LCO 5443 1 of 7
General Assembly Raised Bill No. 7105
January Session, 2025
LCO No. 5443
Referred to Committee on HUMAN SERVICES
Introduced by:
(HS)
AN ACT CONCERNING FORENSIC AUDITS CONDUCTED BY THE
DEPARTMENT OF SOCIAL SERVICES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 17b-99a of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective from passage): 2
(a) (1) For purposes of this section, (A) "extrapolation" means the 3
determination of an unknown value by projecting the results of the 4
review of a sample to the universe from which the sample was drawn, 5
(B) "facility" means any facility described in this subsection and for 6
which rates are established pursuant to section 17b-340 [, and] or 17b-7
340d, (C) "universe" means a defined population of claims submitted by 8
a facility during a specific time period, and (D) "forensic audit" means 9
an examination of financial records for information or evidence that 10
may be used to determine compliance with applicable law. 11
(2) The Commissioner of Social Services shall conduct any audit, 12
including a forensic audit, of a licensed chronic and convalescent 13
nursing home, chronic disease hospital associated with a chronic and 14
convalescent nursing home, a rest home with nursing supervision, a 15 Raised Bill No. 7105
LCO 5443 2 of 7
licensed residential care home, as defined in section 19a-490, and a 16
residential facility for persons with intellectual disability which is 17
licensed pursuant to section 17a-227 and certified to participate in the 18
Medicaid program as an intermediate care facility for individuals with 19
intellectual disabilities in accordance with the provisions of this section. 20
(b) Not less than thirty days prior to the commencement of any such 21
audit, the commissioner shall provide written notification of the audit 22
to such facility, unless the commissioner makes a good -faith 23
determination that (1) the health or safety of a recipient of services is at 24
risk; or (2) the facility is engaging in vendor fraud under sections 53a-25
290 to 53a-296, inclusive. 26
(c) Any clerical error, including, but not limited to, recordkeeping, 27
typographical, scrivener's or computer error, discovered in a record or 28
document produced for any such audit, shall not of itself constitute a 29
wilful violation of the rules of a medical assistance program 30
administered by the Department of Social Services unless proof of intent 31
to commit fraud or otherwise violate program rules is established. In 32
determining which facilities shall be subject to audits, the Commissioner 33
of Social Services may give consideration to the history of a facility's 34
compliance in addition to other criteria used to select a facility for an 35
audit. 36
(d) A finding of overpayment or underpayment to such facility shall 37
not be based on extrapolation unless (1) there is a determination of 38
sustained or high level of payment error involving the facility, (2) 39
documented educational intervention has failed to correct the level of 40
payment error, or (3) the value of the claims in aggregate exceeds two 41
hundred thousand dollars on an annual basis. 42
(e) A facility, in complying with the requirements of any such audit, 43
shall be allowed not less than thirty days to provide documentation in 44
connection with any discrepancy discovered and brought to the 45
attention of such facility in the course of any such audit. 46
(f) The commissioner shall produce a preliminary written report 47 Raised Bill No. 7105
LCO 5443 3 of 7
concerning any audit conducted pursuant to this section and such 48
preliminary report shall be provided to the facility that was the subject 49
of the audit not later than sixty days after the conclusion of such audit. 50
(g) The commissioner shall, following the issuance of the preliminary 51
report pursuant to subsection (f) of this section, hold an exit conference 52
with any facility that was the subject of any audit pursuant to this 53
subsection for the purpose of discussing the preliminary report. Such 54
facility may present evidence at such exit conference refuting findings 55
in the preliminary report. 56
(h) The commissioner shall produce a final written report concerning 57
any audit conducted pursuant to this subsection. Such final written 58
report shall be provided to the facility that was the subject of the audit 59
not later than sixty days after the date of the exit conference conducted 60
pursuant to subsection (g) of this section, unless the commissioner and 61
the facility agree to a later date or there are other referrals or 62
investigations pending concerning the facility. 63
(i) Any facility aggrieved by a final report issued pursuant to 64
subsection (h) of this section may request a rehearing. A rehearing shall 65
be held by the commissioner or the commissioner's designee, provided 66
a detailed written description of all items of aggrievement in the final 67
report is filed by the facility not later than ninety days following the date 68
of written notice of the commissioner's decision. The rehearing shall be 69
held not later than thirty days following the date of filing of the detailed 70
written description of each specific item of aggrievement. The 71
commissioner shall issue a final decision not later than sixty days 72
following the close of evidence or the date on which final briefs are filed, 73
whichever occurs later. Any items not resolved at such rehearing to the 74
satisfaction of the facility or the commissioner shall be submitted to 75
binding arbitration by an arbitration board consisting of one member 76
appointed by the facility, one member appointed by the commissioner 77
and one member appointed by the Chief Court Administrator from 78
among the retired judges of the Superior Court, which retired judge 79
shall be compensated for his services on such board in the same manner 80 Raised Bill No. 7105
LCO 5443 4 of 7
as a state referee is compensated for his services under section 52-434. 81
The proceedings of the arbitration board and any decisions rendered by 82
such board shall be conducted in accordance with the provisions of the 83
Social Security Act, 42 USC 1396, as amended from time to time, and 84
chapter 54. 85
(j) The submission of any false or misleading fiscal information or 86
data to the commissioner shall be grounds for suspension of payments 87
by the state under sections 17b-239 to 17b-246, inclusive, and sections 88
