PRIOR PRINTER'S NOS. 602, 1358, 1957, PRINTER'S NO. 3721
2181, 2395, 2432
No. 552 Session of 1979
Report of the Committee of Conference
To the Members of the House of Representatives and Senate:
We, the undersigned, Committee of Conference on the part of
the House of Representatives and Senate for the purpose of
considering House Bill No. 552, entitled:
"An act amending the act of June 13, 1967 (P.L.31, No.21),
entitled, 'An act to consolidate, editorially revise, and codify
the public welfare laws of the Commonwealth,' prohibiting
assistance to certain students, and limiting the exclusion of
certain students from the employables program. FURTHER PROVIDING <--
FOR IDENTIFICATION AND PROOF OF RESIDENCE, AND PROHIBITING
COPAYMENT PLANS."
respectfully submit the following bill as our report:
JOSEPH V. ZORD, JR.
WILLIAM K. KLINGAMAN, SR.
JOSEPH M. HOEFFEL
(Committee on the part of the House of Representatives.)
W. LOUIS COPPERSMITH
JAMES R. KELLEY
RICHARD A. SNYDER
(Committee on the part of the Senate.)
AN ACT
1 Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
2 act to consolidate, editorially revise, and codify the public
3 welfare laws of the Commonwealth," requiring the Department
4 of Public Welfare to develop and implement a State plan for
5 regulating and licensing personal care boarding homes,
6 prohibiting abusive, fraudulent and deceptive acts and
7 practices by providers of and persons eligible for State
8 medical assistance; providing remedies and penalties
9 therefor; imposing certain participation requirements on
10 providers and persons eligible; providing for third party
11 liability; and imposing powers and duties on the Attorney
12 General, the Department of Public Welfare and the district
13 attorneys.
14 The General Assembly finds and declares that it is in the
15 interest of the people of Pennsylvania to establish a legal and
16 regulatory basis for controlling medical assistance fraud and
17 abuse of services reimbursed by Federal and State funds. The
18 purpose of the act is not to penalize the majority of recipients
19 and providers who abide by medical assistance laws and
20 regulations, but rather to eliminate fraudulent, abusive and
21 deceptive conduct and practices that may occur. It is in the
22 public interest that medical assistance services be administered
23 and regulated in a way that will ensure that public funds will
24 be properly expended for essential services to medically needy
25 persons.
26 The General Assembly of the Commonwealth of Pennsylvania
27 hereby enacts as follows:
28 Section 1. The act of June 13, 1967 (P.L.31, No.21), known
29 as the "Public Welfare Code," is amended by adding a section to
30 read:
31 Section 211. State Plan for Regulating and Licensing
32 Personal Care Boarding Homes.--(a) In accordance with the
33 statutory authority and responsibility vested in the department
34 to regulate nonprofit boarding homes for adults which provide
1 personal care and services and to license for profit personal
2 care boarding homes for adults, pursuant to Articles IX and X,
3 the department shall develop and implement a State plan for
4 regulating and licensing said facilities as defined by section
5 1001 of this act.
6 (b) In developing rules and regulations for the State plan,
7 the department shall:
8 (1) Distinguish between personal care homes serving less
9 than eight persons and personal care homes serving more than
10 eight persons.
11 (2) By July 1, 1981 adopt rules relating to the conduct of
12 owners and employes of personal care boarding homes relative to
13 the endorsement or delivery of public or private welfare,
14 pension or insurance checks by a resident of a personal care
15 boarding home.
16 (3) Not regulate or require the registration of boarding
17 homes which merely provide room, board and laundry services to
18 persons who do not need personal care boarding home services.
19 (c) Within three months following the effective date of this
20 act, the department shall submit to the General Assembly for
21 comment and review, and publish in the Pennsylvania Bulletin in
22 accordance with the provisions of the Commonwealth Documents Law
23 relating to the publication of regulations, a preliminary State
24 plan for regulating and licensing personal care boarding homes.
25 (d) The preliminary plan shall include, but is not limited
26 to, the following:
27 (1) Coordination of the department's statutory
28 responsibilities with those of other State and local agencies
29 having statutory responsibilities relating to personal care
30 boarding homes, with particular attention given to the
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1 Department of Labor and Industry, the Department of
2 Environmental Resources, the Department of Aging and the
3 Pennsylvania Human Relations Commission. The Department of Labor
4 and Industry shall promulgate rules and regulations applicable
5 to personal care boarding homes on a Statewide basis consistent
6 with size distinctions set forth in subsection (b) pertaining to
7 construction and means of egress.
8 (2) Recommendations for changes in existing State law and
9 proposed legislation to:
10 (i) Resolve inconsistencies that hinder the department's
11 implementation of the State plan.
12 (ii) Promote the cost efficiency and effectiveness of
13 visitations and inspections.
14 (iii) Delegate to other State and local agencies
15 responsibility for visitations, inspections, referral, placement
16 and protection of adults residing in personal care boarding
17 homes.
18 (iv) Evaluate the State's fire and panic laws as applied to
19 personal care boarding homes.
20 (3) Recommendations for implementation of fire safety and
21 resident care standards relating to personal care boarding homes
22 by cities of the first class, second class and second class A.
23 (4) A programmatic and fiscal impact statement regarding the
24 effect of the plan on existing residential programs for the
25 disabled, including but not limited to skilled nursing homes,
26 intermediate care facilities, domiciliary care homes, adult
27 foster care homes, community living arrangements for the
28 mentally retarded and group homes for the mentally ill and the
29 effect of the plan on recipients of Supplemental Security
30 Income.
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1 (5) Cost analysis of the entire plan and of all regulations
2 that will be proposed pursuant to the plan.
3 (6) Number of personnel at the State, regional and county
4 level required to inspect personal care boarding homes and
5 monitor and enforce final rules and regulations adopted by the
6 department.
7 (7) Process for relocating residents of personal care
8 boarding homes whose health and safety are in imminent danger.
9 (e) If the department deems that it is in the best interest
10 of the Commonwealth to develop a plan for implementation on a
11 phased basis, the department shall submit a detailed schedule of
12 the plan to the General Assembly which shall be part of the
13 preliminary State plan.
