Promoting Responsibility in Medical Expenditures Act of 2011 - Amends title XI of the Social Security Act (SSA) to increase civil money penalties, criminal fines, and prison sentences for fraud and abuse under the SSA title XVIII (Medicare) program.
Directs the Secretary of Health and Human Services to submit to Congress annual fraud reports with respect to Medicare, SSA title XIX (Medicaid), and SSA title XXI (Children's Health Insurance) (CHIP).
Amends the Small Business Jobs Act to exempt from disclosure under the Freedom of Information Act the algorithms used in predictive modeling and other analytics technology to identify and prevent waste, fraud, and abuse in the Medicare fee-for-service program.
Requires valid National Provider Identifiers for prescribers on pharmacy claims for covered Medicare part D prescription drugs.
Requires a prescription drug plan (PDP) sponsor identifying a claim for reimbursement for a drug prescribed by an individual without a valid National Provider Identifier to report to the HHS Inspector General any relevant information on such a prescriber, including any invalid national provider identifiers being used to submit such claims and related records. Requires the Inspector General of HHS to provide such information to appropriate law enforcement agencies.
Directs the Secretary of HHS to establish procedures and rules to restrict access to the National Provider Identifier Registry in order to deter the fraudulent use of National Provider Identifiers.
Decreases by 10% per quarter the federal medical assistance percentage (FMAP) for a state if: (1) it is receiving a grant for a state controlled substance monitoring program through which it identifies fraud, waste, or abuse in connection with the provision of prescription drug coverage under the state Medicaid plan; and (2) the state or a political subdivision is reimbursed by a third party for expenditures related to such fraud, waste, or abuse, or for a recovered amount.
Directs the Secretary of HHS to establish procedures to eliminate the unnecessary collection, use, and display of Social Security account numbers of Medicare beneficiaries.
Requires the Secretary of HHS to ensure that each newly issued Medicare identification card does not display or electronically store, in an unencrypted format, a Medicare beneficiary's Social Security account number, unless the beneficiary's health insurance claim number is the beneficiary's or spouse's Social Security number, and the risk of fraudulent use of such numbers is not unacceptably high.
Requires the Secretary of HHS to prohibit the display of a Medicare beneficiary's Social Security account number in any written or electronic communication to the beneficiary unless its inclusion is essential for the operation of the Medicare program.
Directs the Secretary of HHS to establish a pilot program to evaluate the applicability of smart card technology to the Medicare program, and whether such cards would be effective in preventing Medicare fraud.
Prohibits payment for an item or service under Medicaid or CHIP unless the claim contains: (1) a valid beneficiary identification number corresponding to an individual enrolled under the state plan or an applicable waiver; and (2) a valid provider identifier corresponding to a provider eligible to receive payment for furnishing such item or service.
Directs the Comptroller General to recommend methods to make Medicare claims data available to the public to improve Medicare transparency while protecting the privacy of individual Medicare beneficiaries, service providers, and suppliers.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3474 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 3474
To amend titles XI and XVIII of the Social Security Act to prevent
fraud and abuse under the Medicare program and to require National
Provider Identifiers for reimbursement of prescriptions under part D of
the Medicare program, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 18, 2011
Mr. Stearns introduced the following bill; which was referred to the
Committee on Energy and Commerce, and in addition to the Committee on
Ways and Means, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend titles XI and XVIII of the Social Security Act to prevent
fraud and abuse under the Medicare program and to require National
Provider Identifiers for reimbursement of prescriptions under part D of
the Medicare program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Promoting Responsibility in Medical
Expenditures Act of 2011'' or the ``PRIME Act of 2011''.
SEC. 2. INCREASED CIVIL AND CRIMINAL PENALTIES.
(a) Increased Civil Money Penalties and Criminal Fines for Federal
Health Care Program Fraud and Abuse.--
(1) Increased civil money penalties.--Section 1128A of the
Social Security Act (42 U.S.C. 1320a-7a) is amended--
(A) in subsection (a), in the matter following
paragraph (10)--
(i) by striking ``$10,000'' and inserting
``$20,000'' each place it appears;
(ii) by striking ``$15,000'' and inserting
``$30,000''; and
(iii) by striking ``$50,000'' and inserting
``$100,000'' each place it appears; and
(B) in subsection (b)--
(i) in paragraph (1), in the flush text
following subparagraph (B), by striking
``$2,000'' and inserting ``$4,000'';
(ii) in paragraph (2), by striking
``$2,000'' and inserting ``$4,000''; and
(iii) in paragraph (3)(A)(i), by striking
``$5,000'' and inserting ``$10,000''.
