Sec. 10.67.07.01. Requirements to Detect and Prevent Fraud, Waste, and Abuse

A. An MCO or its responsible subcontractor shall implement and maintain arrangements or procedures that are designed to detect and prevent fraud, waste, and abuse, which includes a compliance program that has, at a minimum, the following elements:

(1) Written policies, procedures, and standards of conduct that include the MCO’s commitment to comply with all applicable:

(a) Requirements and standards under the contract; and

(b) Federal and State requirements including:

(i) Written policies for all employees and those of any contractor or agent that provide detailed information about the False Claims Act and other Federal and State laws described in §1902(a)(68) of the Social Security Act; and

(ii) Information about rights of employees to be protected as whistleblowers.

(2) The designation of a compliance officer, who reports directly to the chief executive officer and the board of directors and is responsible for developing and implementing policies, procedures, and practices designed to ensure compliance with the requirements of the contract, and at minimum the following staff members:

(a) An investigator who is responsible for fraud, waste, and abuse investigations;

(b) An auditor who is responsible for identifying potential fraud, waste, and abuse through analysis of claims and related information; and

(c) An analyst capable of reviewing data and codes who is responsible for reviewing and researching evidence of potential fraud, waste, and abuse.

(3) Staffing and resources located in Maryland to identify and investigate potential fraud, waste, and abuse, which shall be based on criteria determined by the Department that may include but are not limited to:

(a) Number of enrollees;

(b) Number of claims received on an annual basis;

(c) Volume of suspected fraudulent and abusive claims currently being detected;

(d) Other factors relating to the vulnerability of the MCO to fraud and abuse; and

(e) An assessment of optimal caseload which can be handled by an investigator on an annual basis.

(4) The establishment of a regulatory compliance committee, which reports to the board of directors and to the MCO’s senior management level and is charged with overseeing the organization’s compliance program and its compliance with the requirements under the contract;

(5) A system for training and educating the compliance officer, the organization’s senior management, and the organization’s employees regarding the federal and State standards and requirements under the contract;

(6) Effective lines of communication between the compliance officer and the organization’s employees;

(7) Enforcement of standards through well-publicized disciplinary guidelines;

(8) Establishment and implementation of procedures and a system with dedicated staff for:

(a) Routine internal monitoring and auditing of compliance risks;

(b) Prompt response to compliance issues as they are raised;

(c) Investigation of potential compliance problems as identified in the course of self-evaluation and audits;

(d) Correction of problems, identified under §A(7)(c) of this regulation, promptly and thoroughly, or coordination of suspected criminal acts with law enforcement agencies, to reduce the potential for recurrence; and

(e) Ongoing compliance with the requirements under the contract.

B. An MCO shall ensure that a subcontractor is legally qualified to furnish the services provided for in the subcontract.

C. An MCO may not contract with the State unless conflict of interest safeguards at least equal to federal safeguards under section 27 of 41 U.S.C. §423, as amended, are in place.

D. An MCO may not knowingly have a relationship of the type described in §E of this regulation with the following:

(1) An individual or entity that is debarred, suspended, or otherwise excluded from:

(a) Participating in procurement activities under the Federal Acquisition Regulation; or

(b) Participating in non-procurement activities under Executive Order Number 12549, 3 CFR 189 (1986); or

(2) An individual or entity who is an affiliate, as defined in 48 CFR §2.101, of a person described in §D(1) of this regulation.

E. The relationships described in §D of this Regulation, are as follows:

(1) A director, officer, or partner of the MCO;

(2) A subcontractor of the MCO;

(3) A person with beneficial ownership of 5 percent or more of the MCO’s equity; or

(4) A network provider or person with an employment, consulting or other arrangement with the MCO for the provision of items and services that is significant and material to the MCO’s obligations under its contract with the Department.

F. An MCO may not have a relationship with an individual or entity that is excluded from participation in any Federal health care program under §1128 or 1128A of the Social Security Act.

G. An MCO shall monitor the Department’s correspondence and any database publicizing Department-initiated terminations of providers from the Program.

H. An MCO shall terminate the contract of, or refrain from contracting with, providers terminated or excluded from participation in the Program.

I. An MCO shall suspend payments to a network provider for which the Department has determined that there is a credible allegation of fraud in accordance with 42 CFR §455.23.

J. An MCO shall establish a system to verify, by sampling or other methods, whether services that have been represented to have been delivered by network providers were received by enrollees and shall apply such verification processes at least annually.

K. An MCO shall require and have a mechanism for a network provider to report to the MCO when it has received an overpayment and to:

(1) Return the overpayment to the MCO within 60 calendar days after the date on which the overpayment was identified; and

(2) Notify the MCO in writing of the reason for the overpayment.

L. Overpayments to Providers and Subcontractors.

(1) Overpayments recovered by an MCO, including those recovered due to waste, fraud and abuse, may be retained by the MCO, so long as it is reported to the Department.

(2) If the Department, Federal government, or its agents identified the potential fraud, waste, or abuse that leads to recovery of funds paid to an MCO provider, and the MCO did not previously identify and report the provider for potential overpayments, the State shall have the right to recover from the MCO the entire amount of the overpayment.

(3) The State shall have the sole right of recovery of an overpayment when the MCO has identified the overpayment and the MCO has not initiated recovery within 90 days after the completion of the MCO’s investigation.

(4) The MCO shall have the right to appeal, pursuant to COMAR 10.67.10.02, the Department’s recovery of an overpayment.

M. The Department has the authority to recover any overpayments made to MCOs.

N. An MCO shall ensure that all of its network providers are screened, enrolled, and revalidated by the State as Medicaid providers, in accordance with 42 CFR part 455, subparts B and E.