HB 216 — An Act amending the act of June 13, 1967 (P.L.31, No.21), known as the Human Services Code, in fraud and abuse control, further providing for definitions and for provider prohibited acts, criminal penalties and civil remedies.

PRINTER'S NO.   173

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 216
                                               Session of
                                                 2025

     INTRODUCED BY KUTZ, HAMM, JAMES, KAUFFMAN, ECKER AND GROVE,
        JANUARY 22, 2025

     REFERRED TO COMMITTEE ON JUDICIARY, JANUARY 22, 2025


                                    AN ACT
 1   Amending the act of June 13, 1967 (P.L.31, No.21), entitled "An
 2      act to consolidate, editorially revise, and codify the public
 3      welfare laws of the Commonwealth," in fraud and abuse
 4      control, further providing for definitions and for provider
 5      prohibited acts, criminal penalties and civil remedies.
 6      The General Assembly of the Commonwealth of Pennsylvania
 7   hereby enacts as follows:
 8      Section 1.    Section 1401 of the act of June 13, 1967 (P.L.31,
 9   No.21), known as the Human Services Code, is amended by adding a
10   definition to read:
11      Section 1401.    Definitions.--The following words and phrases
12   when used in this article shall have, unless the context clearly
13   indicates otherwise, the meanings given to them in this section:
14      * * *
15      "Representation" means a communication that is used to
16   identify goods or services for which reimbursement is sought
17   under the medical assistance program or that is or may be used
18   to determine a rate of reimbursement under the medical
19   assistance program.
 1         * * *
 2         Section 2.   Section 1407 of the act is amended to read:
 3         Section 1407.   [Provider] Prohibited Acts, Criminal Penalties
 4   and Civil Remedies.--(a)     It shall be unlawful for any person
 5   to:
 6         (1)   [Knowingly or intentionally present for allowance or
 7   payment any false or fraudulent claim or cost report for
 8   furnishing services or merchandise under medical assistance, or
 9   to knowingly present for allowance or payment any claim or cost
10   report for medically unnecessary services or merchandise under
11   medical assistance, or to knowingly submit false information,
12   for the purpose of obtaining greater compensation than that to
13   which he is legally entitled for furnishing services or
14   merchandise under medical assistance, or to knowingly submit
15   false information for the purpose of obtaining authorization for
16   furnishing services or merchandise under medical assistance.]
17   Make or cause to be made a materially false, fraudulent or
18   misleading statement, claim or representation in a document or
19   record in any format, including written or electronic, used by
20   any person in connection with providing goods or services to any
21   recipient under the medical assistance program.
22         (1.1)   Submit or cause to be submitted false information for
23   the purpose of obtaining greater compensation than that to which
24   the person is legally entitled for furnishing goods or services
25   under the medical assistance program.
26         (1.2)   Submit or cause to be submitted a claim for medically
27   unnecessary or inadequate services or merchandise provided to a
28   recipient under the medical assistance program.
29         (2)   Solicit or receive or to offer or pay any remuneration,
30   including any kickback, bribe or rebate, directly or indirectly,

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 1   in cash or in kind from or to any person in connection with the
 2   furnishing of services or merchandise for which payment may be
 3   in whole or in part under the medical assistance program or in
 4   connection with referring an individual to a person for the
 5   furnishing or arranging for the furnishing of any services or
 6   merchandise for which payment may be made in whole or in part
 7   under the medical assistance program.
 8      (3)    Submit or cause to be submitted a duplicate claim for
 9   services, supplies or equipment for which [the provider] a
10   person has already received or claimed reimbursement from any
11   source.
12      (4)    Submit or cause to be submitted a claim for services,
13   supplies or equipment which were not rendered to a recipient.
14      (5)    Submit or cause to be submitted a claim for services,
15   supplies or equipment which includes costs or charges not
16   related to such services, supplies or equipment rendered to the
17   recipient.
18      (6)    Submit or cause to be submitted a claim or refer a
19   recipient to another provider by referral, order or
20   prescription, for services, supplies or equipment which:
21      (i)    are not documented in the record in the prescribed
22   manner and are of little or no benefit to the recipient[,];
23      (ii)    are below the accepted medical treatment standards[,
24   or]; or
25      (iii)     are unneeded by the recipient.
26      (7)    Submit or cause to be submitted a claim which
27   misrepresents the description of services, supplies or equipment
28   dispensed or provided; the dates of services; the identity of
29   the recipient; the identity of the attending, prescribing or
30   referring practitioner; or the identity of the actual