14 (f) Within six months of the effective date of this act, the
15 department shall adopt a final State plan which shall be
16 submitted and published in the same manner as the preliminary
17 plan.
18 (g) The final plan shall include the information required in
19 the preliminary plan and, in addition, the cost to operators of
20 personal care boarding homes for compliance with the
21 regulations.
22 (h) At no time may the department change, alter, amend or
23 modify the final State plan, except in emergency situations,
24 without first publishing such change in the Pennsylvania
25 Bulletin in accordance with the Commonwealth Documents Law
26 relating to publication of regulations and without first
27 submitting the proposed change to the General Assembly for
28 comment and review. In an emergency, the department may change,
29 alter, amend or modify the State plan without publishing the
30 change or submitting the change to the General Assembly; but,
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1 within thirty days, the department shall submit and publish the
2 change as otherwise required.
3 (i) The State plan shall not apply to any facility operated
4 by a religious organization for the care of clergymen or other
5 persons in a religious profession.
6 (j) Prior to January 1, 1985, department regulations shall
7 not apply to personal care boarding homes in which services are
8 integrated with, are under the same management as, and on the
9 same grounds as a skilled nursing or intermediate care facility
10 licensed for more than twenty-five beds and having an average
11 daily occupancy of more than fifteen beds. Prior to January 1,
12 1985 the department may require registration of such facilities
13 and may visit such facilities for the purpose of assisting
14 residents and securing information regarding facilities of this
15 nature.
16 (k) Any regulations by the department relating to the
17 funding of residential care for the mentally ill or mentally
18 retarded adults and any regulations of the Department of Aging
19 relating to domiciliary care shall use as their base,
20 regulations established in accordance with this section.
21 Supplementary requirements otherwise authorized by law may be
22 added.
23 (l) After initial approval, personal care boarding homes
24 need not be visited or inspected annually; provided that the
25 department shall schedule inspections in accordance with a plan
26 that provides for the coverage of at least seventy-five percent
27 of the licensed personal care boarding homes every two years and
28 all homes shall be inspected at least once every three years.
29 (m) Regulations specifically related to personal care homes
30 or personal care boarding home services adopted prior to the
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1 effective date of this act shall remain in effect until
2 superseded by a final plan adopted in accordance with this
3 section.
4 Section 2. The definition of "personal care home for adults"
5 in section 1001 of the act is amended to read:
6 Section 1001. Definitions.--As used in this article--
7 * * *
8 "Personal care home for adults" means any premises [operated
9 for profit] in which food, shelter and personal assistance or
10 supervision are provided for a period exceeding twenty-four
11 hours for more than [two] three adults who are not relatives of
12 the operator and who require assistance or supervision in such
13 matters as dressing, bathing, diet or medication prescribed for
14 self administration.
15 * * *
16 Section 3. Article XIV of the act is amended to read:
17 ARTICLE XIV
18 [RESERVED] FRAUD AND ABUSE CONTROL
19 Section 1401. Definitions.--The following words and phrases
20 when used in this article shall have, unless the context clearly
21 indicates otherwise, the meanings given to them in this section:
22 "Eligible person" means anyone who lawfully receives or holds
23 a Medical Assistance Eligibility Identification Card from the
24 department.
25 "Health services corporation" means a nonprofit hospital plan
26 corporation or a nonprofit professional health service plan
27 corporation approved under Pennsylvania law.
28 "Medical assistance" means medical services rendered to
29 eligible persons under Articles IV and V of this act.
30 "Medical assistance program" means the services funded and
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1 operations administered by the department under Articles IV and
2 V of this act.
3 "Medical facility" means a licensed or approved hospital,
4 skilled nursing facility, intermediate care facility, clinic,
5 shared health facility, pharmacy, laboratory or other medical
6 institution.
7 "Practitioner" means any medical doctor, doctor of
8 osteopathy, dentist, optometrist, podiatrist, chiropractor or
9 other medical professional personnel licensed by the
10 Commonwealth or by any other state who is authorized to
11 participate in the medical assistance program.
12 "Provider" means any individual or medical facility which
13 signs an agreement with the department to participate in the
14 medical assistance program, including, but not limited to,
15 licensed practitioners, pharmacies, hospitals, nursing homes,
16 clinics, home health agencies and medical purveyors.
17 "Purveyor" means any person other than a practitioner, who,
18 directly or indirectly, engages in the business of supplying to
19 patients any medical supplies, equipment or services for which
20 reimbursement under the program is received, including, but not
21 limited to, clinical laboratory services or supplies, x-ray
22 laboratory services or supplies, inhalation therapy services or
23 equipment, ambulance services, sick room supplies, physical
24 therapy services or equipment and orthopedic or surgical
25 appliances or supplies.
26 "Recipient" means an eligible person who receives medical
27 assistance from a participating provider.
28 "Shared health facility" means an entity which provides the
29 services of three or more health care practitioners, two or more
30 of whom are practicing within different professions, in one
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1 physical location. To meet this definition, the practitioners
2 must share any of the following: common waiting areas, examining
3 rooms, treatment rooms, equipment, supporting staff or common
4 records. In addition, to meet this definition, at least one
5 practitioner must receive payment on a fee-for-services basis,
6 and payments under the medical assistance program to any person
7 or entity providing services or merchandise at the location must
8 exceed thirty thousand dollars ($30,000) per year. "Shared
9 health facility" does not mean or include any licensed or
10 approved hospital facility, a skilled nursing facility,
11 intermediate care facility, public health clinics, or any entity
12 organized or operating as a facility wherein ambulatory medical
13 services are provided by an organized group of practitioners all
14 of whom practice the same profession pursuant to an arrangement
15 between such group and a health services corporation or a
16 Federally approved health maintenance organization operating
17 under Pennsylvania law, and where a health services corporation
18 or a health maintenance organization is reimbursed on a prepaid
19 capitation basis for the provision of health care services under
20 the medical assistance program.
