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[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1251 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1251

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 22, 2011

Mr. Carper (for himself, Mr. Coburn, Mr. Bennet, Mr. Enzi, Mr. Corker, 
 Mr. Brown of Massachusetts, Ms. Klobuchar, and Mr. Thune) 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 ``Medicare and 
Medicaid Fighting Fraud and Abuse to Save Taxpayers' Dollars Act'' or 
the ``Medicare and Medicaid FAST Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
     TITLE I--PREVENTING PRESCRIPTION DRUG WASTE, FRAUD, AND ABUSE

Sec. 101. Requiring valid National Provider Identifiers of prescribers 
                            on pharmacy claims and limiting access to 
                            the National Provider Identifier Registry.
Sec. 102. Encouraging the establishment of State Prescription Drug 
                            Monitoring Programs.
Sec. 103. Updating of DEA database of controlled substances providers.
                  TITLE II--CURBING IMPROPER PAYMENTS

Sec. 201. Addressing vulnerabilities identified by Recovery Audit 
                            Contractors.
Sec. 202. Improving Senior Medicare Patrol and fraud reporting rewards.
Sec. 203. Prohibiting the display of Social Security account numbers on 
                            newly issued Medicare identification cards 
                            and communications provided to Medicare 
                            beneficiaries.
Sec. 204. Requiring prepayment review of all claims for durable medical 
                            equipment at high risk of waste, fraud, and 
                            abuse.
Sec. 205. Strengthening Medicaid Program integrity through flexibility.
     TITLE III--IMPROVING DATA SHARING ACROSS AGENCIES AND PROGRAMS

Sec. 301. Improving data sharing across agencies and programs.
Sec. 302. Expanding automated prepayment review of Medicare claims.
Sec. 303. Improving the sharing of data between the Federal Government 
                            and State Medicaid programs.
Sec. 304. Improving claims processing and detection of fraud within the 
                            Medicaid and CHIP programs.
Sec. 305. Reports.
             TITLE IV--IMPROVING CMS CONTRACTOR PERFORMANCE

Sec. 401. Establishing Medicare administrative contractor error 
                            reduction incentives.
Sec. 402. Separating provider enrollment and screening from Medicare 
                            administrative contractors.
Sec. 403. Developing measurable performance metrics for Medicare 
                            contractors.
                       TITLE V--OTHER PROVISIONS

Sec. 501. Strengthening penalties for the illegal distribution of a 
                            Medicare, Medicaid, or CHIP beneficiary 
                            identification or billing privileges.
Sec. 502. Providing implementation funding.

     TITLE I--PREVENTING PRESCRIPTION DRUG WASTE, FRAUD, AND ABUSE

SEC. 101. REQUIRING VALID NATIONAL PROVIDER IDENTIFIERS OF PRESCRIBERS 
              ON PHARMACY CLAIMS AND LIMITING ACCESS TO THE NATIONAL 
              PROVIDER IDENTIFIER REGISTRY.

    (a) Requiring Valid National Provider Identifiers of Prescribers 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 national provider identifiers of 
        prescribers on pharmacy claims.--
                    ``(A) In general.--For plan year 2013 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 the valid National 
                Provider Identifier for the drug's prescriber.
                    ``(B) Procedures.--The Secretary shall establish--
                            ``(i) procedures for determining the 
                        validity of 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, 2014, 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).''.
    (b) Limiting Access to National Provider Identifier Registry.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this subsection referred to as the ``Secretary''), in 
        consultation with the Attorney General, the Inspector General 
        of the Department of Health and Human Services, the Chairman of 
        the Federal Trade Commission, and affected parties (including 
        prescription drug plans under part D of title XVIII of the 
        Social Security Act (42 U.S.C. 1395w-101 et seq.), MA-PD plans 
        under part C of title XVIII of the Social Security Act (42 
        U.S.C. 1395w-21 et seq.), pharmacies, physicians, and pharmacy 
        computer vendors), shall establish procedures and rules to 
        restrict access to the National Provider Identifier Registry in 
        order to deter its fraudulent use.
            (2) Access.--The procedures established under paragraph (1) 
        shall provide governmental and non-governmental entities, as 
        appropriate, access to such Registry under data use agreements 
        and in accordance with rules established by the Secretary under 
        such paragraph.

SEC. 102. ENCOURAGING THE ESTABLISHMENT OF STATE PRESCRIPTION DRUG 
              MONITORING PROGRAMS.

    (a) Encouraging the Establishment of State Prescription Drug 
Monitoring Programs.--Title XIX of the Social Security Act (42 U.S.C. 
1396 et seq.) is amended by adding at the end the following new 
section:

``SEC. 1947. ENCOURAGING THE ESTABLISHMENT OF STATE PRESCRIPTION DRUG 
              MONITORING PROGRAMS.

