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Kansas Senate Bill SB488

Kansas 2023-2024 Regular Session

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11 Session of 2024
22 SENATE BILL No. 488
33 By Committee on Public Health and Welfare
44 2-8
55 AN ACT concerning the attorney general; relating to the office of the
66 inspector general and the powers, duties and responsibilities thereof;
77 expanding the power of the inspector general to investigate and audit
88 all state cash, food and health assistance programs; amending K.S.A.
99 75-7427 and repealing the existing section.
1010 Be it enacted by the Legislature of the State of Kansas:
1111 Section 1. K.S.A. 75-7427 is hereby amended to read as follows: 75-
1212 7427. (a) As used in this section:
1313 (1) "Attorney general" means the attorney general of the state of
1414 Kansas, employees of the attorney general or authorized representatives of
1515 the attorney general.
1616 (2) "Benefit" means the receipt of money, goods, items, facilities,
1717 accommodations or anything of pecuniary value.
1818 (3) "Cash assistance" means assistance that is administered and
1919 provided by the secretary for children and families to individuals for a
2020 family's ongoing basic needs.
2121 (4) "Claim" means an electronic, electronic impulse, facsimile,
2222 magnetic, oral, telephonic or written communication that is utilized to
2323 identify any goods, service, item, facility or accommodation as
2424 reimbursable to the any state medicaid cash, food or health assistance
2525 program, or its the state's fiscal agents, the state mediKan program or the
2626 state children's health insurance program or which that states income or
2727 expense.
2828 (4)(5) "Client" means past or present beneficiaries or recipients of the
2929 any state medicaid cash, food or health assistance program, the state
3030 mediKan program or the state children's health insurance program.
3131 (5)(6) "Contractor" means any contractor, supplier, vendor or other
3232 person who, through a contract or other arrangement, has received, is to
3333 receive or is receiving public funds or in-kind contributions from the
3434 contracting agency as part of the any state medicaid cash, food or health
3535 assistance program, the state mediKan program or the state children's
3636 health insurance program, and shall include includes any subcontractor.
3737 (6)(7) "Contractor files" means those records of contractors which
3838 that relate to the any state medicaid cash, food or health assistance
3939 program, the state mediKan program or the state children's health
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7676 insurance program.
7777 (7)(8) "Fiscal agent" means any corporation, firm, individual,
7878 organization, partnership, professional association or other legal entity
7979 which that, through a contractual relationship with the state of Kansas,
8080 receives, processes and pays claims under the state medicaid program, the
8181 state mediKan program or the state children's health insurance program
8282 cash, food or medical assistance programs.
8383 (8)(9) "Food assistance" means assistance that is administered by the
8484 United States department of agriculture and provided by the secretary for
8585 children and families to individuals for eligible food products. 
8686 (10) "Health assistance" means the medicaid program, the state
8787 children's health insurance program and the state employee health
8888 benefits plan as established by K.S.A. 75-37,162, and amendments thereto.
8989 (11) "Health careHealthcare provider" means a health care healthcare
9090 provider as defined under K.S.A. 65-4921, and amendments thereto, who
9191 has applied to participate in, who currently participates in, or who has
9292 previously participated in the state medicaid program, the state mediKan
9393 program or the state children's health insurance health assistance
9494 program.
9595 (9)(12) "Managed care program" means a program which that
9696 provides coordination, direction and provision of health services to an
9797 identified group of individuals by providers, agencies or organizations.
9898 (10)(13) "Medicaid program" means the Kansas program of medical
9999 assistance for which federal or state moneys, or any combination thereof,
100100 are expended, or any successor federal or state, or both, health insurance
101101 program or waiver are granted thereunder.
102102 (11)(14) "Person" means any agency, association, corporation, firm,
103103 limited liability company, limited liability partnership, natural person,
104104 organization, partnership or other legal entity, the agents, employees,
105105 independent contractors, and subcontractors, thereof, and the legal
106106 successors thereto.
107107 (12)(15) "Provider" means a person who has applied to participate in,
108108 who currently participates in, who has previously participated in, who
109109 attempts or has attempted to participate in the state medicaid program, the
110110 state mediKan program or the state children's health insurance program,
111111 cash, food or health assistance programs by providing or claiming to have
112112 provided goods, services, items, facilities or accommodations.