21 Section 1402. Special Provider Participation Requirements.--
22 (a) As a condition of participation in the medical assistance
23 program, a medical facility shall be required to disclose to the
24 department upon execution of a new provider agreement or renewal
25 thereof the name and social security number of any person who
26 has a direct or indirect ownership or control interest of five
27 percent or more in such medical facility; such disclosure shall
28 include the identity of any such person who has been convicted
29 of a criminal offense under section 1407 and the specific nature
30 of the offense involved. In addition to the disclosure required
19790H0552B3721 - 8 -
1 upon execution of a provider agreement, any change in such
2 ownership or control interest of five percent or more shall be
3 reported to the department within thirty days of the date such
4 change occurs. Failure to submit a complete and accurate report
5 shall constitute a deceptive practice under section 1407(a)(1)
6 and will justify a termination of the provider agreement by the
7 department.
8 (b) As a second condition of participation in the medical
9 assistance program, a provider must maintain for a minimum of
10 four years appropriate medical and financial records to fully
11 support his claims and charges for payment under the medical
12 assistance program. Such records shall at reasonable times be
13 made available for inspection, review and copying by the
14 department or by other authorized State officers.
15 (c) Payments under the medical assistance program will be
16 made directly to providers who have signed a provider agreement
17 with the department. Providers shall not factor, assign,
18 reassign or execute a power of attorney for the rights to any
19 claims or payments for services rendered under the medical
20 assistance program. Notwithstanding the above stated language a
21 provider may use accounts receivables as collateral at a
22 certified lending institution.
23 (d) Each skilled nursing facility or intermediate care
24 facility shall maintain a complete and accurate record of all
25 receipts and disbursements for medical assistance recipients'
26 personal funds and shall furnish each such patient a quarterly
27 report of all transactions recorded for that recipient.
28 Section 1403. Special Participation Requirements for Shared
29 Health Facilities.--(a) The registration requirements are as
30 follows:
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1 (1) Each shared health facility shall register with the
2 department and specify the kind or kinds of services the
3 facility is authorized to provide and shall establish a uniform
4 system of reports and internal audits which meet the
5 requirements of the department. In addition, the owner of the
6 premises upon which the facility is located, or the lessor of
7 the structure in which the facility is located, if either has a
8 role in operating the facility, shall file a statement
9 specifying the kind or kinds of services the facility is
10 authorized to provide, and shall establish a uniform system of
11 reports and audits meeting the requirements of the department.
12 (2) Application for registration of a shared health facility
13 shall be made upon forms prescribed by the department. The
14 application shall contain:
15 (i) the name of the facility;
16 (ii) the kind or kinds of services to be provided;
17 (iii) the location and physical description of the facility;
18 (iv) the name, social security number and residence address
19 of every person, partnership or corporation having any financial
20 interest in the ownership (including leasehold ownership) of the
21 facility and the structure in which the facility is located;
22 (v) the name, social security number and residence address
23 of every person, partnership or corporation holding any
24 mortgage, lien, leasehold or any other security interest in the
25 shared health facility or in any equipment located in and used
26 in connection with shared health facility and a brief
27 description of such lien or security interest;
28 (vi) the name, residence address and professional license
29 number of every practitioner participating in the shared health
30 facility;
19790H0552B3721 - 10 -
1 (vii) the name and residence address of the individual
2 designated as operator to assume responsibility for the central
3 coordination and management of the activities of the shared
4 health facility; and
5 (viii) such other information as the department may require
6 to carry out the provisions of this act.
7 (3) Each operator shall apply for an initial registration
8 upon notification by the department and shall apply for renewal
9 of such registration annually thereafter.
10 (b) The notification requirements are as follows:
11 (1) Each operator shall notify the department within fifteen
12 days of any change in:
13 (i) the persons, partnerships or corporations having any
14 financial interest in the ownership (including leasehold
15 ownership) of the shared health facility; or
16 (ii) the persons, partnerships or corporations holding any
17 mortgage, lien, leasehold or any other security interests in the
18 shared health facility or in any equipment located in and used
19 in connection with a shared health facility. A statement of the
20 monetary and repayment provisions of that lien or security
21 interest shall accompany such notification.
22 (2) Each operator shall notify the department within fifteen
23 days of the termination of the services of the individual
24 designated to assume responsibility for coordination and
25 management of the activities of the shared health facility and
26 of the name, residence address and professional qualifications
27 of any new individual appointed to assume such central
28 administrative responsibility.
29 (3) Each operator shall notify the department within fifteen
30 days of any termination of the services of any practitioner in
19790H0552B3721 - 11 -
1 the shared health facility and of the name, residence address
2 and license number of each practitioner newly participating in
3 the facility.
4 (c) The minimum care requirements are as follows:
5 (1) To ensure quality, continuity and proper coordination of
6 medical care, each shared health facility shall:
7 (i) designate an individual who shall coordinate and manage
8 the facility's activities. The person so designated shall be
9 responsible for compliance with the provisions of this act;
10 (ii) devise an appropriate means of assuring that a
11 recipient will be treated by a practitioner familiar with the
12 recipient's medical history;
13 (iii) post conspicuously the names and scheduled office
14 hours of all practitioners practicing in the facility;
15 (iv) maintain proper recipient records which shall contain
16 at least the following information:
17 (A) the full name, address and medical assistance record
18 number of each recipient;
19 (B) the dates of all visits to all providers in the shared
20 health facility;
21 (C) the chief complaint for each visit to each provider in
22 the shared health facility;
23 (D) pertinent history and all physical examinations rendered
24 by each provider in the shared health facility;
25 (E) diagnostic impressions for each visit to any provider in
26 the shared health facility;
27 (F) all medications prescribed by any provider in the shared
28 health facility;
29 (G) the precise dosage and prescription regimens for each
30 medication prescribed by a provider in the shared health
19790H0552B3721 - 12 -
1 facility;
2 (H) all x-ray, laboratory work and electrocardiograms
3 ordered at each visit by any provider in the shared health
4 facility and their results;
5 (I) all referrals by providers in the shared health facility
6 to other medical practitioners and the reason for such
7 referrals; and
8 (J) a statement as to whether or not the recipient is
9 expected to return for further treatment and the dates of all
10 return appointments;
11 (v) assign a clearly identified general practitioner to each
12 recipient. This assignment may be changed at any time at the
13 recipient's request;
14 (vi) make available to registered recipients either:
15 (A) the central answering services telephone number of each
16 recipient's designated practitioner service or such
17 practitioner's personally designated colleagues; or
18 (B) a centralized twenty-four-hour-a-day, seven-day-weekly
19 telephone line for off-hour recipient emergency questions;
20 (vii) maintain a central day-book registry which shall
21 record;
22 (A) the name and medical assistance record number of all
23 recipients entering the facility; and
24 (B) the chief complaint and the names of all providers whose
25 services were requested by the recipient and/or to whom such
26 recipient was referred;
27 (viii) insure that the physical facilities of each shared
28 health facility shall provide for privacy for all recipients
29 during examination, interview and treatment; and
30 (ix) post conspicuously the telephone number of the office
19790H0552B3721 - 13 -
1 within the department which is responsible for providing
2 information concerning shared health facilities and/or for
3 receiving complaints concerning the provision of health care
4 services at shared health facilities.
