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scs-hhs-dhsintegrity--art5

A bill for an act
relating to BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
162.17ARTICLE 5
162.18DEPARTMENT OF HUMAN SERVICES PROGRAM INTEGRITY AND
162.19OFFICE OF INSPECTOR GENERAL

162.20    Section 1. Minnesota Statutes 2012, section 243.166, subdivision 7, is amended to read:
162.21    Subd. 7. Use of data. (a) Except as otherwise provided in subdivision 7a or sections
162.22244.052 and 299C.093, the data provided under this section is private data on individuals
162.23under section 13.02, subdivision 12.
162.24(b) The data may be used only for by law enforcement and corrections agencies for
162.25 law enforcement and corrections purposes.
162.26(c) The commissioner of human services is authorized to have access to the data for:
162.27(1) state-operated services, as defined in section 246.014, are also authorized to
162.28have access to the data for the purposes described in section 246.13, subdivision 2,
162.29paragraph (b); and
162.30(2) purposes of completing background studies under chapter 245C.

162.31    Sec. 2. Minnesota Statutes 2012, section 245C.04, is amended by adding a subdivision
162.32to read:
162.33    Subd. 4a. Agency background studies. (a) The commissioner shall develop
162.34and implement an electronic process for the regular transfer of new criminal history
162.35information that is added to the Minnesota court information system. The commissioner's
163.1system must include for review only information that relates to individuals who have been
163.2the subject of a background study under this chapter that remain affiliated with the agency
163.3that initiated the background study. For purposes of this paragraph, an individual remains
163.4affiliated with an agency that initiated the background study until the agency informs the
163.5commissioner that the individual is no longer affiliated. When any individual no longer
163.6affiliated according to this paragraph returns to a position requiring a background study
163.7under this chapter, the agency with whom the individual is again affiliated shall initiate
163.8a new background study regardless of the length of time the individual was no longer
163.9affiliated with the agency.
163.10(b) The commissioner shall develop and implement an online system for agencies that
163.11initiate background studies under this chapter to access and maintain records of background
163.12studies initiated by that agency. The system must show all active background study subjects
163.13affiliated with that agency and the status of each individual's background study. Each
163.14agency that initiates background studies must use this system to notify the commissioner
163.15of discontinued affiliation for purposes of the processes required under paragraph (a).

163.16    Sec. 3. Minnesota Statutes 2012, section 245C.08, subdivision 1, is amended to read:
163.17    Subdivision 1. Background studies conducted by Department of Human
163.18Services. (a) For a background study conducted by the Department of Human Services,
163.19the commissioner shall review:
163.20    (1) information related to names of substantiated perpetrators of maltreatment of
163.21vulnerable adults that has been received by the commissioner as required under section
163.22626.557, subdivision 9c , paragraph (j);
163.23    (2) the commissioner's records relating to the maltreatment of minors in licensed
163.24programs, and from findings of maltreatment of minors as indicated through the social
163.25service information system;
163.26    (3) information from juvenile courts as required in subdivision 4 for individuals
163.27listed in section 245C.03, subdivision 1, paragraph (a), when there is reasonable cause;
163.28    (4) information from the Bureau of Criminal Apprehension, including information
163.29regarding a background study subject's registration in Minnesota as a predatory offender
163.30under section 243.166;
163.31    (5) except as provided in clause (6), information from the national crime information
163.32system when the commissioner has reasonable cause as defined under section 245C.05,
163.33subdivision 5; and
163.34    (6) for a background study related to a child foster care application for licensure or
163.35adoptions, the commissioner shall also review:
164.1    (i) information from the child abuse and neglect registry for any state in which the
164.2background study subject has resided for the past five years; and
164.3    (ii) information from national crime information databases, when the background
164.4study subject is 18 years of age or older.
164.5    (b) Notwithstanding expungement by a court, the commissioner may consider
164.6information obtained under paragraph (a), clauses (3) and (4), unless the commissioner
164.7received notice of the petition for expungement and the court order for expungement is
164.8directed specifically to the commissioner.
164.9    (c) The commissioner shall also review criminal history information received
164.10according to section 245C.04, subdivision 4a, from the Minnesota court information
164.11system that relates to individuals who have already been studied under this chapter and
164.12who remain affiliated with the agency that initiated the background study.

164.13    Sec. 4. [245E.01] CHILD CARE PROVIDER AND RECIPIENT FRAUD
164.14INVESTIGATIONS WITHIN THE CHILD CARE ASSISTANCE PROGRAM.
164.15    Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
164.16subdivision have the meanings given them.
164.17(b) "Applicant" has the meaning given in section 119B.011, subdivision 2.
164.18(c) "Child care assistance program" means any of the assistance programs under
164.19chapter 119B.
164.20(d) "Commissioner" means the commissioner of human services.
164.21(e) "Controlling individual" has the meaning given in section 245A.02, subdivision
164.225a.
164.23(f) "County" means a local county child care assistance program staff or
164.24subcontracted staff, or a county investigator acting on behalf of the commissioner.
164.25(g) "Department" means the Department of Human Services.
164.26(h) "Financial misconduct" or "misconduct" means an entity's or individual's acts or
164.27omissions that result in fraud and abuse or error against the Department of Human Services.
