Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 518 3
4
By: Senator Irvin 5
6
For An Act To Be Entitled 7
AN ACT TO AMEND THE MEDICAID FRAUD ACT A ND THE 8
MEDICAID FRAUD FALSE CLAIMS ACT; TO UPDAT E LANGUAGE 9
AND DEFINITIONS TO R EFLECT CHANGES WITHI N THE 10
HEALTHCARE SYSTEM; T O MAKE DEFINITIONS A ND LANGUAGE 11
CONSISTENT BETWEEN T HE MEDICAID FRAUD AC T AND THE 12
MEDICAID FRAUD FALSE CLAIMS A CT; TO REDUCE CIVIL 13
PENALTIES TO BE CONS ISTENT WITH FEDERAL LAW; TO 14
ENHANCE A SENTENCE I F THE MEDICAID FRAUD CAUSES 15
PHYSICAL INJURY OR D EATH; AND FOR OTHER PURPOSES. 16
17
18
Subtitle 19
TO AMEND THE MEDICAID FRAUD ACT AND THE 20
MEDICAID FRAUD FALSE CLAIMS ACT; AND TO 21
UPDATE LANGUAGE AND DEFINITIONS TO 22
REFLECT CHANGES WITHIN THE HEALTHCARE 23
SYSTEM;. 24
25
26
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 27
28
SECTION 1. Arkansas Code § 5 -55-102(2), concerning the definition of 29
"claim" within the Medicaid Fraud Act, is amended to read as follows: 30
(2)(A) “Claim” means any written or electronically submitted 31
request or demand for reimbursement or payment made by any Medicaid provider 32
to the Arkansas Medicaid Program, a managed care orga nization, or any fiscal 33
agent of the Arkansas Medicaid Program or a managed care organization for 34
each good or service purported to have been provided to any Medicaid 35
recipient and all documentation required to be created or maintained by law 36 SB518
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or rule to justify, support, approve, or document the delivery of healthcare 1
goods or services to a Medicaid recipient as a condition of participation in 2
the Arkansas Medicaid Program as mandated by the Arkansas Medicaid Program 3
provider agreement, rules, or managed ca re contract request or demand for 4
money or property, regardless of whether under a contract, that: 5
(i) Is presented to an officer, employee, agent, or 6
fiscal agent of the Arkansas Medicaid Program; and 7
(ii) Is made to a contractor, grantee, or ot her 8
recipient if: 9
(a) The money or property is spent or used on 10
behalf of the Arkansas Medicaid Program or to advance the Arkansas Medicaid 11
Program or its interest; and 12
(b) The Arkansas Medicaid Program: 13
(1) Provides or has provided any portion 14
of the money or property requested or demanded; or 15
(2) Is reimbursing the contractor, 16
grantee, or other recipient for any portion of the money or property that is 17
requested or demanded. 18
(B) "Claim" includes: 19
(i) Billing documentatio n; 20
(ii) All documentation required to be created or 21
maintained by law or rule to justify, support, or document the delivery of 22
healthcare goods or services to a Medicaid recipient; 23
(iii) All documentation submitted to justify or help 24
establish a unit rate, capitated rate, or other method of determining what is 25
to be paid for healthcare goods and services to a Medicaid recipient; and 26
(iv) All transactions in payment for healthcare 27
goods and services delivered or claimed to have been delivered to a Medicaid 28
recipient under the Arkansas Medicaid Program, regardless of whether the 29
state has title to the money or property or has transferred responsibility 30
for delivering healthcare goods or services to another legal entity ; 31
32
SECTION 2. Arkansas Co de § 5-55-102(4) and (5), concerning the 33
definitions within the Medicaid Fraud Act, are amended to read as follows: 34
(4)(A) “Illegal Medicaid participation” means participation in 35
the Arkansas Medicaid Program when the individual or organization is 36 SB518
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suspended from the Arkansas Medicaid Program or on a state or federal 1
excluded Medicaid provider list. 2
(B) “Illegal Medicaid participation” includes without 3
limitation when a suspended or excluded individual or organization: 4
(i) Is employed or contract ing with a Medicaid 5
provider or managed care organization or otherwise associated with a Medicaid 6
provider or managed care organization for the purpose of providing or 7
supervising the provision of goods and services to Medicaid recipients; 8
(ii) Plays any role in the management of a Medicaid 9
provider directly as a manager or management company or indirectly as a 10
consultant or advisor; or 11
(iii) Receives payment for administrative and 12
management services directly or indirectly related to patient care such as 13
processing Medicaid claims for payment, attending to services that assist or 14
support Medicaid recipients, or acting as a Medicaid consultant or advisor; 15
(5)(4) “Managed care organization” means a health insurer, 16
Medicaid provider, or other busi ness entity authorized by state law or 17
through a contract with the state to receive a fixed or capitated rate or fee 18
to manage all or a portion of the delivery of healthcare goods or services to 19
Medicaid recipients; 20
(5) "Material" means having a natural tendency to influence, or 21
to be capable of influencing, the payment or receipt of money or property and 22
includes without limitation a false statement, omission, or representation if 23
the false statement, omission, or representation is likely to induce or c ause 24
the Arkansas Medicaid Program to pay, approve, or act in a particular way; 25
26
SECTION 3. Arkansas Code § 5 -55-102(8) and (9), concerning the 27
definitions within the Medicaid Fraud Act, are amended to read as follows: 28
(8) "Overpayment" means the full amount of the Medicaid funds 29
obtained as a direct or indirect result of a violation of Medicaid fraud, § 30
5-55-111, § 20-77-902, the rules of the Arkansas Medicaid Program, or a 31
managed care provider contract; 32
(9) “Person” means any: 33
(A) Medicaid provider of goods or services under the 34
Arkansas Medicaid Program or any employee of the Medicaid provider, 35
independent contractor of the Medicaid provider, contractor of the Medicaid 36 SB518
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provider, or subcontractor of the Medicaid provider, whether the Medicaid 1
provider be an individual, individual medical vendor, firm, corporation, 2
professional association, partnership, organization, risk -based provider 3
organization, managed care organization, or other legal entity; or 4
(B) Individual, individual medical vend or, firm, 5
corporation, professional association, partnership, organization, risk -based 6
provider organization, managed care organization, or other legal entity, or 7
any employee of any individual, individual medical vendor, firm, corporation, 8
professional association, partnership, organization, risk -based provider 9
organization, managed care organization, or other legal entity, not a 10
Medicaid provider under the Arkansas Medicaid Program but that provides goods 11
or services to a Medicaid provider under the Arkan sas Medicaid Program for 12
which the Medicaid provider submits claims to the Arkansas Medicaid Program 13
or its fiscal agents; and 14
(9)(A)(10) “Records” means all documents that disclose the 15
nature, extent, and level of healthcare goods and services provided to 16
Medicaid recipients., including without limitation: 17
(A) Images, slides, film, video, and similar physical and 18
digital files resulting from common diagnostic testing such as 19
(B) “Records” include X-rays, magnetic resonance imaging 20
scans, computed tomography scans, computed axial tomography scans, 21
ultrasounds, and other diagnostic imaging commonly used and retained as part 22
of the medical records of a patient tools; 23
(B) Records documenting treatment administration, 24
medication administration, and activities of daily living; and 25
(C) All financial reports, cost reports, disclosure forms, 26
and other Medicaid records submitted or required to be retained in any rate 27
development or review process, reconciliation process, or actuarial process 28
required by the rules of Arkansas Medicaid Program or state law; 29
(11) "Serious physical injury" means a physical injury to a 30
person that: 31
(A) Creates a substantial risk of death; or 32
(B) Causes: 33
(i) Protracted disfigurement; 34
(ii) Protracted impairment of health; or 35
(iii) Loss or protracted impairment of the function 36 SB518
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of any bodily member or organ; and 1
(12)(A) “Unlawful Medicaid participation” means participation in 2
the Arkansas Medicaid Program when an individual or organization is sus pended 3
from the Arkansas Medicaid Program or is on a state or federal excluded 4
Medicaid provider list. 5
(B) “Unlawful Medicaid participation” includes without 6
limitation when a suspended or excluded individual or organization: 7
(i) Is employed or co ntracting with a Medicaid 8
provider or managed care organization or otherwise associated with a Medicaid 9
provider or managed care organization for the purpose of providing or 10
supervising the provision of goods and services to Medicaid recipients; 11
(ii) Plays any role in the management of a Medicaid 12
provider directly as a manager or management company or indirectly as a 13
consultant or advisor; or 14
(iii) Receives payment for administrative and 15
management services directly or indirectly related to patien t care such as 16
processing Medicaid claims for payment, attending to services that assist or 17
support Medicaid recipients, or acting as a Medicaid consultant or advisor . 18
19
SECTION 4. Arkansas Code § 5 -55-103 is amended to read as follows: 20
5-55-103. Unlawful acts — Classification. 21
(a)(1) It is unlawful for any person to commit Medicaid fraud as 22
prohibited by § 5-55-111. 23
(b)(2) Medicaid fraud is a: 24
