Bill Text: MI SB0598 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Human services; medical services; office of medicaid inspector general; create. Creates new act.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Introduced - Dead) 2011-09-07 - Referred To Committee On Appropriations [SB0598 Detail]
Download: Michigan-2011-SB0598-Introduced.html
SENATE BILL No. 598
September 7, 2011, Introduced by Senators KAHN, PAPPAGEORGE, PROOS, SCHUITMAKER and EMMONS and referred to the Committee on Appropriations.
A bill to create the office of medicaid inspector general; to
prescribe the manner of appointment and qualifications of the
medicaid inspector general; to prescribe the powers, functions, and
duties of the office of medicaid inspector general; to transfer and
assign staff and other resources to the office of medicaid
inspector general; to allow for appointment of deputies,
assistants, and other officers and employees as may be needed to
perform the duties and responsibilities of the office of medicaid
inspector general; to allow for the office of medicaid inspector
general to enter into contracts; to provide access to information
pertaining to the responsibilities of the medicaid inspector
general; to authorize investigation into the administration of
programs and operations of the Michigan medicaid system; to
authorize the medicaid inspector general to review and approve
contracts, policies, and procedures pertaining to medicaid; and to
mandate assistance and cooperation from state and local entities
and to prescribe the powers and duties of certain state departments
and agencies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"Michigan medicaid inspector general act".
Sec. 2. As used in this act:
(a) "Abuse" means practices that are inconsistent with sound
fiscal, business, or medical practices or violate department
policies and procedures and that result in unnecessary costs to
medicaid, result in reimbursement for services that are not
medically necessary or fail to meet professionally recognized
standards for health care, or result in waste.
(b) "Department" means the department of community health.
(c) "Director" means the director of the department.
(d) "Fraud" means any deception or misrepresentation made by
any person who knows or should have known that the deception could
result in unnecessary or inappropriate cost to the medicaid
program, including any act that constitutes fraud or submission of
a false claim under applicable federal or state law.
(e) "Inspector" means the medicaid inspector general created
in section 3.
(f) "Investigation" means the thorough and systematic inquiry
into potential fraud, abuse, inappropriate billing or use of
services, policy or contractual violations, or illegal acts
committed by any medicaid funds recipient.
(g) "Medicaid" and "medicaid program" mean the program for
medical assistance for the medically indigent provided in
accordance with the social welfare act, 1939 PA 280, MCL 400.1 to
400.119b, that includes the program for medical assistance
established under title XIX of the federal social security act, 42
USC 1396 to 1396w-2, and administered according to the state plan.
(h) "Medicaid fraud control unit" means the certified medicaid
fraud control unit in the office of the attorney general.
(i) "Medicaid funds recipient" means any person or entity,
public or private, that provides medical care, services, or
supplies paid for, directly or indirectly, by medicaid or that
receives or administers medicaid funds paid out under the state
plan. Medicaid funds recipient includes, but is not limited to,
governmental units, providers, contractors, suppliers, and medicaid
managed care organizations, and their subcontractors.
(j) "Office" means the office of medicaid inspector general
created in section 3.
Sec. 3. (1) The office of medicaid inspector general is
created as an agency within the department. The department is the
single state agency for the administration of the medical
assistance program in Michigan. The office of medicaid inspector
general shall assume, exercise, and be responsible for the
department's duties as the single state agency with respect to all
of the following:
(a) Prevention, detection, and investigation of fraud and
abuse within the medicaid program, including fraud or abuse within
the department or by a medicaid funds recipient.
(b) Referral of appropriate cases for criminal prosecution and
civil actions.
(c) Internal and external administrative enforcement, audit,
quality review, and compliance.
(d) Oversight and control of information technology relating
to medicaid program fraud and abuse.
(e) Investigation, oversight, and enforcement of fraud and
abuse control and auditing, including oversight of reporting and
data submissions from managed care organizations.
(2) The head of the office shall be the inspector, who shall
be appointed by the governor. The inspector shall report directly
to the governor. A vacancy in the position shall be filled in the
same manner as the original appointment.
(3) The inspector shall be selected without regard to
political affiliation and on the basis of capacity for effectively
carrying out the duties of the office. The inspector shall possess
demonstrated knowledge, skills, abilities, and experience in
detecting and combating medicaid fraud and abuse and shall be
familiar with the medicaid program.
(4) The inspector shall exercise his or her prescribed powers,
duties, responsibilities, and functions independently of the
department director.
Sec. 4. (1) The medicaid program audit, fraud, and abuse
prevention functions of the department shall be immediately
transferred to the office of medicaid inspector general. Officers
and employees substantially engaged in the performance of the
functions to be transferred to the office shall be transferred,
along with any equipment, office space, documents, records, and
resources necessary and related to the transfer of those functions.
The director and the inspector shall confer to determine the
officers and employees who are substantially engaged in the
medicaid program audit-, fraud-, and abuse-related functions to be
transferred and to expedite establishment of the office. The
employees shall be transferred without further examination or
qualification to the same or similar titles and shall retain their
respective civil service classification. All office employees shall
be colocated, to the greatest extent practicable. The inspector has
sole responsibility for establishing methods of administration for
the office.
(2) State departments, agencies, and state officers shall
fully and actively cooperate with the office of the inspector
general in the implementation of this act.
Sec. 5. The inspector shall function as an autonomous entity
within the department to serve as a single point of leadership and
responsibility for managing and directing medicaid program efforts
to control medicaid fraud and abuse. The powers and duties of the
inspector shall include, but not be limited to, the following
responsibilities:
(a) To appoint deputies, directors, assistants, and other
employees as may be needed for the office to meet its
responsibilities and to prescribe their duties and fix their
compensation in accordance with state law and within the amounts
appropriated.