113113 (13)(16) "Recipient" means an individual, either real or fictitious, in
114114 on whose behalf any person claimed or received any payment or payments
115115 from the state medicaid program cash, food or health assistance programs,
116116 or its the state's fiscal agent agents, the state mediKan program or the state
117117 children's health insurance program, whether or not any such individual
118118 was eligible for benefits under the state medicaid program, the state
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162162 mediKan program or the state children's health insurance program cash,
163163 food or health assistance programs.
164164 (14)(17) "Records" means all written documents and electronic or
165165 magnetic data, including, but not limited to, medical records, x-rays,
166166 professional, financial or business records relating to the treatment or care
167167 of any recipient;, goods, services, items, facilities or accommodations
168168 provided to any such recipient;, rates paid for such goods, services, items,
169169 facilities or accommodations;, and goods, services, items, facilities or
170170 accommodations provided to nonmedicaid recipients to verify rates or
171171 amounts of goods, services, items, facilities or accommodations provided
172172 to medicaid state cash, food or health assistance recipients, as well as any
173173 records that the state medicaid cash, food or health assistance program, or
174174 its the state's fiscal agents, the state mediKan program or the state
175175 children's health insurance program require providers to maintain.
176176 "Records" shall not include any report or record in any format which is
177177 made pursuant to K.S.A. 65-4922, 65-4923 or 65-4924, and amendments
178178 thereto, and which is privileged pursuant to K.S.A. 65-4915 or 65-4925,
179179 and amendments thereto.
180180 (15)(18) "State children's health insurance program" means the state
181181 children's health insurance program as provided in K.S.A. 38-2001 et seq.,
182182 and amendments thereto.
183183 (b) (1) There is hereby established within the office of the attorney
184184 general the office of inspector general. All budgeting, purchasing, related
185185 management functions and personnel of the office of inspector general
186186 shall be administered under the direction and supervision of the attorney
187187 general. The purpose of the office of inspector general is to establish a full-
188188 time program of audit, investigation and performance review to provide
189189 increased accountability, integrity and oversight of the state medicaid
190190 program cash, food or health assistance programs, the state mediKan
191191 program and the state children's health insurance program and to assist in
192192 improving agency and program operations and in deterring and identifying
193193 fraud, waste, abuse and other illegal acts. The office of inspector general
194194 shall be independent and free from political influence and in performing
195195 the duties of the office under this section shall conduct investigations,
196196 audits, evaluations, inspections and other reviews in accordance with
197197 professional standards that relate to the fields of investigation and auditing
198198 in government.
199199 (2) (A) The inspector general shall be appointed by the attorney
200200 general with the advice and consent of the senate and subject to
201201 confirmation by the senate as provided in K.S.A. 75-4315b, and
202202 amendments thereto. Except as provided in K.S.A. 46-2601, and
203203 amendments thereto, no person appointed to the position of inspector
204204 general shall exercise any power, duty or function of the inspector general
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248248 until confirmed by the senate. The inspector general shall be selected
249249 without regard to political affiliation and on the basis of integrity and
250250 capacity for effectively carrying out the duties of the office of inspector
251251 general. The inspector general shall possess demonstrated knowledge,
252252 skills, abilities and experience in conducting audits or investigations and
253253 shall be familiar with the programs subject to oversight by the office of
254254 inspector general.
255255 (B) No former or current executive or manager of any program or
256256 agency subject to oversight by the office of inspector general may be
257257 appointed inspector general within two years of that individual's period of
258258 service with such program or agency. A former or current inspector
259259 general shall not be employed as an executive or manager for any
260260 program or agency subject to the oversight by the office of the inspector
261261 general for a period of two years after such inspector general's period of
262262 service as the inspector general has concluded. The inspector general shall
263263 hold at time of appointment, or shall obtain within one year after
264264 appointment, certification as a certified inspector general from a national
265265 organization that provides training to inspectors general.
266266 (C) A person appointed to the position of inspector general shall serve
267267 for a term which that shall expire on January 15 of each year in which the
268268 whole senate is sworn in for a new term.
269269 (D) The inspector general shall be in the unclassified service and
270270 shall receive an annual salary in an amount equal to the annual salary paid
271271 by the state to a district court judge, except that such compensation may be
272272 increased but not diminished during the term of office of the inspector
273273 general. The inspector general may shall be removed from office prior to
274274 the expiration of the inspector general's term of office by the attorney
275275 general for cause. The inspector general shall exercise independent
276276 judgment in carrying out the duties of the office of inspector general under
277277 subsection (b). Appropriations for the office of inspector general shall be
278278 made to the attorney general by separate line item appropriations for the
279279 office of inspector general. The inspector general shall report to the
280280 attorney general.