(A) Class D felony if the aggregate amount of overpayment 25
resulting from a violation of Medicaid fraud, § 5-55-111 is one thousand 26
dollars ($1,000) or more but less than two thousand five hundred dollars 27
($2,500); 28
(1)(B) Class C felony if the aggregate amount of payments 29
illegally claimed overpayment resulting from a violation of Medicaid fraud, § 30
5-55-111 is two thousand five hundred dollars ($2,500) or more but less than 31
five thousand dollars ($5,000); 32
(2)(C) Class B felony if the aggregate amount of payments 33
illegally claimed overpayment resulting from a violation of Medicaid fraud, § 34
5-55-111 is five thousand dollars ($5,000) or more but less than twenty -five 35
thousand dollars ($25,000); and 36 SB518
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(3)(D) Class A felony if the aggregate amount of payments 1
illegally claimed overpayment resulting from a violation of Medicaid fraud, § 2
5-55-111 is twenty-five thousand dollars ($25,000) or more ; or 3
(E) Class A misdemeanor if the aggregate amount of 4
overpayment resulting from a violation of Medicaid fraud, § 5 -55-111 is less 5
than one thousand dollars ($1,000) . 6
(c) Otherwise, Medicaid fraud i s a Class A misdemeanor. 7
(3)(A) It is unlawful to submit claims as prohibited by any 8
provision of § 5-55-111. 9
(B) If a claim is submitted as prohibited by Medicaid 10
fraud, § 5-55-111, but not paid, the state may bring a charge of attempt to 11
commit Medicaid fraud, § 5-55-111, in accordance with § 5 -3-201. 12
(4)(A) The classification of Medicaid fraud, § 5 -55-111, is 13
enhanced one (1) classification level if the Medicaid fraud, § 5 -55-111, 14
causes serious physical injury to or the death of a Medicaid rec ipient. 15
(B) To seek the enhanced penalty permitted by this 16
section, the state shall charge the enhancement in the information or 17
indictment. 18
(b)(1) It is unlawful to fail to maintain records or documentation 19
required by the rules of the Arkansas Medi caid Program. 20
(2) A violation of subdivision (b)(1) of this section is a Class 21
D felony if the unavailability of records impairs or obstructs the 22
prosecution of a felony or a civil action under § 20 -77-901 et seq. or the 23
Adult and Long-Term Care Facility Resident Maltreatment Act, § 12 -12-1701 et 24
seq. 25
(c)(1) A single scheme or a series of similar violations of this 26
subchapter is a continuing course of conduct offense that may be treated and 27
charged as a single violation. 28
(2)(A) A charge based on agg regated acts of Medicaid fraud, § 5 -29
55-111, may be brought in any county where one (1) of the alleged acts 30
occurred or in Pulaski County. 31
(B) If there are different fraudulent schemes or 32
fraudulent acts involving different defendants, the charges may be brought 33
separately in any county where one (1) of the alleged acts occurred or in 34
Pulaski County. 35
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SECTION 5. Arkansas Code § 5 -55-104(c)-(i), concerning records related 1
to Medicaid fraud within the Medicaid Fraud Act, are amended to read as 2
follows: 3
(c) The Attorney General and the prosecuting attorneys are allowed 4
access to all records of persons and Medicaid recipients under the Arkansas 5
Medicaid Program to which the secretary has access for the purpose of 6
investigating whether any person may have committed the crime of Medicaid 7
fraud or for use or potential use in any legal, administrative, or judicial 8
proceeding. 9
(d) Notwithstanding any other law to the contrary, no person is 10
subject to any civil or criminal liability for providing access to re cords to 11
the secretary, the Attorney General, or the prosecuting attorneys. 12
(e) Records obtained by the secretary, the Attorney General, or the 13
prosecuting attorneys pursuant to this subchapter are classified as 14
confidential information and are not subje ct to outside review or release by 15
any individual except when records are used or potentially to be used by any 16
government entity in any legal, administrative, or judicial proceeding. 17
(f)(1)(c)(1) A Medicaid provider or person providing healthcare goods 18
or services under the Arkansas Medicaid Program shall: 19
(A) Comply with the retention requirements established by 20
the rules of the Arkansas Medicaid Program for all records; and 21
(B) Maintain is required to maintain all records at least 22
for a period of not less than five (5) years from the date of claimed 23
provision of any goods or services to any Medicaid recipient. 24
(2)(A) The records described in subdivision (f)(1) (c)(1) of 25
this section shall be available for audit during regular business hours a t 26
the address listed in the Medicaid provider agreement or where the healthcare 27
goods or services are provided. 28
(B) Closed records for inactive patients or clients may be 29
maintained in offsite storage if: 30
(i) The records can be produced within thr ee (3) 31
working days of being served with a request for records, subpoena, or other 32
lawful notice from any agency with authority to audit the records; and 33
(ii) The records are maintained within the state. 34
(C) A Medicaid provider shall disclose upon request by the 35
Arkansas Medicaid Program, the Office of Medicaid Inspector General, or the 36 SB518
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Medicaid Fraud Control Unit the location of any offsite storage facility or 1
server and the contact information of the person or company that manages the 2
storage facility or server to any agency with authority to audit the records . 3
(3) If the healthcare goods or services are provided in the home 4
of the Medicaid recipient, the records shall be maintained at the principal 5
place of business of the Medicaid provider. 6
(4) If a Medicaid provider goes out of business, the Medicaid 7
provider shall give written notification to the Department of Human Services 8
and the Office of Medicaid Inspector General of where and how the records 9
will be stored. 10
(g)(1) It is unlawful to destroy or alter any record or supporting 11
documentation with a purpose to conceal a false or fraudulent claim made to 12
the Arkansas Medicaid Program or to interfere with an audit, investigation, 13
or prosecution related to a claim made to the Arkansas Medica id Program. 14
(2) A violation of subdivision (g)(1) of this section is a Class 15
B felony. 16
(h)(1) Any person found not to have maintained any records upon 17
conviction is guilty of a Class D felony if the unavailability of records 18
impairs or obstructs the prosecution of a felony. 19
(2) Otherwise, a violation of subdivision (h)(1) of this section 20
is a Class A misdemeanor. 21
(i) It is an affirmative defense to a prosecution under this section 22
that the records in question were lost or destroyed in a flood, fi re, or 23
other natural disaster or by a criminal act that did not result from the 24
defendant's conduct. 25
26
SECTION 6. Arkansas Code § 5 -55-106 is amended to read as follows: 27
5-55-106. Investigation by Attorney General — Access to records. 28
The office of the Attorney General is the entity to which a case of 29
suspected Medicaid fraud shall be referred by the Arkansas Medicaid Program 30
or its fiscal agents for the purposes of investigation, civil action, or 31
referral to the prosecuting attorney having criminal jur isdiction in the 32
matter. 33
(a)(1)(A) In accordance with 42 U.S.C. § 1396b(q), the State of 34
Arkansas shall maintain a single organization with statewide law enforcement 35
authority to protect Medicaid recipients from abuse, neglect, and 36 SB518
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exploitation and to pro tect the Arkansas Medicaid Program from fraud. 1
(B) When fully certified by the Office of Inspector 2
General of the United States Department of Health and Human Services, a 3
investigative and prosecution unit as described in subdivision (a)(1)(A) of 4
this section is identified under federal law and regulations as a Medicaid 5
Fraud Control Unit. 6
(2) The Medicaid Fraud Control Unit, under the supervision of 7
the Attorney General, shall have statewide law enforcement investigative 8
jurisdiction and may utilize all civil investigative and litigation authority 9
of the Attorney General's office. 10
(3) Under § 5-55-114, an attorney of the Medicaid Fraud Control 11
Unit may be appointed by local prosecuting attorneys as a special prosecutor 12
or a special deputy prosecut or to prosecute any criminal case. 13
(b)(1) The Secretary of the Department of Human Services, the Arkansas 14
Medicaid Program, and the Medicaid Inspector General shall work closely with 15
the Medicaid Fraud Control Unit to protect against abuse, neglect, 16
exploitation, and fraud. 17
(2) The secretary and the Medicaid Inspector General shall 18
develop and monitor systems that ensure any credible allegations of Medicaid 19
fraud and abuse, neglect, or exploitation of Medicaid recipients are 20
immediately referred to the Medicaid Fraud Control Unit for investigation. 21
(c)(1) The Medicaid Fraud Control Unit is a health oversight agency 22
that is: 23
(A) Exempt from the Health Insurance Portability and 24
Accountability Act of 1996, Pub. L. No. 104 -191; and 25
(B) Allowed access to all records whether in the 26
possession of the Arkansas Medicaid Program, a Medicaid provider, or employee 27
or contractor of a Medicaid provider. 28
(2) The Medicaid Fraud Control Unit shall have access to: 29
(A)(i) Records on a Medicaid recipient. 30
(ii) The records shall be available for audit during 31
regular business hours at the address listed in the Medicaid provider 32