17b-340 and 17b-343, in accordance with regulations adopted by the 89
commissioner. In addition, any person, including any corporation, who 90
knowingly makes or causes to be made any false or misleading 91
statement or who knowingly submits false or misleading fiscal 92
information or data on the forms approved by the commissioner shall 93
be guilty of a class D felony. 94
(k) The commissioner, or any agent authorized by the commissioner 95
to conduct any inquiry, investigation or hearing under the provisions of 96
this section, shall have power to administer oaths and take testimony 97
under oath relative to the matter of inquiry or investigation. At any 98
hearing ordered by the commissioner, the commissioner or such agent 99
having authority by law to issue such process may subpoena witnesses 100
and require the production of records, papers and documents pertinent 101
to such inquiry. If any person disobeys such process or, having 102
appeared in obedience thereto, refuses to answer any pertinent question 103
put to the person by the commissioner or the commissioner's authorized 104
agent or to produce any records and papers pursuant thereto, the 105
commissioner or the commissioner's agent may apply to the superior 106
court for the judicial district of Hartford or for the judicial district 107
wherein the person resides or wherein the business has been conducted, 108
or to any judge of such court if the same is not in session, setting forth 109
such disobedience to process or refusal to answer, and such court or 110
judge shall cite such person to appear before such court or judge to 111
answer such question or to produce such records and papers. 112
(l) The commissioner shall provide free training to facilities on the 113 Raised Bill No. 7105
LCO 5443 5 of 7
preparation of cost reports to avoid clerical errors and shall post 114
information on the department's Internet web site concerning the 115
auditing process and methods to avoid clerical errors. Not later than 116
April 1, 2015, the commissioner shall establish audit protocols to assist 117
facilities subject to audit pursuant to this section in developing 118
programs to improve compliance with Medicaid requirements under 119
state and federal laws and regulations, provided audit protocols may 120
not be relied upon to create a substantive or procedural right or benefit 121
enforceable at law or in equity by any person, including a corporation. 122
The commissioner shall establish and publish on the department's 123
Internet web site audit protocols for: (1) Licensed chronic and 124
convalescent nursing homes, (2) chronic disease hospitals associated 125
with chronic and convalescent nursing homes, (3) rest homes with 126
nursing supervision, (4) licensed residential care homes, as defined in 127
section 19a-490, and (5) residential facilities for persons with intellectual 128
disability that are licensed pursuant to section 17a-227 and certified to 129
participate in the Medicaid program as intermediate care facilities for 130
individuals with intellectual disabilities. The commissioner shall ensure 131
that the Department of Social Services, or any entity with which the 132
commissioner contracts to conduct an audit pursuant to this section, has 133
on staff or consults with, as needed, licensed health professionals with 134
experience in treatment, billing and coding procedures used by the 135
facilities being audited pursuant to this section. 136
(m) (1) Notwithstanding the provisions of this section, the 137
commissioner shall not conduct a forensic audit of a facility unless the 138
commissioner (A) provides the facility with an opportunity to meet with 139
Department of Social Services representatives and respond to any 140
financial concerns identified by the commissioner, and (B) makes a good 141
faith determination that a forensic audit of such facility is necessary to 142
evaluate such financial concerns. 143
(2) If a facility receives a written request by the department to 144
cooperate and assist with a forensic audit, such facility shall provide the 145
cooperation and assistance requested by the department not more than 146
ten business days after the date the facility receives such request and 147 Raised Bill No. 7105
LCO 5443 6 of 7
shall ensure that all facility personnel, financial consultants and 148
accountants fully cooperate and assist with a forensic audit as may be 149
necessary, except no facility shall be required to divert facility personnel 150
from residential care duties and responsibilities to cooperate and assist 151
with such forensic audit. Any facility that fails to provide such 152
cooperation and assistance shall be subject to a civil monetary penalty 153
not to exceed one thousand dollars per business day for each business 154
day that the facility fails to comply with such written request. A facility 155
may request a fair hearing on the assessment of any such civil monetary 156
penalty as an aggrieved person pursuant to section 17b-60. 157
(3) A facility may be liable to the Department of Social Services for 158
the costs of a forensic audit of a facility identified by the department as 159
experiencing a serious financial loss, including, but not limited to, any 160
reports or subsequent testimony related thereto, provided liability for 161
such costs shall not exceed one hundred thousand dollars. Such costs, 162
not to exceed one hundred thousand dollars, may be assessed against 163
any single facility or in the aggregate if more than one facility is subject 164
to a particular forensic audit. 165
(n) The Department of Social Services may recover (1) subject to the 166
provisions of subdivision (3) of subsection (m) of this section, the costs 167
of any forensic audit conducted pursuant to the provisions of this 168
section from a facility if such forensic audit identifies material issues 169
with a facility's internal financial management or the integrity of a 170
facility's financial statements, or (2) civil monetary penalties assessed 171
against a facility in accordance with subdivision (2) of subsection (m) of 172
this section through recoupment of such forensic audit costs or civil 173
monetary penalties against funds that would otherwise be paid to such 174
facility for services rendered to recipients of assistance under the 175
Medicaid program. 176
This act shall take effect as follows and shall amend the following
sections:
Section 1 from passage 17b-99a Raised Bill No. 7105
LCO 5443 7 of 7
HS Joint Favorable