House Bill 939 Becomes Law, Significant Changes Made to Florida’s Medicaid Program

July 12, 2013

medicalGovernor Rick Scott signed into law Florida House Bill 939 which went into effect July 1, 2013.  The changes contained in this bill mark somewhat significant changes to Florida’s Medicaid Program policies and procedures.  Below is a brief overview of some of the more significant changes.

Click here to read Florida House Bill 939.

Records Retention Period Increases for Medicaid Providers.

Section 409.907 was amended to require Medicaid providers to maintain all medical and Medicaid-related records for six (6) years instead of for (5) years, which was the previous requirement.  This will permit auditors and regulators to review more records when pursuing overpayments or conducting other billing inquiries.

Reports of Changes in Principals to AHCA for Medicaid Providers.

Section 409.907 was also amended to include an entirely new section requiring a Medicaid provider to:

report a change in any principal of the provider, including any officer, director, agent, managing employee, or affiliate person, or any partner or shareholder who has an ownership interest equal to 5 percent or more in the provider, to the agency in writing within 30 days after the change occurs.

Section 409.907(2)(k), Florida Statutes.

These changes in ownership notifications have the potential to make the sale of and investment in Florida Medicaid providers substantially more difficult.  Under this new law, many transactions that previously would not have been classified as “changes in ownership” now require sixty (60) days notice to the Agency for Health Care Administration (AHCA) and completion of a new Medicaid Provider Enrollment Application.

Permissive Inspections Prior to Enrollment.

Previously the AHCA was required to conduct a random on-site inspection within sixty (60) days of receipt of a provider’s completed application.  This requirement has been relaxed and now states that the AHCA may perform an onsite inspection.  It is believed that this requirement was meant to ease the backlog of inspections that the AHCA faces.  However, considering the front-page nature of healthcare fraud potential, providers should not expect that the AHCA will drastically reduce its inspections.  In short, be ready.  An inspection is still coming.

Expansion of Criminal Offenses Resulting in Termination from Medicaid Program.

The list of offenses that will result in termination from the Medicaid program has been expanded to now include any:

criminal offense under federal law or the law of any state relating to the practice of the provider’s profession, or a criminal offense listed under s. 409.907(10), s. 408.809(4), or s. 435.04(2) [Florida Statutes]

Section 409.913(13), Florida Statutes.

The offenses specifically enumerated above deal primarily with Medicaid fraud, and incorporate lists of offenses included in other statutory sections.

Termination for Cause Expansion for Medicaid Program.

Section 409.913(16), Florida Statutes, was amended to permit a termination for cause to be entered:

[i]f a provider voluntarily relinquishes its Medicaid provider number or an associated license, or allows the associated licensure to expire after receiving notice that the agency is conducting, or has conducted, an audit, survey, inspection, or investigation and that a sanction of suspension or termination will or would be imposed for noncompliance discovered as a result of the audit, survey, inspection, or investigation, the agency shall impose the sanction of termination for cause against the provider.

A termination for cause can have far reaching effects.  It can result in being placed on the Department of Health and Human Services (HHS) List of Excluded Entities and Individuals.  Placement on this list can result in all of the provider’s locations being excluded from Medicare and Medicaid nationwide.  Also, there is the possibility that the provider would be placed on the debarred list.  This would mean that the provider can have no affiliation with any entity that receives federal funding of any kind.  These sanctions have extreme consequences and should be carefully evaluated prior to making any kind of relinquishment decision. Click here to read more on the devastating effects of being excluded from Medicare and Medicaid.

Limitation of Records to be Considered During an Overpayment Determination After Medicaid Audit.

Section 409.913(21), Florida Statutes, was updated to now permit the AHCA to consider only information available to it prior to issuing an audit report.  Further, such substantiating information must be based solely on contemporaneous records.

AHCA is no longer permitted to review claims and make decisions based on late entries or updated records of any kind.  All notes and records must have been created on or near the date of service.

It is unclear whether or not this forecloses a provider’s ability to provide peer reviewed studies or explanations to justify a particular service.  In the event that the law is interpreted that way, it will substantially affect the way that a provider should respond to a request for records from AHCA.  Because a provider may no longer have an opportunity to supplement or provide additional documentation after it has been notified of deficiencies in its claims, it is crucial to engage the assistance of an attorney experienced in dealing with Medicaid audits as soon as the initial request for records is received.

Also updated was Section 409.913(22), Florida Statutes.  The changes to this section require that any documents used to contest a final overpayment demand are required to be provided to the AHCA within thirty (30) days of receipt of the final audit report.  This appears to mean that not only will a provider be required to request a formal hearing on the overpayment amount within thirty (30) days, but it will also have to marshal all of the evidence it will use in its defense within that same time.
Repayment to AHCA of Medicaid Overpayments no Longer Stayed Pending Appeal.

Finally, perhaps one of the more significant changes to the law was the termination of the stay of overpayment recoupment pending an appeal.  Now the AHCA will begin withholding reimbursement under the Medicaid program while an overpayment appeal is pending.  For providers largely dependent upon Medicaid reimbursement to remain afloat, this can effectively close your business while appealing an overpayment.

It is crucial that a provider attack an audit as early and effectively as possible.  Not only can this potentially eliminate the ultimate overpayment demand, but it can reduce it to the lowest level possible so that a provider can exercise its rights to appeal the decision.


Some rather substantial changes were made to the Medicaid program in Florida.  There are several new areas of potential liability for providers that warrant consulting with an experienced health care attorney.  Furthermore, some significant provider rights and entitlements were eliminated that can substantially impact the ability of a provider to remain open for business.  Consulting with an experienced health care attorney can help a provider navigate these changes and minimize any potentially adverse outcomes.


Did you know about House Bill 939 becoming a law? Please leave any thoughtful comments below.