S. 1251 (112th): Medicare and Medicaid FAST Act

112th Congress, 2011–2013. Text as of Jun 22, 2011 (Introduced).

Status & Summary | PDF | Source: GPO

II

112th CONGRESS

1st Session

S. 1251

IN THE SENATE OF THE UNITED STATES

June 22, 2011

(for himself, Mr. Coburn, Mr. Bennet, Mr. Enzi, Mr. Corker, Mr. Brown of Massachusetts, Ms. Klobuchar, and Mr. Thune) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend titles XVIII and XIX of the Social Security Act to curb waste, fraud, and abuse in the Medicare and Medicaid programs.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act or the Medicare and Medicaid FAST Act .

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—Preventing prescription drug waste, fraud, and abuse

Sec. 101. Requiring valid National Provider Identifiers of prescribers on pharmacy claims and limiting access to the National Provider Identifier Registry.

Sec. 102. Encouraging the establishment of State Prescription Drug Monitoring Programs.

Sec. 103. Updating of DEA database of controlled substances providers.

TITLE II—Curbing improper payments

Sec. 201. Addressing vulnerabilities identified by Recovery Audit Contractors.

Sec. 202. Improving Senior Medicare Patrol and fraud reporting rewards.

Sec. 203. Prohibiting the display of Social Security account numbers on newly issued Medicare identification cards and communications provided to Medicare beneficiaries.

Sec. 204. Requiring prepayment review of all claims for durable medical equipment at high risk of waste, fraud, and abuse.

Sec. 205. Strengthening Medicaid Program integrity through flexibility.

TITLE III—Improving data sharing across agencies and programs

Sec. 301. Improving data sharing across agencies and programs.

Sec. 302. Expanding automated prepayment review of Medicare claims.

Sec. 303. Improving the sharing of data between the Federal Government and State Medicaid programs.

Sec. 304. Improving claims processing and detection of fraud within the Medicaid and CHIP programs.

Sec. 305. Reports.

TITLE IV—Improving CMS contractor performance

Sec. 401. Establishing Medicare administrative contractor error reduction incentives.

Sec. 402. Separating provider enrollment and screening from Medicare administrative contractors.

Sec. 403. Developing measurable performance metrics for Medicare contractors.

TITLE V—Other provisions

Sec. 501. Strengthening penalties for the illegal distribution of a Medicare, Medicaid, or CHIP beneficiary identification or billing privileges.

Sec. 502. Providing implementation funding.

I

Preventing prescription drug waste, fraud, and abuse

101.

Requiring valid National Provider Identifiers of prescribers on pharmacy claims and limiting access to the National Provider Identifier Registry

(a)

Requiring valid National Provider Identifiers of prescribers on pharmacy claims

Section 1860D–4(c) of the Social Security Act (42 U.S.C. 1395w–104(c)) is amended by adding at the end the following new paragraph:

(4)

Requiring valid National Provider Identifiers of prescribers on pharmacy claims

(A)

In general

For plan year 2013 and subsequent plan years, subject to subparagraph (B), the Secretary shall prohibit PDP sponsors of prescription drug plans from paying claims for prescription drugs under this part that do not include the valid National Provider Identifier for the drug's prescriber.

(B)

Procedures

The Secretary shall establish—

(i)

procedures for determining the validity of National Provider Identifiers under subparagraph (A); and

(ii)

procedures for transferring to the Inspector General of the Department of Health and Human Services and appropriate law enforcement agencies and other oversight entities information on those National Provider Identifiers and pharmacy claims, including records related to such claims, that the Secretary determines are invalid under clause (i).

(C)

Report

Not later than January 1, 2014, the Inspector General of the Department of Health and Human Services shall submit to Congress a report on the effectiveness of the procedures established under subparagraph (B).

.

(b)

Limiting access to National Provider Identifier Registry

(1)

In general

The Secretary of Health and Human Services (in this subsection referred to as the Secretary), in consultation with the Attorney General, the Inspector General of the Department of Health and Human Services, the Chairman of the Federal Trade Commission, and affected parties (including prescription drug plans under part D of title XVIII of the Social Security Act (42 U.S.C. 1395w–101 et seq.), MA–PD plans under part C of title XVIII of the Social Security Act (42 U.S.C. 1395w–21 et seq.), pharmacies, physicians, and pharmacy computer vendors), shall establish procedures and rules to restrict access to the National Provider Identifier Registry in order to deter its fraudulent use.

(2)

Access

The procedures established under paragraph (1) shall provide governmental and non-governmental entities, as appropriate, access to such Registry under data use agreements and in accordance with rules established by the Secretary under such paragraph.

102.

Encouraging the establishment of State Prescription Drug Monitoring Programs

(a)

Encouraging the establishment of State Prescription Drug Monitoring Programs

Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is amended by adding at the end the following new section:

1947.

Encouraging the establishment of State Prescription Drug Monitoring Programs

(a)

In general

To encourage the establishment and use of a State Prescription Drug Monitoring Program, notwithstanding sections 1905(b) and 1927(g), and for purposes of paragraphs (2)(B) and (3)(A) of section 1903(d), if a State has established a State Prescription Drug Monitoring Program that has been certified as meeting the requirements under subsection (b), with respect to any amounts recovered by or paid to a State subsequent to the date of such certification that are related to an overpayment due to fraud, waste, or abuse in connection the provision of covered services under the State plan, the Federal medical assistance percentage with respect to such amounts shall be decreased by 10 percentage points. A State may use such amounts recovered by or paid to the State to support the State Prescription Drug Monitoring Program established by the State.

