II 

111TH CONGRESS 

2D SESSION S. 3632 

To provide for enhanced penalties to combat Medicare and Medicaid fraud, 

a Medicare data-mining system, and a Beneficiary Verification Pilot 

Program, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 22, 2010 

Mrs. GILLIBRAND introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To provide for enhanced penalties to combat Medicare and 

Medicaid fraud, a Medicare data-mining system, and a 

Beneficiary Verification Pilot 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. 

4 This Act may be cited as the ‘‘Medicare and Medicaid 

5 Fraud Enforcement and Prevention Act of 2010’’. 


jbell on DSKDVH8Z91PROD with BILLS
2 

•S 3632 IS

1 SEC. 2. ENHANCED CRIMINAL PENALTIES TO COMBAT 

2 MEDICARE AND MEDICAID FRAUD. 

3 (a) IN GENERAL.—Section 1128B of the Social Secu4 rity Act (42 U.S.C. 1320a–7b) is amended— 

5 (1) in subsection (a), by striking ‘‘$10,000 or 

6 imprisoned for not more than one year’’ and insert7 ing ‘‘$20,000 or imprisoned for not more than two 

8 years’’; and 

9 (2) in each of subsections (a), (b)(1), (b)(2), 

10 (c), and (d), by striking ‘‘$25,000 or imprisoned for 

11 not more than five years’’ and inserting ‘‘$50,000 or 

12 imprisoned for not more than 10 years’’. 

13 (b) ILLEGAL DISTRIBUTION OF MEDICARE OR MED14 ICAID BENEFICIARY IDENTIFICATION OR BILLING PRIVI15 LEGES.—Section 1128B of such Act (42 U.S.C. 1320a– 

16 7b) is amended by adding at the end the following new 

17 subsection: 

18 ‘‘(g) Whoever knowingly, intentionally, and with the 

19 intent to defraud purchases, sells, or distributes, or ar20 ranges for the purchase, sale, or distribution of one or 

21 more Medicare or Medicaid beneficiary identification num22 bers or billing privileges under title XVIII or title XIX 

23 shall be imprisoned for not more than three years or fined 

24 under title 18, United States Code (or, if greater, an 

25 amount equal to the monetary loss to the Federal and any 

26 State government as a result of such acts), or both.’’. 


jbell on DSKDVH8Z91PROD with BILLS
3 

•S 3632 IS

1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to acts committed on or after the 

3 date of the enactment of this Act. 

4 SEC. 3. ENHANCED CIVIL AUTHORITIES TO COMBAT MEDI5 CARE AND MEDICAID FRAUD. 

6 (a) IN GENERAL.—Section 1128A(a) of the Social 

7 Security Act (42 U.S.C. 1320a–7a(a)) is amended— 

8 (1) in paragraph (1), by striking ‘‘to an officer, 

9 employee, or agent of the United States, or of any 

10 department or agency thereof, or of any State agen11 cy (as defined in subsection (i)(1)),’’; 

12 (2) by inserting after paragraph (10), as added 

13 by section 6402(d)(2) of the Patient Protection and 

14 Affordable Care Act (Public Law 111–148) the fol15 lowing new paragraphs: 

16 ‘‘(11) conspires to commit a violation of this 

17 section; or 

18 ‘‘(12) knowingly makes, uses, or causes to be 

19 made or used, a false record or statement material 

20 to an obligation to pay or transmit money or prop21 erty to a Federal health care program, or knowingly 

22 conceals or knowingly and improperly avoids or de23 creases an obligation to pay or transmit money or 

24 property to a Federal health care program;’’; 

25 (3) in the first sentence— 


jbell on DSKDVH8Z91PROD with BILLS
4 

•S 3632 IS

1 (A) by striking ‘‘or in cases under para2 graph (9)’’ and inserting ‘‘in cases under para3 graph (9)’’; and 

4 (B) by striking ‘‘fact)’’ and inserting 

5 ‘‘fact), in cases under paragraph (11), $50,000 

6 for any violation described in this section com7 mitted in furtherance of the conspiracy in8 volved, and in cases under paragraph (12), 

