II 

Calendar No. 183 

114TH CONGRESS 

1ST SESSION S. 861 

[Report No. 114–104] 

To amend titles XVIII and XIX of the Social Security Act to curb waste, 

fraud, and abuse in the Medicare and Medicaid programs. 

IN THE SENATE OF THE UNITED STATES 

MARCH 25, 2015 

Mr. CARPER (for himself, Mr. ENZI, Mr. WHITEHOUSE, Mr. JOHNSON, Mr. 

COONS, Mr. PORTMAN, Ms. KLOBUCHAR, Mr. COTTON, Mrs. MCCASKILL, 

Mr. BARRASSO, Mr. MANCHIN, Ms. AYOTTE, Mr. THUNE, Mrs. SHAHEEN, Mr. WARNER, Mr. TESTER, and Mr. BURR) introduced the following bill; which was read twice and referred to the Committee on Finance 

JULY 30, 2015 

Reported by Mr. HATCH, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To amend titles XVIII and XIX of the Social Security Act 

to curb waste, fraud, and abuse in the Medicare and 

Medicaid programs. 

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


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘Preventing and Reducing Improper Medicare and Med4 icaid Expenditures Act of 2015’’ or the ‘‘PRIME Act of 

5 2015’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—CURBING IMPROPER PAYMENTS 

Sec. 101. Requiring valid prescriber National Provider Identifiers on pharmacy 

claims. 

Sec. 102. Reforming how CMS tracks and corrects the vulnerabilities identified 

by Recovery Audit Contractors. 

Sec. 103. Improving Senior Medicare Patrol and fraud reporting rewards. 

Sec. 104. Strengthening Medicaid Program integrity through flexibility. 

Sec. 105. Establishing Medicare administrative contractor error reduction incentives. 

Sec. 106. Strengthening penalties for the illegal distribution of a Medicare, 

Medicaid, or CHIP beneficiary identification or billing privileges. 

TITLE II—IMPROVING DATA SHARING 

Sec. 201. Access to the National Directory of New Hires. 

Sec. 202. Improving the sharing of data between the Federal Government and 

State Medicaid programs. 

Sec. 203. Improving claims processing and detection of fraud within the Medicaid and CHIP programs. 

TITLE III—REPORT ON IMPLEMENTATION 

Sec. 301. Report on implementation. 


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1 TITLE I—CURBING IMPROPER 

2 PAYMENTS 

3 SEC. 101. REQUIRING VALID PRESCRIBER NATIONAL PRO4 VIDER IDENTIFIERS ON PHARMACY CLAIMS. 

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

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

7 the following new paragraph: 

8 ‘‘(4) REQUIRING VALID PRESCRIBER NATIONAL

9 PROVIDER IDENTIFIERS ON PHARMACY CLAIMS.— 

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

11 and subsequent plan years, subject to subpara12 graph (B), the Secretary shall prohibit PDP 

13 sponsors of prescription drug plans from paying 

14 claims for prescription drugs under this part 

15 that do not include a valid prescriber National 

16 Provider Identifier. 

17 ‘‘(B) PROCEDURES.—The Secretary shall 

18 establish— 

19 ‘‘(i) procedures for determining the 

20 validity of prescriber National Provider 

21 Identifiers under subparagraph (A); and 

22 ‘‘(ii) procedures for transferring to 

23 the Inspector General of the Department 

24 of Health and Human Services and appro25 priate law enforcement agencies and other 


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1 oversight entities information on those Na2 tional Provider Identifiers and pharmacy 

3 claims, including records related to such 

4 claims, that the Secretary determines are 

5 invalid under clause (i). 

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

7 2018, the Inspector General of the Department 

8 of Health and Human Services shall submit to 

9 Congress a report on the effectiveness of the 

10 procedures established under subparagraph 

11 (B).’’. 