(b)

Requirements

For purposes of subsection (a), the requirements of this subsection are that the Attorney General certifies to the Secretary that the State has established a State Prescription Drug Monitoring Program. In making a certification under the preceding sentence, the Attorney General shall take into consideration requirements with respect to Prescription Drug Monitoring Programs under the Harold Rogers Prescription Drug Monitoring Program administered by the Department of Justice or the National All Schedules Prescription Electronic Reporting program administered by the Department of Health and Human Services.

(c)

Commission To examine interoperability and other related issues

(1)

Establishment

The Secretary and the Attorney General shall jointly establish a Commission to examine interoperability and other issues related to State Prescription Drug Monitoring Programs, including—

(A)

best practices with respect to uniform electronic formats for the reporting, sharing, and disclosure of information under such Programs; and

(B)

the ability to interface with such Programs.

(2)

Membership

The Commission shall be composed of the following members:

(A)

The Secretary.

(B)

The Attorney General.

(C)

The heads of other appropriate agencies (as determined jointly by the Secretary and the Attorney General).

(D)

Stakeholders appointed jointly by the Secretary and the Attorney General.

(3)

No compensation of members

(A)

Non-federal employees

A member of the Commission who is not an officer or employee of the Federal Government shall serve without compensation.

(B)

Federal employees

A member of the Commission who is an officer or employee of the Federal Government shall serve without compensation in addition to the compensation received for the services of the member as an officer or employee of the Federal Government.

(4)

Duration

The Commission shall terminate on the date that is 3 years after the date of enactment of the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act

.

(b)

Inclusion of Prescription Drug Monitoring Programs in Medicare part D oversight

Not later than 180 days after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a plan on how Medicare part D oversight contractors and other oversight activities under part D of title XVIII of the Social Security Act (42 U.S.C. 1395w–101 et seq.) can utilize State Prescription Drug Monitoring Programs.

103.

Updating of DEA database of controlled substances providers

(a)

In general

(1)

Updating based on Death Master File

Not less frequently than on a daily basis, the Attorney General shall update the database of the Drug Enforcement Agency of persons registered to manufacture, distribute, or dispense a controlled substance under part C of title II of the Controlled Substances Act (21 U.S.C. 821 et seq.) to reflect any changes in the information in the Death Master File of the Social Security Administration.

(2)

Updating based on other information reported to the Social Security Administration

The Attorney General shall enter into an agreement with the Commissioner of Social Security to obtain information regarding deaths reported to the Commissioner, including death information reported to the Commissioner under section 205(r) of the Social Security Act (42 U.5.C. 405(r)), in order to update the database of the Drug Enforcement Agency of persons registered to manufacture, distribute, or dispense a controlled substance under part C of title II of the Controlled Substances Act (21 U.S.C. 821 et seq.) to reflect any deaths reported to the Commissioner of Social Security. The Attorney General shall take any actions required by the agreement with the Commissioner to maintain the confidentiality of such data and to assure that the data is used solely for the purposes of this paragraph.

(b)

Limiting access to DEA database of registrants

(1)

In general

The Attorney General, in consultation with the Secretary of Health and Human Services, the Inspector General of the Department of Health and Human Services, the Chairman of the Federal Trade Commission, and affected parties (including prescription drug plans under part D of title XVIII of the Social Security Act (42 U.S.C. 1395w–101 et seq.), MA–PD plans under part C of title XVIII of the Social Security Act (42 U.S.C. 1395w–21 et seq.), pharmacies, physicians, and pharmacy computer vendors), shall establish procedures and rules to restrict access to the database of the Drug Enforcement Agency of persons registered to manufacturer, distribute, or dispense a controlled substance under part C of title II of the Controlled Substances Act (21 U.S.C. 821 et seq.) in order to deter its fraudulent use.

(2)

Access

The procedures established under paragraph (1) shall provide governmental and non-governmental entities, as appropriate, access to such database under data use agreements and in accordance with rules established by the Attorney General under such paragraph.

(c)

Review and investigation of invalid DEA registration numbers

The Attorney General, in consultation with the Secretary of Health and Human Services, the Inspector General of the Department of Health and Human Services, the Chairman of the Federal Trade Commission, and affected parties (including prescription drug plans under part D of title XVIII of the Social Security Act (42 U.S.C. 1395w–101 et seq.), MA–PD plans under part C of title XVIII of the Social Security Act (42 U.S.C. 1395w–21 et seq.), pharmacies, physicians, and pharmacy computer vendors), shall establish procedures and rules to review and investigate pharmacy claims under such part D that contain a registration number that was not assigned by the Attorney General under the Controlled Substances Act (21 U.S.C. 801 et seq.) to a practitioner (as defined in section 102 of such Act (21 U.S.C. 802)). Such procedures shall include the matching of National Provider Identifiers submitted under section 1860D–4(c)(4) of the Social Security Act, as added by section 101(a), to such registration numbers and the investigation of such registration numbers that are matched to a National Provider Identifier determined to be invalid under such section.

(d)

Sense of Congress

It is the sense of Congress that the Attorney General should include in the updates required under subsection (a) any other information determined relevant by the Attorney General, such as information from State Medical Boards.

II

Curbing improper payments

201.

