HF4566

Purpose

• Strengthen program integrity for Minnesota’s Medical Assistance (MA) program by giving the commissioner authority to suspend or withhold MA payments during fraud investigations, expand the definition of fraud to cover kickbacks (illegal remuneration), and require expedited rulemaking to align state rules with anti-kickback concepts.

Key Provisions (What the bill does)

• Amends Minnesota Statutes 2024 §256B.064, subdivision 2, to specify how monetary recoveries and sanctions are determined and when payments can be suspended or reduced.
• Allows the commissioner to suspend or reduce MA payments to an individual or entity after notice and before a hearing if necessary to protect public welfare and the integrity of the program (with certain exceptions for nursing homes or convalescent facilities).
• Allows withholding or reduction of MA payments without advance notice if:
  • The individual or entity is convicted of a crime related to fraud or misconduct in provision, management, or administration of health services; or
  • There is a credible allegation of fraud (including illegal remuneration) for which an investigation is pending.
• Defines “credible allegation of fraud” as allegations that have indicia of reliability and have been reviewed carefully, with actions taken on a case-by-case basis. Credible allegations can come from sources such as fraud hotlines, data mining, provider audits, civil false claims cases, and law enforcement investigations.
• Requires notice within five days of withholding or reducing payments, describing general allegations, the types of claims affected, and the right to submit written evidence; notice can be limited in ongoing investigations when appropriate.
• Provides that withholding or reduction ends if there is insufficient evidence of fraud or after legal proceedings conclude, unless a notice of intention to impose monetary recovery or sanctions has been issued.
• If convicted of a crime related to the provision, management, or administration of MA services, any held payment is forfeited to the commissioner or the managed care organization (MCO) regardless of the amount charged or restitution ordered.
• Allows suspension or termination of participation in MA without advance notice when the individual or entity is excluded from Medicare; requires five-day notice of such action, including the reason and effective date, and the need to be reinstated to Medicare before reapplying for MA participation.
• Establishes a right to appeal: individuals or entities can request a contested case under the state’s rules, filed within 30 days, specifying disputed items, computations, statutory/rule authorities, and contact information.
• Provides for fines for failing to fully document services according to program standards or for missing required documentation; fines are generally 20% of the paid claims or up to $5,000, whichever is less. For repeated violations, fines can be up to $5,000 or 20% of the value of the claims, whichever is greater. Failure to pay fines can result in withholding or reduction of payments, with a timely appeal staying payment until a final order is issued.

Significant Changes to Law

• Expands the fraud framework to explicitly include kickbacks (illegal remuneration) within the MA fraud context.
• Requires expedited rulemaking to:
  • Correct or clarify references to the federal anti-kickback statute, or
  • Add references to illegal remuneration in Minnesota law, ensuring state rules align with federal standards.
• Reconfigures enforcement tools (suspension, withholding, monetary recoveries, sanctions, fines) and due process (notice, hearing, and appeal rights) for MA providers and participants.

Process and Protections for Providers and Recipients

• Notice and hearing: prior notice and an opportunity for a hearing are generally required before monetary recovery or sanctions, with some expedited actions allowed to protect public welfare.
• Public welfare: actions may be taken to protect the integrity of the MA program and public health, balancing prompt action with due process.
• Medicare exclusion linkage: actions can occur without advance notice when tied to Medicare exclusions, but with prompt notification.

How the Rulemaking Would Work

• The Department of Human Services would use expedited rulemaking (Minnesota Statutes §14.389) to implement the changes, specifically to:
  • Include kickbacks in the fraud definition, and
  • Correct or clarify citations to the federal anti-kickback statute and related references.

Implementation Scope

• Applies to MA program providers, managed care organizations under MA, and entities involved in MA administration and reimbursement.
• Aligns Minnesota law with broader anti-fraud efforts, including cooperation with federal fraud statutes and Medicare rules.

Relevant Terms kickbacks, kickback, illegal remuneration, fraud, fraudulent, Medical Assistance (MA), Minnesota Medical Assistance, withhold, withholding, suspend, suspension, monetary recovery, sanctions, notice, hearing, credible allegation of fraud, indicia of reliability, data mining, provider audits, civil false claims, law enforcement investigations, five days, Medicare exclusion, Medicare, managed care organization (MCO), restoration/reinstatement, contest/contestant, contested case, 42 CFR 455.23e, 42 CFR 455.23f, Code of Federal Regulations, federal anti-kickback statute, 42 U.S.C. 1320a-7bb, illegal remuneration, Minnesota Statutes 256B.064, subdivision 2, Minnesota Rules chapter 9505, expedited rulemaking, rulemaking, unlawful remuneration, overpayment, underpayment.