Puerto Rico

Other False Claims Act laws.

(Below is an unedited Google translation of the bill’s actual text, which can be read by clicking here. This page is for informational purposes only and is not intended for citation.  The False Claims Act portion of the bill goes into effect on January 19, 2019)

( P. de la C. 1627 )

LAW

For create the “Law of Fraudulent Claims to Programs, Contracts and Services of the Government of Puerto Rico”; establish the Medicaid Fraud Control Unit attached to the Department of Justice; detail their responsibilities and faculties, provide operating guidelines, and for other related purposes.

EXPLANATORY MEMORANDUM

In 1863, the Government of the United States implemented what is now known as the False Claims Act , 31 USC §3729-3733. The purpose of this legislation was to promote citizen participation in those moments when the Government was being defrauded in the purchases that had to be made due to the war. Bliss legislation gives you jurisdiction to the Government of the United States to file lawsuits and civil claims for the recovery of losses for fraud to federal programs and imposition of fines. In turn, the federal False Claims Act allows to citizens to file lawsuits in the name and benefit of the Government of the United States for the recovery of such losses attributable to fraud. In exchange for this, the Government grants a percentage of the money recovered as a result of the information provided by these citizens under what is known today as the ” Qui Tam Provision “.

The anti-fraud provisions regarding the Qui Tam Provision are an essential part of the federal legislation on false claims. According to information provided by the Federal Justice Department, from 2009 through 2016, the Federal Government had recovered $ 31.9 billion under the False Claims Act . In fiscal year 2016 alone, $ 4.7 billion was recovered as a result of civil claims under the False Claims Act. It should be noted that of those $ 4.7 billion recovered in fiscal year 2016, $ 2.9 billion were the product of claims under the provisions of the Qui Tam Provision or “Whistleblower”. Citizens who filed such demands received $ 519 million in that fiscal year.

It should be noted that over 30 jurisdictions in the United States have their own Fraudulent Claims Act within the framework established by federal legislation. These state governments have recovered millions of dollars from people who have defrauded their state programs, especially in the Medicaid field. The provisions of Qui Tam Provision are also an essential part of these state laws since as with federal law, most of the compensation received by states for this type of cause of action comes from the information provided by citizens which in turn receive a quantity as a reward.

In Puerto Rico, there are state programs that benefit thousands of Puerto Ricans daily. Unfortunately, there are individuals and / or participants in such programs who submit false information to receive these benefits, either as a service provider or as a beneficiary of the service. Annually, such fraudulent conduct causes millions in losses to the Government and deprives others of the benefits of these programs. In addition to the crisis represented by fraud against the programs, there has been an increase in fraud in the contracting of services offered by the Government. This behavior includes overbilling and / or submitting bills for services not provided or unnecessary. This causes a substantial loss to the treasury.

Through this Law of Fraudulent Claims to Programs, Contracts and Services of the Government of Puerto Rico, we seek to create the scaffolding to civilly process the fraud to Government Programs and service contracts. With this mechanism we would be establishing a procedure in the Courts where the Government can submit claims to find that these people who have defrauded the Government receive a monetary penalty for their actions. In the same way, we would be encouraging citizen participation in the procedures when creating Qui Tam Provision provisions where these people will be remunerated for the information provided.

On the other hand, and tied directly to fraud in the services offered through the programs, in this case the Medicaid Program, as required by the Social Security Act-as amended byMedicare-Medicaid Anti-Fraud and Abuse Amendments (Pub. L. 95-142) – and Chapter V of the 42nd Code of Federal Regulations , the states and Puerto Rico are called upon to establish aMedicaid Fraud Control Unit (MFCU ) to assist the incidence of fraud among medical service providers. In view of this, the Center for Medicare & Medicaid Services (CMS) of the United States Department of Health had been given the task of monitoring the jurisdictions that had not established the aforementioned unit. Regrettably, this was the case of Puerto Rico because, despite the fact that all the states and the District of Columbia already had an MFCU, the previous administration stopped the process required to join the initiative.

For this reason, as soon as he took the reins of Puerto Rico, the Governor issued Executive Order No. 2017-012, through which he became aware of what had happened and clearly stated the need to respond to the aforementioned requirements, among other things, to avoid further limiting parity in Medicaid funds. In accordance with the above, through various governmental efforts led by the Department of Justice and the Department of Health, Establish by administrative order in the Department of Justice the unit in question, subsidized almost entirely by the Office of the Inspector General of the United States. This unit is responsible for investigating and prosecuting violations of applicable laws regarding fraud in the Medicaid Program, among others. However, even though the creation of the unit is a great advance, we are aware that its success will depend on the effectiveness with which it manages to investigate and process the infractions of the law and the fraud scenarios of the Medicaid Program. Therefore, this Legislature deems it necessary to equip the aforementioned unit with tools and establish its structure by virtue of law, in order to strengthen its operation. After all, the timely detection of fraud to the Medicaid Programs and the reimbursement to the state of the damages caused by that behavior is in the best interest of our people, because it ensures the availability of this valuable resource for the needy citizens.

It is very important to indicate that on February 8, 2018, the President of the United States signed into law the Resolution of the Chamber 1832 (“HR 1832”) known as the Bipartisan Budget Act of 2018 . This legislation gives Puerto Rico an allocation of three thousand six hundred million dollars ($ 3,600,000,000) in Medicaid funds. In addition, it would grant us an additional allocation of one thousand two hundred million dollars ($ 1,200,000,000) if we demonstrate that we have taken the appropriate and necessary steps for the creation of the Medicaid Fraud Control Unit in Puerto Rico. Thus, the Unit would be fully financed by the funds allocated by the United States Congress until September 2019. After the aforementioned date, the Unit would be financed initially by ninety percent (90%) and then would go to be financed in u n seventy-five percent (75%) by the funds allocated by the Congress of the United States. In accordance with the foregoing, and in order to obtain the necessary funds for the better functioning of the Medicaid Program, through this Act we are creating the Medicaid Fraud Control Unit and giving the necessary tools to the Department of Justice to operate This unit that we know will be of great benefit to all Puerto Ricans.

BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF PUERTO RICO:

CHAPTER I : GENERAL PROVISIONS

Article 1.01-Title.

