98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB1330

 

Introduced 2/5/2013, by Sen. Kwame Raoul

 

SYNOPSIS AS INTRODUCED:
 
305 ILCS 5/12-4.25  from Ch. 23, par. 12-4.25

    Amends the Administration Article of the Illinois Public Aid Code. Establishes civil penalties ranging from $10,000 to $50,000 for any person (including a vendor, organization, agency, or other entity, but excluding a recipient) who: knowingly presents or causes to be presented a fraudulent claim for payment under the State's medical assistance program; knowingly gives or causes to be given to any person, with respect to coverage for inpatient hospital services under the medical assistance program, information that he or she knows or should know is false or misleading; arranges or contracts (by employment or otherwise) with an individual or entity that the person knows or should know is excluded from participation in a federal or state health care program, including, but not limited to, the medical assistance program, for the provision of items or services for which payment may be made under such a program; or commits other specified fraudulent acts. Provides that the Director of Healthcare and Family Services may make a determination to terminate, suspend, bar, or exclude the person from participation in the medical assistance program, but not before granting the affected individual, entity, or vendor an opportunity for a hearing after reasonable notice. Provides that a final order, decision, or other determination made by the Director is subject to review in accordance with the Administrative Review Law. Removes language allowing the Department to recover interest on the amount of an overpayment. Makes other changes. Effective immediately.


LRB098 02585 KTG 32689 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1330LRB098 02585 KTG 32689 b

1    AN ACT concerning public aid.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Aid Code is amended by
5changing Section 12-4.25 as follows:
 
6    (305 ILCS 5/12-4.25)  (from Ch. 23, par. 12-4.25)
7    Sec. 12-4.25. Medical assistance program; vendor
8participation.
9    (A) The Illinois Department may deny, suspend, or terminate
10the eligibility of any person, firm, corporation, association,
11agency, institution or other legal entity to participate as a
12vendor of goods or services to recipients under the medical
13assistance program under Article V, or may exclude any such
14person or entity from participation as such a vendor, and may
15deny, suspend, or recover payments, if after reasonable notice
16and opportunity for a hearing the Illinois Department finds:
17        (a) Such vendor is not complying with the Department's
18    policy or rules and regulations, or with the terms and
19    conditions prescribed by the Illinois Department in its
20    vendor agreement, which document shall be developed by the
21    Department as a result of negotiations with each vendor
22    category, including physicians, hospitals, long term care
23    facilities, pharmacists, optometrists, podiatrists and

 

 

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1    dentists setting forth the terms and conditions applicable
2    to the participation of each vendor group in the program;
3    or
4        (b) Such vendor has failed to keep or make available
5    for inspection, audit or copying, after receiving a written
6    request from the Illinois Department, such records
7    regarding payments claimed for providing services. This
8    section does not require vendors to make available patient
9    records of patients for whom services are not reimbursed
10    under this Code; or
11        (c) Such vendor has failed to furnish any information
12    requested by the Department regarding payments for
13    providing goods or services; or
14        (d) Such vendor has knowingly made, or caused to be
15    made, any false statement or representation of a material
16    fact in connection with the administration of the medical
17    assistance program; or
18        (e) Such vendor has furnished goods or services to a
19    recipient which are (1) in excess of need, (2) harmful, or
20    (3) of grossly inferior quality, all of such determinations
21    to be based upon competent medical judgment and
22    evaluations; or
23        (f) The vendor; a person with management
24    responsibility for a vendor; an officer or person owning,
25    either directly or indirectly, 5% or more of the shares of
26    stock or other evidences of ownership in a corporate

 

 

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1    vendor; an owner of a sole proprietorship which is a
2    vendor; or a partner in a partnership which is a vendor,
3    either:
4            (1) was previously terminated, suspended, or
5        excluded from participation in the Illinois medical
6        assistance program, or was terminated, suspended, or
7        excluded from participation in another state or
8        federal medical assistance or health care program; or
9            (2) was a person with management responsibility
10        for a vendor previously terminated, suspended, or
11        excluded from participation in the Illinois medical
12        assistance program, or terminated, suspended, or
13        excluded from participation in another state or
14        federal medical assistance or health care program
15        during the time of conduct which was the basis for that
16        vendor's termination, suspension, or exclusion; or
17            (3) was an officer, or person owning, either
18        directly or indirectly, 5% or more of the shares of
19        stock or other evidences of ownership in a corporate or
20        limited liability company vendor previously
21        terminated, suspended, or excluded from participation
22        in the Illinois medical assistance program, or
23        terminated, suspended, or excluded from participation
24        in a state or federal medical assistance or health care
25        program during the time of conduct which was the basis
26        for that vendor's termination, suspension, or

 

 

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1        exclusion; or
2            (4) was an owner of a sole proprietorship or
3        partner of a partnership previously terminated,
4        suspended, or excluded from participation in the
5        Illinois medical assistance program, or terminated,
6        suspended, or excluded from participation in a state or
7        federal medical assistance or health care program
8        during the time of conduct which was the basis for that
9        vendor's termination, suspension, or exclusion; or
10        (f-1) Such vendor has a delinquent debt owed to the
11    Illinois Department; or
12        (g) The vendor; a person with management
13    responsibility for a vendor; an officer or person owning,
14    either directly or indirectly, 5% or more of the shares of
15    stock or other evidences of ownership in a corporate or
16    limited liability company vendor; an owner of a sole
17    proprietorship which is a vendor; or a partner in a
18    partnership which is a vendor, either:
19            (1) has engaged in practices prohibited by
20        applicable federal or State law or regulation; or
21            (2) was a person with management responsibility
22        for a vendor at the time that such vendor engaged in
23        practices prohibited by applicable federal or State
24        law or regulation; or
25            (3) was an officer, or person owning, either
26        directly or indirectly, 5% or more of the shares of

 

 

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1        stock or other evidences of ownership in a vendor at
2        the time such vendor engaged in practices prohibited by
3        applicable federal or State law or regulation; or
4            (4) was an owner of a sole proprietorship or
5        partner of a partnership which was a vendor at the time
6        such vendor engaged in practices prohibited by
7        applicable federal or State law or regulation; or
8        (h) The direct or indirect ownership of the vendor
9    (including the ownership of a vendor that is a sole
10    proprietorship, a partner's interest in a vendor that is a
11    partnership, or ownership of 5% or more of the shares of
12    stock or other evidences of ownership in a corporate
13    vendor) has been transferred by an individual who is
14    terminated, suspended, or excluded or barred from
15    participating as a vendor to the individual's spouse,
16    child, brother, sister, parent, grandparent, grandchild,
17    uncle, aunt, niece, nephew, cousin, or relative by
18    marriage.
19    (A-5) The Illinois Department may deny, suspend, or
20terminate the eligibility of any person, firm, corporation,
21association, agency, institution, or other legal entity to
22participate as a vendor of goods or services to recipients
23under the medical assistance program under Article V, or may
24exclude any such person or entity from participation as such a
25vendor, if, after reasonable notice and opportunity for a
26hearing, the Illinois Department finds that the vendor; a

