Prevent Health Care Fraud Act of 2009 - Establishes in the Department of Health and Human Services (HHS) the Office of the Deputy Secretary for Health Care Fraud Prevention. Requires the Office to: (1) direct the implementation within HHS of health care fraud prevention and detection recommendations made by federal and private sector antifraud and oversight entities; (2) routinely consult with HHS's Office of the Inspector General, the Attorney General, and private sector health care antifraud entities to identify emerging fraud issues requiring immediate action; (3) provide for the design, development, and operation of a predictive model antifraud system to analyze health care claims data in real-time to identify high risk claims activity and develop a comprehensive antifraud database for federal health agency activities; (4) promulgate and enforce regulations relating to the reporting of data claims to such system by federal health agencies; (5) establish thresholds for fraudulent, wasteful, or abusive claims for excluding providers or suppliers from participation in federal health programs and for the referral of claims to law enforcement entities; and (6) share antifraud information and best practices.
Sets forth requirements for the fraud prevention system, including that it shall: (1) allow viewing of all provider and patient activities across all federal health program payers; (2) provide for a centralized file for data from all government health insurance claims data sources; (3) provide real-time ability to identify high-risk behavior patterns across markets, geographies, and specialty group providers; (4) involve the implementation of a predictive modeling technology that is designed to prevent waste, fraud, and abuse; (5) systematically present scores, reason codes, and treatment actions for high-risk scored transactions; (6) monitor consumer transactions in real-time and monitor provider behavior at different stages within the transaction flow based upon provider, transaction, and consumer trends; and (7) not be designed to deny health care services or to negatively impact prompt-pay laws because assessments are late.
Directs the Deputy Secretary to: (1) prohibit the payment of any health care claim identified as potentially fraudulent, wasteful, or abusive until the claim has been verified as valid; and (2) provide maximum protection of personal privacy consistent with carrying out the Office's responsibilities.
Directs the Secretary to establish procedures for the implementation of fraud and abuse detection methods under all federal health programs.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4222 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 4222
To provide for the establishment of the Office of Deputy Secretary for
Health Care Fraud Prevention.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 8, 2009
Ms. Ginny Brown-Waite of Florida (for herself, Mrs. Emerson, Mr.
Souder, Mr. Rooney, Mr. Buchanan, Mr. Roskam, Mr. Lincoln Diaz-Balart
of Florida, Mr. Putnam, Mr. Mario Diaz-Balart of Florida, and Mr. Mack)
introduced the following bill; which was referred to the Committee on
Energy and Commerce
_______________________________________________________________________
A BILL
To provide for the establishment of the Office of Deputy Secretary for
Health Care Fraud Prevention.
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 ``Prevent Health Care Fraud Act of
2009''.
SEC. 2. ESTABLISHMENT OF OFFICE OF DEPUTY SECRETARY FOR HEALTH CARE
FRAUD PREVENTION IN THE DEPARTMENT OF HEALTH AND HUMAN
SERVICES; APPOINTMENT AND POWERS OF DEPUTY SECRETARY.
(a) In General.--There is hereby established in the Department of
Health and Human Services the Office of the Deputy Secretary for Health
Care Fraud Prevention (referred to in this section as the ``Office'').
