PRINTER'S NO. 2173
No. 1730 Session of 2001
INTRODUCED BY CAPPELLI, BROWNE, CALTAGIRONE, CASORIO, CLARK,
COLEMAN, CORRIGAN, GABIG, HARHAI, HERMAN, HORSEY, KELLER,
KENNEY, PALLONE, PISTELLA, SAINATO, SATHER, STEELMAN,
STETLER, E. Z. TAYLOR, THOMAS, TIGUE, TRICH, WANSACZ, WILT,
WOGAN, YUDICHAK AND YOUNGBLOOD, JUNE 12, 2001
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES,
JUNE 12, 2001
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," further providing for
4 freedom of choice and nondiscrimination, for restrictions on
5 provider charges and payments, for provider prohibited acts
6 and civil and criminal penalties, for venue and limitations
7 on actions, for access to records by the Attorney General and
8 for duty to report fraud or abuse and immunity.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. Sections 1401, 1405, 1406, 1407 and 1411 of the
12 act of June 13, 1967 (P.L.31, No.21), known as the Public
13 Welfare Code, added July 10, 1980 (P.L.493, No.105), are amended
14 to read:
15 Section 1401. Definitions.--The following words and phrases
16 when used in this article shall have, unless the context clearly
17 indicates otherwise, the meanings given to them in this section:
18 "Claim" means any communication, whether oral, written,
19 electronic, magnetic or otherwise, that is used as a basis for
1 obtaining payment or funding under the medical assistance
2 program, regardless of whether the communication is submitted to
3 the department or its fiscal intermediary or to an insurer,
4 managed care organization or other person or entity that the
5 department has designated, selected or contracted to furnish
6 services or to pay providers who furnish services.
7 "Eligible person" means anyone who lawfully receives or holds
8 a medical assistance eligibility identification card from the
9 department.
10 "Health services corporation" means a nonprofit hospital plan
11 corporation or a nonprofit professional health service plan
12 corporation approved under Pennsylvania law.
13 "Managed care organization" means a health maintenance
14 organization organized and regulated under the act of December
15 29, 1972 (P.L.1701, No.364), known as the "Health Maintenance
16 Organization Act," or a risk-assuming preferred provider
17 organization or exclusive provider organization, organized and
18 regulated under the act of May 17, 1921 (P.L.682, No.284), known
19 as "The Insurance Company Law of 1921," a health care insurer or
20 primary care case manager as defined by the Social Security Act
21 (49 Stat. 620, 42 U.S.C. § 1396t(1)(2)), a provider service
22 network, or any other public or private organization that
23 provides or arranges for medical assistance by agreement with
24 the department.
25 "Medical assistance" means medical services, care, supplies,
26 equipment or other items rendered to eligible persons under
27 Articles IV and V of this act.
28 "Medical assistance program" means the services funded and
29 operations administered by the department or the State plan for
30 medical assistance established under Articles IV and V of this
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1 act.
2 "Medical facility" means a licensed or approved hospital,
3 skilled nursing facility, intermediate care facility, clinic,
4 shared health facility, pharmacy, laboratory or other medical
5 institution.
6 "Medically unnecessary or inadequate services or merchandise"
7 means services or merchandise which are unnecessary or
8 inadequate as determined by medical professionals engaged by the
9 department who are competent in a pertinent field within the
10 practice of medicine.
11 "Practitioner" means any medical doctor, doctor of
12 osteopathy, dentist, optometrist, podiatrist, chiropractor or
13 other medical professional personnel licensed by the
14 Commonwealth or by any other state who is authorized to
15 participate in the medical assistance program.
16 "Provider" means any individual [or medical facility], person
17 or entity which signs an agreement with the department to
18 participate in the medical assistance program, including, but
19 not limited to, licensed practitioners, pharmacies, hospitals,
20 nursing homes, clinics, home health agencies [and], medical
21 purveyors, firms, partnerships, groups, associations,
22 fiduciaries, management companies, medical facilities and
23 managed care organizations, as well as employes of a provider,
24 which participate in the medical assistance program to furnish
25 care, services, supplies, equipment or other items.
26 "Purveyor" means any person other than a practitioner, who,
27 directly or indirectly, engages in the business of supplying to
28 patients any medical supplies, equipment or services for which
29 reimbursement under the program is received, including, but not
30 limited to, clinical laboratory services or supplies, x-ray
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1 laboratory services or supplies, inhalation therapy services or
2 equipment, ambulance services, sick room supplies, physical
3 therapy services or equipment and orthopedic or surgical
4 appliances or supplies.
5 "Recipient" means an eligible person who requests or receives
6 medical assistance from a participating provider.