 

 

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1person with management responsibility for a vendor; an officer
2or person owning, either directly or indirectly, 5% or more of
3the shares of stock or other evidences of ownership in a
4corporate vendor; an owner of a sole proprietorship that is a
5vendor; or a partner in a partnership that is a vendor has been
6convicted of an offense based on fraud or willful
7misrepresentation related to any of the following:
8        (1) The medical assistance program under Article V of
9    this Code.
10        (2) A medical assistance or health care program in
11    another state.
12        (3) The Medicare program under Title XVIII of the
13    Social Security Act.
14        (4) The provision of health care services.
15        (5) A violation of this Code, as provided in Article
16    VIIIA, or another state or federal medical assistance
17    program or health care program.
18    (A-10) The Illinois Department may deny, suspend, or
19terminate the eligibility of any person, firm, corporation,
20association, agency, institution, or other legal entity to
21participate as a vendor of goods or services to recipients
22under the medical assistance program under Article V, or may
23exclude any such person or entity from participation as such a
24vendor, if, after reasonable notice and opportunity for a
25hearing, the Illinois Department finds that (i) the vendor,
26(ii) a person with management responsibility for a vendor,

 

 

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1(iii) an officer or person owning, either directly or
2indirectly, 5% or more of the shares of stock or other
3evidences of ownership in a corporate vendor, (iv) an owner of
4a sole proprietorship that is a vendor, or (v) a partner in a
5partnership that is a vendor has been convicted of an offense
6related to any of the following:
7        (1) Murder.
8        (2) A Class X felony under the Criminal Code of 1961.
9        (3) Sexual misconduct that may subject recipients to an
10    undue risk of harm.
11        (4) A criminal offense that may subject recipients to
12    an undue risk of harm.
13        (5) A crime of fraud or dishonesty.
14        (6) A crime involving a controlled substance.
15        (7) A misdemeanor relating to fraud, theft,
16    embezzlement, breach of fiduciary responsibility, or other
17    financial misconduct related to a health care program.
18    (A-15) The Illinois Department may deny the eligibility of
19any person, firm, corporation, association, agency,
20institution, or other legal entity to participate as a vendor
21of goods or services to recipients under the medical assistance
22program under Article V if, after reasonable notice and
23opportunity for a hearing, the Illinois Department finds:
24        (1) The applicant or any person with management
25    responsibility for the applicant; an officer or member of
26    the board of directors of an applicant; an entity owning

 

 

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1    (directly or indirectly) 5% or more of the shares of stock
2    or other evidences of ownership in a corporate vendor
3    applicant; an owner of a sole proprietorship applicant; a
4    partner in a partnership applicant; or a technical or other
5    advisor to an applicant has a debt owed to the Illinois
6    Department, and no payment arrangements acceptable to the
7    Illinois Department have been made by the applicant.
8        (2) The applicant or any person with management
9    responsibility for the applicant; an officer or member of
10    the board of directors of an applicant; an entity owning
11    (directly or indirectly) 5% or more of the shares of stock
12    or other evidences of ownership in a corporate vendor
13    applicant; an owner of a sole proprietorship applicant; a
14    partner in a partnership vendor applicant; or a technical
15    or other advisor to an applicant was (i) a person with
16    management responsibility, (ii) an officer or member of the
17    board of directors of an applicant, (iii) an entity owning
18    (directly or indirectly) 5% or more of the shares of stock
19    or other evidences of ownership in a corporate vendor, (iv)
20    an owner of a sole proprietorship, (v) a partner in a
21    partnership vendor, (vi) a technical or other advisor to a
22    vendor, during a period of time where the conduct of that
23    vendor resulted in a debt owed to the Illinois Department,
24    and no payment arrangements acceptable to the Illinois
25    Department have been made by that vendor.
26        (3) There is a credible allegation of the use,

 

 

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1    transfer, or lease of assets of any kind to an applicant
2    from a current or prior vendor who has a debt owed to the
3    Illinois Department, no payment arrangements acceptable to
4    the Illinois Department have been made by that vendor or
5    the vendor's alternate payee, and the applicant knows or
6    should have known of such debt.
7        (4) There is a credible allegation of a transfer of
8    management responsibilities, or direct or indirect
9    ownership, to an applicant from a current or prior vendor
10    who has a debt owed to the Illinois Department, and no
11    payment arrangements acceptable to the Illinois Department
12    have been made by that vendor or the vendor's alternate
13    payee, and the applicant knows or should have known of such
14    debt.
15        (5) There is a credible allegation of the use,
16    transfer, or lease of assets of any kind to an applicant
17    who is a spouse, child, brother, sister, parent,
18    grandparent, grandchild, uncle, aunt, niece, relative by
19    marriage, nephew, cousin, or relative of a current or prior
20    vendor who has a debt owed to the Illinois Department and
21    no payment arrangements acceptable to the Illinois
22    Department have been made.
23        (6) There is a credible allegation that the applicant's
24    previous affiliations with a provider of medical services
25    that has an uncollected debt, a provider that has been or
26    is subject to a payment suspension under a federal health

 

 

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1    care program, or a provider that has been previously
2    excluded from participation in the medical assistance
3    program, poses a risk of fraud, waste, or abuse to the
4    Illinois Department.
5    As used in this subsection, "credible allegation" is
6defined to include an allegation from any source, including,
7but not limited to, fraud hotline complaints, claims data
8mining, patterns identified through provider audits, civil
9actions filed under the Illinois False Claims Act, and law
10enforcement investigations. An allegation is considered to be
11credible when it has indicia of reliability.
12    (B) The Illinois Department shall deny, suspend or
13terminate the eligibility of any person, firm, corporation,
14association, agency, institution or other legal entity to
15participate as a vendor of goods or services to recipients
16under the medical assistance program under Article V, or may
17exclude any such person or entity from participation as such a
18vendor:
19        (1) immediately, if such vendor is not properly
20    licensed, certified, or authorized;
21        (2) within 30 days of the date when such vendor's
22    professional license, certification or other authorization
23    has been refused renewal, restricted, revoked, suspended,
24    or otherwise terminated; or
25        (3) if such vendor has been convicted of a violation of
26    this Code, as provided in Article VIIIA.