(b) Duties of the Office.--The Office shall--
(1) direct the appropriate implementation within the
Department of Health and Human Services of health care fraud
prevention and detection recommendations made by Federal
Government and private sector antifraud and oversight entities;
(2) routinely consult with the Office of the Inspector
General for the Department of Health and Human Services, the
Attorney General, and private sector health care antifraud
entities to identify emerging health care fraud issues
requiring immediate action by the Office;
(3) through a contract entered into with an entity that has
experience in designing and implementing antifraud systems in
the financial sector, provide for the design, development, and
operation of a predictive model antifraud system (in accordance
with subsection (d)) to analyze health care claims data in
real-time to identify high risk claims activity, develop
appropriate rules, processes, and procedures and investigative
research approaches, in coordination with the Office of the
Inspector General for the Department of Health and Human
Services, based on the risk level assigned to claims activity,
and develop a comprehensive antifraud database for health care
activities carried out or managed by Federal health agencies;
(4) promulgate and enforce regulations relating to the
reporting of data claims to the health care antifraud system
developed under paragraph (3) by all Federal health agencies;
(5) establish thresholds, in consultation with the Office
of the Inspector General of the Department of Health and Human
Services and the Department of Justice--
(A) for the amount and extent of claims verified
and designated as fraudulent, wasteful, or abusive
through the fraud prevention system developed under
paragraph (3) for excluding providers or suppliers from
participation in Federal health programs; and
(B) for the referral of claims identified through
the health care fraud prevention system developed under
paragraph (3) to law enforcement entities (such as the
Office of the Inspector General, Medicaid Fraud Control
Units, and the Department of Justice); and
(6) share antifraud information and best practices with
Federal health agencies, health insurance issuers, health care
providers, antifraud organizations, antifraud databases, and
Federal, State, and local law enforcement and regulatory
agencies.
(c) Deputy Secretary for Health Care Fraud Prevention.--
(1) Establishment.--There is established within the
Department of Health and Human Services the position of Deputy
Secretary for Health Care Fraud Prevention (referred to in this
section as the ``Deputy Secretary''). The Deputy Secretary
shall serve as the head of the Office, shall act as the chief
health care fraud prevention and detection officer of the
United States, and shall consider and direct the appropriate
implementation of recommendations to prevent and detect health
care fraud, waste, and abuse activities and initiatives within
the Department.
(2) Appointment.--The Deputy Secretary shall be appointed
by the President, by and with the advice and consent of the
Senate, and serve for a term of 5 years, unless removed prior
to the end of such term for cause by the President.
(3) Powers.--Subject to oversight by the Secretary, the
Deputy Secretary shall exercise all powers necessary to carry
out this section, including the hiring of staff, entering into
contracts, and the delegation of responsibilities to any
employee of the Department of Health and Human Services or the
Office appropriately designated for such responsibility.
(4) Duties.--
(A) In general.--The Deputy Secretary shall--
(i) establish and manage the operation of
the predictive modeling system developed under
subsection (b)(3) to analyze Federal health
claims in real-time to identify high risk
claims activity and refer risky claims for
appropriate verification and investigative
research;
(ii) consider and order the appropriate
implementation of fraud prevention and
detection activities, such as those recommended
by the Office of the Inspector General of the
Department of Health and Human Services, the
Government Accountability Office, MedPac, and
private sector health care antifraud entities;
(iii) not later than 6 months after the
date on which he or she is initially appointed,
submit to Congress an implementation plan for
the health care fraud prevention systems under
subsection (d); and
(iv) submit annual performance reports to
the Secretary and Congress that, at minimum,
shall provide an estimate of the return on
investment with respect to the system, for all
recommendations made to the Deputy Secretary
under this section, a description of whether
such recommendations are implemented or not
implemented, and contain other relevant
performance metrics.
(B) Analysis and recommendations.--The Deputy
Secretary shall provide required strategies and
treatments for claims identified as high risk
(including a system of designations for claims, such as
``approve'', ``decline'', ``research'', and ``educate
and pay'') to the Centers for Medicare & Medicaid
Services, other Federal and State entities responsible
for verifying whether claims identified as high risk
are payable, should be automatically denied, or require
further research and investigation.
(C) Limitation.--The Deputy Secretary shall not
have any criminal or civil enforcement authority
otherwise delegated to the Office of Inspector General
of the Department of Health and Human Services or the
Attorney General.
(5) Regulations.--The Deputy Secretary shall promulgate and
enforce such rules, regulations, orders, and interpretations as
the Deputy Secretary determines to be necessary to carry out
the purposes of this section. Such authority shall be exercised
as provided under section 553 of title 5, United States Code.