    ``(a) In General.--To encourage the establishment and use of a 
State Prescription Drug Monitoring Program, notwithstanding sections 
1905(b) and 1927(g), and for purposes of paragraphs (2)(B) and (3)(A) 
of section 1903(d), if a State has established a State Prescription 
Drug Monitoring Program that has been certified as meeting the 
requirements under subsection (b), with respect to any amounts 
recovered by or paid to a State subsequent to the date of such 
certification that are related to an overpayment due to fraud, waste, 
or abuse in connection the provision of covered services under the 
State plan, the Federal medical assistance percentage with respect to 
such amounts shall be decreased by 10 percentage points. A State may 
use such amounts recovered by or paid to the State to support the State 
Prescription Drug Monitoring Program established by the State.
    ``(b) Requirements.--For purposes of subsection (a), the 
requirements of this subsection are that the Attorney General certifies 
to the Secretary that the State has established a State Prescription 
Drug Monitoring Program. In making a certification under the preceding 
sentence, the Attorney General shall take into consideration 
requirements with respect to Prescription Drug Monitoring Programs 
under the Harold Rogers Prescription Drug Monitoring Program 
administered by the Department of Justice or the National All Schedules 
Prescription Electronic Reporting program administered by the 
Department of Health and Human Services.
    ``(c) Commission To Examine Interoperability and Other Related 
Issues.--
            ``(1) Establishment.--The Secretary and the Attorney 
        General shall jointly establish a Commission to examine 
        interoperability and other issues related to State Prescription 
        Drug Monitoring Programs, including--
                    ``(A) best practices with respect to uniform 
                electronic formats for the reporting, sharing, and 
                disclosure of information under such Programs; and
                    ``(B) the ability to interface with such Programs.
            ``(2) Membership.--The Commission shall be composed of the 
        following members:
                    ``(A) The Secretary.
                    ``(B) The Attorney General.
                    ``(C) The heads of other appropriate agencies (as 
                determined jointly by the Secretary and the Attorney 
                General).
                    ``(D) Stakeholders appointed jointly by the 
                Secretary and the Attorney General.
            ``(3) No compensation of members.--
                    ``(A) Non-federal employees.--A member of the 
                Commission who is not an officer or employee of the 
                Federal Government shall serve without compensation.
                    ``(B) Federal employees.--A member of the 
                Commission who is an officer or employee of the Federal 
                Government shall serve without compensation in addition 
                to the compensation received for the services of the 
                member as an officer or employee of the Federal 
                Government.
            ``(4) Duration.--The Commission shall terminate on the date 
        that is 3 years after the date of enactment of the Medicare and 
        Medicaid Fighting Fraud and Abuse to Save Taxpayers' Dollars 
        Act''.
    (b) Inclusion of Prescription Drug Monitoring Programs in Medicare 
Part D Oversight.--Not later than 180 days after the date of enactment 
of this Act, the Secretary of Health and Human Services shall submit to 
Congress a plan on how Medicare part D oversight contractors and other 
oversight activities under part D of title XVIII of the Social Security 
Act (42 U.S.C. 1395w-101 et seq.) can utilize State Prescription Drug 
Monitoring Programs.

SEC. 103. UPDATING OF DEA DATABASE OF CONTROLLED SUBSTANCES PROVIDERS.

    (a) In General.--
            (1) Updating based on death master file.--Not less 
        frequently than on a daily basis, the Attorney General shall 
        update the database of the Drug Enforcement Agency of persons 
        registered to manufacture, distribute, or dispense a controlled 
        substance under part C of title II of the Controlled Substances 
        Act (21 U.S.C. 821 et seq.) to reflect any changes in the 
        information in the Death Master File of the Social Security 
        Administration.
            (2) Updating based on other information reported to the 
        social security administration.--The Attorney General shall 
        enter into an agreement with the Commissioner of Social 
        Security to obtain information regarding deaths reported to the 
        Commissioner, including death information reported to the 
        Commissioner under section 205(r) of the Social Security Act 
        (42 U.5.C. 405(r)), in order to update the database of the Drug 
        Enforcement Agency of persons registered to manufacture, 
        distribute, or dispense a controlled substance under part C of 
        title II of the Controlled Substances Act (21 U.S.C. 821 et 
        seq.) to reflect any deaths reported to the Commissioner of 
        Social Security. The Attorney General shall take any actions 
        required by the agreement with the Commissioner to maintain the 
        confidentiality of such data and to assure that the data is 
        used solely for the purposes of this paragraph.
    (b) Limiting Access to DEA Database of Registrants.--
            (1) In general.--The Attorney General, in consultation with 
        the Secretary of Health and Human Services, the Inspector 
        General of the Department of Health and Human Services, the 
        Chairman of the Federal Trade Commission, and affected parties 
        (including prescription drug plans under part D of title XVIII 
        of the Social Security Act (42 U.S.C. 1395w-101 et seq.), MA-PD 
        plans under part C of title XVIII of the Social Security Act 
        (42 U.S.C. 1395w-21 et seq.), pharmacies, physicians, and 
        pharmacy computer vendors), shall establish procedures and 
        rules to restrict access to the database of the Drug 
        Enforcement Agency of persons registered to manufacturer, 
        distribute, or dispense a controlled substance under part C of 
        title II of the Controlled Substances Act (21 U.S.C. 821 et 
        seq.) in order to deter its fraudulent use.
            (2) Access.--The procedures established under paragraph (1) 
        shall provide governmental and non-governmental entities, as 
        appropriate, access to such database under data use agreements 
        and in accordance with rules established by the Attorney 
        General under such paragraph.
    (c) Review and Investigation of Invalid DEA Registration Numbers.--
The Attorney General, in consultation with the Secretary of Health and 
Human Services, the Inspector General of the Department of Health and 
Human Services, the Chairman of the Federal Trade Commission, and 
affected parties (including prescription drug plans under part D of 
title XVIII of the Social Security Act (42 U.S.C. 1395w-101 et seq.), 
MA-PD plans under part C of title XVIII of the Social Security Act (42 
U.S.C. 1395w-21 et seq.), pharmacies, physicians, and pharmacy computer 
vendors), shall establish procedures and rules to review and 
investigate pharmacy claims under such part D that contain a 
registration number that was not assigned by the Attorney General under 
the Controlled Substances Act (21 U.S.C. 801 et seq.) to a practitioner 
(as defined in section 102 of such Act (21 U.S.C. 802)). Such 
procedures shall include the matching of National Provider Identifiers 
submitted under section 1860D-4(c)(4) of the Social Security Act, as 
added by section 101(a), to such registration numbers and the 
investigation of such registration numbers that are matched to a 
National Provider Identifier determined to be invalid under such 
section.
    (d) Sense of Congress.--It is the sense of Congress that the 
Attorney General should include in the updates required under 
subsection (a) any other information determined relevant by the 
Attorney General, such as information from State Medical Boards.