164.28(i) "Identify" means to furnish the full name, current or last known address, phone
164.29number, and e-mail address of the individual or business entity.
164.30(j) "License holder" has the meaning given in section 245A.02, subdivision 9.
164.31(k) "Mail" means the use of any mail service with proof of delivery and receipt.
164.32(l) "Provider" means either a provider as defined in section 119B.011, subdivision
164.3319, or a legal unlicensed provider as defined in section 119B.011, subdivision 16.
164.34(m) "Recipient" means a family receiving assistance as defined under section
164.35119B.011, subdivision 13.
165.1(n) "Terminate" means revocation of participation in the child care assistance
165.2program.
165.3    Subd. 2. Investigating provider or recipient financial misconduct. The
165.4department shall investigate alleged or suspected financial misconduct by providers and
165.5errors related to payments issued by the child care assistance program under this chapter.
165.6Recipients, employees, and staff may be investigated when the evidence shows that their
165.7conduct is related to the financial misconduct of a provider, license holder, or controlling
165.8individual.
165.9    Subd. 3. Scope of investigations. (a) The department may contact any person,
165.10agency, organization, or other entity that is necessary to an investigation.
165.11(b) The department may examine or interview any individual, document, or piece of
165.12evidence that may lead to information that is relevant to child care assistance program
165.13benefits, payments, and child care provider authorizations. This includes, but is not
165.14limited to:
165.15(1) child care assistance program payments;
165.16(2) services provided by the program or related to child care assistance program
165.17recipients;
165.18(3) services provided to a provider;
165.19(4) provider financial records of any type;
165.20(5) daily attendance records of the children receiving services from the provider;
165.21(6) billings; and
165.22(7) verification of the credentials of a license holder, controlling individual,
165.23employee, staff person, contractor, subcontractor, and entities under contract with the
165.24provider to provide services or maintain service and the provider's financial records
165.25related to those services.
165.26    Subd. 4. Determination of investigation. After completing its investigation, the
165.27department shall issue one of the following determinations:
165.28(1) no violation of child care assistance requirements occurred;
165.29(2) there is insufficient evidence to show that a violation of child care assistance
165.30requirements occurred;
165.31(3) a preponderance of evidence shows a violation of child care assistance program
165.32law, rule, or policy; or
165.33(4) there exists a credible allegation of fraud.
165.34    Subd. 5. Actions or administrative sanctions. (a) In addition to section 256.98,
165.35after completing the determination under subdivision 4, the department may take one or
165.36more of the actions or sanctions specified in this subdivision.
166.1(b) The department may take the following actions:
166.2(1) refer the investigation to law enforcement or a county attorney for possible
166.3criminal prosecution;
166.4(2) refer relevant information to the department's licensing division, the child care
166.5assistance program, the Department of Education, the federal child and adult care food
166.6program, or appropriate child or adult protection agency;
166.7(3) enter into a settlement agreement with a provider, license holder, controlling
166.8individual, or recipient; or
166.9(4) refer the matter for review by a prosecutorial agency with appropriate jurisdiction
166.10for possible civil action under the Minnesota False Claims Act, chapter 15C.
166.11(c) The department may impose sanctions by:
166.12(1) pursuing administrative disqualification through hearings or waivers;
166.13(2) establishing and seeking monetary recovery or recoupment; or
166.14(3) issuing an order of corrective action that states the practices that are violations of
166.15child care assistance program policies, laws, or regulations, and that they must be corrected.
166.16    Subd. 6. Duty to provide access. (a) A provider, license holder, controlling
166.17individual, employee, staff person, or recipient has an affirmative duty to provide access
166.18upon request to information specified under subdivision 8 or the program facility.
166.19(b) Failure to provide access may result in denial or termination of authorizations for
166.20or payments to a recipient, provider, license holder, or controlling individual in the child
166.21care assistance program.
166.22(c) When a provider fails to provide access, a 15-day notice of denial or termination
166.23must be issued to the provider, which prohibits the provider from participating in the child
166.24care assistance program. Notice must be sent to recipients whose children are under the
166.25provider's care pursuant to Minnesota Rules, part 3400.0185.
166.26(d) If the provider continues to fail to provide access at the expiration of the 15-day
166.27notice period, child care assistance program payments to the provider must be denied
166.28beginning the 16th day following notice of the initial failure or refusal to provide access.
166.29The department may rescind the denial based upon good cause if the provider submits in
166.30writing a good cause basis for having failed or refused to provide access. The writing must
166.31be postmarked no later than the 15th day following the provider's notice of initial failure
166.32to provide access. Additionally, the provider, license holder, or controlling individual
166.33must immediately provide complete, ongoing access to the department. Repeated failures
166.34to provide access must, after the initial failure or for any subsequent failure, result in
166.35termination from participation in the child care assistance program.
167.1(e) The department, at its own expense, may photocopy or otherwise duplicate
167.2records referenced in subdivision 8. Photocopying must be done on the provider's
167.3premises on the day of the request or other mutually agreeable time, unless removal of
167.4records is specifically permitted by the provider. If requested, a provider, license holder,
167.5or controlling individual, or a designee, must assist the investigator in duplicating any
167.6record, including a hard copy or electronically stored data, on the day of the request.
