I 

111TH CONGRESS 

2D SESSION H. R. 5546 

To provide for the establishment of a fraud, waste, and abuse detection 

and mitigation program for the Medicare Program under title XVIII 

of the Social Security Act. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 16, 2010 

Mr. ROSKAM 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 the establishment of a fraud, waste, and 

abuse detection and mitigation program for the Medicare 

Program under title XVIII of the Social Security Act. 

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

3 SECTION 1. MEDICARE FRAUD, WASTE, AND ABUSE PRE4 VENTION SOLUTION. 

5 (a) ESTABLISHMENT.— 

6 (1) IN GENERAL.—The Secretary of Health and 

7 Human Services (in this section referred to as the 

8 ‘‘Secretary’’) shall develop and implement a fraud, 

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1 waste, and abuse comprehensive pre-payment review 

2 prevention system (in this section referred to as the 

3 ‘‘Prevention System’’) for reviewing claims for reim4 bursement under the Medicare Program under title 

5 XVIII of the Social Security Act (in this section re6 ferred to as the ‘‘Medicare Program’’). 

7 (2) IMPLEMENTATION.—The Secretary shall 

8 carry out the Prevention System acting through the 

9 Center for Program Integrity of the Centers for 

10 Medicare & Medicaid Services. 

11 (b) SELECTION OF CLAIMS ACROSS ALL PROVIDER

12 TYPES.—The Prevention System shall cover all types of 

13 providers of services and suppliers under the Medicare 

14 Program, but may be limited to a subset of claim seg15 ments. 

16 (c) SYSTEM DESIGN ELEMENTS.—To the extent 

17 practicable, the Prevention System, shall— 

18 (1) be holistic; 

19 (2) be able to view and analyze all provider of 

20 services, supplier, and patient activities from mul21 tiple providers of services and suppliers under the 

22 Medicare Program; 

23 (3) be able to be integrated into the health care 

24 claims flow in existence as of the date of the enact25 ment of this Act with minimal effort, time, and cost; 

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1 (4) be designed to use technologies, including 

2 predictive modeling, that can utilize integrated near 

3 real-time transaction risk scoring and referral strat4 egy capabilities to identify transactions, patterns, 

5 anomalies, and linkages that are statistically un6 usual or suspicious and can undertake analysis be7 fore payment is made and that prioritizes unusual or 

8 suspicious claims in terms of likelihood of potential 

9 fraud, waste, or abuse to more efficiently utilize in10 vestigative resources; 

11 (5) be designed to— 

12 (A) allow for ease of integration into mul13 tiple points along the claims flow under the 

14 Medicare Program (pre-adjudication and post15 adjudication of such claims) in order to demon16 stratively show that the system ranks the likeli17 hood of high-risk behavior patterns and of 

18 fraud, waste, or abuse; and 

19 (B) utilize experimental design method20 ology to monitor and measure the performance 

21 between the control treatments (which shall be 

22 the methods and assessments used as of the 

23 day before the date of the enactment of this Act 

24 to address fraud, waste, and abuse under the 

25 Medicare Program) and test treatments (which 

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1 shall be the Prevention System identification of 

2 such fraud, waste, and abuse and actions taken 

3 pursuant to such system to address such fraud, 

4 waste, and abuse); and 

5 (6) be provided through competitively bid con6 tracts using the Federal Acquisition Regulations. 

7 (d) SYSTEM OPERATION.— 

8 (1) SCORING AND NEAR REAL-TIME ANAL9 YSIS.— 

10 (A) IN GENERAL.—The Prevention System 

11 shall identify high-risk Medicare claims by scor12 ing all such claims in near real-time, prior to 

13 the Centers for Medicare & Medicaid Services 

14 making payment on such claims under the 

15 Medicare Program. 

16 (B) USE OF SCORES.—The scores under 

17 subparagraph (A) shall be communicated to the 

18 fraud management system under subsection (f). 

