Section 6402

SEC. 6402. ENHANCED MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

[a] In General- Part A of title XI of the Social Security Act [42 U.S.C. 1301 et seq.], as amended by sections 6002, 6004, and 6102, is amended by inserting after section 1128I the following new section:

'SEC. 1128J. MEDICARE AND MEDICAID PROGRAM INTEGRITY PROVISIONS.

'[a] Data Matching-

'[1] INTEGRATED DATA REPOSITORY-

'[A] INCLUSION OF CERTAIN DATA-

'[i] IN GENERAL- The Integrated Data Repository of the Centers for Medicare & Medicaid Services shall include, at a minimum, claims and payment data from the following:

'[I] The programs under titles XVIII and XIX [including parts A, B, C, and D of title XVIII].

'[II] The program under title XXI.

'[III] Health-related programs administered by the Secretary of Veterans Affairs.

'[IV] Health-related programs administered by the Secretary of Defense.

'[V] The program of old-age, survivors, and disability insurance benefits established under title II.

'[VI] The Indian Health Service and the Contract Health Service program.

'[ii] PRIORITY FOR INCLUSION OF CERTAIN DATA- Inclusion of the data described in subclause [I] of such clause in the Integrated Data Repository shall be a priority. Data described in subclauses [II] through [VI] of such clause shall be included in the Integrated Data Repository as appropriate.

'[B] DATA SHARING AND MATCHING-

'[i] IN GENERAL- The Secretary shall enter into agreements with the individuals described in clause [ii] under which such individuals share and match data in the system of records of the respective agencies of such individuals with data in the system of records of the Department of Health and Human Services for the purpose of identifying potential fraud, waste, and abuse under the programs under titles XVIII and XIX.

'[ii] INDIVIDUALS DESCRIBED- The following individuals are described in this clause:

'[I] The Commissioner of Social Security.

'[II] The Secretary of Veterans Affairs.

'[III] The Secretary of Defense.

'[IV] The Director of the Indian Health Service.

'[iii] DEFINITION OF SYSTEM OF RECORDS- For purposes of this paragraph, the term 'system of records' has the meaning given such term in section 552a[a][5] of title 5, United States Code.

'[2] ACCESS TO CLAIMS AND PAYMENT DATABASES- For purposes of conducting law enforcement and oversight activities and to the extent consistent with applicable information, privacy, security, and disclosure laws, including the regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 and section 552a of title 5, United States Code, and subject to any information systems security requirements under such laws or otherwise required by the Secretary, the Inspector General of the Department of Health and Human Services and the Attorney General shall have access to claims and payment data of the Department of Health and Human Services and its contractors related to titles XVIII, XIX, and XXI.

'[b] OIG Authority To Obtain Information-

'[1] IN GENERAL- Notwithstanding and in addition to any other provision of law, the Inspector General of the Department of Health and Human Services may, for purposes of protecting the integrity of the programs under titles XVIII and XIX, obtain information from any individual [including a beneficiary provided all applicable privacy protections are followed] or entity that--

'[A] is a provider of medical or other items or services, supplier, grant recipient, contractor, or subcontractor; or

'[B] directly or indirectly provides, orders, manufactures, distributes, arranges for, prescribes, supplies, or receives medical or other items or services payable by any Federal health care program [as defined in section 1128B[f]] regardless of how the item or service is paid for, or to whom such payment is made.

'[2] INCLUSION OF CERTAIN INFORMATION- Information which the Inspector General may obtain under paragraph [1] includes any supporting documentation necessary to validate claims for payment or payments under title XVIII or XIX, including a prescribing physician's medical records for an individual who is prescribed an item or service which is covered under part B of title XVIII, a covered part D drug [as defined in section 1860D-2[e]] for which payment is made under an MA-PD plan under part C of such title, or a prescription drug plan under part D of such title, and any records necessary for evaluation of the economy, efficiency, and effectiveness of the programs under titles XVIII and XIX.