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 1   [provider.] person dispensing or providing services, supplies or
 2   equipment.
 3      (8)    Submit or cause to be submitted a claim for
 4   reimbursement for a service, charge or item at a fee or charge
 5   which is higher than the [provider's] person's usual and
 6   customary charge to the general public for the same service or
 7   item.
 8      (9)    Submit or cause to be submitted a claim for a service or
 9   item which was not rendered by the [provider] person.
10      (10)   Dispense, render or provide a service or item without a
11   practitioner's written order and the consent of the recipient,
12   except in emergency situations, or submit a claim for a service
13   or item which was dispensed, or provided without the consent of
14   the recipient, except in emergency situations.
15      (11)   Except in emergency situations, dispense, render or
16   provide a service or item to a patient claiming to be a
17   recipient without making a reasonable effort to ascertain by
18   verification through a current medical assistance identification
19   card, that the person or patient is, in fact, a recipient who is
20   eligible on the date of service and without another available
21   medical resource.
22      (12)   Enter into an agreement, combination or conspiracy to
23   obtain or aid another to obtain reimbursement or payments for
24   which there is not entitlement.
25      (13)   Make a false statement in the application for
26   enrollment as a provider.
27      (14)   Commit any of the prohibited acts described in section
28   1403(d)(1), (2), (4) and (5).
29      (15)   Submit or cause to be submitted a claim or any document
30   or record in any format, including written or electronic, for

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 1   the purposes of obtaining reimbursement from the medical
 2   assistance program during any time period when the person is
 3   excluded or precluded from participation in the medical
 4   assistance program or when the person is on the Federal List of
 5   Excluded Individuals/Entities.
 6      (b)     (1)   [A person who violates any provision of subsection
 7   (a), excepting subsection (a)(11), is guilty of a felony of the
 8   third degree for each such violation with a maximum penalty of
 9   fifteen thousand dollars ($15,000) and seven years imprisonment.
10   A violation of subsection (a) shall be deemed to continue so
11   long as the course of conduct or the defendant's complicity
12   therein continues; the offense is committed when the course of
13   conduct or complicity of the defendant therein is terminated in
14   accordance with the provisions of 42 Pa.C.S. § 5552(d) (relating
15   to other offenses). Whenever any person has been previously
16   convicted in any state or Federal court of conduct that would
17   constitute a violation of subsection (a), a subsequent
18   allegation, indictment or information under subsection (a) shall
19   be classified as a felony of the second degree with a maximum
20   penalty of twenty-five thousand dollars ($25,000) and ten years
21   imprisonment.
22      (2)] A person who knowingly or intentionally violates
23   subsection (a), excluding the provisions of subsection (a)(15),
24   commits:
25      (i)     A felony of the second degree if the amount of excess
26   payments, whether claimed or actually paid, is more than one
27   hundred thousand dollars ($100,000) or if the person has a prior
28   conviction in any Federal or state court for conduct that would
29   constitute a violation of subsection (a).
30      (ii)     A felony of the third degree if the amount of excess

