SB 41 — MEDICAID SERVICES, FRAUD & DUE PROCESS

]"subcontractor" N.means a person that contracts with a medicaid provider or a managed care organization to provide medicaid-related services to recipients." SECTION 3.

"subcontractor" means a person [who] that contracts with a medicaid provider or a managed care organization to provide medicaid-related services to recipients." SECTION 3.

REVIEW OF MEDICAID [PROVIDERS ] PROVIDER OR MANAGED CARE ORGANIZATION--CONTRACT REMEDIES--PENALTIES.-- A.

Consistent with the terms of any contract between the department and a medicaid provider or managed care organization, the secretary shall have the right to be afforded access to such of the medicaid provider's or managed careSB h41 Page 3 care organization's records and personnel, as well as its g o t hr subcontracts and that subcontractor's records and personnel, as g e i k may be necessary to ensure that the medicaid provider or h r i s managed care organization is complying with the terms of its h , t, contract with the department.

e u g e b l e e h B.

Upon not less than two days' written notice to a n d d i = = o h medicaid provider or managed care organizationorganization, , the secretary l ] b ,d i a º e may, consistent with the provisions of the Medicaid Provider rand iManaged =Care rAct tand erules wissued dpursuant mto athat nact, ocarry andout Managedan Careadministrative Actinvestigation andor rulesconduct issuedadministrative pursuantproceedings to thatdetermine act,whether da mmedicaid :provider or managed care organization has:

b e d s º o t n = .210902.1 s k m e - 4 - e a n e d r e l u [ A d carry out an administrative investigation or conduct administrative proceedings to determine whether a medicaid provider or managed care organization has:

(4) intentionally or with reckless disregard advertised or marketed, or attempted to advertise or market, hSB 41 Page 4 its services to recipients in a manner as to misrepresent its g o t hr services or capacity for services, or engaged in any deceptive, g e i k misleading or unfair practice with respect to advertising or h r i s marketing;

h , t, (5) hindered or prevented the secretary from e u g e b l e e h performing any duty imposed by the Public Assistance Act, the n d d i = = o h Human Services Department Act or the Medicaid Provider and l ] b ,d i a º e Managed Care Act or any rules issued pursuant to those acts;

or r i = r t e w d m a n o (6) fraudulently procured or attempted to dprocure many :benefit from medicaid.

b e d s º o t n = .210902.1 s k m e - 5 - e a n e d r e l u [ A d procure any benefit from medicaid.

(1) impose an administrative penalty of not more than five thousand dollars ($5,000) for engaging in any practice described in [Paragraphs (1) through (6) of ] Subsection B of this section;

(2) issue an administrative order requiring hSB 41 Page 5 the medicaid provider or managed care organization to:

g o t hr (a) cease or modify any specified g e i k conduct or practices engaged in by it or its employees, h r i s subcontractors or agents;

h , t, (b) fulfill its contractual obligations e u g e b l e e h in the manner specified in the order;

n d d i = = o h (c) provide any service that has been l ] b ,d i a º e denied;

r(d) itake =steps rto tprovide eor warrange dfor many aservice nthat oit (d)has takeagreed steps to provide or arrangeis forotherwise dobligated mto :make available;

b e d s º o t n = .210902.1 s k m e - 6 - e a n e d r e l u [ A d any service that it has agreed or is otherwise obligated to make available;

If a medicaid provider's or managed care hSB 41 Page 6 organization's contract so specifies, the medicaid provider or g o t hr managed care organization shall have the right to seek de novo g e i k review in district court of any decision by the secretary h r i s regarding a contractual dispute." h , t, SECTION 4.

Section 27-11-4 NMSA 1978 (being Laws 1998, e u g e b l e e h Chapter 30, Section 4, as amended) is amended to read:

n d d i = = o h "27-11-4.

RETENTION AND PRODUCTION OF RECORDS.-- l ] b ,d i a º e A.

Medicaid providers, managed care organizations rand itheir =subcontractors rshall tretain, efor wa dperiod mof aat nleast osix andyears theirfrom subcontractorsthe shalldate retain,of forcreation, aall periodmedical ofand atbusiness leastrecords dthat mare :necessary to verify the:

b e d s º o t n = .210902.1 s k m e - 7 - e a n e d r e l u [ A d six years from the date of creation, all medical and business records that are necessary to verify the:

hSB 41 Page 7 B.