'[c] Administrative Remedy for Knowing Participation by Beneficiary in Health Care Fraud Scheme-

'[1] IN GENERAL- In addition to any other applicable remedies, if an applicable individual has knowingly participated in a Federal health care fraud offense or a conspiracy to commit a Federal health care fraud offense, the Secretary shall impose an appropriate administrative penalty commensurate with the offense or conspiracy.

'[2] APPLICABLE INDIVIDUAL- For purposes of paragraph [1], the term 'applicable individual' means an individual--

'[A] entitled to, or enrolled for, benefits under part A of title XVIII or enrolled under part B of such title;

'[B] eligible for medical assistance under a State plan under title XIX or under a waiver of such plan; or

'[C] eligible for child health assistance under a child health plan under title XXI.

'[d] Reporting and Returning of Overpayments-

'[1] IN GENERAL- If a person has received an overpayment, the person shall--

'[A] report and return the overpayment to the Secretary, the State, an intermediary, a carrier, or a contractor, as appropriate, at the correct address; and

'[B] notify the Secretary, State, intermediary, carrier, or contractor to whom the overpayment was returned in writing of the reason for the overpayment.

'[2] DEADLINE FOR REPORTING AND RETURNING OVERPAYMENTS- An overpayment must be reported and returned under paragraph [1] by the later of--

'[A] the date which is 60 days after the date on which the overpayment was identified; or

'[B] the date any corresponding cost report is due, if applicable.

'[3] ENFORCEMENT- Any overpayment retained by a person after the deadline for reporting and returning the overpayment under paragraph [2] is an obligation [as defined in section 3729[b][3] of title 31, United States Code] for purposes of section 3729 of such title.

'[4] DEFINITIONS- In this subsection:

'[A] KNOWING AND KNOWINGLY- The terms 'knowing' and 'knowingly' have the meaning given those terms in section 3729[b] of title 31, United States Code.

'[B] OVERPAYMENT- The term 'overpayment' means any funds that a person receives or retains under title XVIII or XIX to which the person, after applicable reconciliation, is not entitled under such title.

'[C] PERSON-

'[i] IN GENERAL- The term 'person' means a provider of services, supplier, medicaid managed care organization [as defined in section 1903[m][1][A]], Medicare Advantage organization [as defined in section 1859[a][1]], or PDP sponsor [as defined in section 1860D-41[a][13]].

'[ii] EXCLUSION- Such term does not include a beneficiary.

'[e] Inclusion of National Provider Identifier on All Applications and Claims- The Secretary shall promulgate a regulation that requires, not later than January 1, 2011, all providers of medical or other items or services and suppliers under the programs under titles XVIII and XIX that qualify for a national provider identifier to include their national provider identifier on all applications to enroll in such programs and on all claims for payment submitted under such programs.'.

[b] Access to Data-

[1] MEDICARE PART D- Section 1860D-15[f][2] of the Social Security Act [42 U.S.C. 1395w-116[f][2]] is amended by striking 'may be used by' and all that follows through the period at the end and inserting 'may be used--

'[A] by officers, employees, and contractors of the Department of Health and Human Services for the purposes of, and to the extent necessary in--

'[i] carrying out this section; and

'[ii] conducting oversight, evaluation, and enforcement under this title; and

'[B] by the Attorney General and the Comptroller General of the United States for the purposes of, and to the extent necessary in, carrying out health oversight activities.'.

[2] DATA MATCHING- Section 552a[a][8][B] of title 5, United States Code, is amended--

[A] in clause [vii], by striking 'or' at the end;

[B] in clause [viii], by inserting 'or' after the semicolon; and

[C] by adding at the end the following new clause:

'[ix] matches performed by the Secretary of Health and Human Services or the Inspector General of the Department of Health and Human Services with respect to potential fraud, waste, and abuse, including matches of a system of records with non-Federal records;'.

