I 

113TH CONGRESS 

2D SESSION H. R. 5780 

To amend title XVIII of the Social Security Act to improve the integrity 

of the Medicare program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 2, 2014 

Mr. BRADY of Texas (for himself, Mr. MCDERMOTT, Mr. CAMP, Mr. LEVIN, 

Mr. RANGEL, Mr. LEWIS, Mr. SAM JOHNSON of Texas, Mr. BLUMENAUER, Mr. PASCRELL, Mr. GERLACH, Mr. BOUSTANY, Mr. 

BUCHANAN, Mr. ROSKAM, Mr. REED, Mrs. BLACK, Mr. GRIFFIN of Arkansas, Mr. KELLY of Pennsylvania, Mr. RENACCI, and Mr. VAN HOLLEN) introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committee on Energy and 

Commerce, 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 amend title XVIII of the Social Security Act to improve 

the integrity of the Medicare 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Protecting the Integrity of Medicare Act of 2014’’. 

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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Prohibition of inclusion of Social Security account numbers on Medicare 

cards. 

Sec. 3. Preventing wrongful Medicare payments for items and services furnished to incarcerated individuals, individuals not lawfully 

present, and deceased individuals. 

Sec. 4. Consideration of measures regarding Medicare beneficiary smart cards. 

Sec. 5. Modifying medicare durable medical equipment face-to-face encounter 

documentation requirement. 

Sec. 6. Reducing improper Medicare payments. 

Sec. 7. Improving senior Medicare patrol and fraud reporting rewards. 

Sec. 8. Requiring valid prescriber National Provider Identifiers on pharmacy 

claims. 

Sec. 9. Option to receive Medicare Summary Notice electronically. 

Sec. 10. Renewal of MAC contracts. 

Sec. 11. Study on pathway for incentives to States for State participation in 

medicaid data match program. 

Sec. 12. Programs to prevent prescription drug abuse under Medicare part D. 

Sec. 13. Guidance on application of Common Rule to clinical data registries. 

Sec. 14. Eliminating certain civil money penalties; gainsharing study and report. 

Sec. 15. Modification of Medicare home health surety bond condition of participation requirement. 

Sec. 16. Oversight of Medicare coverage of manual manipulation of the spine 

to correct subluxation. 

Sec. 17. Limiting payment amount under Medicare program for vacuum erection systems. 

Sec. 18. National expansion of prior authorization model for repetitive scheduled non-emergent ambulance transport. 

Sec. 19. Repealing duplicative Medicare secondary payor provision. 

Sec. 20. Plan for expanding data in annual CERT report. 

Sec. 21. Rule of construction. 

3 SEC. 2. PROHIBITION OF INCLUSION OF SOCIAL SECURITY 

4 ACCOUNT NUMBERS ON MEDICARE CARDS. 

5 (a) IN GENERAL.—Section 205(c)(2)(C) of the Social 

6 Security Act (42 U.S.C. 405(c)(2)(C)) is amended— 

7 (1) by moving clause (x), as added by section 

8 1414(a)(2) of the Patient Protection and Affordable 

9 Care Act, 6 ems to the left; 

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1 (2) by redesignating clause (x), as added by 

2 section 2(a)(1) of the Social Security Number Pro3 tection Act of 2010, and clause (xi) as clauses (xi) 

4 and (xii), respectively; and 

5 (3) by adding at the end the following new 

6 clause: 

7 ‘‘(xiii) The Secretary of Health and Human Services, 

8 in consultation with the Commissioner of Social Security, 

9 shall establish cost-effective procedures to ensure that a 

10 Social Security account number (or derivative thereof) is 

11 not displayed, coded, or embedded on the Medicare card 

12 issued to an individual who is entitled to benefits under 

13 part A of title XVIII or enrolled under part B of title 

14 XVIII and that any other identifier displayed on such card 

15 is not identifiable as a Social Security account number (or 

16 derivative thereof).’’. 

17 (b) IMPLEMENTATION.—In implementing clause (xiii) 

18 of section 205(c)(2)(C) of the Social Security Act (42 

19 U.S.C. 405(c)(2)(C)), as added by subsection (a)(3), the 

20 Secretary of Health and Human Services shall do the fol21 lowing: 

22 (1) IN GENERAL.—Establish a cost-effective 

23 process that involves the least amount of disruption 

24 to, as well as necessary assistance for, Medicare 

25 beneficiaries and health care providers, such as a 

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1 process that provides such beneficiaries with access 

2 to assistance through a toll-free telephone number 

3 and provides outreach to providers. 

4 (2) CONSIDERATION OF MEDICARE BENE5 FICIARY IDENTIFIED.—Consider implementing a 

6 process, similar to the process involving Railroad Re7 tirement Board beneficiaries, under which a Medi8 care beneficiary identifier which is not a Social Secu9 rity account number (or derivative thereof) is used 

10 external to the Department of Health and Human 

11 Services and is convertible over to a Social Security 

12 account number (or derivative thereof) for use inter13 nal to such Department and the Social Security Ad14 ministration. 

15 (c) FUNDING FOR IMPLEMENTATION.—For purposes 

16 of implementing the provisions of and the amendments 

17 made by this section, the Secretary of Health and Human 

18 Services shall provide for the following transfers from the 

19 Federal Hospital Insurance Trust Fund under section 

20 1817 of the Social Security Act (42 U.S.C. 1395i) and 

21 from the Federal Supplementary Medical Insurance Trust 

22 Fund established under section 1841 of such Act (42 

23 U.S.C. 1395t), in such proportions as the Secretary deter24 mines appropriate: 

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1 (1) To the Centers for Medicare & Medicaid 

2 Program Management Account, transfers of the fol3 lowing amounts: 

4 (A) For fiscal year 2015, $65,000,000, to 

5 be made available through fiscal year 2018. 

6 (B) For each of fiscal years 2016 and 

7 2017, $53,000,000, to be made available 

8 through fiscal year 2018. 

9 (C) For fiscal year 2018, $48,000,000, to 

10 be made available until expended. 

11 (2) To the Social Security Administration Limi12 tation on Administration Account, transfers of the 

13 following amounts: 

14 (A) For fiscal year 2015, $27,000,000, to 

15 be made available through fiscal year 2018. 

16 (B) For each of fiscal years 2016 and 

17 2017, $22,000,000, to be made available 

18 through fiscal year 2018. 

19 (C) For fiscal year 2018, $27,000,000, to 

20 be made available until expended. 

21 (3) To the Railroad Retirement Board Limita22 tion on Administration Account, the following 

23 amount: 

24 (A) For fiscal year 2015, $3,000,000, to 

25 be made available until expended. 

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1 (d) EFFECTIVE DATE.— 

2 (1) IN GENERAL.—Clause (xiii) of section 

3 205(c)(2)(C) of the Social Security Act (42 U.S.C. 

4 405(c)(2)(C)), as added by subsection (a)(3), shall 

5 apply with respect to Medicare cards issued on and 

6 after an effective date specified by the Secretary of 

7 Health and Human Services, but in no case shall 

8 such effective date be later than the date that is four 

9 years after the date of the enactment of this Act. 

10 (2) REISSUANCE.—The Secretary shall provide 

11 for the reissuance of Medicare cards that comply 

12 with the requirements of such clause not later than 

13 four years after the effective date specified by the 

14 Secretary under paragraph (1). 

15 SEC. 3. PREVENTING WRONGFUL MEDICARE PAYMENTS 

16 FOR ITEMS AND SERVICES FURNISHED TO IN17 CARCERATED INDIVIDUALS, INDIVIDUALS 

18 NOT LAWFULLY PRESENT, AND DECEASED IN19 DIVIDUALS. 

20 (a) REQUIREMENT FOR THE SECRETARY TO ESTAB21 LISH POLICIES AND CLAIMS EDITS RELATING TO INCAR22 CERATED INDIVIDUALS, INDIVIDUALS NOT LAWFULLY

23 PRESENT, AND DECEASED INDIVIDUALS.—Section 1874 

24 of the Social Security Act (42 U.S.C. 1395kk) is amended 

25 by adding at the end the following new subsection: 

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1 ‘‘(f) REQUIREMENT FOR THE SECRETARY TO ESTAB2 LISH POLICIES AND CLAIMS EDITS RELATING TO INCAR3 CERATED INDIVIDUALS, INDIVIDUALS NOT LAWFULLY

4 PRESENT, AND DECEASED INDIVIDUALS.—The Secretary 

5 shall establish and maintain procedures, including proce6 dures for using claims processing edits, updating eligibility 

7 information to improve provider accessibility, and con8 ducting recoupment activities such as through recovery 

9 audit contractors, in order to ensure that payment is not 

10 made under this title for items and services furnished to 

11 an individual who is one of the following: 

12 ‘‘(1) An individual who is incarcerated. 