(2) Increased criminal fines.--Section 1128B of such Act
(42 U.S.C. 1320a-7b) is amended--
(A) in subsection (a), in the matter following
paragraph (6)--
(i) by striking ``$25,000'' and inserting
``$100,000''; and
(ii) by striking ``$10,000'' and inserting
``$20,000'';
(B) in subsection (b)--
(i) in paragraph (1), in the flush text
following subparagraph (B), by striking
``$25,000'' and inserting ``$100,000''; and
(ii) in paragraph (2), in the flush text
following subparagraph (B), by striking
``$25,000'' and inserting ``$100,000'';
(C) in subsection (c), by striking ``$25,000'' and
inserting ``$100,000'';
(D) in subsection (d), in the flush text following
paragraph (2), by striking ``$25,000'' and inserting
``$100,000''; and
(E) in subsection (e), by striking ``$2,000'' and
inserting ``$4,000''.
(b) Increased Sentences for Felonies Involving Federal Health Care
Program Fraud and Abuse.--
(1) False statements and representations.--Section 1128B(a)
of the Social Security Act (42 U.S.C. 1320a-7b(a)) is amended,
in the matter following paragraph (6), by striking ``not more
than five years or both, or (ii)'' and inserting ``not more
than 10 years or both, or (ii)''.
(2) Antikickback.--Section 1128B(b) of such Act (42 U.S.C.
1320a-7b(b)) is amended--
(A) in paragraph (1), in the flush text following
subparagraph (B), by striking ``not more than five
years'' and inserting ``not more than 10 years''; and
(B) in paragraph (2), in the flush text following
subparagraph (B), by striking ``not more than five
years'' and inserting ``not more than 10 years''.
(3) False statement or representation with respect to
conditions or operations of facilities.--Section 1128B(c) of
such Act (42 U.S.C. 1320a-7b(c)) is amended by striking ``not
more than five years'' and inserting ``not more than 10
years''.
(4) Excess charges.--Section 1128B(d) of such Act (42
U.S.C. 1320a-7b(d)) is amended, in the flush text following
paragraph (2), by striking ``not more than five years'' and
inserting ``not more than 10 years''.
(c) Effective Date.--The amendments made by this section shall
apply to acts committed after the date of the enactment of this Act.
SEC. 3. ANNUAL MEDICARE, MEDICAID, AND CHIP FRAUD REPORTS.
(a) In General.--By not later than July 1, 2012, and each
subsequent year, the Secretary of Health and Human Services shall
submit to the Committees on Ways and Means and Energy and Commerce of
the House of Representatives and the Committee on Finance of the Senate
a report that contains the following:
(1) Amount of fraud.--The amount, as estimated by the
Secretary--
(A) of total suspected fraud committed against the
Medicare program under title XVIII of the Social
Security Act, the Medicaid program under title XIX of
such Act, and the Children's Health Insurance Program
under title XXI of such Act; and
(B) the amount of such suspected fraud that is
committed by employees of the Department of Health and
Human Services who have access to data from any of the
programs under subparagraph (A).
(2) Data access implementation.--Information on
implementation of the data access requirement under section
1128J(a)(2) of the Social Security Act (42 U.S.C. 1320a-
7k(a)(2)).
(b) Use of Audits.--
(1) Estimate based on audited claims.--The Secretary shall
base the estimate of suspected fraud under subsection (a)(1)(A)
on an audit of a random sample of at least 10,000 claims for
payment made under the programs under title XVIII, XIX, or XXI
of the Social Security Act.
(2) Authority of the secretary.--For purposes of conducting
the audits under paragraph (1), the Secretary may--
(A) request that a health care provider or supplier
submit documentation relating to the claim being
audited and review such documentation;
(B) conduct unannounced onsite visits; and
(C) interview patients.
(3) Submission of information.--Not later than 30 days
after receiving a request for documentation under paragraph
(2)(A), the health care provider or supplier shall provide to
the Secretary all requested documentation related to such
claim.
(4) Internal audit.--The Secretary shall base the estimate
of suspected fraud committed by employees of the Department of
Health and Human Services under subsection (a)(1)(B) on an
internal audit.
