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Introduced Version Senate Bill 532 History

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Senate Bill No. 532

(By Senators Palumbo, Foster and Minard)

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[Introduced February 16, 2011; referred to the Committee on Health and Human Resources; and then to the Committee on the Judiciary.]

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A BILL to amend and reenact §9-7-1, §9-7-2, §9-7-3, §9-7-4, §9-7-5, §9-7-6 and §9-7-8 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto three new sections, designated §9-7-3a, §9-7-5a and §9-7-6a, all relating to human services; the Department of Health and Human Resources; fraud and abuse in the Medicaid program; powers and duties of the Medicaid Fraud Control Unit; definitions under said article; investigation procedures for the Medicaid Fraud Control Unit; prosecution of crimes in Medicaid; criminal forfeiture of assets and the costs associated with criminal forfeiture; venue for crimes committed against Medicaid; limiting the liability of employees of the Department of Health and Human Resources under article nine, chapter seven of this code; and other remedies and criminal penalties.

Be it enacted by the Legislature of West Virginia:

    That §9-7-1, §9-7-2, §9-7-3, §9-7-4, §9-7-5, §9-7-6 and §9-7-8 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto three new sections, designated §9-7-3a, §9-7-5a and §9-7-6a, all to read as follows:

ARTICLE 7. FRAUD AND ABUSE IN THE MEDICAID PROGRAM.

§9-7-1. Legislative purpose and findings; powers and duties of fraud control unit.

    (a) It is the purpose of the Legislature to continue the Medicaid Fraud Control Unit previously established within the West Virginia Department of Welfare Health and Human Resources and to provide it with the responsibility and authority for investigating and controlling fraud and abuse of the medical programs of the state Department of welfare Health and Human Resources which have been established pursuant to section two, article four of this chapter. It is the finding of the Legislature that substantial sums of money have been lost to the state and federal government in the operation of the medical programs of the state due to the overpayment of moneys to medical providers. Such overpayments have been the result of both the abuse of and fraud in the reimbursement process.

    (b) The Medicaid fraud control unit of the state Department of welfare Health and Human Resources shall be continued and shall have the following powers and duties:

    (1) The investigation and referral for prosecution of all violations of applicable state and federal laws pertaining to the provision of goods or services under the medical programs of the state including the Medicaid program and the program known as handicapped children's services.

    (2) The investigation of complaints alleging abuse, or neglect or financial exploitation of patients in health care facilities which receive payments under the medical programs of the state.

    (3) To cooperate with the federal government in all programs designed to detect and deter fraud and abuse in the medical programs of the state.

    (4) To employ and train personnel to achieve the purposes of this article and to employ legal counsel, investigators, Auditors and clerical support personnel and such other personnel as are deemed necessary from time to time to accomplish the purposes herein.

§9-7-2. Definitions.

    For the purposes of this article:

    (1) "Assistance" means money payments, medical care, transportation and other goods and services necessary for the health or welfare of individuals, including guidance, counseling and other welfare services and shall include all items of any nature contained within the definition of "welfare assistance" in section two, article one of this chapter.

    (2) "Benefits" means money payments, goods, services, or any other thing of value.

    (3) "Claim" means an application for payment for goods or services provided under the medical programs of the Department of welfare Health and Human Resources.

    (4) “Direct Care Worker” means any care worker who is in contact with a patient receiving health care services.

    (5) “Entity” means any corporation, association or partnership.

    (6) “Kickback” means any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind which is provided, directly or indirectly, to any provider, manufacturer, seller, buyer, distributor, health worker or government employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with a state healthcare plan.

    (4) (7) "Medicaid" means that assistance provided under a state plan implemented pursuant to the provisions of subchapter nineteen, chapter seven, Title 42, United States Code, as that chapter has been and may hereafter be amended.

    (8) “Person” means any individual, corporation, association, partnership, proprietor, agent, assignee or entity.

    (5) (9) "Provider" means any individual or entity furnishing goods or services under the medical programs of the Department of welfare Health and Human Resources.