13 ‘‘(2) An individual who is not lawfully present 

14 in the United States and who is not eligible for cov15 erage under this title. 

16 ‘‘(3) A deceased individual.’’. 

17 (b) REPORT.—Not later than 18 months after the 

18 date of the enactment of this section, and periodically 

19 thereafter as determined necessary by the Office of Inspec20 tor General of the Department of Health and Human 

21 Services, such Office shall submit to Congress a report 

22 on the activities described in subsection (f) of section 1874 

23 of the Social Security Act (42 U.S.C. 1395kk), as added 

24 by subparagraph (a), that have been conducted since such 

25 date of enactment. 

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1 SEC. 4. CONSIDERATION OF MEASURES REGARDING MEDI2 CARE BENEFICIARY SMART CARDS. 

3 To the extent the Secretary of Health and Human 

4 Services determines that it is cost effective and techno5 logically viable to use electronic Medicare beneficiary and 

6 provider cards (such as cards that use smart card tech7 nology, including an embedded and secure integrated cir8 cuit chip), as presented in the Government Accountability 

9 Office report required by the conference report accom10 panying the Consolidated Appropriations Act, 2014 (Pub11 lic Law 113–76), the Secretary shall consider such meas12 ures as determined appropriate by the Secretary to imple13 ment such use of such cards for beneficiary and provider 

14 use under title XVIII of the Social Security Act (42 

15 U.S.C. 1395 et seq.). In the case that the Secretary con16 siders measures under the preceding sentence, the Sec17 retary shall submit to the Committees on Ways and Means 

18 and on Energy and Commerce of the House of Represent19 atives, and to the Committee on Finance of the Senate, 

20 a report outlining the considerations undertaken by the 

21 Secretary under such sentence. 

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1 SEC. 5. MODIFYING MEDICARE DURABLE MEDICAL EQUIP2 MENT FACE-TO-FACE ENCOUNTER DOCU3 MENTATION REQUIREMENT. 

4 (a) IN GENERAL.—Section 1834(a)(11)(B)(ii) of the 

5 Social Security Act (42 U.S.C. 1395m(a)(11)(B)(ii)) is 

6 amended— 

7 (1) by striking ‘‘the physician documenting 

8 that’’; and 

9 (2) by striking ‘‘has had a face-to-face encoun10 ter’’ and inserting ‘‘documenting such physician, 

11 physician assistant, practitioner, or specialist has 

12 had a face-to-face encounter’’. 

13 (b) IMPLEMENTATION.—Notwithstanding any other 

14 provision of law, the Secretary of Health and Human 

15 Services may implement the amendments made by sub16 section (a) by program instruction or otherwise. 

17 SEC. 6. REDUCING IMPROPER MEDICARE PAYMENTS. 

18 (a) MEDICARE ADMINISTRATIVE CONTRACTOR IM19 PROPER PAYMENT OUTREACH AND EDUCATION PRO20 GRAM.— 

21 (1) IN GENERAL.—Section 1874A of the Social 

22 Security Act (42 U.S.C. 1395kk–1) is amended— 

23 (A) in subsection (a)(4)— 

24 (i) by redesignating subparagraph (G) 

25 as subparagraph (H); and 

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1 (ii) by inserting after subparagraph 

2 (F) the following new subparagraph: 

3 ‘‘(G) IMPROPER PAYMENT OUTREACH AND

4 EDUCATION PROGRAM.—Having in place an im5 proper payment outreach and education pro6 gram described in subsection (h).’’; and 

7 (B) by adding at the end the following new 

8 subsection: 

9 ‘‘(h) IMPROPER PAYMENT OUTREACH AND EDU10 CATION PROGRAM.— 

11 ‘‘(1) IN GENERAL.—In order to reduce im12 proper payments under this title, each medicare ad13 ministrative contractor shall establish and have in 

14 place an improper payment outreach and education 

15 program under which the contractor, through out16 reach, education, training, and technical assistance 

17 or other activities, shall provide providers of services 

18 and suppliers located in the region covered by the 

19 contract under this section with the information de20 scribed in paragraph (2). The activities described in 

21 the preceding sentence shall be conducted on a reg22 ular basis. 

23 ‘‘(2) INFORMATION TO BE PROVIDED THROUGH

24 ACTIVITIES.—The information to be provided under 

25 such payment outreach and education program shall 

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1 include information the Secretary determines to be 

2 appropriate which may include the following infor3 mation: 

4 ‘‘(A) A list of the providers’ or suppliers’ 

5 most frequent and expensive payment errors 

6 over the last quarter. 

7 ‘‘(B) Specific instructions regarding how to 

8 correct or avoid such errors in the future. 

9 ‘‘(C) A notice of new topics that have been 

10 approved by the Secretary for audits conducted 

11 by recovery audit contractors under section 

12 1893(h). 

13 ‘‘(D) Specific instructions to prevent fu14 ture issues related to such new audits. 

15 ‘‘(E) Other information determined appro16 priate by the Secretary. 

17 ‘‘(3) PRIORITY.—A medicare administrative 

18 contractor shall give priority to activities under such 

19 program that will reduce improper payments that 

20 are one or more of the following: 

21 ‘‘(A) Are for items and services that have 

22 the highest rate of improper payment. 

23 ‘‘(B) Are for items and service that have 

24 the greatest total dollar amount of improper 

25 payments. 

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1 ‘‘(C) Are due to clear misapplication or 

2 misinterpretation of Medicare policies. 

3 ‘‘(D) Are clearly due to common and inad4 vertent clerical or administrative errors. 

5 ‘‘(E) Are due to other types of errors that 

6 the Secretary determines could be prevented 

7 through activities under the program. 

8 ‘‘(4) INFORMATION ON IMPROPER PAYMENTS

9 FROM RECOVERY AUDIT CONTRACTORS.— 

10 ‘‘(A) IN GENERAL.—In order to assist 

11 medicare administrative contractors in carrying 

12 out improper payment outreach and education 

13 programs, the Secretary shall provide each con14 tractor with a complete list of the types of im15 proper payments identified by recovery audit 

16 contractors under section 1893(h) with respect 

17 to providers of services and suppliers located in 

18 the region covered by the contract under this 

19 section. Such information shall be provided on 

20 a time frame the Secretary determines appro21 priate which may be on a quarterly basis. 

22 ‘‘(B) INFORMATION.—The information de23 scribed in subparagraph (A) shall include infor24 mation such as the following: 

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1 ‘‘(i) Providers of services and sup2 pliers that have the highest rate of im3 proper payments. 

4 ‘‘(ii) Providers of services and sup5 pliers that have the greatest total dollar 

6 amounts of improper payments. 

7 ‘‘(iii) Items and services furnished in 

8 the region that have the highest rates of 

9 improper payments. 

10 ‘‘(iv) Items and services furnished in 

11 the region that are responsible for the 

12 greatest total dollar amount of improper 

13 payments. 

14 ‘‘(v) Other information the Secretary 

15 determines would assist the contractor in 

16 carrying out the program. 

17 ‘‘(5) COMMUNICATIONS.—Communications with 

18 providers of services and suppliers under an im19 proper payment outreach and education program are 

20 subject to the standards and requirements of sub21 section (g).’’. 

22 (b) USE OF CERTAIN FUNDS RECOVERED BY

23 RACS.—Section 1893(h) of the Social Security Act (42 

24 U.S.C. 1395ddd(h)) is amended— 

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1 (1) in paragraph (2), by inserting ‘‘or section 

2 1874(h)(6)’’ after ‘‘paragraph (1)(C)’’; and 

3 (2) by adding at the end the following new 

4 paragraph: 

5 ‘‘(10) USE OF CERTAIN RECOVERED FUNDS.— 

6 ‘‘(A) IN GENERAL.—After application of 

7 paragraph (1)(C), the Secretary shall retain a 

8 portion of the amounts recovered by recovery 

9 audit contractors for each year under this sec10 tion which shall be available to the program 

11 management account of the Centers for Medi12 care & Medicaid Services for purposes of, sub13 ject to subparagraph (B), carrying out sections 

14 1833(z), 1834(l)(16), and 1874A(a)(4)(G), car15 rying out section 16(b) of the Protecting the In16 tegrity of Medicare Act of 2014, and imple17 menting strategies (such as claims processing 

18 edits) to help reduce the error rate of payments 

19 under this title. The amounts retained under 

20 the preceding sentence shall not exceed an 

21 amount equal to 15 percent of the amounts re22 covered under this subsection, and shall remain 

23 available until expended. 