12 SEC. 102. REFORMING HOW CMS TRACKS AND CORRECTS 

13 THE VULNERABILITIES IDENTIFIED BY RE14 COVERY AUDIT CONTRACTORS. 

15 (a) IN GENERAL.—Section 1893(h) of the Social Se16 curity Act (42 U.S.C. 1395ddd(h)) is amended— 

17 (1) in paragraph (8)— 

18 (A) by striking ‘‘REPORT.—The Secretary’’ 

19 and inserting ‘‘REPORT.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (C), the Secretary’’; and 

22 (B) by adding after subparagraph (A), as 

23 inserted by subparagraph (A), the following new 

24 subparagraphs: 


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1 ‘‘(B) INCLUSION OF IMPROPER PAYMENT

2 VULNERABILITIES IDENTIFIED.—Each report 

3 submitted under subparagraph (A) shall, sub4 ject to subparagraph (C), include— 

5 ‘‘(i) a description of— 

6 ‘‘(I) the types and financial cost 

7 to the program under this title of im8 proper payment vulnerabilities identi9 fied by recovery audit contractors 

10 under this subsection; and 

11 ‘‘(II) how the Secretary is ad12 dressing such improper payment 

13 vulnerabilities; and 

14 ‘‘(ii) an assessment of the effective15 ness of changes made to payment policies 

16 and procedures under this title in order to 

17 address the vulnerabilities so identified. 

18 ‘‘(C) LIMITATION.—The Secretary shall 

19 ensure that each report submitted under sub20 paragraph (A) does not include information 

21 that the Secretary determines would be sen22 sitive or would otherwise negatively impact pro23 gram integrity.’’; and 

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

25 paragraph: 


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1 ‘‘(10) ADDRESSING IMPROPER PAYMENT

2 VULNERABILITIES.—The Secretary shall address im3 proper payment vulnerabilities identified by recovery 

4 audit contractors under this subsection in a timely 

5 manner, prioritized based on the risk to the program 

6 under this title.’’. 

7 (b) USE OF MEDICARE AND MEDICAID RECOVERY

8 AUDIT CONTRACTOR RECOVERIES FOR PROVIDER EDU9 CATION AND TO PREVENT IMPROPER PAYMENTS AND

10 FRAUD.— 

11 (1) MEDICARE RAC PROGRAM.—Section 

12 1893(h)(1)(C) of the Social Security Act (42 U.S.C. 

13 1395ddd(h)(1)(C)) is amended— 

14 (A) by striking ‘‘the Secretary shall re15 tain’’ and inserting ‘‘the Secretary— 

16 ‘‘(i) shall retain’’; 

17 (B) in clause (i), as added by subpara18 graph (A)— 

19 (i) by inserting ‘‘, in addition to any 

20 other funds that may be available,’’ after 

21 ‘‘available’’; 

22 (ii) by inserting ‘‘until expended’’ 

23 after ‘‘Services’’; and 

24 (iii) by striking the period at the end 

25 and inserting a semicolon; and 


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1 (C) by adding at the end the following new 

2 clauses: 

3 ‘‘(ii) may retain an additional portion 

4 of the amounts recovered (not to exceed 25 

5 percent of such amounts recovered) which 

6 shall be available, in addition to any other 

7 funds that may be available, to such pro8 gram management account until expended 

9 for purposes of activities to address prob10 lems that contribute to improper payments 

11 and fraud under this title; and 

12 ‘‘(iii) shall retain an additional 5 per13 cent of such amounts recovered to be made 

14 available, in addition to any other funds 

15 that may be available, to the Inspector 

16 General of the Department of Health and 

17 Human Services until expended for the In18 spector General to carry out activities of 

19 the Inspector General relating to inves20 tigating improper payments or auditing in21 ternal controls associated with payments 

22 under this title.’’. 

23 (2) MEDICAID RAC PROGRAM.—Section 1936 of 

24 the Social Security Act (42 U.S.C. 1396u–6) is 


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1 amended by adding at the end the following new 

2 subsection: 

3 ‘‘(f) AMOUNTS RECOVERED THROUGH RECOVERY

4 AUDIT CONTRACTORS.—Notwithstanding any other provi5 sion of law, the Secretary— 

6 ‘‘(1) may retain a portion of the amounts recov7 ered pursuant to the program established under sec8 tion 1902(a)(42)(B) (not to exceed 25 percent of the 