5 (2) It shall be the responsibility of each facility's
6 administrator to ensure that recipient records and summaries of
7 all recipient visits include diagnosis and pharmaceuticals
8 prescribed and are at all times available at either the facility
9 or at a place immediately accessible to all health providers at
10 the facility.
11 (3) Nothing in this act shall in any way be interpreted as
12 infringing upon the recipient's rights to free selection of a
13 personal practitioner.
14 (4) The department shall have the right to inspect the
15 business records, recipient records, leases and other contracts
16 executed by any provider in a shared health facility. Such
17 inspections may be by site visits to the facility.
18 (d) Prohibited acts of shared health facilities are as
19 follows:
20 (1) the rental fee for letting space to providers in a
21 shared health facility shall not be calculated wholly or
22 partially, directly or indirectly, as a percentage of earnings
23 or billings of the provider for services rendered on the
24 premises in which the shared health facility is located. The
25 operator of each facility shall file a copy of each lease and
26 any renewal thereof with the department;
27 (2) no purveyor, whether or not located in a building which
28 houses a shared health facility, shall directly or indirectly
29 offer, pay or give to any provider, and no provider shall
30 directly or indirectly solicit, request, receive or accept from
19790H0552B3721 - 14 -
1 any purveyor any sum of money, credit or other valuable
2 consideration for:
3 (i) recommending or procuring goods, services or equipment
4 of such purveyor;
5 (ii) directing patronage or clientele to such purveyor; or
6 (iii) influencing any person to refrain from using or
7 utilizing goods, services or equipment of any purveyor;
8 (3) no provider or purveyor shall demand or collect any
9 reimbursement contrary to the fee schedule of the medical
10 assistance program;
11 (4) no purveyor shall provide to a recipient eligible to
12 receive benefits under the provisions of the medical assistance
13 program any services, equipment, pharmaceutical or other medical
14 supplies differing in quantity or in any other respect from that
15 described in the payment invoice submitted by such purveyor to
16 the department. No purveyor shall provide to any recipient
17 eligible to receive benefits under the provisions of the program
18 any services, equipment, pharmaceutical or medical supplies
19 differing in quality, quantity or in any other respect from that
20 prescribed by the provider;
21 (5) (i) no provider in a shared health facility or person
22 employed in such facility shall refer a recipient to another
23 provider located in such facility unless there is a medical
24 justification for such referral and unless the records of the
25 referring provider pertaining to such recipient clearly set
26 forth the justification for such referral;
27 (ii) no provider practicing in a shared health facility who
28 treats a recipient referred to him by another provider shall
29 fail to communicate in writing to the referring provider the
30 diagnostic evaluation and the therapy rendered. The referring
19790H0552B3721 - 15 -
1 provider shall incorporate such information into the recipient's
2 permanent record;
3 (iii) the invoice submitted to the department by the
4 provider to whom such recipient has been referred shall contain
5 the name and provider number of the referring provider and
6 identify the medical problem which necessitated the referral;
7 (6) if a pharmacy is located in or adjacent to the building
8 in which a shared health facility is located, such shared health
9 facility shall prominently post a notice in the common waiting
10 room or area informing recipients that all pharmaceuticals
11 prescribed by practitioners in the facility may be obtained at
12 any participating pharmacy of the recipient's choice;
13 (7) all provider invoices submitted for services rendered at
14 a shared health facility shall contain the provider number of
15 the facility at which the service was performed, clearly
16 identify the practitioner who provided the service and be signed
17 by the provider after the service has been performed;
18 (8) all orders issued by providers for ancillary clinical
19 services, including but not limited to, x-rays,
20 electrocardiograms, clinical laboratory services,
21 electroencephalograms, as well as orders for medical supplies
22 and equipment, shall contain the prescriber's medical assistance
23 number and the provider number assigned to the facility at which
24 the order was written; and
25 (9) each provider and purveyor shall submit a true bill or
26 invoice for services rendered in the program.
27 Section 1404. Special Recipient Participation
28 Requirements.--(a) Any person applying for medical assistance
29 benefits shall certify to the department that he or she has not
30 transferred title to or ownership interests in any real or
19790H0552B3721 - 16 -
1 personal property to any third person or party within the two
2 years immediately preceding such application; if such a transfer
3 has occurred, the recipient must disclose the nature of the
4 transfer and must demonstrate that it involves, a bona fide
5 arm's length transaction resulting in compensation paid to the
6 transferor in an amount equal to or greater than the fair market
7 value of the property as determined by the department.
8 (b) Any person applying for medical assistance benefits
9 shall as a condition to eligibility, give the department the
10 right of subrogation to any other private or public health
11 insurance benefits to which such person is or may become
12 entitled.
13 (c) Any person applying for medical assistance benefits
14 shall authorize the department to inspect, review and copy any
15 and all medical records relating to services received by the
16 applicant or by any person for which the applicant is legally
17 responsible. The department shall maintain the confidentiality
18 of such records.
