SENATE BILL No. 310
DIGEST OF INTRODUCED BILL
Citations Affected: IC 12-7-2; IC 12-15; IC 35-43-5.
Synopsis: Medicaid fraud. Provides that a person who is convicted of
public assistance fraud or tax fraud is ineligible for medical assistance
for a specified time. Allows the office of Medicaid policy and planning
(office) to adopt rules to establish a process for suspending a person
from receiving medical assistance if the office has reasonable suspicion
that the person has committed public assistance fraud. Requires a
Medicaid recipient to notify the office within 30 days after the recipient
assers a claim or files a legal action against a third party for medical
services costs that were paid for by the office. Requires the office to
send: (1) an itemized list of the medical services provided to the
recipient; and (2) a notice of intent to perfect a lien for the expenses;
to the third party. Prohibits certain actions from becoming final before
first allowing the office written notice and a reasonable opportunity to
perfect a right of recovery. Repeals a provision requiring the office to
send an itemized statement of medical expenses for certain recipients
to perfect a lien. Specifies that "public assistance or relief" includes
medical assistance. Includes applicants and recipients of public
assistance or relief in the crime of welfare fraud.
Effective: July 1, 2012.
January 5, 2012, read first time and referred to Committee on Health and Provider
Second Regular Session 117th General Assembly (2012)
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between statutes enacted by the 2011 Regular Session of the General Assembly.
SENATE BILL No. 310
A BILL FOR AN ACT to amend the Indiana Code concerning
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 12-7-2-128.3; (12)IN0310.1.1. -->
SECTION 1. IC 12-7-2-128.3 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2012]: Sec. 128.3. "Medical assistance" has
the meaning set forth in 42 U.S.C. 1396d(a).
SOURCE: IC 12-7-2-137; (12)IN0310.1.2. -->
SECTION 2. IC 12-7-2-137, AS AMENDED BY P.L.145-2006,
SECTION 56, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2012]: Sec. 137. (a) "Person", except as provided in
and (c), through (d) means an association, a
corporation, a limited liability company, a governmental entity, an
individual, or a partnership.
(b) "Person", for purposes of IC 12-13-14, has the meaning set forth
in IC 12-13-14-1.
(c) "Person", for purposes of IC 12-17.2, means an individual who
is at least twenty-one (21) years of age, a corporation, a partnership, a
voluntary association, or other entity.
(d) "Person", for purposes of IC 12-15-2-20, means an
individual who is at least twenty-one (21) years of age and who is:
(1) applying, on the individual's behalf, for; or
SOURCE: IC 12-7-2-152.5; (12)IN0310.1.3. -->
SECTION 3. IC 12-7-2-152.5 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2012]: Sec. 152.5. "Public assistance", for
purposes of IC 12-15-2-20, means any payment made, service
rendered, hospitalization provided, or other benefit extended to a
person by a governmental entity from public funds, including the
(1) Medical assistance.
(2) Township assistance.
(3) Food stamps.
(4) Direct relief.
(5) Unemployment compensation.
(6) Any other form of support or aid.
SOURCE: IC 12-15-2-20; (12)IN0310.1.4. -->
SECTION 4. IC 12-15-2-20 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 20. (a) This section
does not apply to a provider (as defined in IC 12-7-2-149.1(2)).
(b) A person convicted of an offense under:
(1) IC 35-43-5-7 concerning the application for, or receipt of,
public assistance; or
(2) IC 6-3-6-11 concerning tax fraud;
is ineligible to receive
Medicaid medical assistance under this article
for ten (10) years after the conviction. the applicable period under
(c) A person described in subsection (b) is ineligible to receive
medical assistance for the following period:
(1) One (1) year if the person is convicted of a misdemeanor.
(2) Ten (10) years if the person is convicted of a felony.
(d) The ineligibility period to receive medical assistance for a
person described in subsection (b) begins either:
(1) on the date the individual is sentenced, if the individual's
sentence does not include incarceration; or
(2) on the date the individual is released from incarceration.
(e) The office may adopt rules under IC 4-22-2 to establish a
process to suspend a person from receiving medical assistance if
the office has a reasonable suspicion that the person has engaged
in fraud described in subsection (b)(1).
SOURCE: IC 12-15-8-3; (12)IN0310.1.5. -->
SECTION 5. IC 12-15-8-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 3. A lien under this
chapter is not effective unless the office takes the following actions
before the party alleged to be liable has concluded a final settlement
with the injured, ill, or diseased person or the person's attorney or legal
representative as compensation for the person's injury, illness, or
(1) Filing in the Marion County circuit court a written notice
stating the following:
(A) Notice of the eligibility of the injured, ill, or diseased
person for Medicaid.
