HOUSE BILL No. 2217
AN ACT concerning the attorney general; relating to the office of the inspector general and
the powers, duties and responsibilities thereof; expanding the power of the inspector
general to investigate and audit all state cash, food and health assistance programs;
amending K.S.A. 75-7427 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 75-7427 is hereby amended to read as follows:
75-7427. (a) As used in this section:
(1) "Attorney general" means the attorney general of the state of
Kansas, employees of the attorney general or authorized representatives
of the attorney general.
(2) "Benefit" means the receipt of money, goods, items, facilities,
accommodations or anything of pecuniary value.
(3) "Cash assistance" means assistance that is administered and
provided by the secretary for children and families to individuals for a
family's ongoing basic needs.
(4) "Claim" means an electronic, electronic impulse, facsimile,
magnetic, oral, telephonic or written communication that is utilized to
identify any goods, service, item, facility or accommodation as
reimbursable to the any state medicaid cash, food or health assistance
program, or its the state's fiscal agents, the state mediKan program or
the state children's health insurance program or which that states
income or expense.
(4)(5) "Client" means past or present beneficiaries or recipients of
the any state medicaid cash, food or health assistance program, the
state mediKan program or the state children's health insurance program.
(5)(6) "Contractor" means any contractor, supplier, vendor or
other person who, through a contract or other arrangement, has
received, is to receive or is receiving public funds or in-kind
contributions from the contracting agency as part of the any state
medicaid cash, food or health assistance program, the state mediKan
program or the state children's health insurance program, and shall
include includes any subcontractor.
(6)(7) "Contractor files" means those records of contractors which
that relate to the any state medicaid cash, food or health assistance
program, the state mediKan program or the state children's health
insurance program.
(7)(8) "Fiscal agent" means any corporation, firm, individual,
organization, partnership, professional association or other legal entity
which that, through a contractual relationship with the state of Kansas,
receives, processes and pays claims under the state medicaid program,
the state mediKan program or the state children's health insurance
programcash, food or medical assistance programs.
(8)(9) "Food assistance" means assistance that is administered by
the United States department of agriculture and provided by the
secretary for children and families to individuals for eligible food
products.
(10) "Health assistance" means the medicaid program and the
state children's health insurance program.
(11) "Health careHealthcare provider" means a health care
healthcare provider as defined under K.S.A. 65-4921, and amendments
thereto, who has applied to participate in, who currently participates in,
or who has previously participated in the state medicaid program, the
state mediKan program or the state children's health insurance health
assistance program.
(9)(12) "Managed care program" means a program which that
provides coordination, direction and provision of health services to an
identified group of individuals by providers, agencies or organizations.
(10)(13) "Medicaid program" means the Kansas program of
medical assistance for which federal or state moneys, or any
combination thereof, are expended, or any successor federal or state, or
both, health insurance program or waiver granted thereunder.
(11)(14) "Person" means any agency, association, corporation,
firm, limited liability company, limited liability partnership, natural
person, organization, partnership or other legal entity, the agents, HOUSE BILL No. 2217—page 2
employees, independent contractors, and subcontractors, thereof, and
the legal successors thereto.
(12)(15) "Provider" means a person who has applied to participate
in, who currently participates in, who has previously participated in,
who attempts or has attempted to participate in the state medicaid
program, the state mediKan program or the state children's health
insurance program, cash, food or health assistance programs by
providing or claiming to have provided goods, services, items, facilities
or accommodations.
(13)(16) "Recipient" means an individual, either real or fictitious,
in on whose behalf any person claimed or received any payment or
payments from the state medicaid program cash, food or health
assistance programs, or its the state's fiscal agent agents, the state
mediKan program or the state children's health insurance program,
whether or not any such individual was eligible for benefits under the
state medicaid program, the state mediKan program or the state
children's health insurance program cash, food or health assistance
programs.
(14)(17) "Records" means all written documents and electronic or
magnetic data, including, but not limited to, medical records, x-rays,
professional, financial or business records relating to the treatment or
care of any recipient;, goods, services, items, facilities or
accommodations provided to any such recipient;, rates paid for such
goods, services, items, facilities or accommodations;, and goods,
services, items, facilities or accommodations provided to nonmedicaid
recipients to verify rates or amounts of goods, services, items, facilities
or accommodations provided to medicaid state cash, food or health
assistance recipients, as well as any records that the state medicaid
cash, food or health assistance program, or its the state's fiscal agents,
the state mediKan program or the state children's health insurance
program require providers to maintain. "Records" shall not include any
report or record in any format which is made pursuant to K.S.A. 65-
4922, 65-4923 or 65-4924, and amendments thereto, and which is
privileged pursuant to K.S.A. 65-4915 or 65-4925, and amendments
thereto.
