# H.R. 3200/Division B/Title VII/Subtitle F
## SUBTITLE F — WASTE, FRAUD, AND ABUSE
### Sec. 1751. Health-Care Acquired Conditions.

    (a) Medicaid Non-Payment for Certain Health Care-Acquired Conditions.—
       Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)) is amended—
          (1) by striking ``or´´ at the end of paragraph (23);
          (2) by striking the period at the end of paragraph (24) and inserting ``; or´´; and
          (3) by inserting after paragraph (24) the following new paragraph:
             ``(25) with respect to amounts expended for services related to the presence of a condition that could be identified by a secondary diagnostic code described in section 1886(d)(4)(D)(iv) and for any health care acquired condition determined as a non-covered service under title XVIII.´´.
    (b) Application to CHIP.—
       Section 2107(e)(1)(G) of such Act (42 U.S.C. 1397gg(e)(1)(G)) is amended by striking ``and (17)´´ and inserting ``(17), and (25)´´.
    (c) Permission to Include Additional Health Care-Acquired Conditions.—
       Nothing in this section shall prevent a State from including additional health care-acquired conditions for non-payment in its Medicaid program under title XIX of the Social Security Act.
    (d) Effective Date.—
       The amendments made by this section shall apply to discharges occurring on or after January 1, 2010.

### Sec. 1752. Evaluations and Reports Required Under Medicaid Integrity Program.

    Section 1936(c)(2)) of the Social Security Act (42 U.S.C. 1396u–7(c)(2)) is amended—
          (1) by redesignating subparagraph (D) as subparagraph (E); and
          (2) by inserting after subparagraph (C) the following new subparagraph:
             ``(D) For the contract year beginning in 2011 and each subsequent contract year, the entity provides assurances to the satisfaction of the Secretary that the entity will conduct periodic evaluations of the effectiveness of the activities carried out by such entity under the Program and will submit to the Secretary an annual report on such activities.´´.

### Sec. 1753. Require Providers and Suppliers to Adopt Programs to Reduce Waste, Fraud, and Abuse.

    Section 1902(a) of such Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended by sections 1631(b)(1) and 1703, is further amended—
          (1) in paragraph (74), by striking at the end ``and´´;
          (2) in paragraph (75), by striking at the end the period and inserting ``; and´´; and
          (3) by inserting after paragraph (75) the following new paragraph:
             ``(76) provide that any provider or supplier (other than a physician or nursing facility) providing services under such plan shall, subject to paragraph (5) of section 1874(d), establish a compliance program described in paragraph (1) of such section in accordance with such section.´´.

### Sec. 1754. Overpayments.

    (a) In General.—
       Section 1903(d)(2)(C) of the Social Security Act (42 U.S.C. 1396b(d)(2)(C)) is amended by inserting ``(or 1 year in the case of overpayments due to fraud)´´ after ``60 days´´.
    (b) Effective Date.—
       In the case overpayments discovered on or after the date of the enactment of this Act.

### Sec. 1755. Managed Care Organizations.

    (a) Minimum Medical Loss Ratio.—
          (1) Medicaid.—
             Section 1903(m)(2)(A) of the Social Security Act (42 U.S.C. 1396b(m)(2)(A)), as amended by section 1743(a)(3), is amended—
                (A) by striking ``and´´ at the end of clause (xii);
                (B) by striking the period at the end of clause (xiii) and inserting ``; and´´; and
                (C) by adding at the end the following new clause:
                   ``(xiv) such contract has a medical loss ratio, as determined in accordance with a methodology specified by the Secretary that is a percentage (not less than 85 percent) as specified by the Secretary.´´.
          (2) CHIP.—
             Section 2107(e)(1) of such Act (42 U.S.C. 1397gg(e)(1)) is amended—
                (A) by redesignating subparagraphs (H) through (L) as subparagraphs (I) through (M); and
                (B) by inserting after subparagraph (G) the following new subparagraph:
                   ``(H) Section 1903(m)(2)(A)(xiv) (relating to application of minimum loss ratios), with respect to comparable contracts under this title.´´.
    (3) Effective Date.—
       The amendments made by this subsection shall apply to contracts entered into or renewed on or after July 1, 2010.
    (b) Patient Encounter Data.—
          (1) In General.—
             Section 1903(m)(2)(A)(xi) of the Social Security Act (42 U.S.C. 1396b(m)(2)(A)(xi)) is amended by inserting ``and for the provision of such data to the State at a frequency and level of detail to be specified by the Secretary´´ after ``patients´´.
          (2) Effective Date.—
             The amendment made by paragraph (1) shall apply with respect to contract years beginning on or after January 1, 2010.

### Sec. 1756. Termination of Provider Participation Under Medicaid and CHIP if Terminated Under Medicare or Other State Plan or Child Health Plan.

