Bill Text: FL S1764 | 2017 | Regular Session | Introduced

Bill Title: Medicaid Compliance

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2017-05-05 - Died in Health Policy [S1764 Detail]

Download: Florida-2017-S1764-Introduced.html
       Florida Senate - 2017                                    SB 1764
       By Senator Perry
       8-01335A-17                                           20171764__
    1                        A bill to be entitled                      
    2         An act relating to Medicaid compliance; amending s.
    3         395.003, F.S.; requiring that certain hospitals comply
    4         with provisions relating to the establishment of a
    5         Medicaid compliance office and procedures as a
    6         condition of licensure; amending s. 409.913, F.S.;
    7         defining the term “covered person”; requiring that
    8         certain hospitals establish a Medicaid compliance
    9         office; requiring that the hospitals appoint a
   10         compliance officer and committee; providing
   11         responsibilities for such compliance officer and
   12         committee; requiring the hospitals to develop a code
   13         of conduct, policies and procedures, a risk assessment
   14         and internal review process, a training plan, and
   15         other specified procedures; providing requirements for
   16         such code of conduct, policies and procedures, risk
   17         assessment and internal review process, training plan,
   18         and other specified procedures; requiring a hospital
   19         to notify the inspector general of the Agency for
   20         Health Care Administration of certain reportable
   21         events; providing requirements for such notifications;
   22         establishing a daily fine for failing to notify the
   23         inspector general of a reportable event; requiring
   24         that each hospital submit an annual report to the
   25         agency by a specified date; providing requirements for
   26         such report; providing definitions; providing an
   27         effective date.
   29  Be It Enacted by the Legislature of the State of Florida:
   31         Section 1. Subsection (11) is added to section 395.003,
   32  Florida Statutes, to read:
   33         395.003 Licensure; denial, suspension, and revocation.—
   34         (11)A hospital that is subject to s. 409.913(39) must
   35  comply with the requirements in that subsection as a condition
   36  of licensure.
   37         Section 2. Subsection (39) is added to section 409.913,
   38  Florida Statutes, to read:
   39         409.913 Oversight of the integrity of the Medicaid
   40  program.—The agency shall operate a program to oversee the
   41  activities of Florida Medicaid recipients, and providers and
   42  their representatives, to ensure that fraudulent and abusive
   43  behavior and neglect of recipients occur to the minimum extent
   44  possible, and to recover overpayments and impose sanctions as
   45  appropriate. Beginning January 1, 2003, and each year
   46  thereafter, the agency and the Medicaid Fraud Control Unit of
   47  the Department of Legal Affairs shall submit a joint report to
   48  the Legislature documenting the effectiveness of the state’s
   49  efforts to control Medicaid fraud and abuse and to recover
   50  Medicaid overpayments during the previous fiscal year. The
   51  report must describe the number of cases opened and investigated
   52  each year; the sources of the cases opened; the disposition of
   53  the cases closed each year; the amount of overpayments alleged
   54  in preliminary and final audit letters; the number and amount of
   55  fines or penalties imposed; any reductions in overpayment
   56  amounts negotiated in settlement agreements or by other means;
   57  the amount of final agency determinations of overpayments; the
   58  amount deducted from federal claiming as a result of
   59  overpayments; the amount of overpayments recovered each year;
   60  the amount of cost of investigation recovered each year; the
   61  average length of time to collect from the time the case was
   62  opened until the overpayment is paid in full; the amount
   63  determined as uncollectible and the portion of the uncollectible
   64  amount subsequently reclaimed from the Federal Government; the
   65  number of providers, by type, that are terminated from
   66  participation in the Medicaid program as a result of fraud and
   67  abuse; and all costs associated with discovering and prosecuting
   68  cases of Medicaid overpayments and making recoveries in such
   69  cases. The report must also document actions taken to prevent
   70  overpayments and the number of providers prevented from
   71  enrolling in or reenrolling in the Medicaid program as a result
   72  of documented Medicaid fraud and abuse and must include policy
   73  recommendations necessary to prevent or recover overpayments and
   74  changes necessary to prevent and detect Medicaid fraud. All
   75  policy recommendations in the report must include a detailed
   76  fiscal analysis, including, but not limited to, implementation
   77  costs, estimated savings to the Medicaid program, and the return
   78  on investment. The agency must submit the policy recommendations
   79  and fiscal analyses in the report to the appropriate estimating
   80  conference, pursuant to s. 216.137, by February 15 of each year.