24 ‘‘(B) LIMITATION.—Except for uses that 

25 support claims processing (including edits) or 

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1 system functionality for detecting fraud, 

2 amounts retained under subparagraph (A) may 

3 not be used for technological-related infrastruc4 ture, capital investments, or information sys5 tems. 

6 ‘‘(C) NO REDUCTION IN PAYMENTS TO RE7 COVERY AUDIT CONTRACTORS.—Nothing in 

8 subparagraph (A) shall reduce amounts avail9 able for payments to recovery audit contractors 

10 under this subsection.’’. 

11 SEC. 7. IMPROVING SENIOR MEDICARE PATROL AND 

12 FRAUD REPORTING REWARDS. 

13 (a) IN GENERAL.—The Secretary of Health and 

14 Human Services (in this section referred to as the ‘‘Sec15 retary’’) shall develop a plan to revise the incentive pro16 gram under section 203(b) of the Health Insurance Port17 ability and Accountability Act of 1996 (42 U.S.C. 1395b– 

18 5(b)) to encourage greater participation by individuals to 

19 report fraud and abuse in the Medicare program. Such 

20 plan shall include recommendations for— 

21 (1) ways to enhance rewards for individuals re22 porting under the incentive program, including re23 wards based on information that leads to an admin24 istrative action; and 

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1 (2) extending the incentive program to the 

2 Medicaid program. 

3 (b) PUBLIC AWARENESS AND EDUCATION CAM4 PAIGN.—The plan developed under subsection (a) shall 

5 also include recommendations for the use of the Senior 

6 Medicare Patrols authorized under section 411 of the 

7 Older Americans Act of 1965 (42 U.S.C. 3032) to conduct 

8 a public awareness and education campaign to encourage 

9 participation in the revised incentive program under sub10 section (a). 

11 (c) SUBMISSION OF PLAN.—Not later than 180 days 

12 after the date of enactment of this Act, the Secretary shall 

13 submit to Congress the plan developed under subsection 

14 (a). 

15 SEC. 8. REQUIRING VALID PRESCRIBER NATIONAL PRO16 VIDER IDENTIFIERS ON PHARMACY CLAIMS. 

17 Section 1860D–4(c) of the Social Security Act (42 

18 U.S.C. 1395w–104(c)) is amended by adding at the end 

19 the following new paragraph: 

20 ‘‘(4) REQUIRING VALID PRESCRIBER NATIONAL

21 PROVIDER IDENTIFIERS ON PHARMACY CLAIMS.— 

22 ‘‘(A) IN GENERAL.—For plan year 2016 

23 and subsequent plan years, the Secretary shall 

24 require a claim for a covered part D drug for 

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1 scription drug plan under this part or an MA– 

2 PD plan under part C to include a prescriber 

3 National Provider Identifier that is determined 

4 to be valid under the procedures established 

5 under subparagraph (B)(i). 

6 ‘‘(B) PROCEDURES.— 

7 ‘‘(i) VALIDITY OF PRESCRIBER NA8 TIONAL PROVIDER IDENTIFIERS.—The 

9 Secretary, in consultation with appropriate 

10 stakeholders, shall establish procedures for 

11 determining the validity of prescriber Na12 tional Provider Identifiers under subpara13 graph (A). 

14 ‘‘(ii) INFORMING BENEFICIARIES OF

15 REASON FOR DENIAL.—The Secretary shall 

16 establish procedures to ensure that, in the 

17 case that a claim for a covered part D 

18 drug of an individual described in 

19 subparagaph (A) is denied because the 

20 claim does not meet the requirements of 

21 this paragraph, the individual is properly 

22 informed at the point of service of the rea23 son for the denial. 

24 ‘‘(C) REPORT.—Not later than January 1, 

25 2018, the Inspector General of the Department 

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1 of Health and Human Services shall submit to 

2 Congress a report on the effectiveness of the 

3 procedures established under subparagraph 

4 (B)(i).’’. 

5 SEC. 9. OPTION TO RECEIVE MEDICARE SUMMARY NOTICE 

6 ELECTRONICALLY. 

7 (a) IN GENERAL.—Section 1806 of the Social Secu8 rity Act (42 U.S.C. 1395b–7) is amended by adding at 

9 the end the following new subsection: 

10 ‘‘(c) FORMAT OF STATEMENTS FROM SECRETARY.— 

11 ‘‘(1) ELECTRONIC OPTION BEGINNING IN

12 2016.—Subject to paragraph (2), for statements de13 scribed in subsection (a) that are furnished for a pe14 riod in 2016 or a subsequent year, in the case that 

15 an individual described in subsection (a) elects, in 

16 accordance with such form, manner, and time speci17 fied by the Secretary, to receive such statement in 

18 an electronic format, such statement shall be fur19 nished to such individual for each period subsequent 

20 to such election in such a format and shall not be 

21 mailed to the individual. 

22 ‘‘(2) LIMITATION ON REVOCATION OPTION.— 

23 ‘‘(A) IN GENERAL.—Subject to subpara24 graph (B), the Secretary may determine a max25 imum number of elections described in paramstockstill on DSK4VPTVN1PROD with BILLS

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1 graph (1) by an individual that may be revoked 

2 by the individual. 

3 ‘‘(B) MINIMUM OF ONE REVOCATION OP4 TION.—In no case may the Secretary determine 

5 a maximum number under subparagraph (A) 

6 that is less than one. 

7 ‘‘(3) NOTIFICATION.—The Secretary shall en8 sure that, in the most cost effective manner and be9 ginning January 1, 2017, a clear notification of the 

10 option to elect to receive statements described in 

11 subsection (a) in an electronic format is made avail12 able, such as through the notices distributed under 

13 section 1804, to individuals described in subsection 

14 (a).’’. 

15 (b) ENCOURAGED EXPANSION OF ELECTRONIC

16 STATEMENTS.—To the extent to which the Secretary of 

17 Health and Human Services determines appropriate, the 

18 Secretary shall— 

19 (1) apply an option similar to the option de20 scribed in subsection (c)(1) of section 1806 of the 

21 Social Security Act (42 U.S.C. 1395b–7) (relating to 

22 the provision of the Medicare Summary Notice in an 

23 electronic format), as added by subsection (a), to 

24 other statements and notifications under title XVIII 

25 of such Act (42 U.S.C. 1395 et seq.); and 

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1 (2) provide such Medicare Summary Notice and 

2 any such other statements and notifications on a 

3 more frequent basis than is otherwise required under 

4 such title. 

5 SEC. 10. RENEWAL OF MAC CONTRACTS. 

6 (a) IN GENERAL.—Section 1874A(b)(1)(B) of the 

7 Social Security Act (42 U.S.C. 1395kk–1(b)(1)(B)) is 

8 amended by striking ‘‘5 years’’ and inserting ‘‘10 years’’. 

9 (b) APPLICATION.—The amendments made by sub10 section (a) shall apply to contracts entered into on or 

11 after, and to contracts in effect as of, the date of the en12 actment of this Act. 

13 (c) CONTRACTOR PERFORMANCE TRANSPARENCY.— 

14 Section 1874A(b)(3)(A) of the Social Security Act (42 

15 U.S.C. 1395kk–1(b)(3)(A)) is amended by adding at the 

16 end the following new clause: 

17 ‘‘(iv) CONTRACTOR PERFORMANCE

18 TRANSPARENCY.—To the extent possible 

19 without compromising the process for en20 tering into and renewing contracts with 

21 medicare administrative contractors under 

22 this section, the Secretary shall make 

23 available to the public the performance of 

24 each medicare administrative contractor 

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1 with respect to such performance require2 ments and measurement standards.’’. 

3 SEC. 11. STUDY ON PATHWAY FOR INCENTIVES TO STATES 

4 FOR STATE PARTICIPATION IN MEDICAID 

5 DATA MATCH PROGRAM. 

6 Section 1893(g) of the Social Security Act (42 U.S.C. 

7 1395ddd(g)) is amended by adding at the end the fol8 lowing new paragraph: 

9 ‘‘(3) INCENTIVES FOR STATES.—The Secretary 

10 shall study and, as appropriate, may specify incen11 tives for States to work with the Secretary for the 

12 purposes described in paragraph (1)(A)(ii). The ap13 plication of the previous sentence may include use of 

14 the waiver authority described in paragraph (2).’’. 