Upon written request by the department to a u » r medicaid provider, managed care organization or any t h g e l i subcontractor for copies or inspection of records pursuant to h r i s the Public Assistance Act, the medicaid provider, managed care h , e h organization or subcontractor shall provide the copies or t u g e b l e e , gh permit the inspection, as applicable within two business days n d d i = = o h after the date of the request unless the records are held by a l ] b ,d i a º r subcontractor, agent or satellite office, in which case the e r = t e w d m a n o records shall be made available within ten business days after dthe mdate :of the request.

b r e t º o t n = .210902.1 s k m e - 8 - e a n e d r e l u [ A d the date of the request.

"[NEW"DETERMINATION MATERIAL ] DETERMINATION OF OVERPAYMENTS OR CREDIBLE ALLEGATION OF FRAUD--AUDIT FINDINGS--SAMPLING--EXTRAPOLATION LIMITED--NOTICE OF RIGHT TO INFORMAL CONFERENCE AND EXPEDITED ADJUDICATORY PROCEEDING.-- A.

If the department contracts for the audit, the department shall contract only with an independent auditorSB h41 Page 8 auditor approved by the state auditor.

Each audited claim shall be u » r reviewed by a person who is licensed, certified, registered or t h g e l i otherwise credentialed in New Mexico as to the matters such h r i s person reviews, including coding or specific clinical practice.

h , e h B.

The department shall not extrapolate audit t u g e b l e e , gh findings unless a medicaid provider's or subcontractor's error n d d i = = o h rate exceeds ten percent based upon an appropriate sampling and l ] b ,d i a º r a representative sample of claims computed by valid statistical emethods rin =accordance twith ethe wmost drecently mpublished amedicare nprogram ointegrity methodsmanual inand accordanceusing withstatistical software approved by the mostUnited recentlyStates publisheddepartment medicareof dhealth mand :human services.

b r e t º o t n = .210902.1 s k m e - 9 - e a n e d r e l u [ A d program integrity manual and using statistical software approved by the United States department of health and human services.

and (3) notify the medicaid provider or subcontractor that is the subject of a preliminary finding of SB 41 Page 9 overpayment of its right to request, within thirty calendar h days of service of the preliminary finding of overpayment, an u » r informal conference with a representative of the department who t h g e l i is knowledgeable about the department's preliminary finding of h r i s overpayment and with a member of the audit team, if an audit h , e h formed the basis of any alleged overpayment, to informally t u g e b l e e , gh address, resolve or dispute the department's preliminary n d d i = = o h finding of overpayment.

l ] b ,d i a º r E.

Prior to making either a final determination of eoverpayment ror =a tdetermination eof wcredible dallegation mof afraud, nthe odepartment overpaymentmay impose corrective action upon the medicaid provider or asubcontractor determinationto ofaddress crediblesystemic allegationconditions contributing to errors in the submission of fraud,claims dfor mpayment :to which a medicaid provider or subcontractor is not entitled." SECTION 6.

b r e t º o t n = .210902.1 s k m e - 10 - e a n e d r e l u [ A d the department may impose corrective action upon the medicaid provider or subcontractor to address systemic conditions contributing to errors in the submission of claims for payment to which a medicaid provider or subcontractor is not entitled." SECTION 6.

"[NEW"INFORMAL MATERIAL ] INFORMAL CONFERENCE--CORRECTIVE ACTION--ACTION--REQUIREMENTS.-- REQUIREMENTS.-- A.

Upon receipt of a request for an informal conference, the department shall set SB 41 Page 10 a date for the conference to occur no later than fourteen h business days following receipt of the request.

u » r B.

Within seven days following the informal t h g e l i conference, a medicaid provider or subcontractor may submit a h r i s proposed corrective action plan to the department to correct h , e h clerical, typographical, scrivener's and computer errors or to t u g e b l e e , gh provide requested credentialing, licensure or training records n d d i = = o h identified in audit findings.

The department shall not l ] b ,d i a º r unreasonably withhold approval of the proposed corrective e r = t e w d m a n o action plan.