agreement or where the healthcare goods or services are provided, or as 33
otherwise provided by this subchapter; 34
(B) Encounter claims data and other records of managed 35
care organizations and any other record related to provision of goods and 36 SB518
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services to Medicaid recipients; 1
(C) Notwithstanding any other confidentiality law, all 2
financial reports, cost reports, disclosure forms , and other records 3
submitted or required to be retained in any licensure process, rate 4
development process, rate review process, reconciliation process, or 5
actuarial process required to participate in the Arkansas Medicaid Program or 6
by state law or rule. 7
(3) The Medicaid Fraud Control Unit may obtain any other 8
healthcare or business record necessary to conduct an ongoing investigation 9
or audit by subpoena. 10
(4) Notwithstanding any other law to the contrary, a person is 11
not subject to any civil or cr iminal liability for providing access to 12
records to the Medicaid Fraud Control Unit. 13
(5)(A)(i) Records obtained by the Medicaid Fraud Control Unit 14
under this subchapter are classified as confidential information and are not 15
subject to outside review or release to any individual except as may be 16
necessary for the Medicaid Fraud Control Unit to pursue or to potentially 17
pursue legal, administrative, or judicial proceedings. 18
(ii) Records obtained by the Medicaid Fraud Control 19
Unit under this subchapter are exempt from disclosure under the Freedom of 20
Information Act of 1967, § 25 -19-101 et seq. 21
(B) The Medicaid Fraud Control Unit may share records with 22
the Attorney General, the Office of the Medicaid Inspector General, a 23
prosecuting attorney, and any other government entity as may be necessary and 24
appropriate to carry out the mission of the Medicaid Fraud Control Unit. 25
(6) Whenever possible, the Medicaid Fraud Control Unit shall 26
seek protective orders and take any other measures possible to provide 27
maximum confidentiality to the personal health care information of individual 28
Arkansans while accomplishing its mission. 29
(d)(1) A Medicaid program provider shall cooperate in reviews, audits, 30
and investigations conducted by the Department of Human Servic es, Office of 31
the Medicaid Inspector General, and the Medicaid Fraud Control Unit. 32
(2) A request for information includes formal and informal 33
requests made to a Medicaid provider by any attorney, auditor, officer, or 34
agent of the Office of the Medicaid Inspector General or the Medicaid Fraud 35
Control Unit. 36 SB518
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1
SECTION 7. Arkansas Code § 5 -55-107(a)(1)(A), concerning restitution 2
and collection within the Medicaid Fraud Act, is amended to read as follows: 3
(1)(A) Restitution of an overpayment made to the Arkansas 4
Medicaid Program shall be paid to the Department of Human Services, with the 5
restitution to be deposited into the Arkansas Medicaid Program Trust Fund for 6
the loss to the Arkansas Medicaid Program or its fiscal agents. 7
8
SECTION 8. Arkansas Code § 5-55-107(d)(3), concerning restitution and 9
collection within the Medicaid Fraud Act, is amended to read as follows: 10
(3)(A) Restitution ordered for a loss to the Arkansas Medicaid 11
Program shall not be excused by the court , except where the court conduc ts a 12
hearing and makes a finding of fact that the debt is uncollectable . 13
(B) As the State of Arkansas has a right to litigate any 14
claim that a debt is uncollectable, the Attorney General's office shall be 15
given notice, a reasonable time to investigate a claim by a defendant that 16
the amount of the restitution is uncollectable, and the opportunity to 17
present evidence before any finding that a debt is uncollectable is entered. 18
(B)(C) A conviction under this subchapter shall not be 19
sealed or expunged un til all ordered restitution is paid in full. 20
21
SECTION 9. Arkansas Code § 5 -55-107(e)(2), concerning restitution and 22
collection within the Medicaid Fraud Act, is amended to read as follows: 23
(2) Restitution ordered payments to reimburse for reasonable and 24
necessary expenses incurred by the office of the Attorney General Attorney 25
General's office or the prosecuting attorney during investigation and 26
prosecution shall be paid to the office of the Attorney General or the 27
prosecuting attorney to be retained a nd used in future investigations for 28
Medicaid fraud. 29
30
SECTION 10. Arkansas Code § 5 -55-108 is amended to read as follows: 31
5-55-108. Fines. 32
(a) Any person who is found guilty of or who pleads guilty or nolo 33
contendere to Medicaid fraud as described in this subchapter shall pay one 34
(1) of the following fines assessed under this subchapter : 35
(1) If no monetary loss overpayment is incurred by the Arkansas 36 SB518
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Medicaid Program, a fine of not less than one thousand dollars ($1,000) or 1
more than three thousand dollars ($3,000) for each omission or fraudulent act 2
or claim violation of Medicaid fraud, § 5 -55-111; or 3
(2) If a monetary loss an overpayment is incurred by the 4
Arkansas Medicaid Program, a fine of an amount not less than the amount of 5
the monetary loss to overpayment made by the Arkansas Medicaid Program and 6
not more than three (3) times two (2) times the amount of the monetary loss 7
to overpayment made by the Arkansas Medicaid Program. 8
(b)(1) The fines described in subdivision (a)(2) of this sectio n may 9
be waived by the prosecuting attorney. 10
(2) If the fines are waived, the trier of fact may impose fines 11
under § 5-4-201. 12
(c)(1) All fines assessed under subsection (a) of this section shall 13
be credited to the general revenues of the State of Arka nsas paid to the 14
Attorney General's office and disbursed in accordance with the rules of the 15
Arkansas Medicaid Program with the state's share being deposited into the 16
Arkansas Medicaid Trust Fund . 17
(2) All other fines assessed by the court in an action b rought 18
under this subchapter shall be credited to the general revenues of the State 19
of Arkansas. 20
21
SECTION 11. Arkansas Code § 5 -55-110 and § 5-55-111 are amended to 22
read as follows: 23
5-55-110. Suspension Exclusion of violators. 24
The Secretary of the Department of Human Services may suspend or revoke 25
the provider agreement between the Department of Human Services and a person 26
in the event the person is found guilty of violating a provision of this 27
subchapter. 28
(a) Upon conviction for a violation of thi s subchapter, the Secretary 29
of the Department of Human Services or the Secretary of the Department of 30
Inspector General may exclude a person or Medicaid provider from 31
participation in the Arkansas Medicaid Program and terminate the Medicaid 32
provider number and provider agreement. 33
(b) The exclusion or termination process shall be conducted in 34
accordance with rules of the Arkansas Medicaid Program. 35
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5-55-111. Criminal acts constituting Medicaid fraud. 1
A person commits Medicaid fraud when he or she: 2
(1) Purposely makes or causes to be made any omission or 3
material false statement, omission, or representation of a material fact in 4
any claim, bill, invoice, census, request for payment, or application for any 5
benefit or other communication seeking payment under the Arkansas Medicaid 6
Program; 7
(2) At any time purposely Purposely makes or causes to be made 8
any omission or material false statement, omission, or representation of a 9
material fact in an application for eligibility or in required documentatio n 10
for use in determining rights to a benefit or payment under the Arkansas 11
Medicaid Program; 12
(3) Having knowledge of the occurrence of any event affecting 13
his or her a Medicaid recipient's or a Medicaid provider's initial or 14
continued right to any benef it or payment under the Arkansas Medicaid 15
Program, or the initial or continued right to any benefit or payment under 16
the Arkansas Medicaid Program of any other individual in Medicaid recipient 17
on whose behalf he or she a Medicaid provider has applied for or is receiving 18
the benefit or payment under the Arkansas Medicaid Program, purposely 19
conceals or fails to disclose the event with an intent fraudulently to secure 20
a purpose to secure fraudulently the benefit or payment under the Arkansas 21
Medicaid Program either in a greater amount or quantity than is due or when 22
no benefit or payment under the Arkansas Medicaid Program is authorized; 23
(4) Having made or submitted a claim, request for payment, or 24
application to receive any benefit or payment under the Arka nsas Medicaid 25
Program for the use and benefit of another person and having received it, 26
purposely converts the benefit or payment under the Arkansas Medicaid Program 27
or any part of the benefit or payment under the Arkansas Medicaid Program to 28
a use other than for the use and benefit of the other person; 29
(5) Purposely presents or causes to be presented a claim for a 30
service required to be provided by a person with a particular type of license 31
or credential while knowing that the individual who furnished t he service was 32
not licensed or credentialed; 33
(6) Purposely solicits or receives any remuneration, including 34
any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, 35
in cash or in kind: 36 SB518
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(A) In return for referring an individual to a person for 1
