Suspension of medical assistance payments during investigation of kickback fraud permitted, and rulemaking required to include kickbacks in the definition of fraud.

A bill for an act

relating to human services; permitting suspension of medical assistance payments

during investigation of kickback fraud; requiring rulemaking to include kickbacks

in the definition of fraud; amending Minnesota Statutes 2024, section 256B.064,

subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 256B.064, subdivision 2, is amended to read:

Subd. 2.

Imposition of monetary recovery and sanctions.

(a) The commissioner shall

determine any monetary amounts to be recovered and sanctions to be imposed upon an

individual or entity under this section. Except as provided in paragraphs (b) and (d), neither

a monetary recovery nor a sanction will be imposed by the commissioner without prior

notice and an opportunity for a hearing, according to chapter 14, on the commissioner's

proposed action, provided that the commissioner may suspend or reduce payment to an

individual or entity, except a nursing home or convalescent care facility, after notice and

prior to the hearing if in the commissioner's opinion that action is necessary to protect the

public welfare and the interests of the program.

(b) Except when the commissioner finds good cause not to suspend payments under

Code of Federal Regulations, title 42, section 455.23(e) or (f), the commissioner shall

withhold or reduce payments to an individual or entity without providing advance notice

of such withholding or reduction if either of the following occurs:

(1) the individual or entity is convicted of a crime involving the conduct described in

subdivision 1a; or

(2) the commissioner determines there is a credible allegation of fraud
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, including but

not limited to an illegal remuneration allegation under subdivision 1a, paragraph (c),
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for

which an investigation is pending under the program. Allegations are considered credible

when they have an indicium of reliability and the state agency has reviewed all allegations,

facts, and evidence carefully and acts judiciously on a case-by-case basis. A credible

allegation of fraud is an allegation which has been verified by the state, from any source,

including but not limited to:

(i) fraud hotline complaints;

(ii) claims data mining; and

(iii) patterns identified through provider audits, civil false claims cases, and law

enforcement investigations.

(c) The commissioner must send notice of the withholding or reduction of payments

under paragraph (b) within five days of taking such action unless requested in writing by a

law enforcement agency to temporarily withhold the notice. The notice must:

(1) state that payments are being withheld according to paragraph (b);

(2) set forth the general allegations as to the nature of the withholding action, but need

not disclose any specific information concerning an ongoing investigation;

(3) except in the case of a conviction for conduct described in subdivision 1a, state that

the withholding is for a temporary period and cite the circumstances under which withholding

will be terminated;

(4) identify the types of claims to which the withholding applies; and

(5) inform the individual or entity of the right to submit written evidence for consideration

by the commissioner.

(d) The withholding or reduction of payments will not continue after the commissioner

determines there is insufficient evidence of fraud by the individual or entity, or after legal

proceedings relating to the alleged fraud are completed, unless the commissioner has sent

notice of intention to impose monetary recovery or sanctions under paragraph (a). Upon

conviction for a crime related to the provision, management, or administration of a health

service under medical assistance, a payment held pursuant to this section by the commissioner

or a managed care organization that contracts with the commissioner under section
256B.035

is forfeited to the commissioner or managed care organization, regardless of the amount

charged in the criminal complaint or the amount of criminal restitution ordered.

(e) The commissioner shall suspend or terminate an individual's or entity's participation

in the program without providing advance notice and an opportunity for a hearing when the

suspension or termination is required because of the individual's or entity's exclusion from

participation in Medicare. Within five days of taking such action, the commissioner must

send notice of the suspension or termination. The notice must:

(1) state that suspension or termination is the result of the individual's or entity's exclusion

from Medicare;

(2) identify the effective date of the suspension or termination; and

(3) inform the individual or entity of the need to be reinstated to Medicare before

reapplying for participation in the program.

(f) Upon receipt of a notice under paragraph (a) that a monetary recovery or sanction is

to be imposed, an individual or entity may request a contested case, as defined in section

14.02, subdivision 3
, by filing with the commissioner a written request of appeal. The appeal

request must be received by the commissioner no later than 30 days after the date the

notification of monetary recovery or sanction was mailed to the individual or entity. The

appeal request must specify:

(1) each disputed item, the reason for the dispute, and an estimate of the dollar amount

involved for each disputed item;

(2) the computation that the individual or entity believes is correct;

(3) the authority in statute or rule upon which the individual or entity relies for each

disputed item;

(4) the name and address of the person or entity with whom contacts may be made

regarding the appeal; and

(5) other information required by the commissioner.

(g) The commissioner may order an individual or entity to forfeit a fine for failure to

fully document services according to standards in this chapter and Minnesota Rules, chapter

9505. The commissioner may assess fines if specific required components of documentation

are missing. The fine for incomplete documentation shall equal 20 percent of the amount

paid on the claims for reimbursement submitted by the individual or entity, or up to $5,000,

whichever is less. If the commissioner determines that an individual or entity repeatedly

violated this chapter, chapter 254B or 245G, or Minnesota Rules, chapter 9505, related to

the provision of services to program recipients and the submission of claims for payment,

the commissioner may order an individual or entity to forfeit a fine based on the nature,

severity, and chronicity of the violations, in an amount of up to $5,000 or 20 percent of the

value of the claims, whichever is greater.

(h) The individual or entity shall pay the fine assessed on or before the payment date

specified. If the individual or entity fails to pay the fine, the commissioner may withhold

or reduce payments and recover the amount of the fine. A timely appeal shall stay payment

of the fine until the commissioner issues a final order.

Sec. 2.
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DIRECTION TO COMMISSIONER; REQUIRED RULEMAKING.
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The commissioner of human services must use expedited rulemaking under Minnesota

Statutes, section 14.389, to amend the rules of the Department of Human Services to clearly

include kickbacks in the definition of "fraud" by either:

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(1) correcting the citation in Minnesota Rules, part 9505.2165, subpart 4, item C, to

properly refer to the federal anti-kickback statute as United States Code, title 42, section

1320a-7b(b); or

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(2) adding a reference to the crime of illegal remuneration in Minnesota Statutes, section

609.542, and correcting or removing the incorrect citation to the federal anti-kickback

statute.

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