A medicaid provider or subcontractor shall have dno mless :than thirty days from the date of approval of its corrective action plan to provide additional information or documentation to the department to attempt to address or resolve a disputed preliminary finding of overpayment." SECTION 7.

b r e t º o t n = .210902.1 s k m e - 11 - e a n e d r e l u [ A d no less than thirty days from the date of approval of its corrective action plan to provide additional information or documentation to the department to attempt to address or resolve a disputed preliminary finding of overpayment." SECTION 7.

"[NEW"EXPEDITED MATERIAL ] EXPEDITED ADJUDICATORY PROCEEDINGS--PROCEEDINGS--REQUIREMENTS.-- REQUIREMENTS.-- A.

The chief hearing officer of the administrative hSB 41 Page 11 hearings office shall appoint or contract with a hearing u » r officer qualified pursuant to Section 8 of this 2019 act no t h g e l i later than thirty calendar days after service upon the h r i s administrative hearings office of a request for an expedited h , e h adjudicatory proceeding pursuant to the Medicaid Provider and t u g e b l e e , gh Managed Care Act by a medicaid provider or subcontractor.

n d d i = = o h C.

The expedited adjudicatory proceeding requested l ] b ,d i a º r by a medicaid provider or subcontractor in accordance with the eMedicaid rProvider =and tManaged eCare wAct dshall mcommence ano nlater othan Medicaidthirty Providercalendar anddays Managedfollowing Carethe Actappointment shallof commencethe nohearing laterofficer dor mas :stipulated by the parties or as otherwise ordered by the hearing officer upon a showing of good cause.

b r e t º o t n = .210902.1 s k m e - 12 - e a n e d r e l u [ A d than thirty calendar days following the appointment of the hearing officer or as stipulated by the parties or as otherwise ordered by the hearing officer upon a showing of good cause.

In addition, the hearing officer shall determine the amount of overpayment with respect to each disputed claim submitted for payment, if SB 41 Page 12 any.

The findings of h fact and conclusions of law of the hearing officer shall be u » r made and served upon all parties of record within thirty t h g e l i calendar days following the hearing officer's receipt of the h r i s record.

h , e h E.

The hearing officer's findings of fact and t u g e b l e e , gh conclusions of law shall be binding on the department and n d d i = = o h constitute a final agency decision, which may be appealed l ] b ,d i a º r pursuant to Section 39-3-1.1 NMSA 1978." e r = t e w d m a n o SECTION 8.

A new section of the Medicaid Provider and dManaged mCare :Act is enacted to read:

b"QUALIFICATIONS rAND eSELECTION tOF ºHEARING oOFFICER tFOR nEXPEDITED =ADJUDICATORY .210902.1PROCEEDINGS.-- sA. k m e - 13 - e a n e d r e l u [ A d Managed Care Act is enacted to read:

"[NEW MATERIAL] QUALIFICATIONS AND SELECTION OF HEARING OFFICER FOR EXPEDITED ADJUDICATORY PROCEEDINGS.-- A.

SFCº (3) have at least five years' experience in commercial litigation demonstrating the ability to make a record in an adjudicatory proceeding suitable for judicial h review;»SFC g o t hr SFCº(4) (3)»SFC not currently be employed by or g e i k represent, or belong to a law firm that currently represents, h r i s the SFCºdepartment state»SFC SFCºdepartment»SFC or a medicaid provider hor ,managed t,care eSB u41 gPage or13 managed care organization or third-party administrator e b l e e h currently doing business with the department;

and n(4) d d i = = o h SFCº (5) (4)»SFC not be related within the third l ] b ,d i a º e r i = r degree of consanguinity to a person currently employed by tthe edepartment, wcurrently ddoing mbusiness awith nthe odepartment SFCºor ancurrently executiveemployed agencyby ofan theorganization state, currently doing business dwith mthe :department.

bB. e d s º o t n = .210902.1 s k m e - 14 - e a n e d r e l u [ A d with the state or currently employed by an organization doing business with the state.»SFC SFCºthe department, currently doing business with the department or currently employed by an organization doing business with the department.»SFC SFCºB.

or (2) affiliated with, or the spouse of, a lobbyist registered under the Lobbyist Regulation Act who currently represents, or has in the prior calendar year represented, a client in matters before the department.»SFCdepartment. SFCºB.

C.»SFCC. The chief hearing officer of the administrative hearings office shall select the hearing officer to preside over an expedited adjudicatory proceeding held h pursuant to the Medicaid Provider and Managed Care Act and the u » r t h Administrative Procedures Act." g e l i SECTION 9.