[3] MATCHING AGREEMENTS WITH THE COMMISSIONER OF SOCIAL SECURITY- Section 205[r] of the Social Security Act [42 U.S.C. 405[r]] is amended by adding at the end the following new paragraph:

'[9][A] The Commissioner of Social Security shall, upon the request of the Secretary or the Inspector General of the Department of Health and Human Services--

'[i] enter into an agreement with the Secretary or such Inspector General for the purpose of matching data in the system of records of the Social Security Administration and the system of records of the Department of Health and Human Services; and

'[ii] include in such agreement safeguards to assure the maintenance of the confidentiality of any information disclosed.

'[B] For purposes of this paragraph, the term 'system of records' has the meaning given such term in section 552a[a][5] of title 5, United States Code.'.

[c] Withholding of Federal Matching Payments for States That Fail To Report Enrollee Encounter Data in the Medicaid Statistical Information System- Section 1903[i] of the Social Security Act [42 U.S.C. 1396b[i]] is amended--

[1] in paragraph [23], by striking 'or' at the end;

[2] in paragraph [24], by striking the period at the end and inserting '; or'; and

[3] by adding at the end the following new paragraph:.

'[25] with respect to any amounts expended for medical assistance for individuals for whom the State does not report enrollee encounter data [as defined by the Secretary] to the Medicaid Statistical Information System [MSIS] in a timely manner [as determined by the Secretary].'.

[d] Permissive Exclusions and Civil Monetary Penalties-

[1] PERMISSIVE EXCLUSIONS- Section 1128[b] of the Social Security Act [42 U.S.C. 1320a-7[b]] is amended by adding at the end the following new paragraph:

'[16] MAKING FALSE STATEMENTS OR MISREPRESENTATION OF MATERIAL FACTS- Any individual or entity that knowingly makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of services or supplier under a Federal health care program [as defined in section 1128B[f]], including Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, medicaid managed care organizations under title XIX, and entities that apply to participate as providers of services or suppliers in such managed care organizations and such plans.'.

[2] CIVIL MONETARY PENALTIES-

[A] IN GENERAL- Section 1128A[a] of the Social Security Act [42 U.S.C. 1320a-7a[a]] is amended--

[i] in paragraph [1][D], by striking 'was excluded' and all that follows through the period at the end and inserting 'was excluded from the Federal health care program [as defined in section 1128B[f]] under which the claim was made pursuant to Federal law.';

[ii] in paragraph [6], by striking 'or' at the end;

[iii] by inserting after paragraph [7], the following new paragraphs:

'[8] orders or prescribes a medical or other item or service during a period in which the person was excluded from a Federal health care program [as so defined], in the case where the person knows or should know that a claim for such medical or other item or service will be made under such a program;

'[9] knowingly makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any application, bid, or contract to participate or enroll as a provider of services or a supplier under a Federal health care program [as so defined], including Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, medicaid managed care organizations under title XIX, and entities that apply to participate as providers of services or suppliers in such managed care organizations and such plans;

'[10] knows of an overpayment [as defined in paragraph [4] of section 1128J[d]] and does not report and return the overpayment in accordance with such section;';

[iv] in the first sentence--

[I] by striking the 'or' after 'prohibited relationship occurs;'; and

[II] by striking 'act]' and inserting 'act; or in cases under paragraph [9], $50,000 for each false statement or misrepresentation of a material fact]'; and

[v] in the second sentence, by striking 'purpose]' and inserting 'purpose; or in cases under paragraph [9], an assessment of not more than 3 times the total amount claimed for each item or service for which payment was made based upon the application containing the false statement or misrepresentation of a material fact]'.

