprehension and conviction of criminals who perpetrate Medicaid
  206  and public assistance fraud.
  207         6. Providing grants, contingent upon appropriation, for
  208  multiagency or state and local Medicaid and public assistance
  209  fraud efforts, which include, but are not limited to:
  210         a. Providing for a Medicaid and public assistance fraud
  211  prosecutor in the Office of the Statewide Prosecutor.
  212         b. Providing assistance to state attorneys for support
  213  services or equipment, or for the hiring of assistant state
  214  attorneys, as needed, to prosecute Medicaid and public
  215  assistance fraud cases.
  216         c.Providing assistance to judges for support services or
  217  for the hiring of senior judges, as needed, so that Medicaid and
  218  public assistance fraud cases can be heard expeditiously.
  219         (b)The strike force shall receive periodic reports from
  220  state agencies, law enforcement officers, investigators,
  221  prosecutors, and coordinating teams regarding Medicaid and
  222  public assistance criminal and civil investigations. Such
  223  reports may include discussions regarding significant factors
  224  and trends relevant to a statewide Medicaid and public
  225  assistance fraud strategy.
  226         (7)REPORTS.—The strike force shall annually prepare and
  227  submit a report on its activities and recommendations, by
  228  October 1, to the President of the Senate, the Speaker of the
  229  House of Representatives, the Governor, and the chairs of the
  230  House of Representatives and Senate committees that have
  231  substantive jurisdiction over Medicaid and public assistance
  232  fraud.
  233         Section 3. Section 624.352, Florida Statutes, is created to
  234  read:
  235         624.352Interagency agreements to detect and deter Medicaid
  236  and public assistance fraud.—
  237         (1) The Chief Financial Officer shall prepare model
  238  interagency agreements for the coordination of prevention,
  239  investigation, and prosecution of Medicaid and public assistance
  240  fraud to be known as “Strike Force” agreements. Parties to such
  241  agreements may include any agency that is headed by a Cabinet
  242  officer, the Governor, the Governor and Cabinet, a collegial
  243  body, or any federal, state, or local law enforcement agency.
  244         (2) The agreements must include, but are not limited to:
  245         (a) Establishing the agreement’s purpose, mission,
  246  authority, organizational structure, procedures, supervision,
  247  operations, deputations, funding, expenditures, property and
  248  equipment, reports and records, assets and forfeitures, media
  249  policy, liability, and duration.
  250         (b) Requiring that parties to an agreement have appropriate
  251  powers and authority relative to the purpose and mission of the
  252  agreement.
  253         Section 4. Section 16.59, Florida Statutes, is amended to
  254  read:
  255         16.59 Medicaid fraud control.—The Medicaid Fraud Control
  256  Unit There is created in the Department of Legal Affairs to the
  257  Medicaid Fraud Control Unit, which may investigate all
  258  violations of s. 409.920 and any criminal violations discovered
  259  during the course of those investigations. The Medicaid Fraud
  260  Control Unit may refer any criminal violation so uncovered to
  261  the appropriate prosecuting authority. The offices of the
  262  Medicaid Fraud Control Unit, and the offices of the Agency for
  263  Health Care Administration Medicaid program integrity program,
  264  and the Divisions of Insurance Fraud and Public Assistance Fraud
  265  within the Department of Financial Services shall, to the extent
  266  possible, be collocated; however, positions dedicated to
  267  Medicaid managed care fraud within the Medicaid Fraud Control
  268  Unit shall be collocated with the Division of Insurance Fraud.
  269  The Agency for Health Care Administration, and the Department of
  270  Legal Affairs, and the Divisions of Insurance Fraud and Public
  271  Assistance Fraud within the Department of Financial Services
  272  shall conduct joint training and other joint activities designed
  273  to increase communication and coordination in recovering
  274  overpayments.
  275         Section 5. Paragraph (o) is added to subsection (2) of
  276  section 20.121, Florida Statutes, to read:
  277         20.121 Department of Financial Services.—There is created a
  278  Department of Financial Services.
  279         (2) DIVISIONS.—The Department of Financial Services shall
  280  consist of the following divisions:
  281         (o) The Division of Public Assistance Fraud.
  282         Section 6. Paragraph (b) of subsection (7) of section
  283  411.01, Florida Statutes, is amended to read:
  284         411.01 School readiness programs; early learning
  285  coalitions.—
  286         (7) PARENTAL CHOICE.—
  287         (b) If it is determined that a provider has provided any
  288  cash to the beneficiary in return for receiving the purchase
  289  order, the early learning coalition or its fiscal agent shall
  290  refer the matter to the Department of Financial Services
  291  pursuant to s. 414.411 Division of Public Assistance Fraud for
  292  investigation.
  293         Section 7. Subsection (2) of section 414.33, Florida
  294  Statutes, is amended to read:
  295         414.33 Violations of food stamp program.—
  296         (2) In addition, the department shall establish procedures
  297  for referring to the Department of Law Enforcement any case that
  298  involves a suspected violation of federal or state law or rules
  299  governing the administration of the food stamp program to the
  300  Department of Financial Services pursuant to s. 414.411.
  301         Section 8. Subsection (9) of section 414.39, Florida
  302  Statutes, is amended to read:
  303         414.39 Fraud.—
  304         (9) All records relating to investigations of public
  305  assistance fraud in the custody of the department and the Agency
  306  for Health Care Administration are available for examination by
  307  the Department of Financial Services Law Enforcement pursuant to
  308  s. 414.411 943.401 and are admissible into evidence in
  309  proceedings brought under this section as business records
  310  within the meaning of s. 90.803(6).
