MISSISSIPPI LEGISLATURE
2016 Regular Session
To: Medicaid
By: Representatives White, Crawford, Dixon, Brown, Boyd, Monsour
AN ACT TO CREATE THE MEDICAID AND HUMAN SERVICES FRAUD PREVENTION ACT; TO DEFINE CERTAIN TERMS; TO REQUIRE THE DIVISION OF MEDICAID AND THE DEPARTMENT OF HUMAN SERVICES TO JOINTLY ESTABLISH A COMPUTERIZED INCOME, ASSET AND IDENTITY ELIGIBILITY VERIFICATION SYSTEM IN ORDER TO VERIFY ELIGIBILITY, ELIMINATE THE DUPLICATION OF ASSISTANCE, AND DETER WASTE, FRAUD AND ABUSE WITHIN EACH RESPECTIVE ASSISTANCE PROGRAM ADMINISTERED BY THE DIVISION AND THE DEPARTMENT; TO DIRECT THE DIVISION AND THE DEPARTMENT TO JOINTLY ENTER INTO A COMPETITIVELY BID CONTRACT WITH A THIRD-PARTY VENDOR FOR THE PURPOSES OF DEVELOPING THE VERIFICATION SYSTEM; TO REQUIRE THE DIVISION AND THE DEPARTMENT, BEFORE AWARDING BENEFITS OR ASSISTANCE AND ON A QUARTERLY BASIS THEREAFTER, TO IDENTIFY INFORMATION OF EACH RESPECTIVE APPLICANT AND RECIPIENT OF ASSISTANCE AGAINST CERTAIN SPECIFIED INFORMATION DATABASES, AND TO MATCH IDENTITY INFORMATION OF EACH RESPECTIVE APPLICANT AND RECIPIENT OF ASSISTANCE AGAINST CERTAIN SPECIFIED PUBLIC RECORDS; TO REQUIRE APPLICANTS FOR BENEFITS OR ASSISTANCE FROM THE DIVISION OR THE DEPARTMENT TO COMPLETE A COMPUTERIZED IDENTITY AUTHENTICATION PROCESS THAT CONFIRMS THAT THE APPLICANT OWNS THE IDENTITY PRESENTED IN THE APPLICATION, AND TO REQUIRE THE DIVISION OR THE DEPARTMENT TO REVIEW THE RESPECTIVE APPLICANT OR RECIPIENT'S IDENTITY OWNERSHIP USING CERTAIN PROCEDURES; TO PROVIDE THAT IF A DISCREPANCY RESULTS FROM AN APPLICANT OR RECIPIENT'S IDENTITY INFORMATION AND ONE OR MORE OF THE DATABASES OR INFORMATION TOOLS LISTED IN THIS ACT, THE DIVISION OR THE DEPARTMENT WILL REVIEW THE RESPECTIVE APPLICANT OR RECIPIENT'S CASE USING CERTAIN PROCEDURES; TO PROVIDE THAT AFTER REVIEWING CHANGES OR DISCREPANCIES THAT MAY AFFECT PROGRAM ELIGIBILITY, THE DIVISION OR THE DEPARTMENT SHALL REFER SUSPECTED CASES OF FRAUD TO THE ATTORNEY GENERAL'S OFFICE FOR CRIMINAL PROSECUTION, RECOVERY OF IMPROPER PAYMENTS AND COLLECTION OF CIVIL PENALTIES; TO PROVIDE THAT AFTER REVIEWING CHANGES OR DISCREPANCIES THAT MAY AFFECT PROGRAM ELIGIBILITY, THE DIVISION OR THE DEPARTMENT WILL REFER SUSPECTED CASES OF IDENTITY FRAUD TO THE ATTORNEY GENERAL'S OFFICE FOR CRIMINAL PROSECUTION; TO PROVIDE THAT IN CASES OF FRAUD SUBSTANTIATED BY THE DIVISION OR THE DEPARTMENT, UPON CONVICTION, THE STATE WILL REVIEW ALL LEGAL OPTIONS TO REMOVE ENROLLEES FROM OTHER PUBLIC PROGRAMS AND GARNISH WAGES OR STATE INCOME TAX REFUNDS UNTIL THE STATE RECOVERS AN EQUAL AMOUNT OF BENEFITS OR ASSISTANCE FRAUDULENTLY CLAIMED; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the Medicaid and Human Services Fraud Prevention Act.
SECTION 2. Definitions. For the purposes of this act, the following terms shall be defined as follows, unless the context otherwise requires:
(a) "Agency" means the Division of Medicaid or the Department of Human Services, as the case may be.
(b) "Identity information" means an applicant or recipient's full name, aliases, date of birth, address, social security number and other related information.
SECTION 3. Establishment of enhanced eligibility verification system. (1) The Division of Medicaid and the Department of Human Services shall jointly establish a computerized income, asset and identity eligibility verification system in order to verify eligibility, eliminate the duplication of assistance, and deter waste, fraud and abuse within each respective assistance program administered by the Division of Medicaid and the Department of Human Services.