15 SEC. 12. PROGRAMS TO PREVENT PRESCRIPTION DRUG 

16 ABUSE UNDER MEDICARE PART D. 

17 (a) DRUG MANAGEMENT PROGRAM FOR AT-RISK

18 BENEFICIARIES.— 

19 (1) IN GENERAL.—Section 1860D–4(c) of the 

20 Social Security Act (42 U.S.C. 1395w–10(c)), as 

21 amended by section 8, is further amended by adding 

22 at the end the following: 

23 ‘‘(5) DRUG MANAGEMENT PROGRAM FOR AT24 RISK BENEFICIARIES.— 

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1 ‘‘(A) AUTHORITY TO ESTABLISH.—A PDP 

2 sponsor may establish a drug management pro3 gram for at-risk beneficiaries under which, sub4 ject to subparagraph (B), the PDP sponsor 

5 may, in the case of an at-risk beneficiary for 

6 prescription drug abuse who is an enrollee in a 

7 prescription drug plan of such PDP sponsor, 

8 limit such beneficiary’s access to coverage for 

9 frequently abused drugs under such plan to fre10 quently abused drugs that are prescribed for 

11 such beneficiary by a prescriber selected under 

12 subparagraph (D), and dispensed for such bene13 ficiary by a pharmacy selected under such sub14 paragraph. 

15 ‘‘(B) REQUIREMENT FOR NOTICES.— 

16 ‘‘(i) IN GENERAL.—A PDP sponsor 

17 may not limit the access of an at-risk ben18 eficiary for prescription drug abuse to cov19 erage for frequently abused drugs under a 

20 prescription drug plan until such spon21 sor— 

22 ‘‘(I) provides to the beneficiary 

23 an initial notice described in clause 

24 (ii) and a second notice described in 

25 clause (iii); and 

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1 ‘‘(II) verifies with the providers 

2 of the beneficiary that the beneficiary 

3 is an at-risk beneficiary for prescrip4 tion drug abuse. 

5 ‘‘(ii) INITIAL NOTICE.—An initial no6 tice described in this clause is a notice that 

7 provides to the beneficiary— 

8 ‘‘(I) notice that the PDP sponsor 

9 has identified the beneficiary as po10 tentially being an at-risk beneficiary 

11 for prescription drug abuse; 

12 ‘‘(II) information describing all 

13 State and Federal public health re14 sources that are designed to address 

15 prescription drug abuse to which the 

16 beneficiary has access, including men17 tal health services and other coun18 seling services; 

19 ‘‘(III) notice of, and information 

20 about, the right of the beneficiary to 

21 appeal such identification under sub22 section (h) and the option of an auto23 matic escalation to external review; 

24 ‘‘(IV) a request for the bene25 ficiary to submit to the PDP sponsor 

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1 preferences for which prescribers and 

2 pharmacies the beneficiary would pre3 fer the PDP sponsor to select under 

4 subparagraph (D) in the case that the 

5 beneficiary is identified as an at-risk 

6 beneficiary for prescription drug 

7 abuse as described in clause (iii)(I); 

8 ‘‘(V) an explanation of the mean9 ing and consequences of the identi10 fication of the beneficiary as poten11 tially being an at-risk beneficiary for 

12 prescription drug abuse, including an 

13 explanation of the drug management 

14 program established by the PDP 

15 sponsor pursuant to subparagraph 

16 (A); 

17 ‘‘(VI) clear instructions that ex18 plain how the beneficiary can contact 

19 the PDP sponsor in order to submit 

20 to the PDP sponsor the preferences 

21 described in subclause (IV) and any 

22 other communications relating to the 

23 drug management program for at-risk 

24 beneficiaries established by the PDP 

25 sponsor; and 

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1 ‘‘(VII) contact information for 

2 other organizations that can provide 

3 the beneficiary with assistance regard4 ing such drug management program 

5 (similar to the information provided 

6 by the Secretary in other standardized 

7 notices provided to part D eligible in8 dividuals enrolled in prescription drug 

9 plans under this part). 

10 ‘‘(iii) SECOND NOTICE.—A second no11 tice described in this clause is a notice that 

12 provides to the beneficiary notice— 

13 ‘‘(I) that the PDP sponsor has 

14 identified the beneficiary as an at-risk 

15 beneficiary for prescription drug 

16 abuse; 

17 ‘‘(II) that such beneficiary is 

18 subject to the requirements of the 

19 drug management program for at-risk 

20 beneficiaries established by such PDP 

21 sponsor for such plan; 

22 ‘‘(III) of the prescriber and phar23 macy selected for such individual 

24 under subparagraph (D); 

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1 ‘‘(IV) of, and information about, 

2 the beneficiary’s right to appeal such 

3 identification under subsection (h) 

4 and the option of an automatic esca5 lation to external review; 

6 ‘‘(V) that the beneficiary can, in 

7 the case that the beneficiary has not 

8 previously submitted to the PDP 

9 sponsor preferences for which pre10 scribers and pharmacies the bene11 ficiary would prefer the PDP sponsor 

12 select under subparagraph (D), sub13 mit such preferences to the PDP 

14 sponsor; and 

15 ‘‘(VI) that includes clear instruc16 tions that explain how the beneficiary 

17 can contact the PDP sponsor. 

18 ‘‘(iv) TIMING OF NOTICES.— 

19 ‘‘(I) IN GENERAL.—Subject to 

20 subclause (II), a second notice de21 scribed in clause (iii) shall be provided 

22 to the beneficiary on a date that is 

23 not less than 60 days after an initial 

24 notice described in clause (ii) is pro25 vided to the beneficiary. 

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1 ‘‘(II) EXCEPTION.—In the case 

2 that the PDP sponsor, in conjunction 

3 with the Secretary, determines that 

4 concerns identified through rule5 making by the Secretary regarding 

6 the health or safety of the beneficiary 

7 or regarding significant drug diversion 

8 activities require the PDP sponsor to 

9 provide a second notice described in 

10 clause (iii) to the beneficiary on a 

11 date that is earlier than the date de12 scribed in subclause (II), the PDP 

13 sponsor may provide such second no14 tice on such earlier date. 

15 ‘‘(C) AT-RISK BENEFICIARY FOR PRE16 SCRIPTION DRUG ABUSE.— 

17 ‘‘(i) IN GENERAL.—For purposes of 

18 this paragraph, the term ‘at-risk bene19 ficiary for prescription drug abuse’ means 

20 a part D eligible individual who is not an 

21 exempted individual described in clause (ii) 

22 and— 

23 ‘‘(I) who is identified through the 

24 use of guidelines developed by the 

25 Secretary in consultation with PDP 

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1 sponsors and other stakeholders de2 scribed in section 12(f)(2)(A) of the 

3 Protecting the Integrity of Medicare 

4 Act of 2014; or 

5 ‘‘(II) with respect to whom the 

6 PDP sponsor of a prescription drug 

7 plan, upon enrolling such individual in 

8 such plan, received notice from the 

9 Secretary that such individual was 

10 identified under this paragraph to be 

11 an at-risk beneficiary for prescription 

12 drug abuse under the prescription 

13 drug plan in which such individual 

14 was most recently previously enrolled 

15 and such identification has not been 

16 terminated under subparagraph (F). 

17 ‘‘(ii) EXEMPTED INDIVIDUAL DE18 SCRIBED.—An exempted individual de19 scribed in this clause is an individual 

20 who— 

21 ‘‘(I) receives hospice care under 

22 this title; or 

23 ‘‘(II) the Secretary elects to treat 

24 as an exempted individual for pur25 poses of clause (i). 

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1 ‘‘(D) SELECTION OF PRESCRIBERS.— 

2 ‘‘(i) IN GENERAL.—With respect to 

3 each at-risk beneficiary for prescription 

4 drug abuse enrolled in a prescription drug 

5 plan offered by such sponsor, a PDP spon6 sor shall, based on the preferences sub7 mitted to the PDP sponsor by the bene8 ficiary pursuant to clauses (ii)(IV) and 

9 (iii)(V) of subparagraph (B), select— 

10 ‘‘(I) one or more individuals who 

11 are authorized to prescribe frequently 

12 abused drugs (referred to in this 

13 paragraph as ‘prescribers’) who may 

14 write prescriptions for such drugs for 

15 such beneficiary; and 

16 ‘‘(II) one or more pharmacies 

17 that may dispense such drugs to such 

18 beneficiary. 

19 ‘‘(ii) REASONABLE ACCESS.—In mak20 ing the selection under this subparagraph, 

21 a PDP sponsor shall ensure that the bene22 ficiary continues to have reasonable access 

23 to drugs described in subparagraph (G), 

24 taking into account geographic location, 

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1 beneficiary preference, affordability, and 

2 reasonable travel time. 