  311         Section 9. Section 943.401, Florida Statutes, is
  312  transferred, renumbered as section 414.411, Florida Statutes,
  313  and amended to read:
  314         414.411 943.401 Public assistance fraud.—
  315         (1)(a) The Department of Financial Services Law Enforcement
  316  shall investigate all public assistance provided to residents of
  317  the state or provided to others by the state. In the course of
  318  such investigation the department of Law Enforcement shall
  319  examine all records, including electronic benefits transfer
  320  records and make inquiry of all persons who may have knowledge
  321  as to any irregularity incidental to the disbursement of public
  322  moneys, food stamps, or other items or benefits authorizations
  323  to recipients.
  324         (b) All public assistance recipients, as a condition
  325  precedent to qualification for public assistance received and as
  326  defined under the provisions of chapter 409, chapter 411, or
  327  this chapter 414, must shall first give in writing, to the
  328  Agency for Health Care Administration, the Department of Health,
  329  the Agency for Workforce Innovation, and the Department of
  330  Children and Family Services, as appropriate, and to the
  331  Department of Financial Services Law Enforcement, consent to
  332  make inquiry of past or present employers and records, financial
  333  or otherwise.
  334         (2) In the conduct of such investigation the Department of
  335  Financial Services Law Enforcement may employ persons having
  336  such qualifications as are useful in the performance of this
  337  duty.
  338         (3) The results of such investigation shall be reported by
  339  the Department of Financial Services Law Enforcement to the
  340  appropriate legislative committees, the Agency for Health Care
  341  Administration, the Department of Health, the Agency for
  342  Workforce Innovation, and the Department of Children and Family
  343  Services, and to such others as the department of Law
  344  Enforcement may determine.
  345         (4) The Department of Health and the Department of Children
  346  and Family Services shall report to the Department of Financial
  347  Services Law Enforcement the final disposition of all cases
  348  wherein action has been taken pursuant to s. 414.39, based upon
  349  information furnished by the Department of Financial Services
  350  Law Enforcement.
  351         (5) All lawful fees and expenses of officers and witnesses,
  352  expenses incident to taking testimony and transcripts of
  353  testimony and proceedings are a proper charge to the Department
  354  of Financial Services Law Enforcement.
  355         (6) The provisions of this section shall be liberally
  356  construed in order to carry out effectively the purposes of this
  357  section in the interest of protecting public moneys and other
  358  public property.
  359         Section 10. Review of the Medicaid fraud and abuse
  360  processes.—
  361         (1)The Auditor General and the Office of Program Policy
  362  Analysis and Government Accountability shall review and evaluate
  363  the Agency for Health Care Administration’s Medicaid fraud and
  364  abuse systems, including the Medicaid program integrity program.
  365  The reviewers may access Medicaid-related information and data
  366  from the Attorney General’s Medicaid Fraud Control Unit, the
  367  Department of Health, the Department of Elderly Affairs, the
  368  Agency for Persons with Disabilities, and the Department of
  369  Children and Family Services, as necessary, to conduct the
  370  review. The review must include, but is not limited to:
  371         (a)An evaluation of current Medicaid policies and the
  372  Medicaid fiscal agent;
  373         (b)An analysis of the Medicaid fraud and abuse prevention
  374  and detection processes, including agency contracts, Medicaid
  375  databases, and internal control risk assessments;
  376         (c)A comprehensive evaluation of the effectiveness of the
  377  current laws, rules, and contractual requirements that govern
  378  Medicaid managed care entities;
  379         (d)An evaluation of the agency’s Medicaid managed care
  380  oversight processes;
  381         (e)Recommendations to improve the Medicaid claims
  382  adjudication process, to increase the overall efficiency of the
  383  Medicaid program, and to reduce Medicaid overpayments; and
  384         (f)Operational and legislative recommendations to improve
  385  the prevention and detection of fraud and abuse in the Medicaid
  386  managed care program.
  387         (2)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
  390  review. The Auditor General and the Office of Program Policy
  391  Analysis and Government Accountability shall report to the
  392  President of the Senate, the Speaker of the House of
  393  Representatives, and the Governor by December 1, 2011.
  394         Section 11. Medicaid claims adjudication project.—The
  395  Agency for Health Care Administration shall issue a competitive
  396  procurement pursuant to chapter 287, Florida Statutes, with a
  397  third-party vendor, at no cost to the state, to provide a real
  398  time, front-end database to augment the Medicaid fiscal agent
  399  program edits and claims adjudication process. The vendor shall
  400  provide an interface with the Medicaid fiscal agent to decrease
  401  inaccurate payment to Medicaid providers and improve the overall
  402  efficiency of the Medicaid claims-processing system.
  403         Section 12. All powers, duties, functions, records,
  404  offices, personnel, property, pending issues and existing
  405  contracts, administrative authority, administrative rules, and
  406  unexpended balances of appropriations, allocations, and other
  407  funds relating to public assistance fraud in the Department of
  408  Law Enforcement are transferred by a type two transfer, as
  409  defined in s. 20.06(2), Florida Statutes, to the Division of
  410  Public Assistance Fraud in the Department of Financial Services.
  411         Section 13. Except for section 10 of this act and this
  412  section, which shall take effect July 1, 2010, this act shall
  413  take effect January 1, 2011.

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