This Act shall be known as the “Fraudulent Claims Law to the Programs, Contracts and Services of the Government of Puerto Rico” .

Article 1.02-Definitions.

The words and phrases used in this Law have the meaning indicated below:

(a)                 Health Insurance Administration or ASES – Public corporation created by Law 72-1993 with autonomy to develop the functions and responsibility to implement, manage and negotiate, through contracts with insurers, a health insurance system.

(b)                State Medicaid Agency – agency designated to administer the Medicaid Program in Puerto Rico; in this case, the Department of Health.

(c)                 Beneficiary – Any person who receives benefits under any Government Program, including the Medicaid Program.

(d)                Benefit – any assistance or benefit authorized by any Government Program, including the Medicaid Program.

(e)                 Knowledge or with knowledge – is when the person, with respect to the information:

i. He has personal knowledge of the information.

ii. Acts with deliberate ignorance about the truth or falsity of the information.

iii. Acts with reckless disregard for the truth or falsity of the information. In this case, proof of specific intention to defraud is not needed.

(f)                  Service Contracts – a written obligation formalized between any agency, public corporation or instrumentality of the Government with a natural or legal person, through which this person is obliged to provide services to the Government for which it will be remunerated as agreed.

(g)                Delator- the person who filed the complaint and / or provided the information that gives rise to the cause of action as an informant or “whistleblower”. The following persons are expressly prohibited from being or considered to be informers:

(a) Staff, including contractor, employed by the Medicaid Fraud Control Unit;

(b) Staff, including contractor, featured in the Medicaid and ASES Integrity Programs;

(c) Personnel, including contractor, of Government that operates the Medicaid Management Information System, or any analogous program that contains the necessary tools to identify fraud or violations to this Law;

(d) Any government employee or contractor , including its personnel, whose duties are linked to detecting fraud to the Medicaid Program ;

(e) Any government employee or contractor , including their personnel, whose functions are linked to detecting fraud and abuse in government programs and contracts ; Y

(f)  Any person who files a claim with information provided and detected by any of the persons referred to in paragraphs (a), (b), (c), (d) and (e) of this definition.

(h)                Fraud – intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit for himself or another person. Includes any act that constitutes fraud under applicable federal or state law.

(i)                  Fundamental – for purposes of this statute, it means having a natural tendency to influence or be able to influence the payment or receipt of money or property.

(j)                  government – Government of Puerto Rico, includes its agencies, instrumentalities and public corporations, as defined in their respective enabling laws. In the same way, this definition includes the Legislative Branch and the Judicial Branch. This definition also covers contractors and subcontractors that have been subject to fraud and / or false claim in the line and / or contract structure.

(k)                Managed Care Organization – an entity that has entered into an agreement with the insurer or other state agency to offer and / or hire others to offer health care services to individuals receiving Medicaid Program benefits and who is licensed as an insurer by the Commissioner of Insurance of Puerto Rico.

(l)                  Obligation – an established relationship, fixed or not, arising from a contractual obligation, between the Government and any natural or legal person derived from fees established by law and / or regulation and / or for the retention of any overpayment.

(m)              Person – includes natural and / or legal persons.

(n)                Government Programs – any program authorized by law, whether Federal or State, where the Government is the one that administers the funds and / or services and makes the corresponding disbursements to the participants of said programs.

(o)                Puerto Rico Medicaid Program – Medical Assistance Program authorized by federal law known as “Social Security Act”, as amended, and approved in Puerto Rico in accordance with the “state plan”.

(p)                Provider – Any natural and / or legal person who requested to participate and / or who participates in a Government Program, including the Medicaid Program, as a supplier of goods, products or services.

(q)                Claim – any oral or written communication, electronic or otherwise, request or claim, whether under a contract or otherwise, for money or property, regardless of whether the Government has title to the money or property, is presented to any employee, official or agent of the Government, or to any contractor, dealer or other recipient, in case the money or property is to be spent or used on behalf of the Government or to advance any program or interest State, or if the Government provides or has provided any portion of the money or property requested or claimed; or if the Government will reimburse such contractor, concessionaire or other recipient for any portion of the money or property that is claimed or claimed; This does not include requests or claims for money or property that the Government has paid an individual as compensation for their state employment or as an income subsidy with no restrictions on the individual use of money or property. Likewise, includes, any oral or written communication, electronic or any other nature, request or claim, by virtue of which a certain product and / or service is identified as reimbursable under the Medicaid Program, or by means of which income and / or expenses are reported and used or may be used to determine the amount or source of a payment under the Medicaid Program.

(r)                 Records – any document or file or record medical, professional or business related to the treatment or care of any beneficiary; or related to any good or service received by any beneficiary; or related to the fees paid for any good or service; or any other document or file or record required by the regulations of any Government Program.

(s)                 Secretary – refers to the Secretary of Justice of the Department of Justice of Puerto Rico.

(t)                  Unity – Medicaid Fraud Control Unit attached to the Department of Justice, created by this Act.

Article 1.03 . -Declaration of public policy and rule of statutory interpretation.

It is the public policy of the Government to prevent and attack the fraud of the Programs, Contracts and Services of the Government of Puerto Rico, including the Medicaid Program, and the conduct that is harmful to the proper use and management of the funds allocated to said programs, contracts and services. The eradication of such behavior is a priority on the agenda of this Government, as we are aware of the repercussions of fraud on the services offered in Puerto Rico, including health services and, above all, in the Medicaid Program.Certainly, we recognize that the availability of funds for such services depends on the government’s ability to detect and prevent fraud, and to facilitate the eventual criminal prosecution and / or appropriate recovery actions.

In accordance with the foregoing, the Government will make all necessary efforts to strengthen the structures of investigation and / or prosecution of fraudulent actions, and the effective and vigorous development of such inquiries and procedures. In accordance with the foregoing, this legislation shall be interpreted in a manner that promotes and facilitates criminal investigation and prosecution and civil actions that may be taken to minimize the impact of fraudulent and illegal conduct on the programs, contracts and services offered in Puerto Rico. Rich, including the Medicaid Program.

CHAPTER II: CREATING THE ANTI-FRAUD UNIT

Section 2.01-Medicaid Fraud Control Unit.