3 ‘‘(iii) BENEFICIARY PREFERENCES.— 

4 ‘‘(I) IN GENERAL.—If an at-risk 

5 beneficiary for prescription drug 

6 abuse submits preferences for which 

7 in-network prescribers and pharmacies 

8 the beneficiary would prefer the PDP 

9 sponsor select in response to a notice 

10 under subparagraph (B), the PDP 

11 sponsor shall— 

12 ‘‘(aa) review such pref13 erences; 

14 ‘‘(bb) select or change the 

15 selection of a prescriber or phar16 macy for the beneficiary based on 

17 such preferences; and 

18 ‘‘(cc) inform the beneficiary 

19 of such selection or change of se20 lection. 

21 ‘‘(II) EXCEPTION.—In the case 

22 that the PDP sponsor determines that 

23 a change to the selection of a pre24 scriber or pharmacy under item (bb) 

25 by the PDP sponsor is contributing or 

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1 would contribute to prescription drug 

2 abuse or drug diversion by the bene3 ficiary, the PDP sponsor may change 

4 the selection of a prescriber or phar5 macy for the beneficiary without re6 gard to the preferences of the bene7 ficiary described in subclause (I). 

8 ‘‘(iv) CONFIRMATION.—Before select9 ing a prescriber or pharmacy under this 

10 subparagraph, a PDP sponsor must re11 quest and receive confirmation from the 

12 prescriber or pharmacy acknowledging and 

13 accepting that the beneficiary involved is in 

14 the drug management program for at-risk 

15 beneficiaries. 

16 ‘‘(E) TERMINATIONS AND APPEALS.—The 

17 identification of an individual as an at-risk ben18 eficiary for prescription drug abuse under this 

19 paragraph, a coverage determination made 

20 under a drug management program for at-risk 

21 beneficiaries, and the selection of a prescriber 

22 or pharmacy under subparagraph (D) with re23 spect to such individual shall be subject to re24 consideration and appeal under subsection (h) 

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1 ternal review to the extent provided by the Sec2 retary. 

3 ‘‘(F) TERMINATION OF IDENTIFICATION.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 shall develop standards for the termination 

6 of identification of an individual as an at7 risk beneficiary for prescription drug abuse 

8 under this paragraph. Under such stand9 ards such identification shall terminate as 

10 of the earlier of— 

11 ‘‘(I) the date the individual dem12 onstrates that the individual is no 

13 longer likely, in the absence of the re14 strictions under this paragraph, to be 

15 an at-risk beneficiary for prescription 

16 drug abuse described in subparagraph 

17 (C)(i); or 

18 ‘‘(II) the end of such maximum 

19 period of identification as the Sec20 retary may specify. 

21 ‘‘(ii) RULE OF CONSTRUCTION.— 

22 Nothing in clause (i) shall be construed as 

23 preventing a plan from identifying an indi24 vidual as an at-risk beneficiary for pre25 scription drug abuse under subparagraph 

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1 (C)(i) after such termination on the basis 

2 of additional information on drug use oc3 curring after the date of notice of such ter4 mination. 

5 ‘‘(G) FREQUENTLY ABUSED DRUG.—For 

6 purposes of this subsection, the term ‘frequently 

7 abused drug’ means a drug that is determined 

8 by the Secretary to be frequently abused or di9 verted and that is— 

10 ‘‘(i) a Controlled Drug Substance in 

11 Schedule CII–CIV; 

12 ‘‘(ii) within the same class or category 

13 of drugs as a Controlled Drug Substance 

14 in Schedule CII–CIV; or 

15 ‘‘(iii) within another class or category 

16 of drugs that the Secretary determines, in 

17 consultation with the Inspector General of 

18 the Department of Health and Human 

19 Services, is at high risk for diversion or 

20 abuse. 

21 ‘‘(H) DATA DISCLOSURE.—In the case of 

22 an at-risk beneficiary for prescription drug 

23 abuse whose access to coverage for frequently 

24 abused drugs under a prescription drug plan 

25 has been limited by a PDP sponsor under this 

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1 paragraph, such PDP sponsor shall disclose 

2 data, including any necessary individually iden3 tifiable health information, in a form and man4 ner specified by the Secretary, about the deci5 sion to impose such limitations and the limita6 tions imposed by the sponsor under this part. 

7 ‘‘(I) EDUCATION.—The Secretary shall 

8 provide education to enrollees in prescription 

9 drug plans of PDP sponsors and providers re10 garding the drug management program for at11 risk beneficiaries described in this paragraph, 

12 including education— 

13 ‘‘(i) provided by medicare administra14 tive contractors through the improper pay15 ment outreach and education program de16 scribed in section 1874A(h); and 

17 ‘‘(ii) through current education efforts 

18 (such as State health insurance assistance 

19 programs described in subsection (a)(1)(A) 

20 of section 119 of the Medicare Improve21 ments for Patients and Providers Act of 

22 2008 (42 U.S.C. 1395b–3 note)) and ma23 terials directed toward such enrollees.’’. 

24 (2) INFORMATION FOR CONSUMERS.—Section 

25 1860D–4(a)(1)(B) of the Social Security Act (42 

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1 U.S.C. 1395w–104(a)(1)(B)) is amended by adding 

2 at the end the following: 

3 ‘‘(v) The drug management program 

4 for at-risk beneficiaries under subsection 

5 (c)(5).’’. 

6 (b) UTILIZATION MANAGEMENT PROGRAMS.—Sec7 tion 1860D–4(c) of the Social Security Act (42 U.S.C. 

8 1395w–104(c)), as amended by subsection (a) and section 

9 8, is further amended— 

10 (1) in paragraph (1), by inserting after sub11 paragraph (D) the following new subparagraph: 

12 ‘‘(E) A utilization management tool to pre13 vent drug abuse (as described in paragraph 

14 (6)(A)).’’; and 

15 (2) by adding at the end the following new 

16 paragraph: 

17 ‘‘(6) UTILIZATION MANAGEMENT TOOL TO PRE18 VENT DRUG ABUSE.— 

19 ‘‘(A) IN GENERAL.—A tool described in 

20 this paragraph is any of the following: 

21 ‘‘(i) A utilization tool designed to pre22 vent the abuse of frequently abused drugs 

23 by individuals and to prevent the diversion 

24 of such drugs at pharmacies. 

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1 ‘‘(ii) Retrospective utilization review 

2 to identify— 

3 ‘‘(I) individuals that receive fre4 quently abused drugs at a frequency 

5 or in amounts that are not clinically 

6 appropriate; and 

7 ‘‘(II) providers of services or sup8 pliers that may facilitate the abuse or 

9 diversion of frequently abused drugs 

10 by beneficiaries. 

11 ‘‘(iii) Consultation with the Con12 tractor described in subparagraph (B) to 

13 verify if an individual enrolling in a pre14 scription drug plan offered by a PDP 

15 sponsor has been previously identified by 

16 another PDP sponsor as an individual de17 scribed in clause (ii)(I). 

18 ‘‘(B) REPORTING.—A PDP sponsor offer19 ing a prescription drug plan in a State shall 

20 submit to the Secretary and the Medicare drug 

21 integrity contractor with which the Secretary 

22 has entered into a contract under section 1893 

23 with respect to such State a report, on a 

24 monthly basis, containing information on— 

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1 ‘‘(i) any provider of services or sup2 plier described in subparagraph (A)(ii)(II) 

3 that is identified by such plan sponsor dur4 ing the 30-day period before such report is 

5 submitted; and 

6 ‘‘(ii) the name and prescription 

7 records of individuals described in para8 graph (5)(C).’’. 

9 (c) EXPANDING ACTIVITIES OF MEDICARE DRUG IN10 TEGRITY CONTRACTORS (MEDICS).—Section 1893 of the 

11 Social Security Act (42 U.S.C. 1395ddd) is amended by 

12 adding at the end the following new subsection: 

13 ‘‘(j) EXPANDING ACTIVITIES OF MEDICARE DRUG

14 INTEGRITY CONTRACTORS (MEDICS).— 

15 ‘‘(1) ACCESS TO INFORMATION.—Under con16 tracts entered into under this section with Medicare 

17 drug integrity contractors, the Secretary shall au18 thorize such contractors to directly accept prescrip19 tion and necessary medical records from entities 

20 such as pharmacies, prescription drug plans, and 

21 physicians with respect to an individual in order for 

22 such contractors to provide information relevant to 

23 the determination of whether such individual is an 

24 at-risk beneficiary for prescription drug abuse, as 

25 defined in section 1860D–4(c)(5)(C). 