                  TITLE II--CURBING IMPROPER PAYMENTS

SEC. 201. ADDRESSING VULNERABILITIES IDENTIFIED BY RECOVERY AUDIT 
              CONTRACTORS.

    Section 1893(h) of the Social Security Act (42 U.S.C. 1395ddd(h)) 
is amended--
            (1) in paragraph (1)(C), by inserting ``and for provider 
        education and overpayment appeals'' before the period;
            (2) 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
            (3) 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.''.

SEC. 202. IMPROVING SENIOR MEDICARE PATROL AND FRAUD REPORTING REWARDS.

    (a) In General.--The Secretary shall develop a plan, including 
suggested legislative changes to implement such plan, under which the 
Secretary shall revise the beneficiary 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 ways to enhance rewards for 
individuals reporting under the incentive program, including providing 
a monetary reward prior to the full recovery of an overpayment.
    (b) Public Awareness and Education Campaign.--The plan developed 
under subsection (a) shall also require the Secretary to use 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 
beneficiary 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).
    (d) Definitions.--In this section:
            (1) Medicare beneficiary.--The term ``Medicare 
        beneficiary'' means an individual 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 such title (42 U.S.C. 1395j et seq.).
            (2) Medicare program.--The term ``Medicare program'' means 
        the program under title XVIII of the Social Security Act (42 
        U.S.C. 1395 et seq.).
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 203. PROHIBITING THE DISPLAY OF SOCIAL SECURITY ACCOUNT NUMBERS ON 
              NEWLY ISSUED MEDICARE IDENTIFICATION CARDS AND 
              COMMUNICATIONS PROVIDED TO MEDICARE BENEFICIARIES.

    (a) In General.--Not later than 2 years after the date of enactment 
of this Act, the Secretary of Health and Human Services, in 
consultation with the Commissioner of Social Security, shall establish 
and begin to implement procedures to eliminate the unnecessary 
collection, use, and display of Social Security account numbers of 
Medicare beneficiaries.
    (b) Newly Issued Medicare Cards and Communications Provided to 
Beneficiaries.--
            (1) Newly issued cards.--
                    (A) In general.--Not later than 4 years after the 
                date of enactment of this Act, the Secretary of Health 
                and Human Services, in consultation with the 
                Commissioner of Social Security, shall ensure that each 
                newly issued Medicare identification card meets the 
                requirements described in subparagraph (B).
                    (B) Requirements.--
                            (i) In general.--Subject to clauses (ii) 
                        and (iii), the requirements described in this 
                        subparagraph are, with respect to a Medicare 
                        identification card, that the card does not 
                        display or electronically store (in an 
                        unencrypted format) a Medicare beneficiary's 
                        Social Security account number.
                            (ii) Exception.--The Secretary may waive 
                        the requirements under clause (i) in the case 
                        where the health insurance claim number of a 
                        beneficiary is the Social Security number of 
                        the beneficiary, the beneficiary's spouse, or 
                        another individual.
                            (iii) Use of partial account number.--The 
                        Secretary of Health and Human Services, in 
                        consultation with the Commissioner of Social 
                        Security, may provide for the use of a partial 
                        Social Security account number on a Medicare 
                        identification card if the Secretary determines 
                        that such use does not allow an unacceptable 
                        risk of fraudulent use.
            (2) Communications provided to beneficiaries.--Not later 
        than 4 years after the date of enactment of this Act, the 
        Secretary of Health and Human Services shall prohibit the 
        display of a Medicare beneficiary's Social Security account 
        number on written or electronic communication provided to the 
        beneficiary unless the Secretary, in consultation with the 
        Commissioner of Social Security, determines that inclusion of 
        Social Security account numbers on such communications is 
        essential for the operation of the Medicare program.
    (c) Medicare Beneficiary Defined.--In this section, the term 
``Medicare beneficiary'' means an individual who is entitled to, or 
enrolled for, benefits under part A of title XVIII of the Social 
Security Act or enrolled under part B of such title.
    (d) Conforming Amendments.--
            (1) Reference in the social security act.--Section 
        205(c)(2)(C) of the Social Security Act (42 U.S.C. 
        405(c)(2)(C)) is amended--
                    (A) by moving clause (x), as added by section 
                1414(a)(2) of the Patient Protection and Affordable 
                Care Act (Public Law 111-148), 6 ems to the left;
                    (B) by redesignating clause (x), as added by 
                section 2(a)(1) of the Social Security Number 
                Protection Act of 2010 (42 U.S.C. 1305 note), as clause 
                (xii); and
                    (C) by adding after clause (xii), as redesignated 
                by subparagraph (B), the following new clause:
    ``(xiii) Subject to section 203 of the Medicare and Medicaid 
Fighting Fraud and Abuse to Save Taxpayers' Dollars Act, social 
security account numbers shall not be displayed on Medicare 
identification cards or on communications provided to Medicare 
beneficiaries.''.
            (2) Access to information.--Section 205(r) of the Social 
        Security Act (405 U.S.C. 405(r)) is amended by adding at the 
        end the following new paragraph:
    ``(10) To prevent and identify fraudulent activity, the 
Commissioner shall upon the request of the Attorney General or upon the 
request of the Secretary of Health and Human Services enter into a 
reimbursable agreement with the Attorney General or the Secretary to 
provide information collected under paragraph (1) if--
            ``(A) the requirements of subparagraphs (A) and (B) of 
        paragraph (3) are met; and
            ``(B) such agreement includes appropriate provisions to 
        protect the confidentiality of information provided by the 
        Commissioner under such agreement.''.
    (e) Pilot Program.--
            (1) Establishment.--The Secretary shall establish a pilot 
        program utilizing smart card technology to evaluate--
                    (A) the applicability of smart card technology to 
                the Medicare program under title XVIII of the Social 
                Security Act (42 U.S.C. 1395 et seq.), including the 
                applicability of such technology to Medicare 
                beneficiaries or Medicare providers; and
                    (B) whether such cards would be effective in 
                preventing fraud under the Medicare program.
            (2) Implementation.--
                    (A) Initial implementation.--The Secretary shall 
                implement the pilot program under this subsection not 
                later than 1 year after the date of enactment of this 
                Act.
                    (B) Scope and duration.--The Secretary shall 
                conduct the pilot program--
                            (i) in not less than 2 States; and
                            (ii) for a period of not less than 180 days 
                        or more than 2 years.
            (3) Report.--Not later than 12 months after the completion 
        of the pilot program under this subsection, the Secretary shall 
        submit to the appropriate committees of Congress and make 
        available to the public a report that includes the following:
                    (A) A summary of the pilot program and findings, 
                including--
                            (i) the costs or savings to the Medicare 
                        program as a result of the implementation of 
                        the pilot program;
                            (ii) whether the use of smart card 
                        technology resulted in improvements in the 
                        quality of care provided to Medicare 
                        beneficiaries under the pilot program; and
                            (iii) whether such technology was useful in 
                        preventing or detecting fraud, waste, and abuse 
                        in the Medicare program.
                    (B) Recommendations regarding whether the use of 
                smart card technology should be expanded under the 
                Medicare program.
            (4) Definitions.--In this subsection:
                    (A) Medicare beneficiary.--The term ``Medicare 
                beneficiary'' means an individual 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 such title (42 
                U.S.C. 1395j et seq.).
                    (B) Medicare provider.--The term ``Medicare 
                provider'' includes a provider of services (as defined 
                in section 1861(u) of the Social Security Act (42 
                U.S.C. 1395x(u))) and a supplier (as defined in section 
                1861(d) of such Act (42 U.S.C. 1395x(d))).
                    (C) Secretary.--The term ``Secretary'' means the 
                Secretary of Health and Human Services.
                    (D) Smart card.--The term ``smart card'' means 
                identification used by a Medicare beneficiary or a 
                Medicare provider that includes anti-fraud attributes. 
                Such a card--
                            (i) may rely on existing commercial data 
                        transfer networks or on a network of 
                        proprietary card readers or databases; and
                            (ii) may include--
                                    (I) cards using technology adapted 
                                from the financial services industry;
                                    (II) cards containing individual 
                                biometric identification, provided that 
                                such identification is encrypted and 
                                not contained in any central database;
                                    (III) cards adapting technology and 
                                processes utilized in the TRICARE 
                                program under chapter 55 of title 10, 
                                United States Code, or by the Veterans 
                                Administration; or
                                    (IV) such other technology as the 
                                Secretary determines appropriate.

