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Title III — Medicare and Medicaid program integrity

S. 2157 · 113th Congress · Mar 25, 2014 · Lineage

III Medicare and Medicaid program integrity

Sec. 301 Reducing improper Medicare payments

(a)
Medicare administrative contractor improper payment outreach and education program—
(1)
In general— Section 1874A of the Social Security Act (42 U.S.C. 1395kk–1) is amended—
(A)
in subsection (a)(4)—
(i)
by redesignating subparagraph (G) as subparagraph (H); and
(ii)
by inserting after subparagraph (F) the following new subparagraph:

“(G) Improper payment outreach and education program—Having in place an improper payment outreach and education program described in subsection (h).”

(B)
by adding at the end the following new subsection:

“(h) Improper payment outreach and education program

“(1) In general—In order to reduce improper payments under this title, each medicare administrative contractor shall establish and have in place an improper payment outreach and education program under which the contractor, through outreach, education, training, and technical assistance activities, shall provide providers of services and suppliers located in the region covered by the contract under this section with the information described in paragraph (3). The activities described in the preceding sentence shall be conducted on a regular basis.

“(2) Forms of outreach, education, training, and technical assistance activities—The outreach, education, training, and technical assistance activities under a payment outreach and education program shall be carried out through any of the following:

“(A) Emails and other electronic communications.

“(B) Webinars.

“(C) Telephone calls.

“(D) In-person training.

“(E) Other forms of communications determined appropriate by the Secretary.

“(3) Information to be provided through activities—The information to be provided to providers of services and suppliers under a payment outreach and education program shall include all of the following information:

“(A) A list of the provider’s or supplier's most frequent payment errors and most expensive payment errors over the last quarter.

“(B) Specific instructions regarding how to correct or avoid such errors in the future.

“(C) A notice of all new topics that have been approved by the Secretary for audits conducted by recovery audit contractors under section 1893(h).

“(D) Specific instructions to prevent future issues related to such new audits.

“(E) Other information determined appropriate by the Secretary.

“(4) Error rate reduction training

“(A) In general—The activities under a payment outreach and education program shall include error rate reduction training.

“(B) Requirements

“(i) In general—The training described in subparagraph (A) shall—

“(I) be provided at least annually; and

“(II) focus on reducing the improper payments described in paragraph (5).

“(C) Invitation—A medicare administrative contractor shall ensure that all providers of services and suppliers located in the region covered by the contract under this section are invited to attend the training described in subparagraph (A) either in person or online.

“(5) Priority—A medicare administrative contractor shall give priority to activities under the improper payment outreach and education program that will reduce improper payments for items and services that—

“(A) have the highest rate of improper payment;

“(B) have the greatest total dollar amount of improper payments;

“(C) are due to clear misapplication or misinterpretation of Medicare policies;

“(D) are clearly due to common and inadvertent clerical or administrative errors; or

“(E) are due to other types of errors that the Secretary determines could be prevented through activities under the program.

“(6) Information on improper payments from recovery audit contractors

“(A) In general—In order to assist medicare administrative contractors in carrying out improper payment outreach and education programs, the Secretary shall provide each contractor with a complete list of improper payments identified by recovery audit contractors under section 1893(h) with respect to providers of services and suppliers located in the region covered by the contract under this section. Such information shall be provided on a quarterly basis.

“(B) Information—The information described in subparagraph (A) shall include the following information:

“(i) The providers of services and suppliers that have the highest rate of improper payments.

“(ii) The providers of services and suppliers that have the greatest total dollar amounts of improper payments.

“(iii) The items and services furnished in the region that have the highest rates of improper payments.

“(iv) The items and services furnished in the region that are responsible for the greatest total dollar amount of improper payments.

“(v) Other information the Secretary determines would assist the contractor in carrying out the improper payment outreach and education program.