281281 (E) Subject to subsection (b)(1), the inspector general shall have
282282 general managerial control over the office of the inspector general and
283283 shall establish the organization structure of the office as the inspector
284284 general deems appropriate to carry out the responsibilities and functions of
285285 the office.
286286 (3) Within the limits of appropriations therefor, the attorney general
287287 may hire such employees in the unclassified service as are necessary to
288288 administer the office of the inspector general. Such employees shall serve
289289 at the pleasure of the attorney general. Subject to appropriations and to
290290 subsection (b)(1), the inspector general may obtain the services of certified
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334334 public accountants, qualified management consultants, professional
335335 auditors, or other professionals necessary to independently perform the
336336 functions of the office.
337337 (c) (1) In accordance with the provisions of this section, the duties of
338338 the office of inspector general shall be to oversee, audit, investigate and
339339 make performance reviews of the any state medicaid cash, food or health
340340 assistance program, the state mediKan program and the state children's
341341 health insurance program or their successor programs.
342342 (2) In order to carry out the duties of the office, the inspector general
343343 shall conduct independent and ongoing evaluation of such programs or
344344 their successor programs, which. This oversight includes, but is not limited
345345 to, the following:
346346 (A) Investigation of fraud, waste, abuse and illegal acts directly
347347 relating to such programs.
348348 (B) Audits of state programs, contractors, vendors and health care
349349 healthcare providers related to ensuring that appropriate payments are
350350 made for services rendered and to the recovery of overpayments.
351351 (C) Investigations of fraud, waste, abuse or illegal acts committed by
352352 clients of the programs or by consumers of services of such programs.
353353 (D) Monitoring adherence to the terms of any contract between a
354354 state agency and an organization, if any, with which the state agency has
355355 entered into a contract to make claims payments.
356356 (3) Upon finding credible evidence of significant levels fraud, waste,
357357 abuse or other illegal acts, the inspector general shall report its the findings
358358 to the attorney general.
359359 (d) The inspector general shall have access to all pertinent
360360 information, confidential or otherwise, and to all personnel and facilities of
361361 a state agency, state vendors, contractors and health care healthcare
362362 providers and any federal, state or local governmental agency that are
363363 necessary to perform the duties of the office as directly related to such
364364 programs. Access to contractor or health care provider files shall be
365365 limited to those files necessary to verify the accuracy of the contractor's or
366366 health care provider's invoices or their compliance with the contract
367367 provisions or program requirements. No health care provider shall be
368368 compelled under the provisions of this section to provide individual
369369 medical records of patients who are not clients of the state medicaid
370370 program, the state mediKan program or the state children's health
371371 insurance program. State and local governmental agencies are authorized
372372 and directed to provide to the inspector general requested information,
373373 assistance or cooperation.
374374 (e) Except as otherwise provided in this section, the inspector general
375375 and all employees and former employees of the office of inspector general
376376 shall be subject to the same duty of confidentiality imposed by law on any
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420420 such person or agency with regard to any such information, and shall be
421421 subject to any civil or criminal penalties imposed by law for violations of
422422 such duty of confidentiality. The duty of confidentiality imposed on the
423423 inspector general and all employees and former employees of the office of
424424 inspector general shall be subject to the provisions of subsection (f), and
425425 the inspector general may furnish all such information to the attorney
426426 general, Kansas bureau of investigation or office of the United States
427427 attorney in Kansas pursuant to subsection (f). Upon receipt thereof, the
428428 attorney general, Kansas bureau of investigation or office of the United
429429 States attorney in Kansas and all assistants and all other employees and
430430 former employees of such offices shall be subject to the same duty of
431431 confidentiality with the exceptions that any such information may be
432432 disclosed in criminal or other proceedings which that may be instituted
433433 and prosecuted by the attorney general or the United States attorney in
434434 Kansas, and any such information furnished to the attorney general, the
435435 Kansas bureau of investigation or the United States attorney in Kansas
436436 under subsection (f) may be entered into evidence in any such
437437 proceedings.
