SESSION OF 2024
SUPPLEMENTAL NOTE ON SENATE BILL NO. 488
As Amended by Senate Committee of the Whole
Brief*
SB 488, as amended, would expand the scope of the
Inspector General within the Office of the Attorney General
(OAG) to include the audit, investigation, and performance
review of all state cash, food, and health assistance
programs. The bill would grant the Inspector General (IG) the
power to subpoena, administer oaths, and execute search
warrants. The bill would establish a limit of five additional full-
time employees (FTEs) in fiscal year (FY) 2025 that could be
hired to perform the expanded duties of the Office of the
Inspector General (OIG) as well as the maximum budget
allocation for the additional FTEs. The bill would also add and
amend several definitions and make technical, clarifying, and
conforming amendments.
The amendments made by the bill would expire on July
1, 2028.
Definitions
The bill would add the following definitions:
●“Cash assistance” would mean assistance that is
administered and provided by the Secretary for
Children and Families to individuals for a family’s
ongoing basic needs;
●“Food assistance” would mean assistance that is
administered by the U.S. Department of Agriculture
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org and provided by the Secretary for Children and
Families to individuals for eligible food products;
and
●“Health assistance” would mean the Medicaid
program, the state Children’s Health Insurance
Program (CHIP), and the State Employee Health
Benefits Plan.
The bill would amend the definitions for “claim,” “client,”
“contractor,” “contractor files,” “fiscal agent,” “provider,”
“recipient,” and “records” to replace references to “Medicaid,
the state MediKan program, or the state Children’s Health
Insurance Program” with “any cash, food or health assistance
program.” The definition of “healthcare provider” would be
amended to replace a reference to “Medicaid, the state
MediKan program, or the state Children’s Health Insurance
Program” with “health assistance program,” which would
include those three programs and the State Employee Health
Benefits Plan.
The bill would remove language exempting the following
from the definition of “records”: any report or record in any
format made pursuant to statutes pertaining to risk
management programs for healthcare facilities, healthcare
provider reporting requirements, and reports relating to
impaired providers, which are privileged pursuant to statutes
relating to healthcare provider peer reviews or confidential
and privileged reports.
Office of the Inspector General
Purpose
The bill would clarify the purpose of the OIG full-time
program of audit, investigation, and performance review to
provide increased accountability, integrity, and oversight of
any state cash, food, or health assistance programs and to
assist in improving agency and program operations and in
2- 488 deterring and identifying fraud, waste, abuse, and other illegal
acts. [Note: Current law provides only for a full-time program
to audit, investigate, and perform such reviews of the state
Medicaid program, the MediKan program, and CHIP.]
Prohibited Employment
The bill would prohibit a former or current IG from being
employed as an executive director or manager for any
program or agency subject to oversight by the OIG for two
years after such IG’s period of service as the IG has
concluded.
Removal from Office
The bill would require the Attorney General (AG) to
remove the IG from office prior to the expiration of the IG’s
term for cause. [Note: Current law provides the AG may
remove an IG for cause.]
Office of the Inspector General Staffing and Expenditure
Limitations
Within appropriations and as further provided, the bill
would allow the AG to hire such employees in the unclassified
services as are necessary to administer the OIG. The AG
would be prohibited from authorizing more than five additional
FTEs in FY 2025 in the OIG to perform the expanded duties
established in the bill. The bill would prohibit expenditures in
FY 2025 for salaries and wages and other operating
expenditures for such additional employees from exceeding
$775,456.
Duties of Inspector General
The bill would expand the duties of the IG to require the
oversight, audit, investigation, and performance reviews of
any state cash, food, or health assistance program. [Note:
3- 488 Current law limits such duties to state Medicaid, MediKan,
and CHIP programs.]
Reporting to Attorney General
Upon finding credible evidence of “significant levels” of
fraud, waste, abuse, or other illegal acts, the bill would
require the IG to report the findings to the AG. [Note: Current
law requires reporting upon finding credible evidence and
does not reference “significant levels.”]
Cases for Prosecution
Current law allows the IG to present for prosecution the
findings of any criminal investigation to the AG or the Office of
the U.S. Attorney in Kansas. The bill would allow the IG to
also present such findings for prosecution to any applicable
district or county attorneys.
Powers of the Inspector General and Designees
The bill would grant the IG, and the IG’s designees, the
following additional powers:
●Original jurisdiction to investigate crimes related to
public assistance, including:
○Violations of the Kansas Medicaid Fraud
Control Act;
○Fraud pertaining to eligibility for cash, food
assistance, child care subsidy, and medical
assistance;
○Fraudulent acts involving assistance; and
○Violations for which the AG is allowed access
to records held by a provider;
4- 488 ●The power to issue, serve, or cause to be served
subpoenas or other process of service in the aid of
investigations;
●The power to compel by subpoena the attendance
and testimony of witnesses and the production of
books, electronic records, and papers as directly
related to state cash, food, and health assistance
programs;
●The power to administer oaths and take sworn
statements under penalty of perjury;
●The power to serve and execute in any county
search warrants that relate to investigations being
executed by the OIG; and
●Access to contractor files would be limited to those
files necessary to verify the accuracy of the
contractors’ invoices or its compliance with contract
provisions. No health care provider would be
compelled to provide individual medical records of
patients who are not clients of such a program or
programs. [Note: This is current law that would be
re-designated as one of the powers granted to the
IG and the IG’s designee.]
