(a) All managed care organizations, contractors, subcontractors, providers or any other person or entity shall advise the office of TennCare inspector general immediately when there is actual knowledge, not subject to a testimonial privilege, that an act of recipient, enrollee, or applicant fraud is being, or has been committed. The office of TennCare inspector general shall review the information to determine if there is a sufficient basis to warrant a full investigation. The office of TennCare inspector general is authorized to establish an electronic system for treating physicians to report recipient, enrollee or applicant fraud.

(b) All managed care organizations, contractors, subcontractors, providers or any other person or entity shall advise the medicaid fraud control unit (MFCU) immediately when there is actual knowledge, not subject to a testimonial privilege, that an act of provider fraud is being, or has been committed. The MFCU shall review the information to determine if there is a sufficient basis to warrant a full investigation. MFCU is authorized to establish an electronic system for treating physicians to report provider fraud.

(c) Any person or entity making a complaint or furnishing a report, information or records in good faith pursuant to this section is immune from civil liability for making such complaint or report.

(d) Willful failure to report such fraud shall be subject to a civil penalty of not more than ten thousand dollars ($10,000) for each finding to be assessed by the office of TennCare inspector general.