1998 Regular Session
By: Representative Stevens
House Bill 428
AN ACT TO CREATE AN INSURANCE INTEGRITY ENFORCEMENT BUREAU WITHIN THE OFFICE OF THE ATTORNEY GENERAL; TO PROVIDE DEFINITIONS; TO PROVIDE FUNDING FOR THE BUREAU; TO PROVIDE THAT PROSECUTION FOR INSURANCE FRAUD SHALL BE INSTITUTED BY THE ATTORNEY GENERAL OR THE DISTRICT ATTORNEY; TO REQUIRE THE BUREAU TO FILE AN ANNUAL REPORT WITH THE SENATE AND HOUSE OF REPRESENTATIVES INSURANCE COMMITTEES DETAILING ITS WORK DURING THE PRECEDING CALENDAR YEAR; TO PROHIBIT THE RECEIPT OF CONSIDERATION FOR REFERRING OR REFRAINING FROM REFERRING A PATIENT, CLIENT OR CUSTOMER IN CONNECTION WITH AN INSURANCE PLAN; TO PROHIBIT FALSE STATEMENTS RELATING TO AN INSURANCE PLAN; TO PROVIDE CRIMINAL PENALTIES FOR PERSONS AND ORGANIZATIONS CONVICTED OF INSURANCE FRAUD AND TO AUTHORIZE A MONETARY ASSESSMENT FOR COSTS OF INVESTIGATION; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. There is created within the Office of the Attorney General an Insurance Integrity Enforcement Bureau. The duty of the bureau is to investigate and prosecute claims of insurance abuses and crimes involving insurance. The Attorney General may employ the necessary personnel to carry out the provisions of this section.
SECTION 2. (1) As used in this section:
(a) "An insurance plan" means a plan or program that provides health benefits whether directly through insurance or otherwise and includes a policy of life or property and casualty insurance, a contract of a service benefit organization or any program or plan implemented in accordance with state law or a membership agreement with a health maintenance organization or other prepaid programs.
(b) "Insurance official" means:
(i) An administrator, officer, trustee, fiduciary, custodian, counsel, agent or employee of any insurance plan;
(ii) An officer, counsel, agency or employee of an organization, corporation, partnership, limited partnership or other entity that provides, proposes to, or contracts to provide services through any insurance plan; or
(iii) An official, employee or agent of a state or federal agency having regulatory or administrative authority over any insurance plan.
(2) A person shall not, with the intent to appropriate to himself or to another any benefit, knowingly execute, collude or conspire to execute or attempt to execute a scheme or artifice:
(a) To defraud any insurance plan in connection with the delivery of, or payment for, insurance benefits, items, services or claims; or
(b) To obtain by means of false or fraudulent pretense, representation, statement or promise money, or anything of value, in connection with the delivery of or payment for insurance claims under any plan or program or state law, items or services which are in whole or in part paid for, reimbursed, subsidized by, or are a required benefit of, an insurance plan or an insurance company or any other provider.
(3) A person shall not directly or indirectly give, offer or promise anything of value to an insurance official, or offer or promise an insurance official to give anything of value to another person, with intent to influence such official's decision in carrying out any of his duties or laws or regulations.
(4) A person shall not knowingly pay, offer, deliver, receive, solicit or accept any remuneration, as an inducement for referring or for refraining from referring a patient, client, customer or service in connection with an insurance plan.
(5) A person shall not, in any matter related to any insurance plan, knowingly and willfully falsify, conceal or omit by any trick, scheme, artifice or device a material fact, make any false, fictitious or fraudulent statement or representation or make or use any false writing or document, knowing or having reason to know that the writing or document contains any false or fraudulent statement or entry in connection with the provision of insurance programs.
SECTION 3. (1) To fund the Insurance Integrity Enforcement Bureau, the Workers' Compensation Commission may assess each workers' compensation carrier and self-insurer, in the manner provided in Section 71-3-99, an amount based upon the proportion that the total gross claims for compensation and medical services and supplies paid by such carrier or self-insurer during the preceding one-year period bore to the total gross claims for compensation and medical services and supplies paid by all carriers and self-insurers during such period. The total amount assessed and collected by the commission from all workers' compensation carriers and self-insurers during each fiscal year shall be based upon the recommendation of the Insurance Integrity Enforcement Bureau, but shall not exceed Fifty Thousand Dollars ($50,000.00). Within thirty (30) days of receipt, the Workers' Compensation Commission shall transfer such assessment from the Administrative Expense Fund into a special fund of the Office of the Attorney General created in the State Treasury and designated as the "Insurance Integrity Enforcement Fund."