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 1   payments, whether claimed or actually paid, is more than two
 2   thousand dollars ($2,000) but less than one hundred thousand
 3   dollars ($100,000).
 4      (iii)    A misdemeanor of the first degree if the amount of
 5   excess payments, whether claimed or actually paid, is less than
 6   two thousand dollars ($2,000).
 7      (2)    A person who knowingly or intentionally violates
 8   subsection (a)(15) commits a felony of the second degree.
 9      (b.1)    (1)   In addition to the penalties provided under
10   subsection (b), the trial court shall order any person convicted
11   under subsection (a):
12      (i)    to repay the amount of the excess benefits or payments
13   plus interest on that amount at the maximum legal rate from the
14   date payment was made by the Commonwealth to the date repayment
15   is made to the Commonwealth;
16      (ii)    to pay an amount not to exceed threefold the amount of
17   excess benefits or payments.
18      (2)    (Reserved).
19      (3)    Any person convicted under subsection (a) shall be
20   ineligible to participate in the medical assistance program for
21   a period of five years from the date of conviction. The
22   department shall notify any [provider so convicted that the
23   provider agreement is terminated for five years, and the
24   provider] person so convicted of the termination of any provider
25   agreement and of the five-year period of ineligibility to
26   participate in the medical assistance program. The person is
27   entitled to a hearing on the sole issue of identity. If the
28   conviction is set aside on appeal, the termination shall be
29   lifted.
30      (4)    The Attorney General and the district attorneys of the

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 1   several counties shall have concurrent authority to institute
 2   criminal proceedings under the provisions of this section.
 3      (5)   As used in this section the following words and phrases
 4   shall have the following meanings:
 5      "Conviction" means a verdict of guilty, a guilty plea, or a
 6   plea of nolo contendere in the trial court.
 7      "Medically unnecessary or inadequate services or merchandise"
 8   means services or merchandise which are unnecessary or
 9   inadequate as determined by medical professionals engaged by the
10   department who are competent in the same or similar field within
11   the practice of medicine.
12      (b.2)   A violation of subsection (a) shall be deemed to
13   continue so long as the course of conduct or the person's
14   complicity in the course of conduct continues. An offense is
15   committed when the course of conduct or complicity of the person
16   in the course of conduct is terminated as provided under 42
17   Pa.C.S. § 5552(d) (relating to other offenses).
18      (c)   (1)   If the department determines that a [provider]
19   person providing or dispensing services, supplies or equipment
20   has committed any prohibited act or has failed to satisfy any
21   requirement under [section 1407(a)] subsection (a), it shall
22   have the authority to immediately terminate, upon notice to the
23   [provider, the] person, any provider agreement and to institute
24   a civil suit against such [provider] person in the court of
25   common pleas for twice the amount of excess benefits or payments
26   plus legal interest from the date the violation or violations
27   occurred. The department shall have the authority to use
28   statistical sampling methods to determine the appropriate amount
29   of restitution due from the [provider] person.
30      (2)   [Providers who are] A person who is terminated from

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 1   participation in the medical assistance program for any reason
 2   shall be prohibited from owning, arranging for, rendering or
 3   ordering any service for medical assistance recipients during
 4   the period of [termination] ineligibility to participate in the
 5   medical assistance program. In addition, such [provider] person
 6   may not receive, during the period of [termination]
 7   ineligibility to participate in the medical assistance program,
 8   reimbursement in the form of direct payments from the department
 9   or indirect payments of medical assistance funds in the form of
10   salary, shared fees, contracts, kickbacks or rebates from or
11   through any participating provider.
12      (3)   [Notice of any action taken by the department against a
13   provider pursuant to clauses (1) and (2) will be forwarded by
14   the department to the Medicaid Fraud Control Unit of the
15   Department of Justice and to the appropriate licensing board of
16   the Department of State for appropriate action, if any. In
17   addition, the department will forward to the Medicaid Fraud
18   Control Unit of the Department of Justice and the appropriate
19   Pennsylvania licensing board of the Department of State any
20   cases of suspected provider fraud.] The department shall forward
21   notice of any action taken by the department against a person
22   under this section to the Medicaid Fraud Control Unit of the
23   Office of Attorney General and to the appropriate licensing
24   board of the Department of State for appropriate action. The
25   department shall forward to the Medicaid Fraud Control Unit of
26   the Office of Attorney General and the appropriate licensing
27   board of the Department of State any cases of suspected fraud by
28   a person except for reports required under section 1417.
29      Section 3.   This act shall take effect in 60 days.



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