100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB5660

 

Introduced , by Rep. Jim Durkin - David S. Olsen

 

SYNOPSIS AS INTRODUCED:
 
305 ILCS 5/8A-2.5
305 ILCS 5/8A-6  from Ch. 23, par. 8A-6
305 ILCS 5/8A-7  from Ch. 23, par. 8A-7
305 ILCS 5/8A-11  from Ch. 23, par. 8A-11
305 ILCS 5/8A-16
305 ILCS 5/8A-17

    Amends the Public Assistance Fraud Article of the Illinois Public Aid Code. Increases the criminal and civil penalties for medical assistance fraud committed by individuals and corporations.


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CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY
FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5660LRB100 19209 KTG 34475 b

1    AN ACT concerning public aid.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Aid Code is amended by
5changing Sections 8A-2.5, 8A-6, 8A-7, 8A-11, 8A-16, and 8A-17
6as follows:
 
7    (305 ILCS 5/8A-2.5)
8    Sec. 8A-2.5. Unauthorized use of medical assistance.
9    (a) Any person who knowingly uses, acquires, possesses, or
10transfers a medical card in any manner not authorized by law or
11by rules and regulations of the Illinois Department, or who
12knowingly alters a medical card, or who knowingly uses,
13acquires, possesses, or transfers an altered medical card, is
14guilty of a violation of this Article and shall be punished as
15provided in Section 8A-6.
16    (b) Any person who knowingly obtains unauthorized medical
17benefits or causes to be obtained unauthorized medical benefits
18with or without use of a medical card is guilty of a violation
19of this Article and shall be punished as provided in Section
208A-6.
21    (b-5) Any vendor that knowingly assists a person in
22committing a violation under subsection (a) or (b) of this
23Section is guilty of a violation of this Article and shall be

 

 

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1punished as provided in Section 8A-6.
2    (b-6) Any person (including a vendor, organization,
3agency, or other entity) that, in any matter related to the
4medical assistance program, knowingly or willfully falsifies,
5conceals, or omits by any trick, scheme, artifice, or device a
6material fact, or makes any false, fictitious, or fraudulent
7statement or representation, or makes or uses any false writing
8or document, knowing the same to contain any false, fictitious,
9or fraudulent statement or entry in connection with the
10provision of health care or related services, is guilty of a
11violation of this Article and shall be punished as provided in
12Section 8A-6.
13    (c) The Department may seek to recover any and all State
14and federal monies for which it has improperly and erroneously
15paid benefits as a result of a fraudulent action and any civil
16penalties authorized in this Section. Pursuant to Section
1711-14.5 of this Code, the Department may determine the monetary
18value of benefits improperly and erroneously received. The
19Department may recover the monies paid for such benefits and
20interest on that amount at the rate of 5% per annum for the
21period from which payment was made to the date upon which
22repayment is made to the State. Prior to the recovery of any
23amount paid for benefits allegedly obtained by fraudulent
24means, the recipient or payee of such benefits shall be
25afforded an opportunity for a hearing after reasonable notice.
26The notice shall be served personally or by certified or

 

 

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1registered mail or as otherwise provided by law upon the
2parties or their agents appointed to receive service of process
3and shall include the following:
4        (1) A statement of the time, place and nature of the
5    hearing.
6        (2) A statement of the legal authority and jurisdiction
7    under which the hearing is to be held.
8        (3) A reference to the particular Sections of the
9    substantive and procedural statutes and rules involved.
10        (4) Except where a more detailed statement is otherwise
11    provided for by law, a short and plain statement of the
12    matters asserted, the consequences of a failure to respond,
13    and the official file or other reference number.
14        (5) A statement of the monetary value of the benefits
15    fraudulently received by the person accused.
16        (6) A statement that, in addition to any other
17    penalties provided by law, a civil penalty in an amount not
18    to exceed $4,000 $2,000 may be imposed for each fraudulent
19    claim for benefits or payments.
20        (7) A statement providing that the determination of the
21    monetary value may be contested by petitioning the
22    Department for an administrative hearing within 30 days
23    from the date of mailing the notice.
24        (8) The names and mailing addresses of the
25    administrative law judge, all parties, and all other
26    persons to whom the agency gives notice of the hearing