the furnishing or arranging for the furnishing of any item or service for 2
which payment may be made in whole or in part under the Arkansas Medicaid 3
Program; or 4
(B) In return for purchasing, leasing, ordering, or 5
arranging for or recommend ing purchasing, leasing, or ordering any good, 6
facility, service, or item for which payment may be made in whole or in part 7
under the Arkansas Medicaid Program; 8
(7)(A) Purposely offers or pays any remuneration, including any 9
kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in 10
cash or in kind, to any person to induce that person to: 11
(i) Refer an individual to a person for the 12
furnishing or arranging for the furnishing of any item or service for which 13
payment may be made in who le or in part under the Arkansas Medicaid Program; 14
or 15
(ii) Purchase, lease, order, or arrange for or 16
recommend purchasing, leasing, or ordering any good, facility, service, or 17
item for which payment may be made in whole or in part under the Arkansas 18
Medicaid Program. 19
(B) If the transaction is otherwise legal and properly 20
documented as occurring in the normal course of business, subdivisions 21
(7)(A)(i) and (ii) of this section do not apply to: 22
(i) A discount or other reduction in price obtained 23
by a provider of services or other entity under the Arkansas Medicaid Program 24
if the reduction in price is properly disclosed and appropriately reflected 25
in the costs claimed or charges made by the provider or entity under the 26
Arkansas Medicaid Program; 27
(ii) Any amount paid by an employer to an employee 28
who has a bona fide employment relationship with the employer for employment 29
in the provision of covered items or services; 30
(iii) Any amount paid by a vendor of goods or 31
services to a person authorize d to act as a purchasing agent for a group of 32
individuals or entities who are furnishing services reimbursed under the 33
Arkansas Medicaid Program if: 34
(a) The person has a written contract with 35
each individual or entity that specifies the amount to be paid to the person 36 SB518
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and the amount may be a fixed amount or a fixed percentage of the value of 1
the purchases made by each individual or entity under the co ntract; and 2
(b) In the case of an entity that is a 3
provider of services as defined in § 20 -9-101, the person discloses in such 4
form and manner as the Secretary of the Department of Human Services requires 5
to the entity and, upon request, to the secre tary, the amount received from 6
each vendor with respect to purchases made by or on behalf of the entity; or 7
(iv) Any payment practice specified by the secretary 8
promulgated pursuant to applicable federal or state law; 9
(8)(6) Purposely makes or cause s to be made, or induces or seeks 10
to induce, any omission or material false statement, omission, or 11
representation of a material fact with respect to the conditions or operation 12
of any institution, facility, or Medicaid provider in order that the 13
institution, facility, or Medicaid provider may qualify to obtain or maintain 14
any licensure or certification when the licensure or certification is 15
required to be enrolled or eligible to deliver any healthcare goods or 16
services to Medicaid recipients by state law, federal law, or the rules of 17
the Arkansas Medicaid Program; 18
(9)(7) Purposely: 19
(A) Charges a Medicaid recipient or any person acting on 20
behalf of a Medicaid recipient , for any service provided to a patient under 21
the Arkansas Medicaid Program, money or other consideration for any 22
healthcare goods or services provided to a Medicaid recipient under the 23
Arkansas Medicaid Program at a rate in excess of the rates established by the 24
state Arkansas Medicaid Program ; or 25
(B) Charges, solicits, accepts, or r eceives, in addition 26
to any amount otherwise required to be paid under the Arkansas Medicaid 27
Program, any gift, money, donation, or other consideration other than a 28
charitable, religious, or philanthropic contribution from an organization or 29
from a person unrelated to the patient: 30
(i) As a precondition of admitting a patient to a 31
hospital, nursing facility, or intermediate care facility for individuals 32
with intellectual disabilities; or 33
(ii) As a requirement for the patient's continued 34
stay in a hospital, nursing facility, or intermediate care facility for 35
individuals with intellectual disabilities when the cost of the services 36 SB518
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provided in the hospital, nursing facility, or intermediate care facility for 1
individuals with intellectual disabilities to the patient is paid for in 2
whole or in part under the Arkansas Medicaid Program; or 3
(C) Charges a Medicaid recipient who is receiving 4
healthcare goods or services from a managed care organization or other form 5
of capitated rate program in any amount o r method not authorized by the rules 6
of the Arkansas Medicaid Program or a contract with the Medicaid provider; 7
(10)(8) Purposely makes or causes to be made any material false 8
statement, omission, or representation of a material fact in any application 9
for a benefit or payment in violation of the rules and provider agreements 10
issued by the Arkansas Medicaid Program or its fiscal agents; 11
(11) Knowingly submits false documentation or makes or causes to 12
be made or induces or seeks to induce any material false statement to the 13
Office of Medicaid Inspector General or the Medicaid Fraud Control Unit 14
within the office of the Attorney General during an audit or in response to a 15
request for information or a subpoena; 16
(12)(9) Purposely alters, forges, or utters a forged the 17
signature of a doctor, nurse, or other medical professional on a 18
prescription, referral for healthcare goods or services, or finding of 19
medical necessity for any Medicaid recipient of the Arkansas Medicaid 20
Program; 21
(13) Knowingly submits a forged prescription, referral for 22
healthcare goods or services, or finding of medical necessity for: 23
(A) Payment under the Arkansas Medicaid Program; or 24
(B) An audit or in response to a request for information 25
or a subpoena to the Office of Medic aid Inspector General or the Medicaid 26
Fraud Control Unit within the office of the Attorney General; or 27
(14)(10) Purposely places a false entry makes or causes to be 28
made any material false statement, omission, or representation of fact in a 29
medical chart, medical record, or any record of services required to be made 30
to the Arkansas Medicaid Program that indicates that healthcare goods or 31
services have been provided to a Medicaid recipient knowing that the 32
healthcare goods or services we re not provided; 33
(11) Purposely makes or causes to be made any material false 34
statement, omission, or representation of a fact in any unit rate development 35
process, actuarial process, reconciliation process, cost report, disclosure 36 SB518
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form, or documentatio n required under the Arkansas Medicaid Program; or 1
(12)(A) Having knowledge or having discovered that an improper, 2
inadvertent, or accidental overpayment has been made by the Arkansas Medicaid 3
Program, purposely fails to promptly report and repay the ov erpayment. 4
(B) It is a defense to a prosecution under subdivision 5
(12)(A) of this section that the overpayment was reported and repayment was 6
made within ninety (90) days of discovery . 7
8
SECTION 12. Arkansas Code Title 5, Chapter 55, Subchapter 1, is 9
amended to add an additional section to read as follows: 10
5-55-112. Kickbacks and other unlawful remuneration, referral fees, 11
bonuses, bribes, or rebates. 12
(a) It is unlawful to solicit or receive any payment or other 13
compensation, including any kickback , bribe, rebate, or referral fee, 14
directly or indirectly, overtly or covertly, in cash or in kind: 15
(1) In return for referring an individual to a person for the 16
furnishing or arranging for the furnishing of any item or service for which 17
payment may be made in whole or in part under the Arkansas Medicaid Program; 18
or 19
(2) In return for purchasing, leasing, ordering, or arranging 20
for or recommending purchasing, leasing, or ordering any goods, facility, 21
service, or item for which payment may be made in who le or in part under the 22
Arkansas Medicaid Program. 23
(b) It is unlawful to offer or pay any payment or compensation, 24
including any kickback, bribe, rebate, or referral fee, directly or 25
indirectly, overtly or covertly, in cash or in kind, to any person to i nduce 26
that person to: 27
(1) Refer an individual to a person for the furnishing or 28
arranging for the furnishing of any item or service for which payment may be 29
made in whole or in part under the Arkansas Medicaid Program; or 30
(2) Purchase, lease, order, or arrange for or recommend 31
purchasing, leasing, or ordering any goods, facility, service, or item for 32
which payment may be made in whole or in part under the Arkansas Medicaid 33
Program. 34
(c) If the transaction is otherwise legal and properly documented as 35
occurring in the normal course of business, subdivisions (b)(1) and (2) of 36 SB518
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this section do not apply to: 1
(1) A discount or other reduction in price obtained by a 2
provider of services or other entity under the Arkansas Medicaid Program if 3
the reduction in price is properly disclosed and appropriately reflected in 4
the costs claimed or charges made by the provider or entity under the 5