(b) To conduct and supervise all administrative activities
currently vested in the department relating to medicaid program
integrity, fraud, and abuse, including, but not limited to, audits,
surveillance, utilization review, information systems, database
queries, and all activities related to monitoring and analyzing
payments made to any medicaid funds recipient.
(c) To solicit, receive, and investigate complaints and take
all appropriate action to prevent, detect, investigate, and
prosecute fraud and abuse in the medicaid program committed by the
department or by any medicaid funds recipient.
(d) To make investigations relating to the administration of
the programs and operations of the medicaid program as are in the
judgment of the inspector necessary or desirable and consistent
with the department's obligations under the law, the state plan,
and the memorandum of understanding with the attorney general
regarding jurisdiction of the medicaid fraud control unit.
(e) To promptly refer and provide all information and evidence
relating to suspected criminal acts and potential civil liability
involving medicaid funds to the medicaid fraud control unit,
according to the requirements of federal law, and to provide
assistance to the medicaid fraud control unit to develop criminal
investigations, prosecutions, civil actions, and financial
recoveries.
(f) To identify practices that increase the risk of fraud or
abuse relating to medicaid program funds and make appropriate
recommendations to prevent and detect fraud and financial abuse.
(g) To oversee and recommend policies and procedures relating
to medicaid program integrity and monitor the implementation of
recommendations made by the inspector to the department or to other
offices, agencies, or entities involved in administration of the
medicaid program.
(h) To call on any department, agency, office, commission, or
committee of state or local government and any medicaid fund
recipient to provide full and unrestricted access to all non-law-
enforcement records, reports, audits, reviews, documents, papers,
data, financial statements, recommendations, or other material
prepared, maintained, or held by or available to that entity and to
provide other assistance as the medicaid inspector general
considers necessary to discharge the duties and functions and to
fulfill the responsibilities of the inspector under this act. Each
entity shall, consistent with federal or state law, cooperate with
the medicaid inspector general and furnish the office with the
items and assistance necessary, provided that the information is
afforded patient confidentiality protection required under state
and federal law.
(i) To subpoena and enforce the attendance of witnesses,
administer oaths or affirmations, examine witnesses under oath, and
take testimony as the inspector considers relevant or material to
an investigation, examination, or review. A person summoned to
appear before the inspector may be examined with reference to any
matter within the scope of the inquiry or investigation being
conducted by the office and be compelled to produce any books,
records, or papers demanded by the inspector. If a person to whom a
subpoena is issued fails to appear or, having appeared, refuses to
give testimony, or fails to produce the books, papers, or other
documents required, the inspector may impose appropriate
administrative sanctions and may apply to the circuit court for the
thirtieth judicial circuit for an order for the person to appear
and give testimony and produce books, papers, or other documents. A
person failing to obey an order issued under this subdivision may
be punished by the court for contempt.
(j) To perform on-site inspections and audits of any office or
facility where business records are kept by any medicaid fund
recipient.
(k) To pursue administrative enforcement actions against any
individual or entity that engages in fraud, abuse, or illegal or
improper acts or unacceptable practices regarding the medicaid
program or medicaid funds and to impose administrative sanctions,
including, but not limited to, 1 or more of the following:
(i) Referring information and evidence to regulatory agencies
and licensure boards.
(ii) Withholding or adjusting payment of medical assistance
funds in accordance with state and federal laws and regulations.
(iii) Excluding a medicaid funds recipient from participation in
the medicaid program.
(iv) Imposing other administrative sanctions and penalties in
accordance with state and federal laws and regulations.
(v) Recovery of improperly expended medicaid program funds
from those who engage in fraud or financial abuse.
(l) To develop and implement protocols and procedures to
collect overpayments, restitution amounts, and settlement proceeds.
(m) To recommend rules and regulations relating to the
prevention, detection, investigation, and referral of fraud and
abuse within the medicaid program and recovery of related funds.
(n) To take appropriate actions to ensure that the medicaid
program is the payor of last resort, including development of an
effective third-party liability program to assure that all private
or other governmental program resources have been exhausted before
a claim is paid and to seek reimbursement when a liable third party
is discovered after payment of a claim.
(o) To oversee, audit, and approve contracts pertaining to any
aspect of the medicaid program, including, but not limited to,
audit contracts, cost reports, claims, bills, and any contract for
expenditure of medicaid program funds, to determine compliance with
applicable federal and state laws, regulations, guidelines,
standards, and policies and to enhance program integrity.
(p) To oversee and approve all medicaid managed care contracts
and service arrangements to minimize the risk of fraud and abuse
and assure compliance with contract provisions and medicaid
policies and procedures and to monitor billing, encounter data, and
subcontracting arrangements to detect fraud and abuse by medicaid
managed care organizations or entities or individuals providing
goods or services to beneficiaries through, or to, managed care
organizations.
(q) To serve as the central point of contact for the
department with entities having contracts or grants with the
department to audit, monitor, investigate, or report medicaid
program fraud or abuse.
(r) To apply for and receive federal grants and money as the
inspector requires from the department consistent with the state
plan and to participate in any appropriate federal pilot programs
or demonstration projects.
(s) To prepare an annual report for the governor and the
department on the progress of implementing the office of medicaid
inspector general, fraud control initiatives, results, and
recommendations.
(t) To act as the liaison between the department and the
federal centers for medicare and medicaid services, United States
health and human services department, with respect to all matters
pertaining to medicaid program fraud or abuse, audits and
investigations, compliance programs, and program fiscal integrity
issues.
(u) To perform any other functions necessary or appropriate in
furtherance of the mission of the office.
Sec. 6. Any suit, action, or other proceeding lawfully
commenced by, against, or before any entity affected by this act
shall not abate by reason of this act taking effect.
Enacting section 1. This act takes effect March 1, 2012.