7 "Shared health facility" means an entity which provides the
8 services of three or more health care practitioners, two or more
9 of whom are practicing within different professions, in one
10 physical location. To meet this definition, the practitioners
11 must share any of the following: common waiting areas, examining
12 rooms, treatment rooms, equipment, supporting staff or common
13 records. In addition, to meet this definition, at least one
14 practitioner must receive payment on a fee-for-services basis,
15 and payments under the medical assistance program to any person
16 or entity providing services or merchandise at the location must
17 exceed thirty thousand dollars ($30,000) per year. "Shared
18 health facility" does not mean or include any licensed or
19 approved hospital facility, a skilled nursing facility,
20 intermediate care facility, public health clinics, or any entity
21 organized or operating as a facility wherein ambulatory medical
22 services are provided by an organized group of practitioners all
23 of whom practice the same profession pursuant to an arrangement
24 between such group and a health services corporation or a
25 Federally approved health maintenance organization operating
26 under Pennsylvania law, and where a health services corporation
27 or a health maintenance organization is reimbursed on a prepaid
28 capitation basis for the provision of health care services under
29 the medical assistance program.
30 Section 1405. Freedom of Choice and Nondiscrimination.--(a)
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1 A recipient of medical assistance benefits shall, in all cases,
2 have the freedom to obtain medical services from whichever
3 participating provider or providers he so chooses; however, the
4 participating provider so chosen is free to accept or reject the
5 recipient as a patient.
6 (b) Once a provider has elected to participate in the
7 medical assistance program and has signed an agreement with the
8 department, [such providers] the provider shall not refuse to
9 render services to any recipient on the basis of sex, race,
10 creed, color, national origin, age or handicap.
11 Section 1406. Restrictions on Provider Charges and
12 Payments.--(a) All payments made to providers under the medical
13 assistance program shall constitute full reimbursement to the
14 provider for covered services rendered. Providers may not seek
15 or request supplemental or additional payments from recipients
16 for covered services unless authorized by law or regulation; nor
17 may a provider charge a recipient for other services to
18 supplement a covered service paid for by the department under
19 the medical assistance program. However, nothing in this act
20 shall preclude charges for uncovered services rendered to a
21 recipient.
22 (b) Charges made to the department under the medical
23 assistance program by a provider for covered services or items
24 furnished shall not exceed, in any case, the usual and customary
25 charges made to the general public by such provider for the same
26 services or items.
27 Section 1407. Provider Prohibited Acts, Criminal Penalties
28 and Civil Remedies.--(a) It shall be unlawful for any person or
29 entity to:
30 (1) Knowingly or intentionally present for allowance or
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1 payment any false or fraudulent claim or cost report for
2 furnishing services or merchandise under medical assistance, or
3 to knowingly present for allowance or payment any claim or cost
4 report for medically unnecessary services or merchandise under
5 medical assistance, or to knowingly submit false information,
6 for the purpose of obtaining greater compensation than that to
7 which he is legally entitled for furnishing services or
8 merchandise under medical assistance, or to knowingly submit
9 false information for the purpose of obtaining authorization for
10 furnishing services or merchandise under medical assistance.
11 (2) Solicit or receive or to offer or pay any remuneration,
12 including any kickback, bribe or rebate, directly or indirectly,
13 in cash or in kind from or to any person or entity in connection
14 with the furnishing of services or merchandise for which payment
15 may be in whole or in part under the medical assistance program
16 or in connection with referring an individual to a person or
17 entity for the furnishing or arranging for the furnishing of any
18 services or merchandise for which payment may be made in whole
19 or in part under the medical assistance program.
20 (3) Submit a duplicate claim for care, services, supplies
21 [or], equipment or other items for which the provider has
22 already received or claimed reimbursement from any source.
23 (4) Submit a claim for care, services, supplies [or],
24 equipment or other items which were not rendered to a recipient.
25 (5) Submit a claim for care, services, supplies [or],
26 equipment or other items which includes costs or charges not
27 related to such care, services, supplies [or], equipment or
28 other items rendered to the recipient.
29 (6) Submit a claim or refer a recipient to another provider
30 by referral, order or prescription, for care, services, supplies
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1 [or], equipment or other items which are not documented in the
2 record in the prescribed manner and are of little or no benefit
3 to the recipient, are below the accepted medical treatment
4 standards, or are unneeded by the recipient.
5 (7) Submit a claim which misrepresents the description of
6 care, services, supplies [or], equipment or other items
7 dispensed or provided; the dates of services; the identity of
8 the recipient; the identity of the attending, prescribing or
9 referring practitioner; or the identity of the actual provider.
10 (8) Submit a claim for reimbursement for [a] care, service,
11 [charge or item] supplies, equipment, charges or other items at
12 a fee or charge which is higher than the provider's usual and
13 customary charge to the general public for the same care,
14 service, supplies, equipment or [item] other items.
15 (9) Submit a claim for [a] care, service, supplies,
16 equipment or [item] other items which [was] were not rendered by
17 the provider.
18 (10) Dispense, render or provide [a] care, service,
19 supplies, equipment or [item] other items without a
20 practitioner's written order and the consent of the recipient,
21 except in emergency situations, or submit a claim for [a] care,
22 service, supplies, equipment or [item] other items which [was]
23 were dispensed[,] or provided without the consent of the
24 recipient, except in emergency situations.
25 (11) Except in emergency situations, dispense, render or
26 provide [a] care, service, supplies, equipment or [item] other
27 items to a patient claiming to be a recipient without making a
28 reasonable effort to ascertain by verification through a current
29 medical assistance identification card, that the person or
30 patient is, in fact, a recipient who is eligible on the date of
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1 service and without another available medical resource.