    (6) (10) "Unit" means the Medicaid Fraud Control Unit established under section one of this article.

§9-7-3. Investigations; procedure.

    (a) When the unit has probable cause to believe that information that indicates a person has engaged in an act or activity which is subject to prosecution under this article, the unit shall make an investigation to determine if the act has been committed and, to the extent necessary for such purpose, the commissioner Secretary, or an employee of the unit designated by the commissioner Secretary, shall have the power to may administer oaths or affirmations, present and swear or affirm criminal complaints, request search warrants and issue subpoenas for witnesses and documents relevant to the investigation, including information concerning the existence, description, nature, custody, condition and location of any book, record, documents or other tangible thing and the identity and location of persons having knowledge of relevant facts or any matter reasonably calculated to lead to the discovery of admissible evidence.

    (b) If documents necessary to an investigation of the unit shall appear to be located outside the state, such documents shall be made available by the person or entity within the jurisdiction of the state having control over such documents either at a convenient location within the state or, upon payment of reasonable and necessary expenses to the unit for transportation and inspection, at the place outside the state where such documents are maintained.

    (c) Upon failure of a person to comply with a subpoena or subpoena duces tecum or failure of a person to give testimony without lawful excuse and upon reasonable notice to all persons affected thereby, the unit may apply to the circuit court of the county in which compliance is sought for appropriate orders to compel obedience with the provisions of this section.

    (d) The unit shall not make public the name or identity of a person whose acts or conduct is investigated pursuant to this section or the facts disclosed in such investigation except as the same may be used in any legal action or enforcement proceeding brought pursuant to this article or any other provision of this code.

§9-7-3a. Investigations; procedure.

    When the prosecuting attorney of the county in which a crime lawfully investigated by the unit determines that the office of prosecutor is unable to take appropriate action, the prosecutor may petition the circuit court for the appointment of a special prosecutor or special assistant prosecutor from the West Virginia Prosecuting Attorney Institute pursuant to the provisions of section six, article four, chapter seven of this code. Notwithstanding the provisions of that section, attorneys employed and assigned to the Medicaid Fraud Control Unit created by the provisions of section one of this article may prosecute or assist in the prosecution of violations of the criminal laws of this state as described in this section and may act as special prosecutors or special assistant prosecutors in those cases if assistance is sought by the prosecuting attorney or special prosecutor assigned by the Institute to prosecute those matters.

§9-7-4. Applications for medical assistance; false statements or representations; criminal penalties.

    (a) A person shall not knowingly make or cause to be made a false statement or false representation of any material fact in an application for medical assistance under the medical programs of the Department of welfare Health and Human Resources.

    (b) A person shall not knowingly make or cause to be made a false statement or false representation of any material fact necessary to determine the rights of any other person to medical assistance under the medical programs of the Department of welfare Health and Human Resources.

    (c) A person shall not knowingly and intentionally conceal or fail to disclose any fact with the intent to obtain medical assistance under the medical programs of the Department of welfare Health and Human Resources to which the person or any other person is not entitled.

    (d) Any person found to be in violation of subsection (a), (b) or (c) of this section shall be is guilty of a felony and, upon conviction, shall be confined in the penitentiary imprisoned in a state correctional facility not less than one nor more than ten years, or shall be fined not to exceed ten thousand dollars or both fined and imprisoned. as provided.

§9-7-5. Bribery; false claims; conspiracy; criminal penalties.

    (a) A person shall not solicit, offer or receive any remuneration, including any kickback, rebate or bribe, directly or indirectly, with the intent of causing an expenditure of moneys from the medical services fund established pursuant to section two, article four of this chapter. which expenditure is not authorized by applicable laws or rules and regulations governing said medical services fund.

    (b) A person shall not make or present or cause to be made or presented to the Department of welfare Health and Human Resources a claim under the medical programs of the Department of welfare Health and Human Resources knowing the claim to be false, fraudulent or fictitious.