(d) Health Care Fraud Prevention System.--
(1) In general.--The fraud prevention system established
under subsection (b)(3) shall be designed as follows:
(A) In general.--The fraud prevention system
shall--
(i) be holistic;
(ii) be able to view all provider and
patient activities across all Federal health
program payers;
(iii) be able to integrate into the
existing health care claims flow with minimal
effort, time, and cost;
(iv) be modeled after systems used in the
Financial Services industry; and
(v) utilize integrated real-time
transaction risk scoring and referral strategy
capabilities to identify claims that are
statistically unusual.
(B) Modularized architecture.--The fraud prevention
system shall be designed from an end-to-end modularized
perspective to allow for ease of integration into
multiple points along a health care claim flow (pre- or
post-adjudication), which shall--
(i) utilize a single entity to host,
support, manage, and maintain software-based
services, predictive models, and solutions from
a central location for the customers who access
the fraud prevention system;
(ii) allow access through a secure private
data connection rather than the installation of
software in multiple information technology
infrastructures (and data facilities);
(iii) provide access to the best and latest
software without the need for upgrades, data
security, and costly installations;
(iv) permit modifications to the software
and system edits in a rapid and timely manner;
(v) ensure that all technology and decision
components reside within the module; and
(vi) ensure that the third party host of
the modular solution is not a party, payer, or
stakeholder that reports claims data, accesses
the results of the fraud prevention systems
analysis, or is otherwise required under this
section to verify, research, or investigate the
risk of claims.
(C) Processing, scoring, and storage.--The platform
of the fraud prevention system shall be a high volume,
rapid, real-time information technology solution, which
includes data pooling, data storage, and scoring
capabilities to quickly and accurately capture and
evaluate data from millions of claims per day. Such
platform shall be secure and have (at a minimum) data
centers that comply with Federal and State privacy
laws.
(D) Data consortium.--The fraud prevention system
shall provide for the establishment of a centralized
data file (referred to as a ``consortium'') that
accumulates data from all government health insurance
claims data sources. Notwithstanding any other
provision of law, Federal health care payers shall
provide to the consortium existing claims data, such as
Medicare's ``Common Working File'' and Medicaid claims
data, for the purpose of fraud and abuse prevention.
Such accumulated data shall be transmitted and stored
in an industry standard secure data environment that
complies with applicable Federal privacy laws for use
in building medical waste, fraud, and abuse prevention
predictive models that have a comprehensive view of
provider activity across all payers (and markets).
(E) Market view.--The fraud prevention system shall
ensure that claims data from Federal health programs
and all markets flows through a central source so the
waste, fraud, and abuse system can look across all
markets and geographies in health care to identify
fraud and abuse in Medicare, Medicaid, the State
Children's Health Program, TRICARE, and the Department
of Veterans Affairs holistically. Such cross-market
visibility shall identify unusual provider and patient
behavior patterns and fraud and abuse schemes that may
not be identified by looking independently at one
Federal payer's transactions.
(F) Behavior engine.--The fraud prevention system
shall ensure that the technology used provides real-
time ability to identify high-risk behavior patterns
across markets, geographies, and specialty group
providers to detect waste, fraud, and abuse, and to
identify providers that exhibit unusual behavior
patterns. Behavior pattern technology that provides the
capability to compare a provider's current behavior to
their own past behavior and to compare a provider's
current behavior to that of other providers in the same
specialty group and geographic location shall be used
in order to provide a comprehensive waste, fraud, and
abuse prevention solution.
(G) Predictive model.--The fraud prevention system
shall involve the implementation of a statistically
sound, empirically derived predictive modeling
technology that is designed to prevent (versus post-
payment detect) waste, fraud, and abuse. Such
prevention system shall utilize historical transaction
data, from across all Federal health programs and
markets, to build and re-develop scoring models, have
the capability to incorporate external data and
external models from other sources into the health care
predictive waste, fraud, and abuse model, and provide
for a feedback loop to provide outcome information on
verified claims so future system enhancements can be
developed based on previous claims experience.