[B] CLARIFICATION OF TREATMENT OF CERTAIN CHARITABLE AND OTHER INNOCUOUS PROGRAMS- Section 1128A[i][6] of the Social Security Act [42 U.S.C. 1320a-7a[i][6]] is amended--

[i] in subparagraph [C], by striking 'or' at the end;

[ii] in subparagraph [D], as redesignated by section 4331[e] of the Balanced Budget Act of 1997 [Public Law 105-33], by striking the period at the end and inserting a semicolon;

[iii] by redesignating subparagraph [D], as added by section 4523[c] of such Act, as subparagraph [E] and striking the period at the end and inserting '; or'; and

[iv] by adding at the end the following new subparagraphs:

'[F] any other remuneration which promotes access to care and poses a low risk of harm to patients and Federal health care programs [as defined in section 1128B[f] and designated by the Secretary under regulations];

'[G] the offer or transfer of items or services for free or less than fair market value by a person, if--

'[i] the items or services consist of coupons, rebates, or other rewards from a retailer;

'[ii] the items or services are offered or transferred on equal terms available to the general public, regardless of health insurance status; and

'[iii] the offer or transfer of the items or services is not tied to the provision of other items or services reimbursed in whole or in part by the program under title XVIII or a State health care program [as defined in section 1128[h]];

'[H] the offer or transfer of items or services for free or less than fair market value by a person, if--

'[i] the items or services are not offered as part of any advertisement or solicitation;

'[ii] the items or services are not tied to the provision of other services reimbursed in whole or in part by the program under title XVIII or a State health care program [as so defined];

'[iii] there is a reasonable connection between the items or services and the medical care of the individual; and

'[iv] the person provides the items or services after determining in good faith that the individual is in financial need; or

'[I] effective on a date specified by the Secretary [but not earlier than January 1, 2011], the waiver by a PDP sponsor of a prescription drug plan under part D of title XVIII or an MA organization offering an MA-PD plan under part C of such title of any copayment for the first fill of a covered part D drug [as defined in section 1860D-2[e]] that is a generic drug for individuals enrolled in the prescription drug plan or MA-PD plan, respectively.'.

[e] Testimonial Subpoena Authority in Exclusion-only Cases- Section 1128[f] of the Social Security Act [42 U.S.C. 1320a-7[f]] is amended by adding at the end the following new paragraph:

'[4] The provisions of subsections [d] and [e] of section 205 shall apply with respect to this section to the same extent as they are applicable with respect to title II. The Secretary may delegate the authority granted by section 205[d] [as made applicable to this section] to the Inspector General of the Department of Health and Human Services for purposes of any investigation under this section.'.

[f] Health Care Fraud-

[1] KICKBACKS- Section 1128B of the Social Security Act [42 U.S.C. 1320a-7b] is amended by adding at the end the following new subsection:

'[g] In addition to the penalties provided for in this section or section 1128A, a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim for purposes of subchapter III of chapter 37 of title 31, United States Code.'.

[2] REVISING THE INTENT REQUIREMENT- Section 1128B of the Social Security Act [42 U.S.C. 1320a-7b], as amended by paragraph [1], is amended by adding at the end the following new subsection:

'[h] With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.'.

[g] Surety Bond Requirements-

[1] DURABLE MEDICAL EQUIPMENT- Section 1834[a][16][B] of the Social Security Act [42 U.S.C. 1395m[a][16][B]] is amended by inserting 'that the Secretary determines is commensurate with the volume of the billing of the supplier' before the period at the end.

[2] HOME HEALTH AGENCIES- Section 1861[o][7][C] of the Social Security Act [42 U.S.C. 1395x[o][7][C]] is amended by inserting 'that the Secretary determines is commensurate with the volume of the billing of the home health agency' before the semicolon at the end.

[3] REQUIREMENTS FOR CERTAIN OTHER PROVIDERS OF SERVICES AND SUPPLIERS- Section 1862 of the Social Security Act [42 U.S.C. 1395y] is amended by adding at the end the following new subsection:

'[n] Requirement of a Surety Bond for Certain Providers of Services and Suppliers-

'[1] IN GENERAL- The Secretary may require a provider of services or supplier described in paragraph [2] to provide the Secretary on a continuing basis with a surety bond in a form specified by the Secretary in an amount [not less than $50,000] that the Secretary determines is commensurate with the volume of the billing of the provider of services or supplier. The Secretary may waive the requirement of a bond under the preceding sentence in the case of a provider of services or supplier that provides a comparable surety bond under State law.