“(C) Format of information—The information furnished to medicare administrative contractors by the Secretary under this paragraph shall be transmitted in a manner that permits the contractor to easily identify the areas of the Medicare program in which targeted outreach, education, training, and technical assistance would be most effective. In carrying out the preceding sentence, the Secretary shall ensure that—

“(i) the information with respect to improper payments made to a provider of services or supplier clearly displays the NPI or other provider identifier of the provider or supplier, the amount of the improper payment, and any other information the Secretary determines appropriate; and

“(ii) the information is in an electronic, easily searchable database.

“(7) Communications—All communications with providers of services and suppliers under a payment outreach and education program are subject to the standards and requirements of subsection (g).

“(8) Funding—After application of paragraph (1)(C) of section 1893(h), the Secretary shall retain a portion of the amounts recovered by recovery audit contractors under such section which shall be available to the Centers for Medicare & Medicaid Services Program Management Account for purposes of carrying out this subsection and to implement corrective actions to help reduce the error rate of payments under this title. The amount retained under the preceding sentence shall not exceed an amount equal to 25 percent of the amounts recovered under section 1893(h).”

(2)
Funding conforming amendment— Section 1893(h)(2) of the Social Security Act (42 U.S.C. 1395ddd(h)(2)) is amended by inserting “or section 1874A(h)(8)” after “paragraph (1)(C)”.
(3)
Effective date— The amendments made by this subsection take effect on the date of enactment of this Act.
(b)
Transparency— Section 1893(h)(8) of the Social Security Act (42 U.S.C. 1395ddd(h)(8)) is amended—
(1)
by striking “report.—The Secretary” and inserting “report.—

“(A) In general—The Secretary”

(2)
by adding at the end the following new subparagraph:

“(B) Inclusion of certain information

“(i) In general—For reports submitted under this paragraph for 2015 or a subsequent year, each such report shall include the information described in clause (ii) with respect to each of the following categories of audits carried out by recovery audit contractors under this subsection:

“(I) Automated.

“(II) Complex.

“(III) Medical necessity review.

“(IV) Part A.

“(V) Part B.

“(VI) Durable medical equipment.

“(ii) Information described—For purposes of clause (i), the information described in this clause, with respect to a category of audit described in clause (i), is the result of all appeals for each individual level of appeals in such category.”

