HB290 By Representative Rowe RFD Military and Veterans Affairs Rd 1 24-FEB-16

SYNOPSIS: Under existing law, criminal penalties are provided for receiving certain remuneration for certain referrals for Medicaid payments or in return for purchasing, leasing, ordering, or arranging certain goods or services to be paid by Medicaid.

This bill would provide that a person must knowingly engage in the prohibited conduct in order to be subject to the criminal penalties, would provide that the criminal penalties do not apply to certain safe harbor exceptions included in federal law, would define a person to include a corporation or other business entity, and would provide for a six-year statute of limitations for prosecution of the offenses.

Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.

A BILL TO BE ENTITLED AN ACT

To amend Section 22-1-11, Code of Alabama 1975, relating to false statements or claims on applications for payment of medical benefits from the Medicaid Agency, to provide that a person must knowingly engage in the conduct in order to be subject to the criminal penalties; to provide that the criminal penalties do not apply to certain activity excepted by federal law; to provide for a six-year statute of limitations; and to define person to include business entities; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 22-1-11, Code of Alabama 1975, is amended to read as follows:

§22-1-11.

"(a) Any person who, with intent to defraud or deceive, makes, or causes to be made or assists in the preparation of any false statement, representation, or omission of a material fact in any claim or application for any payment, regardless of amount, from the Medicaid Agency, knowing the same to be false; or with intent to defraud or deceive, makes, or causes to be made, or assists in the preparation of any false statement, representation, or omission of a material fact in any claim or application for medical benefits from the Medicaid Agency, knowing the same to be false; shall be guilty of a Class C felony and upon conviction thereof shall be fined not more than ten thousand dollars ($10,000) or imprisoned for not less than one nor more than five years, or both. The offense set out herein shall not be complete until the claim or application is received by the Medicaid Agency or the contractor with the Medicaid Agency or its successor.

"(b) Any person who knowingly solicits or receives any remuneration, including any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind:

"(1) In return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by the Medicaid Agency or its agents, or

"(2) In return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part by the Medicaid Agency, or its agents shall be guilty of a Class C felony and upon conviction thereof, shall be fined not more than ten thousand dollars ($10,000) or imprisoned for not less than one nor more than five years, or both.

"(c) Any person who knowingly offers or pays any remuneration including any kickback, bribe, or rebate directly or indirectly, overtly or covertly, in cash or in kind to any person to induce a person to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by the Medicaid Agency or its agents, or to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part by the Medicaid Agency, or its agents, shall be guilty of a Class C felony and upon conviction thereof shall be fined not more than ten thousand dollars ($10,000) or imprisoned for not less than one nor more than five years, or both.

"(d)(1) Subsections (b) and (c) of this section shall not apply to a discount or other reduction in price obtained by a provider of services or other entity under Medicaid if the reduction in price is properly disclosed and appropriately reflected in costs claimed or charges made by the provider or entity to the Medicaid Agency or its agents, or any amount paid by an employer to an employee who has a bona fide employment relationship with employer for employment in the provision of covered items or services.

"(2) Subsections (b) and (c) shall not apply to any payment practice identified as an exception enumerated in 42 C.F.R. 1001.952.

"(e) Any two or more offenses in violation of this section may be charged in the same indictment in separate counts for each offense and the offense shall be tried together, with separate sentences being imposed for each offense for which the defendant is found guilty.

"(f) No prosecution under this section may be commenced after six years from the date of the completion of the offense.

"(g) For the purposes of this section, the term "person" includes any individual, partnership, corporation, or association."

Section 2. Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of local funds, the bill is excluded from further requirements and application under Amendment 621, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, because the bill defines a new crime or amends the definition of an existing crime.

Section 3. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Medicaid

Crimes and Offenses

Criminal Law and Procedure

Health

Code Amended