 

 

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1    (C) Upon termination, suspension, or exclusion of a vendor
2of goods or services from participation in the medical
3assistance program authorized by this Article, a person with
4management responsibility for such vendor during the time of
5any conduct which served as the basis for that vendor's
6termination, suspension, or exclusion is barred from
7participation in the medical assistance program.
8    Upon termination, suspension, or exclusion of a corporate
9vendor, the officers and persons owning, directly or
10indirectly, 5% or more of the shares of stock or other
11evidences of ownership in the vendor during the time of any
12conduct which served as the basis for that vendor's
13termination, suspension, or exclusion are barred from
14participation in the medical assistance program. A person who
15owns, directly or indirectly, 5% or more of the shares of stock
16or other evidences of ownership in a terminated, suspended, or
17excluded vendor may not transfer his or her ownership interest
18in that vendor to his or her spouse, child, brother, sister,
19parent, grandparent, grandchild, uncle, aunt, niece, nephew,
20cousin, or relative by marriage.
21    Upon termination, suspension, or exclusion of a sole
22proprietorship or partnership, the owner or partners during the
23time of any conduct which served as the basis for that vendor's
24termination, suspension, or exclusion are barred from
25participation in the medical assistance program. The owner of a
26terminated, suspended, or excluded vendor that is a sole

 

 

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1proprietorship, and a partner in a terminated, suspended, or
2excluded vendor that is a partnership, may not transfer his or
3her ownership or partnership interest in that vendor to his or
4her spouse, child, brother, sister, parent, grandparent,
5grandchild, uncle, aunt, niece, nephew, cousin, or relative by
6marriage.
7    A person who owns, directly or indirectly, 5% or more of
8the shares of stock or other evidences of ownership in a
9corporate or limited liability company vendor who owes a debt
10to the Department, if that vendor has not made payment
11arrangements acceptable to the Department, shall not transfer
12his or her ownership interest in that vendor, or vendor assets
13of any kind, to his or her spouse, child, brother, sister,
14parent, grandparent, grandchild, uncle, aunt, niece, nephew,
15cousin, or relative by marriage.
16    Rules adopted by the Illinois Department to implement these
17provisions shall specifically include a definition of the term
18"management responsibility" as used in this Section. Such
19definition shall include, but not be limited to, typical job
20titles, and duties and descriptions which will be considered as
21within the definition of individuals with management
22responsibility for a provider.
23    A vendor or a prior vendor who has been terminated,
24excluded, or suspended from the medical assistance program, or
25from another state or federal medical assistance or health care
26program, and any individual currently or previously barred from

 

 

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1the medical assistance program, or from another state or
2federal medical assistance or health care program, as a result
3of being an officer or a person owning, directly or indirectly,
45% or more of the shares of stock or other evidences of
5ownership in a corporate or limited liability company vendor
6during the time of any conduct which served as the basis for
7that vendor's termination, suspension, or exclusion, may be
8required to post a surety bond as part of a condition of
9enrollment or participation in the medical assistance program.
10The Illinois Department shall establish, by rule, the criteria
11and requirements for determining when a surety bond must be
12posted and the value of the bond.
13    A vendor or a prior vendor who has a debt owed to the
14Illinois Department and any individual currently or previously
15barred from the medical assistance program, or from another
16state or federal medical assistance or health care program, as
17a result of being an officer or a person owning, directly or
18indirectly, 5% or more of the shares of stock or other
19evidences of ownership in that corporate or limited liability
20company vendor during the time of any conduct which served as
21the basis for the debt, may be required to post a surety bond
22as part of a condition of enrollment or participation in the
23medical assistance program. The Illinois Department shall
24establish, by rule, the criteria and requirements for
25determining when a surety bond must be posted and the value of
26the bond.

 

 

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1    (D) If a vendor has been suspended from the medical
2assistance program under Article V of the Code, the Director
3may require that such vendor correct any deficiencies which
4served as the basis for the suspension. The Director shall
5specify in the suspension order a specific period of time,
6which shall not exceed one year from the date of the order,
7during which a suspended vendor shall not be eligible to
8participate. At the conclusion of the period of suspension the
9Director shall reinstate such vendor, unless he finds that such
10vendor has not corrected deficiencies upon which the suspension
11was based.
12    If a vendor has been terminated, suspended, or excluded
13from the medical assistance program under Article V, such
14vendor shall be barred from participation for at least one
15year, except that if a vendor has been terminated, suspended,
16or excluded based on a conviction of a violation of Article
17VIIIA or a conviction of a felony based on fraud or a willful
18misrepresentation related to (i) the medical assistance
19program under Article V, (ii) a federal or another state's
20medical assistance or health care program, or (iii) the
21provision of health care services, then the vendor shall be
22barred from participation for 5 years or for the length of the
23vendor's sentence for that conviction, whichever is longer. At
24the end of one year a vendor who has been terminated,
25suspended, or excluded may apply for reinstatement to the
26program. Upon proper application to be reinstated such vendor

 

 

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1may be deemed eligible by the Director providing that such
2vendor meets the requirements for eligibility under this Code.
3If such vendor is deemed not eligible for reinstatement, he
4shall be barred from again applying for reinstatement for one
5year from the date his application for reinstatement is denied.
6    A vendor whose termination, suspension, or exclusion from
7participation in the Illinois medical assistance program under
8Article V was based solely on an action by a governmental
9entity other than the Illinois Department may, upon
10reinstatement by that governmental entity or upon reversal of
11the termination, suspension, or exclusion, apply for
12rescission of the termination, suspension, or exclusion from
13participation in the Illinois medical assistance program. Upon
14proper application for rescission, the vendor may be deemed
15eligible by the Director if the vendor meets the requirements
16for eligibility under this Code.
17    If a vendor has been terminated, suspended, or excluded and
18reinstated to the medical assistance program under Article V
19and the vendor is terminated, suspended, or excluded a second
20or subsequent time from the medical assistance program, the
21vendor shall be barred from participation for at least 2 years,
22except that if a vendor has been terminated, suspended, or
23excluded a second time based on a conviction of a violation of
24Article VIIIA or a conviction of a felony based on fraud or a
25willful misrepresentation related to (i) the medical
26assistance program under Article V, (ii) a federal or another

 

 

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1state's medical assistance or health care program, or (iii) the
2provision of health care services, then the vendor shall be
3barred from participation for life. At the end of 2 years, a
4vendor who has been terminated, suspended, or excluded may
5apply for reinstatement to the program. Upon application to be
6reinstated, the vendor may be deemed eligible if the vendor
7meets the requirements for eligibility under this Code. If the
8vendor is deemed not eligible for reinstatement, the vendor
9shall be barred from again applying for reinstatement for 2
10years from the date the vendor's application for reinstatement
11is denied.
12    (E) The Illinois Department may recover money improperly or
13erroneously paid, or overpayments, either by setoff, crediting
14against future billings or by requiring direct repayment to the
15Illinois Department. The Illinois Department may suspend or
16deny payment, in whole or in part, if such payment would be
17improper or erroneous or would otherwise result in overpayment.
18        (1) Payments may be suspended, denied, or recovered
19    from a vendor or alternate payee: (i) for services rendered
20    in violation of the Illinois Department's provider
21    notices, statutes, rules, and regulations; (ii) for
22    services rendered in violation of the terms and conditions
23    prescribed by the Illinois Department in its vendor
24    agreement; (iii) for any vendor who fails to grant the
25    Office of Inspector General timely access to full and
26    complete records, including, but not limited to, records

 

 