It is created, attached to the Department of Justice, the Medicaid Fraud Control Unit, for the purpose of operating a system of investigation and prosecution , or referrals for prosecution , of violations of state laws relating to fraud in the administration of the Medicaid Program. Medicaid in Puerto Rico; the offering of medical services and the activities of health care providers under the State Medicaid Program.

The Unit will also review complaints about allegations of mistreatment and / or neglect of patients at facilities receiving funds under the Medicaid Program health plan and may review complaints about allegations of illegal appropriation of funds or private property of patients admitted to said facilities.

For such purposes, the Unit will conduct investigations and will promote the corresponding civil and criminal actions for the recovery and / or restitution of the losses and damages caused to the Medicaid Program, including , but not limited to , actions under the Law of False Claims or any analogous legislation.

The Unit will have autonomy and independence from the other offices of the Department of Justice, and will maintain complete independence from the state Medicaid agencyand the Health Insurance Administration (ASES) . However, the Unit will establish an agreement with both agencies , in order to establish the details of the referral system and ensure compliance with the parameters established in Section 455.21 (a) (2) of Title 42 of the Code of Federal Regulations .

Article 2.02 . -Structure of the Medicaid Fraud Control Unit.

The Unit will operate under the general supervision of the Secretary, and its immediate address will be in charge of a Director selected by the latter. The Unit will also have a work team composed of lawyers, investigators and auditors, in addition to the administrative staff that the Secretary deems necessary. All the personnel of the Unit will be exclusively dedicated to attend to the matters for which the organization was created. The attorneys will have experience in investigating and prosecuting fraud cases, and they should be able to provide effective prosecution, and offer advice on the applicable legislation and processes of law.

The auditors attached to the Unit must be able to supervise the process of reviewing the files and financial data , as well as guiding and assisting in the investigation of alleged fraud.

The Unit will also have a “senior” researcher , or superior, with extensive experience in commercial and financial investigations, who will supervise and direct the investigative work of the agency.

The rest of the personnel assigned to the Unit must also have knowledge about the legislation that regulates the Medicaid Program and the operation of the health service providers.

Article 2.03 . -Functions and attributions of the essential personnel of the Unit.

The attorneys of the Unit shall have the power in law to conduct criminal investigations as Prosecutors, and to file the civil and administrative actions that they deem necessary to fulfill the purposes for which the Unit was created. In turn, for the performance of the work entrusted, investigators of the Unit will have the power to investigate, denounce, arrest, fill orders, possess and carry firearms, take oaths and issue citations and / or investigative administrative requirements.

CHAPTER III: FRAUD TO MEDICAID

Article 3.01 . -Referidos and investigations.

The Unit will receive referrals about suspected or possible fraud to the Puerto Rico Medicaid Program of the State Medicaid Agency, the Health Insurance Administration , affected beneficiaries and / or external sources. Depending on the nature of the allegations, the Unit Director will order the initiation of an investigation, refer the matter to the competent body or order the case file if it determines that no further action is required. When the Unit accepts or rejects A referral will notify the determination in writing. If the initial review of the referral does not reveal substantial possibility of criminal prosecution, the Unit will refer the matter to the corresponding agency for analysis and determination . Likewise, the Unit will have access to the Medicaid Management Information System (“MMIS”) of Puerto Rico as part of its investigative function, as well as access to the Prescription Drug Monitoring Program(PDMP) for the same purpose.

The Unit may also refer to both the state Medicaid agency as the ASES, for the possible suspension of payments, at any provider for which had begun an investigation into materials and credible allegations of Medicaid fraud. Likewise, if in performing the delegated functions related to the initial review of the referral, the Unit discovers that excess payments were made in favor of a health care facility or other health care provider under the Medicaid Program, the Unit will initiate the corresponding recovery actions or refer the matter to the appropriate agency for this purpose.

Article 3.02 . -Investigation; Request; Process.

When the Secretary has reason to believe that any person and / or entity is in possession, custody or ownership of any object and / or document relevant to an investigation ofpossible fraud to the Medicaid Program, he may require in writing that he produce and / or permit the examination of documents or objects for examination and investigation through an investigative administrative requirement. That includes service provider or organization of health care, who -in accordance with the provisions of 42 CFR § 431.107-, shall provide information and / or r é cords relating to services provided to beneficiaries. The Secretary may request information about the owner or holder of shares or any other pecuniary interest to the members of the Board of Directors, administrators or any other employee of a company.

The requirement shall:

(1)               establish the nature of the conduct that constitutes the alleged fraud activity to the Medicaid Program investigated under this Act or other applicable law provisions;

(2)               describe with precision and certainty the class or classes of documents or objects to be produced, in order to be easily identified;

(3)               establish the fixed date on which the requirement must be met, granting a reasonable period of time for the documents or objects to be produced for inspection, copying and / or reproduction; and

(4)               designate the custodian to whom the required material will be delivered.

No person who has custody documents relevant to an investigation into possible fraud in the Medicaid program objects, including r é cords of services provided to beneficiaries may refuse to provide access to them relying on the right to privacy beneficiary; in any privilege of the beneficiary against the disclosure or use, or in any other privilege or right under the exclusions to the general privacy rule of the Health Insurance Portability and Accountability Act of 1996, Pub. L. 104-191, as amended (HIPAA, for its acronym in English).

The Unit will respect the privacy and privacy rights of individuals and will establish safeguards to prevent the misuse of the information under its control.

Article 3.03 . -Notification of the requirement.

(a)                 Notification requirement or any request under this Article can be made of any of the following ways:

(1)               giving a duly completed copy to any partner, officer, agent, or general agent, and / or any agent authorized by law to receive locations for that person, and / or the person directly;

(2)               delivering a duly completed copy in the main office or main business site; or

(3)               sending a copy by certified mail with acknowledgment of receipt addressed to the person to the address of their main office or main business site.

(b)                The receipt of the notification duly completed by the person who served it, shall be considered prima facie evidence of such notification. In the case of notification by certified or registered mail, the notification must be accompanied by the receipt of the mail. Any person who has been duly notified of an order under this Article, must make available to the investigator the documents that have been requested for inspection, copying or reproduction. Said inspection, copy or reproduction shall be carried out in the main business office or in any other place where the investigator and the person agree in writing, or -in their absence- where the Court determines. The researcher to whom any document under this Article has been delivered will take possession of it and will be responsible for the use that is given to it and will return it in accordance with the provisions herein. While the documents are in the possession of said investigator, they may not be examined by any person, except the Secretary, the person delegated by him or her, and the personnel of the Unit, unless the consent of the person who produced said documents or objects. Under the terms and conditions established by the Secretary, the documents in the possession of the investigator may be inspected by the person who produced them or their authorized agent.