AThe newchief sectionhearing officer of the Medicaidadministrative Providerhearings andoffice hshall rselect ithe shearing officer to preside over an expedited adjudicatory proceeding held pursuant to the Medicaid Provider and Managed Care Act isand enactedthe toAdministrative read:Procedures Act." SECTION 9.

hA ,new esection hof tthe uMedicaid gProvider "[NEWand MATERIALManaged ]Care COSTSAct OFis EXPEDITEDenacted ADJUDICATORYto eread: b l e e , gh PROCEEDING.-- n d d i = = o h A.

Each"COSTS partyOF shallEXPEDITED beADJUDICATORY responsiblePROCEEDING.-- forA. its own l ] b ,d i a º r e r = costs related to the expedited adjudicatory proceeding, t e w d m a n o including costs associated with preparation for the hearing, d m :

bEach rparty eshall tbe ºresponsible ofor tits nown =SB .210902.141 sPage k14 mcosts erelated -to 15the -expedited eadjudicatory aproceeding, nincluding ecosts dassociated rwith epreparation lfor uthe [hearing, A d discovery, depositions, subpoenas, service of process and witness expenses, travel expenses and investigation expenses and attorney fees.

"[NEW"RIGHTS MATERIAL] RIGHTS OF MEDICAID PROVIDER OR SUBCONTRACTOR--PRELIMINARYSUBCONTRACTOR-- PRELIMINARY OR FINAL DETERMINATION OF OVERPAYMENT.-- A.

(1) the department's preliminary or final h determination of overpayment as:

g o t hr (a) exceeding statutory authority;

g e i k (b) arbitrary or capricious;

h r i s (c) a failure to follow department h , t, procedure;

or e u g e b l e e h (d) not supported by substantial n d d i = = o h evidence;

l ] b ,d i a º e (2) the credentials of persons who rSB i41 =Page r15 t e w d m a n o participated in the audit or claims review;

or d(3) mthe :methodology or accuracy of the department's audit.

b e d s º o t n = .210902.1 s k m e - 16 - e a n e d r e l u [ A d (3) the methodology or accuracy of the department's audit.

"[NEW"RELEASE MATERIAL ] RELEASE OF SUSPENDED PAYMENT FOR SERVICES PREVIOUSLY RENDERED--PREPAYMENT REVIEW--REMEDIAL TRAINING AND EDUCATION--TEMPORARY ASSISTANCE.-- A.

The department shall direct the release of a suspended payment to a medicaid provider or subcontractor that is the subject of a referral based upon a determination of a credible allegation of fraud for services previously rendered if the medicaid provider or subcontractor posts a surety bond in the amount of the suspended payment, which posting shall be h deemed good cause not to suspend payment.

u » r B.

The provisions of this section shall not prevent t h g e l i the department from:

h r i s (1) conducting a prepayment review of claims h , e h for ongoing services rendered by the medicaid provider or t u g e b l e e , gh subcontractor;

n d d i = = o h (2) requiring the medicaid provider or lSB ]41 bPage ,d16 i a º r subcontractor or its employees to complete remedial training or e r = t e w d m a n o education to prevent the submission of claims for payment to dwhich mthe :medicaid provider or subcontractor is not entitled;

b r e t º o t n = .210902.1 s k m e - 17 - e a n e d r e l u [ A d which the medicaid provider or subcontractor is not entitled;

(2) notice from the attorney general that the attorney general will not pursue legal action against the medicaid provider or subcontractor arising out of the referral of the medicaid provider or subcontractor based on a h determination of a credible allegation of fraud;

u » r (3) the date on which an administrative t h g e l i decision as to the basis for suspending such payments, or h r i s portion of such payments, in favor of the medicaid provider or h , e h subcontractor becomes final;

or t u g e b l e e , gh (4) the date on which a judicial decision as n d d i = = o h to the basis for suspending such payments, or portion of such lSB ]41 bPage ,d17 i a º r payments, in favor of the medicaid provider or subcontractor e r = t e w d m a n o becomes final and not subject to further appeal." dSECTION m12. :

b r e t º o t n = .210902.1 s k m e - 18 - e a n e d r e l u [ A d SECTION 12.