19 (C) NEAR REAL-TIME ANALYSIS.—Under 

20 the Prevention System, the near real-time anal21 ysis of Medicare claims data shall be conducted 

22 in a manner that ensures— 

23 (i) prompt identification of fraud, 

24 waste, and abuse; and 

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1 (ii) prompt payment of legitimate 

2 claims. 

3 (2) PREDICTIVE MODELING.—The Prevention 

4 System shall involve the implementation of a statis5 tically sound, empirically derived predictive modeling 

6 technology that is designed to prevent fraud, waste, 

7 and abuse (by identifying such fraud, waste, and 

8 abuse before payment is made under the Medicare 

9 Program on related claims). The Prevention System 

10 shall use a predictive model to identify fraud, waste, 

11 and abuse that is— 

12 (A) based on historical transaction data, 

13 from across all markets and regions available, 

14 to build and continuously re-develop scoring 

15 models that are capable of incorporating exter16 nal data and external models from other 

17 sources into the predictive model; and 

18 (B) regularly updated, through the feed19 back loop under subsection (g), to provide infor20 mation and incorporate data on reimbursement 

21 claims that is collected through the Prevention 

22 System, including information gathered through 

23 the investigation of claims for reimbursement 

24 under the Medicare Program that the system 

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1 identifies as being potentially fraudulent, waste2 ful, or abusive. 

3 (3) PROTECTIONS FOR PATIENTS AND PRO4 VIDERS.—The identification of an unusual or sus5 pect Medicare claim by the Prevention System 

6 shall— 

7 (A) not result in the denial of items or 

8 services to an individual under the Medicare 

9 Program until such claim is further reviewed by 

10 the Secretary; and 

11 (B) not result in a failure to comply with 

12 prompt payment requirements under applicable 

13 law. 

14 (4) COMPLIANCE WITH HIPAA.—Any data col15 lected, stored, or reviewed under the Prevention Sys16 tem shall be treated in a manner that is in accord17 ance with the regulations promulgated under section 

18 264(c) of the Health Insurance Portability and Ac19 countability Act of 1996 (42 U.S.C. 1320d–2 note) 

20 and any other applicable law. 

21 (e) TREATMENT OF DATA.— 

22 (1) IN GENERAL.—The Prevention System shall 

23 be a high volume, rapid, near real-time information 

24 technology solution, which includes data pooling and 

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1 scoring capabilities to quickly and accurately capture 

2 and evaluate data. 

3 (2) DATA SOURCES.—The Prevention System 

4 shall, for purposes of preventing fraud, waste, and 

5 abuse under the Medicare Program— 

6 (A) use data from claims for reimburse7 ment under the Medicare Program contained in 

8 existing files of Medicare claims data, including 

9 the Common Working File of the Centers for 

10 Medicare & Medicaid Services; and 

11 (B) to the extent practicable, pool data 

12 from all available Government sources (includ13 ing the Death Master File of the Social Secu14 rity Administration). 

15 (3) DATA STORAGE.—The Prevention System 

16 shall be stored in an industry standard secure data 

17 environment that complies with applicable Federal 

18 privacy laws for use in building Medicare fraud, 

19 waste, and abuse prevention predictive models that 

20 have a comprehensive view of provider and supplier 

21 activity across all markets, geographic areas, and 

22 provider and supplier types. 

23 (f) FRAUD MANAGEMENT SYSTEM.— 

24 (1) IN GENERAL.—The Prevention System shall 

25 utilize a fraud management system containing 

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1 workflow management and workstation tools to pro2 vide the ability to systematically present score, rea3 son codes, and treatment actions for high-risk scored 

4 transactions, as determined under subsection (d). 

5 (2) REVIEW OF CLAIMS.—The fraud manage6 ment system under paragraph (1) shall ensure that 

7 analysts who review Medicare claims have the capa8 bility to access, review, and research claims effi9 ciently, as well as decline or approve payments on 

10 claims in an automated manner. 

11 (g) FEEDBACK LOOP.— 

12 (1) IN GENERAL.—The Prevention System shall 

13 utilize a feedback loop to gain access to outcome in14 formation on adjudicated Medicare claims so future 

15 system enhancements can utilize previous experience. 