SB1330- 17 -LRB098 02585 KTG 32689 b

1    relating to recipients under the medical assistance
2    program for the most recent 6 years, in accordance with
3    Section 140.28 of Title 89 of the Illinois Administrative
4    Code, and other information for the purpose of audits,
5    investigations, or other program integrity functions,
6    after reasonable written request by the Inspector General;
7    this subsection (E) does not require vendors to make
8    available the medical records of patients for whom services
9    are not reimbursed under this Code or to provide access to
10    medical records more than 6 years old; (iv) when the vendor
11    has knowingly made, or caused to be made, any false
12    statement or representation of a material fact in
13    connection with the administration of the medical
14    assistance program; or (v) when the vendor previously
15    rendered services while terminated, suspended, or excluded
16    from participation in the medical assistance program or
17    while terminated or excluded from participation in another
18    state or federal medical assistance or health care program.
19        (2) Notwithstanding any other provision of law, if a
20    vendor has the same taxpayer identification number
21    (assigned under Section 6109 of the Internal Revenue Code
22    of 1986) as is assigned to a vendor with past-due financial
23    obligations to the Illinois Department, the Illinois
24    Department may make any necessary adjustments to payments
25    to that vendor in order to satisfy any past-due
26    obligations, regardless of whether the vendor is assigned a

 

 

SB1330- 18 -LRB098 02585 KTG 32689 b

1    different billing number under the medical assistance
2    program.
3    If the Illinois Department establishes through an
4administrative hearing that the overpayments resulted from the
5vendor or alternate payee knowingly making, using, or causing
6to be made or used, a false record or statement to obtain
7payment or other benefit from the medical assistance program
8under Article V, the Department may recover interest on the
9amount of the payment or other benefit at the rate of 5% per
10annum. In addition to any other penalties that may be
11prescribed by law, such a vendor or alternate payee shall be
12subject to civil penalties consisting of an amount not to
13exceed 3 times the amount of payment or other benefit resulting
14from each such false record or statement, and the sum of $2,000
15for each such false record or statement for payment or other
16benefit. For purposes of this paragraph, "knowingly" means that
17a vendor or alternate payee with respect to information: (i)
18has actual knowledge of the information, (ii) acts in
19deliberate ignorance of the truth or falsity of the
20information, or (iii) acts in reckless disregard of the truth
21or falsity of the information. No proof of specific intent to
22defraud is required.
23    (E-5) Civil monetary penalties.
24        (1) For purposes of this Section, "knowingly" means
25    that a vendor or alternate payee, with respect to
26    information: (i) has actual knowledge of the information,

 

 

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1    (ii) acts in deliberate ignorance of the truth or falsity
2    of the information, or (iii) acts in reckless disregard of
3    the truth or falsity of the information. No proof of
4    specific intent to defraud is required.
5        (2) Any person (including a vendor, provider,
6    organization, agency, or other entity, or an alternate
7    payee thereof, but excluding a recipient) who:
8            (a) knowingly presents or causes to be presented to
9        an officer, employee, or agent of the Department or the
10        State, a claim that the Department determines:
11                (i) is for a medical or other item or service
12            that the person knows or should know was not
13            provided as claimed, including any person who
14            engaged in a pattern or practice of presenting or
15            causing to be presented a claim for an item or
16            service that is based on a billing procedure code
17            that the person knows or should know will result in
18            a greater payment to the person than the billing
19            procedure code the person knows or should know is
20            applicable to the item or service actually
21            provided;
22                (ii) is for a medical or other item or service
23            and the person knows or should know that the claim
24            is false or fraudulent;
25                (iii) is presented for a vendor physician's
26            service, or an item or service incident to a vendor

 

 

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1            physician's service, by a person who knows or
2            should know that the individual who furnished, or
3            who supervised the furnishing of, the service:
4                    (AA) was not licensed as a physician;
5                    (BB) was licensed as a physician but such
6                license had been obtained through a
7                misrepresentation of material fact (including
8                cheating on an examination required for
9                licensing); or
10                    (CC) represented to the patient at the
11                time the service was furnished that the
12                physician was certified in a medical specialty
13                by the applicable specialty board, when the
14                individual was not so certified;
15                (iv) is for a medical or other item or service
16            furnished during a period in which the person was
17            excluded from the medical assistance program; or
18                (v) is for a pattern of medical or other items
19            or services that a person knows or should know are
20            not medically necessary;
21            (b) knowingly presents or causes to be presented to
22        any person a request for payment which is in violation
23        of the terms of an agreement with the Department or
24        another requirement of the medical assistance program;
25            (c) knowingly gives or causes to be given to any
26        person, with respect to coverage for inpatient

 

 

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1        hospital services under the medical assistance
2        program, information that he or she knows or should
3        know is false or misleading, and that could reasonably
4        be expected to influence the decision when to discharge
5        such person or other individual from the hospital;
6            (d) in the case of a person who is not an
7        organization, agency, or other entity, is excluded
8        from participating in any federal or state health care
9        program, including, but not limited to, the medical
10        assistance program, and who, at the time of a violation
11        of this subsection (E-5):
12                (i) has a direct or indirect ownership or
13            control interest in an entity that is
14            participating in the medical assistance program,
15            and who knows or should know of the action
16            constituting the basis for the exclusion; or
17                (ii) is an officer or managing employee of such
18            an entity;
19            (e) offers or transfers remuneration to any
20        individual eligible for benefits under the medical
21        assistance program that such person knows or should
22        know is likely to influence such individual to order or
23        receive from a particular provider, vendor, or
24        supplier any item or service for which payment may be
25        made, in whole or in part, under the medical assistance
26        program;

 

 

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1            (f) arranges or contracts (by employment or
2        otherwise) with an individual or entity that the person
3        knows or should know is excluded from participation in
4        a federal or state health care program, including, but
5        not limited to, the medical assistance program, for the
6        provision of items or services for which payment may be
7        made under such a program;
8            (g) commits an act described in subsection (b) or
9        (c) of Section 8A-3;
10            (h) orders or prescribes a medical or other item or
11        service during a period in which that person was
12        excluded from the medical assistance program, in the
13        case where the person knows or should know that a claim
14        for such medical or other item or service will be made
15        under such a program;
16            (i) knowingly makes, uses, or causes to be made or
17        used, a false record or statement material to a false
18        or fraudulent claim to obtain payment or other benefit
19        from the medical assistance program;
20            (j) knowingly makes or causes to be made any false
21        statement, omission, or misrepresentation of a
22        material fact in any application, bid, or contract to
23        participate or enroll as a provider of services under
24        the medical assistance program;
25            (k) fails to grant timely access, upon reasonable
26        request (as defined by the Department) to the

 

 