"[NEW"MAINTENANCE MATERIAL] MAINTENANCE OF SERVICES--PAYMENT FOR ONGOING SERVICES.-- A.

(2) demonstrates that its employees have h completed remedial training or education required by the u » r department to prevent the submission of claims for payment to t h g e l i which the medicaid provider or subcontractor is not entitled;

h r i s and h , e h (3) engages an independent third party t u g e b l e e , gh approved by the department to temporarily manage or provide nSB d41 dPage i18 = = o h technical assistance to the medicaid provider or subcontractor l ] b ,d i a º r following the referral or during the pendency of the dispute.

e r = t e w d m a n o B.

The department shall not unreasonably withhold dapproval mof :a third party proposed by the medicaid provider or subcontractor pursuant to Paragraph (3) of Subsection A of this section.

b r e t º o t n = .210902.1 s k m e - 19 - e a n e d r e l u [ A d approval of a third party proposed by the medicaid provider or subcontractor pursuant to Paragraph (3) of Subsection A of this section.

"[NEW"DISPOSITION MATERIAL ] DISPOSITION OF RECOVERED MEDICAID FUNDS.-- A.

The department shall not enter into a contract h to pay any portion of funds recovered by the state from a u » r medicaid provider, a managed care organization or a t h g e l i subcontractor to any other person unless expressly authorized h r i s or required to do so by state or federal law." hSB ,41 ePage h19 SECTION 14.

A new section of the Medicaid Provider and t u g e b l e e , gh Managed Care Act is enacted to read:

n"CREDIBLE d d i = = o h "[NEW MATERIAL ] CREDIBLE ALLEGATION OF FRAUD--JUDICIAL lREVIEW-- ]SUBSTANTIAL b ,d i a º r REVIEW--SUBSTANTIAL EVIDENCE REQUIRED.-- e r = t e w d m a n o A.

A credible allegation of fraud determination by dthe mdepartment :shall be deemed a final agency decision and may be appealed pursuant to Section 39-3-1.1 NMSA 1978.

b r e t º o t n = .210902.1 s k m e - 20 - e a n e d r e l u [ A d the department shall be deemed a final agency decision and may be appealed pursuant to Section 39-3-1.1 NMSA 1978.

(1) it has SFCºfollowed not abused its discretion by failing to follow»SFC SFCºfollowed»SFC its own procedures;

In a proceeding for judicial review under this section, the reviewing court shall not consider evidence h acquired by the department after making its credible allegation g o t hr of fraud determination." g e i k SECTION 15.

A new section of the Medicaid Provider and h r i s Managed Care Act is enacted to read:

h"AWARD , t, e u g "[NEW MATERIAL ] AWARD OF COSTS, FEES AND INTEREST.-- eSB b41 lPage e20 e h A.

If a medicaid provider or subcontractor is the n d d i = = o h prevailing party in any expedited adjudicatory or court l ] b ,d i a º e proceeding brought by the medicaid provider or subcontractor rpursuant ito =the rMedicaid tProvider eand wManaged dCare mAct on or after January 1, 2020 in connection with a npreliminary oor pursuantfinal todetermination theof Medicaidoverpayment Provideror anda Manageddetermination Careof Actcredible onallegation of fraud, the medicaid provider or dsubcontractor mshall :be entitled to:

b e d s º o t n = .210902.1 s k m e - 21 - e a n e d r e l u [ A d after SFCºJuly 1, 2019»SFC SFCºJanuary 1, 2020»SFC in connection with a preliminary or final determination of overpayment or a determination of credible allegation of fraud, the medicaid provider or subcontractor shall be entitled to:

(2) "reasonable administrative costs" means actual charges for preparation for and conduct of an h administrative proceeding, including:

g o t hr (a) court reporter fees, service of g e i k process fees and similar expenses;

h r i s (b) the services of expert witnesses;

h , t, (c) any study, analysis, report, test orSB e41 uPage g21 eor b l e e h project reasonably necessary for the preparation of the party's n d d i = = o h case;

and l ] b ,d i a º e (d) fees and costs paid or incurred for r i = r t e w d m a n o the services of attorneys or of certified public accountants in dconnection mwith :the expedited adjudicatory proceeding;

b e d s º o t n = .210902.1 s k m e - 22 - e a n e d r e l u [ A d connection with the expedited adjudicatory proceeding;

or (b) substantially prevailed with respect h to most of the issues involved in the case or the most g o t hr significant issue or set of issues involved in the case;

g e i k (2) the medicaid provider or subcontractor h r i s shall not be treated as the prevailing party if SFCº , prior to h , t, July 1, 2019, the departmenthearing establishesSB or,41 onPage or22 after July e u g e b l e e h 1, 2019,»SFC the hearing officer finds that the position of the n d d i = = o h department in the proceeding was based upon a reasonable l ] b ,d i a º e application of the law to the facts of the case.