Addressing vulnerabilities identified by Recovery Audit Contractors

Section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)) is amended—

(1)

in paragraph (1)(C), by inserting and for provider education and overpayment appeals before the period;

(2)

in paragraph (8)—

(A)

by striking report.—The Secretary and inserting “report.—

(A)

In general

Subject to subparagraph (C), the Secretary

; and

(B)

by adding after subparagraph (A), as inserted by subparagraph (A), the following new subparagraphs:

(B)

Inclusion of improper payment vulnerabilities identified

Each report submitted under subparagraph (A) shall, subject to subparagraph (C), include—

(i)

a description of—

(I)

the types and financial cost to the program under this title of improper payment vulnerabilities identified by recovery audit contractors under this subsection; and

(II)

how the Secretary is addressing such improper payment vulnerabilities; and

(ii)

an assessment of the effectiveness of changes made to payment policies and procedures under this title in order to address the vulnerabilities so identified.

(C)

Limitation

The Secretary shall ensure that each report submitted under subparagraph (A) does not include information that the Secretary determines would be sensitive or would otherwise negatively impact program integrity.

; and

(3)

by adding at the end the following new paragraph:

(10)

Addressing improper payment vulnerabilities

The Secretary shall address improper payment vulnerabilities identified by recovery audit contractors under this subsection in a timely manner.

.

202.

Improving Senior Medicare Patrol and fraud reporting rewards

(a)

In general

The Secretary shall develop a plan, including suggested legislative changes to implement such plan, under which the Secretary shall revise the beneficiary incentive program under section 203(b) of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1395b–5(b)) to encourage greater participation by individuals to report fraud and abuse in the Medicare program. Such plan shall include recommendations for ways to enhance rewards for individuals reporting under the incentive program, including providing a monetary reward prior to the full recovery of an overpayment.

(b)

Public awareness and education campaign

The plan developed under subsection (a) shall also require the Secretary to use the Senior Medicare Patrols authorized under section 411 of the Older Americans Act of 1965 (42 U.S.C. 3032) to conduct a public awareness and education campaign to encourage participation in the revised beneficiary incentive program under subsection (a).

(c)

Submission of plan

Not later than 180 days after the date of enactment of this Act, the Secretary shall submit to Congress the plan developed under subsection (a).

(d)

Definitions

In this section:

(1)

Medicare beneficiary

The term Medicare beneficiary means an individual entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.) or enrolled for benefits under part B of such title (42 U.S.C. 1395j et seq.).

(2)

Medicare program

The term Medicare program means the program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).

(3)

Secretary

The term Secretary means the Secretary of Health and Human Services.

203.

Prohibiting the display of Social Security account numbers on newly issued Medicare identification cards and communications provided to Medicare beneficiaries

(a)

In general

Not later than 2 years after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the Commissioner of Social Security, shall establish and begin to implement procedures to eliminate the unnecessary collection, use, and display of Social Security account numbers of Medicare beneficiaries.

(b)

Newly issued medicare cards and communications provided to beneficiaries

(1)

Newly issued cards

(A)

In general

Not later than 4 years after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the Commissioner of Social Security, shall ensure that each newly issued Medicare identification card meets the requirements described in subparagraph (B).

(B)

Requirements

(i)

In general

Subject to clauses (ii) and (iii), the requirements described in this subparagraph are, with respect to a Medicare identification card, that the card does not display or electronically store (in an unencrypted format) a Medicare beneficiary’s Social Security account number.

(ii)

Exception

The Secretary may waive the requirements under clause (i) in the case where the health insurance claim number of a beneficiary is the Social Security number of the beneficiary, the beneficiary's spouse, or another individual.

(iii)

Use of partial account number

The Secretary of Health and Human Services, in consultation with the Commissioner of Social Security, may provide for the use of a partial Social Security account number on a Medicare identification card if the Secretary determines that such use does not allow an unacceptable risk of fraudulent use.

(2)

Communications provided to beneficiaries

Not later than 4 years after the date of enactment of this Act, the Secretary of Health and Human Services shall prohibit the display of a Medicare beneficiary’s Social Security account number on written or electronic communication provided to the beneficiary unless the Secretary, in consultation with the Commissioner of Social Security, determines that inclusion of Social Security account numbers on such communications is essential for the operation of the Medicare program.

(c)

Medicare beneficiary defined

In this section, the term Medicare beneficiary means an individual who is entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act or enrolled under part B of such title.

(d)

Conforming amendments

(1)

Reference in the Social Security Act

Section 205(c)(2)(C) of the Social Security Act (42 U.S.C. 405(c)(2)(C)) is amended—

(A)

by moving clause (x), as added by section 1414(a)(2) of the Patient Protection and Affordable Care Act (Public Law 111–148), 6 ems to the left;

(B)

by redesignating clause (x), as added by section 2(a)(1) of the Social Security Number Protection Act of 2010 (42 U.S.C. 1305 note), as clause (xii); and

(C)

by adding after clause (xii), as redesignated by subparagraph (B), the following new clause:

(xiii)

Subject to section 203 of the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act, social security account numbers shall not be displayed on Medicare identification cards or on communications provided to Medicare beneficiaries.

.

(2)

Access to information

Section 205(r) of the Social Security Act (405 U.S.C. 405(r)) is amended by adding at the end the following new paragraph:

(10)

To prevent and identify fraudulent activity, the Commissioner shall upon the request of the Attorney General or upon the request of the Secretary of Health and Human Services enter into a reimbursable agreement with the Attorney General or the Secretary to provide information collected under paragraph (1) if—

(A)

the requirements of subparagraphs (A) and (B) of paragraph (3) are met; and

(B)

such agreement includes appropriate provisions to protect the confidentiality of information provided by the Commissioner under such agreement.

.

(e)

Pilot program

(1)

Establishment

The Secretary shall establish a pilot program utilizing smart card technology to evaluate—

(A)

the applicability of smart card technology to the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), including the applicability of such technology to Medicare beneficiaries or Medicare providers; and

(B)

whether such cards would be effective in preventing fraud under the Medicare program.

