Honorable Lois W. Kolkhorst, Chair, House Committee on Public Health
FROM:
John S O'Brien, Director, Legislative Budget Board
IN RE:
SB544 by Seliger (Relating to unlawful acts against and criminal offenses involving the Medicaid program; providing penalties.), Committee Report 2nd House, Substituted
The bill would amend the Penal Code as it relates to Medicaid fraud. Under the provisions of the bill, causing a claim to be made under the Medicaid program for a service or product that has not been approved or acquiesced in by a treating physician or health care practitioner or a service or product that is substantially inadequate or inappropriate when compared to generally recognized standards within the particular discipline or within the health care industry or a product that has been adulterated, debased, mislabeled, or that is otherwise inappropriate would be a criminal offense. Under current statute, Medicaid fraud is punishable at both misdemeanor and felony levels with the level of punishment increasing in severity based on the monetary amount of the payment provided or claimed.
A state jail felony is punishable by confinement in a state jail for a term from 180 days to 2 years and, in addition to confinement, an optional fine not to exceed $10,000 or Class A Misdemeanor punishment (mandatory post conviction community supervision). A felony of the third degree is punishable by confinement in prison for a term from 2 to 10 years and, in addition to confinement, an optional fine not to exceed $10,000. A felony of the second degree is punishable by confinement in prison for a term from 2 to 20 years and, in addition to confinement, an optional fine not to exceed $10,000. A felony of the first degree is punishable by confinement in prison for life or a term from 5 to 99 years and, in addition to confinement, an optional fine not to exceed $10,000.
Expanding the list of behaviors for which a penalty is applied for any criminal offense is expected to result in increased demands upon the correctional resources of counties or of the State due to longer terms of probation, or longer terms of confinement in county jail, state jail or prison. In the case of this bill, the impact on correctional populations would depend on how many persons would be prosecuted under the proposed statute compared to existing statute for the offense of Medicaid fraud. In fiscal year 2010, less than 5 people were arrested and less than 5 of those arrested in fiscal year 2010 were convicted for the offense of Medicaid fraud. For this analysis, it is assumed the number of offenders convicted under this statute would not result in a significant impact on the programs and workload of state corrections agencies or on the demand for resources and services of those agencies.