 

 

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1    unless otherwise confidential by law.
2    An opportunity shall be afforded all parties to be
3represented by legal counsel and to respond and present
4evidence and argument.
5    Unless precluded by law, disposition may be made of any
6contested case by stipulation, agreed settlement, consent
7order, or default.
8    Any final order, decision, or other determination made,
9issued or executed by the Director under the provisions of this
10Article whereby any person is aggrieved shall be subject to
11review in accordance with the provisions of the Administrative
12Review Law, and the rules adopted pursuant thereto, which shall
13apply to and govern all proceedings for the judicial review of
14final administrative decisions of the Director.
15    Upon entry of a final administrative decision for repayment
16of any benefits obtained by fraudulent means, or for any civil
17penalties assessed, a lien shall attach to all property and
18assets of such person, firm, corporation, association, agency,
19institution, vendor, or other legal entity until the judgment
20is satisfied.
21    Within 18 months of the effective date of this amendatory
22Act of the 96th General Assembly, the Department of Healthcare
23and Family Services will report to the General Assembly on the
24number of fraud cases identified and pursued, and the fines
25assessed and collected. The report will also include the
26Department's analysis as to the use of private sector resources

 

 

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1to bring action, investigate, and collect monies owed.
2    (d) In subsections (a), (b), (b-5) and (b-6), "knowledge"
3has the meaning ascribed to that term in Section 4-5 of the
4Criminal Code of 2012. For any administrative action brought
5under subsection (c) pursuant to a violation of this Section,
6the Department shall define "knowing" by rule.
7(Source: P.A. 97-23, eff. 1-1-12; 98-354, eff. 8-16-13.)
 
8    (305 ILCS 5/8A-6)  (from Ch. 23, par. 8A-6)
9    Sec. 8A-6. Classification of violations.
10    (a) Any person, firm, corporation, association, agency,
11institution or other legal entity that has been found by a
12court to have engaged in an act, practice or course of conduct
13declared unlawful under Sections 8A-2 through 8A-5 or Section
148A-13 or 8A-14 where:
15        (1) the total amount of money involved in the
16    violation, including the monetary value of federal food
17    stamps and the value of commodities, is less than $150,
18    shall be guilty of a Class 4 felony Class A misdemeanor;
19        (2) the total amount of money involved in the
20    violation, including the monetary value of federal food
21    stamps and the value of commodities, is $150 or more but
22    less than $1,000, shall be guilty of a Class 3 Class 4
23    felony;
24        (3) the total amount of money involved in the
25    violation, including the monetary value of federal food

 

 

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1    stamps and the value of commodities, is $1,000 or more but
2    less than $5,000, shall be guilty of a Class 2 Class 3
3    felony;
4        (4) the total amount of money involved in the
5    violation, including the monetary value of federal food
6    stamps and the value of commodities, is $5,000 or more but
7    less than $10,000, shall be guilty of a Class 1 Class 2
8    felony; or
9        (5) the total amount of money involved in the
10    violation, including the monetary value of federal food
11    stamps and the value of commodities, is $10,000 or more,
12    shall be guilty of a Class X Class 1 felony and,
13    notwithstanding the provisions of Section 8A-8 except for
14    Subsection (c) of Section 8A-8, shall be ineligible for
15    financial aid under this Article for a period of two years
16    following conviction or until the total amount of money,
17    including the value of federal food stamps, is repaid,
18    whichever first occurs.
19    (b) Any person, firm, corporation, association, agency,
20institution or other legal entity that commits a subsequent
21violation of any of the provisions of Sections 8A-2 through
228A-5 and:
23        (1) the total amount of money involved in the
24    subsequent violation, including the monetary value of
25    federal food stamps and the value of commodities, is less
26    than $150, shall be guilty of a Class 3 Class 4 felony;