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1 ‘‘(2) REQUIREMENT FOR ACKNOWLEDGMENT

2 OF REFERRALS.—If a PDP sponsor refers informa3 tion to a contractor described in paragraph (1) in 

4 order for such contractor to assist in the determina5 tion described in such paragraph, the contractor 

6 shall— 

7 ‘‘(A) acknowledge to the PDP sponsor re8 ceipt of the referral; and 

9 ‘‘(B) in the case that any PDP sponsor 

10 contacts the contractor requesting to know the 

11 determination by the contractor of whether or 

12 not an individual has been determined to be an 

13 individual described such paragraph, shall in14 form such PDP sponsor of such determination 

15 on a date that is not later than 15 days after 

16 the date on which the PDP sponsor contacts 

17 the contractor. 

18 ‘‘(3) MAKING DATA AVAILABLE TO OTHER

19 ENTITIESSECT.— 

20 ‘‘(A) IN GENERAL.—For purposes of car21 rying out this subsection, subject to subpara22 graph (B), the Secretary shall authorize MED23 ICs to respond to requests for information from 

24 PDP sponsors, State prescription drug moni25 toring programs, and other entities delegated by 

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1 PDP sponsors using available programs and 

2 systems in the effort to prevent fraud, waste, 

3 and abuse. 

4 ‘‘(B) HIPAA COMPLIANT INFORMATION

5 ONLY.—Information may only be disclosed by a 

6 MEDIC under subparagraph (A) if the disclo7 sure of such information is permitted under the 

8 Federal regulations (concerning the privacy of 

9 individually identifiable health information) pro10 mulgated under section 264(c) of the Health 

11 Insurance Portability and Accountability Act of 

12 1996 (42 U.S.C. 1320d–2 note).’’. 

13 (d) TREATMENT OF CERTAIN COMPLAINTS FOR PUR14 POSES OF QUALITY OR PERFORMANCE ASSESSMENT.— 

15 Section 1860D–42 of the Social Security Act (42 U.S.C. 

16 1395w–152) is amended by adding at the end the fol17 lowing new subsection: 

18 ‘‘(d) TREATMENT OF CERTAIN COMPLAINTS FOR

19 PURPOSES OF QUALITY OR PERFORMANCE ASSESS20 MENT.—In conducting a quality or performance assess21 ment of a PDP sponsor, the Secretary shall develop or 

22 utilize existing screening methods for reviewing and con23 sidering complaints that are received from enrollees in a 

24 prescription drug plan offered by such PDP sponsor and 

25 that are complaints regarding the lack of access by the 

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1 individual to prescription drugs due to a drug manage2 ment program for at-risk beneficiaries.’’. 

3 (e) GAO STUDIES AND REPORTS.— 

4 (1) STUDIES.—The Comptroller General of the 

5 United States shall conduct a study on each of the 

6 following: 

7 (A) The implementation of the amend8 ments made by this section. 

9 (B) The effectiveness of the at-risk bene10 ficiaries for prescription drug abuse drug man11 agement programs authorized by section 

12 1860D–4(c)(5) of the Social Security Act (42 

13 U.S.C. 1395w–10(c)(5)), as added by sub14 section (a)(1), including an analysis of— 

15 (i) the impediments, if any, that im16 pair the ability of individuals described in 

17 subparagraph (C) of such section 1860D– 

18 4(c)(5) to access clinically appropriate lev19 els of prescription drugs; and 

20 (ii) the types of— 

21 (I) individuals who, in the imple22 mentation of such section, are deter23 mined to be individuals described in 

24 such subparagraph; and 

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1 (II) prescribers and pharmacies 

2 that are selected under subparagraph 

3 (D) of such section. 

4 (2) REPORTS.—Not later than January 1, 

5 2016, the Comptroller General of the United States 

6 shall begin work, with respect to each study de7 scribed in paragraph (1), on a report that describes 

8 the result of such study. Upon the completion of 

9 each such report, such Comptroller General shall 

10 submit the report to each of the committees de11 scribed in paragraph (3). 

12 (3) COMMITTEES DESCRIBED.—The committees 

13 described in this paragraph are the following: 

14 (A) The Committee on Ways and Means of 

15 the House of Representatives. 

16 (B) The Committee on Energy and Com17 merce of the House of Representatives. 

18 (C) The Committee on Finance of the Sen19 ate. 

20 (D) The Committee on Health, Education, 

21 Labor, and Pensions of the Senate. 

22 (E) The Special Committee on Aging of 

23 the Senate. 

24 (f) EFFECTIVE DATE.— 

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1 (1) IN GENERAL.—The amendments made by 

2 this section shall apply to prescription drug plans for 

3 plan years beginning on or after January 1, 2017. 

4 (2) STAKEHOLDER MEETINGS PRIOR TO EFFEC5 TIVE DATE.— 

6 (A) IN GENERAL.—Not later than January 

7 1, 2016, the Secretary shall convene stake8 holders, including individuals entitled to bene9 fits under part A of title XVIII of the Social 

10 Security Act or enrolled under part B of such 

11 title of such Act, advocacy groups representing 

12 such individuals, clinicians, plan sponsors, and 

13 entities delegated by plan sponsors, for input 

14 regarding the topics described in subparagraph 

15 (B). 

16 (B) TOPICS DESCRIBED.—The topics de17 scribed in this subparagraph are the topics of— 

18 (i) ensuring affordability and accessi19 bility to prescription drugs for enrollees in 

20 prescription drug plans of PDP sponsors 

21 who are at-risk beneficiaries for prescrip22 tion drug abuse (as defined in paragraph 

23 (5)(C) of section 1860D–4(c) of the Social 

24 Security Act (42 U.S.C. 1395w–10(c))); 

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1 (ii) the use of an expedited appeals 

2 process under which such an enrollee may 

3 appeal an identification of such enrollee as 

4 an at-risk beneficiary for prescription drug 

5 abuse under such paragraph (similar to the 

6 processes established under the Medicare 

7 Advantage program under part C of title 

8 XVIII of the Social Security Act that allow 

9 an automatic escalation to external review 

10 of claims submitted under such part); 

11 (iii) the types of enrollees that should 

12 be treated as exempted individuals, as de13 scribed in clause (ii) of such paragraph; 

14 (iv) the manner in which terms and 

15 definitions in paragraph (5) of such section 

16 1860D–4(c) should be applied, such as the 

17 use of clinical appropriateness in deter18 mining whether an enrollee is an at-risk 

19 beneficiary for prescription drug abuse as 

20 defined in subparagraph (C) of such para21 graph (5); 

22 (v) the information to be included in 

23 the notices described in subparagraph (B) 

24 of such section and the standardization of 

25 such notices; and 

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1 (vi) with respect to a PDP sponsor 

2 that establishes a drug management pro3 gram for at-risk beneficiaries under such 

4 paragraph (5), the responsibilities of such 

5 PDP sponsor with respect to the imple6 mentation of such program. 

7 (C) RULEMAKING.—The Secretary shall 

8 promulgate regulations based on the input 

9 gathered pursuant to subparagraph (A). 

10 SEC. 13. GUIDANCE ON APPLICATION OF COMMON RULE TO 

11 CLINICAL DATA REGISTRIES. 

12 Not later than one year after the date of the enact13 ment of this section, the Secretary of Health and Human 

14 Services shall issue a clarification or modification with re15 spect to the application of subpart A of part 46 of title 

16 45, Code of Federal Regulations, governing the protection 

17 of human subjects in research (and commonly known as 

18 the ‘‘Common Rule’’), to activities, including quality im19 provement activities, involving clinical data registries, in20 cluding entities that are qualified clinical data registries 

21 pursuant to section 1848(m)(3)(E) of the Social Security 

22 Act (42 U.S.C. 1395w–4(m)(3)(E)). 

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1 SEC. 14. ELIMINATING CERTAIN CIVIL MONEY PENALTIES; 

2 GAINSHARING STUDY AND REPORT. 

3 (a) ELIMINATING CIVIL MONEY PENALTIES FOR IN4 DUCEMENTS TO PHYSICIANS TO LIMIT SERVICES THAT

5 ARE NOT MEDICALLY NECESSARY.— 

6 (1) IN GENERAL.—Section 1128A(b)(1) of the 

7 Social Security Act (42 U.S.C. 1320a–7a(b)(1)) is 

8 amended by inserting ‘‘medically necessary’’ after 

9 ‘‘reduce or limit’’. 

10 (2) EFFECTIVE DATE.—The amendment made 

11 by paragraph (1) shall apply to payments made on 

12 or after the date of the enactment of this Act. 