(15)(18) "State children's health insurance program" means the
state children's health insurance program as provided in K.S.A. 38-
2001 et seq., and amendments thereto.
(b) (1) There is hereby established within the office of the attorney
general the office of inspector general. All budgeting, purchasing,
related management functions and personnel of the office of inspector
general shall be administered under the direction and supervision of the
attorney general. The purpose of the office of inspector general is to
establish a full-time program of audit, investigation and performance
review to provide increased accountability, integrity and oversight of
the state medicaid program cash, food or health assistance programs,
the state mediKan program and the state children's health insurance
program and to assist in improving agency and program operations and
in deterring and identifying fraud, waste, abuse and other illegal acts.
The office of inspector general shall be independent and free from
political influence and in performing the duties of the office under this
section shall conduct investigations, audits, evaluations, inspections
and other reviews in accordance with professional standards that relate
to the fields of investigation and auditing in government.
(2) (A) The inspector general shall be appointed by the attorney
general with the advice and consent of the senate and subject to
confirmation by the senate as provided in K.S.A. 75-4315b, and
amendments thereto. Except as provided in K.S.A. 46-2601, and
amendments thereto, no person appointed to the position of inspector
general shall exercise any power, duty or function of the inspector
general until confirmed by the senate. The inspector general shall be
selected without regard to political affiliation and on the basis of
integrity and capacity for effectively carrying out the duties of the
office of inspector general. The inspector general shall possess HOUSE BILL No. 2217—page 3
demonstrated knowledge, skills, abilities and experience in conducting
audits or investigations and shall be familiar with the programs subject
to oversight by the office of inspector general.
(B) No former or current executive or manager of any program or
agency subject to oversight by the office of inspector general may be
appointed inspector general within two years of that individual's period
of service with such program or agency. A former or current inspector
general shall not be employed as an executive or manager for any
program or agency subject to the oversight by the office of the
inspector general for a period of two years after such inspector
general's period of service as the inspector general has concluded. The
inspector general shall hold at time of appointment, or shall obtain
within one year after appointment, certification as a certified inspector
general from a national organization that provides training to inspectors
general.
(C) A person appointed to the position of inspector general shall
serve for a term which that shall expire on January 15 of each year in
which the whole senate is sworn in for a new term.
(D) The inspector general shall be in the unclassified service and
shall receive an annual salary in an amount equal to the annual salary
paid by the state to a district court judge, except that such compensation
may be increased but not diminished during the term of office of the
inspector general. The inspector general may shall be removed from
office prior to the expiration of the inspector general's term of office by
the attorney general for cause. The inspector general shall exercise
independent judgment in carrying out the duties of the office of
inspector general under subsection (b). Appropriations for the office of
inspector general shall be made to the attorney general by separate line
item appropriations for the office of inspector general. The inspector
general shall report to the attorney general.
(E) Subject to subsection (b)(1), the inspector general shall have
general managerial control over the office of the inspector general and
shall establish the organization structure of the office as the inspector
general deems appropriate to carry out the responsibilities and
functions of the office.
(3) Within the limits of appropriations therefor, and as provided
further, the attorney general may hire such employees in the
unclassified service as are necessary to administer the office of the
inspector general. Such employees shall serve at the pleasure of the
attorney general. Subject to appropriations and to subsection (b)(1), the
inspector general may obtain the services of certified public
accountants, qualified management consultants, professional auditors,
or other professionals necessary to independently perform the functions
of the office.
(c) (1) In accordance with the provisions of this section, the duties
of the office of inspector general shall be to oversee, audit, investigate
and make performance reviews of the any state medicaid cash, food or
health assistance program, the state mediKan program and the state
children's health insurance program or their successor programs.
(2) In order to carry out the duties of the office, the inspector
general shall conduct independent and ongoing evaluation of such
programs or their successor programs, which. This oversight includes,
but is not limited to, the following:
(A) Investigation of fraud, waste, abuse and illegal acts directly
relating to such programs.
(B) Audits of state programs, contractors, vendors and health care
healthcare providers related to ensuring that appropriate payments are
made for services rendered and to the recovery of overpayments.
(C) Investigations of fraud, waste, abuse or illegal acts committed
by clients of the programs or by consumers of services of such
programs.
(D) Monitoring adherence to the terms of any contract between a
state agency and an organization, if any, with which the state agency
has entered into a contract to make claims payments. HOUSE BILL No. 2217—page 4
(3) Upon finding credible evidence of significant levels of fraud,
waste, abuse or other illegal acts, the inspector general shall report its
the findings to the attorney general.