19 Section 1405. Freedom of Choice and Nondiscrimination.--(a)
20 A recipient of medical assistance benefits shall, in all cases,
21 have the freedom to obtain medical services from whichever
22 participating provider or providers he so chooses; however, the
23 participating provider so chosen is free to accept or reject the
24 recipient as a patient.
25 (b) Once a provider has elected to participate in the
26 medical assistance program and has signed an agreement with the
27 department, such providers shall not refuse to render services
28 to any recipient on the basis of sex, race, creed, color,
29 national origin or handicap.
30 Section 1406. Restrictions on Provider Charges and
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1 Payments.--(a) All payments made to providers under the medical
2 assistance program shall constitute full reimbursement to the
3 provider for covered services rendered. Providers may not seek
4 or request supplemental or additional payments from recipients
5 for covered services unless authorized by law or regulation; nor
6 may a provider charge a recipient for other services to
7 supplement a covered service paid for by the department.
8 However, nothing in this act shall preclude charges for
9 uncovered services rendered to a recipient.
10 (b) Charges made to the department by a provider for covered
11 services or items furnished shall not exceed, in any case, the
12 usual and customary charges made to the general public by such
13 provider for the same services or items.
14 Section 1407. Provider Prohibited Acts, Criminal Penalties
15 and Civil Remedies.--(a) It shall be unlawful for any person
16 to:
17 (1) Knowingly or intentionally present for allowance or
18 payment any false or fraudulent claim or cost report for
19 furnishing services or merchandise under medical assistance, or
20 to knowingly present for allowance or payment any claim or cost
21 report for medically unnecessary services or merchandise under
22 medical assistance, or to knowingly submit false information,
23 for the purpose of obtaining greater compensation than that to
24 which he is legally entitled for furnishing services or
25 merchandise under medical assistance, or to knowingly submit
26 false information for the purpose of obtaining authorization for
27 furnishing services or merchandise under medical assistance.
28 (2) Solicit or receive or to offer or pay any remuneration,
29 including any kickback, bribe or rebate, directly or indirectly,
30 in cash or in kind from or to any person in connection with the
19790H0552B3721 - 18 -
1 furnishing of services or merchandise for which payment may be
2 in whole or in part under the medical assistance program or in
3 connection with referring an individual to a person for the
4 furnishing or arranging for the furnishing of any services or
5 merchandise for which payment may be made in whole or in part
6 under the medical assistance program.
7 (3) Submit a duplicate claim for services, supplies or
8 equipment for which the provider has already received or claimed
9 reimbursement from any source.
10 (4) Submit a claim for services, supplies or equipment which
11 were not rendered to a recipient.
12 (5) Submit a claim for services, supplies or equipment which
13 includes costs or charges not related to such services, supplies
14 or equipment rendered to the recipient.
15 (6) Submit a claim or refer a recipient to another provider
16 by referral, order or prescription, for services, supplies or
17 equipment which are not documented in the record in the
18 prescribed manner and are of little or no benefit to the
19 recipient, are below the accepted medical treatment standards,
20 or are unneeded by the recipient.
21 (7) Submit a claim which misrepresents the description of
22 services, supplies or equipment dispensed or provided; the dates
23 of services; the identity of the recipient; the identity of the
24 attending, prescribing or referring practitioner; or the
25 identity of the actual provider.
26 (8) Submit a claim for reimbursement for a service, charge
27 or item at a fee or charge which is higher than the provider's
28 usual and customary charge to the general public for the same
29 service or item.
30 (9) Submit a claim for a service or item which was not
19790H0552B3721 - 19 -
1 rendered by the provider.
2 (10) Dispense, render or provide a service or item without a
3 practitioner's written order and the consent of the recipient,
4 except in emergency situations, or submit a claim for a service
5 or item which was dispensed, or provided without the consent of
6 the recipient, except in emergency situations.
7 (11) Except in emergency situations, dispense, render or
8 provide a service or item to a patient claiming to be a
9 recipient without making a reasonable effort to ascertain by
10 verification through a current medical assistance identification
11 card, that the person or patient is, in fact, a recipient who is
12 eligible on the date of service and without another available
13 medical resource.
14 (12) Enter into an agreement, combination or conspiracy to
15 obtain or aid another to obtain reimbursement or payments for
16 which there is not entitlement.
17 (13) Make a false statement in the application for
18 enrollment as a provider.
19 (14) Commit any of the prohibited acts described in section
20 1403(d)(1),(2),(4) and (5).
21 (b) (1) A person who violates any provision of subsection
22 (a), excepting subsection (a)(11), is guilty of a felony of the
23 third degree for each such violation with a maximum penalty of
24 fifteen thousand dollars ($15,000) and seven years imprisonment.
25 A violation of subsection (a) shall be deemed to continue so
26 long as the course of conduct or the defendant's complicity
27 therein continues; the offense is committed when the course of
28 conduct or complicity of the defendant therein is terminated in
29 accordance with the provisions of 42 Pa.C.S. § 5552(d)(relating
30 to other offenses). Whenever any person has been previously
19790H0552B3721 - 20 -
1 convicted in any state or Federal court of conduct that would
2 constitute a violation of subsection (a), a subsequent
3 allegation, indictment or information under subsection (a) shall
4 be classified as a felony of the second degree with a maximum
5 penalty of twenty-five thousand dollars ($25,000) and ten years
6 imprisonment.
7 (2) In addition to the penalties provided under subsection
8 (b), the trial court shall order any person convicted under
9 subsection (a):
10 (i) to repay the amount of the excess benefits or payments
11 plus interest on that amount at the maximum legal rate from the
12 date payment was made by the Commonwealth to the date repayment
13 is made to the Commonwealth;
14 (ii) to pay an amount not to exceed threefold the amount of
15 excess benefits or payments.
16 (3) Any person convicted under subsection (a) shall be
17 ineligible to participate in the medical assistance program for
18 a period of five years from the date of conviction. The
19 department shall notify any provider so convicted that the
20 provider agreement is terminated for five years, and the
21 provider is entitled to a hearing on the sole issue of identity.