(2)

Implementation

(A)

Initial implementation

The Secretary shall implement the pilot program under this subsection not later than 1 year after the date of enactment of this Act.

(B)

Scope and duration

The Secretary shall conduct the pilot program—

(i)

in not less than 2 States; and

(ii)

for a period of not less than 180 days or more than 2 years.

(3)

Report

Not later than 12 months after the completion of the pilot program under this subsection, the Secretary shall submit to the appropriate committees of Congress and make available to the public a report that includes the following:

(A)

A summary of the pilot program and findings, including—

(i)

the costs or savings to the Medicare program as a result of the implementation of the pilot program;

(ii)

whether the use of smart card technology resulted in improvements in the quality of care provided to Medicare beneficiaries under the pilot program; and

(iii)

whether such technology was useful in preventing or detecting fraud, waste, and abuse in the Medicare program.

(B)

Recommendations regarding whether the use of smart card technology should be expanded under the Medicare program.

(4)

Definitions

In this subsection:

(A)

Medicare beneficiary

The term Medicare beneficiary means an individual entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.) or enrolled for benefits under part B of such title (42 U.S.C. 1395j et seq.).

(B)

Medicare provider

The term Medicare provider includes a provider of services (as defined in section 1861(u) of the Social Security Act (42 U.S.C. 1395x(u))) and a supplier (as defined in section 1861(d) of such Act (42 U.S.C. 1395x(d))).

(C)

Secretary

The term Secretary means the Secretary of Health and Human Services.

(D)

Smart card

The term smart card means identification used by a Medicare beneficiary or a Medicare provider that includes anti-fraud attributes. Such a card—

(i)

may rely on existing commercial data transfer networks or on a network of proprietary card readers or databases; and

(ii)

may include—

(I)

cards using technology adapted from the financial services industry;

(II)

cards containing individual biometric identification, provided that such identification is encrypted and not contained in any central database;

(III)

cards adapting technology and processes utilized in the TRICARE program under chapter 55 of title 10, United States Code, or by the Veterans Administration; or

(IV)

such other technology as the Secretary determines appropriate.

204.

Requiring prepayment review of all claims for durable medical equipment at high risk of waste, fraud, and abuse

Section 1834(a) of the Social Security Act (42 U.S.C. 1395m(a)) is amended by adding at the end the following new paragraph:

(22)

Prepayment review for durable medical equipment at high risk of fraud

Not later than 270 days after the date of enactment of the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act, the Secretary, in consultation with the Inspector General of the Department of Health and Human Services, shall establish policies and procedures for prepayment review, which may include pre-certification, for all claims for reimbursement under this title for durable medical equipment at high risk of waste, fraud, and abuse, as determined by the Secretary, including power wheelchairs.

.

205.

Strengthening Medicaid Program integrity through flexibility

Section 1936 of the Social Security Act (42 U.S.C. 1396u–6) is amended—

(1)

in subsection (a), by inserting , or otherwise, after entities; and

(2)

in subsection (e)—

(A)

in paragraph (1), in the matter preceding subparagraph (A), by inserting (including the costs of equipment, salaries and benefits, and travel and training) after Program under this section; and

(B)

in paragraph (3), by striking by 100 and inserting by 100, or such number as determined necessary by the Secretary to carry out the Program,.

III

Improving data sharing across agencies and programs

301.

Improving data sharing across agencies and programs

(a)

In general

In order to ensure that the Secretary, Medicare program safeguard contractors and other oversight contractors (as defined in subsection (g)(4)), the Inspector General of the Department of Health and Human Services, the Attorney General, and State and local law enforcement are able to operate with greater coordination to curb fraud and improper payments, the Secretary, the Inspector General of the Department of Health and Human Services, and the Attorney General shall provide for increased coordination and data sharing as described in the succeeding subsections.

(b)

Improving data sharing internally and with CMS contractors

(1)

In general

The Secretary shall establish policies and procedures to ensure that claims and other data, including the data described in paragraph (3), is accessible to Medicare program safeguard contractors and other oversight contractors not less frequently than on a daily basis.

(2)

Analysis of data

The Secretary shall require Medicare program safeguard contractors and other oversight contractors to analyze the data accessed under paragraph (1) on an ongoing basis for purposes of conducting pre- and post-payment reviews under the Medicare program.

(3)

Data described

The following data is described in this paragraph:

(A)

Claims payment, claims denial, and other claims data under the Medicare program from the common working file and the Medicare national claims history database.

(B)

Data on providers of services and suppliers under the Medicare program, including data from the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) of the Centers for Medicare & Medicaid Services.

(C)

Medicare beneficiary data, including data from the Enrollment DataBase of the Centers for Medicare & Medicaid Services.

(c)

Provider database reviews and verification

(1)

In general

(A)

Review and update of Medicare provider databases

The Secretary shall establish policies and procedures, which may include contractors, to review and update on a daily basis Medicare provider databases, including the review and update of the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) of the Centers for Medicare & Medicaid Services against death data of the Social Security Administration, for accuracy and completeness. Such policies and procedures shall also include data matches on a daily basis, as determined appropriate by the Secretary, against other databases as determined appropriate by the Secretary, including the database of the Drug Enforcement Agency of persons registered to manufacture, distribute, or dispense a controlled substance under part C of title II of the Controlled Substances Act (21 U.S.C. 821 et seq.), State medical licensing data, databases of suspended or debarred Federal contractors, including the Excluded Parties List System of the General Services Administration, the Debt Check program of the Department of the Treasury, a list of incarcerated individuals from the Department of Justice and each State’s Department of Corrections, and the List of Excluded Individuals/Entities of the Office of Inspector General of the Department of Health and Human Services.