(d) (1) The inspector general shall have access to all pertinent
information, confidential or otherwise, and to all personnel and
facilities of a state agency, state vendors, contractors and health care
healthcare providers and any federal, state or local governmental
agency that are necessary to perform the duties of the office as directly
related to such programs. Access to contractor or health care healthcare
provider files shall be limited to those files necessary to verify the
accuracy of the contractor's or health care healthcare provider's
invoices or their compliance with the contract provisions or program
requirements. No health care healthcare provider shall be compelled
under the provisions of this section to provide individual medical
records of patients who are not clients of the a state medicaid health
assistance program, the state mediKan program or the state children's
health insurance program. State and local governmental agencies are
authorized and directed to provide to the inspector general requested
information, assistance or cooperation.
(e) Except as otherwise provided in this section, the inspector
general and all employees and former employees of the office of
inspector general shall be subject to the same duty of confidentiality
imposed by law on any such person or agency with regard to any such
information, and shall be subject to any civil or criminal penalties
imposed by law for violations of such duty of confidentiality. The duty
of confidentiality imposed on the inspector general and all employees
and former employees of the office of inspector general shall be subject
to the provisions of subsection (f), and the inspector general may
furnish all such information to the attorney general, Kansas bureau of
investigation or office of the United States attorney in Kansas pursuant
to subsection (f). Upon receipt thereof, the attorney general, Kansas
bureau of investigation or office of the United States attorney in Kansas
and all assistants and all other employees and former employees of
such offices shall be subject to the same duty of confidentiality with the
exceptions that any such information may be disclosed in criminal or
other proceedings which that may be instituted and prosecuted by the
attorney general or the United States attorney in Kansas, and any such
information furnished to the attorney general, the Kansas bureau of
investigation or the United States attorney in Kansas under subsection
(f) may be entered into evidence in any such proceedings.
(f) All investigations conducted by the inspector general shall be
conducted in a manner that ensures the preservation of evidence for use
in criminal prosecutions, civil actions or agency administrative actions.
If the inspector general determines that a possible criminal act or false
claim relating to fraud in the provision or administration of such
programs has been committed, the inspector general shall immediately
notify the attorney general. If the inspector general determines that a
possible criminal act has been committed within the jurisdiction of the
office, the inspector general may request the special expertise of the
Kansas bureau of investigation. The inspector general may present for
prosecution the findings of any criminal investigation to the office of
the attorney general, applicable district or county attorney or the office
of the United States attorney in Kansas.
(g) (1) To carry out the duties as described in this section, the
inspector general and the inspector general's designees shall have:
(A) Original jurisdiction to investigate crimes related to public
assistance, including those found in K.S.A. 21-5926 through 21-5932,
39-709, 39-720 and 75-726, and amendments thereto;
(B) the power to issue, serve or cause to be served subpoenas or
other process of service in aid of investigations;
(C) 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 such state cash, food or health
assistance programs; HOUSE BILL No. 2217—page 5
(D) the power to administer oaths and take sworn statements
under penalty of perjury;
(E) the power to serve and execute in any county search warrants
that relate to investigations being executed by the office of the
inspector general.
(2) Access to contractor files shall be limited to those files
necessary to verify the accuracy of the contractor's invoices or its
compliance with the contract provisions. No health care healthcare
provider shall be compelled to provide individual medical records of
patients who are not clients of such a program or programs.
(h) The inspector general shall report all convictions, terminations
and suspensions taken against vendors, contractors and health care
healthcare providers to any agency contracting with or responsible for
licensing or regulating those persons or entities. If the inspector general
determines 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 healthcare provider
who is licensed or regulated by an agency, the inspector general shall
immediately notify such agency of the possible violation, unless such
notification would jeopardize an ongoing criminal investigation.
(i) The inspector general shall make annual reports, findings and
recommendations regarding the office's investigations into reports of
fraud, waste, abuse and illegal acts relating to any such programs to the
appropriate state agency, the legislative post auditor, the committee on
ways and means of the senate, the committee on appropriations of the
house of representatives, the attorney general and the governor. These
Such reports shall include, but not be limited to, the following
information:
(1) Aggregate provider billing and payment information;(2) The
number and type of audits of such programs administered by the
department of health and environment conducted and the dollar
savings, if any, resulting from those audits;
(3)(2) health carehealthcare provider sanctions, in the aggregate,
including terminations and suspensions; and
(4)(3) a detailed summary of the investigations undertaken in the
previous fiscal year, which summaries that shall comply with all laws
and rules and regulations regarding maintaining confidentiality in such
programs.