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1        Department or Department Inspector General, for the
2        purpose of audits, investigations, evaluations, or
3        other statutory functions of the Inspector General; or
4            (l) knows of any overpayment and does not report
5        and return the overpayment to the Department;
6    shall be subject, in addition to any other penalties that
7    may be prescribed by law, to a civil monetary penalty of
8    not more than $10,000 for each item or service (or, in
9    cases under item (c), $15,000 for each individual with
10    respect to whom false or misleading information was given;
11    in cases under item (d), $10,000 for each day the
12    prohibited relationship occurs; in cases under item (g),
13    $50,000 for each such act; in cases under item (h), $50,000
14    for each order or prescription; in cases under paragraphs
15    (i) or (j), $50,000 for each false record or statement; or
16    in cases under item (k), $15,000 for each day of the
17    failure described in such item). In addition, such a person
18    shall be subject to an assessment of not more than 3 times
19    the amount claimed for each such item or service in lieu of
20    damages sustained by the Department because of such claim
21    (or, in the case of item (g), damages of not more than 3
22    times the total amount of remuneration offered, paid,
23    solicited, or received, with regard to whether a portion of
24    such remuneration was offered, paid, solicited, or
25    received for a lawful purpose). In addition, the Director
26    or his or her designee may make a determination in the same

 

 

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1    proceeding to terminate, suspend, bar, or exclude the
2    person from participation in the medical assistance
3    program.
4        (3) The Illinois Department may seek the civil monetary
5    penalties or termination, suspension, barment, or
6    exclusion identified in this subsection (E-5). Prior to the
7    imposition of any penalties or sanctions, the affected
8    individual, entity, or vendor shall be afforded an
9    opportunity for a hearing after reasonable notice. The
10    Department shall establish hearing procedures by rule.
11        Any final order, decision, or other determination
12    made, issued, or executed by the Director under the
13    provisions of this subsection, whereby an individual,
14    entity, or vendor is aggrieved, shall be subject to review
15    in accordance with the provisions of the Administrative
16    Review Law, and the rules adopted pursuant thereto, which
17    shall apply to and govern all proceedings for the judicial
18    review of final administrative decisions of the Director.
19    (F) The Illinois Department may withhold payments to any
20vendor or alternate payee prior to or during the pendency of
21any audit or proceeding under this Section, and through the
22pendency of any administrative appeal or administrative review
23by any court proceeding. The Illinois Department shall state by
24rule with as much specificity as practicable the conditions
25under which payments will not be withheld under this Section.
26Payments may be denied for bills submitted with service dates

 

 

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1occurring during the pendency of a proceeding, after a final
2decision has been rendered, or after the conclusion of any
3administrative appeal, where the final administrative decision
4is to terminate, exclude, or suspend eligibility to participate
5in the medical assistance program. The Illinois Department
6shall state by rule with as much specificity as practicable the
7conditions under which payments will not be denied for such
8bills. The Illinois Department shall state by rule a process
9and criteria by which a vendor or alternate payee may request
10full or partial release of payments withheld under this
11subsection. The Department must complete a proceeding under
12this Section in a timely manner.
13    Notwithstanding recovery allowed under subsection (E) or
14this subsection (F), the Illinois Department may withhold
15payments to any vendor or alternate payee who is not properly
16licensed, certified, or in compliance with State or federal
17agency regulations. Payments may be denied for bills submitted
18with service dates occurring during the period of time that a
19vendor is not properly licensed, certified, or in compliance
20with State or federal regulations. Facilities licensed under
21the Nursing Home Care Act shall have payments denied or
22withheld pursuant to subsection (I) of this Section.
23    (F-5) The Illinois Department may temporarily withhold
24payments to a vendor or alternate payee if any of the following
25individuals have been indicted or otherwise charged under a law
26of the United States or this or any other state with an offense

 

 

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1that is based on alleged fraud or willful misrepresentation on
2the part of the individual related to (i) the medical
3assistance program under Article V of this Code, (ii) a federal
4or another state's medical assistance or health care program,
5or (iii) the provision of health care services:
6        (1) If the vendor or alternate payee is a corporation:
7    an officer of the corporation or an individual who owns,
8    either directly or indirectly, 5% or more of the shares of
9    stock or other evidence of ownership of the corporation.
10        (2) If the vendor is a sole proprietorship: the owner
11    of the sole proprietorship.
12        (3) If the vendor or alternate payee is a partnership:
13    a partner in the partnership.
14        (4) If the vendor or alternate payee is any other
15    business entity authorized by law to transact business in
16    this State: an officer of the entity or an individual who
17    owns, either directly or indirectly, 5% or more of the
18    evidences of ownership of the entity.
19    If the Illinois Department withholds payments to a vendor
20or alternate payee under this subsection, the Department shall
21not release those payments to the vendor or alternate payee
22while any criminal proceeding related to the indictment or
23charge is pending unless the Department determines that there
24is good cause to release the payments before completion of the
25proceeding. If the indictment or charge results in the
26individual's conviction, the Illinois Department shall retain

 

 

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1all withheld payments, which shall be considered forfeited to
2the Department. If the indictment or charge does not result in
3the individual's conviction, the Illinois Department shall
4release to the vendor or alternate payee all withheld payments.
5    (F-10) If the Illinois Department establishes that the
6vendor or alternate payee owes a debt to the Illinois
7Department, and the vendor or alternate payee subsequently
8fails to pay or make satisfactory payment arrangements with the
9Illinois Department for the debt owed, the Illinois Department
10may seek all remedies available under the law of this State to
11recover the debt, including, but not limited to, wage
12garnishment or the filing of claims or liens against the vendor
13or alternate payee.
14    (F-15) Enforcement of judgment.
15        (1) Any fine, recovery amount, other sanction, or costs
16    imposed, or part of any fine, recovery amount, other
17    sanction, or cost imposed, remaining unpaid after the
18    exhaustion of or the failure to exhaust judicial review
19    procedures under the Illinois Administrative Review Law is
20    a debt due and owing the State and may be collected using
21    all remedies available under the law.
22        (2) After expiration of the period in which judicial
23    review under the Illinois Administrative Review Law may be
24    sought for a final administrative decision, unless stayed
25    by a court of competent jurisdiction, the findings,
26    decision, and order of the Director may be enforced in the

 

 

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1    same manner as a judgment entered by a court of competent
2    jurisdiction.
3        (3) In any case in which any person or entity has
4    failed to comply with a judgment ordering or imposing any
5    fine or other sanction, any expenses incurred by the
6    Illinois Department to enforce the judgment, including,
7    but not limited to, attorney's fees, court costs, and costs
8    related to property demolition or foreclosure, after they
9    are fixed by a court of competent jurisdiction or the
10    Director, shall be a debt due and owing the State and may
11    be collected in accordance with applicable law. Prior to
12    any expenses being fixed by a final administrative decision
13    pursuant to this subsection (F-15), the Illinois
14    Department shall provide notice to the individual or entity
15    that states that the individual or entity shall appear at a
16    hearing before the administrative hearing officer to
17    determine whether the individual or entity has failed to
18    comply with the judgment. The notice shall set the date for
19    such a hearing, which shall not be less than 7 days from
20    the date that notice is served. If notice is served by
21    mail, the 7-day period shall begin to run on the date that
22    the notice was deposited in the mail.
23        (4) Upon being recorded in the manner required by
24    Article XII of the Code of Civil Procedure or by the
25    Uniform Commercial Code, a lien shall be imposed on the
26    real estate or personal estate, or both, of the individual

