II 

113TH CONGRESS 

2D SESSION S. 2361 

To amend title XVIII of the Social Security Act to crack down on fraud 

in the Medicare program to protect seniors, people with disabilities, 

and taxpayers. 

IN THE SENATE OF THE UNITED STATES 

MAY 20, 2014 

Mr. NELSON (for himself, Ms. COLLINS, Mr. CARPER, Mr. GRASSLEY, and 

Mr. CASEY) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to crack 

down on fraud in the Medicare program to protect seniors, people with disabilities, and taxpayers. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Schemes and 

5 Crimes Against Medicare and Seniors (Stop SCAMS) 

6 Act’’. 


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1 SEC. 2. ENSURING THAT NEW MEDICAL CODING SYSTEMS 

2 DO NOT COMPROMISE FRAUD PREVENTION 

3 EFFORTS. 

4 (a) IN GENERAL.—Section 1173(c) of the Social Se5 curity Act (42 U.S.C. 1320d–2(c)) is amended— 

6 (1) in paragraph (1)— 

7 (A) in subparagraph (A), by striking ‘‘; 

8 or’’ and inserting ‘‘or, if no code sets for such 

9 data elements have been developed, establish 

10 code sets for the data elements;’’; and 

11 (B) by striking subparagraph (B) and add12 ing the following new subparagraphs: 

13 ‘‘(B) ensure that any entity producing and 

14 transmitting valid transactions that include 

15 code sets are subject to a consistent, industry16 wide framework that supports a seamless tran17 sition to new and modified code sets; and 

18 ‘‘(C) establish, by a rule promulgated after 

19 notice and an opportunity for a hearing on the 

20 record, an end-to-end testing procedure for new 

21 and modified code sets that shall require the 

22 participation of any entity producing and trans23 mitting valid transactions that use such new or 

24 modified code set.’’; and 

25 (2) by adding at the end the following para26 graphs: 


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1 ‘‘(3) ADOPTING NEW AND MODIFIED CODE

2 SETS.—The Secretary shall not adopt a new or 

3 modified code set unless the Secretary— 

4 ‘‘(A) assesses the impact of the code set on 

5 fraud prevention and pre-payment review, de6 termines that anti-fraud edits work as intended, 

7 and confirms that a plan is in place to ensure 

8 continuing effective detection of fraud following 

9 the adoption of the code set; 

10 ‘‘(B) ensures that the end-to-end testing 

11 procedure established by the Secretary under 

12 paragraph (1) has been completed; and 

13 ‘‘(C) completes end-to-end testing with any 

14 Federal Government entity that produces and 

15 transmits valid transactions that include the 

16 code set with private sector tracking partners. 

17 ‘‘(4) ROUTINE UPDATES TO EXISTING CODE

18 SETS.—Paragraph (3) shall not apply to routine, 

19 regularly scheduled updates to existing code sets.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall be effective as of October 1, 2015. 

22 SEC. 3. VERIFICATION OF PROVIDER OWNERSHIP INTER23 ESTS. 

24 (a) IN GENERAL.—Section 1124(c) of the Social Se25 curity Act (42 U.S.C. 1320a–3(c)) is amended— 


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1 (1) by redesignating paragraph (5) as para2 graph (6); and 

3 (2) by inserting after paragraph (4) the fol4 lowing paragraph: 

5 ‘‘(5) VERIFICATION OF INFORMATION.— 

6 ‘‘(A) IN GENERAL.—With respect to infor7 mation supplied by a disclosing entity under 

8 subsections (a) and (b), the Secretary shall— 

9 ‘‘(i) verify such information by com10 paring it to available data on the provider 

11 collected through disclosures made to the 

12 Secretary under section 1128G(a)(2), or, 

13 in the case of a disclosing entity to which 

14 section 1128G(a)(2) does not apply, verify 

15 such information through comparison with 

16 at least one other public or private data17 base which contains information as to the 

18 identity of each person with an ownership 

19 or control interest in the entity; and 

20 ‘‘(ii) confirm the accuracy of any so21 cial security account number or employer 