22 If the conviction is set aside on appeal, the termination shall
23 be lifted.
24 (4) The Attorney General and the district attorneys of the
25 several counties shall have concurrent authority to institute
26 criminal proceedings under the provisions of this section.
27 (5) As used in this section the following words and phrases
28 shall have the following meanings:
29 "Conviction" means a verdict of guilty, a guilty plea, or a
30 plea of nolo contendere in the trial court.
19790H0552B3721 - 21 -
1 "Medically unnecessary or inadequate services or merchandise"
2 means services or merchandise which are unnecessary or
3 inadequate as determined by medical professionals engaged by the
4 department who are competent in the same or similar field within
5 the practice of medicine.
6 (c) (1) If the department determines that a provider has
7 committed any prohibited act or has failed to satisfy any
8 requirement under section 1407(a), it shall have the authority
9 to immediately terminate, upon notice to the provider, the
10 provider agreement and to institute a civil suit against such
11 provider in the court of common pleas for twice the amount of
12 excess benefits or payments plus legal interest from the date
13 the violation or violations occurred. The department shall have
14 the authority to use statistical sampling methods to determine
15 the appropriate amount of restitution due from the provider.
16 (2) Providers who are terminated from participation in the
17 medical assistance program for any reason shall be prohibited
18 from owning, arranging for, rendering or ordering any service
19 for medical assistance recipients during the period of
20 termination. In addition, such provider may not receive, during
21 the period of termination, reimbursement in the form of direct
22 payments from the department or indirect payments of medical
23 assistance funds in the form of salary, shared fees, contracts,
24 kickbacks or rebates from or through any participating provider.
25 (3) Notice of any action taken by the department against a
26 provider pursuant to clauses (1) and (2) will be forwarded by
27 the department to the Medicaid Fraud Control Unit of the
28 Department of Justice and to the appropriate licensing board of
29 the Department of State for appropriate action, if any. In
30 addition, the department will forward to the Medicaid Fraud
19790H0552B3721 - 22 -
1 Control Unit of the Department of Justice and the appropriate
2 Pennsylvania licensing board of the Department of State any
3 cases of suspected provider fraud.
4 Section 1408. Recipient Prohibited Acts, Criminal Penalties
5 and Civil Remedies.--(a) It shall be unlawful for any person
6 to:
7 (1) knowingly or intentionally make or cause to be made
8 false statement or representation of a material fact in any
9 application for any benefit or payment;
10 (2) having knowledge of the occurrence of any event
11 affecting his initial or continued right to any such benefit or
12 payment or the initial or continued right to any such benefit or
13 payment of any other individual in whose behalf he has applied
14 for or is receiving such benefit or payment, conceal or fail to
15 disclose such event with an intent fraudulently to secure such
16 benefit or payment either in a greater amount or quantity than
17 is due or when no such benefit or payment is authorized;
18 (3) having made application to receive any such benefit or
19 payment for the use and benefit of himself or another and having
20 received it, knowingly or intentionally converts such benefit or
21 any part thereof to a use other than for the use and benefit of
22 himself or such other person; or
23 (4) knowingly or intentionally visit more than three
24 practitioners or providers, who specialize in the same field, in
25 the course of one month for the purpose of obtaining excessive
26 services or benefits beyond what is reasonably needed (as
27 determined by medical professionals engaged by the department)
28 for the treatment of a diagnosed condition of the recipient.
29 (5) borrow or use a medical assistance identification card
30 for which he is not entitled or otherwise gain or attempt to
19790H0552B3721 - 23 -
1 gain medical services covered under the medical assistance
2 program if he has not been determined eligible for the program.
3 (b) (1) A person who commits a violation of subsection
4 (a)(1),(2) or (3) is guilty of a felony of the third degree for
5 each violation thereof with a maximum penalty thereof of fifteen
6 thousand dollars ($15,000) and seven years imprisonment.
7 (2) A person who commits a violation of subsection (a)(4) or
8 (5) is guilty of a misdemeanor of the first degree for each
9 violation thereof with a maximum penalty thereof of ten thousand
10 dollars ($10,000) and five years imprisonment.
11 (c) (1) Anyone who is convicted of a violation of
12 subsection (a)(1),(2),(3), (4) or (5) shall, upon notification
13 by the department, forfeit any and all rights to medical
14 assistance benefits for any period of incarceration.
15 (2) If the department determines that a recipient misuses or
16 overutilizes medical assistance benefits, the department is
17 authorized to restrict a recipient to a provider of his choice
18 for each medical specialty or type of provider covered under the
19 medical assistance program.
20 (3) If the department determines that a general assistance
21 eligible person who is also a medical assistance recipient has
22 violated the provisions of subsection (a)(3), (4) or (5), the
23 department shall have the authority to terminate such
24 recipient's rights to any and all medical assistance benefits
25 for a period up to one year.
26 (4) If the department determines that a recipient has
27 violated the provisions of subsection (a)(3), (4) or (5), the
28 department shall have the authority to institute a civil suit
29 against such recipient in the court of common pleas for the
30 amount of the benefits obtained by the recipient in violation of
19790H0552B3721 - 24 -
1 subsection (a)(3), (4) or (5), plus legal interest from the date
2 the violation or violations occurred.
3 (5) If it is found that a recipient or a member of his
4 family or household, who would have been ineligible for medical
5 assistance, possessed unreported real or personal property in
6 excess of the amount permitted by law, the amount collectable
7 shall be limited to an amount equal to the market value of such
8 excess property or the amount of medical assistance granted
9 during the period the excess property was held, whichever is
10 less. Reimbursement of the overpayment shall be sought from the
11 recipient, or person acting on the recipient's behalf and/or
12 survivors benefiting from receiving such property. Proof of date
13 of acquisition of such property must be provided by the
14 recipient or person acting on his behalf.