9 Federal share of such amounts recovered) which 

10 shall be available, in addition to any other funds 

11 that may be available, to the program management 

12 account of the Centers for Medicare & Medicaid 

13 Services for purposes of activities to address prob14 lems that contribute to improper payments and 

15 fraud under this title; and 

16 ‘‘(2) shall retain an additional 5 percent of the 

17 Federal share of such amounts recovered to be made 

18 available, in addition to any other funds that may be 

19 available, to the Inspector General of the Depart20 ment of Health and Human Services until expended 

21 for the Inspector General to carry out activities of 

22 the Inspector General relating to investigating im23 proper payments or auditing internal controls associ24 ated with payments under this title.’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this section shall take effect on the date that is 

3 1 year after the date of enactment of this Act. 

4 SEC. 103. IMPROVING SENIOR MEDICARE PATROL AND 

5 FRAUD REPORTING REWARDS. 

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

7 Human Services (in this section referred to as the ‘‘Sec8 retary’’) shall develop a plan to revise the incentive pro9 gram under section 203(b) of the Health Insurance Port10 ability and Accountability Act of 1996 (42 U.S.C. 1395b– 

11 5(b)) to encourage greater participation by individuals to 

12 report fraud and abuse in the Medicare program. Such 

13 plan shall include recommendations for— 

14 (1) ways to enhance rewards for individuals re15 porting under the incentive program, including re16 wards based on information that leads to an admin17 istrative action; and 

18 (2) extending the incentive program to the 

19 Medicaid program. 

20 (b) PUBLIC AWARENESS AND EDUCATION CAM21 PAIGN.—The plan developed under subsection (a) shall 

22 also include recommendations for the use of the Senior 

23 Medicare Patrols authorized under section 411 of the 

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

25 a public awareness and education campaign to encourage 


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1 participation in the revised incentive program under sub2 section (a). 

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

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

5 submit to Congress the plan developed under subsection 

6 (a). 

7 SEC. 104. STRENGTHENING MEDICAID PROGRAM INTEG8 RITY THROUGH FLEXIBILITY. 

9 Section 1936 of the Social Security Act (42 U.S.C. 

10 1396u–6) is amended— 

11 (1) in subsection (a), by inserting ‘‘, or other12 wise,’’ after ‘‘entities’’; and 

13 (2) in subsection (e)— 

14 (A) in paragraph (1), in the matter pre15 ceding subparagraph (A), by inserting ‘‘(includ16 ing the costs of equipment, salaries and bene17 fits, and travel and training)’’ after ‘‘Program 

18 under this section’’; and 

19 (B) in paragraph (3), by striking ‘‘by 100’’ 

20 and inserting ‘‘by 100, or such number as de21 termined necessary by the Secretary to carry 

22 out the Program,’’. 


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1 SEC. 105. ESTABLISHING MEDICARE ADMINISTRATIVE CON2 TRACTOR ERROR REDUCTION INCENTIVES. 

3 (a) IN GENERAL.—Section 1874A(b)(1)(D) of the 

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

5 amended— 

6 (1) by striking ‘‘QUALITY.—The Secretary’’ and 

7 inserting ‘‘QUALITY.— 

8 ‘‘(i) IN GENERAL.—Subject to clauses 

9 (ii) and (iii), the Secretary’’; and 

10 (2) by inserting after clause (i), as added by 

11 paragraph (1), the following new clauses: 

12 ‘‘(ii) IMPROPER PAYMENT ERROR

13 RATE REDUCTION INCENTIVES.—The Sec14 retary shall provide incentives for medicare 

15 administrative contractors to reduce the 

16 improper payment error rates in their ju17 risdictions. 

18 ‘‘(iii) INCENTIVES.—The incentives 

19 provided for under clause (ii)— 

20 ‘‘(I) may include a sliding scale 

21 of bonus payments and additional in22 centives to medicare administrative 

23 contractors that reduce the improper 

24 payment error rates in their jurisdic25 tions to certain benchmark levels, as 

26 determined by the Secretary; and 


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1 ‘‘(II) shall include substantial re2 ductions in award fee payments under 

3 award fee contracts, for any medicare 

4 administrative contractor that reaches 

5 an upper end error threshold or other 

6 threshold as determined by the Sec7 retary.’’. 