13 (b) GAINSHARING STUDY AND REPORT.—Not later 

14 than 12 months after the date of the enactment of this 

15 Act, the Secretary of Health and Human Services, in con16 sultation with the Inspector General of the Department 

17 of Health and Human Services, shall submit to Congress 

18 a report with options for amending existing fraud and 

19 abuse laws in, and regulations related to, titles XI and 

20 XVIII of the Social Security Act (42 U.S.C. 301 et seq.), 

21 through exceptions, safe harbors, or other narrowly tar22 geted provisions, to permit gainsharing arrangements that 

23 otherwise would be subject to the civil money penalties de24 scribed in paragraphs (1) and (2) of section 1128A(b) of 

25 such Act (42 U.S.C. 1320a–7a(b)), or similar arrange26 ments between physicians and hospitals, and that improve 

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1 care while reducing waste and increasing efficiency. The 

2 report shall— 

3 (1) consider whether such provisions should 

4 apply to ownership interests, compensation arrange5 ments, or other relationships; 

6 (2) describe how the recommendations address 

7 accountability, transparency, and quality, including 

8 how best to limit inducements to stint on care, dis9 charge patients prematurely, or otherwise reduce or 

10 limit medically necessary care; and 

11 (3) consider whether a portion of any savings 

12 generated by such arrangements (as compared to an 

13 historical benchmark or other metric specified by the 

14 Secretary to determine the impact of delivery and 

15 payment system changes under such title XVIII on 

16 expenditures made under such title) should accrue to 

17 the Medicare program under title XVIII of the So18 cial Security Act. 

19 SEC. 15. MODIFICATION OF MEDICARE HOME HEALTH SUR20 ETY BOND CONDITION OF PARTICIPATION 

21 REQUIREMENT. 

22 Section 1861(o)(7) of the Social Security Act (42 

23 U.S.C. 1395x(o)(7)) is amended to read as follows: 

24 ‘‘(7) provides the Secretary with a surety 

25 bond— 

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1 ‘‘(A) in a form specified by the Secretary 

2 and in an amount that is not less than the min3 imum of $50,000; and 

4 ‘‘(B) that the Secretary determines is com5 mensurate with the volume of payments to the 

6 home health agency; and’’. 

7 SEC. 16. OVERSIGHT OF MEDICARE COVERAGE OF MANUAL 

8 MANIPULATION OF THE SPINE TO CORRECT 

9 SUBLUXATION. 

10 (a) IN GENERAL.—Section 1833 of the Social Secu11 rity Act (42 U.S.C. 1395l) is amended by adding at the 

12 end the following new subsection: 

13 ‘‘(z) MEDICAL REVIEW OF SPINAL SUBLUXATION

14 SERVICES.— 

15 ‘‘(1) IN GENERAL.—The Secretary shall imple16 ment a process for the medical review (as described 

17 in paragraph (2)) of treatment by a chiropractor de18 scribed in section 1861(r)(5) by means of manual 

19 manipulation of the spine to correct a subluxation 

20 (as described in such section) of an individual who 

21 is enrolled under this part and apply such process to 

22 such services furnished on or after January 1, 2017, 

23 focusing on services such as— 

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1 ‘‘(A) services furnished by a such a chiro2 practor whose pattern of billing is aberrant 

3 compared to peers; and 

4 ‘‘(B) services furnished by such a chiro5 practor who, in a prior period, has a services 

6 denial percentage in the 85th percentile or 

7 greater, taking into consideration the extent 

8 that service denials are overturned on appeal. 

9 ‘‘(2) MEDICAL REVIEW.— 

10 ‘‘(A) PRIOR AUTHORIZATION MEDICAL RE11 VIEW.— 

12 ‘‘(i) IN GENERAL.—Subject to clause 

13 (ii), the Secretary shall use prior author14 ization medical review for services de15 scribed in paragraph (1) that are furnished 

16 to an individual by a chiropractor de17 scribed in section 1861(r)(5) that are part 

18 of an episode of treatment that includes 

19 more than 12 services. For purposes of the 

20 preceding sentence, an episode of treat21 ment shall be determined by the underlying 

22 cause that justifies the need for services, 

23 such as a diagnosis code. 

24 ‘‘(ii) ENDING APPLICATION OF PRIOR

25 AUTHORIZATION MEDICAL REVIEW.—The 

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1 Secretary shall end the application of prior 

2 authorization medical review under clause 

3 (i) to services described in paragraph (1) 

4 by such a chiropractor if the Secretary de5 termines that the chiropractor has a low 

6 denial rate under such prior authorization 

7 medical review. The Secretary may subse8 quently reapply prior authorization medical 

9 review to such chiropractor if the Secretary 

10 determines it to be appropriate and the 

11 chiropractor has, in the time period subse12 quent to the determination by the Sec13 retary of a low denial rate with respect to 

14 the chiropractor, furnished such services 

15 described in paragraph (1). 

16 ‘‘(iii) EARLY REQUEST FOR PRIOR AU17 THORIZATION REVIEW PERMITTED.—Noth18 ing in this subsection shall be construed to 

19 prevent such a chiropractor from request20 ing prior authorization for services de21 scribed in paragraph (1) that are to be 

22 furnished to an individual before the chiro23 practor furnishes the twelfth such service 

24 to such individual for an episode of treat25 ment. 

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1 ‘‘(B) TYPE OF REVIEW.—The Secretary 

2 may use pre-payment review or post-payment 

3 review of services described in section 

4 1861(r)(5) that are not subject to prior author5 ization medical review under subparagraph (A). 

6 ‘‘(C) RELATIONSHIP TO LAW ENFORCE7 MENT ACTIVITIES.—The Secretary may deter8 mine that medical review under this subsection 

9 does not apply in the case where potential fraud 

10 may be involved. 

11 ‘‘(3) NO PAYMENT WITHOUT PRIOR AUTHORIZA12 TION.—With respect to a service described in para13 graph (1) for which prior authorization medical re14 view under this subsection applies, the following 

15 shall apply: 

16 ‘‘(A) PRIOR AUTHORIZATION DETERMINA17 TION.—The Secretary shall make a determina18 tion, prior to the service being furnished, of 

19 whether the service would or would not meet 

20 the applicable requirements of section 

21 1862(a)(1)(A). 

22 ‘‘(B) DENIAL OF PAYMENT.—Subject to 

23 paragraph (5), no payment may be made under 

24 this part for the service unless the Secretary 

25 determines pursuant to subparagraph (A) that 

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1 the service would meet the applicable require2 ments of such section 1862(a)(1)(A). 

3 ‘‘(4) SUBMISSION OF INFORMATION.—A chiro4 practor described in section 1861(r)(5) may submit 

5 the information necessary for medical review by fax, 

6 by mail, or by electronic means. The Secretary shall 

7 make available the electronic means described in the 

8 preceding sentence as soon as practicable. 

9 ‘‘(5) TIMELINESS.—If the Secretary does not 

10 make a prior authorization determination under 

11 paragraph (3)(A) within 14 business days of the 

12 date of the receipt of medical documentation needed 

13 to make such determination, paragraph (3)(B) shall 

14 not apply. 

15 ‘‘(6) APPLICATION OF LIMITATION ON BENE16 FICIARY LIABILITY.—Where payment may not be 

17 made as a result of the application of paragraph 

18 (2)(B), section 1879 shall apply in the same manner 

19 as such section applies to a denial that is made by 

20 reason of section 1862(a)(1). 

21 ‘‘(7) REVIEW BY CONTRACTORS.—The medical 

22 review described in paragraph (2) may be conducted 

23 by medicare administrative contractors pursuant to 

24 section 1874A(a)(4)(G) or by any other contractor 

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1 determined appropriate by the Secretary that is not 

2 a recovery audit contractor. 

3 ‘‘(8) MULTIPLE SERVICES.—The Secretary 

4 shall, where practicable, apply the medical review 

5 under this subsection in a manner so as to allow an 

6 individual described in paragraph (1) to obtain, at a 

7 single time rather than on a service-by-service basis, 

8 an authorization in accordance with paragraph 

9 (3)(A) for multiple services. 

10 ‘‘(9) CONSTRUCTION.—With respect to a serv11 ice described in paragraph (1) that has been af12 firmed by medical review under this subsection, 

13 nothing in this subsection shall be construed to pre14 clude the subsequent denial of a claim for such serv15 ice that does not meet other applicable requirements 

16 under this Act. 

17 ‘‘(10) IMPLEMENTATION.— 

18 ‘‘(A) AUTHORITY.—The Secretary may im19 plement the provisions of this subsection by in20 terim final rule with comment period. 

21 ‘‘(B) ADMINISTRATION.—Chapter 35 of 

22 title 44, United States Code, shall not apply to 

23 medical review under this subsection.’’. 

