Jan. 13, 2020

HARRISBURG – To ensure taxpayer dollars are used to fund the priorities of Pennsylvanians and not being used fraudulently or misspent, Rep. Seth Grove (R-York) and a bipartisan group of lawmakers joined Attorney General Josh Shapiro to unveil a comprehensive plan to guarantee funding is being used on the people who truly need assistance.

“Every instance of Medicaid abuse or fraud hurts Pennsylvanians who truly rely on the program. We are overdue for relevant and important reforms that keep closer watch over those who are taking advantage of the system, and at the same time makes the program more useful and reliable for Pennsylvanians in need,” said Republican Leader Bryan Cutler (R-Lancaster).

The package of bills is the direct result of a grand jury report on fraud in Pennsylvania’s Medical Assistance Program, also known as Medicaid, released by General Josh Shapiro’s office and a report recently released by the House Government Oversight Committee.

“As one of the top eight Medicaid spending states, Pennsylvania is the only one without a False Claims Act, which means we cannot comprehensively combat Medicaid fraud and recoup money lost,” Shapiro said. “A state False Claims Act and the reforms recommended by the grand jury that are being put forth today offer a dynamic, multi-faceted approach to fixing these problems.”

After reading the grand jury report and conducting further research, Grove worked with fellow members of the General Assembly to draft a package of bills to address problems laid out in both reports. Included in the reports were several recommendations such as, suggested legislation strengthening the requirements for Medicaid providers.

To this end, Grove will introduce a bill to adopt a state version of the Federal False Claims Act, which would allow the Commonwealth to, during national settlements, recoup an additional 10% from false claims made against Medicaid. Additionally, this legislation empowers the attorney general’s office, or a district attorney designated by the attorney general to investigate other potential cases of false claims made against the Commonwealth. Sen. Lindsay Williams (D-Allegheny) will introduce companion legislation in the Senate.

“I applaud Attorney General Shapiro for bringing to light the glaring problems our Medicaid program faces. Every misspent or fraudulently used dollar is another dollar hard-working taxpayers have to make up for,” Grove said. “It is now up to the Legislature to get to work and fix these problems.”

In order to prevent improper payments within state programs, legislation by Rep. Valerie Gaydos (R-Allegheny) which mirrors the Federal Improper Payment law, would require agencies to review their programs and expenditures and assess whether they are highly, moderately or unlikely to be susceptible to an improper payment.

“With Medicaid, like everything else, we expect our state agencies to operate competently and in the best interest of the taxpayer,” Gaydos said. “My legislation will ensure those agencies are safeguarded against interruptions to patient service that result from improper payments.”

Legislation by Rep. Clint Owlett (R-Tioga/Bradford/Potter) would establish a searchable database of a variety of sources that would help identify organizations, individuals and entities that are not eligible to receive funds from a commonwealth agency. The bill is modeled after the federal Do Not Pay law.

“Like the federal Do Not Pay System, this tool is designed to identify, detect and prevent improper payments before they happen,” Owlett said. “This proposal has the potential to save the Commonwealth millions of dollars, not only by avoiding payments to ineligible people but also by avoiding the costs associated with trying to recover funds that were improperly paid out. And most importantly, it will allow us to help even more people in need in our communities.”

Recently, the U.S. Department of Health and Human Services released a report detailing how Pennsylvania spent over $40 million in taxpayer money on “Provider Preventable Conditions” (PPC). According to the report, a PPC is a condition acquired in an in-patient setting which has a high cost, or an invasive or surgical procedure performed on the wrong person or wrong body part.

Rep. Tommy Sankey (R-Clearfield/Cambria) will introduce legislation to require any Medicaid Managed Care Organization to enter into an agreement with the Department of Human Services to allow the department to recoup any Medicaid funds which were spent on a PPC.

“We treat the taxpayer like an ATM if we fail to focus on having a finite number of tax dollars from which to work,” Sankey commented. “Maintaining that focus means reining in spending to include any funds that are accumulated extraneously through human error or unfortunate condition.”

Finally, Rep. Wendi Thomas (R-Bucks) will introduce legislation to crack down on fraud. Specifically, under her bill, the penalty for knowing or causing a fraudulent claim to be submitted would be a second-degree felony if the fraudulent claim is $100,000 or more. If the claim is between $2,000 and $100,000, the penalty for the fraudulent claim would be a third-degree felony. If the claim is $2,000 or less the penalty would be a third-degree misdemeanor.

“When the penalties are not strong enough, we cannot stop fraud,” Thomas said. “If you plot to steal thousands from the Medicare system, you should pay a harsh price.”

The goal of the package of bills is to improve Pennsylvania’s Medicaid system while protecting the valuable taxpayer dollars put into it. Ensuring the proper management of taxpayer money and protecting taxpayer dollars from falling into fraudsters’ hands is a core function of government.

“Every dollar that our state government holds is the result of a Pennsylvanian’s hard work. When they give it to us, they’re giving up everything else they could have used that dollar for. We must take every action possible to safeguard and protect that trust. At Treasury, we work hard to analyze every payment that leaves the building to be sure it is lawful and correct. In that spirit, I strongly support Rep. Grove’s efforts to strengthen Pennsylvania’s tools to stop fraud and improper payments before they happen. I urge the Legislature to do the same. I will be comprehensively reviewing our operations and practices at Treasury, including the December report's suggestions to determine how we can do everything in our power to protect taxpayer dollars,” said Pennsylvania Treasurer Joe Torsella.

Pennsylvania House of Representatives
Media Contact: Greg Gross