8 (b) EFFECTIVE DATE.— 

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

10 subsection (a) shall apply to contracts entered into 

11 or renewed on or after the date that is 12 months 

12 after the date of enactment of this Act. 

13 (2) CONTRACTS ENTERED INTO OR RENEWED

14 PRIOR TO EFFECTIVE DATE.—In the case of con15 tracts in existence on or after the date of the enact16 ment of this Act and that are not subject to the ef17 fective date under paragraph (1), the Secretary of 

18 Health and Human Services shall, when appropriate 

19 and practicable, seek to apply the incentives pro20 vided for in the amendments made by subsection (a) 

21 through contract modifications. 


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1 SEC. 106. STRENGTHENING PENALTIES FOR THE ILLEGAL 

2 DISTRIBUTION OF A MEDICARE, MEDICAID, 

3 OR CHIP BENEFICIARY IDENTIFICATION OR 

4 BILLING PRIVILEGES. 

5 Section 1128B(b) of the Social Security Act (42 

6 U.S.C. 1320a–7b(b)) is amended by adding at the end the 

7 following: 

8 ‘‘(4) Whoever knowingly, intentionally, and with 

9 the intent to defraud purchases, sells or distributes, 

10 or arranges for the purchase, sale, or distribution of 

11 a Medicare, Medicaid, or CHIP beneficiary identi12 fication number or billing privileges under title 

13 XVIII, title XIX, or title XXI shall be imprisoned 

14 for not more than 10 years or fined not more than 

15 $500,000 ($1,000,000 in the case of a corporation), 

16 or both.’’. 

17 TITLE II—IMPROVING DATA 

18 SHARING 

19 SEC. 201. ACCESS TO THE NATIONAL DIRECTORY OF NEW 

20 HIRES. 

21 Section 453(j) of the Social Security Act (42 U.S.C. 

22 653(j)) is amended by adding at the end of the following 

23 new paragraph: 

24 ‘‘(12) INFORMATION COMPARISONS AND DIS25 CLOSURES TO ASSIST IN ADMINISTRATION OF THE


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1 MEDICARE PROGRAM AND STATE HEALTH SUBSIDY

2 PROGRAMS.— 

3 ‘‘(A) DISCLOSURE TO THE ADMINIS4 TRATOR OF THE CENTERS FOR MEDICARE &

5 MEDICAID SERVICES.—The Administrator of 

6 the Centers for Medicare & Medicaid Services 

7 shall have access to the information in the Na8 tional Directory of New Hires for purposes of 

9 determining the eligibility of an applicant for, 

10 or enrollee in, the Medicare program under title 

11 XVIII or an applicable State health subsidy 

12 program (as defined in section 1413(e) of the 

13 Patient Protection and Affordable Care Act (42 

14 U.S.C. 18083(e))). 

15 ‘‘(B) DISCLOSURE TO THE INSPECTOR

16 GENERAL OF THE DEPARTMENT OF HEALTH

17 AND HUMAN SERVICES.— 

18 ‘‘(i) IN GENERAL.—If the Inspector 

19 General of the Department of Health and 

20 Human Services transmits to the Secretary 

21 the names and social security account 

22 numbers of individuals, the Secretary shall 

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1 ers maintained in the National Directory 

2 of New Hires. 

3 ‘‘(ii) USE OF INFORMATION.—The In4 spector General of the Department of 

5 Health and Human Services may use in6 formation provided under clause (i) only 

7 for purposes of— 

8 ‘‘(I) determining the eligibility of 

9 an applicant for, or enrollee in, the 

10 Medicare program under title XVIII 

11 or an applicable State health subsidy 

12 program (as defined in section 

13 1413(e) of the Patient Protection and 

14 Affordable Care Act (42 U.S.C. 

15 18083(e))); or 

16 ‘‘(II) evaluating the integrity of 

17 the Medicare program or an applica18 ble State health subsidy program (as 

19 so defined). 

