1784-S AMS HEA S5045.1

SHB 1784 - S COMM AMD

By Committee on Health & Long-Term Care

    Strike everything after the enacting clause and insert the following:

    "NEW SECTION. Sec. 1.  The legislature finds that it is imperative that the limited resources dedicated to assist those in need be protected from fraud and abuse.  While the legislature recognizes that it is a small percentage of the population that seeks to defraud the public assistance system, those who do defraud the public assistance system take significant resources from the needy.

    The legislature also finds that one of the most effective ways to protect against these criminal acts is to have specific personnel whose focus is to investigate and refer for prosecution individuals who receive assistance improperly.

    Therefore, the legislature intends to establish a specific entity within the department of social and health services whose purpose is to protect the state's limited resources by focusing on public assistance fraud.

    Sec. 2.  RCW 43.20A.020 and 1987 c 283 s 1 are each amended to read as follows:

    ((As used in this chapter, unless the context indicates)) The definitions in this section apply throughout this chapter unless the context clearly requires otherwise:

    (1) "Director" means the director of the division of fraud investigations.

(2) "Department" means the department of social and health services.

    (((2) "Secretary" means the secretary of the department of social and health services.

    (3) "Deputy secretary" means the deputy secretary of the department of social and health services.

    (4) "Overpayment" means any department payment or department benefit to a recipient or to a vendor in excess of that to which the recipient or vendor is entitled by law, rule, or contract, including amounts in dispute pending resolution.

    (5))) (3) "Deputy secretary" means the deputy secretary of the department.

(4) "Disclosable information" means public information that:

(a) Is not exempt from disclosure under chapter 42.17 RCW;

(b) Does not pertain to an ongoing investigation; and

(c) Has not previously been disclosed in a public record.

(5) "Fraud or abuse" means acts and practices of fraud or abuse in programs administered by the department, including criminal or administrative misconduct by clients or vendors.  This does not include provider fraud as it relates to the department's administration of funds under Title XIX of the federal social security act, medicaid.

(6) "Division" means the division of fraud investigations of the department.

(7) "Overpayment" means any department payment or department benefit to a recipient or to a vendor in excess of that to which the recipient or vendor is entitled by law, rule, or contract, including amounts in dispute pending resolution.

(8) "Secretary" means the secretary of the department.

(9) "Vendor" means an entity that provides goods or services to or for clientele of the department and that controls operational decisions.

NEW SECTION. Sec. 3.  (1) The division is established in the department in order to create an independent unit to:

    (a) Conduct and supervise investigations relating to allegations of fraud or abuse;

    (b) Provide leadership and coordination in recommending policies and procedures designed to detect and prevent fraud and abuse; and

    (c) Provide a method of informing the secretary and the legislature about vulnerabilities and deficiencies relating to the detection and prevention of fraud or abuse as may be discovered as a result of completed investigations conducted or coordinated by the division.

    (2) The division is designated a criminal justice agency as defined in RCW 10.97.030 and 43.43.705.

NEW SECTION. Sec. 4.  The director is the head of the division and is appointed by the secretary solely on the basis of integrity and demonstrated ability in law enforcement management, public administration, and investigations.  The director reports to and is under the general supervision of the secretary in all matters related to fraud and program integrity.

NEW SECTION. Sec. 5. If the director discovers that improper governmental action, as defined in RCW 42.40.020, has occurred during an investigation with respect to an employee, such as an abuse of authority so as to impede or interfere with an investigation, then the director may report the improper governmental action to the auditor under chapter 42.40 RCW.

NEW SECTION. Sec. 6.  (1) It is the duty and responsibility of the director to:

    (a) Conduct, supervise, and coordinate fraud and abuse investigations and provide policy direction as it relates to program integrity and fraud and abuse;

    (b) Review proposed legislation and rules relating to the detection and prevention of fraud and abuse in programs administered by the department, and make recommendations for improvement;

    (c) Recommend policies for and coordinate activities carried out or financed by the department for the purpose of preventing and detecting fraud or abuse;

    (d) Recommend policies for, and conduct, supervise, and coordinate, relationships between the department and federal, state, and local governmental agencies, and nongovernmental entities, with respect to:  (i) Matters relating to the prevention and detection of fraud or abuse in programs and operations administered by the department; or (ii) the identification and prosecution of participants in such fraud or abuse; and

    (e) Keep the secretary and the legislature informed by means of reports concerning the detection and prevention of fraud or abuse, and to make recommendations for improvement of the activities.

    (2) In carrying out the duties and responsibilities established in sections 3 through 12 of this act, the director must refer all investigations in which the director has found substantial evidence supporting a finding of a violation of federal or state criminal law to the appropriate prosecuting authority for possible criminal prosecution.

NEW SECTION. Sec. 7.  The division has the authority to apply for and execute all warrants and serve process of law issued by the courts.  The division has the power to issue and serve subpoenas under RCW 43.20A.110 and 43.20A.605.