(B) The name and address of the injured, ill, or diseased
(C) The name of the person, firm, limited liability company, or
corporation alleged to be liable to the injured, ill, or diseased
(2) Sending to the person, firm, limited liability company, or
corporation alleged to be liable, by registered or certified mail,
(A) A copy of the notice required by subdivision (1).
(B) A statement of the date of filing of the notice.
SOURCE: IC 12-15-8-4.5; (12)IN0310.1.6. -->
SECTION 6. IC 12-15-8-4.5 IS ADDED TO THE INDIANA CODE
AS A NEW
SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2012]: Sec. 4.5. (a) Not later than thirty (30) days after:
(1) asserting a claim; or
(2) filing a legal action;
against a third party for costs related to medical services paid by
the office or a contractor of the office on behalf of the recipient, the
Medicaid recipient or the recipient's guardian shall notify the
office or the office's contractor in writing of the action.
(b) The written notice required by subsection (a) must include
the following information:
(1) The name of the third party.
(2) The address of the third party.
(3) The dates of the medical services, if known, for which the
recipient is seeking recovery.
(4) The name of the third party's insurance carrier, if known.
(5) Authorization for release of the recipient's health records
concerning the medical services for which the recipient is
(c) Not more than twenty-one (21) days after receiving the
written notice required by subsection (a) and the release of health
records under subsection (b)(5), the office or the office's contractor
shall send to the third party described in subsection (a):
(1) an itemized statement of the medical expenses paid by the
office or the office's contractor for the medical services; and
(2) notice of the office's intent to perfect a lien for the
expenses described in subdivision (1) against a person
described in section 4(1) through 4(3) of this chapter.
(d) In an action or claim by a Medicaid recipient or the
recipient's guardian in which the office has a right of recovery:
(1) a settlement;
(2) a compromise;
(3) a judgment;
(4) an award; or
(5) a recovery;
may not be made final without first giving the office written notice
as required by subsection (a) and a reasonable opportunity for the
office to perfect a right of recovery.
(e) A Medicaid recipient may be subject to a penalty under
IC 35-43-5-7 for knowingly failing to give the notice required
under this section.
SOURCE: IC 12-15-8-5; (12)IN0310.1.7. -->
SECTION 7. IC 12-15-8-5 IS REPEALED [EFFECTIVE JULY 1,
Sec. 5. Not more than twenty-one (21) days after the filing of the
notice required under section 3(1) of this chapter, the office shall send
to persons or entities listed in section 4(1) and 4(3) of this chapter an
itemized statement of the medical expenses paid by the office for which
the office seeks to perfect a lien.
SOURCE: IC 35-43-5-1; (12)IN0310.1.8. -->
SECTION 8. IC 35-43-5-1, AS AMENDED BY P.L.137-2009,
SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2012]: Sec. 1. (a) The definitions set forth in this section apply
throughout this chapter.
(b) "Claim statement" means an insurance policy, a document, or a
statement made in support of or in opposition to a claim for payment
or other benefit under an insurance policy, or other evidence of
expense, injury, or loss. The term includes statements made orally, in
writing, or electronically, including the following:
(1) An account.
(2) A bill for services.
(3) A bill of lading.
(4) A claim.
(5) A diagnosis.
(6) An estimate of property damages.
(7) A hospital record.
(8) An invoice.
(9) A notice.
(10) A proof of loss.
(11) A receipt for payment.
(12) A physician's records.
(13) A prescription.
(14) A statement.
(15) A test result.
(c) "Coin machine" means a coin box, vending machine, or other
mechanical or electronic device or receptacle designed:
(1) to receive a coin, bill, or token made for that purpose; and
(2) in return for the insertion or deposit of a coin, bill, or token
(A) to offer, provide, or assist in providing; or
(B) to permit the acquisition of;
(d) "Credit card" means an instrument or device (whether known as
a credit card or charge plate, or by any other name) issued by an issuer
for use by or on behalf of the credit card holder in obtaining property.
(e) "Credit card holder" means the person to whom or for whose
benefit the credit card is issued by an issuer.
(f) "Customer" means a person who receives or has contracted for
a utility service.
(g) "Drug or alcohol screening test" means a test that:
(1) is used to determine the presence or use of alcohol, a
controlled substance, or a drug in a person's bodily substance; and
(2) is administered in the course of monitoring a person who is:
(A) incarcerated in a prison or jail;
(B) placed in a community corrections program;
(C) on probation or parole;
(D) participating in a court ordered alcohol or drug treatment
(E) on court ordered pretrial release.
(h) "Entrusted" means held in a fiduciary capacity or placed in
charge of a person engaged in the business of transporting, storing,
lending on, or otherwise holding property of others.