(B)

Consultation

The policies and procedures under subparagraph (A) shall require the Secretary to periodically consult with external organizations, including the Federation of State Medical Boards, to determine data sources and screening tools best suited to detect fraudulent applications for enrollment under section 1866(j) of the Social Security Act (42 U.S.C. 1395cc(j)) submitted by providers of medical or other items or services and suppliers under the Medicare program.

(C)

Data matching

(i)

In general

The policies and procedures under subparagraph (A) may include entering into agreements with the Commissioner of Social Security pursuant to section 205(r) of the Social Security Act (42 U.S.C. 405(r)) to match data against the death information maintained by the Commissioner, and matching against the database of the Drug Enforcement Agency of persons registered to manufacture, distribute, or dispense a controlled substance under part C of title II of the Controlled Substances Act (21 U.S.C. 821 et seq.), and other Federal databases, as determined appropriate by the Secretary.

(ii)

Confidentiality of data obtained

The Secretary shall take any actions required by an agreement described in clause (i) or any other agreement with the Commissioner of Social Security to obtain data from the Commissioner for purposes of this section to maintain the confidentiality of data obtained from the Commissioner and to assure that the data is used solely for the purposes of this section.

(D)

Ongoing analysis

The Secretary shall use analytic software for the conduct of ongoing analysis of Medicare provider databases described in subparagraph (A) to verify and update data supplied by providers of services and suppliers under the Medicare program. The Secretary may use commercial database sources for purposes of verifying such data.

(2)

Access to national directory of new hires

Section 453(j) of the Social Security Act (42 U.S.C. 653(j)) is amended by adding at the end the following new paragraph:

(12)

Provision of new hire information to the centers for medicare & medicaid services and applicable State health subsidy programs

The National Directory of New Hires shall provide the Administrator of the Centers for Medicare & Medicaid Services and, for purposes of carrying out section 1413(c)(3)(A)(ii) of Public Law 111–148, each applicable State health subsidy program (as defined in section 1413(e) of such Public Law) with all information in the National Directory.

(3)

Access to list of convicted individuals

The Attorney General shall provide the Secretary of Health and Human Services access to a list of convicted individuals for use in preventing waste, fraud, and abuse under the Medicare and Medicaid programs.

(d)

Beneficiary database review and verification

(1)

In general

The Secretary shall establish policies and procedures, which may include contractors, to review and update on a daily basis Medicare beneficiary databases, including the Enrollment DataBase of the Centers for Medicare & Medicaid Services, for accuracy and completeness. Such policies and procedures shall include data matches against death data of the Social Security Administration and also on a daily basis, as determined appropriate by the Secretary, other Federal databases as determined appropriate by the Secretary, including a list of incarcerated individuals from the Department of Justice and each State’s Department of Corrections.

(2)

Ongoing analysis

The Secretary shall use analytic software for the conduct of ongoing analysis of Medicare beneficiary databases described in paragraph (1) to verify and update data supplied by providers of services and suppliers under the Medicare program. The Secretary may use commercial database sources for purposes of verifying such data.

(e)

Continued efforts on integrated data repository and one PI project; expanded access by agencies

(1)

Continued efforts on integrated data repository and one PI project

(A)

In general

The Secretary shall—

(i)

continue to incorporate Medicare claims and payment, provider, and beneficiary data into the Integrated Data Repository under section 1128J(a)(1) of the Social Security Act, as added by section 6402(a) of the Patient Protection and Affordable Care Act; and

(ii)

fully implement the waste, fraud, and abuse detection solution of the Centers for Medicare & Medicaid Services, called the One PI project.

(B)

Updating of IDR on daily basis

The Secretary shall establish policies and procedures to ensure that the Integrated Data Repository is updated with Medicare claims payment data and data from the Medicare provider databases described in subsection (c)(1) and Medicare beneficiary databases described in subsection (d)(1), including the common working file, on a daily basis.

(C)

Access to IDR

The Secretary shall ensure that Medicare program safeguard contractors and other oversight contractors have access to the full range of data contained in the Integrated Data Repository and related analytic tools by not later than September 30, 2012. Such access shall include both real-time portal access and other means in accordance with protocols established by the Secretary.

(D)

Law enforcement access

The Secretary shall ensure that Federal and other appropriate law enforcement agencies, including the Inspector General of the Department of Health and Human Services and the Attorney General, have access to the full range of data contained in the Integrated Data Repository and related analytic tools by not later than September 30, 2012. Such access shall include both real-time portal access and other means in accordance with protocols established by the Secretary.

(E)

Date certain for inclusion of prepayment claims data

The Secretary shall ensure that the Integrated Data Repository includes access to prepayment claims data by not later than September 30, 2012.

(F)

Date certain for inclusion of medicaid program data

The Secretary shall ensure that the Integrated Data Repository includes access to or incorporates Medicaid program data by not later than September 30, 2014 (or, if States are unable to provide certain data to the Secretary by such date, a substantial amount of the Medicaid program data that is available as of such date).

(2)

Expanded database access to appropriate state entities

(A)

Access to Integrated data repository

For purposes of enhancing data sharing in order to identify programmatic weaknesses and improving the timeliness of analysis and actions to prevent waste, fraud, and abuse, relevant State agencies, including the State Medicaid plans under title XIX of the Social Security Act, State child health plans under title XXI of such Act, and State Medicaid fraud control units (as described in section 1903(q) of the Social Security Act (42 U.S.C. 1396b(q))), shall have access to the full range of data contained in the Integrated Data Repository, including the One PI system established under the One PI project, as directed by the Secretary, by not later than September 30, 2013. The Secretary may, in consultation with the Inspector General of the Department of Health and Human Services, give such access to State attorneys general and State law enforcement agencies.

