II 

109TH CONGRESS 

2D SESSION S. 3730 

To amend title XVIII of the Social Security Act to require the use of 

recovery audit contractors under the Medicare Integrity Program with 

respect to Medicare Secondary Payer claims and activities. 

IN THE SENATE OF THE UNITED STATES 

JULY 25, 2006 

Mr. CRAPO 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 require 

the use of recovery audit contractors under the Medicare 

Integrity Program with respect to Medicare Secondary 

Payer claims and activities. 

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 ‘‘Ensuring the Integrity 

5 of the Medicare Program Act of 2006’’. 


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1 SEC. 2. USE OF RECOVERY AUDIT CONTRACTORS UNDER 

2 THE MEDICARE INTEGRITY PROGRAM FOR 

3 AUDITS OF MEDICARE SECONDARY PAYER 

4 CLAIMS AND ACTIVITIES. 

5 (a) IN GENERAL.—Section 1893 of the Social Secu6 rity Act (42 U.S.C. 1395ddd), as amended by section 

7 6034(d) of the Deficit Reduction Act of 2006 (Public Law 

8 109–171), is amended by adding at the end the following 

9 new subsection: 

10 ‘‘(h) USE OF RECOVERY AUDIT CONTRACTORS FOR

11 AUDITS OF MEDICARE SECONDARY PAYER CLAIMS AND

12 ACTIVITIES.— 

13 ‘‘(1) IN GENERAL.—Under the Program, the 

14 Secretary, using a competitive procurement process, 

15 shall enter into contracts with recovery audit con16 tractors in accordance with this subsection for the 

17 purpose of identifying underpayments and overpay18 ments and recouping overpayments with respect to 

19 Medicare Secondary Payer claims and activities for 

20 which payment is made under part A or B. Under 

21 the contracts— 

22 ‘‘(A) payment shall be made to such a con23 tractor on a contingent basis at a rate deter24 mined by the Secretary; and 

25 ‘‘(B) such percentage as the Secretary may 

26 specify of the amount recovered shall be reVerDate Aug 31 2005 04:12 Jul 29, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3730.IS S3730

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1 tained by the Secretary and shall be available to 

2 the program management account of the Cen3 ters for Medicare & Medicaid Services. 

4 ‘‘(2) USE ON A NATIONAL BASIS.—The Sec5 retary shall designate audit and recovery regions for 

6 the use of recovery audit contractors on a national 

7 basis. Each such region shall be covered under a 

8 contract with a recovery audit contractor (or con9 tractors, if the Secretary determines appropriate). 

10 ‘‘(3) AUDIT AND RECOVERY PERIODS.—Each 

11 contract with a recovery audit contractor shall pro12 vide that audit and recovery activities may be con13 ducted with respect to payments made under part A 

14 or B with respect to Medicare Secondary Payer 

15 claims and activities— 

16 ‘‘(A) during the current fiscal year; 

17 ‘‘(B) retrospectively (for a period of not 

18 more than 4 fiscal years prior to the current 

19 fiscal year); and 

20 ‘‘(C) with respect to continuing fiscal 

21 years. 

22 ‘‘(4) QUALIFICATIONS OF CONTRACTORS.—A 

23 recovery audit contractor is eligible to enter into a 

24 contract under this subsection to carry out the acVerDate Aug 31 2005 04:12 Jul 29, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3730.IS S3730

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1 tivities described in paragraph (1) if the con2 tractor— 

3 ‘‘(A) has staff that has the appropriate 

4 clinical knowledge of, and experience with, the 

5 payment rules and regulations under the pro6 gram under this title or the contractor has, or 

7 will contract with, another entity that has such 

8 knowledgeable and experienced staff; and 

9 ‘‘(B) is not a fiscal intermediary under sec10 tion 1816, a carrier under section 1842, a 

11 Medicare Administrative Contractor under sec12 tion 1874A, or a Coordination of Benefits Con13 tractor of the Centers for Medicare & Medicaid 