9 $50,000 for each false record or statement, or 

10 concealment, avoidance, or decrease’’; and 

11 (4) in the second sentence, by striking ‘‘mate12 rial fact).’’ and inserting ‘‘material fact); or in cases 

13 under paragraph (11), an assessment of not more 

14 than 3 times the total amount that would otherwise 

15 apply for any violation described in this section com16 mitted in furtherance of the conspiracy involved; or 

17 in cases under paragraph (12), an assessment of not 

18 more than 3 times the total amount of the obligation 

19 to which the false record or statement was material 

20 or that was avoided or decreased.’’. 

21 (b) TIMEFRAME.—Section 1128A(c)(1) of the Social 

22 Security Act (42 U.S.C. 1320a–7a(c)(1)) is amended by 

23 striking ‘‘six years’’ and inserting ‘‘10 years’’. 

24 (c) DEFINITIONS.—Section 1128A(i) of the Social 

25 Security Act (42 U.S.C. 1320a–7a(i)) is amended— 


jbell on DSKDVH8Z91PROD with BILLS
5 

•S 3632 IS

1 (1) by amending paragraph (2) to read as fol2 lows: 

3 ‘‘(2) The term ‘claim’ means any application, 

4 request, or demand, whether under contract, or oth5 erwise, for money or property for items and services 

6 under a Federal health care program (as defined in 

7 section 1128B(f)), whether or not the United States 

8 or a State agency has title to the money or property, 

9 that— 

10 ‘‘(A) is presented or caused to be pre11 sented to an officer, employee, or agent of the 

12 United States, or of any department or agency 

13 thereof, or of any State agency (as defined in 

14 subsection (i)(1)); or 

15 ‘‘(B) is made to a contractor, grantee, or 

16 other recipient if the money or property is to be 

17 spent or used on the Federal health care pro18 gram’s behalf or to advance a Federal health 

19 care program interest, and if the Federal health 

20 care program— 

21 ‘‘(i) provides or has provided any por22 tion of the money or property requested or 

23 demanded; or 

24 ‘‘(ii) will reimburse such contractor, 

25 grantee, or other recipient for any portion 


jbell on DSKDVH8Z91PROD with BILLS
6 

•S 3632 IS

1 of the money or property which is re2 quested or demanded.’’; 

3 (2) by amending paragraph (3) to read as fol4 lows: 

5 ‘‘(3) The term ‘item or service’ means, without 

6 limitation, any medical, social, management, admin7 istrative, or other item or service used in connection 

8 with or directly or indirectly related to a Federal 

9 health care program.’’; 

10 (3) in paragraph (7)— 

11 (A) by striking ‘‘term ‘should know’ 

12 means’’ and inserting ‘‘terms ‘knowing’, ‘know13 ingly’, and ‘should know’ mean’’; 

14 (B) by redesignating subparagraphs (A) 

15 and (B) as subparagraphs (B) and (C), respec16 tively; 

17 (C) by inserting before subparagraph (B), 

18 as redesignated by clause (ii), the following new 

19 subparagraph: 

20 ‘‘(A) has actual knowledge of the informa21 tion;’’; and 

22 (D) in the matter following subparagraph 

23 (C), as redesignated by clause (ii)— 

24 (i) by inserting ‘‘require’’ after ‘‘and’’; 

25 and 


jbell on DSKDVH8Z91PROD with BILLS
7 

•S 3632 IS

1 (ii) by striking ‘‘is required’’; and 

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

3 paragraphs: 

4 ‘‘(8) The term ‘obligation’ means an established 

5 duty, whether or not fixed, arising from an express 

6 or implied contractual, grantor-grantee, or licensor 

7 licensee relationship, from a fee-based or similar re8 lationship, from statute or regulation, or from the 

9 retention of any overpayment. 

10 ‘‘(9) The term ‘material’ means having a nat11 ural tendency to influence, or be capable of influ12 encing, the payment or receipt of money or prop13 erty.’’. 