    (a) State Plan Requirement.—
       Section 1902(a)(39) of the Social Security Act (42 U.S.C. 42 U.S.C. 1396a(a)) is amended by inserting after ``1128A,´´ the following: ``terminate the participation of any individual or entity in such program if (subject to such exceptions are are permitted with respect to exclusion under sections 1128(b)(3)(C) and 1128(d)(3)(B)) participation of such individual or entity is terminated under title XVIII, any other State plan under this title, or any child health plan under title XXI,´´.
    (b) Application to CHIP.—
       Section 2107(e)(1)(A) of such Act (42 U.S.C. 1397gg(e)(1)(A)) is amended by inserting before the period at the end the following: ``and section 1902(a)(39) (relating to exclusion and termination of participation)´´.
    (c) Effective Date.—
          (1) Except as provided in paragraph (2), the amendments made by this section shall apply to services furnished on or after JJanuary 1, 2011, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.
          (2) In the case of a State plan for medical assistance under title XIX of the Social Security Act or a child health plan under title XXI of such Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendments made by this section, the State plan or child health plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

### Sec. 1757. Medicaid and CHIP Exclusion from Participation Relating to Certain Ownership, Control, and Management Affiliations.

    (a) State Plan Requirement.—
       Section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)), as amended by sections 1631(b)(1), 1703, and 1753, is further amended—
          (1) in paragraph (75), by striking at the end ``and´´;
          (2) in paragraph (76), by striking at the end the period and inserting ``; and´´; and
          (3) by inserting after paragraph (76) the following new paragraph:
             ``(77) provide that the State agency described in paragraph (9) exclude, with respect to a period, any individual or entity from participation in the program under the State plan if such individual or entity owns, controls, or manages an entity that (or if such entity is owned, controlled, or managed by an individual or entity that)—
                ``(A) has unpaid overpayments under this title during such period determined by the Secretary or the State agency to be delinquent;
                ``(B) is suspended or excluded from participation under or whose participation is terminated under this title during such period; or
                ``(C) is affiliated with an individual or entity that has been suspended or excluded from participation under this title or whose participation is terminated under this title during such period.´´.
    (b) Child Health Plan Requirement.—
       Section 2107(e)(1)(A) of such Act (42 U.S.C. 1397gg(e)(1)(A)), as amended by section 1756(b), is amended by striking ``section 1902(a)(39)´´ and inserting ``sections 1902(a)(39) and 1902(a)(77)´´.
    (c) Effective Date.—
          (1) Except as provided in paragraph (2), the amendments made by this section shall apply to services furnished on or after January 1, 2011, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.
          (2) In the case of a State plan for medical assistance under title XIX of the Social Security Act or a child health plan under title XXI of such Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendments made by this section, the State plan or child health plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

### Sec. 1758. Requirement to Report Expanded Set of Data Elements Under MMIS to Detect Fraud and Abuse.

    Section 1903(r)(1)(F) of the Social Security Act (42 U.S.C. 1396b(r)(1)(F)) is amended by inserting after ``necessary´´ the following: ``and including, for data submitted to the Secretary on or after July 1, 2010, data elements from the automated data system that the Secretary determines to be necessary for detection of waste, fraud, and abuse´´.

### Sec. 1759. Billing Agents, Clearinghouses, or Other Alternate Payees Required to Register Under Medicaid.

    (a) In General.—
       Section 1902(a) of the Social Security Act (42 U.S.C. 42 U.S.C. 1396a(a)), as amended by sections 1631(b), 1703, 1753, and 1757, is further amended—
          (1) in paragraph (76); by striking at the end ``and´´;
          (2) in paragraph (77), by striking the period at the end and inserting ``and´´; and
          (3) by inserting after paragraph (77) the following new paragraph:
             ``(78) provide that any agent, clearinghouse, or other alternate payee that submits claims on behalf of a health care provider must register with the State and the Secretary in a form and manner specified by the Secretary under section 1866(j)(1)(D).´´.
    (b) Denial of Payment.—
       Section 1903(i) of such Act (42 U.S.C. 1396b(i)), as amended by section 1753, is amended—
          (1) by striking ``or´´ at the end of paragraph (24);
          (2) by striking the period at the end of paragraph (25) and inserting ``; or´´; and
          (3) by inserting after paragraph (25) the following new paragraph:
             ``(26) with respect to any amount paid to a billing agent, clearinghouse, or other alternate payee that is not registered with the State and the Secretary as required under section 1902(a)(78).´´.
    (c) Effective Date.—
          (1) Except as provided in paragraph (2), the amendments made by this section shall apply to claims submitted on or after January 1, 2012, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.
          (2) In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendments made by this section, the State plan or child health plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

### Sec. 1760. Denial of Payments for Litigation-Related Misconduct.

    (a) In General.—
       Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)), as previously amended is amended—
          (1) by striking ``or´´ at the end of paragraph (25);
          (2) by striking the period at the end of paragraph (26) and inserting a semicolon; and
          (3) by inserting after paragraph (26) the following new paragraphs:
             ``(27) with respect to any amount expended—
                ``(A) on litigation in which a court imposes sanctions on the State, its employees, or its counsel for litigation-related misconduct; or
                ``(B) to reimburse (or otherwise compensate) a managed care entity for payment of legal expenses associated with any action in which a court imposes sanctions on the managed care entity for litigation-related misconduct.´´.
    (b) Effective Date.—
       The amendments made by subsection (a) shall apply to amounts expended on or after January 1, 2010.