(2) The Division of Medicaid and the Department of Human Services shall jointly enter into a competitively bid contract with a third-party vendor for the purposes of developing a system by which to verify the income, asset and identity eligibility of applicants to prevent fraud, misrepresentation and inadequate documentation when determining an applicant's eligibility for assistance before the distribution of benefits or granting of assistance, periodically between eligibility redeterminations, and during eligibility redeterminations and reviews, as prescribed in this section. The Division of Medicaid and the Department of Human Services may also jointly contract with a vendor to provide information to facilitate reviews of recipient eligibility conducted by the Division of Medicaid and the Department of Human Services.
(3) When the Division of Medicaid and the Department of Human Services enter into a contract with a third-party vendor for the purposes of carrying out this act, the vendor, in partnership with the Division of Medicaid and the Department of Human Services, shall be required by contract to establish annualized savings realized from implementation of the verification system and savings shall exceed the total yearly cost to the state for implementing the verification system.
(4) When the Division of Medicaid and the Department of Human Services enter into a contract with a third-party vendor, the payment structure shall be based on a per-applicant rate and a performance bonus for achieving above a predetermined rate of success of identifying waste, fraud and abuse.
(5) To avoid any conflict of interest, when the Division of Medicaid and the Department of Human Services enter into a contract with a third-party vendor, that primary vendor may not currently or will not be allowed to bid on or be awarded a state contract to run enrollment services.
(6) If the Division of Medicaid and the Department of Human Services are unable to jointly enter into a contract with a third-party vendor within twelve (12) months after the effective date of this act, then the Department of Information Technology Services shall enter into a contract with a third-party vendor on behalf of the Division of Medicaid and the Department of Human Services under this section.
(7) Nothing in this act shall preclude the agency from continuing to conduct additional eligibility verification processes, not detailed in this act, that are currently in practice.
SECTION 4. Enhanced eligibility verification process. (1) All applications for benefits or assistance must be processed within a ten-day period or the minimum required by federal law. Before awarding benefits or assistance and on a quarterly basis thereafter, the agency shall identity information of each respective applicant and recipient of assistance from the agency against the following:
(a) Earned and unearned income information maintained by the Internal Revenue Service;
(b) Employer weekly, monthly, and/or quarterly reports of income and unemployment insurance payment information maintained by the Department of Employment Security;
(c) Earned income information maintained by the Social Security Administration;
(d) Immigration status information maintained by United States Citizenship and Immigration Services;
(e) Death register information maintained by the Social Security Administration;
(f) Prisoner information maintained by the Social Security Administration;
(g) Public housing and Section 8 Housing Assistance payment information maintained by the United States Department of Housing and Urban Development;
(h) National fleeing felon information maintained by the Federal Bureau of Investigation;
(i) Wage reporting and similar information maintained by states contiguous to this state;
(j) Beneficiary records and earnings information maintained by the Social Security Administration in its Beneficiary and Earnings Data Exchange (BENDEX) database;
(k) Earnings and pension information maintained by the Social Security Administration in its Beneficiary Earnings Exchange Record System (BEERS) database;
(l) Employment information maintained by the Department of Employment Security;
(m) Employment information maintained by the United States Department of Health and Human Services in its National Directory of New Hires (NDNH) database;
(n) Supplemental Security Income information maintained by the Social Security Administration in its SSI State Data Exchange (SDX) database;
(o) Veterans' benefits information maintained by the United States Department of Health and Human Services, in coordination with the State Department of Health and State Veterans Affairs Board, in the federal Public Assistance Reporting Information System (PARIS) database;
(p) Child care services information maintained by the Department of Human Services;
(q) Utility payments information maintained by the state under the Low Income Home Energy Assistance Program;
(r) Emergency utility payment information maintained by the state or local entities;
(s) A database of all persons who currently hold a license, permit or certificate from any state agency the cost of which exceeds Five Hundred Dollars ($500.00);
(t) Income and employment information maintained by Child Support Unit of the Department of Human Services and the United States Department of Health and Human Services' Office of Child Support Enforcement;
(u) Earnings and pension information maintained by Public Employees' Retirement System;
(v) Any existing real-time database of persons currently receiving benefits or assistance in other states, such as the National Accuracy Clearinghouse; and
(w) A database that is substantially similar to or a successor of a database established in this act.
(2) Before awarding benefits or assistance and on a quarterly basis, the agency shall match identity information of each respective applicant and recipient of assistance from the agency against, at minimum, the following public records:
(a) A nationwide public records data source of physical asset ownership such as real property, automobiles, watercraft, aircraft and luxury vehicles, or any other vehicle owned by the applicant and recipient of assistance;
(b) A nationwide public records data source of incarcerated individuals;
(c) A nationwide best-address and driver's license data source to verify individuals are residents of the state;
(d) A comprehensive public records database that identifies potential identity fraud or identity theft that can closely associate name, social security number, date of birth, phone and address information;
(e) Outstanding default or arrest warrant information maintained by the Mississippi Justice Information System; and
(f) A database that is substantially similar to or a successor of a database established in this act.