167.7(f) A provider, license holder, controlling individual, employee, or staff person must
167.8grant the department access during the department's normal business hours, and any hours
167.9that the program is operated, to examine the provider's program or the records listed in
167.10subdivision 8. A provider shall make records available at the provider's place of business
167.11on the day for which access is requested, unless the provider and the department both agree
167.12otherwise. The department's normal business hours are 8:00 a.m. to 5:00 p.m., Monday
167.13through Friday, excluding state holidays as defined in section 645.44, subdivision 5.
167.14    Subd. 7. Honest and truthful statements. It shall be unlawful for a provider,
167.15license holder, controlling individual, or recipient to:
167.16(1) falsify, conceal, or cover up by any trick, scheme, or device a material fact;
167.17(2) make any materially false, fictitious, or fraudulent statement or representation; or
167.18(3) make or use any false writing or document knowing the same to contain any
167.19materially false, fictitious, or fraudulent statement or entry related to any child care
167.20assistance program services that the provider, license holder, or controlling individual
167.21supplies or in relation to any child care assistance payments received by a provider, license
167.22holder, or controlling individual or to any fraud investigator or law enforcement officer
167.23conducting a financial misconduct investigation.
167.24    Subd. 8. Record retention. (a) The following records must be maintained,
167.25controlled, and made immediately accessible to license holders, providers, and controlling
167.26individuals. The records must be organized and labeled to correspond to categories that
167.27make them easy to identify so that they can be made available immediately upon request
167.28to an investigator acting on behalf of the commissioner at the provider's place of business:
167.29(1) payroll ledgers, canceled checks, bank deposit slips, and any other accounting
167.30records;
167.31(2) daily attendance records required by and that comply with section 119B.125,
167.32subdivision 6;
167.33(3) billing transmittal forms requesting payments from the child care assistance
167.34program and billing adjustments related to child care assistance program payments;
167.35(4) records identifying all persons, corporations, partnerships, and entities with an
167.36ownership or controlling interest in the provider's child care business;
168.1(5) employee records identifying those persons currently employed by the provider's
168.2child care business or who have been employed by the business at any time within the
168.3previous five years. The records must include each employee's name, hourly and annual
168.4salary, qualifications, position description, job title, and dates of employment. In addition,
168.5employee records that must be made available include the employee's time sheets, current
168.6home address of the employee or last known address of any former employee, and
168.7documentation of background studies required under chapter 119B or 245C;
168.8(6) records related to transportation of children in care, including but not limited to:
168.9(i) the dates and times that transportation is provided to children for transportation to
168.10and from the provider's business location for any purpose. For transportation related to
168.11field trips or locations away from the provider's business location, the names and addresses
168.12of those field trips and locations must also be provided;
168.13(ii) the name, business address, phone number, and Web site address, if any, of the
168.14transportation service utilized; and
168.15(iii) all billing or transportation records related to the transportation.
168.16(b) A provider, license holder, or controlling individual must retain all records
168.17in paragraph (a) for at least six years after the date the record is created. Microfilm or
168.18electronically stored records satisfy the record keeping requirements of this subdivision.
168.19(c) A provider, license holder, or controlling individual who withdraws or is
168.20terminated from the child care assistance program must retain the records required under
168.21this subdivision and make them available to the department on demand.
168.22(d) If the ownership of a provider changes, the transferor, unless otherwise provided
168.23by law or by written agreement with the transferee, is responsible for maintaining,
168.24preserving, and upon request from the department, making available the records related to
168.25the provider that were generated before the date of the transfer. Any written agreement
168.26affecting this provision must be held in the possession of the transferor and transferee.
168.27The written agreement must be provided to the department or county immediately upon
168.28request, and the written agreement must be retained by the transferor and transferee for six
168.29years after the agreement is fully executed.
168.30(e) In the event of an appealed case, the provider must retain all records required in
168.31this subdivision for the duration of the appeal or six years, whichever is longer.
168.32(f) A provider's use of electronic record keeping or electronic signatures is governed
168.33by chapter 325L.
168.34    Subd. 9. Factors regarding imposition of administrative sanctions. (a) The
168.35department shall consider the following factors in determining the administrative sanctions
168.36to be imposed:
169.1(1) nature and extent of financial misconduct;
169.2(2) history of financial misconduct;
169.3(3) actions taken or recommended by other state agencies, other divisions of the
169.4department, and court and administrative decisions;
169.5(4) prior imposition of sanctions;
169.6(5) size and type of provider;
169.7(6) information obtained through an investigation from any source;
169.8(7) convictions or pending criminal charges; and
169.9(8) any other information relevant to the acts or omissions related to the financial
169.10misconduct.
169.11(b) Any single factor under paragraph (a) may be determinative of the department's
169.12decision of whether and what sanctions are imposed.
169.13    Subd. 10. Written notice of department sanction. (a) The department shall give
169.14notice in writing to a person of an administrative sanction that is to be imposed. The notice
169.15shall be sent by mail as defined in subdivision 1, paragraph (k).
169.16(b) The notice shall state:
169.17(1) the factual basis for the department's determination;
169.18(2) the sanction the department intends to take;
169.19(3) the dollar amount of the monetary recovery or recoupment, if any;
169.20(4) how the dollar amount was computed;
169.21(5) the right to dispute the department's determination and to provide evidence;
169.22(6) the right to appeal the department's proposed sanction; and
169.23(7) the option to meet informally with department staff, and to bring additional
169.24documentation or information, to resolve the issues.