   81  The agency and the Medicaid Fraud Control Unit of the Department
   82  of Legal Affairs each must include detailed unit-specific
   83  performance standards, benchmarks, and metrics in the report,
   84  including projected cost savings to the state Medicaid program
   85  during the following fiscal year.
   86         (39)(a) For purposes of this subsection, the term “covered
   87  person” means:
   88         1. An owner, officer, director, commissioner, or employee
   89  of the hospital;
   90         2. A contractor, subcontractor, agent, or other person who
   91  provides patient care items or services or who performs billing
   92  or coding functions on behalf of the hospital, excluding a
   93  vendor whose only connection with the hospital is selling or
   94  otherwise providing medical supplies or equipment and who does
   95  not bill any federal health care program for such medical
   96  supplies or equipment; or
   97         3. Physician or nonphysician personnel who are members of
   98  the hospital’s active medical staff.
   99         (b) Each hospital licensed under chapter 395 that annually
  100  accepts state or federal funds in the amount of $10 million or
  101  more to provide services to Medicaid recipients shall establish
  102  an office of Medicaid compliance within the hospital. The
  103  hospital shall appoint a compliance officer who is a member of
  104  senior management of the hospital and who shall report directly
  105  to the chief executive officer or president of the hospital. The
  106  compliance officer shall:
  107         1. Develop and implement policies, procedures, and
  108  practices designed to ensure compliance with all state and
  109  federal health care program requirements.
  110         2. At least quarterly, submit a report regarding compliance
  111  matters directly to the chief executive officer or president of
  112  the hospital.
  113         3. Monitor the day-to-day compliance activities of the
  114  hospital and analyze the hospital’s risk areas for
  115  noncompliance.
  116         4. Report any suspected or substantiated violations of the
  117  hospital’s code of conduct or policies and procedures to the
  118  chief executive officer or president of the hospital and to the
  119  agency.
  120         (c) Each hospital shall appoint a compliance committee that
  121  must include, at a minimum, a compliance officer and other
  122  members of senior management. The compliance officer shall serve
  123  as chair of the compliance committee. The compliance committee
  124  shall assist the compliance officer in fulfilling his or her
  125  responsibilities as provided in paragraph (b).
  126         (d)1. Each hospital shall develop, implement, and annually
  127  distribute a written code of conduct to each covered person. The
  128  code of conduct must, at a minimum, address the hospital’s:
  129         a. Commitment to fully comply with all state and federal
  130  health care program requirements.
  131         b. Requirement that each covered person is expected to
  132  comply with all state and federal health care program
  133  requirements and with the hospital’s policies and procedures.
  134         c. Requirement that each covered person is expected to
  135  report to the compliance officer suspected violations of any
  136  state and federal health care program requirements or the
  137  hospital’s policies and procedures.
  138         d. Commitment to not retaliate against a covered person who
  139  reports a suspected violation as provided in sub-subparagraph c.
  140  and to maintain, as appropriate, the confidentiality and
  141  anonymity of such reports.
  142         2. Each hospital shall evaluate the performance of its
  143  employees based on their compliance with the code of conduct. At
  144  least annually, the hospital shall review the code of conduct
  145  and make any necessary revisions.
  146         (e)1. Each hospital shall develop and implement written
  147  policies and procedures regarding the operation of its
  148  compliance office and program. The policies and procedures must
  149  address the criminal penalties for violations under Title XI of
  150  the Social Security Act, 42 U.S.C. ss. 1320a-7b(b) and 1395nn,
  151  including implementing regulations and other federal guidance;
  152  the types of business or financial arrangements that violate
  153  such federal laws and regulations; and the penalties associated
  154  with violations of state anti-rebating and anti-kickback laws
  155  applicable to hospitals and health care providers.
  156         2. The hospital shall distribute the policies and
  157  procedures to each covered person. The hospital shall enforce
  158  and comply with its policies and procedures and shall evaluate
  159  the performance of its employees based on their compliance with
  160  the policies and procedures. At least annually, the hospital
  161  shall assess and update the policies and procedures as
  162  necessary.
  163         3. Within 90 days after implementing the policies and
  164  procedures required under this paragraph, each hospital subject
  165  to this subsection shall develop and implement a centralized
  166  annual risk assessment and internal review process to identify
  167  and address risks associated with arrangements as defined in
  168  paragraph (f). The risk assessment and internal review process
  169  shall be evaluated and updated annually, if necessary, and must
  170  include procedures for:
  171         a. Identifying and prioritizing risks;
  172         b. Developing and implementing remediation plans in
  173  response to such risks, including internal auditing and
  174  monitoring of the identified risk areas; and
  175         c. Tracking results to assess the effectiveness of the
  176  remediation plans.