(B)

Conforming amendments

Section 1128J(a)(2) of the Social Security Act, as added by section 6402(a) of the Patient Protection and Affordable Care Act (Public Law 111–148) is amended—

(i)

by striking DATABASES.— and inserting DATABASES.—

(A)

Access for the conduct of law enforcement and oversight activities

For purposes

;

(ii)

in subparagraph (A), as added by subclause (I), by inserting , including, in accordance with section 301(e)(1)(D) of the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act, the Integrated Data Repository under paragraph (1) before the period at the end; and

(iii)

by adding at the end the following new subparagraph:

(B)

Access to reduce waste, fraud, and abuse

For purposes of reducing waste, fraud, and abuse, and to the extent consistent with applicable information, privacy, security, and disclosure laws, including the regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 and section 552a of title 5, United States Code, and subject to any information systems security requirements under such laws or otherwise required by the Secretary, the Secretary, in consultation with the Inspector General of the Department of Health and Human Services, shall allow appropriate State agency access to claims and payment data of the Department of Health and Human Services and its contractors related to titles XVIII, XIX, and XXI, including, in accordance with section 301(e)(2)(A) of the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act, the Integrated Data Repository under paragraph (1).

.

(f)

General protocols and security

(1)

In general

The Secretary shall ensure that any data provided to an entity or individual under the provisions of or amendments made by this section is provided to such entity or individual in accordance with protocols established by the Secretary under paragraph (2). The Secretary shall consult with the Inspector General of the Department of Health and Human Services prior to implementing this subsection.

(2)

Protocols

(A)

In general

The Secretary shall establish protocols to ensure the secure transfer and storage of any data provided to another entity or individual under the provisions of or amendments made by this section.

(B)

Consideration of recommendations of the Inspector General of the Department of Health and Human Services

In establishing protocols under subparagraph (A), the Secretary shall take into account recommendations submitted to the Secretary by the Inspector General of the Department of Health and Human Services with respect to the secure transfer and storage of such data.

(g)

Definitions

In this section:

(1)

Federal health care program

The term Federal health care program has the meaning given such term in section 1128B(f) of the Social Security Act (42 U.S.C. 1320a–7b(f)).

(2)

Medicaid program

The term Medicaid program means the program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

(3)

Medicare program

The term Medicare program means the program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).

(4)

Medicare program safeguard contractors and other oversight contractors

The term Medicare program safeguard contractors and other oversight contractors includes zone program integrity contractors, program safeguard or integrity contractors, recovery audit contractors under section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)), special investigative units at Medicare contractors (as defined in section 1889(g) of the Social Security Act (42 U.S.C. 1395zz(g))), and any other oversight contractors designated by the Secretary.

(5)

Provider of services

The term provider of services has the meaning given such term in section 1861(u) of the Social Security Act (42 U.S.C. 1395x(u)).

(6)

Secretary

The term Secretary means the Secretary of Health and Human Services.

(7)

State

The term State includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.

(8)

Supplier

The term supplier has the meaning given such term in section 1861(d) of the Social Security Act (42 U.S.C. 1395x(d)).

302.

Expanding automated prepayment review of Medicare claims

(a)

Automated prepayment review

(1)

In general

Subject to subsection (b), the Secretary shall establish automated prepayment review of all Medicare claims under parts A and B of title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) by not later than September 30, 2012.

(2)

Implementation

The provisions of this section shall be implemented in conjunction with, and as part of, any predictive modeling and other analytics technologies implemented under section 4241 of the Small Business Jobs Act of 2010 (42 U.S.C. 1320a–7n), except that any requirement under such section 4241 that conflicts with a requirement under this section shall not apply to this section.

(b)

Elements

Such automated prepayment review shall include the following:

(1)

Program integrity system

(A)

In general

Subject to subparagraph (D), a program integrity system under which relevant claims under such parts A and B are compared in order to—

(i)

identify errors or fraud under the Medicare program, including—

(I)

duplicate claims for items or services; and

(II)

claims where payment of benefits under one such part is only available if such payment is not available under another such part; and

(ii)

obtain such other information or conduct such other analysis as the Secretary determines is useful for program integrity purposes.

(B)

Implementation

Not later than September 30, 2013, the Secretary shall ensure that all relevant daily claims data under such parts A and B are compared as part of such program integrity system.

(C)

Plan for inclusion of part D claims data

Not later than September 30, 2013, the Secretary shall establish a plan for including Medicare claims under part D of such title XVIII (42 U.S.C. 1395w–101 et seq.) for use in comparisons under such program integrity system.

(D)

No impact on prompt payment requirements

In no case shall the program integrity system under this paragraph have any impact on prompt payment requirements under such parts A and B, including such requirements under sections 1816(c)(2) and 1842(c)(2) of the Social Security Act (42 U.S.C. 1395h(c)(2); 1395u(c)(2)).

(2)

Automated risk-based provider verification

(A)

In general

An automated risk-based verification system for the purpose of verification and analysis of providers of services and suppliers under the Medicare program on an ongoing basis, including during the period between the enrollment of the provider of services or supplier under section 1866(j) of the Social Security Act (42 U.S.C. 1395cc(j)) and the revalidation (or any subsequent revalidation) of such provider of services or supplier under such section. Subject to subparagraph (C), such system shall include criminal background checks for providers of services and suppliers who the Secretary determines present a high risk of waste, fraud, and abuse.