Article 3.04 . -Paralization of bank accounts and occupation of other properties.

At the request of the Secretary or the person delegated by the Unit, the Court may issue an interim injunction or preliminary injunction to paralyze bank accounts, require the provision of a compliance bond for real property, or take any other action to keep the availability of the property described in Article 3.02, in order to guarantee its confiscation if applicable under this Article, according to any of the following alternatives:

(1)               Upon the filing of an accusation or complaint for a violation of this Act and alleging that the property with respect to which the order is requested, would be subject to confiscation in case of a conviction.

(2)               Even if there is no accusation or prior denunciation, the Court may issue a provisional interdict order, without notifying the person, nor having provided him with the opportunity to be heard, when the Prosecutor demonstrates that there is a reasonable suspicion to believe that the property over which the order is requested, if a conviction occurs, it would be subject to confiscation and that the notification would endanger the investigation and the availability of the property to be confiscated. The temporary order will expire in a term that will not exceed ninety (90) days from the date it is issued, unless it is extended when just cause is demonstrated. When a provisional interdict order has been issued under this subparagraph and an interested party so requests, the Court shall hold a hearing as soon as possible, before the expiration of the temporary order.

(3)               In any hearing held pursuant to this subsection, the Rules of Evidence of Puerto Rico shall not apply.

Article 3.05 . -Incompliance with the requirement.

If any person fails to comply with the requirement of production of documents or objects under this Act or when it is impeded to copy or satisfactorily reproduce the evidence because the person refuses to deliver the material, the Secretary will request from the Court an order for the person to comply with the provisions of this Law. If the person does not comply with the order issued by the Court, it will incur civil contempt and will be grounds for revoking any license, permit or authorization that has been granted to the person or company under investigation. Within twenty (20) days after the notification of the request, or at any time before the delivery date specified therein, whichever is shorter, the person may request from the Court an order to modify or cancel the requirement. The term granted to fulfill the requirement will be suspended while the Tribunal considers said request. The petition shall specify the grounds on which it is based and may be based on the breach of any requirement of the request in accordance with the provisions of this Act and / or any constitutional or legal provision.

Article 3.06 . -Devolution of documents.

Upon completion of the investigation or any case or proceeding arising therefrom, the investigator shall return the documents or objects to the person who produced them, except for copies made by the Secretary. If an action or proceeding is not initiated as a result of the investigation within a reasonable time after the examination and analysis of all the evidence in the course of the investigation is completed, the person who produced the evidence shall be entitled, by written request to the Secretary, to the return of all the documentary evidence or objects that this person produced. In the event of death, incapacity or separation from the position of the person in possession of any documentary evidence produced under the provisions of this Act, or in case the investigator is relieved of the responsibility of guarding said material, the Secretary shall immediately (1) designate another investigator of the Unit to serve as custodian; and (2) notify in writing the name and address of the successor so designated to the person who produced the evidence. Any successor so designated shall have the same functions, duties and responsibilities imposed by this Act on his predecessor, except that he shall not be responsible for any negligent act that may have occurred prior to his appointment as custodian.

Article 3.07 . -Fraud the Medicaid Program and penalties.

  1. Fraud in the Medicaid Program, any person who intentionally and knowingly:

(1)                 Submit and / or encourage another to submit a claim under the Medicaid Program, knowing that it is partially or totally false.

(2)                 Offers or encourages another to offer a statement or representation for the purpose of obtaining or seeking authorization to offer a product or service under the Medicaid Program, with knowledge that the statement or representation is totally or partially false.

(3)                 Offers or encourages another to offer a statement or representation for the purpose of being used by another person in obtaining a good or service under the Medicaid Program, with knowledge that the statement or representation is totally or partially false.

(4)                 Offers or encourages another to offer a statement or representation for the purpose of being used in the qualification as a provider of a good or service under the Medicaid Program, with knowledge that the statement or representation is totally or partially false.

(5)                 Charges any beneficiary or person acting on behalf of a beneficiary, money or other consideration, in addition to or in excess of the rates agreed with the Managed Care Organization , any health service organization and / or insurer regardless of the model of benefit of services .

(6)                 Except as authorized under the Medicaid program, you pay, cobra, requests, accepts or receives, in addition to an amount paid under the Medicaid Program, a gift, money, donation or any other d to diva or bribery in relation to goods or services paid or claimed by a provider that are payable by the Medicaid Program.

(7)               Knowingly submits or encourages others to submit a claim for payment under the Medicaid Program by:

(a)               a service or product that has not been approved or authorized (acquiesced) by a doctor (medical practitioner) or health professional;

(b)               a service or product that is substantially inappropriate or inappropriate compared to generally recognized standards within the particular discipline or within the health care industry; or

(c)               a product that has been adulterated, degraded, mislabeled, or otherwise inappropriate;

(d)               a product or service that has not been provided as detailed in the claim for payment; I

(e)               a service or product that is not medically necessary.

(8)               It is a Manage d Care Organization , a organization of health services and / or insurance regardless of the model of service provision , which voluntarily:

(a)               does not offer an individual a health benefit or service that the entity is obligated to provide under the contract;

(b)               does not disclose to the commission or appropriate state agency the information that must be provided by law, regulation, or contractual clause;

(c)               engages in fraudulent activity for the purpose of granting Medicaid program benefits under the organization’s managed care plan or in connection with the marketing of the organization’s services to an individual eligible under the Medicaid Program; I

(d)               incur in a violation of any of the provisions contained in this Act to obtain, or that another illegally obtains, a payment or benefit under the Medicaid Program.