(i) "Identifying information" means information that identifies a
person, including a person's:
(1) name, address, date of birth, place of employment, employer
identification number, mother's maiden name, Social Security
number, or any identification number issued by a governmental
(2) unique biometric data, including the person's fingerprint,
voice print, or retina or iris image;
(3) unique electronic identification number, address, or routing
(4) telecommunication identifying information; or
(5) telecommunication access device, including a card, a plate, a
code, a telephone number, an account number, a personal
identification number, an electronic serial number, a mobile
identification number, or another telecommunications service or
device or means of account access that may be used to:
(A) obtain money, goods, services, or any other thing of value;
(B) initiate a transfer of funds.
(j) "Insurance policy" includes the following:
(1) An insurance policy.
(2) A contract with a health maintenance organization (as defined
in IC 27-13-1-19) or a limited service health maintenance
organization (as defined in IC 27-13-1-27).
(3) A written agreement entered into under IC 27-1-25.
(k) "Insurer" has the meaning set forth in IC 27-1-2-3(x). The term
also includes the following:
(1) A reinsurer.
(2) A purported insurer or reinsurer.
(3) A broker.
(4) An agent of an insurer, a reinsurer, a purported insurer or
reinsurer, or a broker.
(5) A health maintenance organization.
(6) A limited service health maintenance organization.
(l) "Manufacturer" means a person who manufactures a recording.
The term does not include a person who manufactures a medium upon
which sounds or visual images can be recorded or stored.
(m) "Make" means to draw, prepare, complete, counterfeit, copy or
otherwise reproduce, or alter any written instrument in whole or in part.
(n) "Metering device" means a mechanism or system used by a
utility to measure or record the quantity of services received by a
(o) "Public relief or assistance" means any payment made, service
rendered, hospitalization provided, or other benefit extended to a
person by a governmental entity from public funds and includes
medical assistance, township assistance, food stamps, direct relief,
unemployment compensation, and any other form of support or aid.
(p) "Recording" means a tangible medium upon which sounds or
visual images are recorded or stored. The term includes the following:
(1) An original:
(A) phonograph record;
(B) compact disc;
(E) audio cassette;
(F) video cassette; or
(2) Any other medium on which sounds or visual images are or
can be recorded or otherwise stored.
(3) A copy or reproduction of an item in subdivision (1) or (2)
that duplicates an original recording in whole or in part.
(q) "Slug" means an article or object that is capable of being
deposited in a coin machine as an improper substitute for a genuine
coin, bill, or token.
(r) "Synthetic identifying information" means identifying
information that identifies:
(1) a false or fictitious person;
(2) a person other than the person who is using the information;
(3) a combination of persons described under subdivisions (1) and
(s) "Utility" means a person who owns or operates, for public use,
any plant, equipment, property, franchise, or license for the production,
storage, transmission, sale, or delivery of electricity, water, steam,
telecommunications, information, or gas.
(t) "Written instrument" means a paper, a document, or other
instrument containing written matter and includes money, coins,
tokens, stamps, seals, credit cards, badges, trademarks, medals, retail
sales receipts, labels or markings (including a universal product code
(UPC) or another product identification code), or other objects or
symbols of value, right, privilege, or identification.
SOURCE: IC 35-43-5-7; (12)IN0310.1.9. -->
SECTION 9. IC 35-43-5-7 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2012]: Sec. 7. (a)
A person An
applicant or recipient of public relief or assistance
(1) obtains public relief or assistance by means of impersonation,
fictitious transfer, false or misleading oral or written statement,
conveyance, or other fraudulent means;
(2) acquires, possesses, uses, transfers, sells, trades, issues, or
(A) an authorization document to obtain public relief or
(B) public relief or assistance;
except as authorized by law;
(3) uses, transfers, acquires, issues, or possesses a blank or
incomplete authorization document to participate in public relief
or assistance programs, except as authorized by law;
(4) counterfeits or alters an authorization document to receive
public relief or assistance, or knowingly uses, transfers, acquires,
or possesses a counterfeit or altered authorization document to
receive public relief or assistance; or
(5) conceals information for the purpose of receiving public relief
or assistance to which he is not entitled;
commits welfare fraud, a Class A misdemeanor, except as provided in
(b) The offense is:
(1) a Class D felony if:
(A) the amount of public relief or assistance involved is more
than two hundred fifty dollars ($250) but less than two
thousand five hundred dollars ($2,500); or
(B) the amount involved is not more than two hundred fifty
dollars ($250) and the person has a prior conviction of welfare
fraud under this section; and
(2) a Class C felony if the amount of public relief or assistance
involved is two thousand five hundred dollars ($2,500) or more,
regardless of whether the person has a prior conviction of welfare
fraud under this section.
(c) Whenever a person is convicted of welfare fraud under this
section, the clerk of the sentencing court shall certify to the appropriate
state agency and the appropriate agency of the county of the defendant's
(1) his conviction; and
(2) whether the defendant is placed on probation and restitution
is ordered under IC 35-38-2.