Provides for the appointment of a special prosecutor for medical care fraud to investigate and prosecute fraud, waste and abuse in the health care industry to serve for a term of 10 years; provides authority to receive complaints and investigate; provides for toll free number to receive complaints and immunity from liability for persons making complaints; provides for an annual report to the governor, the temporary president of the senate, speaker of the assembly and attorney general.
- Jan 14, 2011: REFERRED TO FINANCE
BILL NUMBER:S1950 TITLE OF BILL: An act to amend the executive law, in relation to the appointment of a special prosecutor for criminal medical care fraud and providing for such prosecutor's functions, powers and duties PURPOSE OR GENERAL IDEA OF BILL: To combat criminal fraud, abuse and waste in the health care industry which contributes to the high costs of medical care. SUMMARY OF SPECIFIC PROVISIONS: The bill provides for the appointment of a special prosecutor for criminal medical care fraud by the Governor with the advice and consent of the Senate. The special prosecutor would serve for a term of ten years unless removed for cause. The special prosecutor shall have the authority to receive, investigate and prosecute complaints from the public or any other source concerning alleged abuses, suspected criminal frauds and other violations committed by a medical care provider, a recipient, third party payors or any other entity connected to such care or system. The prosecutor would have the power to receive, investigate and prosecute complaints of alleged failures to enforce state laws and regulations regarding the medical care provider and reimbursement system. Additionally, among the duties, the prosecutor is granted the authority to receive, investigate and prosecute complaints concerning pricing of medical supplies and materials, the provision of unnecessary tests and services including false diagnosis which may involve patient complicity, false billings and claims and allegations of solicitation or kickbacks for steering patients and for the utilization of products and/or services. To facilitate reporting of criminal fraud and abuse, the special prosecutor would establish a statewide toll free telephone number and reporters would be immune from lawsuits and their communication would, in most cases, remain confidential. The special prosecutor would be required to make an annual report to the Governor, Attorney General and the Legislature describing the work performed and outlining future goals. The prosecutor would work in concert with the insurance, health and education departments and the special prosecutor for Medicaid Fraud to effectuate the provisions of this act. Finally the special prosecutor is granted the authority to seek and recover damages equal to three times the amount fraudulently obtained. Amounts collected shall be deposited in the general fund to the credit of the office to offset the expenses of the office. EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER: The Executive Law is amended by adding a new section 62-a. JUSTIFICATION: Criminal fraud, abuse and waste in the health care industry cost the government, citizens, and insurers billions of dollars each year and cause incalculable damage to the quality of our health care system. Estimates of fraud, scams and abuse in the health care industry and reimbursement system indicate that the cost could reach between 50 and 80 billion dollars a year. As the GAO concluded, the size of the health care sector and the volume of " money involved make it an "attractive and relatively easy target for fraudulent and abusive providers." Additionally, fraudulent practices contribute to the skyrocketing cost of health care which remains the obstacle to accessible health care and affordable insurance. For every dollar wasted and defrauded, beneficiaries risk potential reductions in coverage, increased out-of-pocket expenses and increased premiums. Health care frauds, abuses and crimes committed by health care professionals and others strike at those least able to protect themselves. The sick, especially the terminally ill, elderly and the disabled seeking medical treatment are the unwitting victims of unnecessary tests, surgeries, x-rays, prescriptions, supplies and other services which not only defraud government and insurance carriers but also expose these patients to unwarranted dangers. In the current system, only a fraction of the fraud and abuse committed against the health care system is identified and prosecuted. The success of the Special Prosecutor for Medicaid Fraud in combating criminal fraud and white collar crimes justifies application of the strategy to the entire health care spectrum and reimbursement system in order to enhance our efforts in developing and instituting cost containment measures. PRIOR LEGISLATIVE HISTORY: 2003-2004 A.2820 - referred to governmental operations 2001-2002 A.517 - referred to governmental operations 1999-2000 A.508 - referred to governmental operations FISCAL IMPLICATIONS FOR STATE & LOCAL GOVERNMENTS: It is projected that restitution and damages secured by the Special Prosecutor will offset the expenses of the office. Moreover, the presence of the unit will deter outbreaks of large-scale provider fraud thereby contributing to systemic reform. EFFECTIVE DATE: The act shall take effect on the sixtieth day after it shall become law.