438438 (f) All investigations conducted by the inspector general shall be
439439 conducted in a manner that ensures the preservation of evidence for use in
440440 criminal prosecutions, civil actions or agency administrative actions. If the
441441 inspector general determines that a possible criminal act or false claim
442442 relating to fraud in the provision or administration of such programs has
443443 been committed, the inspector general shall immediately notify the
444444 attorney general. If the inspector general determines that a possible
445445 criminal act has been committed within the jurisdiction of the office, the
446446 inspector general may request the special expertise of the Kansas bureau of
447447 investigation. The inspector general may present for prosecution the
448448 findings of any criminal investigation to the office of the attorney general,
449449 applicable district or county attorney or the office of the United States
450450 attorney in Kansas.
451451 (g) To carry out the duties as described in this section, the inspector
452452 general and the inspector general's designees shall have:
453453 (1) Original jurisdiction to investigate crimes related to public
454454 assistance, including those found in K.S.A. 21-5926 through 21-5932, 39-
455455 709, 39-720 and 75-726, and amendments thereto;
456456 (2) the power to issue, serve or cause to be served subpoenas or
457457 other process of service in aid of investigations;
458458 (3) the power to compel by subpoena the attendance and testimony of
459459 witnesses and the production of books, electronic records and papers as
460460 directly related to such state cash, food or health assistance programs;
461461 (4) the power to administer oaths and take sworn statements under
462462 penalty of perjury; and
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506506 (5) the power to serve and execute in any county search warrants
507507 that relate to investigations being executed by the office of the inspector
508508 general. Access to contractor files shall be limited to those files necessary
509509 to verify the accuracy of the contractor's invoices or its compliance with
510510 the contract provisions. No health care provider shall be compelled to
511511 provide individual medical records of patients who are not clients of such
512512 a program or programs.
513513 (h) The inspector general shall report all convictions, terminations
514514 and suspensions taken against vendors, contractors and health care
515515 healthcare providers to any agency contracting with or responsible for
516516 licensing or regulating those persons or entities. If the inspector general
517517 determines reasonable suspicion exists that an act relating to the violation
518518 of an agency licensure or regulatory standard has been committed by a
519519 vendor, contractor or health care healthcare provider who is licensed or
520520 regulated by an agency, the inspector general shall immediately notify
521521 such agency of the possible violation, unless such notification would
522522 jeopardize an ongoing criminal investigation.
523523 (i) The inspector general shall make annual reports, findings and
524524 recommendations regarding the office's investigations into reports of
525525 fraud, waste, abuse and illegal acts relating to any such programs to the
526526 appropriate state agency, the legislative post auditor, the committee on
527527 ways and means of the senate, the committee on appropriations of the
528528 house of representatives, the attorney general and the governor. These
529529 Such reports shall include, but not be limited to, the following information:
530530 (1) Aggregate provider billing and payment information;(2) The
531531 number and type of audits of such programs administered by the
532532 department of health and environment conducted and the dollar savings, if
533533 any, resulting from those audits;
534534 (3)(2) health carehealthcare provider sanctions, in the aggregate,
535535 including terminations and suspensions; and
536536 (4)(3) a detailed summary of the investigations undertaken in the
537537 previous fiscal year, which summaries that shall comply with all laws and
538538 rules and regulations regarding maintaining confidentiality in such
539539 programs.
540540 (j) Based upon the inspector general's findings under subsection (c),
541541 the inspector general may make such recommendations to the state agency
542542 or agencies which that administer such program or programs or the
543543 legislature for changes in law, rules and regulations, policy or procedures
544544 as the inspector general deems appropriate to carry out the provisions of
545545 law or to improve the efficiency of such programs. The inspector general
546546 shall not be required to obtain permission or approval from any other
547547 official or department prior to making any such recommendation.