15 Where a person receiving medical assistance for which he
16 would have been ineligible due to possession of such unreported
17 property and proof of date of acquisition of such property is
18 not provided, it shall be deemed that such personal property was
19 held by the recipient the entire time he was on medical
20 assistance and reimbursement shall be for all medical assistance
21 paid for the recipient or the value of such excess property,
22 whichever is less. Reimbursement shall be sought from the
23 recipient, the person acting on the recipient's behalf, the
24 person receiving or holding such property, the recipient's
25 estate and/or survivors benefiting from receiving such property.
26 The department is authorized to institute a civil suit in the
27 court of common pleas to enforce any of the rights established
28 by this section.
29 Section 1409. Third Party Liability.--(a) (1) No person
30 having private health care coverage shall be entitled to receive
19790H0552B3721 - 25 -
1 the same health care furnished or paid for by a publicly funded
2 health care program. For the purposes of this section, "publicly
3 funded health care program" shall mean care for services
4 rendered by a State or local government or any facility thereof,
5 health care services for which payment is made under the medical
6 assistance program established by the department or by its
7 fiscal intermediary, or by an insurer or organization with which
8 the department has contracted to furnish such services or to pay
9 providers who furnish such services. For the purposes of this
10 section, "privately funded health care" means medical care
11 coverage contained in accident and health insurance policies or
12 subscriber contracts issued by health plan corporations and
13 nonprofit health service plans, certificates issued by fraternal
14 benefit societies, and also any medical care benefits provided
15 by self insurance plan including self insurance trust, as
16 outlined in Pennsylvania insurance laws and related statutes.
17 (2) If such a person receives health care furnished or paid
18 for by a publicly funded health care program, the insurer of his
19 private health care coverage shall reimburse the publicly funded
20 health care program, the cost incurred in rendering such care to
21 the extent of the benefits provided under the terms of the
22 policy for the services rendered.
23 (3) Each publicly funded health care program that furnishes
24 or pays for health care services to a recipient having private
25 health care coverage shall be entitled to be subrogated to the
26 rights that such person has against the insurer of such coverage
27 to the extent of the health care services rendered. Such action
28 may be brought within three years from the date that service was
29 rendered such person.
30 (4) When health care services are provided to a person under
19790H0552B3721 - 26 -
1 this section who at the time the service is provided has any
2 other contractural or legal entitlement to such services, the
3 secretary of the department shall have the right to recover from
4 the person, corporation, or partnership who owes such
5 entitlement, the amount which would have been paid to the person
6 entitled thereto, or to a third party in his behalf, or the
7 value of the service actually provided, if the person entitled
8 thereto was entitled to services. The Attorney General may, to
9 recover under this section, institute and prosecute legal
10 proceedings against the person, corporation, health service plan
11 or fraternal society owing such entitlement in the appropriate
12 court in the name of the secretary of the department.
13 (5) The Commonwealth of Pennsylvania shall not reimburse any
14 local government or any facility thereof, under medical
15 assistance or under any other health program where the
16 Commonwealth pays part or all of the costs, for care provided to
17 a person covered under any disability insurance, health
18 insurance or prepaid health plan.
19 (6) In local programs fully or partially funded by the
20 Commonwealth, Commonwealth participation shall be reduced in the
21 amount proportionate to the cost of services provided to a
22 person.
23 (7) When health care services are provided to a dependent of
24 a legally responsible relative, including but not limited to a
25 spouse or a parent of an unemancipated child, such legally
26 responsible relative shall be liable for the cost of health care
27 services furnished to the individual on whose behalf the duty of
28 support is owed. The department shall have the right to recover
29 from such legally responsible relative the charges for such
30 services furnished under the medical assistance program.
19790H0552B3721 - 27 -
1 (b) (1) When benefits are provided or will be provided to a
2 beneficiary under this section because of an injury for which
3 another person is liable, or for which an insurer is liable in
4 accordance with the provisions of any policy of insurance issued
5 pursuant to Pennsylvania insurance laws and related statutes the
6 department shall have the right to recover from such person or
7 insurer the reasonable value of benefits so provided. The
8 Attorney General or his designee may, at the request of the
9 department, to enforce such right, institute and prosecute legal
10 proceedings against the third person or insurer who may be
11 liable for the injury in an appropriate court, either in the
12 name of the department or in the name of the injured person, his
13 guardian, personal representative, estate or survivors.
14 (2) The department may:
15 (i) compromise, or settle and release any such claims; or
16 (ii) waive any such claim, in whole or in part, or if the
17 department determines that collection would result in undue
18 hardship upon the person who suffered the injury, or in a
19 wrongful death action upon the heirs of the deceased.
20 (3) No action taken in behalf of the department pursuant to
21 this section or any judgment rendered in such action shall be a
22 bar to any action upon the claim or cause of action of the
23 beneficiary, his guardian, person representative, estate,
24 dependents or survivors against the third person who may be
25 liable for the injury, or shall operate to deny to the
26 beneficiary the recovery for that portion of any damages not
27 covered hereunder.
28 (4) Where an action is brought by the department pursuant to
29 this section, it shall be commenced within five years of the
30 date the cause of action arises.
19790H0552B3721 - 28 -
1 (i) The death of the beneficiary does not abate any right of
2 action established by this section.
3 (ii) When an action or claim is brought by persons entitled
4 to bring such actions or assert such claims against a third
5 party who may be liable for causing the death of a beneficiary,
6 any settlement, judgment or award obtained is subject to the
7 department's claims for reimbursement of the benefits provided
8 to the beneficiary under the medical assistance program.
9 (iii) Where the action or claim is brought by the
10 beneficiary alone and the beneficiary incurs a personal
11 liability to pay attorney's fees and costs of litigation, the
12 department's claim for reimbursement of the benefits provided to
13 the beneficiary shall be limited to the amount of the medical
14 expenditures for the services to the beneficiary.
15 (5) If either the beneficiary or the department brings an
16 action or claim against such third party or insurer, the
17 beneficiary or the department shall within thirty days of filing
18 the action give to the other written notice by personal service,
19 or certified or registered mail of the action or claim. Proof of
20 such notice shall be filed in such action or claim. If an action
21 or claim is brought by either the department or beneficiary, the
22 other may, at any time before trial on the facts, become a party
23 to, or shall consolidate his action or claim with the other if
24 brought independently.
