I 

112TH CONGRESS 

1ST SESSION H. R. 3735 

To provide for enhanced penalties to combat Medicare and Medicaid fraud, 

a Medicare data-mining system and biometric technology pilot program, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 19, 2011 

Ms. ROS-LEHTINEN introduced the following bill; which was referred to the 

Committee on Energy and Commerce, and in addition to the Committee 

on Ways and Means, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

A BILL 

To provide for enhanced penalties to combat Medicare and 

Medicaid fraud, a Medicare data-mining system and biometric technology pilot program, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare Fraud En5 forcement and Prevention Act of 2011’’. 


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1 SEC. 2. ENHANCED CRIMINAL PENALTIES TO COMBAT 

2 MEDICARE AND MEDICAID FRAUD. 

3 (a) IN GENERAL.—Section 1128B of the Social Secu4 rity Act (42 U.S.C. 1320a–7b) is amended— 

5 (1) in subsection (a), by striking ‘‘$10,000 or 

6 imprisoned for not more than one year’’ and insert7 ing ‘‘$20,000 or imprisoned for not more than two 

8 years’’; and 

9 (2) in each of subsections (a), (b)(1), (b)(2), 

10 (c), and (d), by striking ‘‘$25,000 or imprisoned for 

11 not more than five years’’ and inserting ‘‘$50,000 or 

12 imprisoned for not more than 10 years’’. 

13 (b) ILLEGAL DISTRIBUTION OF MEDICARE OR MED14 ICAID BENEFICIARY IDENTIFICATION OR BILLING PRIVI15 LEGES.—Section 1128B of such Act (42 U.S.C. 1320a– 

16 7b) is amended by adding at the end the following new 

17 subsection: 

18 ‘‘(g) Whoever knowingly, intentionally, and with the 

19 intent to defraud purchases, sells, or distributes, or ar20 ranges for the purchase, sale, or distribution of two or 

21 more Medicare or Medicaid beneficiary identification num22 bers or billing privileges under title XVIII or title XIX 

23 shall be imprisoned for not more than 10 years or fined 

24 under title 18, United States Code (or, if greater, an 

25 amount equal to the monetary loss to the Federal and any 

26 State government as a result of such acts), or both.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to acts committed on or after the 

3 date of the enactment of this Act. 

4 SEC. 3. ENHANCED CIVIL AUTHORITIES TO COMBAT MEDI5 CARE AND MEDICAID FRAUD. 

6 (a) CIVIL MONETARY PENALTIES LAW ALIGNMENT

7 AND OTHER CHANGES.— 

8 (1) Section 1128A(a) of the Social Security Act 

9 (42 U.S.C. 1320a–7a(a)) is amended— 

10 (A) in paragraph (1), by striking ‘‘to an 

11 officer, employee, or agent of the United States, 

12 or of any department or agency thereof, or of 

13 any State agency (as defined in subsection 

14 (i)(1)),’’; 

15 (B) by inserting after paragraph (10), as 

16 added by section 6402(d)(2) of the Patient Pro17 tection and Affordable Care Act (Public Law 

18 111–148) the following new paragraphs: 

19 ‘‘(11) conspires to commit a violation of this 

20 section; or 

21 ‘‘(12) knowingly makes, uses, or causes to be 

22 made or used, a false record or statement material 

23 to an obligation to pay or transmit money or prop24 erty to a Federal health care program, or knowingly 

25 conceals or knowingly and improperly avoids or deVerDate Mar 15 2010 02:28 Dec 24, 2011 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3735.IH H3735

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1 creases an obligation to pay or transmit money or 

2 property to a Federal health care program;’’; 

3 (C) in the first sentence— 

4 (i) by striking ‘‘or in cases under 

5 paragraph (9)’’ and inserting ‘‘in cases 

6 under paragraph (9)’’; and 

7 (ii) by striking ‘‘fact)’’ and inserting 

8 ‘‘fact), in cases under paragraph (11), 

9 $50,000 for any violation described in this 

10 section committed in furtherance of the 

11 conspiracy involved, and in cases under 

12 paragraph (12), $50,000 for each false 

13 record or statement, or concealment, avoid14 ance, or decrease’’; and 

15 (D) in the second sentence, by striking 

16 ‘‘material fact).’’ and inserting ‘‘material fact); 