22 identification number supplied under sub23 section (a) by verifying— 


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1 ‘‘(I) each social security account 

2 number with the Commissioner of So3 cial Security; and 

4 ‘‘(II) each employer identification 

5 number with the Secretary of the 

6 Treasury. 

7 ‘‘(B) DISCREPANCIES.—If the comparison 

8 described in subparagraph (A)(i) reveals a dis9 crepancy between information supplied by a dis10 closing entity under subsections (a) and (b) and 

11 available data on the provider collected through 

12 disclosures made to the Secretary under section 

13 1128G(a)(2), the Secretary shall independently 

14 verify the accuracy of such data collected under 

15 section 1128G(a)(2) before taking any action 

16 against a provider based on such discrepancy.’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this section shall be effective as of the date that is 1 year 

19 after the date of enactment of this Act. 

20 SEC. 4. SUPPORTING PUBLIC AND PRIVATE INFORMATION 

21 SHARING TO PREVENT HEALTH CARE FRAUD. 

22 (a) DEFINITIONS.—In this section: 

23 (1) HEALTHCARE FRAUD PREVENTION PART24 NERSHIP; PARTNERSHIP.—The terms ‘‘Healthcare 

25 Fraud Prevention Partnership’’ and ‘‘Partnership’’ 


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1 mean the information sharing partnership estab2 lished between the Department of Health and 

3 Human Services, the Department of Justice, and 

4 other public and private stakeholders, including pri5 vate insurers, under the authority of section 

6 1128C(a)(2) of the Social Security Act (42 U.S.C. 

7 1320a–7c(a)(2)) for the purpose of detecting and 

8 preventing health care fraud. 

9 (2) PRIVATE INSURER.—The term ‘‘private in10 surer’’ has the meaning given the term ‘‘health in11 surance issuer’’ under section 2791(b)(2) of the 

12 Public Health Service Act (42 U.S.C. 300GG– 

13 91(b)(2)). 

14 (b) SAFE HARBOR FOR THE SHARING OF INFORMA15 TION.— 

16 (1) GENERAL IMMUNITY.— 

17 (A) IN GENERAL.—A non-governmental 

18 entity participating in the Partnership (includ19 ing a private insurer) that— 

20 (i) provides data or information de21 scribed in clause (i) or (ii) of subparagraph 

22 (B) to the Department of Health and 

23 Human Services, the Department of Jus24 tice, any other Federal or State law en25 forcement agency, any contractor of such 


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1 Department or agency, or another entity 

2 participating in the Partnership (including 

3 a private insurer); or 

4 (ii) uses such data or information as 

5 permitted by this subsection, 

6 shall be immune from civil liability with respect 

7 to the provision or authorized use of such data 

8 or information. 

9 (B) DATA OR INFORMATION.— 

10 (i) DATA.—The data described in this 

11 clause is aggregated claims data or other 

12 information described in clause (ii) that 

13 does not include individually identifiable 

14 information with respect to any health care 

15 provider, supplier, or beneficiary, whether 

16 or not analysis of such information results 

17 in the identification of a health care pro18 vider, supplier, or other person or organi19 zation as having committed fraud or hav20 ing committed acts suspected of being 

21 fraudulent. 

22 (ii) INFORMATION.—The information 

23 described in this clause is information con24 cerning fraud or suspected fraudulent acts 

25 that identifies a specific health care proVerDate Mar 15 2010 04:12 May 23, 2014 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2361.IS S2361

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1 vider, supplier, or other person or organi2 zation if the provider, supplier, or other 

3 person or organization so identified— 

4 (I) is the subject of a bona fide 

5 fraud investigation conducted by the 

6 entity participating in the Partner7 ship, including a private insurer, that 

8 is providing the information; 

9 (II) is the subject of a fraud-re10 lated allegation that has been filed by 

11 or received by the entity participating 

12 in the Partnership, including a private 

13 insurer, that is providing the informa14 tion; or 

15 (III) has been convicted of a 

16 fraud-related offense. 