 

 

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1        (2) the total amount of money involved in the
2    subsequent violation, including the monetary value of
3    federal food stamps and the value of commodities, is $150
4    or more but less than $1,000, shall be guilty of a Class 2
5    Class 3 felony;
6        (3) the total amount of money involved in the
7    subsequent violation, including the monetary value of
8    federal food stamps and the value of commodities, is $1,000
9    or more but less than $5,000, shall be guilty of a Class 1
10    Class 2 felony;
11        (4) the total amount of money involved in the
12    subsequent violation, including the monetary value of
13    federal food stamps and the value of commodities, is $5,000
14    or more but less than $10,000, shall be guilty of a Class X
15    Class 1 felony.
16    (c) For purposes of determining the classification of
17offense under this Section, all of the money received as a
18result of the unlawful act, practice or course of conduct can
19be accumulated.
20(Source: P.A. 90-538, eff. 12-1-97.)
 
21    (305 ILCS 5/8A-7)  (from Ch. 23, par. 8A-7)
22    Sec. 8A-7. Civil Remedies. (a) A person who receives
23financial aid by means of a false statement, willful
24misrepresentation or by his failure to notify the county
25department or local governmental unit, as the case may be, of a

 

 

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1change in his status as required by Sections 11-18 and 11-19,
2for the purpose of preventing the denial, cancellation or
3suspension of his grant, or a variation in the amount thereof,
4or by other fraudulent device, or a person who knowingly aids
5or abets any person in obtaining financial aid for which he is
6not eligible, shall be answerable to the county department or
7the local governmental unit, as the case may be, for refunding
8the entire amount of aid received. If the refund is not made,
9it shall be recoverable in a civil action from the person who
10received the aid, or from anyone who willfully aided such
11person to obtain the aid. If an act which would be unlawful
12under Section 8A-2 is proven, the court may as a penalty assess
13an additional sum of money, not to exceed the entire amount of
14aid provided, against the recipient or against any person who
15willfully aided the recipient. If assessed, the penalty shall
16be included in any judgment entered for the aid received, and
17paid to the county department or the local governmental unit,
18as the case may be. Upon entry of the judgment a lien shall
19attach to all property and assets of such person until the
20judgment is satisfied.
21    (b) Any person, firm, corporation, association, agency,
22institution or other legal entity, other than an individual
23recipient, that willfully, by means of a false statement or
24representation, or by concealment of any material fact or by
25other fraudulent scheme or device on behalf of himself or
26others, obtains or attempts to obtain benefits or payments

 

 

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1under this Code to which he or it is not entitled, or in a
2greater amount than that to which he or it is entitled, shall
3be liable for repayment of any excess benefits or payments
4received and, in addition to any other penalties provided by
5law, civil penalties consisting of (1) the interest on the
6amount of excess benefits or payments at the maximum legal rate
7in effect on the date the payment was made to such person,
8firm, corporation, association, agency, institution or other
9legal entity for the period from the date upon which payment
10was made to the date upon which repayment is made to the State,
11(2) an amount not to exceed 3 times the amount of such excess
12benefits or payments, and (3) the sum of $4,000 $2,000 for each
13excessive claim for benefits or payments. Upon entry of a
14judgment for repayment of any excess benefits or payments, or
15for any civil penalties assessed by the court, a lien shall
16attach to all property and assets of such person, firm,
17corporation, association, agency, institution or other legal
18entity until the judgment is satisfied.
19    (c) Civil recoveries provided for in this Section may be
20recoverable in court proceedings initiated by the Attorney
21General or, in actions involving a local governmental unit, by
22the State's Attorney.
23    (d) Any person who commits the offense of vendor fraud or
24recipient fraud as defined in Section 8A-2 and Section 8A-3 of
25this Article shall forfeit, according to the provisions of this
26subsection, any monies, profits or proceeds, and any interest

 

 