SEC. 204. REQUIRING PREPAYMENT REVIEW OF ALL CLAIMS FOR DURABLE MEDICAL 
              EQUIPMENT AT HIGH RISK OF WASTE, FRAUD, AND ABUSE.

    Section 1834(a) of the Social Security Act (42 U.S.C. 1395m(a)) is 
amended by adding at the end the following new paragraph:
            ``(22) Prepayment review for durable medical equipment at 
        high risk of fraud.--Not later than 270 days after the date of 
        enactment of the Medicare and Medicaid Fighting Fraud and Abuse 
        to Save Taxpayers' Dollars Act, the Secretary, in consultation 
        with the Inspector General of the Department of Health and 
        Human Services, shall establish policies and procedures for 
        prepayment review, which may include pre-certification, for all 
        claims for reimbursement under this title for durable medical 
        equipment at high risk of waste, fraud, and abuse, as 
        determined by the Secretary, including power wheelchairs.''.

SEC. 205. 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,''.

     TITLE III--IMPROVING DATA SHARING ACROSS AGENCIES AND PROGRAMS

SEC. 301. IMPROVING DATA SHARING ACROSS AGENCIES AND PROGRAMS.

    (a) In General.--In order to ensure that the Secretary, Medicare 
program safeguard contractors and other oversight contractors (as 
defined in subsection (g)(4)), the Inspector General of the Department 
of Health and Human Services, the Attorney General, and State and local 
law enforcement are able to operate with greater coordination to curb 
fraud and improper payments, the Secretary, the Inspector General of 
the Department of Health and Human Services, and the Attorney General 
shall provide for increased coordination and data sharing as described 
in the succeeding subsections.
    (b) Improving Data Sharing Internally and With CMS Contractors.--
            (1) In general.--The Secretary shall establish policies and 
        procedures to ensure that claims and other data, including the 
        data described in paragraph (3), is accessible to Medicare 
        program safeguard contractors and other oversight contractors 
        not less frequently than on a daily basis.
            (2) Analysis of data.--The Secretary shall require Medicare 
        program safeguard contractors and other oversight contractors 
        to analyze the data accessed under paragraph (1) on an ongoing 
        basis for purposes of conducting pre- and post-payment reviews 
        under the Medicare program.
            (3) Data described.--The following data is described in 
        this paragraph:
                    (A) Claims payment, claims denial, and other claims 
                data under the Medicare program from the common working 
                file and the Medicare national claims history database.
                    (B) Data on providers of services and suppliers 
                under the Medicare program, including data from the 
                Medicare Provider Enrollment, Chain, and Ownership 
                System (PECOS) of the Centers for Medicare & Medicaid 
                Services.
                    (C) Medicare beneficiary data, including data from 
                the Enrollment DataBase of the Centers for Medicare & 
                Medicaid Services.
    (c) Provider Database Reviews and Verification.--
            (1) In general.--
                    (A) Review and update of medicare provider 
                databases.--The Secretary shall establish policies and 
                procedures, which may include contractors, to review 
                and update on a daily basis Medicare provider 
                databases, including the review and update of the 
                Medicare Provider Enrollment, Chain, and Ownership 
                System (PECOS) of the Centers for Medicare & Medicaid 
                Services against death data of the Social Security 
                Administration, for accuracy and completeness. Such 
                policies and procedures shall also include data matches 
                on a daily basis, as determined appropriate by the 
                Secretary, against other databases as determined 
                appropriate by the Secretary, including the database of 
                the Drug Enforcement Agency of persons registered to 
                manufacture, distribute, or dispense a controlled 
                substance under part C of title II of the Controlled 
                Substances Act (21 U.S.C. 821 et seq.), State medical 
                licensing data, databases of suspended or debarred 
                Federal contractors, including the Excluded Parties 
                List System of the General Services Administration, the 
                Debt Check program of the Department of the Treasury, a 
                list of incarcerated individuals from the Department of 
                Justice and each State's Department of Corrections, and 
                the List of Excluded Individuals/Entities of the Office 
                of Inspector General of the Department of Health and 
                Human Services.
                    (B) Consultation.--The policies and procedures 
                under subparagraph (A) shall require the Secretary to 
                periodically consult with external organizations, 
                including the Federation of State Medical Boards, to 
                determine data sources and screening tools best suited 
                to detect fraudulent applications for enrollment under 
                section 1866(j) of the Social Security Act (42 U.S.C. 
                1395cc(j)) submitted by providers of medical or other 
                items or services and suppliers under the Medicare 
                program.
                    (C) Data matching.--
                            (i) In general.--The policies and 
                        procedures under subparagraph (A) may include 
                        entering into agreements with the Commissioner 
                        of Social Security pursuant to section 205(r) 
                        of the Social Security Act (42 U.S.C. 405(r)) 
                        to match data against the death information 
                        maintained by the Commissioner, and matching 
                        against the database of the Drug Enforcement 
                        Agency of persons registered to manufacture, 
                        distribute, or dispense a controlled substance 
                        under part C of title II of the Controlled 