(c)
Recovery Audit Contractor Demonstration Project—
(1)
In general— The Secretary shall conduct a demonstration project under title XVIII of the Social Security Act that—
(A)
targets audits by recovery audit contractors under section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)) with respect to high error providers of services and suppliers identified under paragraph (3); and
(B)
rewards low error providers of services and suppliers identified under such paragraph.
(2)
Scope—
(A)
Duration— The demonstration project shall be implemented not later than January 1, 2015, and shall be conducted for a period of three years.
(B)
Demonstration area— In determining the geographic area of the demonstration project, the Secretary shall consider the following:
(i)
The total number of providers of services and suppliers in the region.
(ii)
The diversity of types of providers of services and suppliers in the region.
(iii)
The level and variation of improper payment rates of and among individual providers of services and suppliers in the region.
(iv)
The inclusion of a mix of both urban and rural areas.
(3)
Identification of low error and high error providers of services and suppliers—
(A)
In general— Subject to paragraph (5), in conducting the demonstration project, the Secretary shall identify the following two groups of providers in accordance with this paragraph:
(i)
Low error providers of services and suppliers.
(ii)
High error providers of services and suppliers.
(B)
Analysis— For purposes of identifying the groups under subparagraph (A), the Secretary shall analyze each of the following:
(i)
The improper payment rates of individual providers of services and suppliers.
(ii)
The amount of improper payments made to individual providers of services and suppliers.
(iii)
The frequency of errors made by the provider of services or supplier over time.
(iv)
Other information determined appropriate by the Secretary.
(C)
Assignment based on composite score— The Secretary shall analyze the information under subparagraph (B) and assign selected providers of services and suppliers under the demonstration program as follows:
(i)
Providers of services and suppliers with high, expensive, and frequent errors relative to national error rates for specific items and services shall be identified as high error providers of services and suppliers under subparagraph (A).
(ii)
Providers of services and suppliers with few, inexpensive, and infrequent errors relative to national error rates for specific items and services shall be identified as low error providers of services and suppliers under such subparagraph.
(iii)
Only a small proportion of the total providers of services and suppliers and individual types of providers of services and suppliers in the geographic area of the demonstration project shall be assigned to either group identified under such subparagraph.
(D)
Timeframe of identification—
(i)
In general— Any identification of a provider of services or a supplier under subparagraph (A) shall be for a period of 3 months.
(ii)
Reevaluation— The Secretary shall reevaluate each such identification at the end of such period.
(iii)
Use of most current information— In carrying out the reevaluation under clause (ii) with respect to a provider of services or supplier, the Secretary shall—
(I)
consider the most current information available with respect to the provider of services or supplier under the analysis under subparagraph (B); and
(II)
take into account improvement or regression of the provider of services or supplier.
(4)
Adjustment of record request maximum— Sujbect to paragraph (5), under the demonstration project, the Secretary shall establish procedures to—
(A)
increase the maximum record request made by recovery audit contractors to providers of services and suppliers identified as high error providers of services and suppliers under paragraph (3); and
(B)
decrease the maximum record request made by recovery audit contractors to providers of services and suppliers identified as low error providers of services and supplier under such paragraph.
(5)
Flexibility— Notwithstanding paragraphs (3) and (4), the Secretary may identify more than two groups of providers in a geographical area. If the Secretary identifies more than two groups of providers in a geographic area pursuant to the preceding sentence—
(A)
providers shall be assigned to such groups in a manner similar to the manner in which providers are assigned to a group under paragraph (3); and
(B)
the maximum record request would be adjusted in a manner similar to the manner in which the maximum record request is adjusted under paragraph (4).
(6)
Additional adjustments—
(A)
In general— Under the demonstration project, the Secretary may make additional adjustments to requirements for recovery audit contractors under section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)) and the conduct of audits with respect to low error providers of services and suppliers identified under paragraph (3) (or paragraph (5), as the case may be) and high error providers of services and suppliers identified under paragraph (3) (or paragraph (5), as the case may be) as the Secretary determines necessary in order to incentivize reductions in improper payment rates under title XVIII of such Act (42 U.S.C. 1395 et seq.).
(B)
Limitation— The Secretary shall not exempt any group of providers of services or suppliers in the demonstration project, absent evidence of fraud or abuse, from being subject to audit by a recovery audit contractor under such section 1893(h).
(7)
Evaluation and report—
(A)
Evaluation— The Inspector General of the Department of Health and Human Services shall conduct an evaluation of the demonstration project under this subsection. The evaluation shall include an analysis of—
(i)
the error rates of providers of services and suppliers—
(I)
identified under paragraph (3) (or paragraph (5), as the case may be) as low error providers of services and suppliers;
(II)
identified under paragraph (3) (or paragraph (5), as the case may be) as high error providers of services and suppliers; and
(III)
that are located in the geographic area of the demonstration project and are not identified as either a low error or high error provider of services or supplier under such paragraphs; and
(ii)
any improvements in the error rates of those high error providers of services and suppliers identified under such paragraphs.
(B)
Report— Not later than 12 months after completion of the demonstration project, the Inspector General shall submit to Congress a report containing the results of the evaluation conducted under subparagraph (A), together with recommendations on whether the demonstration project should be continued or expanded, including on a permanent or nationwide basis.
(8)
Funding—
(A)
Funding for implementation— After application of paragraph (1)(C) of section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)) and section 1874A(h)(8) of such Act (42 U.S.C. 1395kk–1(h)(8)), as added by subsection (a)(1), the Secretary shall retain $10,000,000 of the amounts recovered by recovery audit contractors under such section 1893(h), which shall be available to the Centers for Medicare & Medicaid Services Program Management Account for purposes of carrying out the demonstration project under this subsection (other than the evaluation and report under paragraph (7)). The amount retained under the preceding sentence shall remain available until expended.
(B)
Funding for Inspector General evaluation and report— After application of such paragraph (1)(C), such section 1874A(h)(8), as so added, and subparagraph (A), the Secretary shall retain $245,000 of the amounts recovered by recovery audit contractors under such section 1893(h), which shall be transferred to the Inspector General of the Department of Health and Human Services for purposes of carrying out the evaluation and report under paragraph (7). The amount transferred under the preceding sentence shall remain available until expended.
(C)
No reduction in payments to recovery audit contractors— Nothing in subparagraph (A) or (B) of this paragraph or such section 1874A(h)(8), as so added, shall reduce amounts available for payments to recovery audit contractors under such section 1893(h).
(D)
Funding conforming amendment— Section 1893(h)(2) of the Social Security Act (42 U.S.C. 1395ddd(h)(2)), as amended by subsection (a)(2), is amended by striking “or section 1874A(h)(8)” and inserting “, section 1874A(h)(8), or subparagraphs (A) and (B) of section 301(c)(8) of the Commonsense Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014”.
(9)
Definitions— In this section:
(A)
Demonstration project— The term “demonstration project” means the demonstration project under this subsection.
(B)
Provider of services— The term “provider of services” has the meaning given that term in section 1861(u).
(C)
Recovery audit contractor— The term recovery audit contractor means an entity with a contract under section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)).
(D)
Secretary— The term Secretary means the Secretary of Health and Human Services.
(E)
Supplier— The term supplier has the meaning given that term in section 1861(d).