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1or property which the sentencing court determines he has
2acquired or maintained, directly or indirectly, in whole or in
3part as a result of such offense. Such person shall also
4forfeit any interest in, securities of, claim against, or
5contractual right of any kind which affords him a source of
6influence over, any enterprise which he has established,
7operated, controlled, conducted, or participated in
8conducting, where his relationship to or connection with any
9such thing or activity directly or indirectly, in whole or in
10part, is traceable to any thing or benefit which he has
11obtained or acquired through vendor fraud or recipient fraud.
12    Proceedings instituted pursuant to this subsection shall
13be subject to and conducted in accordance with the following
14procedures:
15    (1) The sentencing court shall, upon petition by the
16Attorney General or State's Attorney at any time following
17sentencing, conduct a hearing to determine whether any property
18or property interest is subject to forfeiture under this
19subsection. At the forfeiture hearing the People shall have the
20burden of establishing, by a preponderance of the evidence,
21that the property or property interests are subject to such
22forfeiture.
23    (2) In any action brought by the People of the State of
24Illinois under this Section, in which any restraining order,
25injunction or prohibition or any other action in connection
26with any property or interest subject to forfeiture under this

 

 

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1subsection is sought, the circuit court presiding over the
2trial of the person charged with recipient fraud or vendor
3fraud as defined in Sections 8A-2 or 8A-3 of this Article shall
4first determine whether there is probable cause to believe that
5the person so charged has committed the offense of recipient
6fraud or vendor fraud and whether the property or interest is
7subject to forfeiture under this subsection. To make such a
8determination, prior to entering any such order, the court
9shall conduct a hearing without a jury, at which the People
10shall establish that there is (i) probable cause that the
11person so charged has committed the offense of recipient fraud
12or vendor fraud and (ii) probable cause that any property or
13interest may be subject to forfeiture pursuant to this
14subsection. Such hearing may be conducted simultaneously with a
15preliminary hearing, if the prosecution is commenced by
16information or complaint, or by motion of the People at any
17stage in the proceedings. The court may accept a finding of
18probable cause at a preliminary hearing following the filing of
19an information charging the offense of recipient fraud or
20vendor fraud as defined in Sections 8A-2 or 8A-3 or the return
21of an indictment by a grand jury charging the offense of
22recipient fraud or vendor fraud as defined in Sections 8A-2 or
238A-3 of this Article as sufficient evidence of probable cause
24as provided in item (i) above. Upon such a finding, the circuit
25court shall enter such restraining order, injunction or
26prohibition, or shall take such other action in connection with

 

 

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1any such property or other interest subject to forfeiture under
2this Act as is necessary to insure that such property is not
3removed from the jurisdiction of the court, concealed,
4destroyed or otherwise disposed of by the owner of that
5property or interest prior to a forfeiture hearing under this
6subsection. The Attorney General or State's Attorney shall file
7a certified copy of such restraining order, injunction or other
8prohibition with the recorder of deeds or registrar of titles
9of each county where any such property of the defendant may be
10located. No such injunction, restraining order or other
11prohibition shall affect the rights of any bonafide purchaser,
12mortgagee, judgement creditor or other lien holder arising
13prior to the date of such filing. The court may, at any time,
14upon verified petition by the defendant, conduct a hearing to
15determine whether all or portions of any such property or
16interest which the court previously determined to be subject to
17forfeiture or subject to any restraining order, injunction, or
18prohibition or other action, should be released. The court may
19in its discretion release such property to the defendant for
20good cause shown.
21    (3) Upon conviction of a person under this Article, the
22court shall authorize the Director of the Illinois Department
23of State Police to seize all property or other interest
24declared forfeited under this subsection upon such terms and
25conditions as the court shall deem proper.
26    (4) The Director of the Illinois Department of State Police

 

 