  1. Fraud Penalties for the Medicaid Program.

Any person who violates any of the provisions contained in this Act to obtain, or otherwise obtains, a payment or benefit under the Medicaid Program, will be found guilty of the offense of Medicaid Program Fraud and will be sanctioned with the penalties They are detailed below:

(a)                 Any person who commits Fraud to the Medicaid Program where the total amount of the illegally claimed or received payments is less than two thousand five hundred dollars ($ 2,500.00) will incur a felony and, convicted, will be punished with imprisonment for a fixed term of three (3) years. If there are aggravating circumstances, the penalty shall be increased up to a maximum of five (5) years; if there are mitigating circumstances, the penalty will be reduced to a minimum of one (1) year. In addition, you must pay a fine of not more than three (3) times the amount of illegally claimed or received payments or a fine of one thousand dollars ($ 1,000.00), whichever is greater.

(b)                Any person who commits Medicaid Fraud where the total amount of illegally claimed or received payments is two thousand five hundred dollars ($ 2,500.00) or more, will incur a felony and, convicted, will be punished with imprisonment for a fixed term of five (5) years. If there are aggravating circumstances, the penalty shall be increased to a maximum of eight (8) years; If there are mitigating circumstances, the penalty will be reduced to a minimum of three (3) years. In addition, you must pay a fine of not more than three (3) times the amount of illegally claimed or received payments or a fine of ten thousand dollars ($ 10,000.00), whichever is greater.

(c)                 If the person who commits Medicaid Fraud is an entity or legal person and not an individual, it will be sanctioned with a fine of no more than fifty thousand dollars ($ 50,000) for each crime if it is the modality described in subsection (a) and of no more than two hundred and fifty thousand dollars ($ 250,000) for each crime if it is the modality described in subsection (b).

  1. Other prohibited acts.

(a)               Conspiracy to defraud the Medicaid Program.

Any person who conspired with another person to defraud the Government and commit a violation of any of the provisions contained in this Act to obtain, or that another illegally obtains, a payment or benefit under the Medicaid Program will commit a felony and will be punished with penalty. of imprisonment for a fixed term of three (3) years. If there are aggravating circumstances, the established fixed penalty may be increased up to a maximum of five (5) years; if there are mitigating circumstances, it may be reduced to a minimum of two (2) years.

(b)               Obstruction to an investigation initiated by the Unit.

Any person who intentionally obstructs a criminal investigation initiated by the Unit for violations that arise under the scope of this Act shall commit a felony and shall be punished with imprisonment for a fixed term of three (3) years. If there are aggravating circumstances, the established fixed penalty may be increased up to a maximum of five (5) years; if there are mitigating circumstances, it may be reduced to a minimum of two (2) years.

(c)               Acquisition of property by third party.

Any person who, acting in concert and common agreement, will conspire with or on behalf of a person accused or convicted of violating this Act, who in violation of the provisions of this statute, acquires or intends to acquire a property described in subsection (b) of Article 3.08, which has been confiscated or is subject to confiscation, shall be punished with imprisonment for a fixed term of ten (10) years. If there are aggravating circumstances, the established fixed penalty may be increased to a maximum of fifteen (15) years; if there are mitigating circumstances, it may be reduced to a minimum of five (5) years.

(d)               Destruction of documents or objects.

Any destruction, mutilation, alteration, concealment, removal, or damage to documents or objects requested by the Secretary for purposes of an investigation into Medicaid Program fraud will be a felony and will be punishable by imprisonment for a fixed term of three ( 3 years. If there are aggravating circumstances, the established fixed penalty may be increased up to a maximum of five (5) years; if there are mitigating circumstances, it may be reduced to a minimum of two (2) years.

  1. Referred to the Office of the Insurance Commissioner.

Upon the determination by the Unit of a possible violation of this Law by a company under the jurisdiction of the Office of the Commissioner of Insurance, the Unit shall have the obligation to refer said determination to the Commissioner of Insurance for the corresponding administrative action. Depending on the severity of the violation, the Office of the Insurance Commissioner may withdraw the insurance license to that entity.

  1. Referred to the Licensing Board.

Once becomes final and binding any sentence for violation of the provisions of this A rticle, the Unit shall be obliged to refer to the License Board to regulate the profession of that conviction copy of the judgment to any relevant disciplinary procedure person.

F . Prescription of the criminal action. 

The criminal action arising from the provisions of this Article shall prescribe:

(1)               at ten (10) years, in serious crimes;

(2)               at five (5) years, for less serious crimes.

Section 3.08-Confiscation of Property.

  1. (a)The Court, in issuing a judgment against a person for violation of the penal provisions of this Act, shall order, in addition to any penalty imposed under this Act, the confiscation in favor of the Government of all the property described in the following clauses:

(1)               any interest that the person has acquired or retained in violation of the provisions of this Act;

(2)               any interest in, guarantee of, claim against, or right of property or contract of any kind that constitutes a way to influence any company that the person has established, operated, controlled, or participated in its direction, in violation of this Law; I

(3)               Any property that constitutes, or has been received, directly or indirectly, from a criminal activity, or from the collection of an illegal debt, or is the product of an illegal activity as defined in this Act.

  1. (b)The property subject to forfeiture under this section , shall include immovable and movable property, including rights, privileges, interests, claims and securities.
  2. (c)Any right, title or interest in the property described in subsection (b) shall become the property of the Government, when an act that results in confiscation under this Article is committed. Any property that, subsequent to the commission of such act, is transferred to another person other than the accused, may be confiscated in favor of the Government, unless the purchaser establishes that he is a good faith acquirer of such property and that at the time of the purchase did not know or could not know that the property could be confiscated under the provisions of this Article.

(d)               In the cases in which due to the nature of the good applied, and after the seizure of the confiscated property, the Secretary shall order the disposition of the property through its sale or any other viable commercial transaction, taking the necessary measures to protect the rights of the property. any innocent party. Any right of property or interest that is exercisable or transferable by value to the Government will be extinguished and will not revert to the convict. In no case shall the convict or any person who has acted in concert with or on behalf of the convict be eligible to acquire the property confiscated in a sale made by the Government.

(e)               The proceeds of the sale or any other disposition of the property confiscated under this Article, as well as the confiscated money, will be used to raise funds for the operation of the Unit, as well as to pay the expenses incurred in the confiscation and sale, including the Expenses incurred in the seizure, maintenance and custody of the property until its disposition, the announcements and the expenses and costs of the process, at the discretion of the Director of the Unit, after consulting with the Secretary.