20 ‘‘(C) DISCLOSURE TO STATE AGENCIES.— 

21 ‘‘(i) IN GENERAL.—If, for purposes of 

22 administering an applicable State health 

23 subsidy program (as defined in section 

24 1413(e) of the Patient Protection and Af25 fordable Care Act (42 U.S.C. 18083(e))), a 


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1 State agency responsible for administering 

2 such program transmits to the Secretary 

3 the names and social security account 

4 numbers of individuals, the Secretary shall 

5 disclose to such State agency information 

6 on such individuals and their employers 

7 maintained in the National Directory of 

8 New Hires, subject to this subparagraph. 

9 ‘‘(ii) CONDITION ON DISCLOSURE BY

10 THE SECRETARY.—The Secretary shall 

11 make a disclosure under clause (i) only to 

12 the extent that the Secretary determines 

13 that the disclosure would not interfere with 

14 the effective operation of the program 

15 under this part. 

16 ‘‘(iii) USE AND DISCLOSURE OF IN17 FORMATION BY STATE AGENCIES.— 

18 ‘‘(I) IN GENERAL.—A State 

19 agency may not use or disclose infor20 mation provided under clause (i) ex21 cept for purposes of administering a 

22 program referred to in clause (i). 

23 ‘‘(II) INFORMATION SECURITY.— 

24 The State agency shall have in effect 

25 data security and control policies that 


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1 the Secretary finds adequate to ensure 

2 the security of information obtained 

3 under clause (i) and to ensure that 

4 access to such information is re5 stricted to authorized persons for pur6 poses of authorized uses and disclo7 sures. 

8 ‘‘(III) PENALTY FOR MISUSE OF

9 INFORMATION.—An officer or em10 ployee of the State agency who fails to 

11 comply with this clause shall be sub12 ject to the sanctions under subsection 

13 (l)(2) to the same extent as if such of14 ficer or employee were an officer or 

15 employee of the United States. 

16 ‘‘(iv) PROCEDURAL REQUIREMENTS.— 

17 State agencies requesting information 

18 under clause (i) shall adhere to uniform 

19 procedures established by the Secretary 

20 governing information requests and data 

21 matching under this paragraph. 

22 ‘‘(v) REIMBURSEMENT OF COSTS.— 

23 The State agency shall reimburse the Sec24 retary, in accordance with subsection 

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1 retary in furnishing the information re2 quested under this subparagraph.’’. 

3 SEC. 202. IMPROVING THE SHARING OF DATA BETWEEN 

4 THE FEDERAL GOVERNMENT AND STATE 

5 MEDICAID PROGRAMS. 

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

7 Human Services (in this section referred to as the ‘‘Sec8 retary’’) shall establish a plan to encourage and facilitate 

9 the participation of States in the Medicare-Medicaid Data 

10 Match Program (commonly referred to as the ‘‘Medi-Medi 

11 Program’’) under section 1893(g) of the Social Security 

12 Act (42 U.S.C. 1395ddd(g)). 

13 (b) PROGRAM REVISIONS TO IMPROVE MEDI-MEDI

14 DATA MATCH PROGRAM PARTICIPATION BY STATES.— 

15 Section 1893(g)(1)(A) of the Social Security Act (42 

16 U.S.C. 1395ddd(g)(1)(A)) is amended— 

17 (1) in the matter preceding clause (i), by insert18 ing ‘‘or otherwise’’ after ‘‘eligible entities’’; 

19 (2) in clause (i)— 

20 (A) by inserting ‘‘to review claims data’’ 

21 after ‘‘algorithms’’; and 

22 (B) by striking ‘‘service, time, or patient’’ 

23 and inserting ‘‘provider, service, time, or pa24 tient’’; 

25 (3) in clause (ii)— 


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1 (A) by inserting ‘‘to investigate and re2 cover amounts with respect to suspect claims’’ 

3 after ‘‘appropriate actions’’; and 

4 (B) by striking ‘‘; and’’ and inserting a 

5 semicolon; 

6 (4) in clause (iii), by striking the period and in7 serting ‘‘; and’’; and 

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

9 clause: 

10 ‘‘(iv) furthering the Secretary’s de11 sign, development, installation, or enhance12 ment of an automated data system archi13 tecture— 