169.25(c) In cases of determinations resulting in denial or termination of payments, in
169.26addition to the requirements of paragraph (b), the notice must state:
169.27(1) the length of the denial or termination;
169.28(2) the requirements and procedures for reinstatement; and
169.29(3) the provider's right to submit documents and written arguments against the
169.30denial or termination of payments for review by the department before the effective date
169.31of denial or termination.
169.32(d) The submission of documents and written argument for review by the department
169.33under paragraph (b), clause (5) or (7), or paragraph (c), clause (3), does not stay the
169.34deadline for filing an appeal.
169.35(e) Unless timely appealed, the effective date of the proposed sanction shall be 30
169.36days after the license holder's, provider's, controlling individual's, or recipient's receipt of
170.1the notice. If a timely appeal is made, the proposed sanction shall be delayed pending
170.2the final outcome of the appeal. Implementation of a proposed sanction following the
170.3resolution of a timely appeal may be postponed if, in the opinion of the department, the
170.4delay of sanction is necessary to protect the health or safety of children in care. The
170.5department may consider the economic hardship of a person in implementing the proposed
170.6sanction, but economic hardship shall not be a determinative factor in implementing the
170.7proposed sanction.
170.8(f) Requests for an informal meeting to attempt to resolve issues and requests
170.9for appeals must be sent or delivered to the department's Office of Inspector General,
170.10Financial Fraud and Abuse Division.
170.11    Subd. 11. Appeal of department sanction under this section. (a) If the department
170.12does not pursue a criminal action against a provider, license holder, controlling individual,
170.13or recipient for financial misconduct, but the department imposes an administrative
170.14sanction, any individual or entity against whom the sanction was imposed may appeal the
170.15department's administrative sanction under this section pursuant to section 119B.16 or
170.16256.045 with the additional requirements in clauses (1) to (4). An appeal must specify:
170.17(1) each disputed item, the reason for the dispute, and an estimate of the dollar
170.18amount involved for each disputed item, if appropriate;
170.19(2) the computation that is believed to be correct, if appropriate;
170.20(3) the authority in the statute or rule relied upon for each disputed item; and
170.21(4) the name, address, and phone number of the person at the provider's place of
170.22business with whom contact may be made regarding the appeal.
170.23(b) An appeal is considered timely only if postmarked or received by the
170.24department's Office of Inspector General, Financial Fraud and Abuse Division within 30
170.25days after receiving a notice of department sanction.
170.26(c) Before the appeal hearing, the department may deny or terminate authorizations
170.27or payment to the entity or individual if the department determines that the action is
170.28necessary to protect the public welfare or the interests of the child care assistance program.
170.29    Subd. 12. Consolidated hearings with licensing sanction. If a financial
170.30misconduct sanction has an appeal hearing right and it is timely appealed, and a licensing
170.31sanction exists for which there is an appeal hearing right and the sanction is timely
170.32appealed, and the overpayment recovery action and licensing sanction involve the same
170.33set of facts, the overpayment recovery action and licensing sanction must be consolidated
170.34in the contested case hearing related to the licensing sanction.
170.35    Subd. 13. Grounds for and methods of monetary recovery. (a) The department
170.36may obtain monetary recovery from a provider who has been improperly paid by the
171.1child care assistance program, regardless of whether the error was intentional or county
171.2error. The department does not need to establish a pattern as a precondition of monetary
171.3recovery of erroneous or false billing claims, duplicate billing claims, or billing claims
171.4based on false statements or financial misconduct.
171.5(b) The department shall obtain monetary recovery from providers by the following
171.6means:
171.7(1) permitting voluntary repayment of money, either in lump-sum payment or
171.8installment payments;
171.9(2) using any legal collection process;
171.10(3) deducting or withholding program payments; or
171.11(4) utilizing the means set forth in chapter 16D.
171.12    Subd. 14. Reporting of suspected fraudulent activity. (a) A person who, in
171.13good faith, makes a report of or testifies in any action or proceeding in which financial
171.14misconduct is alleged, and who is not involved in, has not participated in, or has not aided
171.15and abetted, conspired, or colluded in the financial misconduct, shall have immunity from
171.16any liability, civil or criminal, that results by reason of the person's report or testimony.
171.17For the purpose of any proceeding, the good faith of any person reporting or testifying
171.18under this provision shall be presumed.
171.19(b) If a person that is or has been involved in, participated in, aided and abetted,
171.20conspired, or colluded in the financial misconduct reports the financial misconduct,
171.21the department may consider that person's report and assistance in investigating the
171.22misconduct as a mitigating factor in the department's pursuit of civil, criminal, or
171.23administrative remedies.
171.24    Subd. 15. Data privacy. Data of any kind obtained or created in relation to a provider
171.25or recipient investigation under this section is defined, classified, and protected the same as
171.26all other data under section 13.46, and this data has the same classification as licensing data.