                        Substances Act (21 U.S.C. 821 et seq.), and 
                        other Federal databases, as determined 
                        appropriate by the Secretary.
                            (ii) Confidentiality of data obtained.--The 
                        Secretary shall take any actions required by an 
                        agreement described in clause (i) or any other 
                        agreement with the Commissioner of Social 
                        Security to obtain data from the Commissioner 
                        for purposes of this section to maintain the 
                        confidentiality of data obtained from the 
                        Commissioner and to assure that the data is 
                        used solely for the purposes of this section.
                    (D) Ongoing analysis.--The Secretary shall use 
                analytic software for the conduct of ongoing analysis 
                of Medicare provider databases described in 
                subparagraph (A) to verify and update data supplied by 
                providers of services and suppliers under the Medicare 
                program. The Secretary may use commercial database 
                sources for purposes of verifying such data.
            (2) Access to 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 the following new paragraph:
            ``(12) Provision of new hire information to the centers for 
        medicare & medicaid services and applicable state health 
        subsidy programs.--The National Directory of New Hires shall 
        provide the Administrator of the Centers for Medicare & 
        Medicaid Services and, for purposes of carrying out section 
        1413(c)(3)(A)(ii) of Public Law 111-148, each applicable State 
        health subsidy program (as defined in section 1413(e) of such 
        Public Law) with all information in the National Directory.''
            (3) Access to list of convicted individuals.--The Attorney 
        General shall provide the Secretary of Health and Human 
        Services access to a list of convicted individuals for use in 
        preventing waste, fraud, and abuse under the Medicare and 
        Medicaid programs.
    (d) Beneficiary Database Review and Verification.--
            (1) In general.--The Secretary shall establish policies and 
        procedures, which may include contractors, to review and update 
        on a daily basis Medicare beneficiary databases, including the 
        Enrollment DataBase of the Centers for Medicare & Medicaid 
        Services, for accuracy and completeness. Such policies and 
        procedures shall include data matches against death data of the 
        Social Security Administration and also on a daily basis, as 
        determined appropriate by the Secretary, other Federal 
        databases as determined appropriate by the Secretary, including 
        a list of incarcerated individuals from the Department of 
        Justice and each State's Department of Corrections.
            (2) Ongoing analysis.--The Secretary shall use analytic 
        software for the conduct of ongoing analysis of Medicare 
        beneficiary databases described in paragraph (1) to verify and 
        update data supplied by providers of services and suppliers 
        under the Medicare program. The Secretary may use commercial 
        database sources for purposes of verifying such data.
    (e) Continued Efforts on Integrated Data Repository and One PI 
Project; Expanded Access by Agencies.--
            (1) Continued efforts on integrated data repository and one 
        pi project.--
                    (A) In general.--The Secretary shall--
                            (i) continue to incorporate Medicare claims 
                        and payment, provider, and beneficiary data 
                        into the Integrated Data Repository under 
                        section 1128J(a)(1) of the Social Security Act, 
                        as added by section 6402(a) of the Patient 
                        Protection and Affordable Care Act; and
                            (ii) fully implement the waste, fraud, and 
                        abuse detection solution of the Centers for 
                        Medicare & Medicaid Services, called the ``One 
                        PI project''.
                    (B) Updating of idr on daily basis.--The Secretary 
                shall establish policies and procedures to ensure that 
                the Integrated Data Repository is updated with Medicare 
                claims payment data and data from the Medicare provider 
                databases described in subsection (c)(1) and Medicare 
                beneficiary databases described in subsection (d)(1), 
                including the common working file, on a daily basis.
                    (C) Access to idr.--The Secretary shall ensure that 
                Medicare program safeguard contractors and other 
                oversight contractors have access to the full range of 
                data contained in the Integrated Data Repository and 
                related analytic tools by not later than September 30, 
                2012. Such access shall include both real-time portal 
                access and other means in accordance with protocols 
                established by the Secretary.
                    (D) Law enforcement access.--The Secretary shall 
                ensure that Federal and other appropriate law 
                enforcement agencies, including the Inspector General 
                of the Department of Health and Human Services and the 
                Attorney General, have access to the full range of data 
                contained in the Integrated Data Repository and related 
                analytic tools by not later than September 30, 2012. 
                Such access shall include both real-time portal access 
                and other means in accordance with protocols 
                established by the Secretary.
                    (E) Date certain for inclusion of prepayment claims 
                data.--The Secretary shall ensure that the Integrated 
                Data Repository includes access to prepayment claims 
                data by not later than September 30, 2012.
                    (F) Date certain for inclusion of medicaid program 
                data.--The Secretary shall ensure that the Integrated 
                Data Repository includes access to or incorporates 