Arkansas Medicaid Program; 6
(2) Any amount paid by an employer to an employee who has a bona 7
fide employment relationship with the employer for employment in the 8
provision of covered goods or services, except that an employer may not pay 9
an employee a signing bonus, referral fee, or other payments for a new client 10
or patient that the employee provided covered goods or service s to at a prior 11
place of employment during the preceding twelve (12) months; 12
(3) Any amount paid by a vendor of goods or services to a person 13
authorized to act as a purchasing agent for a group of individuals or 14
entities who are furnishing services reim bursed under the Arkansas Medicaid 15
Program if: 16
(A) The person has a written contract with each individual 17
or entity that specifies the amount to be paid to the person and the amount 18
may be a fixed amount or a fixed percentage of the value of the purcha ses 19
made by each individual or entity under the contract; and 20
(B) In the case of an entity that is a provider of 21
services as defined in § 20 -9-101, the person discloses on a form and in a 22
manner as the Secretary of the Department of Human Services requ ires to the 23
entity and, upon request, to the secretary, the amount received from each 24
vendor with respect to purchases made by or on behalf of the entity. 25
(d)(1)(A) A violation under this section is a Class D felony if the 26
aggregate amount of the unlawfu l compensation paid or received in violation 27
of this section is one thousand dollars ($1,000) or more but less than two 28
thousand five hundred dollars ($2,500). 29
(B) A violation under this section is a Class A 30
misdemeanor if the aggregate amount of the u nlawful compensation paid or 31
received in violation of this section is less than one thousand dollars 32
($1,000). 33
(2) A violation under this section is a Class C felony if the 34
aggregate amount of the unlawful compensation paid or received in violation 35
of this section is two thousand five hundred dollars ($2,500) or more but 36 SB518
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less than five thousand dollars ($5,000). 1
(3) A violation under this section is a Class B felony if the 2
aggregate amount of the unlawful compensation paid or received in violation 3
of this section is five thousand dollars ($5,000) or more but less than 4
twenty-five thousand dollars ($25,000). 5
(4) A violation under this section is a Class A felony if the 6
aggregate amount of the unlawful compensation paid or received in violation 7
of this section is twenty-five thousand dollars ($25,000) or more. 8
(e) Restitution ordered for a violation of this section is limited to 9
the actual loss to the Arkansas Medicaid Program that resulted directly or 10
indirectly from the unlawful payment or compensa tion. 11
(f)(1) Upon conviction for a violation of this section and in addition 12
to any other fine authorized for the offense, the court shall impose a fine 13
of not less than the unlawful payment or compensation paid or received or 14
more than two (2) times the unlawful payment or compensation paid or 15
received. 16
(2) All other fines assessed under this section shall be paid to 17
the Attorney General's office and disbursed in accordance with rules of the 18
Arkansas Medicaid Program with the state’s share being deposited into the 19
Arkansas Medicaid Program Trust Fund. 20
21
SECTION 13. Arkansas Code § 5 -55-113(e), concerning rewards for 22
information within the Medicaid Fraud Act, is amended to read as follows: 23
(e)(1) The Attorney General may agree to a payment of up to ten 24
percent (10%) of the civil penalty funds collected at the time of the 25
conviction not to exceed ten thousand dollars ($10,000) as a reward in any 26
settlement agreement case under this section. 27
(2) A portion of restitution shall not be used as a re ward The 28
reward authorized by subdivision (e)(1) of this section shall not reduce the 29
restitution owed. 30
31
SECTION 14. Arkansas Code § 5 -55-114(c)-(e), concerning a special 32
deputy prosecutor within the Medicaid Fraud Act, is amended to read as 33
follows: 34
(c) With the approval of the prosecuting attorney, a special deputy 35
prosecutor under this section may also use a prosecutor investigative 36 SB518
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subpoena as provided in § 16 -43-212. 1
(d) A special deputy prosecutor appointed and functioning as 2
authorized under this section is entitled to the same immunity granted by law 3
to the prosecuting attorney. 4
(d)(1)(e)(1) Appointment as a special deputy prosecutor does not 5
enable the attorney to receive any additional fees or salary from the state 6
for services provided pur suant to the appointment. 7
(2) Expenses of the special deputy prosecutor and any fees and 8
costs incurred by the special deputy prosecutor in the prosecution of cases 9
as provided in this section are the responsibility of the Attorney General. 10
(e)(f) The prosecuting attorney may revoke the appointment of a 11
special deputy prosecutor at any time. 12
13
SECTION 15. Arkansas Code § 5 -55-115 is amended to read as follows: 14
5-55-115. Suspension, exclusion, and illegal unlawful Medicaid 15
participation. 16
(a)(1) It is unlawful for a suspended or excluded individual person or 17
organization to participate in the Arkansas Medicaid Program under federal 18
and state laws. 19
(2) A violation of subdivision (a)(1) of this section is a Class 20
C felony. 21
(b)(1) A person commits illegal Medicaid participation if: 22
(A) Having been suspended from the Arkansas Medicaid 23
Program or placed on a state or federal excluded Medicaid provider list, the 24
person knowingly participates, directly or indirectly, in the Arkansas 25
Medicaid Program; or 26
(B) As a certified health provider enrolled in the 27
Arkansas Medicaid Program pursuant to Title XIX of the Social Security Act, 28
as amended, 42 U.S.C. § 1396 et seq., or as the fiscal agent of the certified 29
health provider, the person employs, or en gages as an independent contractor, 30
or engages as a consultant, or otherwise permits the participation in the 31
business activities of the certified health provider, any person who has 32
pleaded guilty or nolo contendere to or has been found guilty of a charge of 33
Medicaid fraud, theft of public benefits, § 5 -36-202, or abuse of adults, § 34
5-28-101 et seq. 35
(2) Illegal Medicaid participation is a Class A misdemeanor. 36 SB518
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(b)(1) A person commits unlawful Medicaid participation if the person 1
knowingly allows or per mits a suspended or excluded person or organization to 2
participate directly or indirectly in the Arkansas Medicaid Program. 3
(2) Unlawful Medicaid participation is a Class A misdemeanor. 4
5
SECTION 16. Arkansas Code Title 5, Chapter 55, Subchapter 1, is 6
amended to add an additional section to read as follows: 7
5-55-116. Obstructing a Medicaid review, audit, investigation, or 8
prosecution. 9
(a) A person commits the offense of obstructing a Medicaid review, 10
audit, investigation, or prosecution if the perso n: 11
(1) Purposely makes a material false statement or omission or 12
causes another person to make a material false statement or omission to an 13
auditor or investigator with the Office of the Medicaid Inspector General, or 14
the Medicaid Fraud Control Unit, or in response to a request for information 15
or subpoena; 16
(2) Purposely submits or causes another person to submit false, 17
fabricated, forged, or altered documentation to the Office of the Medicaid 18
Inspector General or the Medicaid Fraud Control Unit, witho ut regard to 19
whether the documentation is provided in response to a verbal request, 20
written request for information, or a subpoena; or 21
(3) Purposely destroys or alters any record with the purpose to 22
conceal a false or fraudulent claim made to the Arkansas Medicaid Program or 23
to interfere with an ongoing review, audit, investigation, or prosecution 24
being conducted by the Office of the Medicaid Inspector General or the 25
Medicaid Fraud Control Unit. 26
(b)(1) Obstructing a Medicaid review, audit, invest igation, or 27
prosecution is a Class B felony if the conduct interferes with an audit, 28
investigation, or prosecution related to any felony offense. 29
(2) Otherwise, obstructing a Medicaid review, audit, 30
investigation, or prosecution is a Class A misdemeanor . 31
32
SECTION 17. Arkansas Code § 20 -77-901(7), concerning the definition of 33
"material" within the Medicaid Fraud False Claims Act, is amended to read as 34
follows: 35
(7)(A) “Material” means having a natural tendency to influence, 36 SB518
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or be capable of influencin g, the payment or receipt of money or property . 1
(B) A false statement, omission, or representation is 2
material if the false statement, omission, or representation is likely to 3
induce or cause the Arkansas Medicaid Program to pay, approve, or act in a 4
particular way; 5
6
SECTION 18. Arkansas Code § 20 -77-901(11) and (12), concerning the 7
definitions within the Medicaid Fraud False Claims Act, is amended to read as 8
follows: 9
(11) "Overpayment" means the full amount of the Medicaid funds 10
obtained as a direct or indirect result of a violation of § 5 -55-111, § 20-11
77-902, the rules of the Arkansas Medicaid Program, or a managed care 12
provider contract; 13
(12) “Person” means any: 14
(A) Medicaid provider of goods or services or any 15
employee, independent contra ctor, or subcontractor of the Medicaid provider, 16
whether that provider be an individual, individual medical vendor, firm, 17
