A BILL TO BE ENTITLED
AN ACT to provide that the regular business practice of waiving required medicaid recipient co-payments by a medicaid provider constitutes fraud.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 108A‑63 reads as rewritten:
"§ 108A‑63.  Medical assistance provider fraud.
(a)	It shall be unlawful for any provider of medical assistance under this Part to knowingly and willfully make or cause to be made any false statement or representation of a material fact:
(1)	In any application for payment under this Part, or for use in determining entitlement to such payment; or
(2)	With respect to the conditions or operation of a provider or facility in order that such provider or facility may qualify or remain qualified to provide assistance under this Part.
(b)	It shall be unlawful for any provider of medical assistance to knowingly and willfully conceal or fail to disclose any fact or event affecting:
(1)	His initial or continued entitlement to payment under this Part; or
(2)	The amount of payment to which such person is or may be entitled.
(c)	Except as otherwise provided in subsection (e) of this section, any person who violates a provision of this section shall be guilty of a Class I felony.
(d)	"Provider" shall include any person who provides goods or services under this Part and any other person acting as an employee, representative or agent of such person.
(e)	In connection with the delivery of or payment for benefits, items, or services under this Part, it shall be unlawful for any provider of medical assistance under this Part to knowingly and willfully execute, or attempt to execute, a scheme or artifice to:
(1)	Defraud the Medical Assistance Program.
(2)	Obtain, by means of false or fraudulent pretenses, representations, or promises of material fact, any of the money or property owned by, or under the custody or control of, the Medical Assistance Program.
(3)	Waive the collection of co-payments owed by recipients of medical assistance as required under the Medical Assistance Program with the intent to induce recipients to purchase, lease, or order items or services from the provider.
A violation of this subsection is a Class H felony. A conspiracy to violate this subsection is a Class I felony.
(f)	It shall be unlawful for any provider, with the intent to obstruct, delay, or mislead an investigation of a violation of this section by the Attorney General's office, to knowingly and willfully make or cause to be made a false entry in, alter, destroy, or conceal, or make a false statement about a financial, medical, or other record related to the provision of a benefit, item, or service under this Part.
(g)	It shall be unlawful for any person to knowingly and willfully solicit or receive any remuneration (including any kickback, bribe, rebate, or waiver of a co-payment owed by a recipient of medical assistance) directly or indirectly, overtly or covertly, in cash or in‑kind:
(1)	In return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under this Part.
(2)	In return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under this Part.
(h)	It shall be unlawful for any person to knowingly and willfully offer or pay any remuneration (including any kickback, bribe, rebate, or waiver of a co-payment owed by a recipient of medical assistance) directly or indirectly, overtly or covertly, in cash or in‑kind to any person to induce such person:
(1)	To refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under this Part.
(2)	To purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under this Part.
(i)	Subsections (g) and (h) of this section shall not apply to:
(1)	Contracts between the State and a public or private agency where part of the agency's responsibility is referral of a person to a provider.
(2)	Any conduct or activity that is specified in 42 U.S.C. § 1320a‑7b(b)(3), as amended, or any federal regulations adopted pursuant thereto.
(i1)	For enforcement purposes, a provider that waives a co-payment owed by a recipient of medical assistance in violation of subsections (g) and (h) of this section shall be considered in violation of those subsections regardless of the monetary amount that is waived by the provider. A provider of medical assistance shall not be in violation of subsections (g) and (h) of this section if the provider waives a co-payment owed by a recipient of medical assistance for any of the following reasons:
(1)	The waiver is authorized under the Medical Assistance Program.
(2)	The provider determines on an individual basis that the collection of the co‑payment amount would create a substantial financial hardship for the recipient, provided the waiver of co-payments is not a regular business practice of the provider. For the purposes of this subdivision, a provider shall be considered engaged in the regular business practice of waiving co‑payments if the provider holds himself or herself out to recipients as waiving required co-payments.
(3)	The provider has made a good faith effort to collect the co-payment amount but the provider's reasonable collection efforts fail.(i2)	For the purposes of this section, the waiver of a co-payment includes a full or partial waiver of the amount that is owed by the recipient of medical assistance.
(j)	Nothing in subsections (g) and (h) of this section shall be interpreted or construed to conflict with 42 U.S.C. § 1320a‑7b(b), as amended.
(k)	The Department shall suspend or terminate a provider's participation in the Medical Assistance Program if the provider is convicted of a violation of this section, whether upon a verdict after trial or upon a plea of guilty or nolo contendere, in accordance with administrative sanctions and remedial measures established by the Department. The administrative sanctions or remedial measures required by this subsection shall be in addition to the imposition of any criminal penalties."
SECTION 2. G.S. 108A‑70.12(a) reads as rewritten:
"(a)	Liability for Certain Acts. – It shall be unlawful for any provider of medical assistance under the Medical Assistance Program to do any of the following:
(1)	Knowingly present, or cause to be presented to the Medical Assistance Program a false or fraudulent claim for payment or approval.
(2)	Knowingly make, use, or cause to be made or used a false record or statement to get a false or fraudulent claim paid or approved by the Medical Assistance Program.
(3)	Knowingly waive a co-payment, in part or in full, owed by a recipient of medical assistance related to a claim presented to the Medical Assistance Program for payment or approval. A provider may be found in violation of this subdivision regardless of the monetary amount that is waived by the provider. A provider of medical assistance is not in violation of this subdivision if the provider waives a co-payment, in part or in full, owed by a recipient of medical assistance for any of the following reasons:
a.	The waiver is authorized under the Medical Assistance Program.
b.	The provider determines on an individual basis that the collection of the co-payment amount would create a substantial financial hardship for the recipient, provided the waiver of co-payments is not a regular business practice of the provider. For the purposes of this sub‑subdivision, a provider shall be considered engaged in the regular business practice of waiving co-payments if the provider holds himself or herself out to recipients as waiving required co‑payments.
c.	The provider has made a good faith effort to collect the co-payment amount but the provider's reasonable collection efforts fail.
Each claim presented or caused to be presented in violation of this section is a separate violation."
SECTION 3. This act becomes effective December 1, 2013, and applies to acts and offenses committed on or after that date.