NEW SECTION. Sec. 8.  (1) The director must submit a report summarizing the activities of the division to the appropriate committees of the senate and house of representatives by November 30, 1998, and by November 30, 1999, and biennially thereafter.  The report shall contain only disclosable information, including:

    (a) A description of significant fraud or abuse, and of vulnerabilities or deficiencies relating to the prevention and detection of fraud or abuse, discovered as a result of investigations completed during the reporting period;

    (b) A description of corrective action taken by the department regarding fraud and abuse discovered as a result of investigations conducted by the division;

    (c) Recommendations for improving the activities of the division with respect to the vulnerabilities or deficiencies identified under (a) of this subsection;

    (d) An identification of each significant recommendation described in the previous reports on which corrective action has or has not been completed;

    (e) A summary of matters referred to prosecution authorities during the reporting period and the charges filed and convictions entered during the reporting period that have resulted from referrals by the division; and

    (f) Any comments the secretary determines to be appropriate.

    (2) The director must forward a draft of the report to the secretary not less than twenty days before the date that the report is to be issued.

    (3) Within sixty days after the transmission of the report of the director to the legislature, the secretary must make copies of the report available to the public upon request and at a reasonable cost.

NEW SECTION. Sec. 9.  (1) In carrying out the provisions of sections 3 through 12 of this act, the director is authorized to:

    (a) Request information or assistance as is necessary for carrying out the duties and responsibilities provided by sections 3 through 12 of this act from a federal, state, or local governmental agency or unit of a governmental agency;

    (b) Issue subpoenas for witnesses, documents, information, and other data necessary in the furtherance of an investigation conducted by the division.  The subpoenas are enforceable under RCW 34.05.588.  Before issuing subpoenas to a state agency, the director must make a reasonable request to the agency for documents and information in possession of the agency;

    (c) Administer oaths and take testimony, when appropriate in the performance of the duties and responsibilities provided in sections 3 through 12 of this act, unless otherwise prohibited by law;

    (d) To the extent and in the amount as may be provided by appropriation, select, appoint, and employ personnel as may be necessary to carry out the provisions of sections 3 through 12 of this act;

    (e) To the extent and in the amount as may be provided by appropriation, enter into contracts and other arrangements for audits, studies, analyses, and other services with public agencies and with private persons, and make the payments necessary to carry out the provisions of sections 3 through 12 of this act, subject to compliance with civil service laws, collective bargaining agreements, and other applicable law; and

    (f) To the extent and in the amount as may be provided by appropriation, purchase or lease facilities, equipment, and supplies necessary to carry out the provisions of sections 3 through 12 of this act.

    (2) Whenever information or assistance requested under subsection (1)(a)of this section is, in the judgment of the director, unreasonably refused or not provided, the director must report the circumstances to the secretary without delay.

NEW SECTION. Sec. 10.  (1) In carrying out the provisions of sections 3 through 12 of this act, the director is authorized to:

    (a) Have reasonable access to the secretary or his or her designee when necessary in the performance of the duties and responsibilities provided by sections 3 through 12 of this act;

    (b) Have prompt access to all individuals, records, electronic data, reports, audits, reviews, documents, and other materials available to the department that relate to operations of the division that is not otherwise prohibited from disclosure to the director.

    (2) Whenever information or assistance requested under subsection (1)(a) or (b) of this section is, in the judgment of the director, unreasonably refused or not provided, the director must report the circumstances to the secretary without delay.

NEW SECTION. Sec. 11.  (1) The director may receive and investigate complaints or information from an employee of the department or a citizen concerning the possible existence of an activity constituting a violation of law or rules, or mismanagement, gross waste of funds, abuse of authority, or a substantial and specific danger to the public health and safety.

    (2) The director must not, after receipt of a complaint or information from a complainant, disclose the identity of the complainant without the consent of the complainant, unless the director determines that the disclosure is unavoidable during the course of investigation, except as otherwise provided by state law.

    (3) An employee who has authority to take, direct others to take, recommend, or approve a personnel action, must not, with respect to the authority, take or threaten to take an action against an employee as a reprisal for making a complaint or disclosing information to the director, unless the complaint was made with willful disregard for its truth or falsity.

NEW SECTION. Sec. 12.  (1) The director may be contracted by other state agencies to conduct investigations into allegations of fraud and abuse in those agencies.  The requesting agency must reimburse the division for the cost of the investigation.

    (2) The director must provide the requesting agency a report of findings and may also file the findings with the appropriate prosecuting attorney.

NEW SECTION. Sec. 13.  Sections 3 through 12 of this act are each added to chapter 43.20A RCW."

SHB 1784 - S COMM AMD

By Committee on Health & Long-Term Care

    On page 1, line 1 of the title, after "fraud;" strike the remainder of the title and insert "amending RCW 43.20A.020; adding new sections to chapter 43.20A RCW; and creating a new section."

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