 

 

SB1330- 29 -LRB098 02585 KTG 32689 b

1    or entity in the amount of any debt due and owing the State
2    under this Section. The lien may be enforced in the same
3    manner as a judgment of a court of competent jurisdiction.
4    A lien shall attach to all property and assets of such
5    person, firm, corporation, association, agency,
6    institution, or other legal entity until the judgment is
7    satisfied.
8        (5) The Director may set aside any judgment entered by
9    default and set a new hearing date upon a petition filed at
10    any time (i) if the petitioner's failure to appear at the
11    hearing was for good cause, or (ii) if the petitioner
12    established that the Department did not provide proper
13    service of process. If any judgment is set aside pursuant
14    to this paragraph (5), the hearing officer shall have
15    authority to enter an order extinguishing any lien which
16    has been recorded for any debt due and owing the Illinois
17    Department as a result of the vacated default judgment.
18    (G) The provisions of the Administrative Review Law, as now
19or hereafter amended, and the rules adopted pursuant thereto,
20shall apply to and govern all proceedings for the judicial
21review of final administrative decisions of the Illinois
22Department under this Section. The term "administrative
23decision" is defined as in Section 3-101 of the Code of Civil
24Procedure.
25    (G-5) Vendors who pose a risk of fraud, waste, abuse, or
26harm.

 

 

SB1330- 30 -LRB098 02585 KTG 32689 b

1        (1) Notwithstanding any other provision in this
2    Section, the Department may terminate, suspend, or exclude
3    vendors who pose a risk of fraud, waste, abuse, or harm
4    from participation in the medical assistance program prior
5    to an evidentiary hearing but after reasonable notice and
6    opportunity to respond as established by the Department by
7    rule.
8        (2) Vendors who pose a risk of fraud, waste, abuse, or
9    harm shall submit to a fingerprint-based criminal
10    background check on current and future information
11    available in the State system and current information
12    available through the Federal Bureau of Investigation's
13    system by submitting all necessary fees and information in
14    the form and manner prescribed by the Department of State
15    Police. The following individuals shall be subject to the
16    check:
17            (A) In the case of a vendor that is a corporation,
18        every shareholder who owns, directly or indirectly, 5%
19        or more of the outstanding shares of the corporation.
20            (B) In the case of a vendor that is a partnership,
21        every partner.
22            (C) In the case of a vendor that is a sole
23        proprietorship, the sole proprietor.
24            (D) Each officer or manager of the vendor.
25        Each such vendor shall be responsible for payment of
26    the cost of the criminal background check.

 

 

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1        (3) Vendors who pose a risk of fraud, waste, abuse, or
2    harm may be required to post a surety bond. The Department
3    shall establish, by rule, the criteria and requirements for
4    determining when a surety bond must be posted and the value
5    of the bond.
6        (4) The Department, or its agents, may refuse to accept
7    requests for authorization from specific vendors who pose a
8    risk of fraud, waste, abuse, or harm, including
9    prior-approval and post-approval requests, if:
10            (A) the Department has initiated a notice of
11        termination, suspension, or exclusion of the vendor
12        from participation in the medical assistance program;
13        or
14            (B) the Department has issued notification of its
15        withholding of payments pursuant to subsection (F-5)
16        of this Section; or
17            (C) the Department has issued a notification of its
18        withholding of payments due to reliable evidence of
19        fraud or willful misrepresentation pending
20        investigation.
21        (5) As used in this subsection, the following terms are
22    defined as follows:
23            (A) "Fraud" means an intentional deception or
24        misrepresentation made by a person with the knowledge
25        that the deception could result in some unauthorized
26        benefit to himself or herself or some other person. It

 

 

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1        includes any act that constitutes fraud under
2        applicable federal or State law.
3            (B) "Abuse" means provider practices that are
4        inconsistent with sound fiscal, business, or medical
5        practices and that result in an unnecessary cost to the
6        medical assistance program or in reimbursement for
7        services that are not medically necessary or that fail
8        to meet professionally recognized standards for health
9        care. It also includes recipient practices that result
10        in unnecessary cost to the medical assistance program.
11        Abuse does not include diagnostic or therapeutic
12        measures conducted primarily as a safeguard against
13        possible vendor liability.
14            (C) "Waste" means the unintentional misuse of
15        medical assistance resources, resulting in unnecessary
16        cost to the medical assistance program. Waste does not
17        include diagnostic or therapeutic measures conducted
18        primarily as a safeguard against possible vendor
19        liability.
20            (D) "Harm" means physical, mental, or monetary
21        damage to recipients or to the medical assistance
22        program.
23    (G-6) The Illinois Department, upon making a determination
24based upon information in the possession of the Illinois
25Department that continuation of participation in the medical
26assistance program by a vendor would constitute an immediate

 

 

SB1330- 33 -LRB098 02585 KTG 32689 b

1danger to the public, may immediately suspend such vendor's
2participation in the medical assistance program without a
3hearing. In instances in which the Illinois Department
4immediately suspends the medical assistance program
5participation of a vendor under this Section, a hearing upon
6the vendor's participation must be convened by the Illinois
7Department within 15 days after such suspension and completed
8without appreciable delay. Such hearing shall be held to
9determine whether to recommend to the Director that the
10vendor's medical assistance program participation be denied,
11terminated, suspended, placed on provisional status, or
12reinstated. In the hearing, any evidence relevant to the vendor
13constituting an immediate danger to the public may be
14introduced against such vendor; provided, however, that the
15vendor, or his or her counsel, shall have the opportunity to
16discredit, impeach, and submit evidence rebutting such
17evidence.
18    (H) Nothing contained in this Code shall in any way limit
19or otherwise impair the authority or power of any State agency
20responsible for licensing of vendors.
21    (I) Based on a finding of noncompliance on the part of a
22nursing home with any requirement for certification under Title
23XVIII or XIX of the Social Security Act (42 U.S.C. Sec. 1395 et
24seq. or 42 U.S.C. Sec. 1396 et seq.), the Illinois Department
25may impose one or more of the following remedies after notice
26to the facility:

 

 

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1        (1) Termination of the provider agreement.
2        (2) Temporary management.
3        (3) Denial of payment for new admissions.
4        (4) Civil money penalties.
5        (5) Closure of the facility in emergency situations or
6    transfer of residents, or both.
7        (6) State monitoring.
8        (7) Denial of all payments when the U.S. Department of
9    Health and Human Services has imposed this sanction.
10    The Illinois Department shall by rule establish criteria
11governing continued payments to a nursing facility subsequent
12to termination of the facility's provider agreement if, in the
13sole discretion of the Illinois Department, circumstances
14affecting the health, safety, and welfare of the facility's
15residents require those continued payments. The Illinois
16Department may condition those continued payments on the
17appointment of temporary management, sale of the facility to
18new owners or operators, or other arrangements that the
19Illinois Department determines best serve the needs of the
20facility's residents.
21    Except in the case of a facility that has a right to a
22hearing on the finding of noncompliance before an agency of the
23federal government, a facility may request a hearing before a
24State agency on any finding of noncompliance within 60 days
25after the notice of the intent to impose a remedy. Except in
26the case of civil money penalties, a request for a hearing