(B)

Implementation

The Secretary shall establish the system under subparagraph (A) not later than September 30, 2013.

(C)

No duplication of screening under enrollment process

The system under subparagraph (A) shall be in addition to and shall not duplicate any screening, including any criminal background check, conducted under section 1866(j)(2) of the Social Security Act (42 U.S.C. 1395cc(j)(2)).

(D)

Prohibition on disclosure of risk-based data and analysis

The Secretary shall not disclose to the public any data collected or analysis conducted under the automated risk-based verification system under subparagraph (A).

(3)

Tracking rejected claims

(A)

In general

For the purpose of identifying and analyzing potentially fraudulent and otherwise inappropriate claims under the Medicare program, a process for identifying and tracking, including by provider of services or supplier, claims for payment under the Medicare program that were rejected or denied under the automated edit process of a medicare administrative contractor under section 1874A of the Social Security Act (42 U.S.C. 1395kk).

(B)

Implementation

The Secretary shall establish the process under subparagraph (A) not later than September 30, 2013.

(c)

Definitions

In this section:

(1)

Medicare program

The term Medicare program means the program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).

(2)

Automated prepayment review

The term automated prepayment review means screening using automated data analysis and intelligent analysis prior to making payment. Such term does not include prepayment medical review.

(3)

Provider of services

The term provider of services has the meaning given that term in section 1861(u) of such Act (42 U.S.C. 1395ww(u)).

(4)

Secretary

The term Secretary means the Secretary of Health and Human Services.

(5)

Supplier

The term supplier has the meaning given such term in section 1861(d) of such Act (42 U.S.C. 1395ww(d)).

303.

Improving the sharing of data between the Federal Government and State Medicaid programs

(a)

In general

The Secretary of Health and Human Services (in this section referred to as the Secretary) shall establish a plan to encourage and facilitate the inclusion of States in the Medicare-Medicaid Data Match Program (commonly referred to as the Medi-Medi Program) under section 1893(g) of the Social Security Act (42 U.S.C. 1395ddd(g)).

(b)

Program revisions To improve Medi-Medi Data Match Program participation by States

Section 1893(g)(1)(A) of the Social Security Act (42 U.S.C. 1395ddd(g)(1)(A)) is amended—

(1)

in the matter preceding clause (i), by inserting or otherwise after eligible entities;

(2)

in clause (i)—

(A)

by inserting to review claims data after algorithms; and

(B)

by striking service, time, or patient and inserting provider, service, time, or patient;

(3)

in clause (ii)—

(A)

by inserting to investigate and recover amounts with respect to suspect claims after appropriate actions; and

(B)

by striking ; and and inserting a semicolon;

(4)

in clause (iii), by striking the period and inserting ; and; and

(5)

by adding at end the following new clause:

(iv)

furthering the Secretary’s design, development, installation, or enhancement of an automated data system architecture—

(I)

to collect, integrate, and assess data for purposes of program integrity, program oversight, and administration, including the Medi-Medi Program; and

(II)

that improves the coordination of requests for data from States.

.

(c)

Providing states with data on improper payments made for items or services provided to dual eligible individuals

(1)

In general

The Secretary shall develop and implement a plan that allows each State agency responsible for administering a State plan for medical assistance under title XIX of the Social Security Act access to relevant data on improper or erroneous payments made under the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) for health care items or services provided to dual eligible individuals.

(2)

Dual eligible individual defined

In this section, the term dual eligible individual means an individual who is entitled to, or enrolled for, benefits under part A of title XVIII of the Social Security Act (42 U.S.C. 1395c et seq.), or enrolled for benefits under part B of title XVIII of such Act (42 U.S.C. 1395j et seq.), and is eligible for medical assistance under a State plan under title XIX of such Act (42 U.S.C. 1396 et seq.) or under a waiver of such plan.

304.

Improving claims processing and detection of fraud within the Medicaid and CHIP programs

(a)

Medicaid

Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)), as amended by section 2001(a)(2)(B) of the Patient Protection and Affordable Care Act (Public Law 111–148), is amended—

(1)

in paragraph (25), by striking or at the end;

(2)

in paragraph (26), by striking the period and inserting ; or; and

(3)

by adding at the end the following new paragraph:

(27)

with respect to amounts expended for an item or service for which medical assistance is provided under the State plan or under a waiver of such plan unless the claim for payment for such item or service contains—

(A)

a valid beneficiary identification number that, for purposes of the individual who received such item or service, has been determined by the State agency to correspond to an individual who is eligible to receive benefits under the State plan or waiver; and

(B)

a valid provider identifier that, for purposes of the provider that furnished such item or service, has been determined by the State agency to correspond to a participating provider that is eligible to receive payment for furnishing such item or service under the State plan or waiver.

.

(b)

Chip

Section 2107(e)(1)(I) of the Social Security Act (42 U.S.C. 1397gg(e)(1)(I)) is amended by striking and (17) and inserting (17), and (27).

305.

Reports

(a)

Report to congress on plan for implementation

(1)

Report

(A)

In general

Not later than 270 days after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the Commissioner of Social Security and the Attorney General, shall submit to Congress a report containing a plan for implementing the provisions of and amendments made by sections 301 through 304, including, with respect to the implementation of section 303, the plan described in subparagraph (B).

(B)

Plan for increasing recovery of overpayments

The report submitted under subparagraph (A) shall include a plan, developed by the Secretary of Health and Human Services, in consultation with the inspector General of the Department of Health and Human Services, to increase the recovery of overpayments for health care items or services provided to dual eligible individuals (as defined in section 303(c)(2)).