For purposes rof ithis =paragraph, rthe tposition eof wthe ddepartment mshall abe npresumed onot ofto thisbe paragraph,based theupon positiona reasonable application of the departmentlaw shallto bethe dfacts mof :the case if:

b e d s º o t n = .210902.1 s k m e - 23 - e a n e d r e l u [ A d presumed not to be based upon a reasonable application of the law to the facts of the case if:

or h (c) in a court proceeding, by the court.

u » r D.

A decision or order granting or denying in whole t h g e l i or in part an award for reasonable administrative costs h r i s pursuant to Subsection A of this section by the hearing officerSB h41 ,Page e23 hofficer shall be reviewable in the same manner as other decisions of t u g e b l e e , gh the administrative hearings office.

An order granting or n d d i = = o h denying in whole or in part an award for reasonable litigation l ] b ,d i a º r costs pursuant to Subsection A of this section in a court eproceeding rmay =be tincorporated eas wa dpart mof athe ndecision oor judgment in the court proceeding mayand shall be incorporatedsubject asto aappeal partin ofthe same manner as the decision or djudgment. m :

b r e t º o t n = .210902.1 s k m e - 24 - e a n e d r e l u [ A d judgment in the court proceeding and shall be subject to appeal in the same manner as the decision or judgment.

(1) clean claim electronically submitted by h the medicaid provider or subcontractor and not paid within u » r thirty days of receipt;

t h g e l i (2) clean claim manually submitted by the hSB r41 iPage s24 medicaid provider or subcontractor and not paid within forty- h , e h five days of receipt;

or t u g e b l e e , gh (3) claim for which additional information was n d d i = = o h necessary to substantiate the claim and not paid within sixty l ] b ,d i a º r days of receipt of such additional information." e r = t e w d m a n o SECTION 16.

A new section of the Medicaid Provider and dManaged mCare :Act is enacted to read:

b"APPLICABILITY rOF eADMINISTRATIVE tPROCEDURES ºACT.-- oA. t n = .210902.1 s k m e - 25 - e a n e d r e l u [ A d Managed Care Act is enacted to read:

"[NEW MATERIAL ] APPLICABILITY OF ADMINISTRATIVE PROCEDURES ACT.-- A.

"[NEW"APPOINTMENT MATERIAL ] APPOINTMENT OF HEARING OFFICER FOR EXPEDITED ADJUDICATORY PROCEEDINGS UNDER THE MEDICAID PROVIDER AND MANAGED CARE ACT.--The chief hearing officer shall select a hearing officer for expedited adjudicatory proceedings as h provided by the Medicaid Provider and Managed Care Act." g o t hr SECTION 18.

TEMPORARY PROVISION--REFERENCES IN LAW.--As g e i k of the effective date of this act, all references in law to the h r i s Medicaid Provider Act shall be deemed to be references to theSB h41 ,Page t,25 the Medicaid Provider and Managed Care Act.

e u g e b l e e h SFCº SECTION 19.

SEVERABILITY.--If any part or application of n d d i = = o h this act is held invalid, the remainder or its application to l ] b ,d i a º e other situations or persons shall not be affected.»SFCaffected. r i = r t e w d m a n o SECTION SFCº19.

20.»SFCSECTION EFFECTIVE20. DATE.--The effective d m :

bEFFECTIVE eDATE.--The deffective s º o t n = .210902.1 s k m e - 26 - e a n e d r e l u [ A d date of the provisions of this act is January 1, 2020.

-SB 2741 -Page »26 g8 o25 » r h t i k l i g t h s , e h t l i w l b l e e , g n d l h = = b , a l º d i a r e r = , a t e d m a n o d m :

b r e t º o t n = .210902.1 s k em e - 27 - e a n e d r e l u [ A d