171.27    Subd. 16. Monetary recovery; random sample extrapolation. The department is
171.28authorized to calculate the amount of monetary recovery from a provider, license holder, or
171.29controlling individual based upon extrapolation from a statistical random sample of claims
171.30submitted by the provider, license holder, or controlling individual and paid by the child
171.31care assistance program. The department's random sample extrapolation shall constitute a
171.32rebuttable presumption of the accuracy of the calculation of monetary recovery. If the
171.33presumption is not rebutted by the provider, license holder, or controlling individual in the
171.34appeal process, the department shall use the extrapolation as the monetary recovery figure.
171.35The department may use sampling and extrapolation to calculate the amount of monetary
171.36recovery if the claims to be reviewed represent services to 50 or more children in care.
172.1    Subd. 17. Effect of department's monetary penalty determination. Unless
172.2a timely and proper appeal is received by the department's Office of Inspector General,
172.3Financial Fraud and Abuse Division, the department's administrative determination or
172.4sanction shall be considered a final department determination.
172.5    Subd. 18. Office of Inspector General recoveries. Overpayment recoveries
172.6resulting from child care provider fraud investigations initiated by the department's Office
172.7of Inspector General's fraud investigations staff are excluded from the county recovery
172.8provision in section 119B.11, subdivision 3.

172.9    Sec. 5. Minnesota Statutes 2012, section 256B.04, subdivision 21, is amended to read:
172.10    Subd. 21. Provider enrollment. (a) If the commissioner or the Centers for
172.11Medicare and Medicaid Services determines that a provider is designated "high-risk," the
172.12commissioner may withhold payment from providers within that category upon initial
172.13enrollment for a 90-day period. The withholding for each provider must begin on the date
172.14of the first submission of a claim.
172.15(b) An enrolled provider that is also licensed by the commissioner under chapter
172.16245A must designate an individual as the entity's compliance officer. The compliance
172.17officer must:
172.18(1) develop policies and procedures to assure adherence to medical assistance laws
172.19and regulations and to prevent inappropriate claims submissions;
172.20(2) train the employees of the provider entity, and any agents or subcontractors of
172.21the provider entity including billers, on the policies and procedures under clause (1);
172.22(3) respond to allegations of improper conduct related to the provision or billing of
172.23medical assistance services, and implement action to remediate any resulting problems;
172.24(4) use evaluation techniques to monitor compliance with medical assistance laws
172.25and regulations;
172.26(5) promptly report to the commissioner any identified violations of medical
172.27assistance laws or regulations; and
172.28    (6) within 60 days of discovery by the provider of a medical assistance
172.29reimbursement overpayment, report the overpayment to the commissioner and make
172.30arrangements with the commissioner for the commissioner's recovery of the overpayment.
172.31The commissioner may require, as a condition of enrollment in medical assistance, that a
172.32provider within a particular industry sector or category establish a compliance program that
172.33contains the core elements established by the Centers for Medicare and Medicaid Services.
172.34(c) The commissioner may revoke the enrollment of an ordering or rendering
172.35provider for a period of not more than one year, if the provider fails to maintain and, upon
173.1request from the commissioner, provide access to documentation relating to written orders
173.2or requests for payment for durable medical equipment, certifications for home health
173.3services, or referrals for other items or services written or ordered by such provider, when
173.4the commissioner has identified a pattern of a lack of documentation. A pattern means a
173.5failure to maintain documentation or provide access to documentation on more than one
173.6occasion. Nothing in this paragraph limits the authority of the commissioner to sanction a
173.7provider under the provisions of section 256B.064.
173.8(d) The commissioner shall terminate or deny the enrollment of any individual or
173.9entity if the individual or entity has been terminated from participation in Medicare or
173.10under the Medicaid program or Children's Health Insurance Program of any other state.
173.11(e) As a condition of enrollment in medical assistance, the commissioner shall
173.12require that a provider designated "moderate" or "high-risk" by the Centers for Medicare
173.13and Medicaid Services or the Minnesota Department of Human Services commissioner
173.14 permit the Centers for Medicare and Medicaid Services, its agents, or its designated
173.15contractors and the state agency, its agents, or its designated contractors to conduct
173.16unannounced on-site inspections of any provider location. The commissioner shall publish
173.17in the Minnesota Health Care Program Provider Manual a list of provider types designated
173.18"limited," "moderate," or "high-risk," based on the criteria and standards used to designate
173.19Medicare providers in Code of Federal Regulations, title 42, section 424.518. The list and
173.20criteria are not subject to the requirements of chapter 14. The commissioner's designations
173.21are not subject to administrative appeal.
173.22(f) As a condition of enrollment in medical assistance, the commissioner shall
173.23require that a high-risk provider, or a person with a direct or indirect ownership interest in
173.24the provider of five percent or higher, consent to criminal background checks, including
173.25fingerprinting, when required to do so under state law or by a determination by the
173.26commissioner or the Centers for Medicare and Medicaid Services that a provider is
173.27designated high-risk for fraud, waste, or abuse.
173.28(g) As a condition of enrollment, all durable medical equipment, prosthetics,
173.29orthotics, and supplies (DMEPOS) suppliers operating in Minnesota are required to name
173.30the Department of Human Services, in addition to the Centers for Medicare and Medicaid
173.31Services, as an obligee on all surety performance bonds required pursuant to section
173.324312(a) of the Balanced Budget Act of 1997, Public Law 105-33, amending Social
173.33Security Act, section 1834(a). The performance bond must also allow for recovery of
173.34costs and fees in pursuing a claim on the bond.