S T A T E O F N E W Y O R K ________________________________________________________________________ 1950 2011-2012 Regular Sessions I N SENATE January 14, 2011 ___________ Introduced by Sen. KRUGER -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the executive law, in relation to the appointment of a special prosecutor for criminal medical care fraud and providing for such prosecutor's functions, powers and duties THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The legislature hereby finds and declares that criminal fraud, waste and abuse in the health care indus- try in this state costs the government, taxpayers, and insurers billions of dollars each year and causes incalculable damage to the quality of our health care system. Estimates of criminal fraud, scams and abuse in the health-care industry indicate the cost to this state alone could reach between fifty and eighty billion dollars a year. Such criminal frauds, waste, abuses and crimes committed by health care professionals and others strike at those least able to protect themselves. The sick, especially the terminally ill, elderly and the infirmed seeking medical treatment are the unwitting victims of unneces- sary tests, surgeries, x-rays, prescriptions, supplies and other services which not only defraud government and insurance carriers but also expose these patients to unwarranted dangers. For every dollar wasted, beneficiaries risk potential reductions in program coverage, increased out-of-pocket expenses and increased health insurance premiums. The need to control health care costs which have spiraled out of control and to develop a system that facilitates the detection of fraud is of paramount importance and necessitates the enactment of this act. S 2. The executive law is amended by adding a new section 62-a to read as follows:
S 62-A. SPECIAL PROSECUTOR FOR CRIMINAL MEDICAL CARE FRAUD. 1. THE GOVERNOR, BY AND WITH THE ADVICE AND CONSENT OF THE SENATE AND ASSEMBLY, EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06661-01-1 S. 1950 2 SHALL WITHIN THIRTY DAYS OF THE EFFECTIVE DATE OF THIS SECTION APPOINT A SPECIAL PROSECUTOR FOR CRIMINAL MEDICAL CARE FRAUD. THE SPECIAL PROSECU- TOR SHALL SERVE FOR A TERM OF TEN YEARS UNLESS REMOVED BY THE GOVERNOR, AFTER NOTICE AND AN OPPORTUNITY FOR A HEARING, AND THEN ONLY FOR ONE OR MORE OF THE FOLLOWING REASONS: PERMANENT DISABILITY WHICH RENDERS THE SPECIAL PROSECUTOR INCAPABLE OF PERFORMING THE DUTIES OF HIS/HER OFFICE; GROSS INEFFICIENCY, TYPIFIED BY A LACK OF ABILITY TO PROPERLY CONDUCT INVESTIGATIONS AND PROSECUTIONS; NEGLECT OF DUTY, INCLUDING AN UNWILL- INGNESS TO PURSUE CLAIMS OF CRIMINAL FRAUD, ABUSE OR CORRUPTION; MALFEA- SANCE; CONVICTION OF A FELONY; OR CONDUCT INVOLVING MORAL TURPITUDE. A SPECIAL PROSECUTOR REMOVED FROM OFFICE UNDER THIS SUBDIVISION MAY NOT BE REAPPOINTED. SUCH SPECIAL PROSECUTOR SHALL RECEIVE AN ANNUAL SALARY TO BE FIXED BY LAW FROM WITHIN THE AMOUNTS APPROPRIATED THEREFOR. SUCH SPECIAL PROSECUTOR SHALL POSSESS ALL OF THE POWERS OF AN ASSISTANT ATTORNEY GENERAL OTHERWISE AUTHORIZED BY THIS ARTICLE PROVIDED, HOWEVER THAT SUCH SPECIAL PROSECUTOR SHALL DEVOTE HIS OR HER FULL TIME AND EFFORT EXCLUSIVELY TO INVESTIGATIONS AND PROSECUTIONS OF ACTIONS AND PROCEEDINGS RELATING TO CRIMINAL MEDICAL CARE FRAUD AND CRIMINAL FRAUD INVOLVING THE STATE'S MEDICAL CARE PROVIDER AND REIMBURSEMENT SYSTEM. 