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SF 3287

1st Engrossment - 91st Legislature (2019 - 2020) Posted on 02/27/2020 03:01pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to human services; establishing prohibition against and administrative
penalties for remuneration involving human services programs; amending
Minnesota Statutes 2018, section 245E.01, subdivision 8; Minnesota Statutes 2019
Supplement, sections 256.046, subdivisions 1, 3; 256B.064, subdivision 1a;
proposing coding for new law in Minnesota Statutes, chapter 256.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2018, section 245E.01, subdivision 8, is amended to read:


Subd. 8.

Financial misconduct or misconduct.

"Financial misconduct" or "misconduct"
means an entity's or individual's acts or omissions that result in fraud and abuse or error
against the Department of Human Services. Financial misconduct includesnew text begin: (1)new text end acting as a
recruiter offering conditional employment on behalf of a provider that has received funds
from the child care assistance programnew text begin; and (2) committing an act or acts that meet the
definition of violations listed in section 256.044, subdivision 3
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2020.
new text end

Sec. 2.

new text begin [256.044] HUMAN SERVICES PROGRAM REMUNERATIONS
PROHIBITED; ADMINISTRATIVE PENALTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) "Federal health care program" has the meaning provided
in United States Code, title 42, section 1320a-7b(f).
new text end

new text begin (b) "Remuneration" has the meaning provided in United States Code, title 42, section
1320a-7a(i)(6).
new text end

new text begin Subd. 2. new text end

new text begin Prohibited remunerations; medical assistance program. new text end

new text begin (a) A person commits
a violation that shall constitute grounds for sanctions under section 256B.064, subdivision
1a, if the person solicits or receives any remuneration, including any kickback, bribe, or
rebate, directly or indirectly, overtly or covertly, in cash or in kind, from another person in
return for:
new text end

new text begin (1) applying for, receiving, or arranging for or referring another person to apply for or
receive any item or service for which payment may be made in whole or in part under a
federal health care program; or
new text end

new text begin (2) purchasing, leasing, ordering, or arranging for or inducing the purchasing, leasing,
or ordering of any good, facility, service, or item for which payment may be made in whole
or in part under a federal health care program.
new text end

new text begin (b) A person commits a violation that shall constitute grounds for sanctions under section
256B.064, subdivision 1a, if the person offers or pays any remuneration, including any
kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind, to
another person to induce that person to:
new text end

new text begin (1) apply for, receive, or arrange for or refer a person to apply for or receive any item
or service for which payment may be made in whole or in part under a federal health care
program; or
new text end

new text begin (2) purchase, lease, order, or arrange for or induce the purchasing, leasing, or ordering
of any good, facility, service, or item for which payment may be made in whole or in part
under a federal health care program.
new text end

new text begin (c) This subdivision does not apply to remuneration exempted under United States Code,
title 42, section 1320a-7b(b)(3), payment practices listed in Code of Federal Regulations,
title 42, section 1001.952, or the activities described in section 62J.23, subdivision 2,
paragraphs (b) to (d), and subdivision 4.
new text end

new text begin Subd. 3. new text end

new text begin Prohibited remunerations; child care assistance program. new text end

new text begin (a) A person
commits a violation that shall constitute grounds for disqualification or sanctions under
chapter 245E, if the person solicits or receives any remuneration, including any kickback,
bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind, from another
person in return for:
new text end

new text begin (1) applying for, receiving, or arranging for or referring another person to apply for or
receive any item or service for which payment may be made in whole or in part under
chapter 119B; or
new text end

new text begin (2) purchasing, leasing, ordering, or arranging for or inducing the purchasing, leasing,
or ordering of any good, facility, service, or item for which payment may be made in whole
or in part under chapter 119B.
new text end

new text begin (b) A person commits a violation that shall constitute grounds for disqualification or
sanctions under chapter 245E, if the person offers or pays any remuneration, including any
kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind, to
another person to induce that person to:
new text end

new text begin (1) apply for, receive, or arrange for or refer a person to apply for or receive any item
or service for which payment may be made in whole or in part under chapter 119B; or
new text end

new text begin (2) purchase, lease, order, or arrange for or induce the purchasing, leasing, or ordering
of any good, facility, service, or item for which payment may be made in whole or in part
under chapter 119B.
new text end

new text begin (c) This subdivision does not apply to any amount paid by an employer to a bona fide
employee for providing covered items or services under chapter 119B while acting in the
course and scope of employment.
new text end

new text begin (d) This subdivision does not apply to marketing or promotional offerings that directly
benefit an eligible individual's child for whom the child care provider is providing child
care services.
new text end

new text begin Subd. 4. new text end

new text begin Intentional program violation. new text end

new text begin A violation under this section shall constitute
an intentional program violation subject to an administrative disqualification hearing pursuant
to section 256.046.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2020.
new text end

Sec. 3.

Minnesota Statutes 2019 Supplement, section 256.046, subdivision 1, is amended
to read:


Subdivision 1.

Hearing authority.