173.35(h) The Department of Human Services may require a provider to purchase a
173.36performance surety bond as a condition of initial enrollment, reenrollment, reinstatement,
174.1or continued enrollment if: (1) the provider fails to demonstrate financial viability, (2) the
174.2department determines there is significant evidence of or potential for fraud and abuse by
174.3the provider, or (3) the provider or category of providers is designated high-risk pursuant
174.4to paragraph (a) and as per Code of Federal Regulations, title 42, section 455.450, or the
174.5department otherwise finds it is in the best interest of the Medicaid program to do so. The
174.6performance bond must be in an amount of $100,000 or ten percent of the provider's
174.7payments from Medicaid during the immediately preceding 12 months, whichever is
174.8greater. The performance bond must name the Department of Human Services as an
174.9obligee and must allow for recovery of costs and fees in pursuing a claim on the bond.
174.10EFFECTIVE DATE.This section is effective the day following final enactment.

174.11    Sec. 6. Minnesota Statutes 2012, section 256B.04, is amended by adding a subdivision
174.12to read:
174.13    Subd. 22. Application fee. (a) The commissioner must collect and retain federally
174.14required nonrefundable application fees to pay for provider screening activities in
174.15accordance with Code of Federal Regulations, title 42, section 455, subpart E. The
174.16enrollment application must be made under the procedures specified by the commissioner,
174.17in the form specified by the commissioner, and accompanied by an application fee
174.18described in paragraph (b), or a request for a hardship exception as described in the
174.19specified procedures. Application fees must be deposited in the provider screening account
174.20in the special revenue fund. Amounts in the provider screening account are appropriated
174.21to the commissioner for costs associated with the provider screening activities required
174.22in Code of Federal Regulations, title 42, section 455, subpart E. The commissioner
174.23shall conduct screening activities as required by Code of Federal Regulations, title 42,
174.24section 455, subpart E, and as otherwise provided by law, to include database checks,
174.25unannounced pre- and postenrollment site visits, fingerprinting, and criminal background
174.26studies. The commissioner must revalidate all providers under this subdivision at least
174.27once every five years.
174.28(b) The application fee under this subdivision is $532 for the calendar year 2013.
174.29For calendar year 2014 and subsequent years, the fee:
174.30(1) is adjusted by the percentage change to the consumer price index for all urban
174.31consumers, United States city average, for the 12-month period ending with June of the
174.32previous year. The resulting fee must be announced in the Federal Register;
174.33(2) is effective from January 1 to December 31 of a calendar year;
174.34(3) is required on the submission of an initial application, an application to establish
174.35a new practice location, an application for re-enrollment when the provider is not enrolled
175.1at the time of application of re-enrollment, or at revalidation when required by federal
175.2regulation; and
175.3(4) must be in the amount in effect for the calendar year during which the application
175.4for enrollment, new practice location, or re-enrollment is being submitted.
175.5(c) The application fee under this subdivision cannot be charged to:
175.6(1) providers who are enrolled in Medicare or who provide documentation of
175.7payment of the fee to, and enrollment with, another state;
175.8(2) providers who are enrolled but are required to submit new applications for
175.9purposes of re-enrollment; or
175.10(3) a provider who enrolls as an individual.
175.11EFFECTIVE DATE.This section is effective the day following final enactment.

175.12    Sec. 7. Minnesota Statutes 2012, section 256B.064, subdivision 1a, is amended to read:
175.13    Subd. 1a. Grounds for sanctions against vendors. The commissioner may
175.14impose sanctions against a vendor of medical care for any of the following: (1) fraud,
175.15theft, or abuse in connection with the provision of medical care to recipients of public
175.16assistance; (2) a pattern of presentment of false or duplicate claims or claims for services
175.17not medically necessary; (3) a pattern of making false statements of material facts for
175.18the purpose of obtaining greater compensation than that to which the vendor is legally
175.19entitled; (4) suspension or termination as a Medicare vendor; (5) refusal to grant the state
175.20agency access during regular business hours to examine all records necessary to disclose
175.21the extent of services provided to program recipients and appropriateness of claims for
175.22payment; (6) failure to repay an overpayment or a fine finally established under this
175.23section; and (7) failure to correct errors in the maintenance of health service or financial
175.24records for which a fine was imposed or after issuance of a warning by the commissioner;
175.25and (8) any reason for which a vendor could be excluded from participation in the
175.26Medicare program under section 1128, 1128A, or 1866(b)(2) of the Social Security Act.
175.27The determination of services not medically necessary may be made by the commissioner
175.28in consultation with a peer advisory task force appointed by the commissioner on the
175.29recommendation of appropriate professional organizations. The task force expires as
175.30provided in section 15.059, subdivision 5.

175.31    Sec. 8. Minnesota Statutes 2012, section 256B.064, subdivision 1b, is amended to read:
175.32    Subd. 1b. Sanctions available. The commissioner may impose the following
175.33sanctions for the conduct described in subdivision 1a: suspension or withholding of
175.34payments to a vendor and suspending or terminating participation in the program, or
176.1imposition of a fine under subdivision 2, paragraph (f). When imposing sanctions under
176.2this section, the commissioner shall consider the nature, chronicity, or severity of the
176.3conduct and the effect of the conduct on the health and safety of persons served by the
176.4vendor. Regardless of imposition of sanctions, the commissioner may make a referral
176.5to the appropriate state licensing board.