(F)               With respect to confiscated property, the Secretary may:

(1)               grant those requests that have been made to mitigate the damages caused by the confiscation, return the confiscated property to the victims of activities prohibited by this Law and / or take any other action to protect the rights of innocent parties when it is in the interest of justice and that is not inconsistent with the provisions of this Law;

(2)               settle claims arising under this Article;

(3)               grant compensation to persons who provide information that results in the confiscation of property;

(4)               carry out disposition procedures on behalf of the Government of all property confiscated through public sale or any other viable commercial transaction, taking the necessary measures to protect the rights of the innocent parties;

(5)               take the necessary measures to safeguard and preserve the confiscated property until its final disposition.

(g)               No person claiming an interest in a property subject to confiscation may intervene in a judgment or appeal of a judgment in a criminal case involving the confiscation of such property under this Article; nor initiate an action against the Government in relation to the validity of their alleged interest in the property, subsequent to the filing of an accusation or denunciation in which it is alleged that the property is subject to be confiscated.

(h)               To facilitate the identification or location of the confiscated property and to facilitate the consideration of requests made for the return or mitigation of the damages caused by the confiscation, after issuing a property confiscation order in favor of the Government, the Court may, at the request of the Prosecutor, order that depositions be taken to witnesses whose testimony is related to the confiscated property and may also order the production of any book, document, history, recording or other non-privileged material, in the same manner as is available for the taking of depositions under the Rules of Criminal Procedure.

(i)               After issuing a confiscation order under this Article, the Secretary shall publish in a newspaper of general circulation, a notice of said order and his intention to dispose of the confiscated property. The Secretary may, as far as practicable, notify by certified mail to any person known to have claimed an interest in the property subject to a confiscation order, in substitution of the public notification in relation to said people. Any person, except the convicted person, who claims to have a legal interest in the property confiscated,may file an action for a declaratory judgment before the Court of First Instance for it to adjudicate on the validity of its alleged interest in the property within thirty (30) days following the last publication of the notification or receipt of the notification provided in subsection (1), whichever occurs first. The claim will be sworn by the petitioner and will establish the nature and scope of his right, title, or interest in the property, the time and circumstances of the acquisition of title or interest in the property, any additional facts that sustain his claim and the remedy requested. To the extent feasible and consistent with the interests of justice, the hearing on the claim shall be held within thirty (30) days following the filing date.The Court may consolidate this hearing with any other claim filed under this subsection by any person, except the convicted person. In addition to the testimony and evidence presented at the hearing by either party, the Court may consider the relevant part of the record of the criminal case that gave rise to the confiscation order.

The Court will amend the confiscation order if after the hearing it concludes that the claimant has proven by preponderance of the evidence that: (A) has a right, title, or interest in the property that invalidates, in whole or in part, the order of confiscation, because they are the same superior to any other right, title, or interest of the convict at the time of the commission of the facts that gave rise to the confiscation of the property under this Article; or (B) is a good faith acquirer of the right, title or interest in the property, and at the time of acquisition was unaware that the property was subject to be confiscated. The Court must amend the confiscation order in line with its findings.

After the Court resolves all the claims filed under this subsection or, if no claim is filed, after the expiration of the term established to present such claims, the title in favor of the Government on the confiscated property will be perfected and its title will be recordable in the Land Registry by court order. The Government may validly transfer its title to any person.

The Court of First Instance, Superior Court of San Juan shall have jurisdiction to issue the orders provided for in this Article regardless of the location of any property that may be confiscated , or that has been ordered to be confiscated under this Article. When the property is outside the jurisdiction of the Government, the Secretary will manage compliance with the orders issued by the Court.

Article 3.09 . -Cancellation of incorporation certificate.

The Secretary may request a procedure of a civil nature to cancel the incorporation certificate of any corporation organized in accordance with the laws of the Government or to cancel or revoke any license, permit or authorization granted to any foreign corporation doing business or charitable work in Puerto Rico. when the entity has incurred in violations of this Law and has been convicted. In such cases, if it is a company that is not a corporation, the Secretary may request the suspension of operations.

CHAPTER IV: FRAUDULENT CLAIMS

Article 4.01 . -Violations.

Subject to subsection (2) of this Article, any person who:

    1. With present knowledge or cause a false or fraudulent claim to be presented for a payment for the approval of benefits under any Government Program; or because of a service contract;
  1. With knowledge, make, use, or cause to be made or used a false record or a statement that is essential to submit a false or fraudulent claim under any Government Program or because of a service contract;
  2. Conspire to commit a violation of subsections 1 (a) and 1 (b) of this Article; I
  3. With knowledge make, use, or cause to be made or used a false record or statement that is fundamental to an obligation to pay, transmit money or property to the Government, or with knowledge hide and improperly evade or diminish an obligation to pay or transmit money or property, relative to any Government Program or service contract, as defined in this Act.

He will be subject to pay the Government a civil penalty of not less than eleven thousand one hundred and eighty-one dollars ($ 11,181), but not more than twenty-two thousand three hundred and sixty-three dollars ($ 22,363). These penalties will be automatically adjusted each year in accordance with the provisions of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 to be on par with those authorized in the Federal False Claims Act, 31 USC §3729 (a). In addition to this civil penalty, you will be subject to three (3) times the amount of damages received by the Government as a result of these fraudulent actions.

  1. However, if the Court finds that:
  2. The person who committed the violation of paragraph 1 (a) to 1 (d) of this A rticle they provided to government officials investigating the fraudulent claim, all information known to him about the violation within the first thirty (30) days since you obtained it;
  3. The person cooperated fully with any state or federal investigation, as certified by the Department of Justice, related to any violation of subparagraphs 1 (a) through 1 (d) of this A rticle; Y
  4. At the time the person provided information to the Government regarding the violation of subparagraphs 1 (a) through 1 (d) of this Article, there was no criminal action, or civil or administrative actions under this Act and the person did not have knowledge of the existence of an investigation against them for these violations.

In these circumstances, the Court could reduce from three (3) times to two (2) times the amount awarded for the damages received by the Government as a result of those actions.

