Preventing and Reducing Improper Medicare and Medicaid Expenditures Act of 2013 or PRIME Act of 2013 - Amends part D (Prescription Drug Benefits) of title XVIII (Medicare) of the Social Security Act (SSA) to direct the Secretary of Health and Human Services (HHS) to prohibit sponsors of prescription drug plans (PDPs) from paying claims for prescription drugs that do not include the valid National Provider Identifier for the drug's prescriber.
Requires the Secretary's annual report to Congress on the use of recovery audit contractors under the Medicare Integrity Program to: (1) describe the types and financial cost of improper payment vulnerabilities identified by recovery audit contractors and how the Secretary is addressing them, and (2) assess the effectiveness of changes made to Medicare payment policies and procedures in order to address those vulnerabilities.
Requires the Secretary to address improper payment vulnerabilities in a timely manner, prioritized based on the risk to the Medicare program.
Authorizes the Secretary, under recovery audit contracts under both Medicare and Medicaid (SSA title XIX), to retain a certain portion of the recovered amounts for a program management account for activities addressing problems that contribute to improper payments and fraud.
Requires the Secretary, under such contracts, to retain an additional 5% of the recovered amounts to be made available to the HHS Inspector General to investigate improper payments or audit internal controls associated with Medicare or Medicaid payments.
Directs the Secretary to develop a plan to revise the incentive program under the Health Insurance Portability and Accountability Act of 1996 for the reporting of fraud and abuse to encourage greater participation by individuals reporting Medicare fraud and abuse. Requires the plan to include certain recommendations for: (1) ways to enhance rewards for individuals reporting, and (2) extention of the incentive program to the Medicaid program.
Amends SSA title XIX to cover the costs of equipment, salaries and benefits, and travel and training in appropriations for the Medicaid Integrity Program. Allows the Secretary to increase Centers for Medicare and Medicaid Services (CMS) staff whose duties consist solely of protecting the integrity of the Medicare program by a number determined necessary to carry out the Program (currently, by 100).
Directs the Secretary to provide incentives for Medicare administrative contractors to reduce the improper payment error rates in their jurisdictions.
Requires imprisonment for up to 10 years or a fine of up to $500,000 ($1 million in the case of a corporation), or both, for knowingly, intentionally, and with the intent to defraud purchasing, selling, distributing, or arranging for the purchase, sale, or distribution of a Medicare, Medicaid, or CHIP beneficiary identification number or billing privileges under SSA titles XVIII, title XIX, or title XXI (Children's Health Insurance Program).
Amends SSA title IV part D (Child Support and Establishment of Paternity) with respect to the Federal Parent Locator Service to give the CMS Administrator access to information in the National Directory of New Hires to determine the eligibility of an applicant for, or enrollee in, the Medicare program or an applicable state health subsidy program under the Patient Protection and Affordable Care Act (PPACA).
Requires the Secretary to disclose to the HHS Inspector General information on individuals and their employers in the National Directory of New Hires if the HHS Inspector General gives the Secretary their names and Social Security account numbers. Restricts the use of such information to: (1) determining the eligibility of an applicant for, or enrollee in, the Medicare program or an applicable state health subsidy program; or (2) evaluating the integrity of such programs. Sets forth rules for the use and disclosure of such information by state agencies.
Directs the Secretary to establish a plan to encourage and facilitate the participation of states in the Medicare-Medicaid Data Match Program (Medi-Medi Program). Revises Medi-Medi Data Match Program purposes.
Amends SSA title XIX, as amended by PPACA, and XXI with respect to claims processing and detection of fraud within the Medicaid and CHIP programs.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1123 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 1123
To amend titles XVIII and XIX of the Social Security Act to curb waste,
fraud, and abuse in the Medicare and Medicaid programs.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 10, 2013
Mr. Carper (for himself, Mr. Coburn, Mr. Bennet, Mr. Coons, Ms.
Klobuchar, Ms. Landrieu, Mrs. McCaskill, Mr. Warner, Ms. Ayotte, Mr.
Enzi, Mr. Isakson, and Mr. Corker) 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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Preventing and
Reducing Improper Medicare and Medicaid Expenditures Act of 2013'' or
the ``PRIME Act of 2013''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--CURBING IMPROPER PAYMENTS
Sec. 101. Requiring valid prescriber National Provider Identifiers on
pharmacy claims.
Sec. 102. Reforming how CMS tracks and corrects the vulnerabilities
identified by Recovery Audit Contractors.
Sec. 103. Improving Senior Medicare Patrol and fraud reporting rewards.
Sec. 104. Strengthening Medicaid Program integrity through flexibility.
Sec. 105. Establishing Medicare administrative contractor error
reduction incentives.
Sec. 106. Strengthening penalties for the illegal distribution of a
Medicare, Medicaid, or CHIP beneficiary
identification or billing privileges.
TITLE II--IMPROVING DATA SHARING
Sec. 201. Access to the National Directory of New Hires.
Sec. 202. Improving the sharing of data between the Federal Government
and State Medicaid programs.