2. THE SPECIAL PROSECUTOR MAY APPOINT SUCH OTHER DEPUTIES, DIRECTORS, ASSISTANTS, AND OTHER EMPLOYEES TO SERVE AT THE SPECIAL PROSECUTOR'S PLEASURE AND DISCRETION AS MAY BE NEEDED FOR THE PERFORMANCE OF DUTIES AND MAY PRESCRIBE THEIR POWERS AND FIX THEIR COMPENSATION WITHIN THE AMOUNTS APPROPRIATED THEREFOR. 3. THE SPECIAL PROSECUTOR SHALL HAVE THE FOLLOWING SPECIAL FUNCTIONS, POWERS AND DUTIES:
(A) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS AS MORE PARTIC- ULARLY ENUMERATED IN PARAGRAPHS (B) THROUGH (N) OF THIS SUBDIVISION WHENEVER SUCH SPECIAL PROSECUTOR REASONABLY CONCLUDES THAT THE ACTIVITY ALLEGED MAY CONSTITUTE A CRIME. (B) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS FROM THE PUBLIC OR ANY OTHER SOURCE CONCERNING ALLEGED ABUSES, SUSPECTED CRIMINAL FRAUDS, AND OTHER VIOLATIONS OF THE MEDICAL CARE PROVIDER AND REIMBURSE- MENT SYSTEM WHICH SHALL BE DEEMED TO INCLUDE CRIMINAL FRAUD OR ABUSE BY A MEDICAL CARE PROVIDER, A MEDICAL CARE RECIPIENT, THIRD PARTY PAYORS OR ANY OTHER PERSON OR BUSINESS ENTITY CONNECTED THEREWITH. (C) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS OF ALLEGED FAIL- URES TO ENFORCE THE STATE'S LAWS AND PERTINENT RULES AND REGULATIONS REGARDING THE MEDICAL CARE PROVIDER AND REIMBURSEMENT SYSTEM, AND TO INVESTIGATE AND PROSECUTE THE SAME. (D) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS OF ALLEGED FAIL- URES OF LOCAL OFFICIALS AND EMPLOYEES AND PRIVATE INDIVIDUALS TO COMPLY WITH STATE LAWS AND RULES AND REGULATIONS REGARDING THE MEDICAL CARE PROVIDER AND REIMBURSEMENT SYSTEM AND TO INVESTIGATE AND PROSECUTE THE SAME. (E) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS FROM THE PUBLIC OR ANY OTHER SOURCE CONCERNING PRICING OF MEDICAL SUPPLIES AND MATERI- ALS. (F) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS FROM THE PUBLIC OR ANY OTHER SOURCE CONCERNING THE PROVISION OF UNNECESSARY MEDICAL TESTS AND SERVICES INCLUDING FALSE DIAGNOSIS WHICH MAY INVOLVE PATIENT COMPLICITY. (G) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS FROM THE PUBLIC OR ANY OTHER SOURCE CONCERNING ALLEGED FALSE BILLINGS AND CLAIMS. (H) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS FROM THE PUBLIC OR ANY OTHER SOURCE CONCERNING ALLEGED SOLICITATION FOR REMUNERATION S. 1950 3 DIRECTLY OR INDIRECTLY, OVERTLY OR COVERTLY, IN CASH OR IN KIND, IN RETURN FOR REFERRING AN INDIVIDUAL TO A HEALTH CARE PROVIDER FOR THE FURNISHING OR ARRANGING FOR THE FURNISHING OF ANY TEST, SERVICE, ITEM OR CARE OR IN RETURN FOR PURCHASING, LEASING, ORDERING OR ARRANGING FOR OR RECOMMENDING, PURCHASING, LEASING OR ORDERING ANY