17 (2) LIMITATION.—The immunity described in 

18 paragraph (1) shall apply only where— 

19 (A) the data or information involved was 

20 provided in good faith and without malice; and 

21 (B) the data or information provided is 

22 true, based on a reasonable belief, to the knowl23 edge of the person providing the information, or 

24 if false, the information is provided without 


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1 knowledge of, and without reckless disregard 

2 for, its falsity. 

3 (3) USE OF PARTNERSHIP DATA OR INFORMA4 TION.—For purposes of this subsection, data or in5 formation relating to a specific provider or supplier 

6 received by a private insurer solely through the 

7 Partnership shall be used, with respect to such pro8 vider or supplier, only for the purpose of informing 

9 decisionmaking by the private insurer related to 

10 fraud investigations, including whether to conduct 

11 such an investigation. Nothing in the preceding sen12 tence shall prevent a private insurer or other entity 

13 participating in the Partnership from taking other 

14 actions, not specific to such provider or supplier, 

15 based on such data or information. 

16 (c) REPORT.—Not later than October 1 of each cal17 endar year that begins after the date of enactment of this 

18 Act, the Secretary of Health and Human Services shall 

19 submit to the Special Committee on Aging, the Committee 

20 on Finance, and the Committee on Homeland Security 

21 and Governmental Affairs of the Senate, and the Com22 mittee on Ways and Means and the Committee on Energy 

23 and Commerce of the House of Representatives, a report 

24 that describes the activities of the Healthcare Fraud Pre25 vention Partnership. Such report shall include— 


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1 (1) a description of how input was obtained 

2 from private insurers regarding the appropriate 

3 usage of data shared through the Healthcare Fraud 

4 Prevention Partnership; and 

5 (2) plans for the Partnership to be expanded to 

6 encompass a representative sample of national pri7 vate insurers and to include health care provider or8 ganizations. 

9 SEC. 5. MEDPAC STUDY AND REPORT. 

10 (a) STUDY.—The Medicare Payment Advisory Com11 mission shall conduct a study on administrative efforts to 

12 strengthen program integrity in the Medicare program. 

13 Such study may include— 

14 (1) an evaluation of ways to detect fraudulent 

15 claims before payment is made; 

16 (2) a review of the efficiency and effectiveness 

17 of post-payment recovery methods; 

18 (3) analysis by the Centers for Medicare & 

19 Medicaid Services and public reporting of claims and 

20 spending patterns; and 

21 (4) a review of the organizational structure and 

22 resources of the Centers for Medicare & Medicaid 

23 Services as they relate to program integrity. 

24 (b) REPORT.—Not later than June 15, 2016, the 

25 Medicare Payment Advisory Commission shall submit to 


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1 Congress a report on the study conducted under sub2 section (a), together with recommendations for such legis3 lative and administrative action as the Commission deter4 mines appropriate. 

5 SEC. 6. ABILITY TO MEASURE FRAUD PREVENTION EF6 FORTS. 

7 Section 4241 of the Small Business Jobs Act of 2010 

8 (42 U.S.C. 1320a–7m) is amended— 

9 (1) in subsection (b)(4), by inserting ‘‘and on 

10 civil recoveries, administrative actions, and criminal 

11 convictions for fraud’’ after ‘‘reimbursement’’; and 

12 (2) in subsection (c), by adding at the end the 

13 following paragraph: 

14 ‘‘(7) IMPLEMENTATION OF AMENDMENTS.—The 

15 Secretary shall implement amendments made to this 

16 subsection by the Stop Schemes and Crimes Against 

17 Medicare and Seniors (Stop SCAMS) Act not later 

18 than 6 months after the date of enactment of such 

19 Act. If the Secretary determines that new technology 

20 or data processing systems are required to carry out 

21 such amendments, the Secretary shall issue a re22 quest for proposals to carry out such amendments 

23 not later than 6 months after the enactment of such 

24 Act, and the contractors selected under such request 

25 for proposal shall implement such amendments not 


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1 later than 12 months after the date of enactment of 

2 such Act.’’. 

Æ 


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