14 ‘‘(I) to collect, integrate, and as15 sess data for purposes of program in16 tegrity, program oversight, and ad17 ministration, including the Medi-Medi 

18 Program; and 

19 ‘‘(II) that improves the coordina20 tion of requests for data from 

21 States.’’. 

22 (c) PROVIDING STATES WITH DATA ON IMPROPER

23 PAYMENTS MADE FOR ITEMS OR SERVICES PROVIDED TO

24 DUAL ELIGIBLE INDIVIDUALS.— 


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1 (1) IN GENERAL.—The Secretary shall develop 

2 and implement a plan that allows each State agency 

3 responsible for administering a State plan for med4 ical assistance under title XIX of the Social Security 

5 Act access to relevant data on improper or fraudu6 lent payments made under the Medicare program 

7 under title XVIII of the Social Security Act (42 

8 U.S.C. 1395 et seq.) for health care items or serv9 ices provided to dual eligible individuals. 

10 (2) DUAL ELIGIBLE INDIVIDUAL DEFINED.—In 

11 this section, the term ‘‘dual eligible individual’’ 

12 means an individual who is entitled to, or enrolled 

13 for, benefits under part A of title XVIII of the So14 cial Security Act (42 U.S.C. 1395c et seq.), or en15 rolled for benefits under part B of title XVIII of 

16 such Act (42 U.S.C. 1395j et seq.), and is eligible 

17 for medical assistance under a State plan under title 

18 XIX of such Act (42 U.S.C. 1396 et seq.) or under 

19 a waiver of such plan. 

20 SEC. 203. IMPROVING CLAIMS PROCESSING AND DETEC21 TION OF FRAUD WITHIN THE MEDICAID AND 

22 CHIP PROGRAMS. 

23 (a) MEDICAID.—Section 1903(i) of the Social Secu24 rity Act (42 U.S.C. 1396b(i)) is amended (after the appliVerDate Sep 11 2014 23:15 Jul 30, 2015 Jkt 049200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6401 E:\BILLS\S861.RS S861

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1 cation of the amendments made by subsection (c) of this 

2 section)— 

3 (1) in paragraph (25), by striking ‘‘or’’ at the 

4 end; 

5 (2) in paragraph (26), by striking the period 

6 and inserting ‘‘; or’’; and 

7 (3) by inserting after paragraph (26), the fol8 lowing new paragraph: 

9 ‘‘(27) with respect to amounts expended for an 

10 item or service for which medical assistance is pro11 vided under the State plan or under a waiver of such 

12 plan unless the claim for payment for such item or 

13 service contains a valid beneficiary identification 

14 number that, for purposes of the individual who re15 ceived such item or service, has been determined by 

16 the State agency to correspond to an individual who 

17 is eligible to receive benefits under the State plan or 

18 waiver.’’. 

19 (b) CHIP.—Section 2107(e)(1)(I) of the Social Secu20 rity Act (42 U.S.C. 1397gg(e)(1)(I)) is amended by strik21 ing ‘‘and (17)’’ and inserting ‘‘(17), and (27)’’. 

22 (c) TECHNICAL CORRECTIONS.—Effective as if in23 cluded in the enactment of Public Law 111–148, the fol24 lowing sections of such Act are amended as follows: 


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1 (1) Section 6402(c)(3) is amended by striking 

2 ‘‘by adding at the end’’ and inserting ‘‘by inserting 

3 after paragraph (24)’’. 

4 (2) Section 2001(a)(2)(B)(iii) is amended by 

5 striking ‘‘by adding at the end’’ and inserting ‘‘by 

6 inserting after paragraph (25)’’. 

7 TITLE III—REPORT ON 

8 IMPLEMENTATION 

9 SEC. 301. REPORT ON IMPLEMENTATION. 

10 Not later than 270 days after the date of the enact11 ment of this Act, the Secretary of Health and Human 

12 Services shall submit to Congress a report on the imple13 mentation of the provisions of, and the amendments made 

14 by, this Act. 

15 SECTION 1. SHORT TITLE. 

16 This Act may be cited as the ‘‘Preventing and Reduc17 ing Improper Medicare and Medicaid Expenditures Act of 

18 2015’’ or the ‘‘PRIME Act of 2015’’. 