Sec. 203. Improving claims processing and detection of fraud within the
Medicaid and CHIP programs.
TITLE III--REPORT ON IMPLEMENTATION
Sec. 301. Report on implementation.
TITLE I--CURBING IMPROPER PAYMENTS
SEC. 101. 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--
``(i) procedures for determining the
validity of prescriber 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, 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).''.
SEC. 102. REFORMING HOW CMS TRACKS AND CORRECTS THE VULNERABILITIES
IDENTIFIED BY RECOVERY AUDIT CONTRACTORS.
(a) In General.--Section 1893(h) of the Social Security Act (42
U.S.C. 1395ddd(h)) is amended--
(1) 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
(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.''.
(b) Use of Medicare and Medicaid Recovery Audit Contractor
Recoveries for Provider Education and To Prevent Improper Payments and
Fraud.--
(1) Medicare rac program.--Section 1893(h)(1)(C) of the
Social Security Act (42 U.S.C. 1395ddd(h)(1)(C)) is amended--
(A) by striking ``the Secretary shall retain'' and
inserting ``the Secretary--
``(i) shall retain'';
(B) in clause (i), as added by subparagraph (A)--
(i) by inserting ``, in addition to any
other funds that may be available,'' after
``available'';
(ii) by inserting ``until expended'' after
``Services''; and
(iii) by striking the period at the end and
inserting a semicolon; and
(C) by adding at the end the following new clauses:
``(ii) may retain an additional portion of
the amounts recovered (not to exceed 25 percent
of such amounts recovered) which shall be
available, in addition to any other funds that
may be available, to such program management
account until expended for purposes of
activities to address problems that contribute
to improper payments and fraud under this
title; and
``(iii) shall retain an additional 5
percent of such amounts recovered to be made
available, in addition to any other funds that
may be available, to the Inspector General of
the Department of Health and Human Services
until expended for the Inspector General to
carry out activities of the Inspector General
relating to investigating improper payments or
auditing internal controls associated with
payments under this title.''.
(2) Medicaid rac program.--Section 1936 of the Social
Security Act (42 U.S.C. 1396u-6) is amended by adding at the
end the following new subsection:
``(f) Amounts Recovered Through Recovery Audit Contractors.--
Notwithstanding any other provision of law, the Secretary--
``(1) may retain a portion of the amounts recovered
pursuant to the program established under section
1902(a)(42)(B) (not to exceed 25 percent of the Federal share
of such amounts recovered) which shall be available, in
addition to any other funds that may be available, to the
program management account of the Centers for Medicare &
Medicaid Services for purposes of activities to address
problems that contribute to improper payments and fraud under
this title; and
``(2) shall retain an additional 5 percent of the Federal
share of such amounts recovered to be made available, in
addition to any other funds that may be available, to the
Inspector General of the Department of Health and Human
Services until expended for the Inspector General to carry out
activities of the Inspector General relating to investigating
improper payments or auditing internal controls associated with
payments under this title.''.
(3) Effective date.--The amendments made by this section
shall take effect on January 1, 2014.
SEC. 103. IMPROVING SENIOR MEDICARE PATROL AND FRAUD REPORTING REWARDS.
(a) In General.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall develop a plan to
revise the 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--
(1) ways to enhance rewards for individuals reporting under
the incentive program, including rewards based on information
that leads to an administrative action; and
(2) extending the incentive program to the Medicaid
program.
(b) Public Awareness and Education Campaign.--The plan developed
under subsection (a) shall also include recommendations for the use of
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
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).
SEC. 104. 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,''.
SEC. 105. 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 incentives.--The Secretary shall
provide incentives for medicare administrative
contractors to reduce the improper payment
error rates in their jurisdictions.
``(iii) Incentives.--The incentives
provided for 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, as determined by the Secretary;
and
``(II) shall include 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.--
(1) In general.--The amendments made by subsection (a)
shall apply to contracts entered into or renewed on or after
the date that is 12 months after the date of enactment of this
Act.
(2) Contracts entered into or renewed prior to effective
date.--In the case of contracts in existence on or after the
date of the enactment of this Act and that are not subject to
the effective date under paragraph (1), the Secretary of Health
and Human Services shall, when appropriate and practicable,
seek to apply the incentives provided for in the amendments
made by subsection (a) through contract modifications.
SEC. 106. 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 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.''.
TITLE II--IMPROVING DATA SHARING
SEC. 201. 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 of 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) 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))); or
``(II) evaluating the integrity of
the Medicare program or an applicable
State health subsidy program (as so
defined).
``(C) Disclosure to state agencies.--
``(i) In general.--If, for purposes of
administering 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 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 administering 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.''.
SEC. 202. 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 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)).
(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 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.
(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.
SEC. 203. 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 after paragraph (26), 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 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.''.
(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)''.
TITLE III--REPORT ON IMPLEMENTATION
SEC. 301. REPORT ON IMPLEMENTATION.
Not later than 270 days after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit to
Congress a report on the implementation of the provisions of, and the
amendments made by, this Act.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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