SECTION 5. Enhanced identity authentication process. (1) Before awarding benefits or assistance, applicants must complete a computerized identity authentication process that confirms that the applicant owns the identity presented in the application. The agency shall review the respective applicant or recipient's identity ownership using the following procedures:
(a) Provide a knowledge-based quiz consisting of financial or personal questions. The quiz must provide support for nonbanked or under-banked applicants who do not have an established credit history.
(b) Require the quiz for applications submitted through all channels, including online, in-person and via phone.
SECTION 6. Discrepancies and case review. (1) If a discrepancy results from an applicant or recipient's identity information and one or more of the databases or information tools listed under Section 4 or Section 5 of this act, the agency shall review the respective applicant or recipient's case using the following procedures:
(a) If the information discovered does not result in the agency finding a discrepancy or change in an applicant's or recipient's circumstances that may affect eligibility, the agency shall take no further action.
(b) If the information discovered under Section 4 or Section 5 of this act results in the agency finding a discrepancy or change in a recipient's circumstances that may affect eligibility, the agency shall promptly redetermine eligibility after receiving that information.
(c) (i) If the information discovered under Section 4 or Section 5 of this act results in the agency finding a discrepancy or change in an applicant's or recipient's circumstances that may affect eligibility, the applicant or recipient shall be given an opportunity to explain the discrepancy; however, self-declarations by applicants or recipients shall not be accepted as verification of categorical and financial eligibility during eligibility evaluations, reviews and redeterminations.
(ii) The agency shall provide written notice to the applicant or recipient, which shall describe in sufficient detail the circumstances of the discrepancy or change, the manner in which the applicant or recipient may respond, and the consequences of failing to take action. The applicant or recipient shall have thirty (30) days, or the minimum required by state or federal law, to respond in an attempt to resolve the discrepancy or change. The explanation provided by the recipient or applicant shall be given in writing. After receiving the explanation, the agency may request additional documentation if it determines that there is risk of fraud, misrepresentation, or inadequate documentation.
(d) If the applicant or recipient does not respond to the notice, the agency shall deny or discontinue assistance for failure to cooperate, in which case the agency shall provide notice of intent to deny or discontinue assistance. Eligibility for assistance shall not be established or reestablished until the discrepancy or change has been resolved.
(e) If an applicant or recipient responds to the notice and disagrees with the findings of the match between his or her identity information and one or more databases or information tools listed under this act, the agency shall reinvestigate the matter. If the agency finds that there has been an error, the agency shall take immediate action to correct it and no further action shall be taken. If, after an investigation, the agency determines that there is no error, the agency shall determine the effect on the applicant's or recipient's case and take appropriate action. Written notice of the respective agency's action shall be given to the applicant or recipient.
(f) If the applicant or recipient agrees with the findings of the match between the applicant's or recipient's identity information and one or more databases or information tools listed under this act, the agency shall determine the effect on the applicant or recipient's case and take appropriate action. Written notice of the agency's action shall be given to the applicant or recipient. In no case shall the agency discontinue assistance as a result of a match between the applicant's or recipient's identity information and one or more databases or information tools listed under this act until the applicant or recipient has been given notice of the discrepancy and the opportunity to respond as required under this act.
(2) The Division of Medicaid and the Department of Human Services shall jointly promulgate rules and regulations necessary for the purposes of carrying out this act.
SECTION 7. Referrals for fraud, misrepresentation, or inadequate documentation. (1) After reviewing changes or discrepancies that may affect program eligibility, the agency shall refer suspected cases of fraud to the Attorney General's office for criminal prosecution, recovery of improper payments and collection of civil penalties.
(2) After reviewing changes or discrepancies that may affect program eligibility, the agency shall refer suspected cases of identity fraud to the Attorney General's office for criminal prosecution.
(3) In cases of fraud substantiated by the agency, upon conviction, the state shall review all legal options to remove enrollees from other public programs and garnish wages or state income tax refunds until the state recovers an equal amount of benefits or assistance fraudulently claimed.
(4) After reviewing changes or discrepancies that may affect program eligibility, the agency shall refer suspected cases of fraud, misrepresentation or inadequate documentation to appropriate agencies or departments for review of eligibility discrepancies in other public programs. This also includes cases where an individual is determined to be no longer eligible for the original program.
SECTION 8. Implementation date and reporting. (1) This act shall be implemented twelve (12) months following the effective date of this act.
(2) Six (6) months after the implementation of this act, and quarterly thereafter, the agency shall provide a written report to the Governor and the Legislature detailing the effectiveness and general findings of the eligibility verification system, including the number of cases reviewed, the number of case closures, the number of referrals for criminal prosecution, recovery of improper payment, collection of civil penalties, the outcomes of cases referred to Attorney General's office under this act, and the savings that have resulted from the system.
SECTION 9. Transparency in Medicaid. Following the precedent set by Medicare, the Division of Medicaid shall release data that includes, but is not limited to, the following: the physician's name and office locations; a provider's National Provider Identifier (NPI); the type of service provided by Healthcare Common Procedure Coding System (HCPCS) code; and whether the service was performed in a facility or office setting. This public data also shall include the number of services, average submitted charges, average allowed amount, average Medicaid payment, and a count of unique beneficiaries treated.
SECTION 10. This act shall take effect and be in force from and after its passage.