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1is authorized to sell all property forfeited and seized
2pursuant to this subsection, unless such property is required
3by law to be destroyed or is harmful to the public. After the
4deduction of all requisite expenses of administration and sale,
5the court shall order the Director to distribute to the
6Illinois Department an amount from the proceeds of the
7forfeited property, or monies forfeited or seized, which will
8satisfy any unsatisfied court order of restitution entered
9pursuant to a conviction under this Article. If the proceeds
10are less than the amount necessary to satisfy the order of
11restitution, the Director shall distribute to the Illinois
12Department the entire amount of the remaining proceeds. The
13Director shall distribute any remaining proceeds of such sale,
14along with any monies forfeited or seized, in accordance with
15the following schedules:
16    (a) 25% shall be distributed to the unit of local
17government whose officers or employees conducted the
18investigation into recipient fraud or vendor fraud and caused
19the arrest or arrests and prosecution leading to the
20forfeiture. Amounts distributed to units of local government
21shall be used solely for enforcement matters relating to
22detection, investigation or prosecution of recipient fraud or
23vendor fraud as defined in Section 8A-2 or 8A-3 of this
24Article. Where the investigation, arrest or arrests leading to
25the prosecution and forfeiture is undertaken solely by the
26Illinois Department of State Police, the portion provided

 

 

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1hereunder shall be paid into the Medicaid Fraud and Abuse
2Prevention Fund, which is hereby created in the State treasury.
3Monies from this fund shall be used by the Department of State
4Police for the furtherance of enforcement matters relating to
5detection, investigation or prosecution of recipient fraud or
6vendor fraud. Monies directed to this fund shall be used in
7addition to, and not as a substitute for, funds annually
8appropriated to the Department of State Police for medicaid
9fraud enforcement.
10    (b) 25% shall be distributed to the county in which the
11prosecution and petition for forfeiture resulting in the
12forfeiture was instituted, and deposited in a special fund in
13the county treasury and appropriated to the State's Attorney
14for use solely in enforcement matters relating to detection,
15investigation or prosecution of recipient fraud or vendor
16fraud; however, if the Attorney General brought the prosecution
17resulting in the forfeiture, the portion provided hereunder
18shall be paid into the Medicaid Fraud and Abuse Prevention
19Fund, to be used by the Medicaid Fraud Control Unit of the
20Illinois Department of State Police for enforcement matters
21relating to detection, investigation or prosecution of
22recipient fraud or vendor fraud. Where the Attorney General and
23a State's Attorney have jointly participated in any portion of
24the proceedings, 12.5% shall be distributed to the county in
25which the prosecution resulting in the forfeiture was
26instituted, and used as specified herein, and 12.5% shall be

 

 

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1paid into the Medicaid Fraud and Abuse Prevention Fund, and
2used as specified herein.
3    (c) 50% shall be transmitted to the State Treasurer for
4deposit in the General Revenue Fund.
5(Source: P.A. 85-707.)
 
6    (305 ILCS 5/8A-11)  (from Ch. 23, par. 8A-11)
7    Sec. 8A-11. (a) No person shall:
8        (1) Knowingly charge a resident of a nursing home for
9    any services provided pursuant to Article V of the Illinois
10    Public Aid Code, money or other consideration at a rate in
11    excess of the rates established for covered services by the
12    Illinois Department pursuant to Article V of the Illinois
13    Public Aid Code; or
14        (2) Knowingly charge, solicit, accept or receive, in
15    addition to any amount otherwise authorized or required to
16    be paid pursuant to Article V of the Illinois Public Aid
17    Code, any gift, money, donation or other consideration:
18            (i) As a precondition to admitting or expediting
19        the admission of a recipient or applicant, pursuant to
20        Article V of the Illinois Public Aid Code, to a
21        long-term care facility as defined in Section 1-113 of
22        the Nursing Home Care Act or a facility as defined in
23        Section 1-113 of the ID/DD Community Care Act, Section
24        1-113 of the MC/DD Act, or Section 1-102 of the
25        Specialized Mental Health Rehabilitation Act of 2013;

 

 