25 (6) If an action or claim is brought by the department
26 pursuant to subsection (a), written notice to the beneficiary,
27 guardian, personal representative, estate or survivor given
28 pursuant to this section shall advise him of his right to
29 intervene in the proceeding, his right to recover the reasonable
30 value of the benefits provided.
19790H0552B3721 - 29 -
1 (7) In the event of judgment or award in a suit or claim
2 against such third party or insurer:
3 (i) If the action or claim is prosecuted by the beneficiary
4 alone, the court or agency shall first order paid from any
5 judgment or award the reasonable litigation expenses, as
6 determined by the court, incurred in preparation and prosecution
7 of such action or claim, together with reasonable attorney's
8 fees, when an attorney has been retained. After payment of such
9 expenses and attorney's fees the court or agency shall, on the
10 application of the department, allow as a first lien against the
11 amount of such judgment or award, the amount of the department's
12 expenditures for the benefit of the beneficiary under the
13 medical assistance program, as provided in subsection (d).
14 (ii) If the action or claim is prosecuted both by the
15 beneficiary and the department, the court or agency shall first
16 order paid from any judgment or award, the reasonable litigation
17 expenses incurred in preparation and prosecution of such action
18 or claim, together with reasonable attorney's fees based solely
19 on the services rendered for the benefit of the beneficiary.
20 After payment of such expenses and attorney's fees, the court or
21 agency shall apply out of the balance of such judgment or award
22 an amount of benefits paid on behalf of the beneficiary under
23 the medical assistance program.
24 (8) The court or agency shall, upon further application at
25 any time before the judgment or award is satisfied, allow as a
26 further lien the amount of any expenditures of the department in
27 payment of additional benefits arising out of the same cause of
28 action or claim provided on behalf of the beneficiary under the
29 medical assistance program, where such benefits were provided or
30 became payable subsequent to the original order.
19790H0552B3721 - 30 -
1 (9) No judgment, award, or settlement in any action or claim
2 by a beneficiary to recover damages for injuries, where the
3 department has an interest, shall be satisfied without first
4 giving the department notice and an opportunity to perfect and
5 satisfy his lien.
6 (10) When the department has perfected a lien upon a
7 judgment or award in favor of a beneficiary against any third
8 party for an injury for which the beneficiary has received
9 benefits under the medical assistance program, the department
10 shall be entitled to a writ of execution as lien claimant to
11 enforce payment of said lien against such third party with
12 interest and other accruing costs as in the case of other
13 executions. In the event the amount of such judgment or award so
14 recovered has been paid to the beneficiary, the department shall
15 be entitled to a writ of execution against such beneficiary to
16 the extent of the department's lien, with interest and other
17 accruing costs as in the cost of other executions.
18 (11) Except as otherwise provided in this act,
19 notwithstanding any other provision of law, the entire amount of
20 any settlement of the injured beneficiary's action or claim,
21 with or without suit, is subject to the department's claim for
22 reimbursement of the benefits provided any lien filed pursuant
23 thereto, but in no event shall the department's claim exceed
24 one-half of the beneficiary's recovery after deducting for
25 attorney's fees, litigation costs, and medical expenses relating
26 to the injury paid for by the beneficiary.
27 (12) In the event that the beneficiary, his guardian,
28 personal representative, estate or survivors or any of them
29 brings an action against the third person who may be liable for
30 the injury, notice of institution of legal proceedings, notice
19790H0552B3721 - 31 -
1 of settlement and all other notices required by this act shall
2 be given to the secretary (or his designee) in Harrisburg except
3 in cases where the secretary specifies that notice shall be
4 given to the Attorney General. All such notices shall be given
5 by the attorney retained to assert the beneficiary's claim, or
6 by the injured party beneficiary, his guardian, personal
7 representative, estate or survivors, if no attorney is retained.
8 (13) The following special definitions apply to subsection
9 (b):
10 "Beneficiary" means any person who has received benefits or
11 will be provided benefits under this act because of an injury
12 for which another person may be liable. It includes such
13 beneficiary's guardian, conservator, or other personal
14 representative, his estate or survivors.
15 "Insurer" includes any insurer as defined in the act of May
16 17, 1921 (P.L.789, No.285), known as "The Insurance Department
17 Act of one thousand nine hundred and twenty-one," including any
18 insurer authorized under the Laws of this Commonwealth to insure
19 persons against liability or injuries caused to another, and
20 also any insurer providing benefits under a policy of bodily
21 injury liability insurance covering liability arising out of
22 ownership, maintenance or use of a motor vehicle which provides
23 uninsured motorist endorsement of coverage pursuant to the act
24 of July 19, 1974 (P.L.489, No.176), known as the "Pennsylvania
25 No-fault Motor Vehicle Insurance Act."
26 Section 1410. Rules and Regulations.--The department shall
27 have the power and its duty shall be to adopt rules and
28 regulations to carry out the provisions of this article. Prior
29 to the adoption of any rule or regulation pursuant to this
30 amendatory act, the secretary shall send a copy to the members
19790H0552B3721 - 32 -
1 of the House Health and Welfare Committee and Senate Public
2 Health and Welfare Committee. Each of those committees shall
3 review the proposal and shall have thirty calendar days or five
4 legislative days, whichever is the longer period, to reject
5 their implementation or the secretary may thereafter implement
6 the proposal.
7 Section 1411. Venue and Limitations on Actions.--Any civil
8 actions or criminal prosecutions brought pursuant to this act
9 for violations hereof shall be commenced within five years of
10 the date the violation or violations occur. In addition, any
11 such actions or prosecutions may be brought in any county where
12 the offender has an office or place of business or where claims
13 and payments are processed by the Commonwealth or where
14 authorized by the Rules of the Pennsylvania Supreme Court.
15 Section 4. Section 4, act of April 27, 1927 (P.L.465,
16 No.299), referred to as the Fire and Panic Act, is repealed
17 insofar as it relates to personal care boarding homes.
18 Section 5. This act shall take effect in 60 days.
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