176.6    Sec. 9. Minnesota Statutes 2012, section 256B.064, subdivision 2, is amended to read:
176.7    Subd. 2. Imposition of monetary recovery and sanctions. (a) The commissioner
176.8shall determine any monetary amounts to be recovered and sanctions to be imposed upon
176.9a vendor of medical care under this section. Except as provided in paragraphs (b) and
176.10(d), neither a monetary recovery nor a sanction will be imposed by the commissioner
176.11without prior notice and an opportunity for a hearing, according to chapter 14, on the
176.12commissioner's proposed action, provided that the commissioner may suspend or reduce
176.13payment to a vendor of medical care, except a nursing home or convalescent care facility,
176.14after notice and prior to the hearing if in the commissioner's opinion that action is
176.15necessary to protect the public welfare and the interests of the program.
176.16(b) Except when the commissioner finds good cause not to suspend payments under
176.17Code of Federal Regulations, title 42, section 455.23 (e) or (f), the commissioner shall
176.18withhold or reduce payments to a vendor of medical care without providing advance
176.19notice of such withholding or reduction if either of the following occurs:
176.20(1) the vendor is convicted of a crime involving the conduct described in subdivision
176.211a; or
176.22(2) the commissioner determines there is a credible allegation of fraud for which an
176.23investigation is pending under the program. A credible allegation of fraud is an allegation
176.24which has been verified by the state, from any source, including but not limited to:
176.25(i) fraud hotline complaints;
176.26(ii) claims data mining; and
176.27(iii) patterns identified through provider audits, civil false claims cases, and law
176.28enforcement investigations.
176.29Allegations are considered to be credible when they have an indicia of reliability
176.30and the state agency has reviewed all allegations, facts, and evidence carefully and acts
176.31judiciously on a case-by-case basis.
176.32(c) The commissioner must send notice of the withholding or reduction of payments
176.33under paragraph (b) within five days of taking such action unless requested in writing by a
176.34law enforcement agency to temporarily withhold the notice. The notice must:
176.35(1) state that payments are being withheld according to paragraph (b);
177.1(2) set forth the general allegations as to the nature of the withholding action, but
177.2need not disclose any specific information concerning an ongoing investigation;
177.3(3) except in the case of a conviction for conduct described in subdivision 1a, state
177.4that the withholding is for a temporary period and cite the circumstances under which
177.5withholding will be terminated;
177.6(4) identify the types of claims to which the withholding applies; and
177.7(5) inform the vendor of the right to submit written evidence for consideration by
177.8the commissioner.
177.9The withholding or reduction of payments will not continue after the commissioner
177.10determines there is insufficient evidence of fraud by the vendor, or after legal proceedings
177.11relating to the alleged fraud are completed, unless the commissioner has sent notice of
177.12intention to impose monetary recovery or sanctions under paragraph (a).
177.13(d) The commissioner shall suspend or terminate a vendor's participation in the
177.14program without providing advance notice and an opportunity for a hearing when the
177.15suspension or termination is required because of the vendor's exclusion from participation
177.16in Medicare. Within five days of taking such action, the commissioner must send notice of
177.17the suspension or termination. The notice must:
177.18(1) state that suspension or termination is the result of the vendor's exclusion from
177.19Medicare;
177.20(2) identify the effective date of the suspension or termination; and
177.21(3) inform the vendor of the need to be reinstated to Medicare before reapplying
177.22for participation in the program.
177.23(e) Upon receipt of a notice under paragraph (a) that a monetary recovery or
177.24sanction is to be imposed, a vendor may request a contested case, as defined in section
177.2514.02, subdivision 3 , by filing with the commissioner a written request of appeal. The
177.26appeal request must be received by the commissioner no later than 30 days after the date
177.27the notification of monetary recovery or sanction was mailed to the vendor. The appeal
177.28request must specify:
177.29(1) each disputed item, the reason for the dispute, and an estimate of the dollar
177.30amount involved for each disputed item;
177.31(2) the computation that the vendor believes is correct;
177.32(3) the authority in statute or rule upon which the vendor relies for each disputed item;
177.33(4) the name and address of the person or entity with whom contacts may be made
177.34regarding the appeal; and
177.35(5) other information required by the commissioner.
178.1(f) The commissioner may order a vendor to forfeit a fine for failure to fully document
178.2services according to standards in this chapter and Minnesota Rules, chapter 9505. The
178.3commissioner may assess fines if specific required components of documentation are
178.4missing. The fine for incomplete documentation shall equal 20 percent of the amount paid
178.5on the claims for reimbursement submitted by the vendor, or up to $5,000, whichever is less.
178.6(g) The vendor shall pay the fine assessed on or before the payment date specified. If
178.7the vendor fails to pay the fine, the commissioner may withhold or reduce payments and
178.8recover the amount of the fine. A timely appeal shall stay payment of the fine until the
178.9commissioner issues a final order.