Sec. 302 Authority for Medicaid fraud control units to investigate and prosecute complaints of abuse and neglect of Medicaid patients in home and community-based settings

(a)
In general— Section 1903(q)(4)(A) of the Social Security Act (42 U.S.C. 1396b(q)(4)(A)) is amended to read as follows:

“(4)

“(A) The entity’s function includes a statewide program for the—

“(i) investigation and prosecution, or referral for prosecution or other action, of complaints of abuse or neglect of patients in health care facilities which receive payments under the State plan under this title or under a waiver of such plan;

“(ii) at the option of the entity, investigation and prosecution, or referral for prosecution or other action, of complaints of abuse or neglect of individuals in connection with any aspect of the provision of medical assistance and the activities of providers of such assistance in a home or community based setting that is paid for under the State plan under this title or under a waiver of such plan; and

“(iii) at the option of the entity, investigation and prosecution, or referral for prosecution or other action, of complaints of abuse or neglect of patients residing in board and care facilities.”

(b)
Effective date— The amendment made by subsection (a) shall take effect on January 1, 2015.

Sec. 303 Improved use of funds received by the HHS Inspector General from oversight and investigative activities

(a)
In general— Section 1128C(b) of the Social Security Act (42 U.S.C. 1320a–7c(b)) is amended to read as follows:

“(b) Additional use of funds by Inspector General

“(1) Collections from Medicare and Medicaid recovery actions—Notwithstanding section 3302 of title 31, United States Code, or any other provision of law affecting the crediting of collections, the Inspector General of the Department of Health and Human Services may receive and retain for current use three percent of all amounts collected pursuant to civil debt collection and administrative enforcement actions related to false claims or frauds involving the Medicare program under title XVIII or the Medicaid program under title XIX.

“(2) Crediting—Funds received by the Inspector General under paragraph (1) shall be deposited as offsetting collections to the credit of any appropriation available for oversight and enforcement activities of the Inspector General permitted under subsection (a), and shall remain available until expended.”

(b)
Effective date— The amendment made by subsection (a) shall apply to funds received from settlements finalized, judgments entered, or final agency decisions issued, on or after the date of the enactment of this Act.

Sec. 304 Preventing and reducing improper Medicare and Medicaid expenditures

(a)
Requiring valid prescriber National Provider Identifiers 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 prescriber National Provider Identifiers on pharmacy claims

“(A) In general—For plan year 2015 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 a valid prescriber National Provider Identifier.

“(B) Procedures—The Secretary shall establish procedures for determining the validity of prescriber National Provider Identifiers under subparagraph (A).

“(C) Report—Not later than January 1, 2017, 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)
Reforming how CMS tracks and corrects the 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 (8), as amended by section 301(b), by adding at the end the following new subparagraphs:

“(C) Inclusion of improper payment vulnerabilities identified—For reports submitted under this paragraph for 2015 or a subsequent year, each such report shall 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.