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1        and
2            (ii) As a requirement for the recipient's or
3        applicant's continued stay in such facility when the
4        cost of the services provided therein to the recipient
5        is paid for, in whole or in part, pursuant to Article V
6        of the Illinois Public Aid Code.
7    (b) Nothing herein shall prohibit a person from making a
8voluntary contribution, gift or donation to a long-term care
9facility.
10    (c) This paragraph shall not apply to agreements to provide
11continuing care or life care between a life care facility as
12defined by the Life Care Facilities Act, and a person
13financially eligible for benefits pursuant to Article V of the
14Illinois Public Aid Code.
15    (d) Any person who violates this Section shall be guilty of
16a business offense and fined not less than $10,000 $5,000 nor
17more than $50,000 $25,000.
18    (e) "Person", as used in this Section, means an individual,
19corporation, partnership, or unincorporated association.
20    (f) The State's Attorney of the county in which the
21facility is located and the Attorney General shall be notified
22by the Illinois Department of any alleged violations of this
23Section known to the Department.
24    (g) The Illinois Department shall adopt rules and
25regulations to carry out the provisions of this Section.
26(Source: P.A. 98-104, eff. 7-22-13; 99-180, eff. 7-29-15.)
 

 

 

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1    (305 ILCS 5/8A-16)
2    Sec. 8A-16. Unfair or deceptive marketing practices.
3    (a) As used in this Section, "health plan" has the meaning
4attributed to that term in Section 8A-13.
5    (b) It is unlawful to knowingly and willfully engage in any
6unfair or deceptive marketing practice in connection with
7proposing, offering, selling, soliciting, or providing any
8health care service or any health plan. Unfair or deceptive
9marketing practices include the following:
10        (1) Making a false and misleading oral or written
11    statement, visual description, advertisement, or other
12    representation of any kind that has the capacity, tendency,
13    or effect of deceiving or misleading health care consumers
14    with respect to any health care service, health plan, or
15    health care provider.
16        (2) Making a representation that a health care plan or
17    a health care provider offers any service, benefit, access
18    to care, or choice that it does not in fact offer.
19        (3) Making a representation that a health plan or
20    health care provider has any status, certification,
21    qualification, sponsorship, affiliation, or licensure that
22    it does not have.
23        (4) A failure to state a material fact if the failure
24    deceives or tends to deceive.
25        (5) Offering any kickback, bribe, reward, or benefit to

 

 

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1    any person as an inducement to select or to refrain from
2    selecting any health care service, health plan, or health
3    care provider, unless the benefit offered is medically
4    necessary health care or is permitted by the Illinois
5    Department.
6        (6) The use of health care consumer or other
7    information that is confidential or privileged or that
8    cannot be disclosed to or obtained by the user without
9    violating a State or federal confidentiality law,
10    including:
11            (A) medical records information; and
12            (B) information that identifies the health care
13        consumer or any member of his or her group as a
14        recipient of any government sponsored or mandated
15        welfare program.
16        (7) The use of any device or artifice in advertising a
17    health plan or soliciting a health care consumer that
18    misrepresents the solicitor's profession, status,
19    affiliation, or mission.
20    (c) Any person who commits a first violation of this
21Section is guilty of a Class 4 felony A misdemeanor and is
22subject to a fine of not more than $10,000 $5,000. Any person
23who commits a second or subsequent violation of this Section is
24guilty of a Class 3 4 felony and is subject to a fine of not
25more than $50,000 $25,000.
26(Source: P.A. 90-538, eff. 12-1-97.)
 

 

 

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1    (305 ILCS 5/8A-17)
2    Sec. 8A-17. Penalties enhanced for persons other than
3individuals. If a person who violates Section 8A-13, 8A-14,
48A-15, or 8A-16 is any person other than an individual, then
5that person is subject to a fine of not more than $100,000
6$50,000 if the violation is a Class 1, 2, 3, or 4 felony
7misdemeanor and a fine of not more than $500,000 $250,000 if
8the violation is a Class X felony a felony.
9(Source: P.A. 90-538, eff. 12-1-97.)