'[2] PROVIDER OF SERVICES OR SUPPLIER DESCRIBED- A provider of services or supplier described in this paragraph is a provider of services or supplier the Secretary determines appropriate based on the level of risk involved with respect to the provider of services or supplier, and consistent with the surety bond requirements under sections 1834[a][16][B] and 1861[o][7][C].'.

[h] Suspension of Medicare and Medicaid Payments Pending Investigation of Credible Allegations of Fraud-

[1] MEDICARE- Section 1862 of the Social Security Act [42 U.S.C. 1395y], as amended by subsection [g][3], is amended by adding at the end the following new subsection:

'[o] Suspension of Payments Pending Investigation of Credible Allegations of Fraud-

'[1] IN GENERAL- The Secretary may suspend payments to a provider of services or supplier under this title pending an investigation of a credible allegation of fraud against the provider of services or supplier, unless the Secretary determines there is good cause not to suspend such payments.

'[2] CONSULTATION- The Secretary shall consult with the Inspector General of the Department of Health and Human Services in determining whether there is a credible allegation of fraud against a provider of services or supplier.

'[3] PROMULGATION OF REGULATIONS- The Secretary shall promulgate regulations to carry out this subsection and section 1903[i][2][C].'.

[2] MEDICAID- Section 1903[i][2] of such Act [42 U.S.C. 1396b[i][2]] is amended--

[A] in subparagraph [A], by striking 'or' at the end; and

[B] by inserting after subparagraph [B], the following:

'[C] by any individual or entity to whom the State has failed to suspend payments under the plan during any period when there is pending an investigation of a credible allegation of fraud against the individual or entity, as determined by the State in accordance with regulations promulgated by the Secretary for purposes of section 1862[o] and this subparagraph, unless the State determines in accordance with such regulations there is good cause not to suspend such payments; or'.

[i] Increased Funding To Fight Fraud and Abuse-

[1] IN GENERAL- Section 1817[k] of the Social Security Act [42 U.S.C. 1395i[k]] is amended--

[A] by adding at the end the following new paragraph:

'[7] ADDITIONAL FUNDING- In addition to the funds otherwise appropriated to the Account from the Trust Fund under paragraphs [3] and [4] and for purposes described in paragraphs [3][C] and [4][A], there are hereby appropriated an additional $10,000,000 to such Account from such Trust Fund for each of fiscal years 2011 through 2020. The funds appropriated under this paragraph shall be allocated in the same proportion as the total funding appropriated with respect to paragraphs [3][A] and [4][A] was allocated with respect to fiscal year 2010, and shall be available without further appropriation until expended.'; and

[B] in paragraph [4][A], by inserting 'until expended' after 'appropriation'.

[2] INDEXING OF AMOUNTS APPROPRIATED-

[A] DEPARTMENTS OF HEALTH AND HUMAN SERVICES AND JUSTICE- Section 1817[k][3][A][i] of the Social Security Act [42 U.S.C. 1395i[k][3][A][i]] is amended--

[i] in subclause [III], by inserting 'and' at the end;

[ii] in subclause [IV]--

[I] by striking 'for each of fiscal years 2007, 2008, 2009, and 2010' and inserting 'for each fiscal year after fiscal year 2006'; and

[II] by striking '; and' and inserting a period; and

[iii] by striking subclause [V].

[B] OFFICE OF THE INSPECTOR GENERAL OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES- Section 1817[k][3][A][ii] of such Act [42 U.S.C. 1395i[k][3][A][ii]] is amended--

[i] in subclause [VIII], by inserting 'and' at the end;

[ii] in subclause [IX]--

[I] by striking 'for each of fiscal years 2008, 2009, and 2010' and inserting 'for each fiscal year after fiscal year 2007'; and

[II] by striking '; and' and inserting a period; and

[iii] by striking subclause [X].