14 Services. 

15 ‘‘(5) PREFERENCE FOR ENTITIES WITH DEM16 ONSTRATED PROFICIENCY.—In awarding contracts 

17 to recovery audit contractors under this section, the 

18 Secretary shall give preference to those risk entities 

19 that the Secretary determines have demonstrated 

20 more than 3 years direct management experience 

21 and a proficiency for cost control or recovery audits 

22 with private insurers, health care providers, health 

23 plans, or under the medicaid program under title 

24 XIX. 


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1 ‘‘(6) CONSTRUCTION RELATING TO CONDUCT

2 OF INVESTIGATION OF FRAUD.—A recovery of an 

3 overpayment to a provider by a recovery audit con4 tractor shall not be construed to prohibit the Sec5 retary or the Attorney General from investigating 

6 and prosecuting, if appropriate, allegations of fraud 

7 or abuse arising from such overpayment. 

8 ‘‘(7) REPORT.—The Secretary shall annually 

9 submit to Congress a report on the use of recovery 

10 audit contractors under the Program. Such report 

11 shall include information on the performance of re12 covery audit contractors in identifying underpay13 ments and overpayments and recouping overpay14 ments, including an evaluation of the comparative 

15 performance of audit recovery contractors with re16 spect to each audit recovery region designated under 

17 paragraph (2). 

18 ‘‘(8) WAIVER.—The Secretary shall waive such 

19 provisions of this title as may be necessary to pro20 vide for payment of recovery audit contractors under 

21 this subsection in accordance with paragraph (1).’’. 

22 (b) ACCESS TO NATIONAL DIRECTORY OF NEW

23 HIRES DATABASE.—The Secretary of Labor shall provide 

24 for access by the Centers for Medicare & Medicaid Serv25 ices and recovery audit contractors conducting audit and 


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1 recovery activities under section 1893(h) of the Social Se2 curity Act, as added by subsection (a), to the National 

3 Directory of New Hires database. 

4 (c) ACCESS TO COORDINATION OF BENEFITS CON5 TRACTOR DATABASE.—The Secretary of Labor shall pro6 vide for access by the Centers for Medicare & Medicaid 

7 Services and recovery audit contractors conducting audit 

8 and recovery activities under section 1893(h) of the Social 

9 Security Act, as added by subsection (a), to the database 

10 of the Coordination of Benefits Contractor of the Centers 

11 for Medicare & Medicaid Services with respect to the audit 

12 and recovery periods described in paragraph (3) such sec13 tion 1893(h). 

14 (d) SUNSET OF DEMONSTRATION PROJECT FOR USE

15 OF RECOVERY AUDIT CONTRACTORS WITH RESPECT TO

16 MEDICARE SECONDARY PAYER CLAIMS AND ACTIVI17 TIES.—Section 306(b)(2) of the Medicare Prescription 

18 Drug, Improvement, and Modernization Act of 2003 (Pub19 lic Law 108–173; 117 Stat. 2256) is amended— 

20 (1) by striking ‘‘DURATION.—The project’’ and 

21 inserting ‘‘DURATION.— 

22 (A) IN GENERAL.—Subject to subpara23 graph (B), the project’’; and 


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1 (2) by inserting after subparagraph (A), as in2 serted by paragraph (1), the following new subpara3 graph: 

4 ‘‘(B) SUNSET OF PROJECT WITH RESPECT

5 TO MEDICARE SECONDARY PAYER CLAIMS AND

6 ACTIVITIES.—The project shall not be con7 ducted with respect to Medicare Secondary 

8 Payer claims and activities on or after the date 

9 of enactment of the Ensuring the Integrity of 

10 the Medicare Program Act of 2006, except that 

11 recovery audit contracts entered into prior to 

12 such date with respect to such claims and ac13 tivities may be completed pursuant to the terms 

14 and conditions of the contract.’’. 

Æ 


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