 

 

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1shall not delay imposition of the penalty. The choice of
2remedies is not appealable at a hearing. The level of
3noncompliance may be challenged only in the case of a civil
4money penalty. The Illinois Department shall provide by rule
5for the State agency that will conduct the evidentiary
6hearings.
7    The Illinois Department may collect interest on unpaid
8civil money penalties.
9    The Illinois Department may adopt all rules necessary to
10implement this subsection (I).
11    (J) The Illinois Department, by rule, may permit individual
12practitioners to designate that Department payments that may be
13due the practitioner be made to an alternate payee or alternate
14payees.
15        (a) Such alternate payee or alternate payees shall be
16    required to register as an alternate payee in the Medical
17    Assistance Program with the Illinois Department.
18        (b) If a practitioner designates an alternate payee,
19    the alternate payee and practitioner shall be jointly and
20    severally liable to the Department for payments made to the
21    alternate payee. Pursuant to subsection (E) of this
22    Section, any Department action to suspend or deny payment
23    or recover money or overpayments from an alternate payee
24    shall be subject to an administrative hearing.
25        (c) Registration as an alternate payee or alternate
26    payees in the Illinois Medical Assistance Program shall be

 

 

SB1330- 36 -LRB098 02585 KTG 32689 b

1    conditional. At any time, the Illinois Department may deny
2    or cancel any alternate payee's registration in the
3    Illinois Medical Assistance Program without cause. Any
4    such denial or cancellation is not subject to an
5    administrative hearing.
6        (d) The Illinois Department may seek a revocation of
7    any alternate payee, and all owners, officers, and
8    individuals with management responsibility for such
9    alternate payee shall be permanently prohibited from
10    participating as an owner, an officer, or an individual
11    with management responsibility with an alternate payee in
12    the Illinois Medical Assistance Program, if after
13    reasonable notice and opportunity for a hearing the
14    Illinois Department finds that:
15            (1) the alternate payee is not complying with the
16        Department's policy or rules and regulations, or with
17        the terms and conditions prescribed by the Illinois
18        Department in its alternate payee registration
19        agreement; or
20            (2) the alternate payee has failed to keep or make
21        available for inspection, audit, or copying, after
22        receiving a written request from the Illinois
23        Department, such records regarding payments claimed as
24        an alternate payee; or
25            (3) the alternate payee has failed to furnish any
26        information requested by the Illinois Department

 

 

SB1330- 37 -LRB098 02585 KTG 32689 b

1        regarding payments claimed as an alternate payee; or
2            (4) the alternate payee has knowingly made, or
3        caused to be made, any false statement or
4        representation of a material fact in connection with
5        the administration of the Illinois Medical Assistance
6        Program; or
7            (5) the alternate payee, a person with management
8        responsibility for an alternate payee, an officer or
9        person owning, either directly or indirectly, 5% or
10        more of the shares of stock or other evidences of
11        ownership in a corporate alternate payee, or a partner
12        in a partnership which is an alternate payee:
13                (a) was previously terminated, suspended, or
14            excluded from participation as a vendor in the
15            Illinois Medical Assistance Program, or was
16            previously revoked as an alternate payee in the
17            Illinois Medical Assistance Program, or was
18            terminated, suspended, or excluded from
19            participation as a vendor in a medical assistance
20            program in another state that is of the same kind
21            as the program of medical assistance provided
22            under Article V of this Code; or
23                (b) was a person with management
24            responsibility for a vendor previously terminated,
25            suspended, or excluded from participation as a
26            vendor in the Illinois Medical Assistance Program,

 

 

SB1330- 38 -LRB098 02585 KTG 32689 b

1            or was previously revoked as an alternate payee in
2            the Illinois Medical Assistance Program, or was
3            terminated, suspended, or excluded from
4            participation as a vendor in a medical assistance
5            program in another state that is of the same kind
6            as the program of medical assistance provided
7            under Article V of this Code, during the time of
8            conduct which was the basis for that vendor's
9            termination, suspension, or exclusion or alternate
10            payee's revocation; or
11                (c) was an officer, or person owning, either
12            directly or indirectly, 5% or more of the shares of
13            stock or other evidences of ownership in a
14            corporate vendor previously terminated, suspended,
15            or excluded from participation as a vendor in the
16            Illinois Medical Assistance Program, or was
17            previously revoked as an alternate payee in the
18            Illinois Medical Assistance Program, or was
19            terminated, suspended, or excluded from
20            participation as a vendor in a medical assistance
21            program in another state that is of the same kind
22            as the program of medical assistance provided
23            under Article V of this Code, during the time of
24            conduct which was the basis for that vendor's
25            termination, suspension, or exclusion; or
26                (d) was an owner of a sole proprietorship or

 

 

SB1330- 39 -LRB098 02585 KTG 32689 b

1            partner in a partnership previously terminated,
2            suspended, or excluded from participation as a
3            vendor in the Illinois Medical Assistance Program,
4            or was previously revoked as an alternate payee in
5            the Illinois Medical Assistance Program, or was
6            terminated, suspended, or excluded from
7            participation as a vendor in a medical assistance
8            program in another state that is of the same kind
9            as the program of medical assistance provided
10            under Article V of this Code, during the time of
11            conduct which was the basis for that vendor's
12            termination, suspension, or exclusion or alternate
13            payee's revocation; or
14            (6) the alternate payee, a person with management
15        responsibility for an alternate payee, an officer or
16        person owning, either directly or indirectly, 5% or
17        more of the shares of stock or other evidences of
18        ownership in a corporate alternate payee, or a partner
19        in a partnership which is an alternate payee:
20                (a) has engaged in conduct prohibited by
21            applicable federal or State law or regulation
22            relating to the Illinois Medical Assistance
23            Program; or
24                (b) was a person with management
25            responsibility for a vendor or alternate payee at
26            the time that the vendor or alternate payee engaged

 

 

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1            in practices prohibited by applicable federal or
2            State law or regulation relating to the Illinois
3            Medical Assistance Program; or
4                (c) was an officer, or person owning, either
5            directly or indirectly, 5% or more of the shares of
6            stock or other evidences of ownership in a vendor
7            or alternate payee at the time such vendor or
8            alternate payee engaged in practices prohibited by
9            applicable federal or State law or regulation
10            relating to the Illinois Medical Assistance
11            Program; or
12                (d) was an owner of a sole proprietorship or
13            partner in a partnership which was a vendor or
14            alternate payee at the time such vendor or
15            alternate payee engaged in practices prohibited by
16            applicable federal or State law or regulation
17            relating to the Illinois Medical Assistance
18            Program; or
19            (7) the direct or indirect ownership of the vendor
20        or alternate payee (including the ownership of a vendor
21        or alternate payee that is a partner's interest in a
22        vendor or alternate payee, or ownership of 5% or more
23        of the shares of stock or other evidences of ownership
24        in a corporate vendor or alternate payee) has been
25        transferred by an individual who is terminated,
26        suspended, or excluded or barred from participating as