TEST, SERVICE, ITEM OR CARE. (I) TO RECEIVE, INVESTIGATE AND PROSECUTE COMPLAINTS FROM THE PUBLIC OR ANY OTHER SOURCE CONCERNING ALLEGED OFFERS OF REMUNERATION OR PAYMENTS DIRECTLY OR INDIRECTLY, OVERTLY OR COVERTLY, IN CASH OR IN KIND TO ANY PERSON TO INDUCE SUCH PERSON TO REFER AN INDIVIDUAL TO A HEALTH CARE PROVIDER FOR THE FURNISHING OR ARRANGING FOR THE FURNISHING OF ANY TEST, SERVICE, ITEM OR CARE OR TO PURCHASE, LEASE, ORDER OR ARRANGE FOR OR RECOMMEND PURCHASING, LEASING OR ORDERING ANY TEST, SERVICE, ITEM OR CARE. (J) TO CONDUCT ANY INQUIRY PERTINENT OR MATERIAL TO THE DISCHARGE OF THE FUNCTIONS, POWERS AND DUTIES IMPOSED BY LAW; AND THROUGH DESIGNATED MEMBERS OF THE STAFF, TO SUBPOENA AND ENFORCE THE ATTENDANCE OF WITNESSES, ADMINISTER OATHS, TAKE TESTIMONY AND COMPEL THE PRODUCTION OF SUCH BOOKS, PAPERS, RECORDS AND DOCUMENTS AS MAY BE RELEVANT TO ANY SUCH INQUIRY AND INVESTIGATION. (K) TO ESTABLISH A STATEWIDE TOLL FREE TELEPHONE HOTLINE FOR REPORTING OF ALLEGED CRIMINAL FRAUD AND ABUSE. (L) TO REQUEST FROM ANY DEPARTMENT, BOARD, BUREAU, COMMISSION OR OTHER AGENCY OF THE STATE AND ITS POLITICAL SUBDIVISIONS, AND THE SAME ARE AUTHORIZED AND DIRECTED TO PROVIDE, SUCH COOPERATION AND ASSISTANCE, SERVICES AND DATA AS WILL ENABLE HIM OR HER PROPERLY TO CARRY OUT HIS OR HER FUNCTIONS, POWERS AND DUTIES AND IN PARTICULAR TO WORK IN CONCERT WITH THE INSURANCE DEPARTMENT, THE HEALTH DEPARTMENT AND THE EDUCATION DEPARTMENT TO EFFECTUATE THE PROVISIONS OF THIS SECTION. (M) TO MAKE AN ANNUAL REPORT TO THE GOVERNOR, THE ATTORNEY GENERAL, THE TEMPORARY PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY CONCERNING SUCH WORK DURING THE PRECEDING YEAR, AND TO MAKE SUCH FURTHER INTERIM REPORTS TO THEM AS THEY OR ANY OF THEM SHALL DEEM ADVISABLE OR REQUIRE. (N) TO DEVELOP AND IMPLEMENT GUIDELINES AND PROCEDURES FOR THE CONDUCT OF INVESTIGATIONS AND TO DEVELOP TRAINING PROGRAMS FOR INVESTIGATORS AND OTHER MEMBERS OF THE STAFF. (O) TO DO ALL THINGS NECESSARY OR CONVENIENT TO CARRY OUT THE FUNC- TIONS, POWERS AND DUTIES SET FORTH IN THIS SECTION. 4. ANY ORGANIZATION, INSTITUTION, INSURANCE COMPANY OR OTHER PERSON WHO REPORTS OR PROVIDES INFORMATION TO THE SPECIAL PROSECUTOR IN GOOD FAITH, AND WITHOUT MALICE, SHALL NOT BE SUBJECT TO AN ACTION FOR CIVIL DAMAGES OR OTHER RELIEF AS THE RESULT OF SUCH COMMUNICATION. ANY SUCH COMMUNICATION SHALL REMAIN CONFIDENTIAL AND SHALL NOT BE DISCLOSED UNLESS CONSENTED TO OR UNLESS ORDERED BY THE COURT. 5. FOR ANY VIOLATION INVOLVING CRIMINAL MEDICAL CARE FRAUD, IN ADDI- TION TO CRIMINALLY PROSECUTING ANY PERSON SO CHARGED THE SPECIAL PROSE- CUTOR SHALL HAVE A CIVIL RIGHT OF ACTION TO RECOVER DAMAGES EQUAL TO THREE TIMES THE AMOUNT FRAUDULENTLY OBTAINED. AMOUNTS COLLECTED PURSUANT TO THE AUTHORITY OF THIS SUBDIVISION SHALL BE DEPOSITED IN THE GENERAL FUND TO THE CREDIT OF THE SPECIAL PROSECUTOR TO OFFSET THE EXPENSES OF THE OFFICE HEREIN CREATED. S 3. This act shall take effect on the sixtieth day after it shall have become a law.