    (c) A person shall not enter into an agreement, combination or conspiracy to obtain or aid another to obtain the payment or allowance of a false, fraudulent or fictitious claim under the medical programs of the Department of welfare Health and Human Resources.

    (d) Any person found to be in violation of subsection (a), (b) or (c) of this section shall be guilty of a felony and, upon conviction, shall be confined in the penitentiary imprisoned in a state correctional facility not less than one nor more than ten years or shall be fined not to exceed ten thousand dollars, or both fined and imprisoned. as provided.

    (e) The court, in imposing sentence on a person convicted of an offense under subsection (a),(b) or (c) of this section, shall order the person to forfeit property, real or personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense. Any person convicted under this section shall be responsible for payment of the costs of asset forfeiture. For purposes of this section, payment of the costs of asset forfeiture includes: (i) Seizure, detention, maintaining, advertising, selling or disposal of property, or of any other necessary expenses incident to the seizure, detention, forfeiture or disposal of the property including liens, mortgages and taxes; (ii) the compromise and payment of valid liens and mortgages against property that has been forfeited to determine the validity of the lien or mortgage and the amount of payment to be made, and the use of or employment of professional realtors as necessary; and (iii) the payment of state and local property taxes on forfeited real property that accrued between the date of the violation giving rise to the forfeiture and the date of the forfeiture order.

§9-7-5a. Bribery; false claims; conspiracy; criminal penalties.

    A criminal prosecution under this article may be commenced in the circuit court of any county in which:

    (a) The defendant is conducting business; or

    (b) Any of the conduct constituting a violation of any provision of this article shall have occurred; or

    (c) Any application, claim, representation, statement, writing, electronic communication, warrant, payment, check, or fund transfer, was prepared, mailed, transmitted, received, relied upon, or acted upon.

§9-7-6. Civil remedies.

    (a) Any person, firm, corporation or other entity which willfully, by means of a false statement or representation, or by concealment of any material fact, or by other fraudulent scheme, devise or artifice on behalf of himself, herself, itself, or others, obtains or attempts to obtain benefits or payments or allowances under the medical programs of the Department of welfare Health and Human Resources to which he or she or it is not entitled, or, in a greater amount than that to which he or she or it is entitled, shall be liable to the Department of welfare Health and Human Resources in an amount equal to three times the amount of such benefits, payments or allowances to which he or she or it is not entitled, and shall be liable for the payment of reasonable attorney fees and all other fees and costs of litigation.

    (b) No criminal action or indictment need be brought against any person, firm, corporation or other entity as a condition for establishing civil liability hereunder.

    (c) A civil action under this section may be prosecuted and maintained on behalf of the Department of welfare Health and Human Resources by the Attorney General and his the Attorney General’s assistants or a prosecuting attorney and his the prosecuting attorney’s assistants or by any attorney in contract with or employed by the Department of welfare Health and Human Resources to provide such representation.

§9-7-6a. Liability of Employees of the Department of Health and Human Resources.

    There shall be no liability on the part of, and no cause of action shall arise against the Secretary or the Department of Health and Human Resources or its employees or agents for any action taken by them in the lawful performance of their powers and duties under this article.

§9-7-8. Remedies and penalties not exclusive.

    The remedies and penalties provided in this article governing the operation of the medical programs of the Department of welfare Health and Human Resources.




    NOTE: The purpose of this bill is to amend sections of the article relating to human services, the Department of Health and Human Resources and fraud and abuse in the Medicaid program. It amends powers and duties of the Medicaid Fraud Control Unit and definitions under article seven. It adds investigation procedures for the Medicaid fraud control unit. It deals with the prosecution of crimes in Medicaid, criminal forfeiture of assets and the costs associated with criminal forfeiture together with the venue for crimes committed against Medicaid and their penalties. The bill limits the liability of employees of the Department of Health and Human Resources under article nine, chapter seven of this code.


    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.



    §9-7-3a, §9-7-5a and §9-7-6a are new; therefore, strike-throughs and underscoring have been omitted.

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