NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

The most recent FIR version (in HTML & Adobe PDF formats) is available on the Legislative Website.  The Adobe PDF version includes all attachments, whereas the HTML version does not.  Previously issued FIRs and attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Varela

 

DATE TYPED:

03/03/03

 

HB

668a/HGUAC

 

SHORT TITLE:

Medicaid Fraud Control Unit

 

SB

 

 

 

ANALYST:

Weber

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

 

 

See Narrative

 

 

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

Attorney General

Human Services Department

Department of Health

 

SUMMARY

 

     Synopsis of HGUAC Amendment

 

The House and Urban Affairs Committee made the following change to House Bill 668.

 

On page 6, line 16 after the period the remainder of the line and all of line 17 and 18 through “unit” is omitted.  The omitted line read, “No disposition of any investigation or settlement of any fraud claim shall be made without the approval of the unit”.  With the omission of this language, the disposition of claims remains the responsibility of HSD.

 

     Synopsis of Original Bill

 

House Bill 668 (HB 668) requires that the Medicaid Fraud Control Unit (MFCU) develop a joint protocol concerning investigation of Medicaid fraud with the Human Services Department (HSD), Children, Youth, Families Department (CYFD), and Department of Health (DOH).  It requires that HSD, CYFD, DOH, and MFCU enter into a memorandum of understanding (MOU) concerning coordination and investigation of fraud.  The Memorandum of Understanding (MOU) will require that a report be made to the Legislative Finance Committee (LFC) concerning the results of all investigations, including the disposition of recoveries received.  Finally, it requires that MFCU must approve the disposition of any investigation or settlement of any fraud claim.

 

     Significant Issues

 

The Human Services Department reports that a joint protocol and MOU concerning fraud investigations is a useful idea to improve cooperation between agencies and increase effectiveness.  However, requiring that MFCU approve the disposition of investigations and settlements of fraud claims will interfere with the ability of HSD to function effectively to assure statewide access to medical care for Medicaid recipients, and may violate federal law.  Reporting to the LFC could result in breaches in the confidentiality necessary to properly perform fraud and abuse control functions.

 

The Attorney General, on the other hand, feels this legislation recognizes that there is currently a lack of coordination between DOH, HSD and the MFCU when conducting investigations involving allegations of Medicaid provider fraud.  Presently, each agency conducts independent investigations, many times without the other agency’s knowledge or input.  A Joint Protocol could eliminate duplicative investigations, allowing the other agencies to pursue different matters.  

 

The legislation also contains two provisions for reporting to the Legislative Finance Committee on a quarterly basis.  The key provision is that all settlement agreements must be approved by the Attorney General’s Office suggests that a significant problem currently exists regarding fraud case dispositions.

 

These two agency’s responses suggest there is a difference of perspective based on what each portrays as its role in the process.  HSD has indicated its desire to arrange financial settlements in some cases, while the Attorney General may want to pursue an investigation criminally.  This inherent difference suggests closer co-operation may be necessary.  HSD refers to, but does not define, the violation of federal law.  This may relate to HSD’s role as primary Medicaid contact for the state leaving the agency as final arbiter among agencies.   

 

FISCAL IMPLICATIONS

 

There is no appropriation but the mechanics of operating such a unit may require additional funds.

 

ADMINISTRATIVE IMPLICATIONS

 

There would be administrative work required to set up and maintain such a unit.

 

OTHER SUBSTANTIVE ISSUES

 

The new section requires that “No disposition of any investigation or settlement of any fraud claim shall be made without the approval of the unit”.  However, how approval is reached is not defined.

 

MW/ls:sb