19 SEC. 2. STRENGTHENING MEDICAID PROGRAM INTEGRITY 

20 THROUGH FLEXIBILITY. 

21 Section 1936 of the Social Security Act (42 U.S.C. 

22 1396u–6) is amended— 

23 (1) in subsection (a), by inserting ‘‘, or other24 wise,’’ after ‘‘entities’’; and 

25 (2) in subsection (e)— 


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1 (A) in paragraph (1), in the matter pre2 ceding subparagraph (A), by inserting ‘‘(includ3 ing the costs of equipment, salaries and benefits, 

4 and travel and training)’’ after ‘‘Program under 

5 this section’’; and 

6 (B) in paragraph (3), by striking ‘‘by 100’’ 

7 and inserting ‘‘by 100, or such number as deter8 mined necessary by the Secretary to carry out 

9 the Program,’’. 

10 SEC. 3. ESTABLISHING MEDICARE ADMINISTRATIVE CON11 TRACTOR ERROR REDUCTION INCENTIVES. 

12 (a) IN GENERAL.—Section 1874A(b)(1)(D) of the So13 cial Security Act (42 U.S.C. 1395kk–1(b)(1)(D)) is amend14 ed— 

15 (1) by striking ‘‘QUALITY.—The Secretary’’ and 

16 inserting ‘‘QUALITY.— 

17 ‘‘(i) IN GENERAL.—Subject to clauses 

18 (ii) and (iii), the Secretary’’; and 

19 (2) by inserting after clause (i), as added by 

20 paragraph (1), the following new clauses: 

21 ‘‘(ii) IMPROPER PAYMENT RATE RE22 DUCTION INCENTIVES.—The Secretary shall 

23 provide incentives for medicare administra24 tive contractors to reduce the improper pay25 ment error rates in their jurisdictions. 


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1 ‘‘(iii) INCENTIVES.—The incentives 

2 provided for under clause (ii)— 

3 ‘‘(I) may include a sliding scale 

4 of award fee payments and additional 

5 incentives to medicare administrative 

6 contractors that either reduce the im7 proper payment rates in their jurisdic8 tions to certain thresholds, as deter9 mined by the Secretary, or accomplish 

10 tasks, as determined by the Secretary, 

11 that further improve payment accu12 racy; and 

13 ‘‘(II) may include substantial re14 ductions in award fee payments under 

15 cost-plus-award-fee contracts, for medi16 care administrative contractors that 

17 reach an upper end improper payment 

18 rate threshold or other threshold as de19 termined by the Secretary, or fail to 

20 accomplish tasks, as determined by the 

21 Secretary, that further improve pay22 ment accuracy.’’. 

23 (b) EFFECTIVE DATE.— 

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

25 subsection (a) shall apply to contracts entered into or 


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1 renewed on or after the date that is 3 years after the 

2 date of enactment of this Act. 

3 (2) APPLICATION TO EXISTING CONTRACTS.—In 

4 the case of contracts in existence on or after the date 

5 of the enactment of this Act and that are not subject 

6 to the effective date under paragraph (1), the Sec7 retary of Health and Human Services shall, when ap8 propriate and practicable, seek to apply the incentives 

9 provided for in the amendments made by subsection 

10 (a) through contract modifications. 

11 SEC. 4. STRENGTHENING PENALTIES FOR THE ILLEGAL 

12 DISTRIBUTION OF A MEDICARE, MEDICAID, 

13 OR CHIP BENEFICIARY IDENTIFICATION OR 

14 BILLING PRIVILEGES. 

15 Section 1128B(b) of the Social Security Act (42 U.S.C. 

16 1320a–7b(b)) is amended by adding at the end the fol17 lowing: 

18 ‘‘(4) Whoever without lawful authority know19 ingly and willfully purchases, sells or distributes, or 

20 arranges for the purchase, sale, or distribution of a 

21 beneficiary identification number or unique health 

22 identifier for a health care provider under title XVIII, 

23 title XIX, or title XXI shall be imprisoned for not 

24 more than 10 years or fined not more than $500,000 

25 ($1,000,000 in the case of a corporation), or both.’’. 