Reporting to Health Care Provider Regulatory Agencies
When the IG determines that reasonable suspicion
exists that an act relating to the violation of an agency
licensure or regulatory standard has been committed by a
vendor, contractor, or health care provider who is licensed or
regulated by an agency, current law requires the IG to
immediately notify such agency of the possible violation. The
bill would add an exception to the reporting requirement if
such notification would jeopardize an ongoing criminal
investigation.
5- 488 Content of Annual Inspector General Report
The bill would require the type of audit conducted to be
included in the IG’s annual report. The bill would remove the
requirement for the annual report to include aggregate
provider billing and payment information as well as the
reference to the programs administered by the Kansas
Department of Health and Environment.
Sunset Provision
The amendments made by the bill would expire on July
1, 2028.
Background
The bill was introduced by the Senate Committee on
Public Health and Welfare at the request of a representative
of the OAG.
Senate Committee on Public Health and Welfare
In the Senate Committee hearing, proponent testimony
was provided by Medicaid Inspector General and Opportunity
Solutions Project. The Medicaid Inspector General stated the
bill would expand the existing responsibilities of the Office of
Medicaid Inspector General to investigate fraud, waste,
abuse, and other illegal acts involving Medicaid to allow for
the investigation of all Kansas cash, food, and health
assistance programs to ensure taxpayer dollars are properly
spent and fraud, waste, and abuse are deterred. The
representative of Opportunity Solutions Project stated the bill
would enhance transparency and accountability within the
state’s welfare assistance programs and provide a proactive
approach to combating fraud, protecting taxpayer dollars, and
ensuring assistance programs remain accessible to those
who need support.
6- 488 Written-only opponent testimony was provided by
representatives of Kansas Action for Children and Kansas
Appleseed Center for Law and Justice.
No other testimony was provided.
The Senate Committee amended the bill to:
●Limit the number of unclassified employees for the
OIG that the AG may authorize in FY 2025 to five
FTEs and set a maximum budget for FY 2025;
●Add a sunset provision to the language amended
by the bill;
●Revert to language in current law that:
○Limits the IG’s access to contractor or
healthcare provider files to those files
necessary to verify the accuracy of the
contractor’s or healthcare provider’s invoices
or their compliance with the contract
provisions or program requirements;
○Prohibits compelling a health care provider to
provide individual medical records of patients
who are not clients of the state Medicaid
program, the MediKan program, or CHIP but
replaces these listed programs with “health
assistance program,” which, as defined,
would also include the State Employee Health
Plan; and
○With regard to the powers granted to the IG
and the IG’s designees to carry out the duties
of the OIG:
- Limits access to contractor files to those files
necessary to verify the accuracy of the
contractor’s invoices or its compliance with
the contract provisions; and
7- 488 - Prohibits compelling a health care provider
to provide individual medical records of
patients who are not clients of the programs
under investigation.
Senate Committee of the Whole
The Senate Committee of the Whole amended the bill to
clarify that the additional FTEs that could be hired to perform
the expanded duties of the OIG in FY 2025 are in addition to
current allocated FTEs. The amendment also clarified that the
limit on expenditures for FY 2025 noted in the bill applied to
the salaries and wages and other operating expenses for
such additional employees.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the OAG states
enactment of the bill would increase expenditures by $3.0
million from the State General Fund (SGF) for FY 2025 and
$2.4 million from the SGF for FY 2026 and beyond. These
expenditures would include hiring of an additional 20.0 FTE
positions along with other operating expenditures. The on-
going costs would include $1.9 million for salaries and fringe
benefits for 2.0 FTE IG positions, 6.0 FTE Special Agent
positions, 3.0 FTE Analyst positions, 5.0 FTE Auditor
positions, 1.0 FTE Legal Assistant position, and 3.0 FTE
Investigator positions. Other ongoing costs of $482,300 would
include certain contractual services and supplies. One-time
costs of $577,288 would include computers, media
equipment, furniture, training, and other commodities.
The additional full-time personnel would be needed to
perform the expected additional audits, reviews, and
investigations of fraud, waste, abuse, and other illegal acts.
The additional staff would allow the OIG to conduct at least
seven additional audits, four reviews, and 120 investigations
per year. The increased funding would be offset by the fraud
8- 488 that is prevented and the identification of wasteful spending,
overpayments, and program savings.
The Kansas Department for Aging and Disability
Services and the Department for Children and Families (DCF)
indicate enactment of the bill would have no fiscal effect on
the respective agencies. Currently, DCF has staff to
investigate cash and food assistance cases. It is assumed
these activities would continue within DCF with the current
staff.
Any fiscal effect associated with the bill is not reflected
in The FY 2025 Governor’s Budget Report.
Office of Inspector General; Inspector General; Attorney General; powers, duties,
and responsibilities; investigations and audits; cash assistance; food assistance;
medical assistance; fraud; sunset provision; limitations on employees and
expenditures
9- 488