  1. The person who violates subsections 1 (a) through 1 (d) of this Article , must also pay for attorney’s fees and costs incurred to recover the civil penalty and / or the damages incurred.
  2. Any person who undertakes, or intends to perform any act described in paragraphs 1 (a) to 1 (d) of this Article , will be brought before the Court of First Instance, San Juan Chamber, in an action brought by the Secretary or person designated by this. The action will be presented on behalf of the Government and will be granted if it is clearly demonstrated that the Government’s rights are being violated by such person or entity and that the Government will suffer immediate and irreparable damages, damage, or loss in which a final judgment is issued adjudicating the controversy, or that the acts or omissions of that person or entity tend to render ineffective that opinion final. The court may issue orders or judgments, including the appointment of a receiver, as necessary, to prevent any act described in subparagraphs 1 (a) through 1 (d) of this Article by any person or entity, or otherwise. necessary to restore to the Government real or personal money or assets, which may have been acquired through said act.

Article 4.02-Civil Action: who can present it.

  1. If the Secretary or the person designated by it finds that a person has violated or is violating Article 4.01 of this Act, the Secretary or the person designated by it may bring a civil action against that person.
    1. Any person can bring a civil action and file a claim as a Delator for a violation of Article 4.01 of this Act in favor of the Government. Any action must be presented in the name of the Government. This action can only be filed without prejudice with the consent of the Secretary or the person designated by it by written consent explaining the reasons for this.
  1. The person filing the claim for benefit and on behalf of the Government in the Court shall on the date of his filing summon the Government through the Secretary, providing a copy of the claim and written disclosure of all evidence and information in his possession. The claim will be filed in the Court of First Instance, will remain sealed for at least the following sixty (60) days, and will not be notified or disclosed to the defendant until the court so decides. In the lawsuit, the informer shall certify under penalty of perjury that did not obtain any information from the person s having n a ban on filing a lawsuit in accordance with Article 1.02 (g) of this Law. The Government may choose to intervene in the process, substitute the plaintiff for the claim and continue with the action within sixty (60) days of receiving notice of both the claim and the of the evidence and information necessary for the Secretary to carry out his investigation of the information reported. The Court may extend the term of sixty (60) days for the decision of intervention or non-intervention by the Government, provided that the Secretary or his / her designee requests the same, detailing just cause to continue the investigative process prior to making the decision. about the intervention.
  2. Before the term is completed, either sixty (60) days or the extension, the Government may:
  • Proceed with the action, in which case it will be promoted by the Government.
  1. Notify the Court that they will not assume jurisdiction of the civil case, in which case, the action will be promoted by the person who filed the complaint.
  • The determination of intervention or non-intervention in any case filed under this legislation by a private citizen is entirely at the discretion of the Secretary or his / her designee and will not be subject to judicial review or challenge by the applicant of the action in court.
  1. When a particular person files the complaint, only the Government can intervene or bring any legal action related to the facts contained in the complaint.
  2. If the Government continues with the cause of action, it will have the primary responsibility to prosecute the case and will not be bound by the acts or any action made by the person who filed the claim initially.
  3. The Government may file the cause of action at any time in accordance with the provisions of subsection 2 (a) of this Article even if there is an objection from the person who filed the complaint. Copy of the motion explaining the reasons for filing the cause of action you must notify the person who filed the complaint. After notification of the motion to the person who filed the complaint, it will have fifteen (15) days to oppose the file. In that case, the Court must hold a hearing to discuss the motion of the Government’s file, within the term of twenty (20) days of receipt and notified the objection of the person who filed the complaint.
  4. The Government can reach an agreement with the defendant even if there is an objection from the party that filed the complaint. This is after the Court evaluates during a hearing whether the agreement is fair, reasonable, adequate and is made in good faith.
  5. If the Government decides not to intervene in the cause of action, the Secretary may allow the person who filed the claim to benefit and in favor of the Government continue to manage the action before the Court. If authorized to continue this management, the Delator will not be authorized to enter into any transaction agreements on behalf of the Government, until the proposal for a settlement agreement or request for withdrawal of the cause of action is submitted to the Secretary or Your designee for approval. All payment for the concept of Transaction will be issued in the name of the Secretary of the Treasury of Puerto Rico. Any compensation granted to a Delator will be the object of agreement between the Government and the Delator. In cases where the Government decides not to intervene and allows the Delator to continue with the litigation, the Secretary may require that he be notified of any motion presented and that he be provided with a copy of all evidence presented,including transcripts of depositions in charge and account of the Delator. To prevail in the lawsuit, in addition to the compensation that is assigned by the referral and management, the Delator may request reimbursement of necessary and reasonable expenses incurred and that have not been replaced by the Court through costs and attorney’s fees . The Government will not be subject to paying attorney fees to the Delator, nor will it be subject to the payment of attorneys’ fees to the opposing party, to have declined to intervene and the Delator to have continued the suit. At any time once the cause of action has been initiated, the Court may allow the intervention of the Government in the proceedings if it understands that there is just cause to do so, and at the express request of the Secretary or his designee.The Court will not have jurisdiction to compel the Secretary to intervene or not in a certain suit. Likewise, the Government can request the Court to limit the witnesses that the Delator intends to present, the testimonies and cross-examination that it will do if the Government understands that not limiting it would affect a related criminal investigation or if it understands that if the testimonies do not they would be repetitive, irrelevant or would lengthen the process unnecessarily.

Regardless of the fact that the Government or the person who filed the lawsuit takes the cause of action, the Court – at the request of the Government – may paralyze the discovery of evidence for a period of not more than sixty (60) days if the Government Proof that part or all of the evidence to be discovered may interfere with any other criminal or civil investigation that arises from the same or similar facts. This view to request the stoppage of the test discovery will be done privately. The term of sixty (60) days may be extended at the request of the Government if the Court deems that it has acted in good faith and that continuing with the discovery of evidence would affect other ongoing investigations.

Article 4.03 . -Compensation.