                Medicaid program data by not later than September 30, 
                2014 (or, if States are unable to provide certain data 
                to the Secretary by such date, a substantial amount of 
                the Medicaid program data that is available as of such 
                date).
            (2) Expanded database access to appropriate state 
        entities.--
                    (A) Access to integrated data repository.--For 
                purposes of enhancing data sharing in order to identify 
                programmatic weaknesses and improving the timeliness of 
                analysis and actions to prevent waste, fraud, and 
                abuse, relevant State agencies, including the State 
                Medicaid plans under title XIX of the Social Security 
                Act, State child health plans under title XXI of such 
                Act, and State Medicaid fraud control units (as 
                described in section 1903(q) of the Social Security Act 
                (42 U.S.C. 1396b(q))), shall have access to the full 
                range of data contained in the Integrated Data 
                Repository, including the One PI system established 
                under the One PI project, as directed by the Secretary, 
                by not later than September 30, 2013. The Secretary 
                may, in consultation with the Inspector General of the 
                Department of Health and Human Services, give such 
                access to State attorneys general and State law 
                enforcement agencies.
                    (B) Conforming amendments.--Section 1128J(a)(2) of 
                the Social Security Act, as added by section 6402(a) of 
                the Patient Protection and Affordable Care Act (Public 
                Law 111-148) is amended--
                            (i) by striking ``DATABASES.--'' and 
                        inserting ``DATABASES.--''
                    ``(A) Access for the conduct of law enforcement and 
                oversight activities.--For purposes'';
                            (ii) in subparagraph (A), as added by 
                        subclause (I), by inserting ``, including, in 
                        accordance with section 301(e)(1)(D) of the 
                        Medicare and Medicaid Fighting Fraud and Abuse 
                        to Save Taxpayers' Dollars Act, the Integrated 
                        Data Repository under paragraph (1)'' before 
                        the period at the end; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(B) Access to reduce waste, fraud, and abuse.--
                For purposes of reducing waste, fraud, and abuse, 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 
                Secretary, in consultation with the Inspector General 
                of the Department of Health and Human Services, shall 
                allow appropriate State agency access to claims and 
                payment data of the Department of Health and Human 
                Services and its contractors related to titles XVIII, 
                XIX, and XXI, including, in accordance with section 
                301(e)(2)(A) of the Medicare and Medicaid Fighting 
                Fraud and Abuse to Save Taxpayers' Dollars Act, the 
                Integrated Data Repository under paragraph (1).''.
    (f) General Protocols and Security.--
            (1) In general.--The Secretary shall ensure that any data 
        provided to an entity or individual under the provisions of or 
        amendments made by this section is provided to such entity or 
        individual in accordance with protocols established by the 
        Secretary under paragraph (2). The Secretary shall consult with 
        the Inspector General of the Department of Health and Human 
        Services prior to implementing this subsection.
            (2) Protocols.--
                    (A) In general.--The Secretary shall establish 
                protocols to ensure the secure transfer and storage of 
                any data provided to another entity or individual under 
                the provisions of or amendments made by this section.
                    (B) Consideration of recommendations of the 
                inspector general of the department of health and human 
                services.--In establishing protocols under subparagraph 
                (A), the Secretary shall take into account 
                recommendations submitted to the Secretary by the 
                Inspector General of the Department of Health and Human 
                Services with respect to the secure transfer and 
                storage of such data.
    (g) Definitions.--In this section:
            (1) Federal health care program.--The term ``Federal health 
        care program'' has the meaning given such term in section 
        1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f)).
            (2) Medicaid program.--The term ``Medicaid program'' means 
        the program under title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).
            (3) Medicare program.--The term ``Medicare program'' means 
        the program under title XVIII of the Social Security Act (42 
        U.S.C. 1395 et seq.).
            (4) Medicare program safeguard contractors and other 
        oversight contractors.--The term ``Medicare program safeguard 
        contractors and other oversight contractors'' includes zone 
        program integrity contractors, program safeguard or integrity 
        contractors, recovery audit contractors under section 1893(h) 
        of the Social Security Act (42 U.S.C. 1395ddd(h)), special 
        investigative units at Medicare contractors (as defined in 
        section 1889(g) of the Social Security Act (42 U.S.C. 
        1395zz(g))), and any other oversight contractors designated by 
        the Secretary.
            (5) Provider of services.--The term ``provider of 
        services'' has the meaning given such term in section 1861(u) 
        of the Social Security Act (42 U.S.C. 1395x(u)).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (7) State.--The term ``State'' includes the District of 
        Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
        Guam, and American Samoa.
            (8) Supplier.--The term ``supplier'' has the meaning given 
        such term in section 1861(d) of the Social Security Act (42 
        U.S.C. 1395x(d)).