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1 SEC. 5. IMPROVING THE SHARING OF DATA BETWEEN THE 

2 FEDERAL GOVERNMENT AND STATE MED3 ICAID PROGRAMS. 

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

5 Human Services (in this section referred to as the ‘‘Sec6 retary’’) shall establish a plan to encourage and facilitate 

7 the participation of States in the Medicare-Medicaid Data 

8 Match Program (commonly referred to as the ‘‘Medi-Medi 

9 Program’’) under section 1893(g) of the Social Security Act 

10 (42 U.S.C. 1395ddd(g)). 

11 (b) PROGRAM REVISIONS TO IMPROVE MEDI-MEDI

12 DATA MATCH PROGRAM PARTICIPATION BY STATES.—Sec13 tion 1893(g)(1)(A) of the Social Security Act (42 U.S.C. 

14 1395ddd(g)(1)(A)) is amended— 

15 (1) in the matter preceding clause (i), by insert16 ing ‘‘or otherwise’’ after ‘‘eligible entities’’; 

17 (2) in clause (i)— 

18 (A) by inserting ‘‘to review claims data’’ 

19 after ‘‘algorithms’’; and 

20 (B) by striking ‘‘service, time, or patient’’ 

21 and inserting ‘‘provider, service, time, or pa22 tient’’; 

23 (3) in clause (ii)— 

24 (A) by inserting ‘‘to investigate and recover 

25 amounts with respect to suspect claims’’ after 

26 ‘‘appropriate actions’’; and 


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1 (B) by striking ‘‘; and’’ and inserting a 

2 semicolon; 

3 (4) in clause (iii), by striking the period and in4 serting ‘‘; and’’; and 

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

6 clause: 

7 ‘‘(iv) furthering the Secretary’s design, 

8 development, installation, or enhancement 

9 of an automated data system architecture— 

10 ‘‘(I) to collect, integrate, and as11 sess data for purposes of program in12 tegrity, program oversight, and admin13 istration, including the Medi-Medi 

14 Program; and 

15 ‘‘(II) that improves the coordina16 tion of requests for data from States.’’. 

17 (c) PROVIDING STATES WITH DATA ON IMPROPER

18 PAYMENTS MADE FOR ITEMS OR SERVICES PROVIDED TO

19 DUAL ELIGIBLE INDIVIDUALS.— 

20 (1) IN GENERAL.—The Secretary shall develop 

21 and implement a plan that allows each State agency 

22 responsible for administering a State plan for med23 ical assistance under title XIX of the Social Security 

24 Act access to relevant data on improper or fraudulent 

25 payments made under the Medicare program under 


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1 title XVIII of the Social Security Act (42 U.S.C. 1395 

2 et seq.) for health care items or services provided to 

3 dual eligible individuals. 

4 (2) DUAL ELIGIBLE INDIVIDUAL DEFINED.—In 

5 this section, the term ‘‘dual eligible individual’’ 

6 means an individual who is entitled to, or enrolled 

7 for, benefits under part A of title XVIII of the Social 

8 Security Act (42 U.S.C. 1395c et seq.), or enrolled for 

9 benefits under part B of title XVIII of such Act (42 

10 U.S.C. 1395j et seq.), and is eligible for medical as11 sistance under a State plan under title XIX of such 

12 Act (42 U.S.C. 1396 et seq.) or under a waiver of 

13 such plan. 

14 SEC. 6. REPORT ON IMPLEMENTATION. 

15 Not later than 18 months after the date of the enact16 ment of this Act, the Secretary of Health and Human Serv17 ices shall submit to Congress a report on the implementa18 tion of the provisions of, and the amendments made by— 

19 (1) this Act; and 

20 (2) sections 506 and 507 of the Medicare Access 

21 and CHIP Reauthorization Act of 2015 (Public Law 

22 114–10). 


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Calendar No. 183 

114TH CONGRESS 

1ST SESSION S. 861 

[Report No. 114–104] 

A BILL 

To amend titles XVIII and XIX of the Social SecuMedicare and Medicaid programs. rity Act to curb waste, fraud, and abuse in the 

JULY 30, 2015 

Reported with an amendment 


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