  177         (f)1. Each hospital shall develop a written training plan
  178  that ensures:
  179         a. A covered person, except an individual employed only in
  180  food service, maintenance, or housekeeping, receives adequate
  181  training regarding the hospital’s code of conduct and policies
  182  and procedures.
  183         b. A covered person receives adequate training regarding
  184  business or financial arrangements that may violate Title XI of
  185  the Social Security Act, 42 U.S.C. ss. 1320a-7b(b) and 1395nn,
  186  including implementing regulations and other federal guidance;
  187  the hospital’s policies and procedures governing such
  188  arrangements; the hospital’s internal review and approval
  189  processes for such arrangements; the hospital’s tracking of
  190  remuneration to and from sources of health care business or
  191  referrals; and the penalties associated with violations of state
  192  anti-rebating and anti-kickback laws applicable to hospitals and
  193  health care providers.
  194         c. Each individual involved in the development, approval,
  195  management, or review of the hospital’s arrangements understands
  196  his or her personal obligation to know the applicable legal
  197  requirements and the hospital’s code of conduct and policies and
  198  procedures.
  199         d. A covered person understands the criminal penalties and
  200  sanctions imposed under Title XI of the Social Security Act, 42
  201  U.S.C. ss. 1320a-7b(b) and 1395nn, and has been provided
  202  examples of violations under such federal laws and related
  203  regulations.
  204         2. The training plan must include information regarding the
  205  topics to be addressed, the identification of covered persons
  206  required to attend each training session, the length of the
  207  training, the schedule for training, and the format of the
  208  training.
  209         3. For purposes of this paragraph, the term “arrangements”
  210  means any contract, transaction, or agreement that:
  211         a. Involves, directly or indirectly, the offer, payment,
  212  solicitation, or receipt of anything of value;
  213         b. Is between the hospital and any actual or potential
  214  source of health care business or referrals, or any actual or
  215  potential recipient of health care business or referrals from
  216  the hospital; or
  217         c. Is between the hospital and a physician or a physician’s
  218  immediate family member who makes a referral to the hospital for
  219  health services.
  220         (g)1. For purposes of this paragraph, the term “focus
  221  arrangement” means each arrangement, as defined in paragraph
  222  (f), that is between a hospital subject to this subsection and:
  223         a. Any actual source of health care business or referrals
  224  to the hospital and involves, directly or indirectly, the offer,
  225  payment, or provision of anything of value; or
  226         b. Any physician or a physician’s immediate family member,
  227  as defined in 42 C.F.R. s. 411.351, who makes a referral, as
  228  defined at 42 U.S.C. s. 1395nn(h)(5), to the hospital for
  229  designated health services, as defined in 42 U.S.C. s.
  230  1395nn(h)(6).
  231         2. Each hospital subject to this subsection shall create
  232  procedures reasonably designed to ensure that each existing and
  233  new or renewed focus arrangement does not violate Title XI of
  234  the Social Security Act, 42 U.S.C. ss. 1320a-7b(b) and 1395nn,
  235  or the federal regulations, directives, and guidance related to
  236  those statutes. The procedures must include the following:
  237         a. Creating and maintaining a centralized tracking system
  238  for all existing and new or renewed focus arrangements;
  239         b. Tracking remuneration to and from all parties to focus
  240  arrangements;
  241         c. Tracking service and activity logs to ensure that
  242  parties to the focus arrangement are performing the services
  243  required under the applicable focus arrangement, if applicable;
  244         d. Monitoring the use of leased space, medical supplies,
  245  medical devices, equipment, or other patient care items to
  246  ensure that such use is consistent with the terms of the
  247  applicable focus arrangement, if applicable;
  248         e. Establishing and implementing a written review and
  249  approval process for all focus arrangements to ensure that all
  250  existing and new or renewed focus arrangements do not violate
  251  Title XI of the Social Security Act, 42 U.S.C. ss. 1320a-7b(b)
  252  and 1395nn, which must, at a minimum, include:
  253         (I) A legal review of all focus arrangements;
  254         (II) A process for specifying the business need or business
  255  rationale for all focus arrangements; and
  256         (III) A process for determining and documenting the fair
  257  market value of the remuneration specified in the focus
  258  arrangement;
  259         f. Requiring the compliance officer to, at least annually,
  260  review the focus arrangements tracking system, internal review
  261  and approval process, and other focus arrangement procedures and
  262  to provide a report on the results of such review to the
  263  compliance committee; and
  264         g. Implementing effective responses when suspected
  265  violations of Title XI of the Social Security Act, 42 U.S.C. ss.