  1. If the Government is the one who proceeds with the cause of action, the person who filed the claim or the Delator is entitled to receive not less than fifteen percent (15%) but not more than twenty-five percent (25%) of the amount charged by the Government for violations of the Government Program or the service contract, as the case may be. It is understood that the right to compensation is activated once the Government has been able to execute the sentence or transaction agreement and in fact has received payment. While the Government does not receive payment, the Delator will not be entitled to collect its percentage. In the absence of an agreement between the Government and the Delator, the Court shall determine the percentage, among those established in this Article, to receive the party that filed the complaint.
  2. If the Court deems that the participation of the person who filed the complaint or the Delator was based on information easily accessible to any person and that it was not the product of a rigorous investigation, it may fix the amount of compensation in ten percent (10 %) of the amount received by the Government in the judgment or transaction agreement.
  3. Any payment made to the person who filed the claim for the benefit of the Government will be satisfied by the amount of the judgment or the transaction agreement. As an exception, if the government receives partial payment in satisfaction of the judgment or settlement agreement, and l Delator only entitled to charge the percentage allocated as compensation payment received. The Court may also impose additional costs on the defendant for additional reasonable expenses incurred by the person filing the claim, such as attorney’s fees. The party filing the complaint shall submit to the Court a breakdown of the expenses incurred, within a period of fifteen (15) days from the date of the judgment or settlement agreement.
  4. In those cases in which the Government does not intervene in the cause of action, the Delator will receive not less than twenty-five percent (25%) and not more than thirty percent (30%) of the amount of the sentence imposed by the Court, in addition to the necessary and reasonable expenses incurred in the litigation of the lawsuit, under the same precept of collection ability of the Government as stated in the preceding paragraph. The Delator who filed the complaint must submit to the Court a breakdown of such expenses in a period of fifteen (15) days from the sentence or transaction.
  5. Regardless of whether it is the Government or the Delator who filed the lawsuit who brings the cause of action, the Court will understand that evidence was presented that the State that filed the complaint conspired, participated or assisted in the commission of the violation of the Government Program. or to the service contract, you must reduce the amount you would receive for the sentence or the transaction to five percent (5%). If as a consequence of the conspiracy, participation or help provided for the violation of the Program or the service contract, the Government submits criminal charges against the person who filed the complaint, the Delator will be disqualified from representing the Government in the suit and to receive any compensation from the proceeds of the judgment or transaction that has been recovered as a result of your referral.The Government may, however, continue with the cause of action at the discretion of the Secretary or his designee.
  6. If the Government does not proceed with the cause of action and the Court understands that it has no merits, the Court will impose the necessary costs for recklessness to the party who filed the complaint. The defendant shall have fifteen (15) days from the time the Court files or dismisses the cause of action to submit to the Court a breakdown of the reasonable fees and expenses incurred.
  7. The Government will never be responsible for the expenses incurred by the Delator who filed the lawsuit to submit the cause of action or process the lawsuit for the benefit of the Government. To prevail in the lawsuit, the Delator may receive reimbursement of those expenses and costs necessary and reasonable for the litigation, excluding sums for attorney fees incurred by the Delator, which will not be reimbursable by the Government.
  8. No Delator will be compensated by the Government for having made any referral of fraud or falsehood for investigation that has not been presented in court by this under the Qui Tam procedure mentioned above.

Article 4.04 . – Collateral Disease.

  1. Under no circumstances may a person file a claim based on allegations or transactions that are already or previously adjudicated in a civil or administrative proceeding in which the Government was a party.
  2. The Court will file the cause of action if the allegations or transactions are the same or arise from the same scheme, series of events, or from the same actors. In these cases, the Government may promote the cause of action at its discretion.

Article 4.05 . – Rights of the Delator

Any person, employee, contractor or agent who does not have an express prohibition under Article 1.02 (g) of this Act has the right to file a report as an Informant if he / she knows about the existence of a violation of this Chapter of this Law. employee, contractor or agent be dismissed, marginalized, suspended, threatened or otherwise discriminated against in the terms and conditions of their employment for filing a complaint this will enjoy the protections contained in Title IV of Law 2-2018, known as the ” Anticorruption Code for the New Puerto Rico ” , and in the applicable Federal Laws.

Article 4.06 . -Citation and Prescription

  1. A summons to require the appearance of witnesses in a proceeding arising under the provisions of this Act, may be completed in Puerto Rico or in any other state or territory of the United States of America, as provided in the Rules of Civil Procedure of Puerto Rico
  2. A civil action pursuant to the provisions of this Act shall prescribe:
  3. Six (6) years after the violation of the Government Program or the service contract, in accordance with the provisions of this Law.
  4. Within three (3) years following the moment in which the Government becomes aware of the allegations of possible violations, regardless of the six (6) years contemplated in subsection (a), but never after ten (10) years from the commission of the violation.
  5. If evidence is presented that the commission of the violation of fraud or falsehood occurred during the course of a conspiracy, the prescriptive term will begin to run from the last act in favor of the conspiracy.

Article 4.07 . -Chause of Criminal Action.

A cause of civil action under the provisions of this Act shall not be an impediment for the Government to submit a cause of criminal action for the same facts on which it is based, or to continue with administrative remedies before the governmental agencies concerned.

CHAPTER V: GENERAL FINAL PROVISIONS

Article 5.01 . -Jurisdiction and Competition.

The Court of First Instance, Superior Court of San Juan, will be the primary and exclusive forum where the causes of criminal action will be filed and dealt with by the Medicaid Fraud Control Unit and will also be the forum for filing the lawsuit. for violation of the Government Program or the service contract, in accordance with the provisions of this Law, regardless of the judicial region where the fraud or falsehood occurred.

Article 5.02 . -Separability clause.

If any clause, paragraph, subparagraph, sentence, article, provision, section, subsection, chapter, subchapter, section or part of this Act were annulled or declared unconstitutional, the resolution, ruling or ruling to that effect shall not affect, prejudice or will invalidate the remnant of this Act. The effect of said judgment will be limited to the part of the Law that has thus been annulled or declared unconstitutional. If the application to a person or a circumstance of any part of this Act is invalidated or declared unconstitutional, the resolution, ruling or ruling to that effect shall not affect or invalidate the application of the remainder of this Act to those persons or circumstances in which can apply validly.It is the express and unequivocal will of this Legislature that the courts enforce the provisions and application of this Act to the fullest extent possible, even if it repeals, annuls, invalidates, damages or declares any of its parts unconstitutional, or , even if it is rendered ineffective, invalidates or declares its application to any person or circumstance unconstitutional. This Legislative Assembly would have approved this Law regardless of the determination of separability that the Court may make.

Article 5.03 . -Validity.

This Act shall take effect immediately after its approval ; no However the provisions contained in Chapter IV False Claims go to n into force one hundred and eighty (180) days after the approval of this Act.

Other False Claims Act laws.