“(D) 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.”

(2)
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, prioritized based on the risk to the program under this title.”

(c)
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 under this section,”.
(d)
Access to the 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) Information comparisons and disclosures to assist in administration of the Medicare program and State health subsidy programs

“(A) Disclosure to the Administrator of the Centers for Medicare & Medicaid Services—The Administrator of the Centers for Medicare & Medicaid shall have access to the information in the National Directory of New Hires for purposes of determining the eligibility of an applicant for, or enrollee in, the Medicare program under title XVIII or an applicable State health subsidy program (as defined in section 1413(e) of the Patient Protection and Affordable Care Act (42 U.S.C. 18083(e)).

“(B) Disclosure to the Inspector General of the Department of Health and Human Services

“(i) In general—If the Inspector General of the Department of Health and Human Services transmits to the Secretary the names and social security account numbers of individuals, the Secretary shall disclose to the Inspector General information on such individuals and their employers maintained in the National Directory of New Hires.

“(ii) Use of information—The Inspector General of the Department of Health and Human Services may use information provided under clause (i) only for purposes of —

“(I) enforcing mandatory and permissive exclusions under title XI; or

“(II) evaluating the integrity of the Medicare program or an applicable State health subsidy program (as defined in section 1413(e) of the Patient Protection and Affordable Care Act).

“(C) Disclosure to State agencies

“(i) In general—If, for purposes of determining the eligibility of an applicant for, or an enrollee in, an applicable State health subsidy program (as defined in section 1413(e) of the Patient Protection and Affordable Care Act (42 U.S.C. 18083(e)), a State agency responsible for administering such program transmits to the Secretary the names, dates of birth, and social security account numbers of individuals, the Secretary shall disclose to such State agency information on such individuals and their employers maintained in the National Directory of New Hires, subject to this subparagraph.

“(ii) Condition on disclosure by the Secretary—The Secretary shall make a disclosure under clause (i) only to the extent that the Secretary determines that the disclosure would not interfere with the effective operation of the program under this part.

“(iii) Use and disclosure of information by State agencies

“(I) In general—A State agency may not use or disclose information provided under clause (i) except for purposes of determining the eligibility of an applicant for, or an enrollee in, a program referred to in clause (i).

“(II) Information security—The State agency shall have in effect data security and control policies that the Secretary finds adequate to ensure the security of information obtained under clause (i) and to ensure that access to such information is restricted to authorized persons for purposes of authorized uses and disclosures.

“(III) Penalty for misuse of information—An officer or employee of the State agency who fails to comply with this clause shall be subject to the sanctions under subsection (l)(2) to the same extent as if such officer or employee were an officer or employee of the United States.

“(iv) Procedural requirements—State agencies requesting information under clause (i) shall adhere to uniform procedures established by the Secretary governing information requests and data matching under this paragraph.

“(v) Reimbursement of costs—The State agency shall reimburse the Secretary, in accordance with subsection (k)(3), for the costs incurred by the Secretary in furnishing the information requested under this subparagraph.”

(e)
Improving the sharing of data between the Federal Government and State Medicaid programs—
(1)
In general— The Secretary of Health and Human Services (in this subsection referred to as the “Secretary”) shall establish a plan to encourage and facilitate the participation 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)).
(2)
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—
(A)
in the matter preceding clause (i), by inserting “or otherwise” after “eligible entities”;
(B)
in clause (i)—
(i)
by inserting “to review claims data” after “algorithms”; and
(ii)
by striking “service, time, or patient” and inserting “provider, service, time, or patient”;
(C)
in clause (ii)—
(i)
by inserting “to investigate and recover amounts with respect to suspect claims” after “appropriate actions”; and
(ii)
by striking “; and” and inserting a semicolon;
(D)
in clause (iii), by striking the period and inserting “; and”; and
(E)
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.”

(3)
Providing states with data on improper payments made for items or services provided to dual eligible individuals—
(A)
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 fraudulent 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.
(B)
Dual eligible individual defined— In this paragraph, 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.