  266  1320a-7b(b) and 1395nn are discovered, including disclosing
  267  reportable events pursuant to paragraph (h).
  268         (h)1. For purposes of this paragraph, the term “reportable
  269  event” means:
  270         a. A substantial overpayment for inpatient or outpatient
  271  Medicare services, Medicaid managed care services, or any other
  272  state or federal health care program service;
  273         b. A matter that a reasonable person would consider a
  274  probable violation of criminal, civil, or administrative laws
  275  applicable to any state or federal health care program for which
  276  penalties or exclusions may be authorized;
  277         c. The employment of or contracting with a covered person
  278  who is an “ineligible person,” which means an individual or
  279  entity who:
  280         (I) Is currently excluded, debarred, suspended, or
  281  otherwise ineligible to participate in federal health care
  282  programs or in federal procurement or non-procurement programs;
  283  or
  284         (II) Has been convicted of a criminal offense pursuant to
  285  42 U.S.C. s. 1320a-7(a), but has not yet been excluded,
  286  debarred, suspended, or otherwise declared ineligible; and
  287         d. The filing of a bankruptcy petition by the hospital.
  288         2. If a hospital subject to this subsection determines,
  289  after a reasonable opportunity to conduct an appropriate review
  290  or investigation of the allegations, that a reportable event has
  291  occurred or is occurring, the hospital shall notify the agency’s
  292  inspector general within 30 days after making such
  293  determination.
  294         3. When notifying the agency’s inspector general of a
  295  reportable event, the hospital shall include a complete
  296  description of all details relevant to the reportable event,
  297  including the types of claims, transactions, or other conduct
  298  giving rise to the reportable event; the period during which the
  299  conduct occurred; the names of entities and individuals believed
  300  to be implicated, including an explanation of their roles in the
  301  reportable event; and any additional information necessary for
  302  the agency’s inspector general to investigate the reportable
  303  event.
  304         4. The agency’s inspector general shall, after
  305  investigating the reportable event and concluding that it is a
  306  violation of federal law governing a state or federal health
  307  care program, report all relevant details regarding the
  308  reportable event to the appropriate federal agency for further
  309  investigation.
  310         5.In addition to any actions that may be taken against a
  311  license under s. 395.003, a hospital that fails to notify the
  312  agency’s inspector general of a reportable event within the
  313  timeframe required in subparagraph 2. shall be fined $1,000 each
  314  day per reportable event until the agency’s inspector general is
  315  notified.
  316         (i) By January 1, 2019, and each year thereafter, a
  317  hospital that is subject to this subsection shall submit to the
  318  agency a report detailing the hospital’s compliance activities
  319  during the preceding year. Each report must include, at a
  320  minimum:
  321         1. Any change in the identity, position description, or
  322  other noncompliance job responsibilities of the compliance
  323  officer.
  324         2. Any change in the membership of the compliance
  325  committee.
  326         3. The dates of each report made by the compliance officer
  327  to the chief executive officer or president of the hospital.
  328         4. A summary of any change or amendment to the hospital’s
  329  code of conduct or policies and procedures as required in
  330  paragraphs (d) and (e).
  331         5. A copy of the hospital’s training plan developed
  332  pursuant to paragraph (f) and for each type of training required
  333  by the training plan, a description of the training, including a
  334  summary of the topics to be addressed; the length of sessions; a
  335  schedule of training sessions; a general description of the
  336  categories of individuals required to complete the training; and
  337  the process by which the hospital ensures that each covered
  338  person receives the required training.
  339         6. All reports of suspected or substantiated violations of
  340  the hospital’s code of conduct or policies and procedures
  341  reported to the chief executive officer or president of the
  342  hospital and the agency.
  343         7. Details regarding the hospital’s risk assessment and
  344  internal review process required in paragraph (e).
  345         8. Details of all reportable events as defined in paragraph
  346  (h), when the agency’s inspector general was notified of each
  347  reportable event, and the status of the state investigation of
  348  each reportable event, and, if applicable, the status of the
  349  federal investigation of each reportable event.
  350         Section 3. This act shall take effect July 1, 2017.