corporation, professional association, partnership, organization, risk -based 18
provider organization, managed care organization, or othe r legal entity; or 19
(B) Individual, individual medical vendor, firm, 20
corporation, professional association, partnership, organization, risk -based 21
provider organization, managed care organization, or other legal entity, or 22
any employee of any individual, individual medical vendor, firm, corporation, 23
professional association, partnership, organization, risk -based provider 24
organization, managed care organization, or other legal entity, not a 25
Medicaid provider under the Arkansas Medicaid Program but that pro vides goods 26
or services to a Medicaid provider under the Arkansas Medicaid Program for 27
which the Medicaid provider submits claims to the Arkansas Medicaid Program 28
or its fiscal agents; and 29
(12)(A)(13) “Records” means all documents in any form that 30
disclose the nature, extent, and level of healthcare goods and services 31
provided to Medicaid recipients ., including without limitation: 32
(A) Images, slides, film, video, and similar physical and 33
digital files resulting from common diagnostic testing such as 34
(B) “Records” include X-rays, magnetic resonance imaging 35
scans, computed tomography scans, computed axial tomography scans, 36 SB518
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ultrasounds, and other diagnostic imaging commonly used and retained as part 1
of the medical records of a patient tools; 2
(B) Records documenting treatment administration, 3
medication administration, and activities of daily living; and 4
(C) All financial reports, cost reports, disclosure forms, 5
and other Medicaid records submitted or required to be retained in any rate 6
development or review process, reconciliation process, or actuarial process 7
required by the rules of Arkansas Medicaid Program or state law; and 8
(14)(A) “Unlawful Medicaid participation” means participation in 9
the Arkansas Medicaid Program when the individual o r organization is 10
suspended from the Arkansas Medicaid Program or on a state or federal 11
excluded Medicaid provider list. 12
(B) “Unlawful Medicaid participation” includes without 13
limitation when a suspended or excluded individual or organization: 14
(i) Is employed or contracting with a Medicaid 15
provider or managed care organization or otherwise associated with a Medicaid 16
provider or managed care organization for the purpose of providing or 17
supervising the provision of goods and services to Medicaid reci pients; 18
(ii) Plays any role in the management of a Medicaid 19
provider directly as a manager or management company or indirectly as a 20
consultant or advisor; or 21
(iii) Receives payment for administrative and 22
management services directly or indirectly related to patient care such as 23
processing Medicaid claims for payment, attending to services that assist or 24
support Medicaid recipients, or acting as a Medicaid consultant or advisor . 25
26
SECTION 19. Arkansas Code §§ 20 -77-902 and 20-77-903 are amended to 27
read as follows: 28
20-77-902. Liability for certain acts. 29
(a) A person shall be liable to the State of Arkansas, through the 30
Attorney General, for restitution, damages, and a civil penalty for an act or 31
omission in violation of this subchapter if he or sh e: 32
(1) Knowingly makes or causes to be made any material false 33
statement, omission, or representation of a material fact in any claim, bill, 34
invoice, request for payment, or application for any benefit or other 35
communication seeking payment under the Ar kansas Medicaid Program; 36 SB518
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(2) Knowingly makes or causes to be made any material omission 1
or false statement, omission, or representation of a material fact in an 2
application for eligibility or in required documentation for use in 3
determining rights the right to a benefit or payment under the Arkansas 4
Medicaid Program; 5
(3) Having knowledge of the occurrence of any event affecting 6
his or her a Medicaid recipient's or a Medicaid provider's initial or 7
continued right to any benefit or payment or the initial or continued right 8
to any benefit or payment under the Arkansas Medicaid Program of any other 9
individual in Medicaid recipient on whose behalf he or she a Medicaid 10
provider has applied for or is receiving a benefit or payment under the 11
Arkansas Medicaid Program , knowingly conceals or fails to disclose that event 12
with an intent fraudulently to secure a purpose to secure fraudulently the 13
benefit or payment under the Arkansas Medicaid Program either in a greater 14
amount or quantity than is due or when no benefit or payment under the 15
Arkansas Medicaid Program is authorized; 16
(4) Having made or submitted a claim, request for payment, or 17
application to receive any benefit or payment under the Arkansas Medicaid 18
Program for the use and benefit of another person and having received it, 19
knowingly converts the benefit or payment under the Arkansas Medicaid Program 20
or any part of the benefit or payment under the Arkansas Medicaid Program to 21
a use other than for the use and benefit of the other person; 22
(5) Knowingly presents or causes to be presented a claim for a 23
physician's service for which payment may be made under the program and knows 24
that the individual who furnished the service was not license d as a physician 25
service required to be provided by a person with a particular type of license 26
or credential while knowing that the individual who furnished the service was 27
not licensed or credentialed ; 28
(6) Knowingly solicits or receives any remuneration payment or 29
other compensation, including any kickback, bribe, or rebate, or referral 30
fee, directly or indirectly, overtly or covertly, in cash or in kind: 31
(A) In return for referring an individual to a person for 32
the furnishing or arranging for the f urnishing of any item or service for 33
which payment may be made in whole or in part under the program Arkansas 34
Medicaid Program; or 35
(B) In return for purchasing, leasing, ordering, or 36 SB518
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arranging for or recommending purchasing, leasing, or ordering any go od, 1
facility, service, or item for which payment may be made in whole or in part 2
under the program Arkansas Medicaid Program ; 3
(7)(A) Knowingly offers or pays any remuneration payment or 4
other compensation, including any kickback, bribe, or rebate, or referral 5
fee, directly or indirectly, overtly or covertly, in cash or in kind to any 6
person to induce the person to: 7
(i) Refer an individual to a person for the 8
furnishing or arranging for the furnishing of any item or service for which 9
payment may be made in whole or in part under the program Arkansas Medicaid 10
Program; or 11
(ii) Purchase, lease, order, or arrange for or 12
recommend purchasing, leasing, or ordering any good, facility, service, or 13
item for which payment may be made in whole or in part u nder the program 14
Arkansas Medicaid Program . 15
(B) If the transaction is otherwise legal and properly 16
documented as occurring in the normal course of business, subdivision (7)(A) 17
of this section does not apply to: 18
(i) A discount or other reduction in price obtained 19
by a provider of services or other entity under the program Arkansas Medicaid 20
Program if the reduction in price is properly disclosed and appropriately 21
reflected in the costs claimed or charges made by the provider or entity 22
under the program Arkansas Medicaid Program ; 23
(ii) Any amount paid by an employer to an employee 24
who has a bona fide employment relationship with the employer for employment 25
in the providing of covered items or services , except that an employer may 26
not pay an employee a signing bonus, referral fee, or other payments for a 27
new client or patient the employee previously provided covered goods or 28
services to at a prior place of employment during the preceding twelve (12) 29
months; or 30
(iii) Any salary, wages, or commiss ion amount paid 31
during the normal course of business by a vendor of goods or services to a 32
person authorized to act as a purchasing agent for a group of individuals or 33
entities that are furnishing services reimbursed under the program Arkansas 34
Medicaid Program, if: 35
(a) The person has a written contract with 36 SB518
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each individual or entity that specifies the amount to be paid to the person, 1
which amount may be a fixed amount or a fixed percentage of the value of the 2
purchases made by each individual or entit y under the contract; and 3
(b) In the case of an entity that is a 4
Medicaid provider as defined in § 20 -77-901, the person discloses, in the 5
form and manner as the Secretary of the Department of Human Services 6
requires, to the entity and upon request t o the secretary the amount received 7
from each vendor with respect to purchases made by or on behalf of the 8
entity; or 9
(iv) Any other payment practice specified by the 10
secretary promulgated pursuant to applicable federal or state law; 11
(8) Knowingly makes or causes to be made or induces or seeks to 12
induce any material omission or false statement, omission, or representation 13
of a material fact with respect to the conditions or operation of any 14
institution, facility, or Medicaid provider in order that t he institution, 15
facility, or Medicaid provider may qualify to obtain or maintain any 16
