19.8166.01000
Sixty-sixth
Legislative Assembly SENATE BILL NO. 2347
of North Dakota
Introduced by
Senators K. Roers, Hogan, J. Lee
Representatives Boschee, Rohr, Schneider
1 A BILL for an Act to provide for liability for false medical assistance claims and to provide for a
2 Medicaid fraud control unit; and to provide a penalty.
3 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
4 SECTION 1.
5 Definitions.
6 As used in this Act, unless the context otherwise requires:
7 1. "Abuse" means conduct by a provider or other person involving disregard of and an
8 unreasonable failure to conform with the laws and rules governing the Medicaid
9 program if the disregard or failure results or may result in payment by a Medicaid
10 agency of medical assistance payments or benefits to which the provider knows the
11 provider is not entitled.
12 2. "Benefit" means the provision of anything of pecuniary value under the Medicaid
13 program.
14 3. "Claim" means any request or demand, whether under a contract or otherwise, for
15 money or property under the Medicaid program regardless of whether the state has
16 title to the money or property which is:
17 a. Presented to an officer, employee, or agent of the state; or
18 b. Made to a contractor, grantee, or other recipient, if the money or property is to be
19 spent or used on the state's behalf or to advance a state program or interest, and
20 if the state:
21 (1) Provides or has provided any portion of the money or property requested or
22 demanded; or
23 (2) Will reimburse such contractor, grantee, or other recipient for any portion of
24 the money or property that is requested or demanded; and does not include
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1 requests or demands for money or property the state has paid to an
2 individual as compensation for state employment or as an income subsidy
3 with no restrictions on that individual's use of the money or property.
4 4. "Department" means the department of human services.
5 5. "Document" means an application, claim, form, report, record, writing, or
6 correspondence, whether in written, electronic, magnetic, or other form.
7 6. "Fraud" means any conduct or activity prohibited by law or rule involving knowing
8 conduct or omission to perform a duty that results in or may result in payments to
9 which the person is not entitled.
10 7. "Knowingly" or "knowing" requires no proof of specific intent to defraud and means a
11 person has actual knowledge of the information, acts in deliberate ignorance of the
12 truth or falsity of the information, or acts in reckless disregard of the truth or falsity of
13 the information.
14 8. "Material" means having a natural tendency to influence, or be capable of influencing,
15 the payment or receipt of money or property.
16 9. "Medicaid agency" means an agency or entity of state, county, or local government
17 which administers any part of the Medicaid program, whether under direct statutory
18 authority or under contract with an authorized agency of the state or federal
19 government.
20 10. "Misappropriation of patient property" means exploitation, deliberate misplacement, or
21 wrongful use or taking of a patient's property, whether temporary or permanent,
22 without authorization by the patient or the patient's designated representative. The
23 term includes conduct with respect to a patient's property, which would constitute a
24 criminal offense under chapter 12.1-23.
25 11. "Obligation" means an established duty, whether fixed, arising from an express or
26 implied contractual, grantor-grantee, or licensor-licensee relationship, from a
27 fee-based or similar relationship, from statute or regulation, or from the retention of
28 any overpayment.
29 12. "Original source" means an individual who before a public disclosure has voluntarily
30 disclosed to the state the information on which allegations or transactions in a claim
31 are based or who has knowledge that is independent of and materially adds to the
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1 publicly disclosed allegations or transactions, and who has voluntarily provided the
2 information to the state before filing an action under this Act.
3 13. "Patient abuse" means the willful infliction of physical or mental injury of a patient or
4 unreasonable confinement, intimidation, or punishment that results in pain, physical or
5 mental harm, or mental anguish of a patient. The term includes conduct with respect to
6 a patient which would constitute a criminal offense under chapter 12.1-16, 12.1-17,
7 12.1-18, 12.1-20, or 12.1-22.
8 14. "Patient neglect" means a failure, through inattentiveness, carelessness, or other
9 omission, to provide to a patient goods and services necessary to avoid physical
10 harm, mental anguish, or mental illness if an omission is not caused by factors beyond
11 the person's control or by good-faith errors in judgment. The term includes conduct
12 with respect to a patient which would constitute a criminal offense under section
13 12.1-17-03.