(H) Change control.--The fraud prevention system
platform shall have the infrastructure to implement new
models and attributes in a test environment prior to
moving into a production environment. Capabilities
shall be developed to quickly make changes to models,
attributes, or strategies to react to changing patterns
in waste, fraud, and abuse.
(I) Scoring engine.--The fraud prevention system
shall identify high-risk claims by scoring all such
claims on a real-time capacity prior to payment. Such
scores shall then be communicated to the fraud
management system provided for under subparagraph (J).
(J) Fraud management system.--The fraud prevention
system shall utilize a fraud management system, that
contains workflow management and workstation tools to
provide the ability to systematically present scores,
reason codes, and treatment actions for high-risk
scored transactions. The fraud prevention system shall
ensure that analysts who review claims have the
capability to access, review, and research claims
efficiently, as well as decline or approve claims
(payments) in an automated manner. Workflow management
under this subparagraph shall be combined with the
ability to utilize principles of experimental design to
compare and measure prevention and detection rates
between test and control strategies. Such strategy
testing shall allow for continuous improvement and
maximum effectiveness in keeping up with ever changing
fraud and abuse patterns. Such system shall provide the
capability to test different treatments or actions
randomly (typically through use of random digit
assignments).
(K) Decision technology.--The fraud prevention
system shall have the capability to monitor consumer
transactions in real-time and monitor provider behavior
at different stages within the transaction flow based
upon provider, transaction and consumer trends. The
fraud prevention system shall provide for the
identification of provider and claims excessive usage
patterns and trends that differ from similar peer
groups, have the capability to trigger on multiple
criteria, such as predictive model scores or custom
attributes, and be able to segment transaction waste,
fraud, and abuse into multiple types for health care
categories and business types.
(L) Feedback loop.--The fraud prevention system
shall have a feedback loop where all Federal health
payers provide pre-payment and post-payment information
about the eventual status of a claim designated as
``Normal'', ``Waste'', ``Fraud'', ``Abuse'', or
``Education Required''. Such feedback loop shall enable
Federal health agencies to measure the actual amount of
waste, fraud, and abuse as well as the savings in the
system and provide the ability to retrain future,
enhanced models. Such feedback loop shall be an
industry file that contains information on previous
fraud and abuse claims as well as abuse perpetrated by
consumers, providers, and fraud rings, to be used to
alert other payers, as well as for subsequent fraud and
abuse solution development.
(M) Tracking and reporting.--The fraud prevention
system shall ensure that the infrastructure exists to
ascertain system, strategy, and predictive model return
on investment. Dynamic model validation and strategy
validation analysis and reporting shall be made
available to ensure a strategy or predictive model has
not degraded over time or is no longer effective. Queue
reporting shall be established and made available for
population estimates of what claims were flagged, what
claims received treatment, and ultimately what results
occurred. The capability shall exist to complete
tracking and reporting for prevention strategies and
actions residing farther upstream in the health care
payment flow. The fraud prevention system shall
establish a reliable metric to measure the dollars that
are never paid due to identification of fraud and
abuse, as well as a capability to effectively test and
estimate the impact from different actions and
treatments utilized to detect and prevent fraud and
abuse for legitimate claims. Measuring results shall
include waste and abuse.
(N) Operating tenet.--The fraud prevention system
shall not be designed to deny health care services or
to negatively impact prompt-pay laws because
assessments are late. The database shall be designed to
speed up the payment process. The fraud prevention
system shall require the implementation of constant and
consistent test and control strategies by stakeholders,
with results shared with Federal health program
leadership on a quarterly basis to validate improving
progress in identifying and preventing waste, fraud,
and abuse. Under such implementation, Federal health
care payers shall use standard industry waste, fraud,
and abuse measures of success.
(2) Coordination.--The Deputy Secretary shall coordinate
the operation of the fraud prevention system with the
Department of Justice and other related Federal fraud
prevention systems.
