SEC. 1174. STRENGTHENING AUDIT AUTHORITY.

[a] For Part C Payments Risk Adjustment- Section- 1857[d][1] of the Social Security Act [42 U.S.C. 1395w-27[d][1]] is amended by inserting after 'section 1858[c]]' the following: ', and data submitted with respect to risk adjustment under section 1853[a][3]'.

[b] Enforcement of Audits and Deficiencies-

[1] IN GENERAL- Section- 1857[e] of such Act, as amended by section 1173, is amended by adding at the end the following new paragraph:

'[5] ENFORCEMENT OF AUDITS AND DEFICIENCIES-

'[A] INFORMATION IN CONTRACT- The Secretary shall require that each contract with an MA organization under this section shall include terms that inform the organization of the provisions in subsection [d].

'[B] ENFORCEMENT AUTHORITY- The Secretary is authorized, in connection with conducting audits and other activities under subsection [d], to take such actions, including pursuit of financial recoveries, necessary to address deficiencies identified in such audits or other activities.'.

[2] APPLICATION UNDER PART D- For provision applying the amendment made by paragraph [1] to prescription drug plans under part D, see section 1860D-12[b][3][D] of the Social Security Act.

[c] Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act and shall apply to audits and activities conducted for contract years beginning on or after January 1, 2011.