licensure or certification when the licensure or certification is required to 17
be enrolled or eligible to deliver any healthcare goods or services to 18
Medicaid recipients by state law, federal law, or the rules of the program 19
Arkansas Medicaid Program ; 20
(9) Knowingly: 21
(A) Charges a Medicaid recipient or any person acting on 22
behalf of a Medicaid recipient money or other consideration for any good or 23
service provided to a patient Medicaid recipient under the program money or 24
other consideration Arkansas Medicaid Program at a rate in excess of the 25
rates established by the state Arkansas Medicaid Program ; or 26
(B) Charges, solicits, accepts, or receives, in addition 27
to any amount otherwise required to be paid under the program Arkansas 28
Medicaid Program, any gift, money, donation, or other consideration other 29
than a charitable, religious, or philanthropic contribution from an 30
organization or from a person unrelated to the pa tient: 31
(i) As a precondition of admitting a patient to a 32
hospital, nursing facility, or intermediate care facility for individuals 33
with intellectual disabilities; or 34
(ii) As a requirement for the patient's continued 35
stay in the hospital, nursing f acility, or intermediate care facility for 36 SB518
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individuals with intellectual disabilities when the cost of the services 1
provided therein at the hospital, nursing facility, or intermediate care 2
facility for individuals with intellectual disabilities to the patient is 3
paid for in whole or in part under the program Arkansas Medicaid Program ; or 4
(C) Charges a Medicaid recipient who is receiving goods or 5
services from a managed care organization or other form of capitated rate 6
program in any amount or method not authorized by the rules of the Arkansas 7
Medicaid Program or a contract with a Medicaid provider; 8
(10) Knowingly makes or causes to be made any material omission 9
or false statement, omission, or representation of a material fact in any 10
application for benefits or for a benefit or payment in violation of the 11
rules, regulations, and provider agreements issued by the program Arkansas 12
Medicaid Program or its fiscal agents; 13
(11) Knowingly: 14
(A) Participates, directly or indirectly, in the Arkansas 15
Medicaid Program after having pleaded guilty or nolo contendere to or been 16
found guilty of a charge of Medicaid fraud, theft of public benefits, or 17
abuse of adults as defined in the Arkansas Criminal Code, § 5 -1-101 et seq.; 18
or 19
(B) As a certified health pro vider enrolled in the program 20
pursuant to Title XIX of the Social Security Act or as the fiscal agent of 21
such a provider who employs, engages as an independent contractor, engages as 22
a consultant, or otherwise permits the participation in the business 23
activities of such a provider, any person who has pleaded guilty or nolo 24
contendere to or has been found guilty of a charge of Medicaid fraud, theft 25
of public benefits, or abuse of adults as defined in the Arkansas Criminal 26
Code, § 5-1-101 et seq.; 27
(12)(11) Knowingly submits any false documentation supporting a 28
claim or prior payment to the Office of Medicaid Inspector General or the 29
Medicaid Fraud Control Unit within the office of the Attorney General during 30
an investigation or audit or in response to a req uest for information or a 31
subpoena; 32
(13)(12) Knowingly makes or causes to be made, or induces or 33
seeks to induce, any material false statement to the Office of Medicaid 34
Inspector General or the Medicaid Fraud Control Unit within the office of the 35
Attorney General Attorney General's office during an investigation or audit 36 SB518
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or in response to a request for information or a subpoena; 1
(14)(13) Knowingly alters, forges, or utters a forged the 2
signature of a doctor or nurse on a prescription, or referral for healthcare 3
goods or services, or submits a forged prescription or referral for 4
healthcare goods or services in support of a claim for payment under the 5
program a finding of medical necessity for a Medicaid recipient ; 6
(15)(14) Knowingly places a false entry makes or causes to be 7
made any material false statement, omission, or representation of a fact in a 8
medical chart, or medical record, or record that indicates that healthcare 9
goods or services have been provided to a Medicaid recipient kn owing that the 10
healthcare goods or services were not provided; 11
(15)(A) Knowing or having discovered that an improper, 12
inadvertent, or accidental overpayment has been made by the Arkansas Medicaid 13
Program, a Medicaid provider fails to promptly report and repay the 14
overpayment. 15
(B) It is a defense to prosecution under this section that 16
the overpayment was reported and repayment was made within ninety (90) days 17
of discovery; 18
(16) Knowingly commits or permits another person or an 19
organization to commit unlawful Medicaid participation as defined by § 20 -77-20
901(14); 21
(16)(17) Knowingly presents, or causes to be presented, a false 22
or fraudulent claim for payment or approval to the program Arkansas Medicaid 23
Program; 24
(17)(18) Knowingly makes, uses, or causes to be made or used a 25
false record or statement that is material to a false or fraudulent claim to 26
the program Arkansas Medicaid Program ; 27
(18)(19) Knowingly: 28
(A) Makes, uses, or causes to be made or used a false 29
record or statement that is material to an obligation to pay or transmit 30
money or property to the program Arkansas Medicaid Program ; or 31
(B) Conceals or improperly avoids or decreases an 32
obligation to pay or transmit money or property to the program Arkansas 33
Medicaid Program; 34
(19) Conspires to commit a violation of this section; or 35
(20) Knowingly presents or causes to be presented a claim for a 36 SB518
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service required to be provided by a person with a particula r type of license 1
or credential while knowing that the individual who furnished the service was 2
not licensed or credentialed 3
(20) Purposely makes or causes to be made any material false 4
statement, omission, or representation of a fact in any unit rate d evelopment 5
process, actuarial process, reconciliation process, cost report, disclosure 6
form, or any other documentation required under the Arkansas Medicaid 7
Program; or 8
(21) Conspires to commit a violation of this section . 9
(b) Every person who directl y or indirectly controls another person 10
who is in violation of or liable under this subchapter and every partner, 11
officer, or director of a person who is in violation of or liable under this 12
subchapter shall be jointly and severally liable for any penaltie s assessed 13
and any monetary judgments awarded in any proceeding for civil enforcement of 14
the provisions of this subchapter if the persons to be held jointly and 15
severally liable knew or should have known of the existence of the facts by 16
reason of which the violation or liability exists. 17
18
20-77-903. Restitution, damages, and civil penalties. 19
(a)(1) It shall be unlawful for any person to commit any act 20
prohibited by § 20-77-902, and any person found to have committed any such 21
act or acts shall be liable to the State of Arkansas through the Attorney 22
General. 23
(2) In a case in which direct monetary loss does not exist or in 24
which it is difficult or impossible to determine the extent of the loss, the 25
Attorney General may elect to seek a civil penalty based o n the number of 26
fraudulent claims submitted or other violations of this subchapter . 27
(3) The state shall make an election and give notice in the 28
complaint whether the state is seeking a civil penalty of: 29
(A) Not less than five hundred dollars ($500) but not more 30
than ten thousand dollars ($10,000) for each false claim or other violation 31
of § 20-77-902; or 32
(B) Two (2) times the amount of overpayment and damages 33
that the state and the Arkansas Medicaid Program sustained because of the act 34
of the person false claim or other violation of § 20 -77-902. 35
(b) When a person or Medicaid provider discovers an employee or 36 SB518
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subcontractor working for the person or Medicaid provider has committed a 1
violation of this subchapter or a violation under the Medicaid Fr aud Act, § 2
5-55-101 et seq., the person or Medicaid provider can avoid any statutory 3
liability for civil penalties under subdivision (a)(3)(B) of this section may 4
be reduced by fifty percent (50%) if a person or Medicaid provider can 5
establish all of the f ollowing: 6
(1) The employer or contractor of the person or Medicaid 7
provider committing the violation of this subchapter furnished officials of 8
the Attorney General's office Medicaid Fraud Control Unit with all 9
information known to the person or Medicaid provider employer or contractor 10
about the violation within thirty (30) sixty (60) days after the date on 11
which the person or Medicaid provider employer or contractor first obtained 12
the information; and 13
(2) The employer or contractor of the person or Medicaid 14
provider committing the violation of this subchapter fully cooperated with 15
any Attorney General's investigation of the violation , and at the time the 16
person or Medicaid provider furnished the Attorney General with the 17
information about the violation:; and 18
(A)(3) No At the time of the report, an audit, 19
investigation, criminal prosecution, civil action, or administrative action 20