[C] FEDERAL BUREAU OF INVESTIGATION- Section 1817[k][3][B] of the Social Security Act [42 U.S.C. 1395i[k][3][B]] is amended--

[i] in clause [vii], by inserting 'and' at the end;

[ii] in clause [viii]--

[I] by striking 'for each of fiscal years 2007, 2008, 2009, and 2010' and inserting 'for each fiscal year after fiscal year 2006'; and

[II] by striking '; and' and inserting a period; and

[iii] by striking clause [ix].

[D] MEDICARE INTEGRITY PROGRAM- Section 1817[k][4][C] of the Social Security Act [42 U.S.C. 1395i[k][4][C]] is amended by adding at the end the following new clause:

'[ii] For each fiscal year after 2010, by the percentage increase in the consumer price index for all urban consumers [all items; United States city average] over the previous year.'.

[j] Medicare Integrity Program and Medicaid Integrity Program-

[1] MEDICARE INTEGRITY PROGRAM-

[A] REQUIREMENT TO PROVIDE PERFORMANCE STATISTICS- Section 1893[c] of the Social Security Act [42 U.S.C. 1395ddd[c]] is amended--

[i] in paragraph [3], by striking 'and' at the end;

[ii] by redesignating paragraph [4] as paragraph [5]; and

[iii] by inserting after paragraph [3] the following new paragraph:

'[4] the entity agrees to provide the Secretary and the Inspector General of the Department of Health and Human Services with such performance statistics [including the number and amount of overpayments recovered, the number of fraud referrals, and the return on investment of such activities by the entity] as the Secretary or the Inspector General may request; and'.

[B] EVALUATIONS AND ANNUAL REPORT- Section 1893 of the Social Security Act [42 U.S.C. 1395ddd] is amended by adding at the end the following new subsection:

'[i] Evaluations and Annual Report-

'[1] EVALUATIONS- The Secretary shall conduct evaluations of eligible entities which the Secretary contracts with under the Program not less frequently than every 3 years.

'[2] ANNUAL REPORT- Not later than 180 days after the end of each fiscal year [beginning with fiscal year 2011], the Secretary shall submit a report to Congress which identifies--

'[A] the use of funds, including funds transferred from the Federal Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Insurance Trust Fund under section 1841, to carry out this section; and

'[B] the effectiveness of the use of such funds.'.

[C] FLEXIBILITY IN PURSUING FRAUD AND ABUSE- Section 1893[a] of the Social Security Act [42 U.S.C. 1395ddd[a]] is amended by inserting ', or otherwise,' after 'entities'.

[2] MEDICAID INTEGRITY PROGRAM-

[A] REQUIREMENT TO PROVIDE PERFORMANCE STATISTICS- Section 1936[c][2] of the Social Security Act [42 U.S.C. 1396u-6[c][2]] is amended--

[i] by redesignating subparagraph [D] as subparagraph [E]; and

[ii] by inserting after subparagraph [C] the following new subparagraph:

'[D] The entity agrees to provide the Secretary and the Inspector General of the Department of Health and Human Services with such performance statistics [including the number and amount of overpayments recovered, the number of fraud referrals, and the return on investment of such activities by the entity] as the Secretary or the Inspector General may request.'.

[B] EVALUATIONS AND ANNUAL REPORT- Section 1936[e] of the Social Security Act [42 U.S.C. 1396u-7[e]] is amended--

[i] by redesignating paragraph [4] as paragraph [5]; and

[ii] by inserting after paragraph [3] the following new paragraph:

'[4] EVALUATIONS- The Secretary shall conduct evaluations of eligible entities which the Secretary contracts with under the Program not less frequently than every 3 years.'.

[k] Expanded Application of Hardship Waivers for Exclusions- Section 1128[c][3][B] of the Social Security Act [42 U.S.C. 1320a-7[c][3][B]] is amended by striking 'individuals entitled to benefits under part A of title XVIII or enrolled under part B of such title, or both' and inserting 'beneficiaries [as defined in section 1128A[i][5]] of that program'.