|Posted:||January 21, 2020 02:25 PM|
|From:||Representative Seth M. Grove and Rep. Aaron D. Kaufer, Rep. Valerie S. Gaydos, Rep. Clint Owlett, Rep. Tommy Sankey, Rep. Wendi Thomas|
|To:||All House members|
|Subject:||Bipartisan Reforms to Prevent Fraud and Stop Improper Payments|
|The commonwealth operates the third-largest Medicaid program in the country, and the program is growing faster than any other Medicaid program. Due to the considerable amount of taxpayer money used to fund Medicaid and the vulnerable population the program serves; it is important to ensure taxpayer money is used to assist those in need. To this end we will introduce a bipartisan package to reform state government operations including Medicaid . This package will codify the recent grand jury recommendations along with enacting statutes which mirror federal law to allow the commonwealth to combat fraud in Medicaid and the rest of state government while recouping state tax dollars. Should you have any questions please contact Jordan Grant by email at email@example.com
|Description:||Grand Jury Recommendation #1. State Provider Identification
On March 1st, 2019, Attorney General Josh Shapiro released the findings of a grand jury about preventing fraud within our Medicaid program. The grand jury made several recommendations including requiring anyone providing services under Medicaid in the commonwealth have either a National Provider Identification (NPI) or receive a State Provider Identification number (SPI). In addition to this recommendation, the grand jury also recommended legislation strengthening the requirements for Medicaid providers for documenting services provided by the Medicaid provider.
This legislation offered by Representative Aaron Kaufer would require any provider which seeks to operate in the Medicaid program use either an NPI or register for SPI. The Department of Human Services would be required to establish a standardized program for any company which lacks an NPI and must register for provider identification with the state. This training would teach providers how to submit claims for reimbursement from Medicaid by using their provider number along with the date, time and service provided. The legislation also includes a clarification of current law recommended by the Attorney General’s office which clarifies current law on where civil claims for Medicaid fraud can be filed.
|Description:||Grand Jury Recommendation #2. Civil Penalties
This legislation, introduced by Representative Wendi Thomas, would increase the penalties for making a false claim against the commonwealth’s Medicaid Program under section 1407 of the Human Services Code. Under this bill the penalty for knowing or causing to a fraudulent claim to be submitted would commit a felony of the second degree if the fraudulent claim is $100,000 or more. If the claim is between $2,000 and $100,000 the penalty for the fraudulent claim would be a third-degree felony. If the claim is $2,000 or less the penalty would be a third-degree misdemeanor.
|Description:||Pennsylvania False Claims Act
Under the federal False Claims Act, the commonwealth is allowed to recoup money which is fraudulently claim against Medicaid when the settlement is a national settlement. However, despite authority under federal law, the state has yet to adopt a state version of the False Claims Act. The failure of the Commonwealth to adopt a state version of the False Claims act prevents the Commonwealth from recouping the maximum amount allowable under federal law. In order to address this problem, we plan to introduce legislation to create a State False Claims Act. This bill offered by Representative Seth Grove would allow the Commonwealth to recover an additional 10% from false claims made against Medicaid.
Additionally, this legislation empowers the Attorney General’s Office, or a District Attorney designated by the Attorney General to investigate other potential cases of false claims made against the Commonwealth. The process for investigating false claims established under the bill is based on the process under the Federal False Claims Act.
The Commonwealth’s Medicaid program, as noted in the recent Grand Jury Report by separating physical and behavioral health services is susceptible to fraud. Enacting a state False Claims Act will allow the Commonwealth to protect/recover taxpayer dollars from fraudulent claims.
|Description:||State Improper Payment Act
In order to prevent improper payments within state programs, we plan to introduce legislation which mirrors the Federal Improper Payment law. This bill, introduced by Representative Valerie Gaydos, would require agencies to review their programs and expenditures and assess whether they are highly, moderately or unlikely to be susceptible to an improper payment. This assessment is sent to the Governor, the Budget Office, the IFO, the General Assembly and the State Inspector General.
As stated in federal law an improper payment in the bill is defined as an overpayment, an underpayment, a payment for an ineligible service or a payment to someone who was ineligible to receive it. Additionally, an improper payment both under the draft and in federal law includes any payment made by a state agency which did not receive a discount or credit which the payment should have received from a vendor or third party.
The bill requires the Inspector General to review at least one state agency per year starting in 2021.If the state agency has an improper payment rate which exceeds 0.3%, the agency must adopt a corrective action plan to reduce the improper payment rate to 0.3%. This requirement is necessary for the Commonwealth to comply with federal law. If a state has an improper payment rate which exceeds 0.3% it results in a “disallowance” from the federal government. Effectively, this means a state government must refund the federal government for improper payments made by the state. A recent example comes from the State of Florida which now owes the Federal Government over $400 million due to improper payments made under Medicaid.
Under the bill, if an agency has failed to reduce the improper payment rate five fiscal years after the Inspector General’s review, the governor will move funds from the agency into budgetary reserve. The amount moved into budgetary reserved will be taken from the agency’s GGO and will be equal to the total amount of improper payments or equal to the percentage of improper payments whichever is lower. These funds will remain into budgetary reserve until the Inspector General has reviewed the agency and determined the improper payment rate is not greater than 0.3%. This will incentivize agencies to address improper payments and prevent the state from owning the federal government money as a result of a disallowance.
|Description:||Treasury Do Not Pay Intiative
This legislation, introduced by Representative Clint Owlett, modeled after the Federal Do Not Pay Legislation, would establish a state database of organizations, individuals and entities which are not eligible to receive funds from a commonwealth agency. This database managed by the State Treasury shall utilize specific records to provide a comprehensive list to state agencies of who is eligible to receive taxpayer funds. The records, under the draft, include:
|Description:||Provider Preventable Conditions
Recently, the Inspector General for the U.S. Department of Health and Human Services released a report detailing how the commonwealth spent over $40 million in taxpayer money on “Provider Preventable Conditions” (PPC). According to the Inspector General, a PPC is a condition acquired in an in-patient setting which has a high cost, or an invasive or surgical procedure performed on the wrong person or wrong body part.
In short, these are Medicaid expenditures should not have been made because the provider made a mistake. This legislation, as introduced by Representative Tommy Sankey would require any Medicaid Managed Care Organization (MCO) to enter into an agreement with the Department of Human Services (DHS) to allow the department to recoup any Medicaid funds which were spent on a PPC.
The legislation also requires MCO’s to cease expenditures which constitute a PPC and provide the department with documentation to determine if claims were made which constitute a PPC. Should the MCO fail to keep adequate records DHS is authorized to levy a heavy fine equal ranging between .5% and 5% of the total claims the MCO made under Medicaid.
After reviewing the documents provided by the MCO, the department shall require the MCO to reimburse Medicaid for claims which constituted a PPC. However, if DHS determines the MCO failed to disclose the PPC to the department they may levy a fine which shall equal 5% of the total amount of claims which constituted a PPC.
This legislation will ensure MCO’s keep proper records of service provided to vulnerable Pennsylvanians under Medicaid. Additionally, the legislation will ensure taxpayer money is not used to pay for egregious mistakes made by a provider.