(2)

Inclusion in annual health care fraud and abuse control account report

Section 1817(k)(5) of the Social Security Act (42 U.S.C. 1395i(k)(5)) is amended—

(A)

in subparagraph (A), by striking and at the end;

(B)

in subparagraph (B), by striking the period at the end and inserting ; and; and

(C)

by adding at the end the following new subparagraph:

(C)

effective beginning with the report submitted January 1 following the date the report under section 306(a)(1) of the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers’ Dollars Act is submitted, any updates to the plan included in the report under such section 306(a)(1), including any potential challenges to meeting the deadlines for implementation of the provisions of and amendments made by sections 301 through 304 of such Act.

.

(b)

Report to congress on interagency cooperation and data sharing

Not later than 180 days after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the Administrator of the Veterans Administration, the Secretary of Defense, the Director of the Office of Personnel Management, and the head of any other relevant Federal agency that administers a Federal health care program, shall submit to Congress a report on the potential of data sharing, including the sharing or data checking of Medicare provider and Medicare beneficiary databases, to prevent and detect potential fraud and improper payments under the Medicare program.

IV

Improving CMS contractor performance

401.

Establishing Medicare administrative contractor error reduction incentives

(a)

In general

Section 1874A(b)(1)(D) of the Social Security Act (42 U.S.C. 1395kk(b)(1)(D)) is amended—

(1)

by striking quality.—The Secretary and inserting “quality.—

(i)

In general

Subject to clauses (ii) and (iii), the Secretary

; and

(2)

by inserting after clause (i), as added by paragraph (1), the following new clauses:

(ii)

Improper payment error rate reduction incentive plan

The Secretary shall establish a plan to provide incentives for medicare administrative contractors to reduce the improper payment error rates in their jurisdictions.

(iii)

Contents of plan

The plan established under clause (ii)—

(I)

may include a sliding scale of bonus payments and additional incentives to medicare administrative contractors that reduce the improper payment error rates in their jurisdictions to certain benchmark levels; and

(II)

shall include penalties, including substantial reductions in award fee payments under award fee contracts, for any medicare administrative contractor that reaches an upper end error threshold or other threshold as determined by the Secretary.

.

(b)

Effective date

The amendments made by this section shall apply to contracts entered into on or after the date that is 12 months after the date of enactment of this Act and to current contracts through modification when practicable.

402.

Separating provider enrollment and screening from Medicare administrative contractors

(a)

In general

Section 1866(j)(1) of the Social Security Act (42 U.S.C. 1395cc(j)(1)) is amended by adding at the end the following new subparagraph:

(D)

Implementation

The enrollment process established under subparagraph (A) and the provider screening under paragraph (2) shall be carried out under one or more contracts with entities. Such contracts shall be separate from any contract to serve as a medicare administrative contractor under section 1874A.

.

(b)

Effective date

The amendment made by subsection (a) shall apply to contracts entered into on or after the date that is 24 months after the date of enactment of this Act and to current contracts through modification when practicable.

403.

Developing measurable performance metrics for Medicare contractors

(a)

Report

Not later than 12 months after the date of enactment of this Act, the Secretary of Health and Human Services (in this section referred to as the Secretary) shall submit to Congress a report containing measurable metrics for improving Medicare contractor performance, including Medicare administrative contractors under section 1874A of the Social Security Act (42 U.S.C. 1395kk), program safeguard contractors and other similar contractors, Medicare Drug Integrity Contractors, qualified independent contractors with a contract under section 1869(c) of the Social Security Act (42 U.S.C. 1395ff(c)), and other contractors that perform administrative or oversight functions under the Medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).

(b)

Contents of report

The report submitted under subsection (a) shall include the Secretary’s recommendations for the development of measurable performance metrics for Medicare contractors (or updated and revised measurable performance metrics), together with recommendations for such legislation and administrative action as the Secretary considers appropriate.

(c)

Relationship to Government Performance and Results Act

The metrics submitted in the report under subsection (a) may include performance goals or performance indicators established under the provisions of and amendments made by the GPRA Modernization Act of 2010 (Public Law 111–352).

(d)

Review by the comptroller general

Not later than 270 days after the date on which the report is submitted under subsection (a), the Comptroller General of the United States shall submit to Congress a report containing a review of the report submitted under such subsection.

V

Other provisions

501.

Strengthening penalties for the illegal distribution of a Medicare, Medicaid, or CHIP beneficiary identification or billing privileges

Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a–7b(b)) is amended by adding at the end the following:

(4)

Whoever knowingly, intentionally, and with the intent to defraud purchases, sells or distributes, or arranges for the purchase, sale, or distribution of a Medicare, Medicaid, or CHIP beneficiary identification number or billing privileges under title XVIII, title XIX, or title XXI, including a provider identifier, shall be imprisoned for not more than 10 years or fined not more than $500,000 ($1,000,000 in the case of a corporation), or both.

.

502.

Providing implementation funding

(a)

In general

For purposes of carrying out the provisions of and amendments made by this Act, in addition to funds otherwise available, there are appropriated to the Secretary of Health and Human Services for the Centers for Medicare & Medicaid Services Program Management Account, from amounts in the general fund of the Treasury not otherwise appropriated, $75,000,000 for the period of fiscal years 2012 through 2016. Amounts appropriated under the preceding sentence shall remain available until expended.

(b)

Revision to the Medicare Improvement Fund

Section 1898(b)(1)(B) of the Social Security Act (42 U.S.C. 1395iii(b)(1)(B)) is amended by striking $275,000,000 and inserting $200,000,000.