(c) Fraud Defined.--In this section, the term ``fraud'' has the
meaning given such term in section 455.2 of title 42, Code of Federal
Regulations.
SEC. 4. PROTECTING PREDICTIVE ANALYTICS TECHNOLOGIES FROM COMPELLED
DISCLOSURE UNDER THE FREEDOM OF INFORMATION ACT.
Section 4241 of the Small Business Jobs Act of 2010 (42 U.S.C.
1320a-7m) is amended by adding at the end the following:
``(j) Exemption From FOIA.--The algorithms used in predictive
modeling and other analytics technologies under this section are exempt
from disclosure under section 552(b)(3) of title 5, United States Code.
``(k) Audit and Review.--The Inspector General of the Department of
Health and Human Services and the Comptroller General of the United
States shall, beginning on January 1, 2013, and annually thereafter,
complete an audit and review of the implementation of this section,
including the effectiveness of the algorithms used in predictive
modeling and other analytics technologies under this section.''.
SEC. 5. REQUIRING VALID NATIONAL PROVIDER IDENTIFIERS FOR PRESCRIBERS
ON PHARMACY CLAIMS AND LIMITING ACCESS TO THE NATIONAL
PROVIDER IDENTIFIER REGISTRY.
(a) Requiring Valid National Provider Identifiers of Prescribers on
Pharmacy Claims.--
(1) In general.--Section 1860D-2(e)(2) of the Social
Security Act (42 U.S.C. 1395w-102(e)(2)) is amended by adding
at the end the following new subparagraph:
``(C) Drugs prescribed by nonvalid prescribers.--
For plan years that begin on or after January 1, 2013,
such term does not include a drug prescribed by an
individual who does not have a valid National Provider
Identifier, as determined through procedures
established by the Secretary.''.
(2) Identifying and reporting invalid prescribers.--
(A) Transfer of information to the inspector
general.--In the case that the procedures established
by the Secretary of Health and Human Services under
section 1860D-2(e)(2) of the Social Security Act result
in a PDP sponsor identifying a claim for reimbursement
under a prescription drug plan under part D of title
XVIII of such Act as being for a drug that was
prescribed by an individual who did not have a valid
National Provider Identifier, the PDP sponsor shall
submit to the Inspector General of the Department of
Health and Human Services any information on such
invalid prescribers on pharmacy claims, including any
invalid national provider identifiers being used to
submit such claims and any records related to such
claims.
(B) Responsibility of the inspector general.--The
Inspector General of the Department of Health and Human
Services shall provide to the appropriate law
enforcement agencies information submitted under
subparagraph (A).
(C) Report to congress.--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
section 1860D-2(e)(2)(C) of the Social Security Act.
(b) Limiting Access to National Provider Identifier Registry.--
(1) In general.--The Secretary of Health and Human
Services, 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 the fraudulent
use of National Provider Identifiers for purposes of making
claims under titles XVIII and XIX of the Social Security Act.
(2) Access.--
(A) In general.--The procedures established under
paragraph (1) shall provide governmental and
nongovernmental entities with appropriate (as
determined by the Secretary) access to the National
Provider Identifier Registry.
(B) Data use agreements.--In order to receive such
access, each such governmental and nongovernmental
entity shall enter into a data use agreement with the
Secretary and agree to use the data in such registry in
accordance with rules established by the Secretary
pursuant such paragraph.
SEC. 6. ENCOURAGING THE ESTABLISHMENT OF STATE PRESCRIPTION DRUG
MONITORING PROGRAMS.
(a) In General.--Section 1905 of the Social Security Act is amended
by adding at the end the following:
``(ee) Incentives for States To Identify Fraud Through State
Prescription Drug Monitoring Programs.--
``(1) In general.--With respect to a calendar quarter, the
Federal medical assistance percentage for the amounts under
clauses (i) and (II) of subparagraph (C) shall be decreased by
10 percent for such quarter, if--
``(A) a State is receiving a grant for a State
controlled substance monitoring program under section
399O of the Public Health Service Act (or the Secretary
determines that the State meets the requirements for
such a grant);
``(B) through such program, the State identifies
fraud, waste, or abuse in connection the provision of
prescription drug coverage under the State plan; and
``(C) the State or a political subdivision of the
State--
``(i) is reimbursed an amount by a third
party (pursuant to the provisions of the State
plan in compliance with section 1902(a)(25))
for expenditures related to such fraud, waste,
or abuse; or
``(ii) recovered (as such term is used
under section 1903(d)(3)(A)) an amount.