SEC. 302. EXPANDING AUTOMATED PREPAYMENT REVIEW OF MEDICARE CLAIMS.

    (a) Automated Prepayment Review.--
            (1) In general.--Subject to subsection (b), the Secretary 
        shall establish automated prepayment review of all Medicare 
        claims under parts A and B of title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.) by not later than 
        September 30, 2012.
            (2) Implementation.--The provisions of this section shall 
        be implemented in conjunction with, and as part of, any 
        predictive modeling and other analytics technologies 
        implemented under section 4241 of the Small Business Jobs Act 
        of 2010 (42 U.S.C. 1320a-7n), except that any requirement under 
        such section 4241 that conflicts with a requirement under this 
        section shall not apply to this section.
    (b) Elements.--Such automated prepayment review shall include the 
following:
            (1) Program integrity system.--
                    (A) In general.--Subject to subparagraph (D), a 
                program integrity system under which relevant claims 
                under such parts A and B are compared in order to--
                            (i) identify errors or fraud under the 
                        Medicare program, including--
                                    (I) duplicate claims for items or 
                                services; and
                                    (II) claims where payment of 
                                benefits under one such part is only 
                                available if such payment is not 
                                available under another such part; and
                            (ii) obtain such other information or 
                        conduct such other analysis as the Secretary 
                        determines is useful for program integrity 
                        purposes.
                    (B) Implementation.--Not later than September 30, 
                2013, the Secretary shall ensure that all relevant 
                daily claims data under such parts A and B are compared 
                as part of such program integrity system.
                    (C) Plan for inclusion of part d claims data.--Not 
                later than September 30, 2013, the Secretary shall 
                establish a plan for including Medicare claims under 
                part D of such title XVIII (42 U.S.C. 1395w-101 et 
                seq.) for use in comparisons under such program 
                integrity system.
                    (D) No impact on prompt payment requirements.--In 
                no case shall the program integrity system under this 
                paragraph have any impact on prompt payment 
                requirements under such parts A and B, including such 
                requirements under sections 1816(c)(2) and 1842(c)(2) 
                of the Social Security Act (42 U.S.C. 1395h(c)(2); 
                1395u(c)(2)).
            (2) Automated risk-based provider verification.--
                    (A) In general.--An automated risk-based 
                verification system for the purpose of verification and 
                analysis of providers of services and suppliers under 
                the Medicare program on an ongoing basis, including 
                during the period between the enrollment of the 
                provider of services or supplier under section 1866(j) 
                of the Social Security Act (42 U.S.C. 1395cc(j)) and 
                the revalidation (or any subsequent revalidation) of 
                such provider of services or supplier under such 
                section. Subject to subparagraph (C), such system shall 
                include criminal background checks for providers of 
                services and suppliers who the Secretary determines 
                present a high risk of waste, fraud, and abuse.
                    (B) Implementation.--The Secretary shall establish 
                the system under subparagraph (A) not later than 
                September 30, 2013.
                    (C) No duplication of screening under enrollment 
                process.--The system under subparagraph (A) shall be in 
                addition to and shall not duplicate any screening, 
                including any criminal background check, conducted 
                under section 1866(j)(2) of the Social Security Act (42 
                U.S.C. 1395cc(j)(2)).
                    (D) Prohibition on disclosure of risk-based data 
                and analysis.--The Secretary shall not disclose to the 
                public any data collected or analysis conducted under 
                the automated risk-based verification system under 
                subparagraph (A).
            (3) Tracking rejected claims.--
                    (A) In general.--For the purpose of identifying and 
                analyzing potentially fraudulent and otherwise 
                inappropriate claims under the Medicare program, a 
                process for identifying and tracking, including by 
                provider of services or supplier, claims for payment 
                under the Medicare program that were rejected or denied 
                under the automated edit process of a medicare 
                administrative contractor under section 1874A of the 
                Social Security Act (42 U.S.C. 1395kk).
                    (B) Implementation.--The Secretary shall establish 
                the process under subparagraph (A) not later than 
                September 30, 2013.
    (c) Definitions.--In this section:
            (1) Medicare program.--The term ``Medicare program'' means 
        the program under title XVIII of the Social Security Act (42 
        U.S.C. 1395 et seq.).
            (2) Automated prepayment review.--The term ``automated 
        prepayment review'' means screening using automated data 
        analysis and intelligent analysis prior to making payment. Such 
        term does not include prepayment medical review.
            (3) Provider of services.--The term ``provider of 
        services'' has the meaning given that term in section 1861(u) 
        of such Act (42 U.S.C. 1395ww(u)).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (5) Supplier.--The term ``supplier'' has the meaning given 
        such term in section 1861(d) of such Act (42 U.S.C. 1395ww(d)).

SEC. 303. 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 inclusion 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 erroneous 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. 304. 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 at the end 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) 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; and
                    ``(B) a valid provider identifier that, for 
                purposes of the provider that furnished such item or 
                service, has been determined by the State agency to 
                correspond to a participating provider that is eligible 
                to receive payment for furnishing such item or service 
                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)''.

SEC. 305. REPORTS.