had not commenced under this subchapter with respect to the violation ; and 21
(B) The person or Medicaid pro vider did not have actual 22
knowledge of the existence of an investigation into the violation . 23
(c) If the reporting employer or contractor was negligent in its 24
supervision, without regarding to subdivision (b) of this section, the 25
employer or contractor ma y be required to pay a single penalty under 26
subdivision (a)(3)(A) of this section. 27
(c)(1)(d) In addition to any other penalties authorized herein under 28
this section, any person violating this subchapter shall also be liable to 29
the State of Arkansas for : 30
(1) Restitution of an overpayment by the Arkansas Medicaid 31
Program, which shall be paid to the Department of Human Services and 32
deposited into the Arkansas Medicaid Program Trust Fund for the loss to the 33
Arkansas Medicaid Program or its fiscal agents; a nd 34
(2) The the Attorney General's reasonable expenses, including 35
the cost of investigation, attorney's fees, court costs, witness fees, and 36 SB518
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deposition fees, which shall be paid to the Attorney General's office to be 1
used for future Medicaid investigatio ns and cases. 2
(2) Any cost or reimbursement ordered under this subsection 3
shall be paid to the office of the Attorney General to be used for future 4
Medicaid investigations and cases. 5
(d)(1)(e)(1) When the loss is to the Arkansas Medicaid Program or it s 6
fiscal agents, the entirety of any penalty obtained under subsection (a) of 7
this section less reimbursement of investigation and prosecution costs and 8
any reward that may be determined by the court pursuant to under this 9
subchapter shall be credited as s pecial revenues of the State of Arkansas and 10
deposited into the Arkansas Medicaid Program Trust Fund for the sole use of 11
the program Arkansas Medicaid Program . 12
(2) When the loss is to a managed care organization or similar 13
organization that is paid at a capitated rate, the Department of Human 14
Services may return all or a portion of the funds to a managed care 15
organization or any similar organization when permitted by the contract or 16
rules. 17
(e)(1)(f)(1) A person who engages or has engaged in any act des cribed 18
by § 20-77-902 may be enjoined in a court of competent jurisdiction in an 19
action brought by the Attorney General. 20
(2) An injunction described by subdivision (e)(1) (f)(1) of this 21
section shall be: 22
(A) Brought in the name of the state; and 23
(B) Granted if a case is clearly shown that the rights of 24
the state are being violated by the person and the state will would suffer 25
immediate and irreparable injury, loss, or damage pending a final judgment in 26
the action or that the acts or omissions of the person will tend to render a 27
final judgment ineffectual. 28
(f)(g) The court may make orders or judgments, including the 29
appointment of a receiver, as necessary to: 30
(1) Prevent any act described by § 20 -77-902 by any person; or 31
(2) Restore to the program any money or property, real or 32
personal, that may have been acquired by means of an act described by § 20 -33
77-902. 34
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SECTION 20. Arkansas Code § 20 -77-904, concerning investigations by 36 SB518
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the Attorney General within the Medicaid Fraud False Claims Act , is amended 1
to add an additional subsection to read as follows: 2
(f)(1) A Medicaid program provider shall cooperate in reviews, audits, 3
and investigations conducted by the Department of Human Services, Office of 4
the Medicaid Inspector General, and the Me dicaid Fraud Control Unit. 5
(2) A request for information includes formal and informal 6
requests made to a Medicaid provider by any attorney, auditor, officer, or 7
agent of the Office of the Medicaid Inspector General or the Medicaid Fraud 8
Control Unit. 9
10
SECTION 21. Arkansas Code § 20 -77-908(c) and (d), concerning the false 11
claims jurisdiction and the procedures within the Medicaid Fraud False Claims 12
Act, are amended to read as follows: 13
(c) If the offense referenced in subsection (a) of this section is not 14
discovered by the Medicaid Fraud Control Unit or an aggrieved party who has a 15
legal duty to refer the action to the Medicaid Fraud Control Unit during the 16
period stated in subsection (b) of this section, the State of Arkansas may 17
bring a civil action u nder this subchapter on behalf of the Arkansas Medicaid 18
Program within one (1) year after the offense is discovered by the parties. 19
(d) In any action brought pursuant to this subchapter, the State of 20
Arkansas shall be required to prove all essential elements of the cause of 21
action, including damages, by a preponderance of the evidence. 22
(d)(e)(1) A subpoena requiring the production of d ocuments or the 23
attendance of a witness at an interview, trial, or hearing conducted under 24
this section may be served by the Attorney General or any duly authorized law 25
enforcement officer in the State of Arkansas personally, telephonically, or 26
by registered or certified mail. 27
(2) In the case of service by registered or certified mail, the 28
return shall be accompanied by the return post office receipt of delivery of 29
the demand. 30
31
SECTION 22. Arkansas Code § 20 -77-910 is amended to read as follows: 32
20-77-910. Suspension of violators. 33
The Secretary of the Department of Human Services may suspend exclude a 34
Medicaid provider or revoke the provider agreement between an individual and 35
the Department of Human Services and the person in the event that the pers on 36 SB518
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is found guilty of or a Medicaid provider for violating the terms of this 1
subchapter. 2
3
SECTION 23. Arkansas Code § 20 -77-911(e)-(g), concerning rewards for 4
persons providing information regarding false Medicaid claims within the 5
Medicaid Fraud False C laims Act, is amended to read as follows: 6
(e)(1) The Attorney General may agree to a payment of up to ten 7
percent (10%) of the civil penalty total funds collected at the time of the 8
settlement not to exceed ten thousand dollars ($10,000) as a reward in any 9
settlement agreement under this section . 10
(2) The reward authorized under subdivision (e)(1) of this 11
section shall not reduce the restitution owed. 12
(f) A portion of restitution shall not be used as a reward. 13
(g)(1)(f)(1) The General Assembly finds that: 14
(A) Medicaid is a joint federal and state program, with 15
each claim normally involving both state and federal funds; 16
(B) The United States Congress has granted jurisdiction to 17
federal district courts over any actio n brought under the laws of any state 18
for the recovery of funds paid by a state or local government if the action 19
arises from the same transaction or occurrence as an action brought under 31 20
U.S.C. § 3730; 21
(C) The General Assembly does not intend to gr ant a 22
general right of action to private parties in state or federal court; and 23
(D) This section authorizes a limited right to bring false 24
claims and other ancillary state claims in federal court under 31 U.S.C. § 25
3730, to recover the Medicaid funds su bject to recovery under 31 U.S.C. § 26
3730 and associated penalties and costs; and 27
(D)(E) As federal law has granted federal courts with 28
jurisdiction to hear claims involving state funds associated with the 29
Arkansas Medicaid Program, the Attorney General shall be given notice and the 30
opportunity to intervene or to otherwise protect the interest of this state 31
any time a party brings an action attempting to recover funds from the 32
Arkansas Medicaid Program under 31 U.S.C. § 3730 . 33
(2)(A) Any party bringing a claim in federal court to recover 34
state funds associated with the Arkansas Medicaid Program or pursuant to an 35
assertion of a state claim under state law shall serve the Attorney General 36 SB518
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through the Medicaid Fraud Control Unit with any complaint, any oth er 1
pleadings, and the written disclosure of all material evidence and 2
information possessed by the person bringing the action. 3
(B) The complaint, pleadings, and disclosed information 4
shall be filed under seal pursuant to federal law and shall remain un der seal 5
until the seal is lifted in accordance with federal law. 6
(3)(A) The Attorney General may investigate the claim and, if 7
appropriate, intervene or otherwise litigate and pursue any claim brought in 8
any litigation in federal court to recover state funds associated with claims 9
paid by the Arkansas Medicaid Program in actions brought under the federal 10
False Claims Act, 31 U.S.C. § 3729 et seq. 11
(B) The Attorney General may also seek related damages, 12
civil penalties, and costs, and to litigate or s ettle said claims as 13
permitted or required under state and federal law. 14
(4)(A) If the state is properly served and given notice as 15
required in this subsection by a party bringing an action under the federal 16
False Claims Act to recover state funds of the Arkansas Medicaid Program , the 17
Attorney General may pay agree to an order or settlement that funds the 18
reward authorized under federal law , if the state's share of funds for the 19
Arkansas Medicaid Program is collected and the Arkansas Medicaid Program is 20
made whole from collected penalties . 21
(B) However, under no circumstances may any reward be paid 22
from the state funds owed to the Arkansas Medicaid Program. 23
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