A local agency must initiate an administrative fraud
disqualification hearing for individuals accused of wrongfully obtaining assistance or
intentional program violations, new text beginincluding violations under section 256.044, new text endin lieu of a
criminal action when it has not been pursued, in the Minnesota family investment program
and any affiliated program to include the diversionary work program and the work
participation cash benefit program, child care assistance programs, general assistance, family
general assistance program formerly codified in section 256D.05, subdivision 1, clause (15),
Minnesota supplemental aid, food stamp programs, MinnesotaCare for adults without
children, and upon federal approval, all categories of medical assistance and remaining
categories of MinnesotaCare except for children through age 18. The Department of Human
Services, in lieu of a local agency, may initiate an administrative fraud disqualification
hearing when the state agency is directly responsible for administration or investigation of
the program for which benefits were wrongfully obtained. The hearing is subject to the
requirements of sections 256.045 and 256.0451 and the requirements in Code of Federal
Regulations, title 7, section 273.16.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2020.
new text end

Sec. 4.

Minnesota Statutes 2019 Supplement, section 256.046, subdivision 3, is amended
to read:


Subd. 3.

Administrative disqualification of child care providers caring for children
receiving child care assistance.

(a) The department or local agency shall pursue an
administrative disqualification, if the child care provider is accused of committing an
intentional program violation, in lieu of a criminal action when it has not been pursued.
Intentional program violations include intentionally making false or misleading statements;
intentionally misrepresenting, concealing, or withholding facts; deleted text beginanddeleted text end repeatedly and
intentionally violating program regulations under chapters 119B and 245Enew text begin; and violations
under section 256.044, subdivision 3
new text end. Intent may be proven by demonstrating a pattern of
conduct that violates program rules under chapters 119B and 245E.

(b) To initiate an administrative disqualification, a local agency or the commissioner
must mail written notice by certified mail to the provider against whom the action is being
taken. Unless otherwise specified under chapter 119B or 245E or Minnesota Rules, chapter
3400, a local agency or the commissioner must mail the written notice at least 15 calendar
days before the adverse action's effective date. The notice shall state (1) the factual basis
for the agency's determination, (2) the action the agency intends to take, (3) the dollar amount
of the monetary recovery or recoupment, if known, and (4) the provider's right to appeal
the agency's proposed action.

(c) The provider may appeal an administrative disqualification by submitting a written
request to the Department of Human Services, Appeals Division. A provider's request must
be received by the Appeals Division no later than 30 days after the date a local agency or
the commissioner mails the notice.

(d) The provider's appeal request must contain the following:

(1) each disputed item, the reason for the dispute, and, if applicable, an estimate of the
dollar amount involved for each disputed item;

(2) the computation the provider believes to be correct, if applicable;

(3) the statute or rule relied on for each disputed item; and

(4) the name, address, and telephone number of the person at the provider's place of
business with whom contact may be made regarding the appeal.

(e) On appeal, the issuing agency bears the burden of proof to demonstrate by a
preponderance of the evidence that the provider committed an intentional program violation.

(f) The hearing is subject to the requirements of sections 256.045 and 256.0451. The
human services judge may combine a fair hearing and administrative disqualification hearing
into a single hearing if the factual issues arise out of the same or related circumstances and
the provider receives prior notice that the hearings will be combined.

(g) A provider found to have committed an intentional program violation and is
administratively disqualified shall be disqualified, for a period of three years for the first
offense and permanently for any subsequent offense, from receiving any payments from
any child care program under chapter 119B.

(h) Unless a timely and proper appeal made under this section is received by the
department, the administrative determination of the department is final and binding.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2020.
new text end

Sec. 5.

Minnesota Statutes 2019 Supplement, section 256B.064, subdivision 1a, is amended
to read:


Subd. 1a.

Grounds for sanctions against vendors.

(a) The commissioner may impose
sanctions against a vendor of medical care for any of the following: (1) fraud, theft, or abuse
in connection with the provision of medical care to recipients of public assistance; (2) a
pattern of presentment of false or duplicate claims or claims for services not medically
necessary; (3) a pattern of making false statements of material facts for the purpose of
obtaining greater compensation than that to which the vendor is legally entitled; (4)
suspension or termination as a Medicare vendor; (5) refusal to grant the state agency access
during regular business hours to examine all records necessary to disclose the extent of
services provided to program recipients and appropriateness of claims for payment; (6)
failure to repay an overpayment or a fine finally established under this section; (7) failure
to correct errors in the maintenance of health service or financial records for which a fine
was imposed or after issuance of a warning by the commissioner; deleted text beginanddeleted text end (8) any reason for
which a vendor could be excluded from participation in the Medicare program under section
1128, 1128A, or 1866(b)(2) of the Social Security Actnew text begin; and (9) violations listed under section
256.044, subdivision 2
new text end.

(b) The commissioner may impose sanctions against a pharmacy provider for failure to
respond to a cost of dispensing survey under section 256B.0625, subdivision 13e, paragraph
(h).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2020.
new text end