24 (b) IMPROVING DOCUMENTATION OF SERVICES.— 

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

2 Human Services shall, in consultation with stake3 holders (including the American Chiropractic Asso4 ciation) and representatives of medicare administra5 tive contractors (as defined in section 

6 1874A(a)(3)(A) of the Social Security Act (42 

7 U.S.C. 1395kk–1(a)(3)(A))), develop educational 

8 and training programs to improve the ability of 

9 chiropractors to provide documentation to the Sec10 retary of services described in section 1861(r)(5) in 

11 a manner that demonstrates that such services are, 

12 in accordance with section 1862(a)(1) of such Act 

13 (42 U.S.C. 1395y(a)(1)), reasonable and necessary 

14 for the diagnosis or treatment of illness or injury or 

15 to improve the functioning of a malformed body 

16 member. 

17 (2) TIMING.—The Secretary shall make the 

18 educational and training programs described in 

19 paragraph (1) publicly available not later than Janu20 ary 1, 2016. 

21 (3) FUNDING.—The Secretary shall use funds 

22 made available under section 1893(h)(10) of the So23 cial Security Act (42 U.S.C. 1395ddd(h)(10)), as 

24 added by section 6, to carry out this subsection. 

25 (c) GAO STUDY AND REPORT.— 

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1 (1) STUDY.—The Comptroller General of the 

2 United States shall conduct a study on the effective3 ness of the process for medical review of services 

4 furnished as part of a treatment by means of man5 ual manipulation of the spine to correct a sub6 luxation implemented under subsection (z) of section 

7 1833 of the Social Security Act (42 U.S.C. 1395l), 

8 as added by subsection (a). Such study shall include 

9 an analysis of— 

10 (A) aggregate data on— 

11 (i) the number of individuals, chiro12 practors, and claims for services subject to 

13 such review; and 

14 (ii) the number of reviews conducted 

15 under such section; and 

16 (B) the outcomes of such reviews. 

17 (2) REPORT.—Not later than four years after 

18 the date of enactment of this Act, the Comptroller 

19 General shall submit to Congress a report containing 

20 the results of the study conducted under paragraph 

21 (1), including recommendations for such legislation 

22 and administrative action with respect to the process 

23 for medical review implemented under subsection (z) 

24 of section 1833 of the Social Security Act (42 

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1 U.S.C. 1395l) as the Comptroller General deter2 mines appropriate. 

3 SEC. 17. LIMITING PAYMENT AMOUNT UNDER MEDICARE 

4 PROGRAM FOR VACUUM ERECTION SYSTEMS. 

5 (a) INCLUSION IN PROGRAM.—Section 1847(a)(2) of 

6 the Social Security Act (42 U.S.C. 1395w–3(a)(2)) is 

7 amended by adding at the end the following new subpara8 graph: 

9 ‘‘(D) VACUUM ERECTION SYSTEMS.—Vacu10 um erection systems covered as prosthetic de11 vices described in section 1861(s)(8) for which 

12 payment would otherwise be made under section 

13 1834(h).’’. 

14 (b) NATIONAL MAIL ORDER PROGRAM.—Section 

15 1847(a)(1)(D) of the Social Security Act (42 U.S.C. 

16 1395w–3(a)(1)(D)) is amended by adding at the end the 

17 following new clause: 

18 ‘‘(iv) NATIONAL MAIL ORDER PRO19 GRAM FOR VACUUM ERECTION SYSTEMS.— 

20 The Secretary shall phase in a national 

21 mail order program under this section for 

22 vacuum erection systems described in para23 graph (2)(D). The first round of competi24 tion for such program shall occur in 2016, 

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1 petition is completed. Chapter 35 of title 

2 44, United States Code (commonly re3 ferred to as the ‘Paperwork Reduction Act 

4 of 1995’) shall not apply to the first round 

5 competition for such program.’’. 

6 SEC. 18. NATIONAL EXPANSION OF PRIOR AUTHORIZATION 

7 MODEL FOR REPETITIVE SCHEDULED NON8 EMERGENT AMBULANCE TRANSPORT. 

9 (a) INITIAL EXPANSION.— 

10 (1) IN GENERAL.—In implementing the model 

11 described in paragraph (2) proposed to be tested 

12 under subsection (b) of section 1115A of the Social 

13 Security Act (42 U.S.C. 1315a), the Secretary of 

14 Health and Human Services shall revise the testing 

15 under subsection (b) of such section to cover, effec16 tive January 1, 2016, States located in medicare ad17 ministrative contractor (MAC) regions L and 11 

18 (consisting of Delaware, the District of Columbia, 

19 Maryland, New Jersey, Pennsylvania, North Caro20 lina, South Carolina, West Virginia, and Virginia). 

21 (2) MODEL DESCRIBED.—The model described 

22 in this paragraph is the testing of a model of prior 

23 authorization for repetitive scheduled non-emergent 

24 ambulance transport proposed to be carried out in 

25 New Jersey, Pennsylvania, and South Carolina. 

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1 (3) FUNDING.—The Secretary shall allocate 

2 funds made available under section 1115A(f)(1)(B) 

3 of the Social Security Act (42 U.S.C. 

4 1315a(f)(1)(B)) to carry out this subsection. 

5 (b) NATIONAL EXPANSION.—Section 1834(l) of the 

6 Social Security Act (42 U.S.C. 1395m(l)) is amended by 

7 adding at the end the following new paragraph: 

8 ‘‘(16) PRIOR AUTHORIZATION FOR REPETITIVE

9 SCHEDULED NON-EMERGENCY AMBULANCE TRANS10 PORTS.— 

11 ‘‘(A) IN GENERAL.—Beginning January 1, 

12 2017, the Secretary shall apply the prior au13 thorization program described in subparagraph 

14 (B) to all States. 

15 ‘‘(B) PROGRAM DESCRIBED.—The prior 

16 authorization program described in this sub17 paragraph is a prior authorization program for 

18 repetitive scheduled ambulance services con19 sisting of non-emergency basic life support serv20 ices involving transport of an individual fur21 nished other than on an emergency basis. In 

22 carrying out the program, the Secretary shall 

23 determine in advance of the provision of items 

24 and services related to the provision of such an 

25 ambulance service whether payment for such 

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1 items or services may not be made because the 

2 item or service is not covered or because of the 

3 application of section 1862(a)(1). 

4 ‘‘(C) IMPLEMENTATION.—The program de5 scribed in subparagraph (B) shall be imple6 mented in a manner that is consistent with the 

7 terms and conditions for the testing of a model 

8 of prior authorization for repetitive scheduled 

9 non-emergent ambulance transport proposed by 

10 the Centers for Medicare & Medicaid Services 

11 to be implemented in New Jersey, Pennsyl12 vania, and South Carolina under section 

13 1115A. 

14 ‘‘(D) FUNDING.—The Secretary shall use 

15 funds made available under section 1893(h)(10) 

16 to carry out this paragraph.’’. 

17 SEC. 19. REPEALING DUPLICATIVE MEDICARE SECONDARY 

18 PAYOR PROVISION. 

19 (a) IN GENERAL.—Section 1862(b)(5) of the Social 

20 Security Act (42 U.S.C. 1395y(b)(5)) is amended by in21 serting at the end the following new subparagraph: 

22 ‘‘(E) END DATE.—The provisions of this 

23 paragraph shall not apply to information re24 quired to be provided on or after July 1, 

25 2016.’’. 

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1 (b) EFFECTIVE DATE.—The amendment made by 

2 subsection (a) shall take effect on the date of the enact3 ment of this Act and shall apply to information required 

4 to be provided on or after January 1, 2016. 

5 SEC. 20. PLAN FOR EXPANDING DATA IN ANNUAL CERT RE6 PORT. 

7 Not later than March 25, 2015, the Secretary of 

8 Health and Human Services shall submit to the Com9 mittee on Finance of the Senate, and to the Committees 

10 on Energy and Commerce and on Ways and Means of the 

11 House of Representatives— 

12 (1) a plan for including, in the annual report of 

13 the Comprehensive Error Rate Testing (CERT) pro14 gram, data on services (or groupings of services) 

15 (other than medical visits) paid under the physician 

16 fee schedule under section 1848 of the Social Secu17 rity Act (42 U.S.C. 1395w–4) where the fee sched18 ule amount is in excess of 250 dollars and where the 

19 error rate is in excess of 20 percent; and 

20 (2) to the extent practicable by such date, spe21 cific examples of services described in paragraph (1). 

22 SEC. 21. RULE OF CONSTRUCTION. 

23 Except as explicitly provided in this Act, nothing in 

24 this Act, including the amendments made by this Act, 

25 shall be construed as preventing the use of notice and commstockstill on DSK4VPTVN1PROD with BILLS

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1 ment rulemaking in the implementation of the provisions 

2 of, and the amendments made by, this Act. 

Æ 

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