14 15. "Proceeds" means civil penalties and damages and excludes attorney's fees and
15 costs.
16 16. "Provider" means a person that furnishes items or services for which payment is
17 claimed under the Medicaid program.
18 17. "Record" means medical, professional, business, or financial information and
19 documents, whether in written, electronic, magnetic, microfilm, or other form:
20 a. Pertaining to the provision of treatment, care, services, or items to a recipient;
21 b. Pertaining to the income and expenses of the provider; or
22 c. Otherwise relating to or pertaining to a determination of entitlement to payment or
23 reimbursement under the Medicaid program.
24 SECTION 2.
25 Liability for certain acts - Civil penalty.
26 1. Except as provided in subsection 2, a person is liable to the state for a civil penalty of
27 not less than ten thousand nine hundred fifty-seven dollars and not more than
28 twenty-one thousand nine hundred fifty-six dollars for each act specified in this
29 section, three times the amount of damages the state sustains because of the
30 person's act, and costs of the investigation and litigation fees, if the person:
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1 a. Knowingly presents or causes to be presented a false or fraudulent claim for
2 payment or approval;
3 b. Knowingly makes, uses, or causes to be made or used, a false record or
4 statement material to a false or fraudulent claim;
5 c. Conspires to commit a violation of this section;
6 d. Has possession, custody, or control of public property or money used or to be
7 used by the state and knowingly delivers or causes to be delivered less than all
8 of that money or property;
9 e. Is authorized to make or deliver a document certifying receipt of property used or
10 to be used by the state and, with the intent to defraud the state, makes or
11 delivers a receipt without completely knowing the information on the receipt is
12 true; or
13 f. Knowingly makes, uses, or causes to be made or used a false record or
14 statement material to an obligation to pay or transmit money or property to the
15 state or knowingly conceals or knowingly and improperly avoids or decreases an
16 obligation to pay or transmit money or property to the state.
17 2. The court may assess not less than two times the amount of damages the state
18 sustains because of the act of the person and the person is liable to the state for the
19 costs of the civil action brought to recover any such penalty or damages if the court
20 finds:
21 a. The person committing the act furnished the attorney general with all information
22 known to that person about the act within thirty days after the date on which the
23 person first obtained the information;
24 b. The person fully cooperated with any investigation of the act by the attorney
25 general; and
26 c. At the time the person furnished the attorney general with information about the
27 act, a criminal prosecution, civil action, or administrative action had not been
28 commenced with respect to the act and the person did not have actual
29 knowledge of the existence of an investigation into the violation.
30 3. Annually, the attorney general shall review the civil penalty rates and by administrative
31 rule shall amend these civil penalty rates to comport with the penalty amounts under
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1 the federal Civil Penalties Inflation Adjustment Act of 1990 [Pub. L. 101-410; 104 Stat.
2 890; 28 U.S.C. 2461].
3 SECTION 3.
4 Limitation of actions.
5 1. A civil action filed under this Act must be brought by the later of:
6 a. Six years after the date on which the violation was committed; or
7 b. Three years after the date facts material to the right of action are known or
8 reasonably should have been known by the official of the state charged with
9 responsibility to act in the circumstances.
10 2. An action may not be brought pursuant to subdivision b of subsection 1 more than ten
11 years after the date on which the violation was committed.
12 SECTION 4.
13 Investigation and action by attorney general.
14 The attorney general's Medicaid fraud control unit shall investigate an alleged violation of
15 this Act and may file a civil action, a criminal action, or both against any person that violated or
16 is violating this Act.
17 SECTION 5.
18 Complaint by person - Civil action.
19 1. A person may bring a civil action for a violation of this Act on behalf of the person and
20 the state. The action must be brought in the name of the state. The action may be
21 dismissed only if the court and the attorney general give written consent to the
22 dismissal and provide the reasons for consenting to the dismissal.
23 2. A copy of the complaint and written disclosure of substantially all material evidence
24 and information the person possesses must be served on the attorney general
25 pursuant to the North Dakota Rules of Civil Procedure. The complaint must be filed
26 under seal and must remain under seal for at least sixty days. The complaint may not
27 be served upon the defendant until the court orders that it be served.