(3) Operation.--The Deputy Secretary shall phase-in the
implementation of the system under this subsection beginning
not later than 18 months after the date of enactment of this
Act, through the analysis of a limited number of Federal health
program claims. Not later than 5 years after such date of
enactment, the Deputy Secretary shall ensure that such system
is fully phased-in and applicable to all Federal health program
claims.
(4) Non-payment of claims.--The Deputy Secretary shall
promulgate regulations to prohibit the payment of any health
care claim that has been identified as potentially
``fraudulent'', ``wasteful'', or ``abusive'' until such time as
the claim has been verified as valid.
(5) Application.--The system under this section shall only
apply to all Federal health programs, including programs
established after the date of enactment of this Act.
(6) Regulations.--The Deputy Secretary shall promulgate
regulations providing the maximum appropriate protection of
personal privacy consistent with carrying out the Office's
responsibilities under this section.
(e) Protecting Participation in Health Care Antifraud Programs.--
(1) In general.--Notwithstanding any other provision of
law, no person providing information to the Secretary under
this section shall be held, by reason of having provided such
information, to have violated any criminal law, or to be
civilly liable under any law of the United States or of any
State (or political subdivision thereof) unless such
information is false and the person providing it knew, or had
reason to believe, that such information was false.
(2) Confidentiality.--The Office shall, through the
promulgation of regulations, establish standards for--
(A) the protection of confidential information
submitted or obtained with regard to suspected or
actual health care fraud;
(B) the protection of the ability of
representatives the Office to testify in private civil
actions concerning any such information; and
(C) the sharing by the Office of any such
information related to the medical antifraud programs
established under this section.
(f) Protecting Legitimate Providers and Suppliers.--
(1) Initial implementation.--Not later than 2 years after
the date of enactment of this Act, the Secretary shall
establish procedures for the implementation of fraud and abuse
detection methods under all Federal health programs (including
the programs under titles XVIII, XIX, and XXI of the Social
Security Act) with respect to items and services furnished by
providers of services and suppliers that includes the
following:
(A) In the case of a new applicant to be such a
provider or supplier, a background check, and in the
case of a supplier a site visit prior to approval of
participation in the program and random unannounced
site visits after such approval.
(B) Not less than 5 years after the date of
enactment of this Act, in the case of a provider or
supplier who is not a new applicant, re-enrollment
under the program, including a new background check
and, in the case of a supplier, a site-visit as part of
the application process for such re-enrollment, and
random unannounced site visits after such re-
enrollment.
(2) Requirement for participation.--In no case may a
provider of services or supplier who does not meet the
requirements under paragraph (1) participate in any Federal
health program.
(3) Background checks.--The Secretary shall determine the
extent of the background check conducted under paragraph (1),
including whether--
(A) a fingerprint check is necessary;
(B) a background check shall be conducted with
respect to additional employees, board members,
contractors or other interested parties of the provider
or supplier; and
(C) any additional national background checks
regarding exclusion from participation in Federal
health programs (such as the program under titles
XVIII, XIX, or XXI of the Social Security Act),
including conviction of any felony, crime that involves
an act of fraud or false statement, adverse actions
taken by State licensing boards, bankruptcies,
outstanding taxes, or other indications identified by
the Inspector General of the Department of Health and
Human Services are necessary.
(4) Limitation.--No payment may be made to a provider of
services or supplier under any Federal health program if such
provider or supplier fails to obtain a satisfactory background
check under this subsection.
(5) Federal health program.--In this subsection, the term
``Federal health program'' means any program that provides
Federal payments or reimbursements to providers of health-
related items or services, or suppliers of such items, for the
provision of such items or services to an individual patient.
(g) Definition.--The term ``Federal health agency'' means the
Department of Health and Human Services, the Department of Veterans
Affairs, and any Federal agency with oversight or authority regarding
the provision of any medical benefit, item, or service for which
payment may be made under a Federal health care plan or contract.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Energy and Commerce.
Referred to the Subcommittee on Health.
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