17 or in cases under paragraph (11), an assess18 ment of not more than 3 times the total 

19 amount that would otherwise apply for any vio20 lation described in this section committed in 

21 furtherance of the conspiracy involved; or in 

22 cases under paragraph (12), an assessment of 

23 not more than 3 times the total amount of the 

24 obligation to which the false record or stateVerDate Mar 15 2010 02:28 Dec 24, 2011 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3735.IH H3735

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1 ment was material or that was avoided or de2 creased.’’. 

3 (2) Section 1128A(c)(1) of the Social Security 

4 Act (42 U.S.C. 1320a–7a(c)(1)) is amended by 

5 striking ‘‘six years’’ and inserting ‘‘10 years’’. 

6 (3) Section 1128A(i) of the Social Security Act 

7 (42 U.S.C. 1320a–7a(i)) is amended— 

8 (A) by amending paragraph (2) to read as 

9 follows: 

10 ‘‘(2) The term ‘claim’ means any application, 

11 request, or demand, whether under contract, or oth12 erwise, for money or property for items and services 

13 under a Federal health care program (as defined in 

14 section 1128B(f)), whether or not the United States 

15 or a State agency has title to the money or property, 

16 that— 

17 ‘‘(A) is presented or caused to be pre18 sented to an officer, employee, or agent of the 

19 United States, or of any department or agency 

20 thereof, or of any State agency (as defined in 

21 subsection (i)(1)); or 

22 ‘‘(B) is made to a contractor, grantee, or 

23 other recipient if the money or property is to be 

24 spent or used on the Federal health care pro25 gram’s behalf or to advance a Federal health 


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1 care program interest, and if the Federal health 

2 care program— 

3 ‘‘(i) provides or has provided any por4 tion of the money or property requested or 

5 demanded; or 

6 ‘‘(ii) will reimburse such contractor, 

7 grantee, or other recipient for any portion 

8 of the money or property which is re9 quested or demanded.’’; 

10 (B) by amending paragraph (3) to read as 

11 follows: 

12 ‘‘(3) The term ‘item or service’ means, without 

13 limitation, any medical, social, management, admin14 istrative, or other item or service used in connection 

15 with or directly or indirectly related to a Federal 

16 health care program.’’; 

17 (C) in paragraph (7)— 

18 (i) by striking ‘‘term ‘should know’ 

19 means’’ and inserting ‘‘terms ‘knowing’, 

20 ‘knowingly’, and ‘should know’ mean’’; 

21 (ii) by redesignating subparagraphs 

22 (A) and (B) as subparagraphs (B) and 

23 (C), respectively; 


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1 (iii) by inserting before subparagraph 

2 (B), as redesignated by clause (ii), the fol3 lowing new subparagraph: 

4 ‘‘(A) has actual knowledge of the informa5 tion;’’; and 

6 (iv) in the matter following subpara7 graph (C), as redesignated by clause (ii)— 

8 (I) by inserting ‘‘require’’ after 

9 ‘‘and’’; and 

10 (II) by striking ‘‘is required’’; 

11 and 

12 (D) by adding at the end the following new 

13 paragraphs: 

14 ‘‘(8) The term ‘obligation’ means an established 

15 duty, whether or not fixed, arising from an express 

16 or implied contractual, grantor-grantee, or licensor 

17 licensee relationship, from a fee-based or similar re18 lationship, from statute or regulation, or from the 

19 retention of any overpayment. 

20 ‘‘(9) The term ‘material’ means having a nat21 ural tendency to influence, or be capable of influ22 encing, the payment or receipt of money or prop23 erty.’’. 