28 3. Within sixty days after receiving the complaint and the material evidence and
29 information, the attorney general may elect to intervene and proceed with the action or
30 to notify the court the attorney general declines to take over the action. If the attorney
31 general declines to intervene or take over the action, the person bringing the action
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1 may conduct the action. For good cause shown, the attorney general may move the
2 court for extensions of the time during which the complaint remains under seal.
3 4. The defendant may not be required to respond to any complaint until twenty days after
4 the complaint is unsealed and served upon the defendant pursuant to rule 5 of the
5 North Dakota Rules of Civil Procedure.
6 5. If a person brings an action under this section, no person other than the attorney
7 general may intervene or bring a related action based on the facts underlying the
8 pending action.
9 6. If the attorney general proceeds with the action, the attorney general has the primary
10 responsibility for prosecuting the action and is not bound by an act of the person
11 bringing the action. The person bringing the action has the right to continue as a party
12 to the action subject to the limitations set forth in this Act.
13 7. If the attorney general elects not to proceed with the action and the person that
14 initiated the action conducts the action:
15 a. Upon the attorney general's request, the person that initiated the action shall
16 serve the attorney general with copies of all pleadings filed in the action and shall
17 supply the attorney general with copies of all deposition transcripts at the
18 attorney general's expense; or
19 b. The court, without limiting the status and rights of the person initiating the action,
20 may permit the attorney general to intervene at a later date upon a showing of
21 good cause.
22 8. If a person files a civil action under this section, no person other than the attorney
23 general may intervene or bring a related action based on the facts underlying the
24 pending action.
25 9. Upon a showing by the attorney general unrestricted participation during the course of
26 the litigation by the person initiating the action would interfere with or unduly delay the
27 attorney general's prosecution of the case or would be repetitious, irrelevant, or for
28 purposes of harassment, the court may impose limitations on the person's
29 participation, including:
30 a. Limiting the number of witnesses the person may call;
31 b. Limiting the length of testimony of witnesses called by the person;
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1 c. Limiting the person's cross-examination of witnesses; or
2 d. Otherwise limiting the participation of the person in the litigation.
3 10. Whether the attorney general proceeds with the action, upon an in camera showing by
4 the attorney general that actions of discovery by the person initiating the action would
5 interfere with the attorney general's investigation or prosecution of a criminal or civil
6 matter arising out of the same facts, the court may stay such discovery for a period of
7 not more than sixty days. The court may extend the sixty-day period upon a further in
8 camera showing the attorney general has pursued the criminal, civil investigation, or
9 proceedings with reasonable diligence and any proposed discovery in the civil action
10 will interfere with the ongoing investigation or proceedings.
11 11. The attorney general may elect to pursue the claim through any alternate remedy
12 available, including administrative proceedings to determine a civil penalty. If an
13 alternate remedy is pursued, the person initiating the action has the same rights in the
14 proceeding as the person would have in proceeding under this section. Any finding of
15 fact or conclusion of law made in another proceeding that has become final is
16 conclusive on all parties to an action under this section. A finding or conclusion is final
17 if determined on appeal to the appropriate court, time for filing the appeal has expired,
18 or the finding or conclusion is not subject to judicial review.
19 12. If the attorney general elects to intervene and proceed with an action, the attorney
20 general may file a complaint or amend the complaint of a person that has brought an
21 action to clarify or add detail to the claims in which the attorney general is intervening
22 and to add additional claims with which the attorney general contends the attorney
23 general is entitled to relief. For statute of limitations purposes, a pleading relates back
24 to the filing date of the complaint of the person that originally brought the action to the
25 extent the attorney general's claim arises out of the conduct, transactions, or
26 occurrences set forth, or attempted to be set forth, in the prior complaint of that
27 person.
28 SECTION 6.
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1 Filing prohibited.
2 1. A person may not bring an action under this Act based upon allegations or
3 transactions which are the subject of a civil suit or an administrative civil money
4 penalty proceeding in which the state i