14 SEC. 4. MEDICARE DATA-MINING SYSTEM; BENEFICIARY 

15 VERIFICATION PILOT PROGRAM. 

16 (a) ACCESS TO CLAIMS AND PAYMENT DATA.— 

17 Section1128J(a)(2) of the Social Security Act, as added 

18 by section 6402(a) of the Patient Protection and Afford19 able Care Act (Public Law 111–148), is amended— 

20 (1) by inserting ‘‘including claims and payment 

21 data,’’ after ‘‘access to claims and payment data’’; 

22 and 

23 (2) by adding at the end the following sentence: 

24 ‘‘In carrying out this section, the Inspector General 

25 of the Department of Health and Human Services, 


jbell on DSKDVH8Z91PROD with BILLS
8 

•S 3632 IS

1 in consultation with the Attorney General, shall im2 plement mechanisms for the sharing of information 

3 about suspected fraud relating to the Federal health 

4 care programs under titles XVIII, XIX, and XXI 

5 with other appropriate law enforcement officials.’’. 

6 (b) BENEFICIARY VERIFICATION PILOT PROGRAM.— 

7 (1) IN GENERAL.—By not later than 1 year 

8 after the date of the enactment of this Act, the Sec9 retary of Health and Human Services (in this sub10 section referred to as the ‘‘Secretary’’) shall imple11 ment a 5-year pilot program (to be know as the 

12 ‘‘Beneficiary Verification Pilot Program’’) under 

13 which the Secretary shall establish a process to 

14 verify, with respect to claims for reimbursement 

15 under title XVIII of the Social Security Act for 

16 items and services (as specified by the Secretary) 

17 furnished to Medicare beneficiaries, that the bene18 ficiary for which the claim was made was actually 

19 furnished such item or service. Such process may in20 clude communicating, by phone or other means, di21 rectly with the beneficiary in order to conduct such 

22 verification. 

23 (2) REPORTS.—The Secretary shall, for each of 

24 the third, fourth, and fifth years of the Beneficiary 

25 Verification Pilot Program under this section, subVerDate Mar 15 2010 05:37 Jul 23, 2010 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3632.IS S3632

jbell on DSKDVH8Z91PROD with BILLS
9 

•S 3632 IS

1 mit to Congress a report on the effectiveness of the 

2 pilot program in reducing the occurrence of waste, 

3 fraud, and abuse in the Medicare program under 

4 title XVIII of the Social Security Act. 

5 (3) AUTHORIZATION OF APPROPRIATIONS.—For 

6 purpose of carrying out the Beneficiary Verification 

7 Pilot Program under this subsection, there is au8 thorized to be appropriated such sums as may be 

9 necessary. 

10 SEC. 5. GAO STUDY AND REPORT. 

11 (a) STUDY.—The Comptroller General of the United 

12 States shall conduct a study on Medicare administrative 

13 contractors under section 1874A of the Social Security 

14 Act, including Recovery Audit Contractors, regarding the 

15 following areas: 

16 (1) Training and expertise in identifying fraud, 

17 including the education levels of the key individuals 

18 tasked to identify or refer potential cases of fraud, 

19 and whether the Centers for Medicare & Medicaid 

20 Services should be providing more training to con21 tractors, or require contractors to hire experts with 

22 greater medical training. 

23 (2) Acquisition and implementation of data 

24 mining software among Medicare administrative con25 tractors, if applicable, and the ability or availability 


jbell on DSKDVH8Z91PROD with BILLS
10 

•S 3632 IS

1 of such software to provide real-time data mining ca2 pabilities. 

3 (b) REPORT.—Not later than one year after the date 

4 of the enactment of this Act, the Comptroller General of 

5 the United States shall complete the study under this sec6 tion and submit a report to Congress regarding the find7 ings of the study and recommendations for legislation and 

8 administrative action. 

Æ 


jbell on DSKDVH8Z91PROD with BILLS