16 (2) PURPOSE.—The purpose of the feedback 

17 loop under paragraph (1) is to— 

18 (A) enable the Secretary to measure— 

19 (i) the actual amount of fraud, waste, 

20 and abuse under the Medicare Program; 

21 and 

22 (ii) any savings to the Medicare Pro23 gram resulting from implementation of the 

24 Prevention System; and 

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1 (B) provide necessary data to develop fu2 ture, enhanced models for use in the Prevention 

3 System. 

4 (3) ANALYSIS OF FINAL CLAIMS STATUS.—The 

5 feedback loop under paragraph (1) shall analyze 

6 data from all carriers to provide post-payment infor7 mation about the eventual status of a Medicare 

8 claim as ‘‘Normal’’, ‘‘Fraud’’, ‘‘Waste’’, ‘‘Abuse’’, or 

9 ‘‘Education required’’. 

10 (h) CLAIMS REVIEW PRIOR TO PAYMENT.— 

11 (1) REVIEW BEFORE PAYMENT.—Subject to 

12 paragraph (2), if a claim for reimbursement under 

13 the Medicare Program is selected for review under 

14 the Prevention System, the Secretary shall not make 

15 a payment on such claim until such claim has been 

16 reviewed under the system. In order to carry out 

17 this paragraph, the Secretary shall ensure that ap18 propriate controls and technology are in place to as19 sess and measure the effectiveness of the Prevention 

20 System, predictive models used under such system, 

21 and the overall strategy for Medicare claims review. 

22 (2) TIMELY REVIEW.— 

23 (A) IN GENERAL.—The review of a claim 

24 under the Prevention System shall occur in a 

25 timely manner. 

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1 (B) APPLICATION OF PROMPT PAYMENT

2 REQUIREMENTS.—The limitation on payment 

3 under paragraph (1) shall not interfere with the 

4 prompt payment of a Medicare claim in accord5 ance with applicable law. 

6 (3) MANUAL REVIEW.—If automated technology 

7 presents a score, reason code, or treatment action 

8 for a claim that is scored as ‘‘high-risk,’’ the Preven9 tion System shall provide for manual review of med10 ical records related to such claim by both clinical 

11 and fraud investigators to ensure accuracy and miti12 gate false positive events. 

13 (4) SELF-AUDIT REVIEW.—The Secretary may 

14 use self-audit practices by providers and suppliers 

15 under the Prevention System in a manner such that 

16 once high-risk claims are identified through the pre17 dictive modeling, providers and suppliers are offered 

18 the opportunity to adjust or withdraw their claims. 

19 (5) DENIAL OF PAYMENT FOR FRAUDULENT

20 CLAIMS.—Under the Prevention System, if auto21 mated technology of a claim under paragraph (3) 

22 and manual review under paragraph (4) confirm 

23 fraud has occurred, the Secretary may deny payment 

24 of such claim. 

25 (i) ANNUAL ASSESSMENT REPORT.— 

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1 (1) IN GENERAL.—Not later than 2 years after 

2 the implementation of the Prevention System, the 

3 Secretary, through the Office of the Inspector Gen4 eral of the Department of Health and Human Serv5 ices, shall submit to Congress a report on the imple6 mentation of such system. 

7 (2) CONTENTS.—The report submitted under 

8 paragraph (1) may contain— 

9 (A) a detailed assessment of the Preven10 tion System’s success in identifying fraud, 

11 waste, and abuse; 

12 (B) the costs of operating the Prevention 

13 System; and 

14 (C) an analysis of the overall return on in15 vestment for the Prevention System. 

16 (j) AUTHORIZATION OF APPROPRIATIONS.—There 

17 are authorized to be appropriated to carry out this section 

18 such sums as may be necessary. 

19 (k) EXPANSION.—If the Secretary determines that 

20 the Prevention System results in savings to the Medicare 

21 Program, the Secretary shall expand the project through22 out Federal health programs, including the Medicaid Pro23 gram under title XIX of the Social Security Act and the 

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1 Children’s Health Insurance Program under title XXI of 

2 such Act. 

Æ 

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