24 (b) EXCLUSION OF RESPONSIBLE CORPORATE OFFI25 CIALS.—Section 1128(b) of the Social Security Act (42 


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1 U.S.C. 1320a–7(b)) is amended by striking clauses (i) and 

2 (ii) of paragraph (15)(A) and inserting the following: 

3 ‘‘(i) who has or had a direct or indi4 rect ownership or control interest in a 

5 sanctioned entity at the time of and who 

6 knew or should have known (as defined in 

7 section 1128(i)(7)) of any of the conduct 

8 that formed a basis for the conviction or 

9 exclusion described in subparagraph (B); 

10 or 

11 ‘‘(ii) who is or was an officer or man12 aging employee (as defined in section 

13 1126(b)) of such an entity at the time of 

14 any of the conduct that formed a basis for 

15 the conviction or exclusion so described.’’. 

16 (c) PAYMENT SUSPENSIONS.—Subsection (o)(1) of 

17 section 1862 of the Social Security Act (42 U.S.C. 1395y), 

18 as added by section 6402(h) of the Patient Protection and 

19 Affordable Care Act (Public Law 111–148), is amended 

20 by striking ‘‘may’’ and inserting ‘‘shall’’. 

21 (d) CIVIL MONETARY PENALTIES FOR FALSE STATE22 MENTS OR DELAYING INSPECTIONS.—Paragraph (9) of 

23 section 1128A(a) of the Social Security Act (42 U.S.C. 

24 1320a–7a(a)), as added by section 6408(a) of the Patient 

25 Protection and Affordable Care Act (Public Law 111– 


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1 148), is amended by inserting ‘‘or to timely provide infor2 mation in response to a request authorized by section 

3 1128J(b),’’ after ‘‘regulations),’’. 

4 SEC. 4. ENHANCED SCREENING, MEDICARE DATA-MINING 

5 SYSTEM; BIOMETRIC TECHNOLOGY PILOT 

6 PROGRAM. 

7 (a) ENHANCED SCREENING.—Section 

8 1866(j)(2)(B)(ii) of the Social Security Act (42 U.S.C. 

9 1395cc(j)), as inserted by section 6401(a)(3) of the Pa10 tient Protection and Affordable Care Act (Public Law 

11 111–148), is amended by striking ‘‘may’’ and inserting 

12 ‘‘shall’’. 

13 (b) ACCESS TO REAL TIME CLAIMS AND PAYMENT

14 DATA.—Section 1128J(a)(2) of the Social Security Act, 

15 as added by section 6402(a) of the Patient Protection and 

16 Affordable Care Act (Public Law 111–148), is amended— 

17 (1) by inserting ‘‘including real time claims and 

18 payment data,’’ after ‘‘access to claims and payment 

19 data’’; and 

20 (2) by adding at the end the following sentence: 

21 ‘‘In carrying out this section, the Inspector General 

22 of the Department of Health and Human Services, 

23 in consultation with the Attorney General, shall im24 plement mechanisms for the sharing of information 

25 about suspected fraud relating to the Federal health 


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1 care programs under titles XVIII, XIX, and XXI 

2 with other appropriate law enforcement officials.’’. 

3 (c) BIOMETRIC TECHNOLOGY PILOT PROGRAM.— 

4 (1) IN GENERAL.—By not later than one year 

5 after the date of the enactment of this Act, the Sec6 retary of Health and Human Services shall carry out 

7 a 5-year pilot program that implements biometric 

8 technology to ensure that individuals entitled to ben9 efits under part A of title XVIII of the Social Secu10 rity Act or enrolled under part B of such title are 

11 physically present at the time and place of receipt of 

12 certain items and services (specified by the Sec13 retary) for which payment may be made under such 

14 title. Under such pilot program the Secretary may 

15 provide for financial incentives to encourage vol16 untary participation of providers of services (as de17 fined in section 1861(u) of such Act) and suppliers 

18 (as defined in section 1861(d) of such Act). 

19 (2) REPORTS.—The Secretary of Health and 

20 Human Services shall, for each of the third, fourth, 

21 and fifth years of the pilot program under para22 graph (1), submit to Congress a report on the effec23 tiveness of the pilot program in reducing the occur24 rence of waste, fraud, and abuse in the Medicare 


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1 program under title XVIII of the Social Security 

2 Act. 

3 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

4 purpose of carrying out paragraph (1), there is au5 thorized to be appropriated such sums as may be 

6 necessary. 

Æ 


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