    (a) Report to Congress on Plan for Implementation.--
            (1) Report.--
                    (A) In general.--Not later than 270 days after the 
                date of enactment of this Act, the Secretary of Health 
                and Human Services, in consultation with the 
                Commissioner of Social Security and the Attorney 
                General, shall submit to Congress a report containing a 
                plan for implementing the provisions of and amendments 
                made by sections 301 through 304, including, with 
                respect to the implementation of section 303, the plan 
                described in subparagraph (B).
                    (B) Plan for increasing recovery of overpayments.--
                The report submitted under subparagraph (A) shall 
                include a plan, developed by the Secretary of Health 
                and Human Services, in consultation with the inspector 
                General of the Department of Health and Human Services, 
                to increase the recovery of overpayments for health 
                care items or services provided to dual eligible 
                individuals (as defined in section 303(c)(2)).
            (2) Inclusion in annual health care fraud and abuse control 
        account report.--Section 1817(k)(5) of the Social Security Act 
        (42 U.S.C. 1395i(k)(5)) is amended--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) effective beginning with the report submitted 
                January 1 following the date the report under section 
                306(a)(1) of the Medicare and Medicaid Fighting Fraud 
                and Abuse to Save Taxpayers' Dollars Act is submitted, 
                any updates to the plan included in the report under 
                such section 306(a)(1), including any potential 
                challenges to meeting the deadlines for implementation 
                of the provisions of and amendments made by sections 
                301 through 304 of such Act.''.
    (b) Report to Congress on Interagency Cooperation and Data 
Sharing.--Not later than 180 days after the date of enactment of this 
Act, the Secretary of Health and Human Services, in consultation with 
the Administrator of the Veterans Administration, the Secretary of 
Defense, the Director of the Office of Personnel Management, and the 
head of any other relevant Federal agency that administers a Federal 
health care program, shall submit to Congress a report on the potential 
of data sharing, including the sharing or data checking of Medicare 
provider and Medicare beneficiary databases, to prevent and detect 
potential fraud and improper payments under the Medicare program.

             TITLE IV--IMPROVING CMS CONTRACTOR PERFORMANCE

SEC. 401. 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 incentive plan.--The Secretary shall 
                        establish a plan to provide incentives for 
                        medicare administrative contractors to reduce 
                        the improper payment error rates in their 
                        jurisdictions.
                            ``(iii) Contents of plan.--The plan 
                        established 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; and
                                    ``(II) shall include penalties, 
                                including 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.--The amendments made by this section shall 
apply to contracts entered into on or after the date that is 12 months 
after the date of enactment of this Act and to current contracts 
through modification when practicable.

SEC. 402. SEPARATING PROVIDER ENROLLMENT AND SCREENING FROM MEDICARE 
              ADMINISTRATIVE CONTRACTORS.

    (a) In General.--Section 1866(j)(1) of the Social Security Act (42 
U.S.C. 1395cc(j)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Implementation.--The enrollment process 
                established under subparagraph (A) and the provider 
                screening under paragraph (2) shall be carried out 
                under one or more contracts with entities. Such 
                contracts shall be separate from any contract to serve 
                as a medicare administrative contractor under section 
                1874A.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to contracts entered into on or after the date that is 24 months 
after the date of enactment of this Act and to current contracts 
through modification when practicable.

SEC. 403. DEVELOPING MEASURABLE PERFORMANCE METRICS FOR MEDICARE 
              CONTRACTORS.

    (a) Report.--Not later than 12 months after the date of enactment 
of this Act, the Secretary of Health and Human Services (in this 
section referred to as the ``Secretary'') shall submit to Congress a 
report containing measurable metrics for improving Medicare contractor 
performance, including Medicare administrative contractors under 
section 1874A of the Social Security Act (42 U.S.C. 1395kk), program 
safeguard contractors and other similar contractors, Medicare Drug 
Integrity Contractors, qualified independent contractors with a 
contract under section 1869(c) of the Social Security Act (42 U.S.C. 
1395ff(c)), and other contractors that perform administrative or 
oversight functions under the Medicare program under title XVIII of the 
Social Security Act (42 U.S.C. 1395 et seq.).
    (b) Contents of Report.--The report submitted under subsection (a) 
shall include the Secretary's recommendations for the development of 
measurable performance metrics for Medicare contractors (or updated and 
revised measurable performance metrics), together with recommendations 
for such legislation and administrative action as the Secretary 
considers appropriate.
    (c) Relationship to Government Performance and Results Act.--The 
metrics submitted in the report under subsection (a) may include 
performance goals or performance indicators established under the 
provisions of and amendments made by the GPRA Modernization Act of 2010 
(Public Law 111-352).
    (d) Review by the Comptroller General.--Not later than 270 days 
after the date on which the report is submitted under subsection (a), 
the Comptroller General of the United States shall submit to Congress a 
report containing a review of the report submitted under such 
subsection.

                       TITLE V--OTHER PROVISIONS

SEC. 501. 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, including a 
        provider identifier, 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.''.

SEC. 502. PROVIDING IMPLEMENTATION FUNDING.

    (a) In General.--For purposes of carrying out the provisions of and 
amendments made by this Act, in addition to funds otherwise available, 
there are appropriated to the Secretary of Health and Human Services 
for the Centers for Medicare & Medicaid Services Program Management 
Account, from amounts in the general fund of the Treasury not otherwise 
appropriated, $75,000,000 for the period of fiscal years 2012 through 
2016. Amounts appropriated under the preceding sentence shall remain 
available until expended.
    (b) Revision to the Medicare Improvement Fund.--Section 
1898(b)(1)(B) of the Social Security Act (42 U.S.C. 1395iii(b)(1)(B)) 
is amended by striking ``$275,000,000'' and inserting ``$200,000,000''.
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