(j) Based upon the inspector general's findings under subsection
(c), the inspector general may make such recommendations to the state
agency or agencies which that administer such program or programs or
the legislature for changes in law, rules and regulations, policy or
procedures as the inspector general deems appropriate to carry out the
provisions of law or to improve the efficiency of such programs. The
inspector general shall not be required to obtain permission or approval
from any other official or department prior to making any such
recommendation.
(k) (1) The inspector general shall make provision to solicit and
receive reports of fraud, waste, abuse and illegal acts in such programs
from any person or persons who shall possess such information. The
inspector general shall not disclose or make public the identity of any
person or persons who provide such reports pursuant to this subsection
unless such person or persons consent in writing to the disclosure of
such person's identity. Disclosure of the identity of any person who
makes a report pursuant to this subsection shall not be ordered as part
of any administrative or judicial proceeding. Any information received
by the inspector general from any person concerning fraud, waste,
abuse or illegal acts in such programs shall be confidential and shall not
be disclosed or made public, upon subpoena or otherwise, except such
information may be disclosed if:
(A) Release of the information would not result in the
identification of the person who provided the information;
(B) the person or persons who provided the information to be
disclosed consent in writing prior to its disclosure; HOUSE BILL No. 2217—page 6
(C) the disclosure is necessary to protect the public health; or
(D) the information to be disclosed is required in an administrative
proceeding or court proceeding and appropriate provision has been
made to allow disclosure of the information without disclosing to the
public the identity of the person or persons who reported such
information to the inspector general.
(2) No person shall:
(A) Prohibit any agent, employee, contractor or subcontractor
from reporting any information under subsection (k) paragraph (1); or
(B) require any such agent, employee, contractor or subcontractor
to give notice to the person prior to making any such report.
(3) Subsection (k)Paragraph (2) shall not be construed as:
(A) Prohibiting an employer from requiring that an employee
inform the employer as to legislative or auditing agency requests for
information or the substance of testimony made, or to be made, by the
employee to legislators or the auditing agency, as the case may be, on
behalf of the employer;
(B) permitting an employee to leave the employee's assigned work
areas during normal work hours without following applicable rules and
regulations and policies pertaining to leaves, unless the employee is
requested by a legislator or legislative committee to appear before a
legislative committee or by an auditing agency to appear at a meeting
with officials of the auditing agency;
(C) authorizing an employee to represent the employee's personal
opinions as the opinions of the employer; or
(D) prohibiting disciplinary action of an employee who discloses
information which that:
(i) The employee knows to be false or which the employee
discloses with reckless disregard for its truth or falsity;
(ii) the employee knows to be exempt from required disclosure
under the open records act; or
(iii) is confidential or privileged under statute or court rule.
(4) Any agent, employee, contractor or subcontractor who alleges
that disciplinary action has been taken against such agent, employee,
contractor or subcontractor in violation of this section may bring an
action for any damages caused by such violation in district court within
90 days after the occurrence of the alleged violation.
(5) Any disciplinary action taken against an employee of a state
agency or firm as such terms are defined under K.S.A. 75-2973, and
amendments thereto, for making a report under subsection (k)
paragraph (1) shall be governed by the provisions of K.S.A. 75-2973,
and amendments thereto.
(l) The scope, timing and completion of any audit or investigation
conducted by the inspector general shall be within the discretion of the
inspector general. Any audit conducted by the inspector general's office
shall adhere and comply with all provisions of generally accepted
governmental auditing standards promulgated by the United States
government accountability office.
(m) Nothing in this section shall limit investigations by any state
department or agency that may otherwise be required or permitted by
law or that may be necessary in carrying out the duties and functions of
such agency.
(n) No contractor who has been convicted of fraud, waste, abuse
or illegal acts or whose actions have caused the state of Kansas to pay
fines to or reimburse the federal government more than $1,000,000 in
the medicaid program shall be eligible for any state medicaid contracts
subsequent to such conviction unless the attorney general finds that the
contractor is the sole source for such contracts, is the least expensive
source for the contract, has reimbursed the state of Kansas for all losses
caused by the contractor, or the removal of the contractor would create
a substantial loss of access for medicaid beneficiaries, in which case,
after a specific finding to this effect, the prohibition of this subsection
may be waived by the attorney general. Nothing in this section shall be
construed to conflict with federal law, or to require or permit the use of HOUSE BILL No. 2217—page 7
federal funds where prohibited.
(o) All information and records of the inspector general that are
made, maintained, kept, obtained or received under any investigation or
audit under this section shall be confidential, except as required or
authorized pursuant to this section.
Sec. 2. K.S.A. 75-7427 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the HOUSE, and passed
that body
Speaker of the House.
Chief Clerk of the House.
Passed the SENATE ______________________________________________________________________________
President of the Senate.
Secretary of the Senate.
APPROVED __________________________________________________________________________________________________
Governor.