 

 

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1        a vendor or is prohibited or revoked as an alternate
2        payee to the individual's spouse, child, brother,
3        sister, parent, grandparent, grandchild, uncle, aunt,
4        niece, nephew, cousin, or relative by marriage.
5    (K) The Illinois Department of Healthcare and Family
6Services may withhold payments, in whole or in part, to a
7provider or alternate payee where there is credible evidence,
8received from State or federal law enforcement or federal
9oversight agencies or from the results of a preliminary
10Department audit, that the circumstances giving rise to the
11need for a withholding of payments may involve fraud or willful
12misrepresentation under the Illinois Medical Assistance
13program. The Department shall by rule define what constitutes
14"credible" evidence for purposes of this subsection. The
15Department may withhold payments without first notifying the
16provider or alternate payee of its intention to withhold such
17payments. A provider or alternate payee may request a
18reconsideration of payment withholding, and the Department
19must grant such a request. The Department shall state by rule a
20process and criteria by which a provider or alternate payee may
21request full or partial release of payments withheld under this
22subsection. This request may be made at any time after the
23Department first withholds such payments.
24        (a) The Illinois Department must send notice of its
25    withholding of program payments within 5 days of taking
26    such action. The notice must set forth the general

 

 

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1    allegations as to the nature of the withholding action, but
2    need not disclose any specific information concerning its
3    ongoing investigation. The notice must do all of the
4    following:
5            (1) State that payments are being withheld in
6        accordance with this subsection.
7            (2) State that the withholding is for a temporary
8        period, as stated in paragraph (b) of this subsection,
9        and cite the circumstances under which withholding
10        will be terminated.
11            (3) Specify, when appropriate, which type or types
12        of Medicaid claims withholding is effective.
13            (4) Inform the provider or alternate payee of the
14        right to submit written evidence for reconsideration
15        of the withholding by the Illinois Department.
16            (5) Inform the provider or alternate payee that a
17        written request may be made to the Illinois Department
18        for full or partial release of withheld payments and
19        that such requests may be made at any time after the
20        Department first withholds such payments.
21        (b) All withholding-of-payment actions under this
22    subsection shall be temporary and shall not continue after
23    any of the following:
24            (1) The Illinois Department or the prosecuting
25        authorities determine that there is insufficient
26        evidence of fraud or willful misrepresentation by the

 

 

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1        provider or alternate payee.
2            (2) Legal proceedings related to the provider's or
3        alternate payee's alleged fraud, willful
4        misrepresentation, violations of this Act, or
5        violations of the Illinois Department's administrative
6        rules are completed.
7            (3) The withholding of payments for a period of 3
8        years.
9        (c) The Illinois Department may adopt all rules
10    necessary to implement this subsection (K).
11    (K-5) The Illinois Department may withhold payments, in
12whole or in part, to a provider or alternate payee upon
13initiation of an audit, quality of care review, investigation
14when there is a credible allegation of fraud, or the provider
15or alternate payee demonstrating a clear failure to cooperate
16with the Illinois Department such that the circumstances give
17rise to the need for a withholding of payments. As used in this
18subsection, "credible allegation" is defined to include an
19allegation from any source, including, but not limited to,
20fraud hotline complaints, claims data mining, patterns
21identified through provider audits, civil actions filed under
22the Illinois False Claims Act, and law enforcement
23investigations. An allegation is considered to be credible when
24it has indicia of reliability. The Illinois Department may
25withhold payments without first notifying the provider or
26alternate payee of its intention to withhold such payments. A

 

 

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1provider or alternate payee may request a hearing or a
2reconsideration of payment withholding, and the Illinois
3Department must grant such a request. The Illinois Department
4shall state by rule a process and criteria by which a provider
5or alternate payee may request a hearing or a reconsideration
6for the full or partial release of payments withheld under this
7subsection. This request may be made at any time after the
8Illinois Department first withholds such payments.
9        (a) The Illinois Department must send notice of its
10    withholding of program payments within 5 days of taking
11    such action. The notice must set forth the general
12    allegations as to the nature of the withholding action but
13    need not disclose any specific information concerning its
14    ongoing investigation. The notice must do all of the
15    following:
16            (1) State that payments are being withheld in
17        accordance with this subsection.
18            (2) State that the withholding is for a temporary
19        period, as stated in paragraph (b) of this subsection,
20        and cite the circumstances under which withholding
21        will be terminated.
22            (3) Specify, when appropriate, which type or types
23        of claims are withheld.
24            (4) Inform the provider or alternate payee of the
25        right to request a hearing or a reconsideration of the
26        withholding by the Illinois Department, including the

 

 

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1        ability to submit written evidence.
2            (5) Inform the provider or alternate payee that a
3        written request may be made to the Illinois Department
4        for a hearing or a reconsideration for the full or
5        partial release of withheld payments and that such
6        requests may be made at any time after the Illinois
7        Department first withholds such payments.
8        (b) All withholding of payment actions under this
9    subsection shall be temporary and shall not continue after
10    any of the following:
11            (1) The Illinois Department determines that there
12        is insufficient evidence of fraud, or the provider or
13        alternate payee demonstrates clear cooperation with
14        the Illinois Department, as determined by the Illinois
15        Department, such that the circumstances do not give
16        rise to the need for withholding of payments; or
17            (2) The withholding of payments has lasted for a
18        period in excess of 3 years.
19        (c) The Illinois Department may adopt all rules
20    necessary to implement this subsection (K-5).
21    (L) The Illinois Department shall establish a protocol to
22enable health care providers to disclose an actual or potential
23violation of this Section pursuant to a self-referral
24disclosure protocol, referred to in this subsection as "the
25protocol". The protocol shall include direction for health care
26providers on a specific person, official, or office to whom

 

 

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1such disclosures shall be made. The Illinois Department shall
2post information on the protocol on the Illinois Department's
3public website. The Illinois Department may adopt rules
4necessary to implement this subsection (L). In addition to
5other factors that the Illinois Department finds appropriate,
6the Illinois Department may consider a health care provider's
7timely use or failure to use the protocol in considering the
8provider's failure to comply with this Code.
9    (M) Notwithstanding any other provision of this Code, the
10Illinois Department, at its discretion, may exempt an entity
11licensed under the Nursing Home Care Act and the ID/DD
12Community Care Act from the provisions of subsections (A-15),
13(B), and (C) of this Section if the licensed entity is in
14receivership.
15(Source: P.A. 97-689, eff. 6-14-12; revised 8-3-12.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.