548548 (k) (1) The inspector general shall make provision to solicit and
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592592 receive reports of fraud, waste, abuse and illegal acts in such programs
593593 from any person or persons who shall possess such information. The
594594 inspector general shall not disclose or make public the identity of any
595595 person or persons who provide such reports pursuant to this subsection
596596 unless such person or persons consent in writing to the disclosure of such
597597 person's identity. Disclosure of the identity of any person who makes a
598598 report pursuant to this subsection shall not be ordered as part of any
599599 administrative or judicial proceeding. Any information received by the
600600 inspector general from any person concerning fraud, waste, abuse or
601601 illegal acts in such programs shall be confidential and shall not be
602602 disclosed or made public, upon subpoena or otherwise, except such
603603 information may be disclosed if:
604604 (A) Release of the information would not result in the identification
605605 of the person who provided the information;
606606 (B) the person or persons who provided the information to be
607607 disclosed consent in writing prior to its disclosure;
608608 (C) the disclosure is necessary to protect the public health; or
609609 (D) the information to be disclosed is required in an administrative
610610 proceeding or court proceeding and appropriate provision has been made
611611 to allow disclosure of the information without disclosing to the public the
612612 identity of the person or persons who reported such information to the
613613 inspector general.
614614 (2) No person shall:
615615 (A) Prohibit any agent, employee, contractor or subcontractor from
616616 reporting any information under subsection (k) paragraph (1); or
617617 (B) require any such agent, employee, contractor or subcontractor to
618618 give notice to the person prior to making any such report.
619619 (3) Subsection (k)Paragraph (2) shall not be construed as:
620620 (A) Prohibiting an employer from requiring that an employee inform
621621 the employer as to legislative or auditing agency requests for information
622622 or the substance of testimony made, or to be made, by the employee to
623623 legislators or the auditing agency, as the case may be, on behalf of the
624624 employer;
625625 (B) permitting an employee to leave the employee's assigned work
626626 areas during normal work hours without following applicable rules and
627627 regulations and policies pertaining to leaves, unless the employee is
628628 requested by a legislator or legislative committee to appear before a
629629 legislative committee or by an auditing agency to appear at a meeting with
630630 officials of the auditing agency;
631631 (C) authorizing an employee to represent the employee's personal
632632 opinions as the opinions of the employer; or
633633 (D) prohibiting disciplinary action of an employee who discloses
634634 information which that:
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678678 (i) The employee knows to be false or which the employee discloses
679679 with reckless disregard for its truth or falsity;
680680 (ii) the employee knows to be exempt from required disclosure under
681681 the open records act; or
682682 (iii) is confidential or privileged under statute or court rule.
683683 (4) Any agent, employee, contractor or subcontractor who alleges that
684684 disciplinary action has been taken against such agent, employee, contractor
685685 or subcontractor in violation of this section may bring an action for any
686686 damages caused by such violation in district court within 90 days after the
687687 occurrence of the alleged violation.
688688 (5) Any disciplinary action taken against an employee of a state
689689 agency or firm as such terms are defined under K.S.A. 75-2973, and
690690 amendments thereto, for making a report under subsection (k) paragraph
691691 (1) shall be governed by the provisions of K.S.A. 75-2973, and
692692 amendments thereto.
693693 (l) The scope, timing and completion of any audit or investigation
694694 conducted by the inspector general shall be within the discretion of the
695695 inspector general. Any audit conducted by the inspector general's office
696696 shall adhere and comply with all provisions of generally accepted
697697 governmental auditing standards promulgated by the United States
698698 government accountability office.
699699 (m) Nothing in this section shall limit investigations by any state
700700 department or agency that may otherwise be required or permitted by law
701701 or that may be necessary in carrying out the duties and functions of such
702702 agency.
703703 (n) No contractor who has been convicted of fraud, waste, abuse or
704704 illegal acts or whose actions have caused the state of Kansas to pay fines
705705 to or reimburse the federal government more than $1,000,000 in the
706706 medicaid program shall be eligible for any state medicaid contracts
707707 subsequent to such conviction unless the attorney general finds that the
708708 contractor is the sole source for such contracts, is the least expensive
709709 source for the contract, has reimbursed the state of Kansas for all losses
710710 caused by the contractor, or the removal of the contractor would create a
711711 substantial loss of access for medicaid beneficiaries, in which case, after a
712712 specific finding to this effect, the prohibition of this subsection may be
713713 waived by the attorney general. Nothing in this section shall be construed
714714 to conflict with federal law, or to require or permit the use of federal funds
715715 where prohibited.
716716 (o) All information and records of the inspector general that are
717717 made, maintained, kept, obtained or received under any investigation or
718718 audit under this section shall be confidential, except as required or
719719 authorized pursuant to this section.
720720 Sec. 2. K.S.A. 75-7427 is hereby repealed.
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764764 Sec. 3. This act shall take effect and be in force from and after its
765765 publication in the statute book.
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