(2) In addition to the monies collected under the assessment provided in this section to fund the Insurance Integrity Enforcement Bureau, the State Tax Commission shall pay to the State Treasurer for the credit of the Insurance Integrity Enforcement Fund for Fiscal Year 1999 the sum of Fifty Thousand Dollars ($50,000.00) out of the insurance premium tax collected from the taxes levied on the gross premium on insurance policies written in this state.
(3) The Insurance Integrity Enforcement Bureau may accept gifts, devises, bequests, grants, loans, appropriations, other financing and assistance and any other aid from any source, public or private, for deposit in the Insurance Integrity Enforcement Fund. The Insurance Integrity Enforcement Fund shall be used solely to defray the expenses of the Insurance Integrity Enforcement Bureau, and any interest earned on monies in such fund shall be credited to the fund. Expenditures from the Insurance Integrity Enforcement Fund shall be made upon requisition by the Attorney General and subject to appropriation by the Legislature.
SECTION 4. (1) If any person or entity has any information that a false or misleading statement or representation or fraud or fraudulent denial has been made in connection with or relating to an insurance claim, such person or entity may report such belief to the Workers' Compensation Commission or to the Insurance Integrity Enforcement Bureau. If any person or entity has any information that a false or misleading statement or representation or fraud or fraudulent denial has been made in connection with or relating to an insurance claim, such person or entity may report such belief to the Insurance Integrity Enforcement Bureau, furnish any information which may be pertinent and cooperate in every way in an investigation conducted by the bureau. Investigators for the Insurance Integrity Enforcement Bureau are authorized law enforcement officers and they are authorized to investigate and exercise such powers as are granted to other authorized law enforcement officers.
(2) Prosecutions for violations under this act or for violations of any other criminal law arising from cases of insurance fraud, may be instituted by the Attorney General, his designee or the district attorney of the district in which the violation occurred, and shall be conducted in the name of the State of Mississippi. In the prosecution of any criminal proceeding in accordance with this subsection by the Attorney General, or his designee, and in any proceeding before a grand jury in connection therewith, the Attorney General, or his designee, shall exercise all the powers and perform all the duties which the district attorney would otherwise be authorized or required to exercise or perform. The Attorney General, or his designee, shall have the authority to issue and serve subpoenas in the investigation of any matter which may violate this act or any matter relating to insurance fraud which may violate any criminal law.
(3) The Workers' Compensation Commission may notify the Insurance Integrity Enforcement Bureau when the commission determines that an investigation by the bureau relating to fraud is appropriate. Such notification shall be privileged and shall not be subject to release to any third party.
(4) On or before January 1 of each year, the Insurance Integrity Enforcement Bureau shall file a report with the Senate and House of Representatives Insurance Committees detailing its work during the preceding calendar year and shall include the following:
(a) The number of cases or complaints reported to the bureau;
(b) The number of cases assigned for investigation;
(c) The total number of criminal warrants issued;
(d) The number of cases referred to a district attorney for prosecution;
(e) The number of cases retained by the Attorney General for prosecution;
(f) The number of cases closed without fraud;
(g) The number of cases closed by the district attorney; and
(h) The number of cases pending.
(5) The jurisdiction of the Insurance Integrity Enforcement Bureau shall not infringe upon any matters where there is federal jurisdictional involvement.
SECTION 5. (1) A person who violates any provision of Section 2 of this act shall be guilty of a felony and, upon conviction thereof, shall be punished by imprisonment for not more than five (5) years, or by a fine of not more than Fifty Thousand Dollars ($50,000.00), or both. Sentences imposed for convictions of separate offenses under this act may run consecutively.
(2) If the defendant found to have violated any provisions of Section 2 of this act is an organization, then it shall be subject to a fine of not more than Two Hundred Fifty Thousand Dollars ($250,000.00) for each felony. "Organization" for purposes of this subsection means a person other than an individual. The term includes corporations, partnerships, associations, joint-stock companies, unions, trusts, pension funds, unincorporated organizations, governments and political subdivisions thereof and nonprofit organizations.
(3) In a proceeding for violations under Section 2 of this act, the court, in addition to the criminal penalties imposed under this section, shall assess against the defendant convicted of such violation double those reasonable costs that are expended by the Insurance Integrity Enforcement Bureau of the Office of Attorney General or the district attorney's office in the investigation of such case, including, but not limited to, the cost of investigators, process service, court reporters, expert witnesses and attorney's fees. A monetary penalty assessed and levied under this section shall be deposited to the credit of the State General Fund, and the Attorney General may institute and maintain proceedings in his name for enforcement of payment in the circuit court of the county of residence of the defendant and, if the defendant is a nonresident, such proceedings shall be in the Circuit Court of the First Judicial District of Hinds County, Mississippi.
SECTION 6. Section 1 of this act shall take effect and be in force from and after its passage. Sections 2 through 5 of this act shall take effect and be in force from and after July 1, 1998.