178.10    Sec. 10. Minnesota Statutes 2012, section 256B.0659, subdivision 21, is amended to
178.11read:
178.12    Subd. 21. Requirements for initial enrollment of personal care assistance
178.13provider agencies. (a) All personal care assistance provider agencies must provide, at the
178.14time of enrollment as a personal care assistance provider agency in a format determined
178.15by the commissioner, information and documentation that includes, but is not limited to,
178.16the following:
178.17    (1) the personal care assistance provider agency's current contact information
178.18including address, telephone number, and e-mail address;
178.19    (2) proof of surety bond coverage in the amount of $50,000 $100,000 or ten percent
178.20of the provider's payments from Medicaid in the previous year, whichever is less more.
178.21The performance bond must be in a form approved by the commissioner, must be renewed
178.22annually, and must allow for recovery of costs and fees in pursuing a claim on the bond;
178.23    (3) proof of fidelity bond coverage in the amount of $20,000;
178.24    (4) proof of workers' compensation insurance coverage;
178.25    (5) proof of liability insurance;
178.26    (6) a description of the personal care assistance provider agency's organization
178.27identifying the names of all owners, managing employees, staff, board of directors, and
178.28the affiliations of the directors, owners, or staff to other service providers;
178.29    (7) a copy of the personal care assistance provider agency's written policies and
178.30procedures including: hiring of employees; training requirements; service delivery;
178.31and employee and consumer safety including process for notification and resolution
178.32of consumer grievances, identification and prevention of communicable diseases, and
178.33employee misconduct;
178.34    (8) copies of all other forms the personal care assistance provider agency uses in
178.35the course of daily business including, but not limited to:
179.1    (i) a copy of the personal care assistance provider agency's time sheet if the time
179.2sheet varies from the standard time sheet for personal care assistance services approved
179.3by the commissioner, and a letter requesting approval of the personal care assistance
179.4provider agency's nonstandard time sheet;
179.5    (ii) the personal care assistance provider agency's template for the personal care
179.6assistance care plan; and
179.7    (iii) the personal care assistance provider agency's template for the written
179.8agreement in subdivision 20 for recipients using the personal care assistance choice
179.9option, if applicable;
179.10    (9) a list of all training and classes that the personal care assistance provider agency
179.11requires of its staff providing personal care assistance services;
179.12    (10) documentation that the personal care assistance provider agency and staff have
179.13successfully completed all the training required by this section;
179.14    (11) documentation of the agency's marketing practices;
179.15    (12) disclosure of ownership, leasing, or management of all residential properties
179.16that is used or could be used for providing home care services;
179.17    (13) documentation that the agency will use the following percentages of revenue
179.18generated from the medical assistance rate paid for personal care assistance services
179.19for employee personal care assistant wages and benefits: 72.5 percent of revenue in the
179.20personal care assistance choice option and 72.5 percent of revenue from other personal
179.21care assistance providers. The revenue generated by the qualified professional and the
179.22reasonable costs associated with the qualified professional shall not be used in making
179.23this calculation; and
179.24    (14) effective May 15, 2010, documentation that the agency does not burden
179.25recipients' free exercise of their right to choose service providers by requiring personal
179.26care assistants to sign an agreement not to work with any particular personal care
179.27assistance recipient or for another personal care assistance provider agency after leaving
179.28the agency and that the agency is not taking action on any such agreements or requirements
179.29regardless of the date signed.
179.30    (b) Personal care assistance provider agencies shall provide the information specified
179.31in paragraph (a) to the commissioner at the time the personal care assistance provider
179.32agency enrolls as a vendor or upon request from the commissioner. The commissioner
179.33shall collect the information specified in paragraph (a) from all personal care assistance
179.34providers beginning July 1, 2009.
179.35    (c) All personal care assistance provider agencies shall require all employees in
179.36management and supervisory positions and owners of the agency who are active in the
180.1day-to-day management and operations of the agency to complete mandatory training
180.2as determined by the commissioner before enrollment of the agency as a provider.
180.3Employees in management and supervisory positions and owners who are active in
180.4the day-to-day operations of an agency who have completed the required training as
180.5an employee with a personal care assistance provider agency do not need to repeat
180.6the required training if they are hired by another agency, if they have completed the
180.7training within the past three years. By September 1, 2010, the required training must
180.8be available with meaningful access according to title VI of the Civil Rights Act and
180.9federal regulations adopted under that law or any guidance from the United States Health
180.10and Human Services Department. The required training must be available online or by
180.11electronic remote connection. The required training must provide for competency testing.
180.12Personal care assistance provider agency billing staff shall complete training about
180.13personal care assistance program financial management. This training is effective July 1,
180.142009. Any personal care assistance provider agency enrolled before that date shall, if it
180.15has not already, complete the provider training within 18 months of July 1, 2009. Any new
180.16owners or employees in management and supervisory positions involved in the day-to-day
180.17operations are required to complete mandatory training as a requisite of working for the
180.18agency. Personal care assistance provider agencies certified for participation in Medicare
180.19as home health agencies are exempt from the training required in this subdivision. When
180.20available, Medicare-certified home health agency owners, supervisors, or managers must
180.21successfully complete the competency test.
180.22EFFECTIVE DATE.This section is effective the day following final enactment.