``(2) Use of funds.--A State may use the amounts received
as a result of the increased Federal medical assistance
percentage under paragraph (1) to support the State controlled
substance monitoring program established by the State.''.
(b) Conforming Amendments.--Section 1905(b) of the Social Security
Act is amended by striking ``Subject to subsections (y), (z), and
(aa)'' and inserting ``Subject to subsections (y), (z), (aa), and
(ee)''.
(c) Effective Date.--The amendments made by this subsection shall
apply to calendar quarters beginning on or after the end of the 30-day
period after the date of the enactment of this Act.
SEC. 7. 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 (referred to in
this section as the ``Secretary''), acting in consultation with the
Commissioner of Social Security, shall establish and implement
procedures to eliminate the unnecessary collection, use, and display of
Social Security account numbers of Medicare beneficiaries under the
Medicare program under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.).
(b) Newly Issued Medicare Cards and Communications Provided to
Beneficiaries.--Not later than 4 years after the date of the enactment
of this Act, the Secretary shall do the following:
(1) Newly issued cards.--Acting in consultation with the
Commissioner of Social Security, ensure that each newly issued
Medicare identification card does not display or electronically
store, in an unencrypted format, a Medicare beneficiary's
Social Security account number, except--
(A) if the health insurance claim number of a
beneficiary is the Social Security number of the
beneficiary, the beneficiary's spouse, or another
individual, the Secretary may use such number on such
card; and
(B) if the Secretary determines that the risk of
fraudulent use of such numbers is not unacceptably
high, the Secretary may use a partial Social Security
account number on a Medicare identification card.
(2) Communications provided to beneficiaries.--Prohibit the
display of a Medicare beneficiary's Social Security account
number in any 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 in 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 7 of the Promoting Responsibility in
Medical Expenditures Act of 2011, 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)(A) To prevent and identify fraudulent activity--
``(i) the Attorney General or the Secretary of Health and
Human Services may submit to the Commissioner a request that
the Commissioner enter into an agreement under this paragraph;
and
``(ii) subject to the requirements of subparagraphs (A) and
(B) of paragraph (3), upon receiving a request under
subparagraph (A), the Commissioner shall enter into a
reimbursable agreement with the individual making such request
to provide to such individual the information collected under
paragraph (1).
``(B) The agreement under subparagraph (A)(ii) shall contain
appropriate provisions (as determined by the Commissioner) to protect
the confidentiality of information provided by the Commissioner under
such agreement.''.
(e) Pilot Program.--
(1) Establishment.--Not later than 1 year after the date of
the enactment of this Act, 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.); and
(B) whether such cards would be effective in
preventing fraud under the Medicare program.
(2) Scope and duration.--The Secretary shall conduct the
pilot program--
(A) in not less than 2 States; and
(B) for a period of not less than 180 days and not
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
resulting from such program, including--
(i) any 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'' means--
(i) a provider of services (as defined in
section 1861(u) of the Social Security Act (42
U.S.C. 1395x(u))); or
(ii) a supplier (as defined in section
1861(d) of such Act (42 U.S.C. 1395x(d))).
(C) Smart card.--The term ``smart card'' means an
identification card used by a Medicare beneficiary or a
Medicare provider that includes antifraud 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.
SEC. 8. 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)) 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 inserting after paragraph (26) the following
paragraph:
``(27) with respect to any amount expended for an item or
service unless the claim for payment for such item or service
contains--
``(A) a valid beneficiary identification number for
the individual to whom such item or service was
furnished, and the State has determined that such
number corresponds to an individual who is enrolled
under the State plan or an applicable waiver of a
requirement of such plan; and
``(B) a valid provider identifier for the provider
who furnished such item or service, and the State has
determined that such identifier corresponds to a
provider that is eligible to receive payment for
furnishing such item or service under the State plan or
an applicable waiver of a requirement of such plan.''.
(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)''.
SEC. 9. GAO REPORT.
Not later than January 1, 2013, the Comptroller General of the
United States shall submit to the Congress a report that contains
recommendations on methods that the Secretary of Health and Human
Services could use to make Medicare claims data available to the public
for the purpose of improving transparency within the Medicare program
while protecting the privacy of individual Medicare beneficiaries,
providers of services, and suppliers.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Health.
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