2 (12) Enter into an agreement, combination or conspiracy to
3 obtain or aid another to obtain reimbursement or payments for
4 which there is not entitlement.
5 (13) Make a false statement in the application for
6 enrollment as a provider.
7 (14) Commit any of the prohibited acts described in section
8 1403(d)(1), (2), (4) and (5).
9 (15) Make or cause to be made a misrepresentation or
10 omission of a material fact in any record required to be
11 retained by the provider under the medical assistance program.
12 (b) (1) A person or entity who violates any provision of
13 subsection (a), excepting subsection (a)(11), is guilty of a
14 felony of the third degree for each such violation with a
15 maximum penalty of [fifteen thousand dollars ($15,000)] fifty
16 thousand dollars ($50,000) if the defendant is an individual and
17 two hundred fifty thousand dollars ($250,000) if the defendant
18 is an entity and seven years imprisonment. A violation of
19 subsection (a) shall be deemed to continue so long as the course
20 of conduct or the defendant's complicity therein continues; the
21 offense is committed when the course of conduct or complicity of
22 the defendant therein is terminated in accordance with the
23 provisions of 42 Pa.C.S. § 5552(d) (relating to other offenses).
24 Whenever any person has been previously convicted in any state
25 or Federal court of conduct that would constitute a violation of
26 subsection (a), a subsequent allegation, indictment or
27 information under subsection (a) shall be classified as a felony
28 of the second degree with a maximum penalty of twenty-five
29 thousand dollars ($25,000) and ten years imprisonment.
30 (2) In addition to the penalties provided under subsection
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1 (b), the trial court shall order any person convicted under
2 subsection (a):
3 (i) to repay the amount of the excess benefits or payments
4 plus interest on that amount at the maximum legal rate from the
5 date payment was made by the Commonwealth under the medical
6 assistance program to the date repayment is made to the
7 [Commonwealth] appropriate entity under the medical assistance
8 program;
9 (ii) to pay an amount not to exceed threefold the amount of
10 excess benefits or payments.
11 (3) Any person or entity convicted under subsection (a)
12 shall be ineligible to participate in the medical assistance
13 program for a period of five years from the date of conviction.
14 The department shall notify any provider so convicted that the
15 provider agreement is terminated for five years, and the
16 provider is entitled to a hearing on the sole issue of identity.
17 If the conviction is set aside on appeal, the termination shall
18 be lifted.
19 (4) The Attorney General and the district attorneys of the
20 several counties shall have concurrent authority to institute
21 criminal proceedings under the provisions of this section.
22 (5) As used in this section the following words and phrases
23 shall have the following meanings:
24 "Conviction" means a verdict of guilty, a guilty plea, or a
25 plea of nolo contendere in the trial court.
26 "Medically unnecessary or inadequate services or merchandise"
27 means services or merchandise which are unnecessary or
28 inadequate as determined by medical professionals engaged by the
29 department who are competent in [the same or similar] a
30 pertinent field within the practice of medicine.
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1 (c) (1) If the department determines that a provider has
2 committed any prohibited act or has failed to satisfy any
3 requirement under section 1407(a), it shall have the authority
4 to immediately terminate, upon notice to the provider, the
5 provider agreement and to institute a civil suit against such
6 provider in the court of common pleas for twice the amount of
7 excess benefits or payments plus legal interest from the date
8 the violation or violations occurred. The department shall have
9 the authority to use statistical sampling methods to determine
10 the appropriate amount of restitution due from the provider.
11 (2) Providers who are terminated from participation in the
12 medical assistance program for any reason shall be prohibited
13 from owning, arranging for, rendering or ordering any service
14 for medical assistance recipients during the period of
15 termination. In addition, such provider may not receive, during
16 the period of termination, reimbursement in the form of direct
17 payments from the department under the medical assistance
18 program or indirect payments of medical assistance funds in the
19 form of salary, shared fees, contracts, kickbacks or rebates
20 from or through any participating provider.
21 (3) Notice of any action taken by the department against a
22 provider pursuant to clauses (1) and (2) will be forwarded by
23 the department to the Medicaid Fraud Control Unit of the
24 [Department of Justice] Office of Attorney General and to the
25 appropriate licensing board of the Department of State for
26 appropriate action, if any. In addition, the department will
27 forward to the Medicaid Fraud Control Unit of the [Department of
28 Justice] Office of Attorney General and the appropriate
29 Pennsylvania licensing board of the Department of State any
30 cases of suspected provider fraud.
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1 Section 1411. Venue and Limitations on Actions.--Any civil
2 actions or criminal prosecutions brought pursuant to this act
3 for violations hereof shall be commenced within five years of
4 the date the violation or violations occur. In addition, any
5 such actions or prosecutions may be brought in any county where
6 the offender has an office or place of business or where [claims
7 and payments are processed by the Commonwealth] the department
8 is located or where authorized by the Rules of the Pennsylvania
9 Supreme Court.
10 Section 2. This act shall take effect in 60 days.
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