Section 1 Short title
This Act may be cited as the “Centers for Medicare & Medicaid Services Auditor Transparency Act of 2025” or the “CAT Act of 2025”.
Centers for Medicare & Medicaid Services Auditor Transparency Act of 2025
A BILL
To amend title XVIII of the Social Security Act to improve transparency with respect to the suspension of Medicare payments pending an investigation into a credible allegation of fraud.
Sec. 2 Findings
Congress finds the following:
In 2020, 139,000,000 individuals received health care coverage through the Medicare or Medicaid programs, costing the Federal Government approximately $1,500,000,000,000. Of these funds paid by United States taxpayers, $3,100,000,000 were discovered to have been fraudulent claims.
Ensuring the integrity of the Medicare and Medicaid programs is crucial to preventing fraud, waste, and abuse and safeguarding the financial sustainability of these important programs.
Even though the Centers for Medicare & Medicaid Services (CMS) utilization of Unified Program Integrity Contractors (UPICs) has shown to be effective at identifying bad actors defrauding the Federal Government through the Medicare and Medicaid programs, current Federal law and regulations have shown to be harmful to most providers who are submitting Medicare and Medicaid claims in good faith.
Existing law provides CMS and UPICs broad authority and discretion to suspend Medicare payments for up to a year pending the investigation of “credible allegations of fraud”.
However, current law does not require adequate transparency from CMS or UPICs into the nature of the alleged fraud before Medicare payments are suspended. Current law also does not require CMS or UPICs to provide adequate due process to providers whose payments have been suspended to challenge or cure the allegations of fraud prior to the suspension of Medicare payments.
In addition, anecdotal reports have shown that some UPICs extend the suspension of Medicare payments on a routine basis so that they may have additional time to finish their audit despite not providing evidence that the continuation of a payment suspension is necessary to protect the integrity of the Medicare program.
The broad authority to suspend Medicare payments pending the investigation of a credible allegation of fraud without adequate due process or transparency places the financial viability of many Medicare providers acting in good faith at risk.
If Medicare providers acting in good faith close their doors as a result of the unnecessary suspension of payments by CMS or UPICs, Medicare beneficiaries and the American public could face additional barriers to access to necessary health care services as a direct result of unfair Federal law and regulations.
Sec. 3 Improving transparency in suspension of payments pending investigation of credible allegations of fraud under Medicare
in paragraph (1)—
by striking “The Secretary may suspend” and inserting “Subject to paragraph (5), the Secretary may suspend”; and
by inserting “An investigation of a credible allegation of fraud, and the suspension of payment pending such investigation under the preceding sentence, may only exceed 180 days if the Secretary determines there is good cause to extend such investigation and suspension.” at the end;
in paragraph (4)—
by striking “a fraud hotline tip (as defined by the Secretary)” and inserting “the following items”; and
by striking “credible allegation of fraud.” and inserting
“(A) A fraud hotline tip (as defined by the Secretary).
“(B) Mere error (as defined by the Secretary).
“(C) A billing error found during the course of an audit that is attributable to human error.”
by adding at the end the following new paragraphs:
“(5) Transparency in suspension of payments
“(A) In general—The Secretary may only suspend payments to a provider of services or supplier under this title pursuant to paragraph (1) if—
“(i) subject to subparagraph (B), not later than 30 days before the date on which the payment suspension begins, the Secretary provides such provider of services or supplier with information about each credible allegation of fraud that is the basis for the payment suspension, including—
“(I) the specific nature of each credible allegation of fraud;
“(II) the date of the alleged fraud; and
“(III) the basis of the credible allegation of fraud, such as whether the allegation is based upon—
“(aa) a fraud hotline complaint;
“(bb) data mining of data with respect to claims for payment under this title, title XIX, or title XXI; or
“(cc) a pattern identified through audits of providers of services or suppliers; and
“(ii) not less frequently than once every 30 days during such payment suspension, the Secretary provides such provider of services or supplier with—
“(I) a detailed, up-to-date list of the findings of the investigation;
“(II) an anticipated timeline for the completion of the investigation; and
“(III) an opportunity to ask the Centers for Medicare & Medicaid Services questions regarding the payment suspension and the investigation.
“(B) Exception—The Secretary may elect not to provide a provider of services or supplier with the information described in subparagraph (A)(i) if the provision of such information would compromise the integrity of the investigation, as determined by the Secretary in consultation with the Inspector General of the Department of Health and Human Services and State auditors (as appropriate).
“(C) Failure to provide information—If the requirements described in subparagraph (A) are not met with respect to the suspension of payment to a provider of services or a supplier under this title, the Secretary shall immediately resume such payment, and shall pay to the provider of services or supplier the amounts not paid due to such suspension and any interest accrued with respect to such amounts.
“(D) Annual report—Not later than 180 days after the end of each fiscal year (beginning with fiscal year 2025), the Secretary shall submit to Congress a report that includes the following information with respect to such fiscal year:
“(i) The number of payment suspensions issued as the result of a pending investigation of a credible allegation of fraud under this subsection, section 1860D–12(b)(7) (including as applied pursuant to section 1857(f)(3)(D)), or section 1903(i)(2)(C).
“(ii) The basis of each such credible allegation of fraud.
“(iii) The average duration of a payment suspension described in clause (i).
“(iv) The average duration of an investigation of a credible allegation of fraud described in clause (i).
“(v) If applicable, the average time between the completion of an investigation into a credible allegation of fraud described in clause (i) and the reinstatement of payments to the relevant provider of services or supplier.
“(6) Appeals—Not later than 180 days after the date of the enactment of the CAT Act of 2025, the Secretary shall provide an independent process by which a provider of services or supplier under this title that has received notice of a payment suspension due to a pending investigation of a credible allegation of fraud pursuant to this subsection may appeal such suspension and receive a resolution of such appeal in a timely manner.”
Stakeholder consultation— In developing the appeals process required under section 1862(o)(6) of the Social Security Act, as added by subsection (a), the Secretary of Health and Human Services shall consult with relevant stakeholders, including providers of services and suppliers under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), title XIX of such Act (42 U.S.C. 1396 et seq.), and title XXI of such Act (42 U.S.C. 1397aa et seq.), as determined appropriate by the Secretary.
Applicability— The amendments made by this section shall apply with respect to any investigation of a credible allegation of fraud under section 1862(o) of the Social Security Act (42 U.S.C. 1395y(o)), section 1860D–12(b)(7) of such Act (42 U.S.C. 1395w–112(b)(7)) (including as applied pursuant to section 1857(f)(3)(D) of such Act (42 U.S.C. 1395w–27(f)(3)(D))), or section 1903(i)(2)(C) of such Act (42 U.S.C. 1396b(i)(2)(C)) that is initiated after the date of enactment of this Act.